UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549





**FORM
      10-KSB**





(Mark
      One)


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


For
      the
      fiscal year ended October 31, 2004




OR




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934.


For
      the
      transition period from _______ to
      ________





Commission
      file number 0-27119








**MEDI-HUT
      CO., INC.**


(Name
      of
      small business issuer in its charter)







Nevada
              (State
                  or other jurisdiction of
                incorporation
                    or organization)
            22-2436721
              (I.R.S.
                  Employer Identification No.)





215
                Morris Avenue, Spring Lake, New Jersey
              (Address
                of principal executive offices)
            07762
              (Zip
                Code)





(732)
      282-1620


Issuer’s
      telephone number





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





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





Common
      Stock, par value $0.001


(Title
      of
      class)





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





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







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. o




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




Revenues
      for the fiscal year ended October 31, 2004 were $502,279.




The
      aggregate market value of the shares of the Registrant’s common stock, par value
      $0.001 per share, held by non-affiliates of the Registrant, as of November
      30,
      2006, was approximately $984,165. The Registrant has no other class of capital
      stock outstanding.




As
      of
      November 30, 2006, 21,701,090 shares of the Registrant’s common stock were
      outstanding .




DOCUMENTS
      INCORPORATED BY REFERENCE




None.




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




SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS




Certain
      information included in this annual report on Form 10-KSB and other filings
      of
      the Registrant under the Securities Act of 1933, as amended (the “Securities
      Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
      as well as information communicated orally or in writing between the dates
      of
      such filings, contains or may contain “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
      of
      the Securities Act and Section 21E of the Exchange Act. Such statements are
      subject to certain risks, trends and uncertainties that could cause actual
      results to differ materially from expected results. Among these risks, trends
      and uncertainties are economic conditions generally and in the industries in
      which the Registrant may participate; competition within the Registrant’s chosen
      industries, including competition from much larger competitors; technological
      advances; available capital; and failure by the Registrant to successfully
      develop or acquire products and form new business relationships.




In
      some
      cases, forward-looking statements can be identified by terminology such as
      “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative of such terms
      or other comparable terminology. Although the Registrant believes that the
      expectations reflected in the forward-looking statements contained herein are
      reasonable, the Registrant cannot guarantee future results, levels of activity,
      performance or achievements. Moreover, neither the Registrant, nor any other
      person assumes responsibility for the accuracy and completeness of such
      statements. The Registrant is under no duty to update any of the forward-looking
      statements contained herein after the date this annual report on Form 10-KSB
      is
      submitted to the Securities and Exchange Commission .







**MEDI-HUT
      CO., INC.**





**INDEX
      TO FORM 10-KSB**







**PART
                I**
            ****Item
                1.
            Description
                of Business
            1Item
                2.
            Description
                of Property
            16Item
                3.
            Legal
                Proceedings
            17Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            24**PART
                II**Item
                5.
            Market
                for Common Equity and Related Stockholder Matters
            24Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation
            28Item
                7.
            Financial
                Statements
            37Item
                8.
            Changes
                In and Disagreements With Accountants on Accounting and Financial
                Disclosure
            37Item
                8A.
            Controls
                and Procedures
            38Item
                8B.
            Other
                Information
            38**PART
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act
            39Item
                10.
            Executive
                Compensation
            41Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            47Item
                12.
            Certain
                Relationships and Related Transactions
            55Item
                13.
            Exhibits
            56Item
                14.
            Principal
                Accountant Fees and Services
            56SIGNATURES
            58











**PART
      I**




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




**General**




Medi-Hut
      Co., Inc. (“Medi-Hut” or the “Company”) is a Nevada corporation that was
      headquartered in Wall Township, New Jersey until May 2004 when it relocated
      its
      headquarters to Spring Lake, New Jersey. Medi-Hut
      was incorporated in the State of New Jersey on November 29, 1982. On January
      28,
      1998, Medi-Hut entered into an Agreement and Plan of Reorganization with
      Indwest, Inc., a Utah corporation, whereby Medi-Hut changed its domicile to
      the
      State of Utah and became subject to the reporting requirements of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”). On February 2, 1998,
      Medi-Hut completed a second change of domicile transaction and became a Delaware
      corporation, and, on October 31, 2001, completed a third and final change of
      domicile transaction and became a Nevada corporation.




On
      October 17, 2003, the Company formed Scivanta Corporation (“Scivanta”), a New
      Jersey corporation and wholly-owned subsidiary of the Company. Scivanta was
      formed to be an operating subsidiary of the Company, but is currently
      inactive.




Currently,
      the Company is not selling any products or technologies. On
      November 10, 2006, the Company acquired
      the exclusive world-wide rights to develop, make and sell certain proprietary
      technologies known as the Hickey Cardiac Monitoring System (the “HCMS”), a
      minimally invasive two-balloon esophageal catheter system used to monitor
      cardiac performance.  The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad . See
      “Strategy for Business Development;” “Company Developments;” and “Principal
      Products.”




During
      the fiscal year ended October 31, 2004, the Company’s business consisted of the
      distribution of condoms, alcohol preps and disposable clinical supplies. The
      Company’s products generally were sold directly to physicians and other
      healthcare providers or to wholesalers who sold the products to pharmacies,
      drug
      store chains or other wholesalers. In October 2004, the Company stopped selling
      these products due to reduced profit margins and the decline in the customer
      base. See “Principal Products - Disposable Medical Products.”




During
      May 2004, the Company’s management team completed its evaluation of the
      Solo-SafeTM Safety Syringe. Due to the early development stage of the product,
      the fact that a manufacturing prototype had not been created, the cost
      associated with developing the product as compared to the overall market
      opportunity and the Company’s limited financial resources, the Company decided
      to stop any further development of this product or the maintenance of the
      related patents. See “Principal Products - Elite Safety Syringe” and
“Manufacturing; Principal Suppliers.”




During
      December 2004, the Company completed its evaluation of the Elite Safety Syringe
      product line. As a result of this evaluation, the Company’s management decided
      not to pursue any further development or marketing of the Elite Safety Syringe
      due to the cost associated with correcting the product design, the cost
      associated with establishing sufficient manufacturing capabilities to support
      a
      market launch and the lack of a market for safety syringes sufficient to support
      the product launch. See “Principal Products - Solo-SafeTM Safety
      Syringe.”




1


**Strategy
      for Business Development**




On
      November 10, 2006, the Company acquired the exclusive world-wide rights to
      develop, make and sell the HCMS. The HCMS will provide the primary measures
      of
      cardiac performance and left atrial pressure which are crucial measurements
      in
      treating critically ill patients. The HCMS is currently in the development
      stage
      and the Company anticipates that it will take approximately 18 months to
      complete development and related clinical trials. In addition, the Company
      must
      also receive the appropriate regulatory approvals before the HCMS can be
      marketed in the United States or abroad .




The
      Company anticipates funding the development of the HCMS through equity and/or
      debt financing and from the settlement proceeds received in connection with
      the
      Syntest litigation. See “Item 3. Legal Proceedings - Syntest Litigation.” No
      assurances can be given that the proceeds from the settlement of the Syntest
      Litigation will be sufficient to develop the HCMS or that the Company will
      otherwise have, or obtain through equity and/or debt financing, the financial
      and other resources necessary for it to successfully develop the HCMS, or that
      if successfully developed and marketed, the HCMS will be
      profitable.




In
      addition to developing the HCMS, the Company’s strategy for business development
      will focus on the acquisition, through licensing or purchasing, of technologies
      or products that are sold or are capable of being sold in a specialty or niche
      market. Technologies or products of interest include, but are not limited to,
      medical devices, pharmaceuticals and other proprietary technologies or patented
      products. Specialty or niche-market technologies or products, as opposed to
      commodities, generally offer greater margins. These products are distributed
      through specialty distributor networks or manufacturer representatives to the
      original equipment manufacturer market, supplier and provider markets and to
      the
      general marketplace.




Annual
      sales, if any, of the technologies and products that the Company will review
      are
      generally less than $5 million. The Company believes that these technologies
      or
      products generally are not attractive to larger companies because they do not
      represent opportunities for revenues and earnings that would be material to
      those companies. The Company will consider technologies and products that suffer
      from lower sales or lack of development because of inadequate distribution
      channels, lack of companion products or insufficient capital.




Following
      is a listing of criteria being utilized by the Company in identifying and
      reviewing potential technology or product acquisitions:




·
            Whether
                the technology or product is a specialty or niche-market product
                which is
                distributed through specialty
                distributors.




·
            Whether
                the technology or product is unique or
                patented.




·
            Whether
                the technology or product has, or is capable of achieving, an attractive
                gross margin, usually in excess of
                35%.




2




·
            Whether
                the prospective seller is receptive to receiving equity as part of
                the
                purchase price.




·
            Whether
                the market for the technology or product is expanding, but not to
                such a
                degree as to attract larger manufacturers or result in the technology
                or
                product achieving commodity status.




·
            Whether
                the Company can access marketing channels to sell and distribute
                the
                technology or product.




No
      assurances can be given that the Company will have the financial and other
      resources necessary for it to acquire additional technologies or products or
      implement any part of its business development strategy. In addition, no
      assurances can be given that any technology or product that the Company acquires
      as part of its business development strategy will be profitable.




**Company
      Developments**




*Government
      Proceedings and Investigations Involving the Company*




SEC
      Investigation - See
“Item 3. Legal Proceedings - SEC Investigation.”




Incomplete
      Periodic Reports - See
“Item 3. Legal Proceedings - Incomplete Periodic Reports.”




FBI
      Investigation - See
“Item 3. Legal Proceedings - FBI Investigation.”




*Litigation*




Class
      Action Lawsuits - See
“Item 3. Legal Proceedings - Class Action Lawsuits.”




Syntest
      Litigation - See
“Item 3. Legal Proceedings - Syntest Litigation.”




Litigation
      Against Certain Former Officers and Directors and Others - See
“Item 3. Legal Proceedings - Litigation Against Certain Former Officers and
      Directors and Others.”




Litigation
      Against Former Accounting Firms - See
“Item 3. Legal Proceedings - Litigation Against Former Accounting
      Firms.”




Lexington
      Insurance Lawsuit - See
“Item 3. Legal Proceedings - Lexington Insurance Lawsuit.”




Loures
      Lawsuit - See
“Item 3. Legal Proceedings - Loures Lawsuit.”




*New
      Management and Board Members*




On
      February 21, 2003, the Company entered into a Consulting Services Agreement
      with
      Century Capital Associates LLC (“Century Capital”) whereby Century Capital would
      provide general corporate and strategic business advisory services to the
      Company. The Consulting Services Agreement was amended and restated as of
      February 1, 2005. See “Item 10. Executive Compensation - Consulting Services
      Agreement.” On March 21, 2003, David R. LaVance of Century Capital replaced
      Joseph A. Sanpietro as the President and Chief Executive Officer of Medi-Hut
      and
      Thomas S. Gifford of Century Capital replaced Laurence M. Simon as the Chief
      Financial Officer of Medi-Hut. Mr. LaVance and Mr. Gifford also were elected
      to
      the Company’s Board of Directors. In addition, at such time, Vincent J.
      Sanpietro, the Chief Operating Officer of Medi-Hut and Joseph Sanpietro, Jr.,
      an
      employee of Medi-Hut, were terminated by the Company. Shortly thereafter, Joseph
      A. Sanpietro and Vincent J. Sanpietro resigned from the Company’s Board of
      Directors. See “Item 3. Legal Proceedings - Litigation Against Certain Former
      Officers and Directors and Others.”




3


In
      May
      2003, Salvatore J. Badalamenti, John A. Moore and Richard E. Otto joined James
      G. Aaron, Thomas S. Gifford and David R. LaVance on the Board of Directors
      of
      Medi-Hut. At such time, James G. Aaron, a member of the Board since April 3,
      2001, agreed to remain on the Board for the primary purpose of assisting the
      transition of management. After assisting the transition of management,
      effective February 5, 2004, Mr. Aaron resigned from the Board. On January 1,
      2005, due to various business and personal commitments, Salvatore J. Badalamenti
      resigned from the Board. See “Item 9. Directors, Executive Officers, Promoters
      and Control Persons; Compliance with Section 16(a) of the Exchange
      Act.”




*New
      Independent Auditors*




On
      March
      3, 2005, the Company engaged the accounting firm, Weiser LLP (“Weiser”), as its
      independent auditors. Weiser replaced Eisner LLP (“Eisner”). See “Item 8.
      Changes In and Disagreements With Accountants on Accounting and Financial
      Disclosure.”




*No
      Established Public Trading Market*




Since
      March 21, 2003, no established public trading market has existed for Medi-Hut’s
      common stock and shares of Medi-Hut’s common stock are neither listed on any
      national securities exchange, nor presently traded on any public stock exchange
      or in any other public market. Although quotations for shares of Medi-Hut’s
      common stock may be obtained through the over-the-counter (“OTC”) “Pink Sheets”
maintained by Pink Sheets LLC (a centralized quotation service that collects
      and
      publishes market maker quotes for OTC securities), because secondary market
      activity for shares of Medi-Hut’s common stock has been limited and sporadic,
      such quotations may not accurately reflect the price or prices at which
      purchasers or sellers would be currently willing to purchase or sell shares
      of
      Medi-Hut’s common stock. See “Item 5. Market for Common Equity and Related
      Stockholder Matters.”




*Relocation
      of Corporate Offices and Settlement with Former Landlord*




In
      May
      2004, the Company relocated its principal offices to 215 Morris Avenue, Spring
      Lake, New Jersey 07762 in order to reduce its monthly operating expenses and
      to
      more appropriately accommodate its current operations. In connection with the
      relocation of its principal offices, the Company and Monmouth/Atlantic Realty
      Associates, L.L.C., the landlord of the Company’s former office space in Wall
      Township, New Jersey, reached an agreement to terminate the remaining term
      of
      the existing lease (44 months resulting in a lease obligation of approximately
      $454,000 plus an additional $154,000 for common area charges) for a one-time
      payment by the Company of $100,000 plus the forfeiture of a $33,388 security
      deposit.




4


*Private
      Placements of Securities*




On
      May
      26, 2005, the Company closed on a private placement of convertible debentures
      (the “Debentures”). The gross proceeds received in connection with this private
      placement were $300,000. The Debentures have a 2 year term maturing on April
      30,
      2007 and bear interest at a rate of 8% per annum. Interest is payable in annual
      installments, beginning on May 1, 2006, in cash or, at the option of the
      Company, in shares of the Company’s common stock. If the Company elects to pay
      the interest in shares of the Company’s common stock, the number of shares
      issued as payment will be equal to the quotient of the unpaid interest divided
      by the market price of the Company’s common stock as defined in the Debentures.
      Up to 50% of the aggregate principal amount of the Debentures are immediately
      convertible into the Company’s common stock, at the option of the holders, at a
      conversion price of $0.10 per share. The remaining 50% of the aggregate
      principal amount of the Debentures are convertible into the Company’s common
      stock, at the option of the holders, at any time after May 1, 2006 at a
      conversion price of $0.20 per share. The market price of the common stock on
      the
      date of closing the transaction was $.06 per share. In connection with the
      issuance of the Debentures, the Company relied on an exemption from registration
      for a private transaction not involving a public distribution provided by
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities
      Act”).




On
      August
      25, 2005, the Company closed on a private placement of 4,000,000 shares of
      its
      common stock. The gross proceeds received in connection with this private
      placement were $200,000 ($.05 per share). Richard S. Rimer, a private investor,
      purchased 3,000,000 shares of the Company’s common stock for $150,000. John A.
      Moore, a director of the Company, purchased 1,000,000 shares of the Company’s
      common stock for $50,000. The market price of the Company’s common stock on the
      date of closing the transaction was $.04 per share. In connection with the
      issuance of these shares, the Company relied on an exemption from registration
      for a private transaction not involving a public distribution provided by
      Section 4(2) of the Securities Act.




*Acquisition
      of the HCMS*




On
      November 10, 2006, the Company entered into a technology license agreement
      (the
“License Agreement”) with The Research Foundation of State University of New
      York, for and on behalf of the University at Buffalo (the “Foundation”), Donald
      D. Hickey, M.D. (“Hickey”) and Clas E. Lundgren (“Lundgren”). The Foundation,
      Hickey and Lundgren shall be collectively referred to herein as the
“Licensor.”




Pursuant
      to the License Agreement, the Licensor granted the Company the exclusive
      world-wide rights to develop, make and sell the HCMS, a minimally invasive
      two-balloon esophageal catheter system used to monitor cardiac performance.
      The
      term of the License Agreement commenced on November 10, 2006, the date of the
      License Agreement, and ends on the later of (i) the expiration date of the
      last
      to expire patent right related to the HCMS or (ii) ten years from the sale
      of
      the first HCMS product.




5


Under
      the
      License Agreement, the Company is required to pay the Licensor a royalty of
      5%
      on annual net sales, as defined in the License Agreement, subject to certain
      reductions as detailed in the License Agreement. Beginning with the first full
      year of sales of the HCMS in the United States and for two years thereafter,
      the
      Company is required to pay an annual minimum royalty of $100,000 to the Licensor
      against which any royalty on net sales paid in the same calendar year for sales
      in the United States will be credited. Further, beginning with the first full
      year of sales of the HCMS outside the United States and for two years
      thereafter, the Company is required to pay an annual minimum royalty of $100,000
      to the Licensor against which any royalty on net sales paid in the same calendar
      year for sales outside the United States will be credited. In addition, the
      Company is required to pay the Licensor 25% of all sublicensing revenue received
      by the Company in connection with the HCMS. The Company is also obligated to
      make milestone payments to the Licensor as follows: (i) first insertion of
      a
      catheter utilizing the HCMS in a human clinical trial - $75,000; (ii) first
      submission of the HCMS for regulatory approval in any country - $100,000; and
      (iii) first notice of regulatory approval to market the HCMS in any country
      -
      $150,000. Further, the Company will reimburse the Licensor a total of $264,300
      for patent costs incurred prior to the execution of the License Agreement as
      follows: $40,900 within five (5) days of the signing of the License Agreement;
      $80,000 on or before November 1, 2007 and $143,400 on or before November 1,
      2008. The $40,900 payment has been made by the Company in accordance with the
      License Agreement.




The
      License Agreement also requires the Company to use commercially reasonable
      efforts to commercialize and market the HCMS within certain timeframes, subject
      to specified exceptions as detailed in the License Agreement. Further, the
      License Agreement contains standard provisions regarding indemnification,
      termination and patent prosecution. See “Principal Products.”




**Principal
      Products**




*HCMS*




The
      HCMS
      is a minimally invasive two-balloon esophageal catheter system that will provide
      the primary measures of cardiac performance and left atrial pressure which
      are
      crucial measurements in treating critically ill patients. The HCMS two balloon
      catheter is inserted into the esophagus and capitalizes on the anatomic
      relationship of the left atrium and aortic arch proximate to the esophagus.
      Once
      positioned, the catheter’s balloons are inflated. The wall motion in the left
      atrium and the aorta generates pressure changes in the respective balloons.
      These signals, along with signals from an electrocardiogram, phonocardiogram
      and
      automated blood pressure cuff, are transmitted to the monitoring system, which
      converts the data into important, real-time, clinical measurements utilizing
      a
      proprietary software algorithm.




The
      current standard of care for monitoring critically ill patients suffering from
      various cardiovascular conditions is an invasive procedure known as pulmonary
      artery catheterization. That procedure requires an incision into a patient’s
      neck or groin and the insertion of a Swanz-Ganz catheter into the right atrium
      and ventricle of the heart, and then into a pulmonary artery. That procedure
      must be performed in an intensive care unit.




Unlike
      the Swan-Ganz catheter, the HCMS will provide the primary measurements of
      cardiac performance in a minimally invasive and more cost effective manner
      and
      is designed to be used outside of an intensive care setting. In addition, the
      HCMS also provides clinical measurements of left ventricular contractility,
      left
      atrial transmural pressure and pleural pressure, which the Swan-Ganz does not
      provide. The Company believes that the measure of contractility during
      isovolumic contraction is an important advance offered by the HCMS, and is
      a
      distinct advantage over the Swan-Ganz catheter. Measurement of left ventricular
      contractility is potentially a new standard for monitoring the treatment of
      congestive heart failure.





6


The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad. See
“Strategy for Business Development.”





*Condoms*




During
      the fiscal year ended October 31, 2004, the Company was a wholesaler of condoms
      under the brand name “Elite” and on a private label basis. The condoms were
      manufactured by third parties. The Company stopped selling condoms in October
      2004 due to reduced profit margins and the decline in the customer
      base.




*Elite
      Safety Syringe*




The
      Company was developing the Elite Safety Syringe, a passive anti-stick syringe
      designed to decrease accidental needle sticks of medical service providers,
      and
      attempted to secure appropriate manufacturing and distribution for the product
      until December 2004. As discussed below, due to development, manufacturing
      and
      marketing issues, sales of the Elite Safety Syringe have not been material
      and,
      as a result, the Company has determined that it will not pursue any further
      development or marketing of the Elite Safety Syringe.




The
      Elite
      Safety Syringe was originally manufactured at two facilities located
      in the Republic of Korea. One facility was operated by Medi-Hut International
      (Mfg.) Co., Ltd. (“Medi-Hut International”), a Korean corporation in which
      Medi-Hut has a 44% ownership interest, and the other facility was operated
      by
      Sam Woo, a Korean corporation (collectively, the “Korean Facilities”)
      independent of the Company. Medi-Hut International was formed pursuant to a
      joint venture between the Company and COA International Industries, Inc.
      (“COA”), a Korean corporation which manufactures and exports medical disposable
      products, including disposable syringes. However, the Company has determined
      that the costs associated with the further development and marketing of the
      Elite Safety Syringe exceed the overall market opportunity that exists for
      the
      product. Accordingly, the Company has decided that it will no longer develop
      or
      market the Elite Safety Syringe. See “Manufacturing; Principal Suppliers.”




Medi-Hut
      and Medi-Hut International entered into a loan agreement, effective June 7,
      2002, to memorialize certain financial assistance that Medi-Hut had been
      providing to Medi-Hut International. Medi-Hut International acknowledged that
      it
      had received loan installments from Medi-Hut during the period from June 7,
      2002
      through February 28, 2003 in the total amount of $450,000. The loan amount
      is to
      be repaid over time with interest as follows plus any and all accrued interest:
      $75,000 on or before December 31, 2004; $125,000 on or before December 31,
      2005;
      $125,000 on or before December 31, 2006; and $125,000 on or before December
      31,
      2007. As of November 30, 2006, the Company had not received the $75,000 payment
      due on or before December 31, 2004 or the $125,000 payment due on or before
      December 31, 2005 and is currently evaluating whether to institute action to
      recover same. As of the fiscal year ended October 31, 2004, the Company
      wrote-off the note receivable since it determined that the outstanding balance
      of the note receivable was not collectable due to the financial condition of
      Medi-Hut International.




7


*Disposable
      Medical Products*




During
      the fiscal year ended October 31, 2004, the disposable medical products sold
      by
      the Company, other than the Elite Safety Syringe, were manufactured for the
      Company by third parties. These products included syringes, hot and cold packs,
      gauze bandages, adhesive bandages, paper products, alcohol preparation pads
      and
      condoms, as discussed above. The Company sold alcohol preparation pads on a
      private-label basis as well as under the Company’s Elite brand name. The Company
      stopped selling these products in October 2004 due to reduced profit margins
      and
      the decline in the customer base.




*Solo-SafeTM
      Safety Syringe*




On
      February 25, 2002, the Company acquired certain intellectual property owned
      by
      Spectrum Biotech, Inc. relating to the Solo-SafeTM Safety Syringe, an active type
      safety syringe designed for intra-muscular injections. The Company acquired
      patents in the United States relating to the Solo-SafeTM Safety Syringe and has
      acquired the rights to patents in New Zealand, Australia, Brazil and Japan
      and
      patents pending in five other foreign countries. Medi-Hut also holds a 510(k)
      premarket notice clearance from the United States Food and Drug Administration
      (the “FDA”) to market the Solo-SafeTM Safety Syringe in the United States. See
“Government Regulation.”




In
      May
      2004, the Company decided that it would not further develop this product or
      maintain its patents due to the significant amount of development costs that
      would have to be incurred in order to bring the product to market, the limited
      market opportunity that exists for the product and the Company’s limited
      financial resources.




*Hormone
      Replacement Therapy Drugs - Syntest*




In
      November 2001, the Company entered into an agreement with Syntho Pharmaceuticals
      Inc. (“Syntho”) for the exclusive distribution rights of esterified
      estrogen/methyl testosterone based prescription hormone replacement therapy
      drugs: Syntest Double-Strength (DS) and Half-Strength (HS). Beginning in October
      2002 through February 2003, the Company sold Syntest on a recurring basis.
      However, in March 2003, the Company was unable to continue the sale of Syntest
      products due to a dispute with the manufacturer and contract sales
      representative for such products. This dispute resulted in the commencement
      of
      litigation against the manufacturer and contract sale representative as well
      as
      other related litigation involving the Company. During July and August 2003,
      the
      Company sold all of its remaining Syntest inventory. On October 17, 2005, the
      Company and Breckenridge Pharmaceutical, Inc. (“Breckenridge”) entered into a
      purchase and settlement agreement pursuant to which the Company sold its
      distribution and other rights and business with respect to the hormone
      replacement drug, Syntest, to Breckenridge. See “Item 3. Legal Proceedings -
      Syntest Litigation.”




8


**Patents
      and Trademarks**




*HCMS*




The
      HCMS
      is the subject of eleven United States patents and corresponding patents in
      major international markets, including Canada, European Union, Japan and India.
      The patents cover the important facets of the HCMS, including catheter design
      and construction, catheter positioning, monitor design, algorithms and balloon
      inflation techniques. The United States patents include United States Patent
      and
      Trademark Office numbers 5,048,532; 5,181,517; 5,263,485; 5,398,692; 5,551,439;
      5,570,671; 5,697,375; 5,921,935; 6,120,442; 6,238,349 and 6,432,059. In
      addition, the software that converts the pressure signals into useful clinical
      information is the subject of copyright.




*Elite
      Safety Syringe and Solo-Safe* *TM* *Safety Syringe*




The
      Company holds two United States patents (5,562,626 and 6,692,470) on the Elite
      Safety Syringe. The Company holds no foreign patents or patent applications
      for
      the Elite Safety Syringe. The Company holds two United States patents (6,129,710
      and 5,382,235) on the Solo-Safe TM Safety
      Syringe. The Company also holds one foreign patent, Japan (3,422,025), with
      respect to the Solo-Safe TM
Safety
      Syringe.




The
      Company’s decision to maintain existing patents and continue the prosecution of
      patent applications depends upon management’s continual analysis of the patent
      and development costs associated with the product versus the market opportunity
      that each product provides and the financial resources available to the Company.
      The Company is maintaining the patents related to the Elite Safety Syringe
      but
      is not maintaining the patents related to the Solo-Safe Safety
      Syringe.




Solo-SafeTM
      Safety Syringe is currently the Company’s only trademark.




**Manufacturing;
      Principal Suppliers**




The
      Company outsourced all of its manufacturing requirements with respect to
      products previously sold by the Company. The Company purchased some of the
      products previously sold by it at wholesale and others directly from the
      manufacturer. The condoms and alcohol preparation pads previously sold by the
      Company were purchased directly from third party manufacturers.




The
      Company currently intends to outsource the manufacturing of the components
      for
      the HCMS. No formal manufacturing agreements have been entered into at this
      time.




The Company
      purchased Syntest as a finished product directly from the manufacturer, Syntho,
      which is located in the United States, pursuant to a distribution agreement
      dated November 20, 2001, as amended on February 7, 2002 and April 3, 2002.
      The
      Company paid Syntho $2.5 million and agreed to purchase the Syntest product
      at a
      price per unit as agreed upon by the parties in exchange for the exclusive
      rights to distribute the product over a five year period commencing on the
      first
      commercial sale of the Syntest product which occurred on October 14, 2002.
      Regular sales of the Syntest product ceased in March 2003 due to Syntho’s
      refusal, beginning in January 2003, to sell any additional product to the
      Company. As a result, the Company commenced litigation against Syntho and other
      parties on May 12, 2003. See “Item 3. Legal Proceedings - Syntest
      Litigation.”




9


On
      November 16, 2000, the Company entered into a joint venture
      agreement  with
      COA
      pursuant to which the Company and COA formed Medi-Hut International for the
      purpose of manufacturing disposable syringes. In order to fund Medi-Hut
      International, the Company made a capital contribution of $1,000,000 to Medi-Hut
      International and COA made a capital contribution of $400,000. In exchange
      for
      their respective capital contributions, the Company received a 44% ownership
      interest in Medi-Hut International and COA received a 46% ownership interest.
      The remaining 10% ownership interest in Medi-Hut International was granted
      to
      Inben Brothers Company as compensation for its actions as coordinator-negotiator
      and agent for both the Company and COA. The agreement between the parties
      continues indefinitely until terminated as provided for therein.




Prior
      to
      May 2003, the Elite Safety Syringe was manufactured in the Republic of Korea
      by
      Medi-Hut International and Sam Woo. In May 2003, the Company determined that
      the
      product quality of the Elite Safety Syringe being manufactured by Medi-Hut
      International and Sam Woo was not sufficient for the United States market.
      Sam
      Woo was not able to correct its manufacturing deficiencies. Medi-Hut
      International instituted a corrective action plan in June 2003 which was
      monitored by the Company. As a result, the Company determined that Medi-Hut
      International had corrected a majority of the manufacturing issues uncovered
      in
      May 2003 and that Medi-Hut International had the capability of manufacturing
      the
      Elite Safety Syringe at a quality sufficient for the United States market.
      However, the Company determined that the cost associated with adequately
      equipping Medi-Hut International to support a market launch of the product
      combined with the cost associated with correcting certain design issues exceeded
      the overall market opportunity that existed for the product. Accordingly, the
      Company decided that it would no longer develop or market the Elite Safety
      Syringe.




On
      September 18, 2003, the Company, COA and Medi-Hut International entered into
      an
      agreement under which the Company granted a non-exclusive license to Medi-Hut
      International to make, manufacture and export the Elite Safety Syringe. The
      territorial boundary of this license is limited to within the Republic of Korea.
      In accordance with the license, Medi-Hut International must obtain the Company’s
      permission prior to any sales to a third party. Medi-Hut International is to
      pay
      to the Company a royalty based upon the total net sales under the license.
      The
      royalty amount is to be negotiated in good faith at the time of such sales.
      For
      the purpose of calculating royalty payments, Medi-Hut International is to
      provide Medi-Hut with a report setting forth the total net sales during the
      previous quarter. The agreement remains in full force and effect until the
      expiration of the last to expire of Medi-Hut’s United States patent with respect
      to the Elite Safety Syringe or upon the voluntary termination of either party
      for any reason with six months notice. As of November 30, 2006, the Company
      had
      not collected any royalties from Medi-Hut International and the Company is
      not
      aware of any sales of the Elite Safety Syringe by Medi-Hut
      International.




**Distribution,
      Sales and Marketing**




The
      Company currently does not maintain a dedicated sales force and currently does
      not sell any products. The Company currently intends to outsource the
      distribution and sales requirements related to the HCMS. No formal distribution
      or sales agreements have been entered into at this time.




10


Prior
      to
      October 31, 2004, when the Company was selling products, the Company’s personnel
      involved in the sales process also maintained other duties within the Company.
      The Company dedicated the equivalent of approximately two full time employees
      to
      sales during this period. These individuals worked out of the Company’s
      corporate headquarters and contacted wholesalers, distributors and physicians
      by
      phone or periodic visits. During the fiscal year ended October 31, 2004, all
      sales by the Company were made on thirty day credit terms. In addition, the
      Company generally required an upfront payment from customers on their purchases
      of private label products.




**Competition**




*HCMS*





The
      pulmonary artery catheter, otherwise known as the Swan-Ganz catheter, is the
      established tool for monitoring cardiac performance and left atrial pressure.
      The Swan-Ganz catheter is inserted through a vein into the right atrium and
      ventricle of the heart, and threaded into the pulmonary artery. Due to the
      invasive nature of the Swan-Ganz catheter, it must be inserted within a
      hospital’s intensive care unit and is not receommended for long-term cardiac
      monitoring. Major distributers of the Swan-Ganz catheter are Edwards
      Lifesciences Corporation and Hospira Inc.





Currently,
      there are products in the market that measure cardiac performance on a
      non-invasive or minimally-invasive basis. None of these products have been
      as
      successful as the Swan-Ganz catheter. Echocardiography has been utilized to
      measure cardiac performance. The echocardiography device measures the aortic
      diameter and the movement of red blood cells to determine the velocity and
      direction of blood flow to calculate stroke volume and thus cardiac performance.
      Echocardiography is thought to generate inconsistent results, is dependent
      on
      technician skill and technique, is limited in the kinds of patients it can
      address and is time intensive. Accordingly, echocardiography has not been widely
      accepted as an alternative device for measuring cardiac performance. Major
      distributors of echocardiography devices include Siemens Medical Solutions
      Inc.
      and Philips Medical Systems.





Trans-esophageal
      probes featuring a doppler transducer on the end of large bore esophageal
      catheters have been utilized to generate echocardiographic images from a
      position in close proximity to the heart. This method also has not met with
      widespread clinical acceptance for reasons of accuracy, significant patient
      discomfort in administration and its time-intensive nature. Arrow International,
      Inc. markets this type of device.





Impedance
      cardiography uses the heart’s electrical characteristics in order to measure the
      heart’s mechanical, or blood flow, characteristics. The procedure is inaccurate
      in many circumstances, such as in patients with septic shock and/or severe
      aortic valve regurgitation and/or irregular heartbeats. In addition,
      measurements can be inaccurate if the patient moves excessively while
      monitoring. CardioDynamics International Corporation markets this type of
      device.





11


*Disposable
      Medical Supplies and Condoms*





During
      the fiscal year ended October 31, 2004, the Company’s competition in the
      disposable medical supply business, which included alcohol preparation pads,
      was
      with numerous large and small manufacturers and wholesalers. Management believes
      that the Company had an insignificant percentage of these markets prior to
      the
      Company’s decision to exit from this business line in October 2004. In addition,
      management believes that the Company had an insignificant percentage of the
      condom market during fiscal year ended October 31, 2004, which market was
      dominated by several major companies.




**Government
      Regulation**




*Medical
      Devices*




As
      a
      developer and possible future distributor of medical devices, the Company was
      subject to regulation by, among other governmental entities, the FDA, and the
      corresponding agencies of the states and foreign countries in which the Company
      sold its products. These regulations govern the introduction of new medical
      devices, the observance of certain standards with respect to the manufacture,
      testing and labeling of such devices, the maintenance of certain records, the
      tracking of devices, and other matters, and could have a material impact on
      the
      Company’s future operations in the event the Company successfully develops the
      HCMS and implements its strategy for its business development and acquires
      or
      develops additional medical devices and related products. See “Strategy for
      Business Development.”




All
      medical device manufacturing establishments are required to be registered with
      the FDA. Similarly, all categories of medical devices marketed by a company
      in
      the United States are required to be listed. This listing information must
      be
      updated pursuant to FDA regulations. The FDA can take regulatory action against
      a company that does not provide or update its registration and listing
      information. Pursuant to the Food, Drug and Cosmetic Act (the “FDC Act”),
      medical devices intended for human use are classified into three categories,
      Classes I, II and III, on the basis of the controls deemed necessary by the
      FDA
      to reasonably assure their safety and effectiveness. Class I devices are subject
      to general controls (for example, labeling, premarket notification and adherence
      to good manufacturing practice regulations) and Class II devices are subject
      to
      general and special controls (for example, performance standards, postmarket
      surveillance, patient registries, and FDA guidelines). Generally, Class III
      devices are those which must receive premarket approval (“PMA”) from the FDA to
      ensure their safety and effectiveness (for example, life-sustaining,
      life-supporting and implantable devices, or new devices which have not been
      found substantially equivalent to legally marketed devices).




Some
      Class I devices and most Class II devices require premarket notification
      (510(k)) clearance pursuant to Section 510(k) of the FDC Act. Most Class III
      devices are required to have an approved PMA application. Obtaining PMA approval
      can take up to several years or more and involve preclinical studies and
      clinical testing. In contrast, the process of obtaining a 510(k) premarket
      notification clearance typically requires the submission of substantially less
      data and generally involves a shorter review period. A 510(k) premarket
      notification clearance indicates that the FDA agrees with an applicant’s
      determination that the product for which clearance has been sought is
      substantially equivalent in terms of safety and effectiveness to another medical
      device that has been previously marketed, but does not indicate that the product
      is safe and effective.




12


In
      addition to requiring clearance or approval for new products, the FDA may
      require clearance or approval prior to marketing products that are modifications
      of existing products. FDA regulations provide that new 510(k) premarket
      notification clearances are required when, among other things, there is a major
      change or modification in the intended use of the device or a change or
      modification to a legally marketed device that could significantly affect its
      safety or effectiveness. The developer and/or manufacturer is expected to make
      the initial determination as to whether a proposed change to a cleared device
      or
      to its intended use is of a kind that would necessitate the filing of a new
      510(k) premarket notification.




In
      order
      to conduct clinical trials of an uncleared or unapproved device, companies
      generally are required to comply with the FDA’s Investigational Device
      Exemptions regulations (“IDE regulations”). For significant risk devices, the
      IDE regulations require FDA approval of an investigational device before a
      clinical study may begin. In its approval letter for significant risk
      investigational device studies, the agency may limit the number of patients
      that
      may be treated with the device and/or the number of institutions at which the
      device may be used. Device studies subject to the IDE regulations, including
      both significant risk and non-significant risk device studies, are subject
      to
      various restrictions imposed by the FDA. Patients must give informed consent
      to
      be treated with an investigational device. The institutional review board of
      each institution where a study is being conducted must also approve the clinical
      study. The device generally may not be advertised or otherwise promoted.
      Unexpected adverse experiences must be reported to the FDA. The company
      sponsoring the investigation must ensure that the investigation is being
      conducted in accordance with the IDE regulations.




Some
      of
      the Company’s products, namely the Elite Safety Syringe, the Solo-SafeTM Safety
      Syringe and the condoms have received FDA marketing clearances through the
      510(k) process (each of these products are no longer sold nor being developed
      by
      the Company). Certain future product applications, however, could require
      approval through the PMA process. There can be no assurance that all necessary
      501(k) premarket notification clearances or PMA approvals will be granted on
      a
      timely basis or at all. In addition, future products may have to comply with
      the
      IDE regulations. The FDA review process may delay the Company’s product
      introductions in the future. It is possible that delays in receipt of or failure
      to receive any necessary clearance or approval could have a material adverse
      effect on the Company’s future operations.




Pursuant
      to the FDA’s Good Manufacturing Practices under the Quality System Regulations
      (“GMP/QSR”), a medical device manufacturer must manufacture products and
      maintain records in a prescribed manner with respect to manufacturing, testing
      and control activities. Further, the manufacturer, distributor and/or owner
      of a
      medical device is required to comply with FDA requirements for labeling and
      promotion of its medical devices. For example, the FDA prohibits cleared or
      approved devices from being marketed or promoted for uncleared or unapproved
      uses. The medical device reporting regulations requires that a company provide
      information to the FDA whenever there is evidence to reasonably suggest that
      one
      of the company’s devices may have caused or contributed to a death or serious
      injury, or that there has occurred a malfunction that would be likely to cause
      or contribute to a death or serious injury if the malfunction were to recur.
      Additionally, the FDA imposes other requirements on medical device
      manufacturers, including reporting and record keeping requirements for device
      corrections and removals (recalls).




13


Medical
      device manufacturers and distributors are generally subject to periodic
      inspections by the FDA. If the FDA determines that a company is not in
      compliance with applicable laws and regulations, it can, among other things,
      issue a warning letter apprising the company of violative conduct, detain or
      seize products, issue a recall, enjoin future violations and assess civil and
      criminal penalties against the company, its officers or its employees. In
      addition, it is possible that clearances or approvals could be withdrawn in
      certain circumstances. Failure to comply with regulatory requirements or any
      adverse regulatory action could have a material adverse effect on the Company’s
      future business, financial condition and results of operations.




Medical
      device laws and regulations are also in effect in many of the countries in
      which
      the Company may conduct business outside the United States. These range from
      comprehensive device approval requirements for certain medical device products
      to simple requests for product data or certifications. The number and scope
      of
      these requirements are increasing. Medical device laws and regulations are
      also
      in effect in many of the states in which the Company may conduct business in
      the
      future. State and foreign medical device laws and regulations may have a
      material impact on the Company. In addition, international sales of certain
      medical devices manufactured in the United States but not cleared or approved
      by
      the FDA for distribution in the United States are subject to FDA export
      requirements and policies, including a policy whereby the Company provides
      a
      statement to FDA certifying that the product to be exported meets certain
      criteria and FDA issues a certificate to facilitate device export.




Federal,
      state and foreign laws and regulations regarding the manufacture, sale and
      distribution of medical devices are subject to future changes. For example,
      the
      Congress enacted the Medical Device User Fee and Modernization Act of 2002,
      which included several significant amendments to the prior law governing medical
      devices. Additionally, the FDA made significant changes to its GMP/QSR
      regulations in 1996 and may make changes to other regulations as well. The
      Company cannot predict what impact, if any, such changes might have on its
      future business; however, such changes could have a material impact on the
      Company and its business, financial condition and operating
      results.




The
      Company currently believes that the HCMS will require 510(k) premarket
      notification clearance from the FDA. A working prototype of the HCMS currently
      exists. However, in order for the Company to be in a position to market the
      HCMS, the Company needs to: (1) design and construct production models of the
      HCMS for clinical testing, (2) file a request with the FDA for authority to
      conduct clinical trials, (3) undertake the clinical trials, (4) file for 510(k)
      premarket notification clearance to distribute the HCMS and (5) initiate
      manufacturing and distribution of the HCMS. The Company currently anticipates
      that it will take approximately 18 months to complete development and the
      related clinical trials and receive the appropriate regulatory approvals. If
      the
      FDA does not grant the Company a 510(k) premarket notification clearance for
      the
      HCMS, the Company would be required to apply for a PMA from the FDA which could
      significantly increase the amount of time required to receive the FDA’s approval
      to market the HCMS. No assurance can be given that the FDA will ultimately
      approve the HCMS for sale.




14


*Pharmaceutical
      Products*




Although
      the Company is not currently selling or developing any pharmaceutical products,
      if the Company can successfully implement its strategy for business development,
      it may acquire or develop one or more pharmaceutical products, which sale and
      development thereof will be subject to government regulation as briefly
      described below. See “Strategy for Business Development.”




The
      FDA
      and comparable regulatory agencies in state and local jurisdictions and in
      foreign countries impose substantial requirements upon the clinical development,
      manufacture and marketing of pharmaceutical products. These agencies and other
      federal, state and local entities regulate research and development activities
      and the testing, manufacture, quality control, safety, effectiveness, labeling,
      storage, record keeping, approval, advertising and promotion of such products.
      Under the FDC Act, all drugs require FDA approval before marketing, with certain
      limited exceptions. This approval requires that the drug company establish
      that
      the drug is safe and effective for its labeled use. These regulations could
      have
      a material impact on the Company’s future ability to distribute pharmaceutical
      products.




Additionally,
      products that contain controlled substances are subject to the requirements
      of
      the Drug Enforcement Administration (“DEA”) relating to the manufacturing,
      marketing and selling of such products. Under the DEA’s requirements, there are
      two ways in which a product can be legally manufactured, marketed and sold:
      registration or exemption. Under the registration requirements, a company that
      wishes to produce or market any product containing a controlled substance can
      register to manufacture, market and sell such product and this registration
      is
      done by schedule and not by product. Further, if a company is registered to
      produce products containing substances at a certain schedule level, the
      registration also includes the right to produce products containing ingredients
      on a “higher” numbered schedule. Under the exemption requirements, a product can
      be exempted from DEA requirements and can be legally manufactured, marketed
      and
      distributed. Exemptions are given on a product by product basis.




*General*




When
      offering for sale medical devices and pharmaceutical products, the Company
      may
      also have to comply with federal and state anti-kickback and other healthcare
      fraud and abuse laws. Moreover, approval must be obtained for a pharmaceutical
      product by comparable governmental regulatory authorities in foreign countries
      prior to the commencement of clinical trials and subsequent marketing of such
      product in those countries. The approval procedure varies from country to
      country, and the time required may be longer or shorter than that required
      for
      FDA approval.




The
      regulatory policies of the FDA and other regulatory bodies may change and
      additional governmental regulations may be enacted which could prevent or delay
      regulatory approval of the products the Company may distribute in the future.
      The Company cannot predict the likelihood, nature or extent of adverse
      governmental regulation that might arise from future legislative or
      administrative action, within the United States or abroad.




15


**Insurance**




The
      Company maintains insurance in such amounts and against such risks as it deems
      prudent, although no assurance can be given that such insurance will be
      sufficient under all circumstances to protect the Company against significant
      claims for damages. The occurrence of a significant event not fully insured
      could materially and adversely affect the Company’s business, financial
      condition and results of operations. Moreover, no assurance can be given that
      the Company will be able to maintain adequate insurance in the future at
      commercially reasonable rates or on acceptable terms.




**Employees**




As
      of
      November 30, 2006, David R. LaVance (President and Chief Executive Officer)
      and
      Thomas S. Gifford (Executive Vice President, Chief Financial Officer (Treasurer)
      and Secretary) are the only executive officers of the Company. Mr. LaVance
      and
      Mr. Gifford are engaged by Medi-Hut pursuant to the amended and restated
      Consulting Services Agreement, dated as of February 1, 2005, between Medi-Hut
      and Century Capital. See “Item 10. Executive Compensation - Consulting Services
      Agreement.” Excluding Messrs. LaVance and Gifford, who are consultants to the
      Company, the Company currently has one full-time employee. Medi-Hut has not
      experienced any work stoppages to date and management believes that the
      Company’s relationship with its employee is good.




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




In
      May
      2004, the Company relocated its principal offices to 215 Morris Avenue, Spring
      Lake, New Jersey 07762 in order to reduce its monthly operating expenses and
      to
      more appropriately accommodate its current operations. The Company and Century
      Capital entered into a Shared Services Agreement whereby the Company rented
      three fully furnished, business equipped offices approximating 340 square feet
      inside Century Capital’s existing offices. This agreement commenced on May 1,
      2004 and has a month to month term that requires sixty day written notice to
      terminate. The monthly rental is $2,500. Century Capital is owned by David
      R.
      LaVance and Thomas S. Gifford, Medi-Hut’s executive management team. See “Item
      12. Certain Relationships and Related Transactions.”




From
      November 2002 through April 2004, the Company’s corporate offices and warehouse
      facilities consisted of 11,718 square feet in Wall Township, which is located
      in
      central New Jersey. The Company leased this property from Monmouth/Atlantic
      Realty Associates, L.L.C. The lease for this property commenced on November
      25,
      2002, had a five year term, and an option to renew for an additional five year
      term. The annual rent for years 1 and 2 of the lease was $114,485. In years
      three, four and five of the lease, the annual rent would have increased to
      $125,969. Additional monthly charges include the Company’s portion of common
      area charges relating to taxes, operating costs, repairs and maintenance and
      other expenses. Medi-Hut provided the landlord with a $33,388 security deposit.
      In connection with the relocation of its principal offices, the Company and
      Monmouth/Atlantic Realty Associates, L.L.C. reached an agreement on May 6,
      2004
      to terminate the remaining term of the existing lease (44 months resulting
      in a
      lease obligation of approximately $454,000 plus an additional $154,000 for
      common area charges) for a one-time payment by the Company of $100,000 plus
      the
      forfeiture of the security deposit.




16




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




**SEC
      Investigation** **




On
      February 21, 2002, the Securities and Exchange Commission (the “SEC”) issued a
      formal order directing a private investigation of Medi-Hut. According to this
      formal order, the SEC investigated, among other things, the accuracy of the
      Company’s filings with the SEC and its financial disclosures in general, as well
      a the sufficiency of the Company’s system of internal accounting controls. The
      SEC’s investigation of Medi-Hut resulted in the commencement of an action
      against Medi-Hut and the Company’s former President and Chief Executive Officer,
      Joseph A. Sanpietro, former Chief Financial Officer, Laurence M. Simon, and
      former Vice President of Sales, Lawrence P. Marasco. In its complaint, filed
      by
      the SEC in the United States District Court for the District of New Jersey
      on
      August 19, 2003, the SEC alleged that these three former corporate officers
      inflated Medi-Hut’s revenues through fictitious period-end invoices and other
      accounting irregularities and concealed that Mr. Marasco owned and controlled
      one of Medi-Hut’s largest customers. On August 19, 2003, without admitting or
      denying the allegations of the complaint, the Company consented to a final
      judgment against it. Pursuant to the final judgment, the Company is permanently
      restrained from making any untrue or misleading disclosures, whether such
      disclosures are in a report filed with the SEC or are contained in a press
      release or other general public disclosure. The Company also must make and
      keep
      accurate books, records and accounts and maintain a system of internal
      accounting control sufficient to ensure fair and accurate financial disclosure.




**Incomplete
      Periodic Reports**




As
      previously disclosed by the Company, the Company’s current management commenced
      an extensive review of the financial statements and information disclosed in
      the
      Company’s annual report on Form 10-KSB for the fiscal year ended October 31,
      2001 and the Company’s quarterly reports on Forms 10-Q and 10-QSB filed with the
      SEC in 2002 and 2001, respectively. As a result, the current management of
      the
      Company concluded that the financial statements and other information disclosed
      in the Company’s quarterly reports on Forms 10-Q and 10-QSB filed with the SEC
      in 2002 and 2001, respectively, and disclosed in the Company’s annual report on
      Form 10-KSB for the fiscal year ended October 31, 2001, could not be relied
      upon
      due to the Company’s inability to adequately verify such information because of
      incomplete or missing data. Consequently, the Company amended its quarterly
      reports for the quarters ended January 31, 2001, April 30, 2001, July 31, 2001,
      January 31, 2002, April 30, 2002 and July 31, 2002, and its 2001 annual report,
      by removing all of the information previously contained therein. In addition, the
      financial statement and notes thereto for the fiscal year ended October 31,
      2002, included in the Company’s annual report on Form 10-KSB for the fiscal year
      ended October 31, 2002, consisted
      only of a balance sheet as of October 31, 2002 and the related footnotes. Since
      a complete set of financial statements for the above noted periods were not
      presented by the Company, no assurance can be given that the SEC will not take
      an enforcement action or other action against the Company. Any such action
      by
      the SEC could have significant adverse consequences to the Company.




In
      addition, as a result of the above noted limitations on financial reporting,
      the
      Company’s quarterly reports on Form 10-QSB for the quarters ended January 31,
      2003, April 30, 2003 and July 31, 2003 and the Company’s annual report on Form
      10-KSB for the fiscal year ended October 31, 2003, do not include the required
      comparative financial information related to the fiscal year ended October
      31,
      2002. Since those reports do not contain the required comparative financial
      information, no assurance can be given that the SEC will not take an enforcement
      action or other action against the Company. Any such action by the SEC could
      have significant adverse consequences to the Company.




17


**Class
      Action Lawsuits**




Beginning
      in February 2002, the Company and certain of its former officers and directors
      were named in an aggregate of eleven class action lawsuits filed in the United
      States District Court for the District of New Jersey. In these lawsuits the
      plaintiffs alleged that, among other contentions, the Company and certain of
      its
      former officers and directors failed to disclose a related party transaction
      between the Company and Lawrence P. Marasco, the Company’s former Vice President
      of Sales, in the Company’s periodic reports filed with the SEC. The lawsuits
      against the Company and certain of its officers and directors were consolidated
      on January 13, 2003.




On
      July
      11, 2003, the Company and Executive Risk Indemnity, Inc. (“Executive Risk”), the
      insurance company that provided the Company with its director and officer
      insurance coverage for a portion of the class period, reached an agreement
      whereby Executive Risk paid $475,000 to the Company. In exchange for the
      $475,000 payment, the Company agreed to terminate the director and officer
      insurance coverage provided by Executive Risk and release and hold harmless
      Executive Risk for any claims for coverage which could be made by any former
      director or officer.




On
      August
      18, 2003, the Company reached an agreement to settle the consolidated class
      action lawsuit, which was subject to the approval of the United States District
      Court for the District of New Jersey. As part of the settlement, the Company
      agreed to pay $400,000 in cash to the plaintiffs and issue 861,990 shares of
      Medi-Hut common stock (fair value of approximately $129,299 as of August 18,
      2003), which was equivalent to 6% of the Company’s issued and outstanding shares
      of the Company’s common stock on the date the settlement agreement was reached.
      The Company utilized the $475,000 received from Executive Risk to fund the
      settlement and to offset a portion of the legal costs and expenses incurred
      by
      the Company in connection with the consolidated class action lawsuit.




On
      January 12, 2004, the United States District Court for the District of New
      Jersey issued a Preliminary Approval Order preliminarily approving the
      settlement of the consolidated class action lawsuit and issued its final
      approval of the settlement on May 3, 2004. For purposes of the settlement only,
      the United States District Court for the District of New Jersey certified a
      class on behalf of all persons or entities who purchased or otherwise acquired
      shares of the Company’s common stock during the period from October 7, 1999
      through August 19, 2003, inclusive, and who were damaged thereby. Excluded
      from
      the class, among others, were the defendants and the members of their immediate
      families, any entity in which any defendant has a controlling interest and
      the
      current and former directors and officers of the Company.




18


**FBI
      Investigation**




On
      November 22, 2002, the Federal Bureau of Investigation (“FBI”) executed a search
      warrant and removed certain documents and computers from the Company’s premises.
      The Company was not advised of the reasons for the FBI’s actions. As of November
      30, 2006, no indictments or charges have been issued against the
      Company.




**Syntest
      Litigation**




On
      May
      12, 2003, Medi-Hut commenced an action in the United States District Court
      for
      the Eastern District of New York against Syntho and its principal owner,
      Muhammed Malik (collectively, the “Syntho Group”), Breckenridge and its
      principal owner, Larry Rumsdorf (the “Breckenridge Group”), Scott Schrader
      (“Schrader”) and his affiliates, namely Schrader Associates, Bluegrass Drug LLC
      (“Bluegrass”) and Medpharm Corporation (“Medpharm”) (collectively, the “Schrader
      Group”), relating to the Company’s exclusive right to distribute the hormone
      replacement therapy drug, Syntest, under an agreement with Syntho which expires
      no earlier than November 2006. In its complaint, the Company alleged, among
      other things, that Syntho permitted Breckenridge, Medpharm and Bluegrass to
      distribute Syntest in violation of the its agreement with Syntho and that
      Schrader and Schrader Associates, which had been appointed by the Company as
      the
      exclusive broker with respect to sales of Syntest to drug wholesalers, chain
      drug stores and managed care companies, and Schrader offered discounts,
      incentives and rebates to customers of the Company without the Company’s
      authorization.




On
      April
      18, 2003, three separate actions were filed against the Company in Kentucky
      state court by different members of the Schrader Group; one by Schrader
      Associates alleging breach of the brokerage agreement with the Company and
      seeking monetary damages; one by Medpharm seeking a declaratory judgment that
      it
      is entitled to credits or goods from the Company under an oral agreement to
      purchase product from the Company; and one by Bluegrass alleging breach of
      an
      agreement to pay compensation and provide free goods and failure to accept
      returns. These actions were later moved from the state court in Frankfort,
      Kentucky to the United States District Court for the Eastern District of
      Kentucky.




The
      Company was served on May 12, 2003 with a summons and complaint by Breckenridge,
      filed in the United States District Court for the Southern District of Florida,
      in which Breckenridge alleges that the Company was interfering with its alleged
      exclusive rights to distribute Syntest. In this action, Breckenridge was seeking
      monetary damages of an unspecified amount. This action was later moved to the
      United States District Court for the Eastern District of New York.




In
      June
      2003, the Syntho Group filed an answer to the Company’s complaint which
      contained counterclaims against the Company for alleged: (1) breach of contract,
      (2) failure to pay for product, (3) tortious interference with Syntho’s
      agreement with Breckenridge, and (4) conversion of property.




On
      April
      21, 2004, the Company entered into a settlement agreement and limited release
      with the Schrader Group. Pursuant to this agreement, the Company and the
      Schrader Group agreed to dismiss with prejudice the actions which were pending
      in the United States District Court for the District of Kentucky, and the
      actions against each other which were pending in the United States District
      Court for the Eastern District of New York. As part of the settlement reached
      by
      the Company and the Schrader Group, the Schrader Group paid to the Company
      a
      cash payment of $375,000. In addition, the parties released each other from
      certain claims arising out of the distribution and sale of Syntest.




19


On
      October 17, 2005, the Company and Breckenridge entered into a purchase and
      settlement agreement pursuant to which the Company sold its distribution and
      other rights and business with respect to the hormone replacement drug, Syntest,
      to Breckenridge. In consideration for the sale of such rights and the other
      benefits provided under the purchase and settlement agreement,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. Further,
      pursuant to the settlement agreement, the Company and Breckenridge dismissed
      their actions against each other and released each other from any further claims
      arising out of the distribution and sale of Syntest, except as provided under
      the purchase and settlement agreement. Pursuant to the purchase and settlement
      agreement, the Company reserved all of its rights to its claims for damages
      against the Syntho Group that were incurred by the Company as a result of the
      alleged breach by the Syntho Group of the Syntho Agreement and other wrongful
      actions by the Syntho Group. As of November 30, 2006, the Company received
      $900,000 of payments from Breckenridge pursuant to the purchase and settlement
      agreement.




On
      February 22, 2006, the Company amended its complaint in this action to, among
      other things, include claims that Muhammed Malik, in his capacity as a
      consultant to the Company and as president of Intermax (“Intermax”) and Syntho,
      provided substantial assistance to the former officers and certain former
      directors of the Company in carrying out the scheme to overstate Medi-Hut’s
      revenues and earnings through fraudulent accounting practices and committed
      violations of state and federal laws prohibiting forgery and fraudulent
      practices and otherwise participated in “racketeering activity” as that term is
      defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1.




On
      April
      10, 2006, the Syntho Group counterclaimed against Medi-Hut and Century Capital,
      David R. LaVance and Thomas S. Gifford, as agents of Medi-Hut, for allegedly
      violating the Lanham Act and tortiously interfering with Syntho’s contractual
      relationship with Breckenridge.




On
      November 22, 2006, the Company, Century Capital, David R. LaVance and Thomas
      S.
      Gifford entered into a settlement agreement and release with the Syntho Group
      and Intermax. Pursuant to the settlement agreement, the Company and the Syntho
      Group agreed to dismiss with prejudice the actions against each other which
      were
      pending in the United States District Court for the Eastern District of New
      York
      and in the Superior Court of New Jersey. See “Litigation Against Certain Former
      Officers and Directors and Others.” In addition, the Syntho Group agreed to
      dismiss with prejudice the related actions against Century Capital, David R.
      LaVance and Thomas S. Gifford which were pending in the United States District
      Court for the Eastern District of New York and the Company and Intermax agreed
      to dismiss with prejudice the related actions against each other which were
      pending in the United States District Court for the Eastern District of New
      York
      and in the Superior Court of New Jersey. As part of the settlement reached
      by
      the parties, the Syntho Group agreed to pay the Company an aggregate of
      $3,100,000 (the “Settlement Amount”) as follows: (1) $250,000 was paid upon the
      execution of the settlement agreement; (2) $100,000 will be paid on the
      27 th day of
      each month for a 3 month period commencing on December 27, 2006 and ending
      on
      February 27, 2007 and (3) $2,550,000 will be paid on or before March 27, 2007.
      A
      portion of the Settlement Amount, $2,850,000, is secured by a first priority
      mortgage on real property owned by the spouse of Muhammed Malik. In the event
      that the Syntho Group defaults on the settlement agreement, the Syntho Group
      and
      Intermax will be responsible for all reasonable costs and expenses incurred
      by
      the Company as a result of the default, including any foreclosure related
      expenses associated with the real property which secures the first priority
      mortgage. In addition, upon a default by the Syntho Group, a consent judgment
      in
      favor of the Company in the amount of $4,000,000 will be entered into in the
      Superior Court of New Jersey against the Syntho Group and Intermax.




20


**Litigation
      Against Certain Former Officers and Directors and Others**




On
      December 4, 2003, Medi-Hut commenced litigation in the Superior Court of New
      Jersey against certain of its former officers and directors, Healthgen
      Distributors, Inc. (formerly known as Larval Corp.), Kinray, Inc. and Santi
      Greco, an officer of Kinray, Inc. In its complaint, Medi-Hut alleged that Joseph
      A. Sanpietro, a former director and the former President and Chief Executive
      Officer of the Company, Vincent J. Sanpietro, a former director and the former
      Chief Operating Officer and Secretary of the Company, Laurence M. Simon, the
      former Chief Financial Officer of the Company, and Lawrence P. Marasco, the
      former Vice President of Sales of the Company, caused the Company to suffer
      significant damage and incur substantial costs by engaging in a scheme to
      overstate Medi-Hut’s revenues and earnings through fraudulent accounting
      practices. The Company also alleged in its complaint that these former officers
      and directors, in furtherance of their scheme to defraud, filed materially
      false
      and misleading documents with the SEC and disseminated materially false and
      misleading information to the general public, investors and financial advisors
      and brokers. In addition to the foregoing, the Company alleged in its complaint
      that these former officers and directors, with the assistance of Larval Corp.,
      an entity controlled by Mr. Marasco, Kinray, Inc., a New York based
      pharmaceutical distributor, and Santi Greco, an officer of Kinray, Inc.,
      committed violations of state and federal laws prohibiting forgery and
      fraudulent practices and otherwise participated in “racketeering activity” as
      that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1.




In
      addition, as set forth in the complaint, the Company sought payment of a
      promissory note in the principal amount of $575,000 issued to it by former
      officer and director, Robert S. Russo, plus all accrued interest thereon. The
      promissory note, due and payable on October 24, 2003, was issued by Mr. Russo
      as
      payment for 100,000 shares of Medi-Hut common stock which he purchased in a
      private placement by the Company during the fall of 2001. The Company also
      sought to recover damages from Mr. Russo for his alleged breach of fiduciary
      duties to the Company during the time he was serving as an officer of the
      Company .




On
      January 20, 2004, Mr. Russo filed his answer to the Company’s complaint along
      with a counterclaim for compensatory and punitive damages, attorneys’ fees and
      costs and a declaration that the promissory note described above be declared
      null and void. Mr. Russo also filed a crossclaim for indemnification from the
      other defendants in the litigation should he be adjudged to be liable on any
      of
      the counts in the Company’s complaint.




On
      February 4, 2004, the Company entered into a settlement and release agreement
      with Vincent J. Sanpietro. In exchange for a one time payment of $20,000, the
      return of 554,800 shares of the Company’s common stock and certain other
      non-monetary considerations, the Company agreed to discharge its claims against
      Mr. Sanpietro.




21


On
      April
      14, 2004, the Company entered into a settlement and release agreement with
      Joseph A. Sanpietro. In exchange for a one-time payment of $60,000 and the
      return of 3,179,200 shares of the Company’s common stock and certain other
      non-monetary consideration, the Company agreed to discharge its claims against
      Mr. Sanpietro.




On
      May
      14, 2004, the Company entered into a settlement and release agreement with
      Robert S. Russo. In exchange for a one-time payment of $300,000, the return
      of
      125,000 shares of the Company’s common stock and other non-monetary
      consideration, the Company agreed to discharge its claims against Mr.
      Russo.




On
      July
      6, 2004, the Company amended the complaint against certain of its former
      officers and directors and others and commenced litigation against Muhammed
      Malik, Intermax and Syntho. In its complaint, Medi-Hut alleges that Muhammed
      Malik, in his capacity as a consultant to the Company and as president of
      Intermax Pharmaceuticals, Inc. and Syntho, provided substantial assistance
      to
      the former officers and certain former directors of the Company in carrying
      out
      the scheme to overstate Medi-hut’s revenues and earnings through fraudulent
      accounting practices and committed violations of state and federal laws
      prohibiting forgery and fraudulent practices and otherwise participated in
      “racketeering activity” as that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1. The defendants in this action have counterclaimed against the Company
      for alleged: (1) breach of contract, (2) breach of implied covenant of good
      faith and fair dealing, (3) fraud, (4) misrepresentation, (5) fraudulent
      concealment, (6) violation of the New Jersey Consumer Fraud Act, (7) conversion,
      and (8) failure to pay for delivered product.




On
      September 16, 2004, the Company entered into a settlement agreement and release
      with Lawrence P. Marasco. As part of the settlement, Mr. Marasco paid to the
      Company the sum of $60,000, returned 405,000 shares of the Company’s common
      stock and agreed to provide certain other non-monetary
      consideration.




On
      November 29, 2004, the Company entered into a settlement agreement and release
      with Laurence M. Simon. In exchange for the return of 30,000 shares of the
      Company’s common stock and certain other non-monetary consideration, the Company
      agreed to dismiss its claims against Mr. Simon.




On
      January 19, 2005, the Company entered into a settlement agreement and release
      in
      connection with its action against Kinray, Inc. and its officer, Santi
      Greco.  As
      part
      of this settlement, Kinray, Inc. agreed to pay to the Company the sum of
      $300,000. This settlement was entered into without any admission of liability
      or
      any inferences of wrongdoing by any settling party.




In
      late
      2005 and early 2006, defendants Syntho and Muhammed Malik made motions to
      dismiss Medi-Hut’s claims based on the entire controversy doctrine and the
      principle of comity. These motions were denied. In April 2006, Syntho and Malik
      sought leave to appeal the denial of their motion to dismiss on the principle
      of
      comity. This motion was also denied.




22


On
      April
      6, 2006, the Company filed a second amended complaint in which it alleges that,
      among other things, it has suffered significant damages as a result of the
      Syntho Group’s breach of the distribution agreement between Syntho and Medi-Hut,
      pursuant to which Medi-Hut had exclusive rights to distribute Syntest, and
      the
      Syntho Group’s related conduct.




On
      November 22, 2006, the Company entered into a settlement agreement and release
      with the Syntho Group and Intermax pursuant to which the Company, the Syntho
      Group and Intermax agreed to dismiss with prejudice the actions against each
      other which were pending in the Superior Court of New Jersey. See “Syntest
      Litigation.”




**Litigation
      Against Former Accounting Firms** **




On
      January 9, 2004, the Company commenced litigation in the Superior Court of
      New
      Jersey against two of its former accounting firms, Rosenberg, Rich, Baker,
      Berman & Company (“Rosenberg”) which served as Medi-Hut’s independent
      registered public accounting firm from February 1998 to March 2003, excluding
      a
      three week period in early 2002, and Koenig, Russo & Associates (“Koenig”),
      an accounting consultant engaged by Medi-Hut to review various tax documents,
      financial statements and filings by the Company with the SEC. Robert S. Russo,
      a
      former officer and director of Medi-Hut and a defendant in a litigation
      commenced by the Company against certain of its former officers and directors
      on
      December 4, 2003, is a principal of Koenig. In its complaint, Medi-Hut alleges
      that Rosenberg and Koenig, through their negligence and accounting malpractice,
      caused the Company to suffer significant damage and incur substantial costs.
      The
      Company alleges in its complaint that as a result of such negligence and
      accounting malpractice, Rosenberg and Koenig failed to detect or simply ignored
      a scheme by certain of the Company’s former officers and directors to overstate
      Medi-Hut’s revenues and earnings through fraudulent accounting practices, which
      had a devastating impact on the Company. The Company also alleges in its
      complaint that, as a result of their negligence and accounting malpractice,
      Rosenberg and Koenig failed to uncover and/or disclose the materially false
      and
      misleading financial information contained in the periodic reports filed by
      the
      Company with the SEC and otherwise disseminated to the general public, investors
      and financial advisors and brokers.




In
      connection with the settlement of the Company’s separate action against Robert
      S. Russo in the Superior Court of New Jersey (see “Litigation Against Certain
      Former Officers and Directors and Others”), on May 14, 2004, the Company entered
      into a settlement and release agreement with Koenig. In exchange for certain
      non-monetary consideration, the Company agreed to discharge its claims against
      Koenig.




On
      February 21, 2006, the Company entered into a settlement agreement and release
      with Rosenberg. As part of the settlement, the parties released each other
      from
      all claims and Rosenberg paid the Company the sum of $425,000. This settlement
      was entered into without any admission of liability or any inferences of
      wrongdoing by any settling party.




**Lexington
      Insurance Lawsuit** **




On
      April
      14, 2004, a complaint was served on Medi-Hut by National Union Fire Insurance
      Co. (“National Union”) in the United States District Court for the District of
      New Jersey. On January 19, 2005, the complaint was amended by National Union
      in
      order to properly state the name of the plaintiff as Lexington Insurance Company
      (“Lexington”). In this action, the plaintiff alleged that the Company owed the
      plaintiff $235,000, representing unpaid insurance premiums.




23


On
      March
      10, 2005, the Company filed a third party complaint against Universal Business
      Insurance, Inc. (“Universal”) and Brett D. Mayer (“Mayer”) in the United States
      District Court for the District of New Jersey. Universal was the retail broker
      that advised the Company during the Company’s business dealings with Lexington
      and Mayer was the individual employed by Universal that dealt directly with
      the
      Company. In its complaint, the Company alleged that Universal and Mayer were
      negligent and breached their fiduciary duty to the Company in providing services
      related to the Company’s procurement of directors and officers insurance.




On
      September 28, 2005, the Company and Lexington entered into an agreement in
      which
      Lexington agreed to dismiss its complaint against the Company and both Lexington
      and the Company agreed to release each other from any and all claims which
      could
      have been asserted as a result of the Lexington lawsuit. On October 13, 2005,
      the Company, Universal and Mayer entered into an agreement in which the Company
      agreed to dismiss its third party complaint against Universal and Mayer in
      exchange for a one time payment from Universal and Mayer of $8,500.




**Loures
      Lawsuit** **




On
      December 28, 2004, an action was commenced in the Superior Court of New Jersey
      by James J. Loures, Jr. and his wife, Christine Loures, against the Company
      and
      certain of its former officers and directors. The plaintiffs allege that the
      Company, its former officers and certain of its former directors engaged in
      a
      scheme to inflate the Company’s revenues and earnings through a series of
      accounting irregularities and fraudulent financial disclosures during the period
      June 2001 through March 2003 which resulted in the plaintiffs’ loss of
      approximately $120,000. The plaintiffs allegations are the same as those alleged
      in the class action lawsuits discussed above. The plaintiffs were one of eight
      parties that opted out of the settlement related to the class action lawsuit.




On
      October 4, 2006, the Company filed a motion to dismiss the plaintiffs’ complaint
      for failure to comply with discovery requests in the time required by the court.
      On November 3, 2006, the court granted the Company’s motion and dismissed the
      complaint without prejudice.




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




No
      matters were submitted to a vote of the Company’s shareholders during the fourth
      quarter of fiscal 2004.


PART
      II




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




On
      March
      21, 2003, trading of the Company’s shares of common stock on the NASDAQ SmallCap
      Market was halted. The Company’s common stock was later delisted from the NASDAQ
      SmallCap Market on March 28, 2003 for, among other things, failure by the
      Company to file with the SEC its annual report on Form 10-KSB for the fiscal
      year ended October 31, 2002. Since that time, no established public trading
      market has existed for the Company’s common stock and shares of the Company’s
      common stock are neither listed on any national securities exchange, or
      presently traded on any public stock exchange or in any other public market.
      Although quotations for shares of the Company’s common stock may be obtained
      through the Pink Sheets maintained by Pink Sheets LLC, because secondary market
      activity for shares of the Company’s common stock has been limited and sporadic,
      such quotations may not actually reflect the price or prices at which purchasers
      and sellers would currently be willing to purchase or sell such shares.




24


The
      following table shows the range of high and low closing bid prices for the
      Company’s common stock for the periods indicated, as reported by NASDAQ and the
      NASDAQ Trading and Market Services under the symbol “MHUT” for the period
      commencing October 1, 2002 to March 20, 2003, and in the Pink Sheets under
      the
      symbol “MHUT” for the period commencing March 21, 2003 through November 30,
      2006. These quotations represent prices between dealers and may not include
      retail markups, markdowns or commissions and may not necessarily represent
      actual transactions.




**Year
                Ending October 31, 2007**
            
            **High**
            
            **Low**First
                Quarter (through November 30, 2006)
            
            $
            .09
            
            $
            .015**Year
                Ending October 31, 2006**
            
            **High**
            
            **Low**First
                Quarter
            
            $
            .15
            
            $
            .07Second
                Quarter
            
            
            .08
            
            
            .03Third
                Quarter
            
            
            .08
            
            
            *Fourth
                Quarter
            
            
            .07
            
            
            ***Year
                Ended October 31, 2005**
            
            **High**
            
            **Low**First
                Quarter
            
            $
            .15
            
            $
            .02Second
                Quarter
            
            
            .14
            
            
            .03Third
                Quarter
            
            
            .11
            
            
            .05Fourth
                Quarter****
            
            
            .10
            
            
            .04**Year
                Ended October 31, 2004**
            
            **High**
            
            **Low**First
                Quarter
            
            $
            .24
            
            $
            .06Second
                Quarter
            
            
            .22
            
            
            .06Third
                Quarter
            
            
            .13
            
            
            .02Fourth
                Quarter
            
            
            .05
            
            
            .02**Year
                Ended October 31, 2003**
            
            **High**
            
            **Low**First
                Quarter
            
            $
            3.53
            
            $
            1.21Second
                Quarter
            
            
            1.65
            
            
            .45Third
                Quarter
            
            
            .80
            
            
            .14Fourth
                Quarter
            
            
            .25
            
            
            .13







*
      Less
      than $.01.




Pink
      Sheets LLC is an electronic quotation and information service that collects
      and
      publishes market maker quotes for OTC securities and thereby enables National
      Association of Securities Dealers (NASD) broker-dealer firms to more efficiently
      deal in OTC securities. The Company’s common stock is currently classified as an
      OTC security. An investment in an OTC security is speculative and involves
      a
      degree of risk. Many OTC securities are relatively illiquid, or “thinly traded,”
which can enhance volatility in the share price and make it difficult for
      investors to buy or sell without dramatically affecting the quoted price or
      may
      be unable to sell a position at a later date.




25


**Shareholders**




As
      of
      November 30, 2006, there were approximately 425 shareholders of record of the
      Company’s common stock and 21,701,090 shares of common stock
      outstanding **.**




**Dividends**




The
      Company has not paid cash or stock dividends on its common stock and does not
      intend to pay cash or stock dividends in the foreseeable future. ******




**Sales
      of Unregistered Securities for the Fiscal Year Ended October 31,
      2004**




*Issuances
      of Common Stock Upon the Exercise of Century Capital Warrant Dated February
      1,
      2003*




On
      February 1, 2003, a warrant to purchase 1,500,000 shares of common stock of
      the
      Company was issued to Century Capital. The warrant has a ten year term and
      was
      exercisable at $1.34 per share (the “Underlying Purchase Price”) until February
      1, 2013. See “Item 11. Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters.”




The
      Underlying Purchase Price adjusted to $.08 per share as of May 14, 2004, the
      date when Century Capital exercised its right to purchase 937,500 shares of
      the
      Company’s common stock underlying the warrant. The $75,000 due from Century
      Capital to the Company as a result of the purchase of the 937,500 shares was
      forgiven by the Company as part of Century Capital’s bonus for the period
      February 1, 2003 through January 31, 2004.




In
      connection with the issuance of the 937,500 shares of common stock to Century
      Capital upon the exercises of the warrant, the Company relied on the exemption
      from registration for a private transaction not involving a public distribution
      provided by Section 4(2) of the Securities Act.




*Century
      Capital Warrant Dated May 14, 2004*




On
      May
      14, 2004, the Company issued Century Capital ten year, non-cancelable warrant
      to
      purchase 700,000 shares of the Company’s common stock at a purchase price of
      $.04 per share. 100,000 shares of the Company’s common stock underlying the
      warrant became available for purchase as of May 14, 2004, with the remaining
      shares underlying the warrant becoming available for purchase upon the
      achievement of specific milestones as follows: 100,000 shares shall be available
      for purchase upon the Company’s receipt of at least $2,000,000 in cumulative
      proceeds related to the Syntho litigation; 100,000 shares shall be available
      for
      purchase upon the filing of the Company’s annual report on Form 10-KSB for the
      fiscal year ended October 31, 2002; 100,000 shares shall be available for
      purchase upon the filing of the Company’s quarterly reports on Form 10-QSB for
      the quarters ended January 31, 2003, April 30, 2003 and July 31, 2003; 100,000
      shares shall be available for purchase upon the Company’s receipt of at least
      $500,000 in cumulative proceeds from the litigation against certain former
      officers, directors and others and/or the litigation against the Rosenberg
      and
      Koenig accounting firms; 100,000 shares shall be available for purchase upon
      the
      Company becoming eligible to register its common stock pursuant to the
      Securities Act; and 100,000 shares shall be available for purchase upon the
      acquisition by the Company of a product or line of business. In the event of
      a
      change in control of the Company, the warrant becomes fully vested as of ten
      days prior to the change in control. For purposes of the warrant, a change
      of
      control means any recapitalization, reorganization, reclassification,
      consolidation, merger, sale of all or substantially all of the Company’s assets
      to another individual, partnership, corporation or other such entity and any
      transaction which is effected in such a way that holders of more than 50% of
      the
      shares of common stock then outstanding are entitled to receive (either directly
      or upon subsequent liquidation) stock, securities or assets of another
      individual, partnership, corporation or other such entity with respect to or
      in
      exchange for their common stock. The warrant also contains standard
      anti-dilution provisions and limited registration rights. The shares of common
      stock issued upon the exercise of the warrant shall be unregistered securities.
      The warrant had a fair value of approximately $44,211 at the date of issuance.




26


In
      connection with the issuance of the warrant to purchase 700,000 shares of common
      stock to Century Capital, the Company relied on the exemption from registration
      for a private transaction not involving a public distribution provided by
      Section 4(2) of the Securities Act.




*Director
      Warrants Dated May 14, 2004*




On
      May
      14, 2004, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 600,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $.04
      per
      share until May 14, 2009. The shares of common stock underlying each warrant
      vested equally on and after the date of issue (66,600 shares) and on and after
      the first anniversary date (133,400 shares). Each warrant contains standard
      anti-dilution provisions and limited registration rights. The shares of common
      stock issued upon the exercise of each warrant shall be unregistered securities.
      The warrants had an aggregate fair value of approximately $32,137 at the date
      of
      issuance.




In
      connection with the issuance to its directors of the warrants to purchase an
      aggregate of 600,000 shares of common stock, the Company relied on the exemption
      from registration for a private transaction not involving a public distribution
      provided by Section 4(2) of the Securities Act.




*Common
      Stock Issued as Compensation to Former Employee*





On
      March
      4, 2004, the Company issued 25,000 shares of common stock to Craig S. Arnold,
      the Company’s Executive Vice President - Sales and Marketing from January 2,
      2003 through August 6, 2003, pursuant to a termination and general release
      agreement dated September 5, 2003. The Company did not receive any proceeds
      from
      this issuance and recorded $5,000 of compensation expense during the fiscal
      year
      ended October 31, 2004 based on the fair market value of the stock ($0.20 per
      share) on the date the agreement was executed (September 5, 2003).




27


In
      connection with the issuance of these 25,000 shares, the Company relied on
      the
      exemption from registration for a private transaction not involving a public
      distribution provided by Section 4(2) of the Securities Act.




*Common
      Stock Issued as Payment for Consulting Services*




On
      May
      14, 2004, the Company issued 1,875,000 shares of common stock to the principals
      of Century Capital related to the annual bonus due to Century Capital, pursuant
      to the Consulting Services Agreement, for the one year period commencing
      February 1, 2003 and ending January 31, 2004. The Company did not receive any
      proceeds from this issuance and recorded $150,000 of compensation expense during
      the fiscal year ended October 31, 2004 based on the fair market value of the
      stock ($0.08 per share) on the date the bonus was awarded (May 14, 2004).




In
      connection with the issuance of these 1,875,000 shares, the Company relied
      on
      the exemption from registration for a private transaction not involving a public
      distribution provided by Section 4(2) of the Securities Act.





*Common
      Stock Issued Pursuant to Class Action Settlement*




On
      May
      26, 2004, the Company issued 861,990 shares of common stock pursuant to the
      settlement agreement entered into on August 18, 2003 related to the class action
      lawsuits filed against the Company during the fiscal year ended October 31,
      2002. The shares of common stock were issued to the members of the class and
      the
      attorney’s representing the class. The Company did not receive any proceeds from
      this issuance.




In
      connection with the issuance of these 861,990 shares, the Company relied on
      the
      exemption from registration provided by Section 3(a)(10) of the Securities
      Act.
      See “Item 3. Legal Proceedings - Class Action Lawsuits.”




No
      other
      sales by the Company of unregistered securities took place during the fiscal
      year ended October 31, 2004.




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




The
      following discussion of the financial condition and results of operations of
      the
      Company should be read in conjunction with the Company’s audited financial
      statements for the fiscal years ended October 31, 2004 and 2003 and the related
      notes thereto appearing elsewhere in this annual report on Form
      10-KSB.




**Background**




Medi-Hut
      Co. is a Nevada corporation headquartered in Spring Lake, New Jersey. Medi-Hut
      was incorporated in the State of New Jersey on November 29, 1982. On January
      28,
      1998, Medi-Hut entered into an Agreement and Plan of Reorganization with
      Indwest, Inc., a Utah corporation, whereby Medi-Hut changed its domicile to
      the
      State of Utah and became subject to the reporting requirements of the Exchange
      Act. On February 2, 1998, Medi-Hut completed a second change of domicile
      transaction and became a Delaware corporation, and, on October 31, 2001,
      completed a third and final change of domicile transaction and became a Nevada
      corporation.




28


On
      October 17, 2003, the Company formed Scivanta, a New Jersey corporation and
      wholly-owned subsidiary of the Company. Scivanta was formed to be an operating
      subsidiary of the Company, but is currently inactive.




Currently,
      the Company is not selling any products. On
      November 10, 2006, the Company acquired
      the exclusive world-wide rights to develop, make and sell the HCMS, a minimally
      invasive two-balloon esophageal catheter system used to monitor cardiac
      performance.  The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad . No
      assurance can be given that the Company will receive the appropriate regulatory
      approvals to market the HCMS. See
“Item
      1. Description of Business - Strategy for Business Development.”




During
      the fiscal year ended October 31, 2004, Medi-Hut’s business consisted of the
      distribution of condoms, alcohol preps and disposable clinical supplies. The
      Company stopped selling these products in October 2004 due to reduced profit
      margins and the decline in the customer base.




During
      May 2004, the Company’s management team completed its evaluation of the
      Solo-SafeTM Safety Syringe. Due to the early development stage of the product,
      the fact that a manufacturing prototype had not been created, the cost
      associated with developing the product as compared to the overall market
      opportunity and the Company’s limited financial resources, the Company decided
      to stop any further development of this product or the maintenance of the
      related patents.




During
      December 2004, after evaluating the various development, manufacturing and
      marketing issues surrounding the Elite Safety Syringe, the Company determined
      that the cost associated with creating sufficient manufacturing capabilities
      to
      support a market launch of the product combined with the cost associated with
      correcting certain design issues exceeded the overall market opportunity that
      exists for the product. Accordingly, the Company decided that it will no longer
      develop or market the Elite Safety Syringe.




**Results
      of Operations**




*Net
      Sales.* The
      Company discontinued all product sales during the fiscal year ended October
      31,
      2004 and
      currently does not have any recurring revenue from the sale of products. The
      Company is currently developing the HCMS.




29


For
      the
      fiscal years ended October 31, 2004 and 2003, net sales were $502,279 and
      $7,643,340, respectively. During these periods, net sales by product category
      were as follows:




**Years
                Ended**
              **October
                31,****2004**
            
            **2003**Syntest
            
            $
            --
            
            $
            5,573,539Name
                Brand and Generic Drugs
            
            
            --
            
            
            1,361,018Condoms
            
            
            355,602
            
            
            502,057Disposable
                Medical Products
            
            
            146,677
            
            
            206,726$
            502,279
            
            $
            7,643,340





For
      the
      fiscal year ended October 31, 2004, net sales decreased approximately 93%
      compared to the fiscal year ended October 31, 2003. This decrease was primarily
      the result of the cessation of sales of Syntest in March 2003 due to a dispute
      with the manufacturer thereof (see Item 3. Legal Proceedings - Syntest
      Litigation) and the cessation of sales of name brand and generic drugs in March
      2003 as a result of the Company’s decision to exit the business due to low
      margins attributed to such sales.





During
      the fiscal year ended October 31, 2004, sales of condoms represented
      approximately 71% of net sales and sales of disposable medical products
      represented approximately 29% of net sales. During the fiscal year ended October
      31, 2003, sales of Syntest represented approximately 73% of net sales and sales
      of pharmaceutical products represented approximately 18% of net
      sales.





*Cost
      of Sales.* During
      the fiscal years ended October 31, 2004 and 2003, the cost of sales was
      approximately 68% and 74%, respectively, of net sales. Cost of sales as a
      percentage of net sales decreased during the fiscal year ended October 31,
      2004,
      as compared to the fiscal year ended October 31, 2003. This decrease was
      primarily the result of the sale of the remaining Syntest inventory during
      the
      fiscal year ended October 31, 2003 at a sales price that approximated the cost
      of the product and the Company’s decision to stop selling name brand and generic
      drugs due to low margins attributed to such sales.





*Selling
      and Marketing.* For the
      fiscal years ended October 31, 2004 and 2003, selling and marketing expenses
      were $5,370 and $486,801, respectively, or approximately 1% and 6%,
      respectively, of net sales. The $481,431 decrease in selling and marketing
      expenses for the fiscal year ended October 31, 2004 was the result of a $276,339
      decrease in sales and marketing consulting expenses, a $125,689 decrease in
      compensation and related benefits as a result of a reduction in personnel and
      a
      $79,403 decrease in marketing costs.





*General
      and Administrative.* For the
      fiscal year ended October 31, 2004, general and administrative expenses were
      $2,713,734, as compared to $4,433,266 for the fiscal year ended October 31,
      2003. The $1,719,532, or 39%, decrease in general and administrative expenses
      for the fiscal year ended October 31, 2004 was primarily the result of a
      $318,151 decrease in the cost of director and officer liability insurance and
      product liability insurance, a $523,049 decrease in legal expenses primarily
      attributable to a reduction in costs related to the class action lawsuit
      involving the Company and the investigation of and proceedings against the
      Company by the SEC and the NASD, a $272,130 decrease in compensation and related
      benefits as a result of a reduction in personnel, a $433,133 decrease in
      consulting expenses primarily related to the warrant issued to Century Capital
      on February 1, 2003 and a $150,000 decrease in expense related to the reserve
      established for the note receivable due from Medi-Hut International. See “Item
      3. Legal Proceedings - SEC Investigation; Class Action Lawsuits.”




30


*Other
      Income (Expenses).* During
      the fiscal year ended October 31, 2004, the Company recorded $515,000 of other
      income related to the settlement of litigations against Vincent J. Sanpietro,
      Joseph A. Sanpietro, the Schrader Group and Lawrence P. Marasco as compared
      to
      $475,000 for the fiscal year ended October 31, 2003 related to the agreement
      between the Company and Executive Risk. During the fiscal year ended October
      31,
      2004, the Company incurred interest expense of $2,831, as compared to $21,839
      for the fiscal year ended October 31, 2003. The $19,008 decrease in interest
      expense for the fiscal year ended October 31, 2004 was primarily due to the
      repayment of a line of credit to PNC Bank in February 2003. During the fiscal
      year ended October 31, 2004, interest income decreased $4,812, or 43%, as
      compared to the fiscal year ended October 31, 2003.





*Net
      Loss.* For
      the
      fiscal year ended October 31, 2004, the Company had a net loss of $2,040,849,
      or
      $0.15 per share (basic and diluted), as compared to a net loss of $2,437,036,
      or
      $0.17 per share (basic and diluted), for the fiscal year ended October 31,
      2003.





**Liquidity
      and Capital Resources**





*Operating
      Activities.* During
      the fiscal year ended October 31, 2004, the Company utilized $938,976 of cash
      flow in operations. Cash for the fiscal year ended October 31, 2004 was
      increased primarily due to a decrease in accounts receivable of $69,016, a
      decrease in inventories of $101,875, a decrease in prepaid insurance of
      $107,850, a decrease in income tax refund of $249,142, a decrease in restricted
      cash of $400,000, a decrease in security deposit of $33,388, an increase in
      accounts payable and related party accounts payable of $218,508, consulting
      expense of $178,127 related to the issuance of warrants to purchase common
      stock
      and the issuance of common stock as payment for services, depreciation expense
      of $38,354 and amortization of deferred compensation of $90,915. The Company’s
      cash position during the fiscal year ended October 31, 2004 was reduced
      primarily due to a $400,000 decrease in the reserve for the class action
      lawsuit, a decrease in deferred revenue of $34,209 and the net loss of
      $2,040,849. The increase in accounts payable and related party accounts payable
      was primarily due to consulting fees, bonuses and expenses owed to Century
      Capital pursuant to the Consulting Services Agreement dated February 1,
      2003.





*Investment
      Activities.* During
      the fiscal year ended October 31, 2004, the Company did not utilize cash flow
      in
      investing activities nor was any cash flow provided by investing activities.





*Financing
      Activities.* During
      the fiscal year ended October 31, 2004, cash flow provided by financing
      activities amounted to $289,355, which consisted of proceeds from a note payable
      of $84,000, payments on notes payable of $94,645 and proceeds from a stock
      subscription receivable of $300,000.





*Liquidity
      and Capital Resources.* As of
      October 31, 2004, the Company had working capital of $289,246. At that date,
      cash and cash equivalents totaled $693,939.




31


On
      May
      26, 2005, the Company closed on a private placement of the Debentures. The
      gross
      proceeds received in connection with this private placement were $300,000.





On
      August
      25, 2005, the Company closed on a private placement of 4,000,000 shares of
      its
      common stock. The gross proceeds received in connection with this private
      placement were $200,000 ($.05 per share).





On
      October 17, 2005, the Company and Breckenridge entered into a purchase and
      settlement agreement whereby Breckenridge agreed to pay the Company an aggregate
      of $1,000,000 as follows: (1) $250,000 was paid shortly after the execution
      of
      the purchase and settlement agreement, and (2) $50,000 will be paid on the
      first
      day of each month for a 15 month period commencing on November 1, 2005 and
      ending on January 1, 2007. As of November 30, 2006, the Company received
      $900,000 of payments from Breckenridge pursuant to the purchase and settlement
      agreement. See “Item 3. Legal Proceedings - Syntest Litigation.”





On
      February 21, 2006, the Company entered into a settlement agreement and release
      with Rosenberg pursuant to which Rosenberg paid the Company the sum of $425,000.
      See “Item 3. Legal Proceedings - Litigation Against Former Accounting
      Firms.”





On
      November 22, 2006, the Company, Century Capital, David R. LaVance, Thomas S.
      Gifford, the Syntho Group and Intermax entered into a settlement agreement
      and
      release whereby the Syntho Group agreed to pay the Company an aggregate of
      $3,100,000 as follows: (1) $250,000 was paid upon the execution of the
      settlement agreement; (2) $100,000 will be paid on the 27 th day of
      each month for a 3 month period commencing on December 27, 2006 and ending
      on
      February 27, 2007 and (3) $2,550,000 will be paid on or before March 27, 2007.
      See “Item 3. Legal Proceedings - Syntest Litigation.”





No
      revenue is currently generated by the Company. As of November 30, 2006, the
      Company’s cash position was approximately $815,000 and $100,000 is due from
      Breckenridge pursuant to the purchase and settlement agreement entered into
      on
      October 17, 2005 by the Company and Breckenridge and $2,850,000 is due from
      the
      Syntho Group pursuant to the settlement agreement and release entered into
      on
      November 22, 2006 by the Company, Century Capital, David R. LaVance, Thomas
      S.
      Gifford, the Syntho Group and Intermax. The Company estimates that the
      combination of the cash on hand and the monies due from Breckenridge and the
      Syntho Group is sufficient in order to fund the Company’s operations and the
      development of the HCMS for at least the next 12 months.




Management
      believes that the Company will require additional capital in order to complete
      the development of the HCMS, to acquire additional products and technologies
      and
      to otherwise implement its strategy for business development. The Company
      currently does not have any lending relationships with commercial banks and
      does
      not anticipate establishing such a relationship in the foreseeable future due
      to
      the Company’s limited operations and assets. Consequently, management believes
      that the Company will have to focus on obtaining additional capital through
      the
      private placement of its securities.




32


**Inflation
      and Seasonality**




Inflation
      has had no material effect on the operations or financial condition of the
      Company’s business. In addition, the Company’s operations are not considered
      seasonal in nature.




**Critical
      Accounting Policies**




The
      discussion and analysis of the Company’s financial condition is based upon the
      financial statements contained elsewhere herein, which have been prepared in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these financial statements required the Company to make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenue and expenses, and related disclosure of contingent assets and
      liabilities. On an on-going basis, the Company evaluates its estimates,
      including those related to revenue recognition, product returns, bad debts,
      intangible assets, income taxes, contingencies and litigation. The Company
      based
      its estimates on historical experience and on various other assumptions that
      are
      believed to be reasonable under the 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.




The
      Company believes the following critical accounting policies affect the more
      significant judgments and estimates used in preparation of the financial
      statements contained elsewhere herein.




***Accounts
      Receivable Reserves***




During
      the fiscal years ended October 31, 2004 and 2003, the Company recorded a
      provision for estimated sales returns and allowances on product sales of $0.
      These estimates were based on the specific facts and circumstances of particular
      orders, analysis of credit memo data and other known factors. If the data the
      Company uses to calculate these estimates did not properly reflect reserve
      requirements, then a change in the allowances would be made in the period in
      which such a determination was made and revenues in that period could be
      adversely affected.




***Revenue
      Recognition***




The
      Company recognizes product revenue upon shipment, provided that there was
      persuasive evidence of a sales arrangement, there were no uncertainties
      regarding acceptance, the sales price was fixed or determinable and collection
      of the resulting receivable was probable.




***Valuation
      of Intangible Assets and Other Long-Lived Assets***




Intangible
      assets with a defined life and other long-lived assets were reviewed for
      impairment in accordance with Statement of Financial Accounting Standards
      (“SFAS”) No. 144, *Accounting
      for the Impairment or Disposal of Long-Lived Assets* .
      Impairment reviews are based on a cash flow approach that requires significant
      management judgment with respect to future volume, revenue and expense growth
      rates, changes in working capital use, appropriate discount rates and other
      assumptions and estimates. The use of alternative estimates and assumptions
      could increase or decrease the estimated fair market value of the asset, and
      potentially result in different impacts to the Company’s results of operations.
      Actual results may differ from management’s estimates.




33


The
      Company acquired the exclusive distribution rights to Syntest, a hormone
      replacement therapy drug manufactured by Syntho, pursuant to an exclusive
      license agreement dated November 20, 2001, as amended on February 7, 2002 and
      April 3, 2002, between the Company and Syntho. The Company paid Syntho
      $2,500,000 and agreed to purchase Syntest at a price per unit as agreed upon
      by
      the parties. The term of the agreement was for a period of five years commencing
      with the first commercial sale of the Syntest product, which occurred in October
      2002. In March 2003, regular sales of Syntest ceased when Syntho refused,
      beginning in January 2003, to sell any additional product to the Company
      resulting in the commencement of litigation by the Company against Syntho and
      other parties on May 12, 2003. The Company’s initial investment of $2,500,000
      was to be amortized over the five year life of the exclusive distribution
      agreement, commencing on the date of the first commercial sale of the product
      which occurred on October 14, 2002. On October 17, 2005, the Company sold its
      distribution and other rights and business with respect to Syntest, to
      Breckenridge. In consideration for the sale of such rights and the other
      benefits provided under the purchase and settlement agreement between
      Breckenridge and the Company,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. The
      difference between the original purchase price of $2,500,000 and the amount
      received through the sale of the distribution rights to Breckenridge had been
      written off during the fiscal year ended October 31, 2002. As of November 30,
      2006, the Company received $900,000 of payments from Breckenridge pursuant
      to
      the purchase and settlement agreement. See “Item 3. Legal Proceedings - Syntest
      Litigation.”




***Income
      Taxes***




The
      Company accounts for income taxes under SFAS No. 109, *Accounting
      for Income Taxes* .
      This
      statement requires that the Company recognize a current tax liability or asset
      for current taxes payable or refundable and a deferred tax liability or asset
      for the estimated future tax effects of temporary differences and carryforwards
      to the extent they are realizable. The Company records a valuation allowance
      to
      reduce the Company’s deferred tax assets to the amount that is more likely than
      not to be realized. While the Company has considered future taxable income
      and
      ongoing prudent and feasible tax planning strategies in assessing the need
      for
      the valuation allowance, in the event the Company was to determine that it
      would
      be able to realize the deferred tax assets in the future in excess of the net
      recorded amount, an adjustment to the deferred tax asset would increase income
      in the period such determination was made. Likewise, should the Company
      determine that it would not be able to realize all or part of its net deferred
      tax asset in the future, an adjustment to the deferred tax asset would be
      charged to income in the period such determination was made.




The
      valuation allowance as of the fiscal years ended October 31, 2004 and 2003
      primarily relates to net operating losses for which the Company can only realize
      a benefit through the generation of future taxable income for which realization
      is uncertain. The Company’s net deferred tax asset was $0 as of fiscal years
      ended October 31, 2004 and 2003.




34


***Stock-based
      Compensation***




*Stock
      Option Grants to Employees* . Stock-based compensation charges represent the difference between the exercise
      price of options granted to employees and the fair value of the Company’s common
      stock on the date of grant for financial statement purposes in accordance with
      Accounting Principles Board Opinion No. 25, *Accounting
      for Stock Issued to Employees* ,
      and its
      related interpretations. The Company recognizes this compensation charge over
      the vesting periods of the shares purchasable upon exercise of options and
      applies a straight-line amortization policy for the deferred compensation.
      Should the Company’s assumptions of fair value change, the amount recorded as
      intrinsic value may increase or decrease in the future. During the fiscal years
      ended October 31, 2004 and 2003, the Company recorded $0 and $7,480,
      respectively, of amortization expense related to the grant of stock options
      to
      the Company’s employees.




*Stock
      Option Grants to Non-Employees.* The
      Company accounts for options granted to non-employees under SFAS 123 and
      Emerging Issues Task Force Consensus No. 96-18, *Accounting
      for Equity Investments that are Issued to Other than Employees for Acquiring,
      or
      in Conjunction with Selling Goods or Services* (“EITF
      96-18”), and may be subject to periodic re-valuation over their vesting terms.
      The resulting stock-based compensation expense is recorded over the service
      period in which the non-employee provides services to the Company.




During
      the fiscal years ended October 31, 2004 and 2003, the Company recorded $119,042
      and $702,134, respectively, of consulting and/or amortization expense related
      to
      the grant of stock options and warrants to the Company’s non-employees.




***Legal
      Contingencies***




The
      Company is currently involved in certain legal proceedings. In connection with
      these legal proceedings, management periodically reviews estimates of potential
      costs to be incurred by the Company in connection with the adjudication or
      settlement, if any, of these proceedings. These estimates are developed in
      consultation with outside counsel and are based on an analysis of potential
      litigation outcomes and settlement strategies. In accordance with the Financial
      Accounting Standards Board (the “FASB”) Statement No. 5, *Accounting
      for Contingencies* ,
      loss
      contingencies are accrued if, in the opinion of management, an adverse outcome
      is probable and such outcome can be reasonably estimated. The Company does
      not
      believe that these proceedings will have a material adverse effect on its
      financial position; however, it is possible that future results for any
      particular quarter or annual period may be materially affected by changes in
      management’s assumptions or the effectiveness of the Company’s strategies
      relating to these proceedings. See “Item 3. Legal Proceedings.”




As
      of the
      fiscal years ended October 31, 2004 and 2003, the Company accrued $0 and
      $529,299, respectively, related to the settlement of the consolidated class
      action lawsuit commenced against the Company in 2002. The Company agreed to
      settle the consolidated class action litigation on August 18, 2003 and the
      United States District Court for the District of New Jersey approved the
      settlement on May 3, 2004. The $529,299 accrual as of the fiscal year ended
      October 31, 2003 represented a $400,000 cash payment made by the Company in
      conjunction with the settlement as well as the fair market value, on the date
      the settlement was executed (August 18, 2003), of the 861,990 shares of the
      Company’s common stock issued in conjunction with the settlement ($129,299).
      Both the payment of the $400,000 and the issuance of 861,990 shares of the
      Company’s common stock occurred during the fiscal year ended October 31, 2004.
      See “Item 3. Legal Proceedings - Class Action Lawsuits.”




35


**Recent
      Accounting Pronouncements**




In
      October 2004, the FASB concluded that the proposed SFAS No. 123R *,
      Share-Based Payment* (“SFAS
      123R”), which would require all companies to measure compensation cost for all
      share-based payments, including employee stock options, at fair value, would
      be
      effective for public companies (except small business issuers as defined in
      SEC
      Regulation S-B) for interim or annual periods beginning after June 15, 2005.
      The
      Company will not have to adopt SFAS 123R until the fiscal year ending October
      31, 2007. The Company does not expect SFAS 123R to have a material impact on
      its
      consolidated results of operations or financial condition.




In
      November of 2004, the FASB issued SFAS No. 151, *Inventory
      Costs* (“SFAS
      151”), which amends the guidance in Accounting Research Bulletin No. 43 (“ARB
      43”), Chapter 4, *Inventory
      Pricing* ,
      to
      clarify the accounting for abnormal amounts of idle facility expense, freight,
      handling costs and wasted material (spoilage). This statement requires that
      those items be recognized as current-period charges regardless of whether they
      meet the criterion of “so abnormal” as stated in ARB 43. Additionally, SFAS 151
      requires that allocation of fixed production overheads to the costs of
      conversion be based on the normal capacity of the production facilities. The
      Company is required to adopt the provisions of SFAS 151 in the first quarter
      of
      2006. The Company does not expect SFAS 151 to have a material impact on its
      consolidated results of operations or financial condition.




In
      December of 2004, the FASB issued SFAS No. 153, *Exchanges
      of Nonmonetary Assets - An Amendment of APB Opinion No. 29* (“SFAS
      153”). SFAS 153 eliminates the exception for nonmonetary exchanges of similar
      productive assets and replaces it with a general exception for exchanges of
      nonmonetary assets that do not have commercial substance. SFAS 153 is effective
      for fiscal years beginning after June 15, 2005 and is required to be adopted
      by
      the Company in the first quarter of 2006. The Company does not expect SFAS
      153
      to have a material impact on its consolidated results of operations or financial
      condition.




The
      FASB
      has issued SFAS No. 154, *Accounting
      Changes and Error Corrections* (“SFAS
      154”), replacing APB Opinion No. 20, *Accounting
      Changes* .
      Among
      other changes, SFAS 154 requires that a voluntary change in accounting principle
      be applied retrospectively with all prior period financial statements presented
      on the new accounting principle, unless it is impracticable to do so. SFAS
      154
      also provides that (1) a change in method of depreciating or amortizing a
      long-lived nonfinancial asset be accounted for as a change in estimate
      (prospectively) that was effected by a change in accounting principle, and
      (2)
      correction of errors in previously issued financial statements should be termed
      a “restatement.” The new standard is effective for accounting changes and
      correction of errors made in fiscal years beginning after December 15, 2005.
      Early adoption of this standard is permitted for accounting changes and
      correction of errors made in fiscal years beginning after June 1, 2005. The
      Company does not expect SFAS 154 to have a material impact on its consolidated
      results of operations or financial condition.




36


In
      July
      2006, the FASB issued FASB Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
      109* ** (“FIN
      48” ),
      which
      clarifies the accounting and disclosure for uncertain tax positions, as defined.
      FIN 48 seeks to reduce the diversity in practice associated with certain aspects
      of the recognition and measurement related to accounting for income taxes.
      This
      interpretation is effective for fiscal years beginning after December 15, 2006.
      The Company is assessing FIN 48 and has not yet determined the impact that
      the
      adoption of FIN 48 will have on its consolidated results of operations or
      financial condition.





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value, and expands disclosure requirements regarding fair value measurement.
      Where applicable, this statement simplifies and codifies fair value related
      guidance previously issued within United States of America generally accepted
      accounting principles. SFAS 157 is effective for financial statements issued
      for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years. The Company is currently reviewing SFAS 157 and has not yet
      determined the impact that the adoption of SFAS 157 will have on its
      consolidated results of operations or financial condition.




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




The
      financial statements and supplementary data of the Company called for by this
      item are submitted under a separate section of this report. Reference is made
      to
      the Index of Financial Statements contained on page F-1 hereof.




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




On
      March
      28, 2003, the Company dismissed Rosenberg as its independent auditors. The
      Company reported the dismissal of the Rosenberg firm as its independent auditors
      in a current report on Form 8-K, dated March 28, 2003. In that current report
      on
      Form 8-K, the Company stated that in connection with its audits for the fiscal
      years ended October 31, 2002 and 2001, respectively, and during any subsequent
      periods preceding the date of dismissal, there were no disagreements with
      Rosenberg in any matter regarding accounting principles or practices, financial
      statement disclosure, or auditing scope or procedure. Pursuant to the procedure
      outlined in SEC Regulation S-K, Item 304, the Company amended its current report
      on Form 8-K, dated March 28, 2003, to include a letter from Rosenberg in which
      the accounting firm disagreed with the Company’s statements. On April 8, 2003,
      the SEC provided comments to the Company with respect to the disclosures in
      the
      Company’s current report on Form 8-K, dated March 28, 2003 and amended on April
      4, 2003. Current management could not adequately respond to the SEC’s comments
      due to the incomplete and unverifiable information left behind by prior
      management. Consequently, the Company’s current report on Form 8-K, dated March
      28, 2003 and amended on April 4, 2003, has been deemed deficient by the SEC.
      Although the SEC has not commenced an enforcement action against the Company
      for
      such deficient current report on Form 8-K, no assurance can be given that the
      SEC will not do so in the future. Any such action by the SEC could have
      significant adverse consequences to the Company.




On
      May
      15, 2003, the Company engaged the accounting firm Eisner as its independent
      auditors to perform an audit of the Company’s financial statements as of the
      fiscal years ended October 31, 2002 and October 31, 2001. Since that time,
      management determined that due to incomplete records, among other issues, they
      could not file complete audited financial statements for these periods. See
      “Item 3. Legal Proceedings - Incomplete Periodic Reports.”




37


On
      March
      3, 2005, the Company replaced Eisner as its independent auditors with the
      accounting firm, Weiser. Management believed that it was in the best interest
      of
      the Company to change auditors in order to facilitate the completion of the
      audit of the Company’s balance sheet as of October 31, 2002. The change in
      auditing firms was reviewed and recommended by the Company’s Audit Committee and
      approved by the Company’s Board of Directors. The Company reported the dismissal
      of the Eisner firm as its independent auditors in a current report on Form
      8-K,
      dated March 3, 2005. In that current report on Form 8-K, the Company stated
      that
      in connection with its audits as of and for the fiscal years ended October
      31,
      2002 and 2001, respectively, and during any subsequent interim periods preceding
      the date of dismissal, there were no disagreements with Eisner on any matter
      regarding accounting principles or practices, financial statement disclosure,
      or
      auditing scope or procedure. In addition, during its engagement by the Company,
      Eisner did not issue any report on the financial statements or review any
      financial statements of the Company.




Pursuant
      to the procedure outlined in SEC Regulation S-B, Item 304, the Company included
      in the current report on Form 8-K a letter from Eisner in which the accounting
      firm agreed with the Company’s statements that there were no disagreements
      between the Company and Eisner on any matter regarding accounting principles
      or
      practices, financial statement disclosure, or auditing scope or
      procedure.




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


As
      required by Rule 13a-15 under the Exchange Act, as of the end of the period
      covered by this Annual Report on Form 10-KSB, the Company carried out an
      evaluation of the effectiveness of the design and operation of the Company's
      disclosure controls and procedures. This evaluation was carried out under the
      supervision and with the participation of the Company's management, including
      the Company's President and Chief Executive Officer and the Company's Chief
      Financial Officer and Secretary, who concluded that the Company's disclosure
      controls and procedures are effective. There has been no significant change
      in
      the Company’s internal controls during the last fiscal year that has materially
      affected, or is reasonably likely to materially affect, the Company's internal
      control over financial reporting.




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


**Item
                  8B.**
                **Other
                    Information**


None.


38




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




The
      Company’s current executive officers and directors who also served as the
      Company’s executive officers and directors during the fiscal year ended October
      31, 2004, their respective ages, positions with the Company and biographical
      information, including business experience, are set forth below.




**Name**
              **Age**
              **Position
                  Held**David
                  R. LaVance
              52
              Chairman
                  of the Board, President and ChiefExecutive
                  OfficerThomas
                  S. Gifford
              38
              Executive
                  Vice President, Chief Financial Officer(Treasurer),
                  Secretary and DirectorJohn
                  A. Moore
              41
              DirectorRichard
                  E. Otto
              56
              Director




There
      are
      no family relationships among the current executive officers and directors
      of
      Medi-Hut. None of the current executive officers or directors of Medi-Hut are
      directors of any company with a class of securities registered pursuant to
      Section 12 of the Exchange Act or subject to the requirements of Section 15(d)
      of the Exchange Act or any company registered as an investment company under
      the
      Investment Company Act of 1940, as amended, except for Mr. LaVance who serves
      as
      a director of Hologic, Inc. (NASDAQ: HOLX), Mr. Otto who serves as a director
      of
      Corautus Genetics Inc. (AMEX: VEGF) and Mr. Moore who serves as a director
      of
      Acorn Factor, Inc., formerly known as Data Systems & Software, Inc. (OTCBB:
      ACFN).




*David
      R. LaVance* *:* Mr.
      LaVance became Medi-Hut’s President and Chief Executive Officer and the Chairman
      of its Board of Directors on March 21, 2003. He also is the President and
      co-founder of Century Capital which was founded in 1997. Mr. LaVance was a
      Managing Director of KPMG Health Ventures, an advisory group providing
      investment banking services to healthcare service providers from 1995 through
      1997. Prior to joining KPMG Health Ventures, Mr. LaVance was a founder of
      Physicians Data Corporation, a startup health informatics company formed in
      1994, and served as the President of Nuclear Care, Inc., a nuclear imaging
      clinical services provider from 1992 through 1995. Mr. LaVance currently is
      a
      member of the Board of Directors of Hologic, Inc. (NASDAQ: HOLX), a medical
      device company specializing in digital imaging. Mr. LaVance received a B.A.
      degree from Furman University in 1976 and a J.D. degree from Washington College
      of Law of the American University in 1979.




*Thomas
      S. Gifford* :
      Mr.
      Gifford became Medi-Hut’s Executive Vice President, Chief Financial Office
      (Treasurer) and a director on March 21, 2003. He later became the Secretary
      of
      Medi-Hut on July 22, 2003. Mr. Gifford is also the Vice President and co-founder
      of Century Capital. He is a licensed attorney in New York and New Jersey and
      is
      a Certified Public Accountant. He was formerly a Manager and Associate Director
      of KPMG Health Ventures. Prior to KPMG Health Ventures, Mr. Gifford was an
      accountant for KPMG Peat Marwick LLP from 1990 through 1994, where he provided
      auditing and financial due diligence services to various publicly traded and
      privately held emerging technology companies. Mr. Gifford currently serves
      on
      the Board of Directors of Maloy Risk Services, Inc., a privately held insurance
      brokerage. Mr. Gifford received a B.S. degree from Rutgers University in 1990
      and a J.D. degree from Seton Hall University School of Law in 1995.




39


*John
      A. Moore* :
      Mr.
      Moore was elected as a director of the Company on May 6, 2003. Since July 2002,
      he has been the President of Edson Moore Healthcare Ventures, an investment
      entity that owns securities in various public and private life science
      companies. Since March 10, 2006, Mr. Moore also has served as the President
      and
      Chief Executive Officer and a director of Acorn Factor, Inc. (formerly known
      as
      Data Systems Software Inc.), a publicly traded provider of software consulting
      and development services (OTCBB: ACFN). From February 2004 to February 2006,
      he
      served as Chairman and Executive Vice President of ImaRx Therapeutics, a
      privately-held company engaged in medical technology development. From 1994
      through June 2002, Mr. Moore was the Chairman and Chief Executive Officer of
      Optimer, Inc., a research based polymer development company. Prior thereto,
      he
      worked for a number of Wall Street firms including Lehman Brothers and Hambrecht
& Quist. Mr. Moore has been a director of Optimer, Inc. since 1994. Mr.
      Moore currently serves as a director of Comverge, Inc., a privately-held company
      providing energy monitoring equipment, software and services to electric
      utilities. Mr. Moore received a B.A. degree from Rutgers
      University.




*Richard
      E. Otto* :
      Mr.
      Otto was elected as a director of the Company on May 6, 2003. He has been the
      Chief Executive Officer and a director of Corautus Genetics Inc. (formerly
      GenStar Therapeutics Corporation), a publicly traded biopharmaceutical company
      (AMEX: VEGF) dedicated to the development of innovative gene therapy products
      for the treatment of cardio and vascular disease, since the merger of Corautus
      and Vascular Genetics Inc. on February 5, 2003. Prior to the merger, he served
      as Chief Executive Officer and a director of Vascular Genetics Inc., a developer
      of gene therapy for the treatment of severe cardiovascular disease, since
      January, 2002. From June 1995 through April 1998, he was Chief Executive Officer
      and director of CardioDynamics International Corporation (NASDAQ: CDIS), a
      publicly traded company that develops, manufactures and markets noninvasive
      heart-monitoring devices. Mr. Otto has served as a consultant to the founder
      of
      WebMD and as a consultant to key management positions with Cardiac Pacemakers
      Inc. (now a Guidant company). Mr. Otto also held positions at Intermedics,
      Inc.,
      Medtronic Inc., and Eli Lilly and Company. Mr. Otto currently serves as a
      director and Chairman of ImaRx Therapeutics, a privately-held company engaged
      in
      medical technology development. He received a B.S. degree from the University
      of
      Georgia.





The
      following individuals served as directors of the Company during all or a portion
      of the fiscal year ended October 31, 2004, but are no longer with the
      Company.




*James
      G. Aaron* *:* Mr.
      Aaron served as a director of Medi-Hut from April 3, 2001 through February
      5,
      2004, when he resigned.




*Salvatore
      J. Badalamenti* :
      Mr.
      Badalamenti served as a director of the Company from May 12, 2003 through
      January 1, 2005, when he resigned.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Exchange Act requires the Company’s directors, executive officers
      and persons who own more than 10% of the Company’s common stock, to file with
      the SEC initial reports of ownership and reports of changes in ownership of
      the
      Company common stock and other equity and derivative securities. Officers,
      directors and greater than 10% beneficial owners are required by SEC regulations
      to furnish Medi-Hut with copies of all Section 16(a) reports they file. To
      the
      knowledge of current management, based upon review of the copies of the forms
      furnished to the Company during the fiscal year ended October 31, 2004, all
      filings required to be made by the Company’s executive officers and directors
      pursuant to Section 16(a) of the Exchange Act for the fiscal year ended October
      31, 2004 were filed within the time periods prescribed, except that the Forms
      4
      required to be filed by Mr. LaVance and Mr. Gifford in May 2004, in connection
      with the issuance of a warrant to Century Capital, of which Mr. LaVance and
      Mr.
      Gifford each have an ownership interest and serve as the President and Vice
      President, respectively, were filed in September 2005.




40


**Item
                10.**
            **Executive
                Compensation**




**Compensation
      of Executive Officers**




The
      following table sets forth information concerning the annual and long-term
      compensation for services in all capacities to the Company for the fiscal years
      ended October 31, 2004, 2003 and 2002 of any person who served as the Company’s
      President and Chief Executive Officer during the fiscal year ended October
      31,
      2004 and each other executive officer of the Company whose total annual salary
      and bonus for the fiscal year ended October 31, 2004 exceeded $100,000 (the
      “Named Executive Officers”).




**SUMMARY
                COMPENSATION TABLE****Annual
                Compensation**
            
            **Long
                Term Compensation****Awards**
            
            **Payouts****Name
                and Position**
            
            **Year**
            
            **Salary
                ($)**
            
            **Bonus
                ($)**
            
            **Other**
              **Annual
                Compensa**
              **-tion
                ($)**
            
            **Restricted
                Stock**
              **Award(s)**
              **($)**
            
            **Securities
                Underlying**
              **Options
                #**
            
            **LTIP**
              **Payouts
                ($)**
            
            **All
                Other Compensa-tion ($)**David
                R. LaVance,
            
            
            2004
            
            $
            --
            
            $
            --
            
            $
            --
            
            $
            --
            
            
            --
            
            $
            --
            
            $
            --President
                and Chief
            
            
            2003
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --Executive
                Officer (1)
            
            
            2002
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --Thomas
                S. Gifford,
            
            
            2004
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --Executive
                Vice
            
            
            2003
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --President
                and Chief
            
            
            2002
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --Financial
                Officer (1)







(1)
            The
                Company has entered into a Consulting Services Agreement, as amended,
                with
                Century Capital, pursuant to which the Company pays consulting fees
                and
                other remuneration to Century Capital for the services provided
                thereunder. Mr. LaVance and Mr. Gifford are owners and officers of
                Century
                Capital. Neither Mr. LaVance nor Mr. Gifford receives any direct
                compensation from the Company. See “Consulting Services Agreement” and
                “Item 12. - Certain Relationships and Related
                Transactions.”




**Stock
      Option/Warrant Grants in Last Fiscal Year**




The
      following table sets forth the stock options and/or warrants granted to the
      Company’s Named Executive Officers during the fiscal year ended October 31,
      2004.




41




**Name**
            
            **Number
                of**
              **Securities**
              **Underlying**
              **Options/Warrants**
              **Granted**
            
            **%
                of Total**
              **Options/Warrants**
              **Granted
                to**
              **Employees/Officers**
              **in
                Fiscal Year**
            
            **Exercise
                Price**
              **($
                per Share)**
            
            **Expiration
                Date**David
                R. LaVance
            
            700,000
                (1)
            
            75%
            
            $0.04
            
            5/14/2014Thomas
                S. Gifford
            
            700,000
                (1)
            
            75%
            
            $0.04
            
            5/14/2014





(1)
            Includes
                700,000 shares subject to the warrants issued on May 14, 2004 to
                Century
                Capital. Mr. LaVance and Mr. Gifford have an ownership interest in
                Century
                Capital and serve as the President and Vice President, respectively,
                of
                Century Capital. Both Mr. LaVance and Mr. Gifford disclaim beneficial
                ownership of these securities except to the extent of their respective
                ownership interests in Century
                Capital.




**Aggregated
      Option/Warrant Exercises in Last Fiscal Year and Year End Option/Warrant
      Values**




The
      following table provides certain information with respect to options and/or
      warrants to purchase the Company’s common stock held by the Named Executive
      Officers at October 31, 2004.




**Number
                of Shares of**
              **Common
                Stock Underlying**
              **Unexercised
                Options/Warrants at**
              **October
                31, 2004**
            
            **Value
                of Unexercised In-the-Money Options/Warrants at October 31,
                2004**
              **($)****Name**
            
            **Shares
                Acquired on Exercise (#)**
            
            **Value
              Realized**
              **($)**
            
            **Exercisable**
            
            **Unexercisable**
            
            **Exercisable**
            
            **Unexercisable**David
                R. LaVance
            
            468,750
                (1)
            
            (2)
            
            621,875
                (3)
            
            640,625
                (4)
            
            $--
                (5)
            
            $--
                (5)Thomas
                S. Gifford
            
            468,750
                (1)
            
            (2)
            
            621,875
                (3)
            
            640,625
                (4)
            
            $
                -- (5)
            
            $--
                (5)







(1)
            A
                total of 937,500 shares were purchased on May 14, 2004 upon the exercise
                of the warrant issued on February 1, 2003 to Century Capital to purchase
                a
                total of 1,500,000 shares of Medi-Hut common stock. David R. LaVance
                and
                Thomas S. Gifford, owners and officers of Century Capital, each were
                issued 468,750 of the 937,500 shares of Medi-Hut common stock purchased
                by
                Century Capital upon the exercise of the
                warrant.




(2)
            No
                dollar value was realized upon the exercise of the warrant issued
                on
                February 1, 2003 to Century Capital because the per share market
                price of
                the Medi-Hut common stock on the date of exercise was not greater
                than the
                per share exercise price of the
                warrant.




(3)
            Includes
                421,875 shares subject to the warrant issued on February 1, 2003
                to
                Century Capital to purchase a total of 1,500,000 shares of Medi-Hut
                common
                stock. Also includes 200,000 shares subject to the warrant issued
                on May
                14, 2004 to Century Capital to purchase a total of 700,000 shares
                of
                Medi-Hut common stock. Mr. LaVance and Mr. Gifford are owners and
                officers
                of Century Capital. Each of Mr. LaVance and Mr. Gifford disclaims
                beneficial ownership of these securities except to the extent of
                his
                ownership interest in Century
                Capital.




(4)
            Includes
                140,625 shares subject to the warrant issued on February 1, 2003
                to
                Century Capital to purchase a total of 1,500,000 shares of Medi-Hut
                common
                stock. Also includes 500,000 shares subject to the warrant issued
                on May
                14, 2004 to Century Capital to purchase a total of 700,000 shares
                of
                Medi-Hut common stock. Mr. LaVance and Mr. Gifford are owners and
                officers
                of Century Capital. Each of Mr. LaVance and Mr. Gifford disclaims
                beneficial ownership of these securities except to the extent of
                his
                ownership interest in Century Capital.




42




(5)
            The
                exercise price of the warrant issued on February 1, 2003 was $ 0.02
                per
                share and the exercise price of the warrant issued on May 14, 2004
                was
                $0.04 per share. The per share market price of the Company’s common stock
                on October 31, 2004 was $ 0.02. Inasmuch as the per share market
                price of
                the common stock on October 31, 2004 did not exceed the per share
                exercise
                price of either warrant, such warrants are not considered in-the-money
                and
                no value is attributable to such warrants for purposes of this
                table.




**Compensation
      of Directors**




Currently,
      the Company does not provide any cash compensation to its directors. However,
      each of the outside directors that participated on the Company’s Board of
      Directors during 2004, which excludes Mr. LaVance and Mr. Gifford, received
      a
      warrant dated May 14, 2004 to purchase 200,000 shares of the Company’s common
      stock. See “Item 5. Market for Common Equity and Related Stockholder Matters -
      Sales of Unregistered Securities for the Fiscal Year Ended October 31,
      2004.”




Each
      of
      the outside directors that participated on the Company’s Board of Directors
      during 2005, which excludes Mr. LaVance and Mr. Gifford, received a warrant
      dated February 25, 2005 to purchase 200,000 shares of the Company’s common
      stock. See “Item 11. Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters - Warrants.”




**Employment
      Agreements**




Currently,
      there exists no employment agreement with any of the Company’s executive
      officers other than the amended and restated Consulting Services Agreement
      with
      Century Capital related to the services of David R. LaVance and Thomas S.
      Gifford. See “Consulting Services Agreement.”




**Consulting
      Services Agreement**




*Original
      Agreement Dated February 1, 2003*




The
      Company entered into a Consulting Services Agreement with Century Capital,
      effective as February 1, 2003, in order to engage Century Capital to provide
      (1)
      general corporate and business advisory services, (2) strategic business
      advisory services, and (3) financial advisory services to the Company. The
      Consulting Services Agreement was approved by the Company’s Board of Directors.
      The initial term of the Consulting Services Agreement was two years, which
      ended
      on January 31, 2005.




Mr.
      LaVance and Mr. Gifford are the sole members of Century Capital. On March 21,
      2003, pursuant to the Consulting Services Agreement, the Board appointed Mr.
      LaVance as Chief Executive Officer of the Company, and Mr. Gifford as Executive
      Vice President and Chief Financial Officer of the Company. Mr. LaVance and
      Mr.
      Gifford were also appointed as directors of the Company to fill vacancies on
      the
      Board as of the same date. Mr. LaVance assumed the position of Chairman of
      the
      Board when he was appointed as a director.




43


During
      the initial term of the Consulting Services Agreement, Century Capital was
      entitled to receive a monthly consulting fee in the amount of $75,000 and was
      entitled to be reimbursed for all reasonable and customary business expenses.
      For each one year period commencing on February 1 and ending on January 31
      during the term of the Consulting Services Agreement, Century Capital was
      entitled to be paid a minimum annual cash bonus in an amount not less than
      $125,000. Century Capital was eligible to earn an annual bonus in excess of
      $125,000 at the discretion of the Company’s Board of Directors.




In
      addition, the Company issued Century Capital a ten year warrant to purchase
      1,500,000 shares of the Company’s common stock. See “Item 11. Security Ownership
      of Certain Beneficial Owners and Management and Related Stockholder Matters
      -
      Warrants Issued to Century Capital.”




On
      May
      14, 2004, in lieu of the minimum annual cash bonus due Century Capital for
      the
      period that began on February 1, 2003 and ended on January 31, 2004, Century
      Capital agreed to accept the following: (1) $50,000 cash payment to be made
      on
      September 1, 2004; (2) 1,875,000 shares of the Company’s common stock and (3)
      the forgiveness of $75,000 due to the Company from Century Capital related
      to
      the purchase by Century Capital of 937,500 shares of the Company’s common stock
      underlying the warrant issued to it on February 1, 2003. On February 25, 2005,
      Century Capital agreed to accept 500,000 shares of the Company’s common stock as
      payment of the $50,000 due to Century Capital on September 1, 2004.




Also,
      on
      May 14, 2004, the Company issued Century Capital a ten year, non-cancelable
      warrant to purchase 700,000 shares of the Company’s common stock at a purchase
      price of $.04 per share. See “Item 5. Market for Common Equity and Related
      Stockholder Matters - Century Capital Warrant Dated May 14, 2004 and Issuances
      of Common Stock Upon the Exercise Thereof.”




Commencing
      July 1, 2004, Century Capital agreed to defer $25,000 of its monthly consulting
      fee for a three month period (through September 30, 2004) in an effort to
      minimize the Company’s cash burn. Century Capital later agreed to continue the
      $25,000 monthly deferment through January 31, 2005, at which point the total
      amount due and owing to Century Capital related to the deferment of its monthly
      consulting fee was $175,000. On November 1, 2004, Century Capital exercised
      warrants to purchase 621,876 shares of the Company’s common stock (421,876
      shares pursuant to the warrant dated February 1, 2003 and 200,000 shares
      pursuant to the warrant dated May 14, 2004). The $16,438 due to the Company
      from
      Century Capital related to these warrant exercises were offset against the
      deferred monthly consulting fees due to Century Capital. On February 25, 2005,
      Century Capital agreed to forgive $60,000 of the monthly deferred consulting
      fees in exchange for 600,000 shares of the Company’s common stock. Further, on
      February 25, 2005, Century Capital exercised its right to purchase 140,624
      shares of the Company’s common stock pursuant to the warrant dated February 1,
      2003. The $2,812 due to the Company from Century Capital as a result of this
      exercise was offset by the Company against the deferred monthly consulting
      fees
      due to Century Capital. On August 25, 2005, Century Capital agreed to forgive
      $50,000 of the deferred monthly consulting fees in exchange for 1,000,000 shares
      of the Company’s common stock. On November 13, 2006, Century Capital exercised
      its right to purchase 300,000 shares of the Company’s common stock pursuant to
      the warrant dated May 14, 2004. The $12,000 due to the Company from Century
      Capital as a result of this exercise was offset by the Company against the
      deferred monthly consulting fees due to Century Capital.




44


During
      the entire term of the original Consulting Services Agreement, Mr. LaVance
      and
      Mr. Gifford were treated as independent contractors for purposes of
      compensation, were not paid any salary or other compensation directly by the
      Company and neither of Mr. LaVance or Mr. Gifford participated in any of the
      Company’s employee benefit plans.




As
      provided in the original Consulting Services Agreement, Mr. LaVance and Mr.
      Gifford were added as covered parties under the Company’s directors’ and
      officers’ liability insurance policies (“D&O Policies”). The Company is
      required to maintain such D&O Policies while Mr. LaVance and Mr. Gifford
      hold positions as officers and/or directors of the Company and for a period
      of
      two years following termination of their service in such positions. The Company
      also agreed in the original Consulting Services Agreement to indemnify and
      hold
      harmless Century Capital and its representatives, including Mr. LaVance and
      Mr.
      Gifford, from and against any and all claims, demands, liabilities, obligations,
      losses, fines, and expenses, including reasonable attorneys’ and accountants’
fees and expenses incurred in connection with the Company’s failure to perform
      under the original Consulting Services Agreement or any threatened, pending
      or
      completed action, suit or proceeding arising out of Century Capital’s
      relationship, or the relationship of any Century Capital representative, with
      the Company.




*Amended
      and Restated Agreement Dated February 1, 2005*




Effective
      February 1, 2005, the original Consulting Services Agreement was replaced by
      an
      amended and restated Consulting Services Agreement. Pursuant to the amended
      and
      restated Consulting Services Agreement, Century Capital agreed to provide the
      services of Mr. LaVance and Mr. Gifford as the Company’s corporate officers. As
      provided in the amended and restated Consulting Services Agreement, Mr. LaVance
      will continue to serve as the Company’s President and Chief Executive Officer
      and Mr. Gifford will continue to serve as the Company’s Executive Vice
      President, Chief Financial Officer, Treasurer and Secretary. The amended and
      restated Consulting Services Agreement also provides that Mr. LaVance and Mr.
      Gifford will continue to be treated as independent contractors for the purposes
      of compensation, will not be paid any salary or other compensation directly
      by
      the Company and will not participate in the Company’s employee benefit plans.




The
      initial term of the amended and restated Consulting Services Agreement, ended
      on
      January 31, 2006. Thereafter, the amended and restated Consulting Services
      Agreement continues until either party elects to terminate the amended and
      restated Consulting Services Agreement by providing sixty days written notice.
      As of November 30, 2006, such notice has not been given by either party. During
      the term of the amended and restated Consulting Services Agreement, Century
      Capital is entitled to receive a monthly consulting fee in the amount of $50,000
      and is entitled to be reimbursed for all reasonable and customary business
      expenses. Century Capital is also entitled to receive an annual bonus in an
      amount not less than $125,000 upon the successful completion of the objectives
      which are established by the independent members of the Company’s Board of
      Directors and Century Capital.




45


The
      Company may terminate the amended and restated Consulting Services Agreement
      for
      cause if Century Capital fails to materially perform the consulting services
      and
      does not cure such non-performance within sixty days of receipt of written
      notice of such non-performance from the Board. Century Capital can terminate
      the
      amended and restated Consulting Services Agreement for cause for, among other
      reasons, (1) any breach of the amended and restated Consulting Services
      Agreement by the Company which is not cured within thirty days of receipt of
      written notice from Century Capital, (2) the failure of the Company to pay
      any
      compensation or bonus to Century Capital when due or payable, (3) the removal
      of
      David R. LaVance as President and Chief Executive Officer of the Company without
      the prior written approval of Century Capital, (4) the removal of Thomas S.
      Gifford as Executive Vice President, Chief Financial Officer (Treasurer) and
      Secretary of the Company, without the prior written approval of Century Capital
      (5) the removal of or failure to elect David R. LaVance and Thomas S. Gifford
      as
      members of the Company’s Board of Directors without the prior written approval
      of Century Capital, or (6) the Company becoming insolvent or
      bankrupt.




If
      the
      amended and restated Consulting Services Agreement is terminated by the Company
      for cause, Century Capital shall be paid all unpaid monthly fees and
      reimbursable expenses through the termination date. If the amended and restated
      Consulting Services Agreement is terminated by Century Capital for cause, then
      Century Capital shall be paid on the termination date a lump sum amount equal
      to
      the sum of all unpaid monthly fees and reimbursable expenses plus the full
      amount of the bonus target established for the year of termination and an amount
      equal to the product of Century Capital’s monthly fee multiplied by six
      months.




During
      the term of the amended and restated Consulting Services Agreement and for
      a
      period of twenty-four months after the termination of the amended and restated
      Consulting Services Agreement, Century Capital shall be entitled to receive
      a
      cash bonus upon the consummation by the Company of certain corporate
      transactions. The bonus compensation shall be an amount not less than 2.5%
      of
      the aggregate consideration to be paid in connection with a sale or acquisition
      of the Company or in connection with a change in control of the Company (which
      means a change in more than 50% of the issued and outstanding shares of the
      Company’s common stock). Century Capital shall be entitled to receive the bonus
      compensation for any corporate transaction which commences before, but is
      consummated after, the end of the twenty-four month period following the
      effective termination date of the amended and restated Consulting Services
      Agreement.




Upon
      the
      execution of the amended and restated Consulting Services Agreement, the Company
      issued Century Capital a ten year, non-cancelable warrant dated February 25,
      2005 to purchase 500,000 shares of the Company’s common stock at a purchase
      price of $.03 per share. See “Item 11. Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder Matters - Equity Compensation
      Plans.” On February 25, 2005, Century Capital exercised its right to purchase
      250,000 shares of the Company’s common stock underlying the warrant. The $7,500
      due to the Company from Century Capital as a result of this exercise was offset
      by the Company against amounts due and owing to Century Capital related to
      the
      deferred monthly consulting fees related to the original Consulting Services
      Agreement. On both May 20, 2005 and August 25, 2005, Century Capital exercised
      its right to purchase 62,500 shares of the Company’s common stock (125,000
      shares in total) underlying the warrant. The $3,750 due to the Company from
      Century Capital as a result of these exercises was offset by the Company against
      the deferred monthly consulting fees due to Century Capital related to the
      original Consulting Services Agreement. On November 13, 2006, Century Capital
      exercised its right to purchase 125,000 shares of the Company’s common stock
      underlying the warrant. The $3,750 due to the Company from Century Capital
      as a
      result of this exercise was offset by the Company against amounts due and owing
      to Century Capital related to the deferred monthly consulting fees related
      to
      the original Consulting Services Agreement.




46


As
      provided in the original Consulting Services Agreement the Company is obligated
      to maintain D&O Policies while Mr. LaVance and Mr. Gifford hold positions as
      officers and/or directors of the Company and for a period of two years following
      termination of their service in such positions. The Company also agreed to
      indemnify and hold harmless Century Capital and its representatives, including
      Mr. LaVance and Mr. Gifford, from and against any and all claims, demands,
      liabilities, obligations, losses, fines, and expenses, including reasonable
      attorneys’ and accountants’ fees and expenses incurred in connection with the
      Company’s failure to perform under the amended and restated Consulting Services
      Agreement or any threatened, pending or completed action, suit or proceeding
      arising out of Century Capital’s relationship, or the relationship of any
      Century Capital representative with, the Company.




Commencing
      July 2005, Century Capital began deferring a portion of its monthly consulting
      fee due pursuant to the amended and restated Consulting Services Agreement
      in
      order to minimize the Company’s cash burn. As of November 30, 2006, $285,000 is
      due to Century Capital related to deferred monthly consulting fees for the
      period commencing July 1, 2005 and ending November 30, 2006. In addition, as
      of
      November 30, 2006, $18,750 was due and owing to Century Capital related to
      deferred monthly consulting fees pursuant to the original Consulting Services
      Agreement and $125,000 was due and owing to Century Capital related to the
      minimum annual bonus for the period beginning February 1, 2004 and ending
      January 31, 2005.




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




**Security
      Ownership of Certain Beneficial Owners and Management**




The
      following table sets forth information as of November 30, 2006, with respect
      to
      the beneficial ownership of the Company’s outstanding common stock by (1) each
      of the Company’s current officers and directors, (2) each of the Named Executive
      Officers and directors for the fiscal year ended October 31, 2004, (3) all
      current executive officers and current directors as a group, and (4) each person
      or group of persons known by the Company to be the beneficial owner of 5% of
      the
      Company’s outstanding common stock. Beneficial ownership is determined in
      accordance with the rules of the SEC and generally includes voting or investment
      power with respect to securities. Except as indicated by footnote, the persons
      named in the table below have sole voting power and investment power with
      respect to the shares of common stock shown as beneficially owned by
      them.




47




**Beneficial
                Ownership of**
              **Medi-Hut’s
                Common Stock****Name
                of Beneficial Owner**
            **No.
                of Shares (1)**
            
            **Percent
                of Class**David
                R. LaVance (2)(3)(4)
            3,237,500
            
            14.92%Thomas
                S. Gifford (3)(5)(6)
            3,548,438
            
            16.35%John
                A. Moore (3)(7)
            1,600,000
            
            7.23%Richard
                E. Otto (3)(8)
            600,000
            
            2.69%Richard
                S. Rimer (9)(10)
            3,375,000
            
            15.55%All
                current executive officers and directors as a group
                (4)(6)(7)(8)
            8,675,000
            
            38.16%







(1)
            In
                accordance with Rule 13d-3 of the Exchange Act, a person is deemed
                to be
                the beneficial owner, for purposes of this table, of any shares of
                Medi-Hut’s common stock if he or she has voting or investment power with
                respect to such security. This includes shares (1) subject to options
                and
                warrants exercisable within sixty days, and (2)(a) owned by a spouse,
                (b)
                owned by other immediate family members, or (c) held in trust or
                held in
                retirement accounts or funds for the benefit of the named individuals,
                over which shares the person named in the table may possess voting
                and/or
                investment power.




(2)
            Such
                person serves as the Company’s President and Chief Executive
                Officer.




(3)
            Such
                person serves as a director of the Company and maintains a mailing
                address
                of 215 Morris Avenue, Spring Lake, New Jersey
                07762.




(4)
            Includes
                310,928 shares held by the LaVance Trust for Children. Mr. LaVance
                disclaims beneficial ownership of these securities.




(5)
            Such
                person serves as the Company’s Executive Vice President, Chief Financial
                Officer (Treasurer) and Secretary.




(6)
            Includes
                310,938 shares held by the LaVance Trust for Children. Mr. Gifford
                is the
                trustee for the LaVance Trust for Children. Mr. Gifford disclaims
                beneficial ownership of these
                securities.




(7)
            Includes
                433,400 shares currently available for purchase or which are available
                for
                purchase within sixty days of November 30, 2006 under the warrants
                issued
                by the Company to him on July 24, 2003, May 14, 2004 and February
                25,
                2005.




(8)
            Represents
                the shares currently available for purchase or which are available
                for
                purchase within sixty days of November 30, 2006 under the warrants
                issued
                by the Company to him on July 24, 2003, May 14, 2004 and February
                25,
                2005.




(9)
            Mr.
                Rimer maintains a mailing address at 17 Chemin De La Sapinere, 1253
                Vandoeuvres, Geneva, Switzerland.




(10)
            Includes
                375,000 shares subject to a convertible debenture issued as of May
                1,
                2005.





**Executive
      Compensation Plans**




The
      following table provides information as of November 30, 2006 on the number
      of
      securities to be issued upon the exercise of outstanding options, warrants
      and
      rights and the number of securities remaining available for future issuance
      under the Company’s 2002 Equity Incentive Plan and certain other compensation
      arrangements entered into or established for the officers and directors of
      the
      Company.




48




**EQUITY
                COMPENSATION PLAN TABLE****Plan
                Category**
            **Number
                of securities to be**
              **issued
                upon exercise of**
              **outstanding
                options,**
              **warrants
                and rights**
              **(a)**
            **Weighted-average**
              **exercise
                price of**
              **outstanding
                options,**
              **warrants
                and rights**
              **(b)**
            **Number
                of securities**
              **remaining
                available for**
              **future
                issuance under**
              **equity
                compensation plans**
              **(excluding
                securities**
              **reflected
                in column (a))**
              **(c)**Equity
                compensation plan approved by security holders(1)
            370,000
            (2)(3)(4)
            $
                .07
            1,630,000Equity
                compensation arrangements not approved by security holders
            1,499,998
            (5)(6)(7)(8)
            $
                .13
            --**Total**
            1,869,998
            (2)(3)(4)(5)(6)(7)(8)(9)
            $
                .12
            1,630,000





(1)
            Medi-Hut
                has no equity compensation plans other than the Company’s 2002 Equity
                Incentive Plan described herein which has been approved by the Company’s
                shareholders.




(2)
            Includes
                shares available for purchase at a price of $.08 per share pursuant
                to
                stock options granted to employees of Medi-Hut on December 23, 2003
                as
                follows: Allan J. Jones - 100,000 shares; Adele Ehlin - 75,000 shares;
                and
                Alan D. Jones - 10,000 shares.




(3)
            Includes
                50,000 shares available for purchase at a price of $.08 per share
                pursuant
                to stock options granted to Adele Ehlin, an employee of Medi-Hut,
                on May
                4, 2004, and shares available for purchase at a price of $.02 per
                share
                pursuant to stock options granted to employees of Medi-Hut on December
                23,
                2004 as follows: Allan J. Jones - 25,000 shares and Adele Ehlin -
                10,000
                shares.




(4)
            Includes
                100,000 shares available for purchase at a price of $.08 per share
                pursuant to stock options granted to Allan J. Jones, an employee
                of
                Medi-Hut, on December 23, 2005.




(5)
            Includes
                200,000 shares available for purchase at a price of $.04 per share
                under
                the warrant issued to Century Capital on May 14,
                2004.




(6)
            Includes
                400,000 shares available for purchase at a price of $.26 per share
                under
                warrants issued on July 24, 2003 (200,000 shares per warrant) to
                the
                current directors of the Company, John A. Moore and Richard E. Otto.
                Also
                includes 133,332 shares available for purchase at a price of $.26
                per
                share under the warrant granted on July 24, 2003 to Salvatore J.
                Badalamenti, a former director of the Company, and 66,666 shares
                available
                for purchase at a price of $.26 per share under the warrant granted
                on
                July 24, 2003 to James G. Aaron, a former director of the
                Company.




(7)
            Includes
                333,400 shares available for purchase at a price of $.04 per share
                under
                warrants issued on May 14, 2004 to the current directors of the Company,
                John A. Moore (133,400 shares available for purchase) and Richard
                E. Otto
                (200,000 shares available for purchase). Also includes 66,600 shares
                available for purchase at a price of $.04 per share under the warrant
                granted on May 14, 2004 to Salvatore J. Badalamenti, a former director
                of
                the Company.




(8)
            Includes
                300,000 shares available for purchase at a price of $.03 per share
                under
                warrants issued on February 25, 2005 to the current directors of
                the
                Company, John A. Moore (100,000 shares available for purchase) and
                Richard
                E. Otto (200,000 shares available for
                purchase).




49


*2002
      Equity Incentive Plan*




General




On
      July
      5, 2002, the shareholders approved the Company’s 2002 Equity Incentive Plan (the
“Equity Incentive Plan”) effective as of January 1, 2002. The Equity Incentive
      Plan was placed into effect in order to promote the long-term success of the
      Company and to (1) encourage employees, independent directors and consultants
      of
      the Company to focus on critical long-range objectives, (2) encourage the
      attraction and retention of employees, independent directors and consultants
      with exceptional qualifications, and (3) link employees, independent directors
      and consultants directly to shareholders’ interests through increased stock
      ownership.




The
      Equity Incentive Plan provides for awards in the form of restricted shares,
      incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”) (ISOs and
      NSOs are sometimes collectively referred to as “Options”) and stock appreciation
      rights (“SARs”). The aggregate number of shares of common stock which may be
      awarded under the Equity Incentive Plan is 2,000,000 shares.




Incentive
      Stock Options (ISOs)




Only
      employees of the Company or a parent or a subsidiary of the Company are eligible
      to receive grants of ISOs. Unless otherwise provided in a stock option
      agreement, the first $100,000 of optioned shares that are part of an option
      grant and can be exercised first in a given year shall be considered ISOs,
      and
      the remainder shall be considered NSOs. The exercise price of an ISO may not
      be
      less then 100% of the fair market value of a share of common stock on the date
      of grant. The term of an ISO shall in no event exceed ten years from the date
      of
      grant.




Non-Statutory
      Stock Options (NSOs)




Employees,
      independent directors and consultants of the Company are eligible to receive
      grants of NSOs. Option grants to any optionee in a single fiscal year of the
      Company cannot cover more than 500,000 shares of common stock (750,000 shares
      of
      common stock for new employees in the fiscal year of the Company in which
      service as an employee first commences). Each individual stock option agreement
      shall specify the exercise price for the awards as determined by the Board.
      Options may be awarded in combination with SARs.




Automatic
      Option Grants to Independent Directors




Upon
      the
      conclusion of each annual meeting of the Company’s shareholders commencing in
      2002, each independent director who continues to serve on the Board after such
      annual meeting shall receive an NSO at the discretion of the Board. All NSOs
      granted to an independent director shall also become exercisable in full in
      the
      event of: (1) the termination of such independent director’s service because of
      death, total and permanent disability or retirement at or after age 65; or
      (2) a
      change in control with respect to the Company, with certain exceptions. The
      exercise price under all NSOs granted to an independent director shall be equal
      to 100% of the fair market value of a share of common stock on the date of
      grant. All NSOs granted to an independent director shall terminate on the
      earlier of (a) the 6 th anniversary of the date of grant or (b) the date 12 months after the termination
      of such independent director’s service for any reason. The Board may permit an
      independent director to elect to receive his or her annual retainer payments,
      if
      any, and/or meeting fees from the Company in the form of cash, NSOs, or
      restricted shares or a combination thereof, as determined by the Board. As
      of
      January 31, 2005, no option grants have been made to any of the Company’s
      independent directors under the Equity Incentive Plan.




50


Stock
      Appreciation Rights




SARs
      granted to any optionee in a single fiscal year cannot cover more than 500,000
      shares of common stock (750,000 shares of common stock for new employees in
      the
      fiscal year of the Company in which service as an employee first commences).
      Each SAR agreement shall specify the exercise price. SARs may be awarded in
      combination with Options, which may vary in accordance with a predetermined
      formula while the SARs are outstanding. A SAR may be included in an ISO only
      at
      the time of grant but may be included in an NSO at the time of grant or
      thereafter. Upon exercise of an SAR, the optionee shall receive from the Company
      (a) shares of common stock, (b) cash, or (c) a combination of common stock
      and
      cash, as the Board shall determine.




Restricted
      Shares




The
      holders of restricted shares shall have the same voting, dividend and other
      rights as the Company’s shareholders, subject to any special restrictions
      contained in the restricted share agreement.




The
      Equity Incentive Plan also contains customary protection against dilution.
      Options and SARs shall terminate immediately prior to the dissolution or
      liquidation of the Company. Unless the applicable agreement provides otherwise,
      in the event of any change in control, the vesting and exercisability of each
      outstanding award shall automatically accelerate so that each such award shall,
      immediately prior to the effective date of the change in control, become fully
      exercisable for all of the shares of common stock at the time subject to such
      award and may be exercised for any or all of those shares as fully-vested common
      stock, except under certain circumstances.




A
      copy of
      the Equity Incentive Plan was attached as “Exhibit B” to the Company’s
      definitive proxy statement filed with the SEC on June 10, 2002. To date, options
      to purchase 370,000 shares of the Company’s common stock have been granted under
      the Equity Incentive Plan to employees of the Company.




**Warrants
      Issued to Century Capital**




*Warrant
      Dated February 1, 2003*




On
      February 1, 2003, a warrant to purchase 1,500,000 shares of common stock of
      the
      Company was issued to Century Capital. The warrant has a ten year term and
      was
      exercisable at the original Underlying Purchase Price of $1.34 per share until
      February 1, 2013. The per share purchase price was subject to certain pricing
      adjustments which included an adjustment if the average closing price of the
      Company’s common stock over a period of thirty days was less than the then
      existing Underlying Purchase Price. A total of 375,000 shares of common stock
      underlying the warrant vested immediately upon issuance with another 46,875
      shares vesting on and after the last day of each month commencing February
      28,
      2003 and ending January 31, 2005.




51


As
      a
      result of the application of the pricing adjustment, the Underlying Purchase
      Price adjusted to $.08 per share as of May 14, 2004, the date when Century
      Capital exercised its right to purchase 937,500 shares of the Company’s common
      stock underlying the warrant. The $75,000 due from Century Capital to the
      Company as a result of the purchase of the 937,500 shares was forgiven by the
      Company as part of Century Capital’s bonus for the period February 1, 2003
      through January 31, 2004. The Underlying Purchase Price adjusted to $.02 per
      share as of November 1, 2004 when Century Capital exercised its right to
      purchase 421,876 shares of the Company’s common stock underlying the warrant.
      The $8,438 due to the Company from Century Capital as a result of this exercise
      was offset by the Company against monthly consulting fees due and owing to
      Century Capital that had been deferred for payment. On February 25, 2005,
      Century Capital exercised its right to purchase 140,624 shares of the Company’s
      common stock underlying the warrant at $.02 per share. The $2,812 due to the
      Company from Century Capital as a result of this exercise was offset by the
      Company against monthly consulting fees due and owing to Century Capital that
      had been deferred for payment. As of February 28, 2005, all 1,500,000 shares
      underlying the warrant had been purchased.




Based
      upon the underlying features of the warrant agreement, management determined
      that the best estimate of fair value was to utilize the intrinsic value method
      using the ultimate lowest exercise price to account for the value of this
      warrant issuance. As such, the Company recorded consulting expense as the
      warrant shares vested with the initial vesting of 375,000 warrant shares on
      February 1, 2003 and 46,875 warrant shares vesting at the end of each month
      from
      February 28, 2003 through January 31, 2005. For the fiscal years ended October
      31, 2004 and 2003, the Company recorded $28,127 and $681,094, respectively,
      of
      consulting expense associated with the warrant shares that vested pursuant
      to
      the warrant.




*Warrant
      Dated May 14, 2004*




On
      May
      14, 2004, the Company issued Century Capital ten year, non-cancelable warrant
      to
      purchase 700,000 shares of the Company’s common stock at a purchase price of
      $.04 per share. See “Item 5. Market for Common Equity and Related Stockholder
      Matters - Sales of Unregistered Securities for the Fiscal Year Ended October
      31,
      2004.”




On
      November 1, 2004, Century Capital exercised its right to purchase 200,000 shares
      of the Company’s common stock underlying the warrant. Of the shares purchased,
      100,000 shares became available for purchase on May 14, 2004, the issuance
      date
      of the warrant, and the other 100,000 shares became available for purchase
      prior
      to November 1, 2004 as a result of the Company’s receipt of $500,000 of
      cumulative proceeds from the litigation against certain former officers,
      directors and others which occurred in 2004. The $8,000 due to the Company
      from
      Century Capital as a result of this exercise was offset by the Company against
      monthly consulting fees due and owing to Century Capital that had been deferred
      for payment.




On
      November 13, 2006, Century Capital exercised its right to purchase 300,000
      shares of the Company’s common stock underlying the warrant. Of the shares
      purchased, 100,000 shares became available for purchase on November 24, 2005,
      the date the Company filed its annual report on Form 10-KSB for the fiscal
      year
      ended October 31, 2002. In addition, 100,000 shares became eligible for purchase
      on May 27, 2006, the date the Company filed its quarterly reports on Form 10-QSB
      for the quarters ended January 31, 2003, April 30, 2003 and July 31, 2003 and
      the other 100,000 shares became available for purchase on November 10, 2006,
      the
      date the Company acquired the exclusive world-wide rights to develop, make
      and
      sell the HCMS. The $12,000 due to the Company from Century Capital as a result
      of this exercise was offset by the Company against monthly consulting fees
      due
      and owing to Century Capital that had been deferred for payment.




52


For
      the
      fiscal year ended October 31, 2004, the Company recorded $12,632 of amortization
      expense associated with warrant shares that had vested pursuant to the warrants.
      As of November 30, 2006, 500,000 shares underlying the warrant had been
      purchased and 200,000 shares underlying the warrant remain unvested and are
      not
      yet available for purchase.




*Warrant
      Dated February 25, 2005*




On
      February 25, 2005, a warrant to purchase 500,000 shares of common stock of
      the
      Company was issued to Century Capital. The warrant has a ten year term and
      is
      exercisable at $.03 per share until February 25, 2015. The warrant vested as
      follows: (a) 250,000 of the shares of the Company’s common stock underlying the
      warrant became available for purchase as of February 1, 2005; (b) an additional
      20,833 of the shares underlying the warrant become available for purchase on
      the
      last day of each month commencing February 28, 2005 and ending December 31,
      2005
      and (c) 20,837 of the shares underlying the warrant became available for
      purchase on January 31, 2006. The warrant has customary terms and provisions
      as
      set forth in a warrant certificate, dated as of February 1, 2005, including,
      without limitation, anti-dilution adjustments, registration rights, and
      acceleration of vesting upon a change in control of the Company. In the event
      of
      a change in control of the Company, the warrant becomes fully vested as of
      ten
      days prior to the change in control. For purposes of the warrant, a change
      of
      control means any recapitalization, reorganization, reclassification,
      consolidation, merger, sale of all or substantially all of the Company’s assets
      to another individual, partnership, corporation or other such entity and any
      transaction which is effected in such a way that holders of more than 50% of
      the
      shares of common stock then outstanding are entitled to receive (either directly
      or upon subsequent liquidation) stock, securities or assets of another
      individual, partnership, corporation or other such entity with respect to or
      in
      exchange for common stock. The warrant also contains standard anti-dilution
      provisions and limited registration rights. The shares of common stock issued
      upon the exercise of the warrant shall be unregistered securities. The warrant
      had a fair value of approximately $10,674 at the date of issuance.




On
      February 25, 2005, Century Capital exercised its right to purchase 250,000
      shares of the Company’s common stock underlying the warrant. The $7,500 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against amounts due and owing to Century Capital related to deferred
      monthly consulting fees. On both May 20, 2005 and August 25, 2005, Century
      Capital exercised a portion of the warrant and purchased 62,500 shares of the
      Company’s common stock (125,000 shares in total). The $3,750 due to the Company
      from Century Capital as a result of these exercises was offset by the Company
      against deferred monthly consulting fees due to Century Capital. On November
      13,
      2006, Century Capital exercised its right to purchase 125,000 shares of the
      Company’s common stock underlying the warrant. The $3,750 due to the Company
      from Century Capital as a result of this exercise was offset by the Company
      against monthly consulting fees due and owing to Century Capital that had been
      deferred for payment. As of November 13, 2006, all 500,000 shares underlying
      the
      warrant had been purchased.




53


**Warrants
      Issued to Directors**




*Warrants
      Dated July 24, 2003*




On
      July
      24, 2003, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 800,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $.26
      per
      share until July 24, 2008. The shares of common stock underlying each warrant
      vested equally on and after the date of issue (66,666 shares), on and after
      the
      first anniversary date (66,666 shares) and on and after the second anniversary
      date (66,668 shares). Each warrant contains standard anti-dilution provisions
      and limited registration rights. The shares of common stock issued upon the
      exercise of each warrant shall be unregistered securities. The warrants had
      an
      aggregate fair value of approximately $155,138 at the date of
      issuance.




For
      the
      fiscal years ended October 31, 2004 and 2003, the Company recorded $63,226
      and
      $21,040, respectively, of amortization expense associated with the warrant
      shares that had vested pursuant to the warrant. As of November 30, 2006, an
      aggregate of 599,998 shares of the Company’s common stock are available for
      purchase under the warrants and an aggregate of 200,002 shares underlying the
      warrants had been cancelled.




*Warrants
      Dated May 14, 2004*




On
      May
      14, 2004, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 600,000 shares of common stock could be issued pursuant
      to
      these warrants. See “Item 5. Market for Common Equity and Related Stockholder
      Matters - Sales of Unregistered Securities for the Fiscal Year Ended October
      31,
      2004.”




For
      the
      fiscal year ended October 31, 2004, the Company recorded $15,057 of amortization
      expense associated with warrant shares that had vested pursuant to the warrants.
      On February 25, 2005, John A. Moore, a current director of the Company,
      exercised his right to purchase 66,600 shares of the Company’s common stock
      underlying the warrant. As of November 30, 2006, an aggregate of 66,600 shares
      of the Company’s common stock underlying the warrants had been purchased, an
      aggregate of 400,000 shares underlying the warrants are available for purchase
      and an aggregate of 133,400 shares underlying the warrants had been cancelled.




*Warrants
      Dated February 25, 2005*




On
      February 25, 2005, a warrant to purchase 200,000 shares of common stock of
      the
      Company was issued to each of its directors, other than Mr. LaVance and Mr.
      Gifford. An aggregate amount of 400,000 shares of common stock could be issued
      pursuant to these warrants. Each warrant has a five year term and is exercisable
      at $.03 per share until February 25, 2010. The shares of common stock underlying
      each warrant vested equally on and after the date of issue (100,000 shares)
      and
      on and after the first anniversary date (100,000). Each warrant contains
      standard anti-dilution provisions and limited registration rights. The shares
      of
      common stock issued upon the exercise of each warrant shall be unregistered
      securities. As of November 30, 2006, an aggregate of 100,000 shares underlying
      the warrants had been purchased and an aggregate of 300,000 shares underlying
      the warrants are available for purchase. The warrants had an aggregate fair
      value of approximately $6,378 at the date of issuance.




54


**Warrant
      Issued to Consultant**




On
      May
      11, 2005, a warrant to purchase 100,000 shares of common stock of the Company
      was issued to Dr. William Sear, a consultant to the Company, for consulting
      services rendered by Dr. Sear to the Company. The warrant has a five year term
      and is exercisable at $.05 per share until May 11, 2010. All of the shares
      of
      common stock underlying the warrant vested on the date of issuance, May 11,
      2005. On May 13, 2005, all 100,000 of the shares underlying the warrant were
      purchased. The warrant had a fair value of approximately $2,813 at the date
      of
      issuance.




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




David
      R.
      LaVance, the Company’s Chairman, President and Chief Executive Officer, and
      Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial
      Officer (Treasurer) and Secretary, are owners and officers of Century Capital.
      Effective February 1, 2005, the Company and Century Capital entered into an
      amended and restated Consulting Service Agreement, pursuant to which Messrs.
      LaVance and Gifford currently provide services to the Company as executive
      management. For the fiscal year ended October 31, 2004, the Company was billed
      $900,000 for consulting services rendered by Century Capital and the Company
      recorded $275,000 of consulting expense related to the annual bonuses due to
      Century Capital which consisted of $181,250 for the one year period commencing
      February 1, 2003 and ending January 31, 2004 and $93,750 for the one year period
      commencing February 1, 2004 and ending January 31, 2005. During the fiscal
      year
      ended October 31, 2004, the Company also reimbursed Century Capital for expenses
      incurred in conjunction with performing the consulting services and issued
      Century Capital a warrant to purchase 700,000 shares of common stock. As of
      October 31, 2004, the Company owed Century Capital $246,620 for unpaid monthly
      fees, bonuses and expenses, of which $152,870 was paid in full by the Company
      during the fiscal year ended October 31, 2005.




For
      the
      fiscal year ended October 31, 2003, the Company was billed $688,500 for
      consulting services rendered by Century Capital and the Company recorded $93,750
      of consulting expense related to the annual bonus due to Century Capital for
      the
      one year period commencing February 1, 2003 and ending January 31, 2004. During
      the fiscal year ended October 31, 2003, the Company also reimbursed Century
      Capital for expenses incurred in conjunction with performing the consulting
      services and issued Century Capital a warrant to purchase 1,500,000 shares
      of
      common stock. See “Item 10. Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters - Warrants Issued to Century
      Capital.”




55


In
      May
      2004, the Company relocated its principal offices to 215 Morris Avenue, Spring
      Lake, New Jersey 07762, the location of Century Capital’s office, in order to
      reduce its monthly operating expenses and to more appropriately accommodate
      its
      current operations. The Company and Century Capital entered into a Shared
      Services Agreement whereby the Company rented three fully furnished, business
      equipped offices approximating 340 square feet inside Century Capital’s existing
      offices. This agreement commenced on May 1, 2004, has a month to month term
      that
      requires sixty day written notice to terminate and a monthly rental fee of
      $2,500. During the fiscal year ended October 31, 2004, the Company was billed
      $15,000 for rent pursuant to the Shared Services Agreement. As of the fiscal
      year ended October 31, 2004, the Company owed Century Capital $15,000 for rent,
      which amount remains outstanding.




The
      Company has a 44% stock ownership interest in Medi-Hut International, a Korean
      based joint venture company established to manufacture the Company’s Elite
      Safety Syringe. During November 2002 and January 2003, the Company purchased
      Elite Safety Syringes from Medi-Hut International for a total purchase price
      of
      $100,002. This amount was paid by the Company during November 2002 and February
      2003. As of the fiscal years ended October 31, 2004 and 2003, there were no
      accounts payable to Medi-Hut International.




Lawrence
      P. Marasco, the Company’s former Vice President of Sales and Marketing whose
      employment was terminated by the Company on March 12, 2003, was the sole
      officer, director and shareholder of Larval Corporation (“Larval”), a privately
      held wholesaler of pharmaceutical products, until February 12, 2002, when he
      transferred his ownership in Larval to his sister-in-law. During fiscal year
      ended October 31, 2003, the Company purchased product with a total purchase
      price of $25,164 from Larval and sold product to Larval for a total sales price
      of $430,678. As of the fiscal years ended October 31, 2004 and 2003, there
      were
      no accounts payable to Larval by the Company and no accounts receivable by
      the
      Company from Larval.




**Item
              13.**
            **Exhibits**




Reference
      is made to the Index of Exhibits beginning on page E-1 herein.




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







**Audit
      Fees**




The
      Company was billed $35,000 by Weiser LLP for audit fees relating to the
      Company’s fiscal year ended October 31, 2004 and was billed $35,000 by Weiser
      for audit fees relating to the Company’s fiscal year ended October 31, 2003.
      Audit fees consisted of fees for the audit of the Company's annual financial
      statements and review of quarterly financial statements as well as services
      normally provided in connection with statutory and regulatory filings or
      engagements, comfort letters, consents and assistance with and review of Company
      documents filed with the SEC.




**Audit
      Related Fees**




The
      Company did not incur any fees associated with audit related services with
      Weiser, or any other accounting firm, relating to fiscal years ended October
      31,
      2004 and 2003. Audit-related fees are fees for assurance and related services,
      including primarily employee benefit plan audits, due diligence related to
      acquisitions, accounting consultations in connection with acquisitions,
      consultation concerning financial accounting and reporting standards and
      consultation concerning matters related to Section 404 of the Sarbanes Oxley
      Act
      of 2002.




56


**Tax
      Fees**




The
      Company did not incur any fees associated with tax services with Weiser relating
      to fiscal years ended October 31, 2004 and 2003. The Company was billed $1,750
      by Karl Dienes, CPA for tax compliance services relating to fiscal year ended
      October 31, 2004 and was billed $1,750 by Karl Dienes, CPA for tax compliance
      services relating to fiscal year ended October 31, 2003. Tax fees consisted
      primarily of fees for tax compliance, tax advice and tax planning
      services.




**All
      Other Fees**




The
      Company did not incur any fees associated with non-audit services with Weiser,
      or any other accounting firm, relating to fiscal years ended October 31, 2004
      and 2003.




57


**SIGNATURES**







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













**DATE:**
            **MEDI-HUT
              CO., INC.**December
              21, 2006
            By:
            /s/
              David R. LaVanceDavid
              R. LaVanceChairman
                of the Board of Directors,
              President
                and Chief Executive Officer




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the Registrant and in the capacities and on
      the
      dates indicated.




Signatures
            
            Title
            
            Date/s/
                David R. LaVance
            
            Chairman
                of the Board of
            
            December
                21, 2006David
                R. LaVance
            
            Directors,
                President andChief
                Executive Officer/s/
                Thomas S. Gifford
            
            Executive
                Vice President,
            
            December
                21, 2006Thomas
                S. Gifford
            
            Chief
                Financial Officer,Secretary
                and Director/s/
                John A. Moore
            
            Director
            
            December
                21, 2006John
                A. Moore/s/
                Richard E. Otto
            
            Director
            
            December
                21, 2006Richard
                E. Otto





58


**Medi-Hut
      Co., Inc. and Subsidiary**





**Consolidated
      Financial Statements**





**Contents**





Report
                of Independent Registered Public Accounting Firm
            F-1Balance
                Sheets as of October 31, 2004 and 2003
            F-2Statements
                of Operations for the Fiscal Years Ended October 31, 2004 and
                2003
            F-3Statements
                of Stockholders’ Equity for the Fiscal Years Ended October 31, 2004 and
                2003
            F-4Statements
                of Cash Flows for the Fiscal Years Ended October 31, 2004 and
                2003
            F-6Notes
                to the Consolidated Financial Statements
            F-7














REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors and


Stockholders
      of Medi-Hut Co., Inc.





We
      have
      audited the accompanying consolidated balance sheets of Medi-Hut Co., Inc.
      and
      subsidiary (the “Company”) as of October 31, 2004 and 2003 and the related
      consolidated statements of operations, stockholders’ equity and cash flows for
      each of the two years in the period ended October 31, 2004. These consolidated
      financial statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these consolidated financial
      statements based upon our audits.





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





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of Medi-Hut Co.,
      Inc. and subsidiary as of October 31, 2004 and 2003 and the consolidated results
      of their operations and their consolidated cash flows for each of the two years
      in the period ended October 31, 2004 in conformity with accounting principles
      generally accepted in the United States of America.










/s/
      Weiser LLP





New
      York,
      New York





December
      4, 2006




F-1





**Medi-Hut
      Co., Inc. and Subsidiary**


**Consolidated
      Balance Sheets**


**October
                31,**
              **2004**
            
            **October
                31,**
              **2003****Assets**Current
                assets:Cash
                and cash equivalents
            
            $
            693,939
            
            $
            1,343,560Accounts
                receivable
            
            
            5,369
            
            
            74,385Inventories
            
            
            --
            
            
            101,875Prepaid
                insurance
            
            
            30,874
            
            
            138,724Income
                tax refund
            
            
            38,246
            
            
            --Prepaid
                expenses and other
            
            
            4,808
            
            
            10,254Total
                current assets
            
            
            773,236
            
            
            1,668,798Other
                assets:Note
                receivable - related party, less reserve of $0 and $470,477,
                respectively
            
            
            --
            
            
            --Distribution
                rights
            
            
            1,000,000
            
            
            1,000,000Income
                tax refund
            
            
            --
            
            
            287,388Restricted
                cash
            
            
            --
            
            
            400,000Security
                deposit
            
            
            --
            
            
            33,388Other
            
            
            42,512
            
            
            80,866Total
                other assets
            
            
            1,042,512
            
            
            1,801,642Total
                assets
            
            $
            1,815,748
            
            $
            3,470,440**Liabilities**Current
                liabilities:Accounts
                payable
            
            $
            118,610
            
            $
            138,857Accounts
                payable - related party
            
            
            261,620
            
            
            4,115Accrued
                expenses
            
            
            103,760
            
            
            159,049Reserve
                for class action lawsuit settlement
            
            
            --
            
            
            529,299Note
                payable
            
            
            --
            
            
            10,645Deferred
                revenue
            
            
            --
            
            
            34,209Total
                current liabilities
            
            
            483,990
            
            
            876,174Commitments
                and contingencies**Stockholders'
                Equity**Common
                stock, $.001 par value; 100,000,000 shares authorized;13,801,990
                and 14,558,800 shares issued, respectively; 13,801,990 and 14,366,500
                shares outstanding, respectively
            
            
            13,802
            
            
            14,559Additional
                paid in capital
            
            
            19,454,635
            
            
            19,438,104Treasury
                stock at cost, 0 and 192,300 shares, respectively
            
            
            --
            
            
            (419,523
            )Stock
                subscription receivable
            
            
            --
            
            
            (300,000
            )Deferred
                compensation
            
            
            (91,054
            )
            
            (134,098
            )Accumulated
                deficit
            
            
            (18,045,625
            )
            
            (16,004,776
            )Total
                stockholders' equity
            
            
            1,331,758
            
            
            2,594,266Total
                liabilities and stockholders' equity
            
            $
            1,815,748
            
            $
            3,470,440




*The
                accompanying notes are an integral part of these consolidated financial
                statements.*





F-2


**Medi-Hut
      Co., Inc. and Subsidiary**


**Consolidated
      Statements of Operations**








**Years
                Ended**
              **October
                31,****2004**
            
            **2003**Net
                sales
            
            $
            502,279
            
            $
            7,643,340Cost
                of sales
            
            
            342,700
            
            
            5,624,789Gross
                profit
            
            
            159,579
            
            
            2,018,551Operating
                expenses:Selling
                and marketing
            
            
            5,370
            
            
            486,801General
                and administrative
            
            
            2,713,734
            
            
            4,433,266Total
                operating expenses
            
            
            2,719,104
            
            
            4,920,067Loss
                from operations
            
            
            (2,559,525
            )
            
            (2,901,516
            )Proceeds
                from settlement of litigation
            
            
            515,000
            
            
            475,000Interest
                income
            
            
            6,507
            
            
            11,319Interest
                expense
            
            
            (2,831
            )
            
            (21,839
            )Net
                loss
            
            $
            (2,040,849
            )
            $
            (2,437,036
            )Net
                loss per common share, basic and diluted
            
            $
            (0.15
            )
            $
            (0.17
            )Weighted
                average number of common shares outstanding, basic and
                diluted
            
            
            13,991,180
            
            
            14,384,811




*The
                accompanying notes are an integral part of these consolidated financial
                statements.*





F-3


**Medi-Hut
      Co., Inc. and Subsidiary**


**Consolidated
      Statements of Stockholders’ Equity**


**For
      the Years Ended October 31, 2004 and 2003**




**Common
                Stock**
            
            **Additional**
              **Paid
                in**
              **Capital**
            
            **Treasury
                Stock**
            
            **Stock**
              **Subscription**
              **Receivable**
            
            
            
            
            
            **Total**
              **Stockholders'**
              **Equity****Number
                of**
              **Shares**
            
            **$0.001**
              **Par
                Value**
            
            
            **Number
                of**
              **Shares**
            
            **Amount**
            
            
            **Deferred**
              **Compensation**
            
            **Accumulated**
              **Deficit**Balance
                at October 31, 2002
            
            
            14,558,800
            
            $
            14,559
            
            $
            18,620,572
            
            
            144,900
            
            $
            (363,717
            )
            $
            (300,000
            )
            $
            (26,180
            )
            $
            (13,567,740
            )
            $
            4,377,494Purchase
                of shares of Company common stock
            
            
            
            
            
            
            
            
            
            
            
            47,400
            
            
            (55,806
            )
            
            
            
            
            
            
            
            
            
            
            (55,806
            )Consulting
                expense - warrant issued to Century Capital
            
            
            
            
            
            
            
            
            681,094
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            681,094Deferred
                compensation - warrants issued to directors
            
            
            
            
            
            
            
            
            155,138
            
            
            
            
            
            
            
            
            
            
            
            (155,138
            )
            
            
            
            
            --Cancellation
                of stock options issued to a former employee
            
            
            
            
            
            
            
            
            (18,700
            )
            
            
            
            
            
            
            
            
            
            
            18,700
            
            
            
            
            
            --Amortization
                of deferred compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            28,520
            
            
            
            
            
            28,520Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,437,036
            )
            
            (2,437,036
            )Balance
                at October 31, 2003
            
            
            14,558,800
            
            $
            14,559
            
            $
            19,438,104
            
            
            192,300
            
            $
            (419,523
            )
            $
            (300,000
            )
            $
            (134,098
            )
            $
            (16,004,776
            )
            $
            2,594,266Shares
                of common stock issued for compensation
            
            
            25,000
            
            
            25
            
            
            4,975
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5,000Cancellation
                of warrants issued to a former director
            
            
            
            
            
            
            
            
            (28,477
            )
            
            
            
            
            
            
            
            
            
            
            28,477
            
            
            
            
            
            --Common
                stock retired - settlement of lawsuits with former
                officers
            
            
            (4,264,000
            )
            
            (4,264
            )
            
            4,264
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            --Treasury
                stock retired
            
            
            (192,300
            )
            
            (192
            )
            
            (419,331
            )
            
            (192,300
            )
            
            419,523
            
            
            
            
            
            
            
            
            
            
            
            --Shares
                issued to Century Capital for partial exercise of warrant dated February
                1, 2003
            
            
            937,500
            
            
            937
            
            
            74,063
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            75,000




F-4


**Medi-Hut
      Co., Inc. and Subsidiary**


**Consolidated
      Statements of Stockholders’ Equity**


**For
      the Years Ended October 31, 2004 and 2003 (continued)**




**Common
                Stock**
            
            **Additional**
              **Paid
                in**
              **Capital**
            
            **Treasury
                Stock**
            
            **Stock**
              **Subscription**
              **Receivable**
            
            **Deferred**
              **Compensation**
            
            **Accumulated**
              **Deficit**
            
            **Total**
              **Stockholders'**
              **Equity****Number
                of**
              **Shares**
            
            **$0.001**
              **Par
                Value**
            
            
            **Number
                of**
              **Shares**
            
            **Amount**Shares
                issued to Century Capital as part of the annual bonus due for the
                one year
                period commencing February 1, 2003 and ending January 31,
                2004
            
            
            1,875,000
            
            
            1,875
            
            
            148,125
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            150,000Shares
                of common stock issued in settlement of class action
                lawsuit
            
            
            861,990
            
            
            862
            
            
            128,437
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            129,299Proceeds
                from stock subscription receivable
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            300,000
            
            
            
            
            
            
            
            
            300,000Consulting
                expense - warrant issued to Century Capital
            
            
            
            
            
            
            
            
            28,127
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            28,127Deferred
                compensation - warrants issued to directors and Century Capital
            
            
            
            
            
            
            
            
            76,348
            
            
            
            
            
            
            
            
            
            
            
            (76,348
            )
            
            
            
            
            --Amortization
                of deferred compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            90,915
            
            
            
            
            
            90,915Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,040,849
            )
            
            (2,040,849
            )Balance
                at October 31, 2004
            
            
            13,801,990
            
            $
            13,802
            
            $
            19,454,635
            
            
            --
            
            $
            --
            
            $
            --
            
            $
            (91,054
            )
            $
            (18,045,625
            )
            $
            1,331,758




*The
                accompanying notes are an integral part of these consolidated financial
                statements.*








F-5







**Medi-Hut
      Co., Inc. and Subsidiary**


**Consolidated
      Statements of Cash Flows**


**Years
                Ended**
              **October
                31,****2004**
            
            **2003**Cash
                flows from operating activities:Net
                loss
            
            $
            (2,040,849
            )
            $
            (2,437,036
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            38,354
            
            
            16,212Amortization
                of deferred compensation
            
            
            90,915
            
            
            28,520Consulting
                expense related to warrant
            
            
            28,127
            
            
            681,094Consulting
                expense related to issuance of common stock
            
            
            150,000
            
            
            --Compensation
                expense related to issuance of common stock
            
            
            5,000
            
            
            --Reserve
                on accounts receivable
            
            
            --
            
            
            (471,210
            )Reserve
                on note receivable - related party
            
            
            --
            
            
            150,000Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            69,016
            
            
            4,868,010Related
                party accounts receivable
            
            
            --
            
            
            479,339Inventories
            
            
            101,875
            
            
            176,849Prepaid
                insurance
            
            
            107,850
            
            
            (138,724
            )Prepaid
                expenses and other
            
            
            5,446
            
            
            138,006Income
                tax refund
            
            
            249,142
            
            
            --Restricted
                cash
            
            
            400,000
            
            
            (400,000
            )Security
                deposit
            
            
            33,388
            
            
            (33,388
            )Accounts
                payable
            
            
            (20,247
            )
            
            (5,206,600
            )Accounts
                payable - related party
            
            
            238,755
            
            
            (2,992
            )Accrued
                expenses
            
            
            38,461
            
            
            23,540Reserve
                for class action lawsuit settlement
            
            
            (400,000
            )
            
            --Deferred
                revenue
            
            
            (34,209
            )
            
            34,209Net
                cash used in operating activities
            
            
            (938,976
            )
            
            (2,094,171
            )Cash
                flows from investing activities:Purchases
                of fixed assets
            
            
            --
            
            
            (74,785
            )Proceeds
                from sale of fixed assets
            
            
            --
            
            
            11,787Note
                receivable - related party
            
            
            --
            
            
            (150,000
            )Net
                cash used in investing activities
            
            
            --
            
            
            (212,998
            )Cash
                flows from financing activities:Purchase
                of Company common stock
            
            
            --
            
            
            (55,806
            )Proceeds
                from note payable
            
            
            84,000
            
            
            15,797Repayment
                of note payable
            
            
            (94,645
            )
            
            (5,152
            )Proceeds
                from stock subscription receivable
            
            
            300,000
            
            
            --Net
                cash provided by (used in) financing activities
            
            
            289,355
            
            
            (45,161
            )Decrease
                in cash and cash equivalents
            
            
            (649,621
            )
            
            (2,352,330
            )Cash
                and cash equivalents - beginning of period
            
            
            1,343,560
            
            
            3,695,890Cash
                and cash equivalents - end of period
            
            $
            693,939
            
            $
            1,343,560Supplemental
                disclosure of cash flow information:Cash
                paid during the period for interest
            
            $
            2,831
            
            $
            20,664Noncash
                financing activities:Retirement
                of treasury stock
            
            $
            419,523
            
            $
            --Issuance
                of common stock for class action settlement
            
            $
            129,299
            
            $
            --Issuance
                of common stock as payment of amounts due to related party
            
            $
            75,000
            
            $
            --




*The
                accompanying notes are an integral part of these consolidated financial
                statements.*




F-6


**Medi-Hut
      Co., Inc. and Subsidiary**


**Notes
      to the Consolidated Financial Statements**





**1.**
            **Organization
                and Description of
                Business**




Medi-Hut
      Co., Inc. and subsidiary (“Medi-Hut” or the “Company”) is a Nevada corporation
      headquartered in Spring Lake, New Jersey. The Company was incorporated in the
      State of New Jersey in November 1982. On January 28, 1998, the Company entered
      into an Agreement and Plan of Reorganization with Indwest, Inc., a Utah
      corporation, whereby the Company changed its domicile to the State of Utah
      and
      became subject to the reporting requirements of the Securities Exchange Act
      of
      1934, as amended (the “Exchange Act”). On February 2, 1998, the Company
      completed a second change of domicile transaction and became a Delaware
      corporation, and, on October 31, 2001, completed a third and final change of
      domicile transaction and became a Nevada corporation.




On
      October 17, 2003, the Company formed its wholly-owned subsidiary, Scivanta
      Corporation (“Scivanta”), a New Jersey corporation. Scivanta was formed to be an
      operating subsidiary of the Company, but is currently inactive.




Although
      the Company ceased selling all products during the fiscal year ended October
      31,
      2004, the Company has not had any significant recurring revenue from the sale
      of
      products since the second quarter of 2003.




In
      March
      2003, the Company exited from the business of selling branded and generic
      pharmaceuticals due to the low profit margins attributed to such sales. In
      addition, in March 2003, the Company ceased selling Syntest due to a dispute
      with the manufacturer and the Company’s contract sales representative for the
      product which resulted in the commencement of litigation by the Company against
      such parties as well as other related litigation involving the Company. See
      Notes 4, 7 and 13.




During
      the fiscal year ended October 31, 2004, the Company’s business consisted of the
      distribution of condoms, alcohol preps and disposable clinical supplies. The
      Company’s products generally were sold directly to physicians and other
      healthcare providers or to wholesalers who sold the products to pharmacies,
      drug
      store chains or other wholesalers. In October 2004, the Company stopped selling
      these products due to reduced profit margins and the decline in the customer
      base.




During
      May 2004, the Company’s management team completed its evaluation of the
      Solo-SafeTM Safety Syringe. Due to the early development stage of the product,
      the fact that a manufacturing prototype had not been created, the cost
      associated with developing the product as compared to the overall market
      opportunity and the Company’s limited financial resources, the Company decided
      to stop any further development of this product or the maintenance of the
      related patents.




During
      December 2004, the Company completed its evaluation of the Elite Safety Syringe
      product line. As a result of this evaluation, the Company’s management decided
      to discontinue any further development or marketing of the Elite Safety Syringe
      due to the cost associated with correcting the product design, the cost
      associated with establishing sufficient manufacturing capabilities to support
      a
      market launch and the lack of a market for safety syringes sufficient to support
      the product launch.




F-7


**2.**
            **Basis
                of Presentation**




The
      Company currently does
      not
      have any recurring revenue from the sale of products. On
      November 10, 2006, the Company acquired
      the exclusive world-wide rights to develop, make and sell certain proprietary
      technologies known as the Hickey Cardiac Monitoring System (the “HCMS”), a
      minimally invasive two-balloon esophageal catheter system used to monitor
      cardiac performance.  The
      HCMS
      is currently in the development stage and the Company anticipates that it will
      take approximately 18 months to complete development and related clinical
      trials. In addition, the Company must also receive the appropriate regulatory
      approvals before the HCMS can be marketed in the United States or
      abroad .  No
      assurance can be given that the Company will receive the appropriate regulatory
      approvals to market the HCMS. See
      Note
      13.




On
      May
      26, 2005, the Company closed on a private placement of 8% convertible debentures
      (the “Debentures”). The gross proceeds received in connection with this private
      placement were $300,000. See Note 13.




On
      August
      25, 2005, the Company closed on a private placement of 4,000,000 shares of
      its
      common stock. The gross proceeds received in connection with this private
      placement were $200,000 ($.05 per share). See Note 13.




On
      October 17, 2005, the Company and Breckenridge Pharmaceutical Inc.
      (“Breckenridge”) entered into a purchase and settlement agreement pursuant to
      which the Company sold its distribution and other rights and business with
      respect to the hormone replacement drug, Syntest, to Breckenridge. In
      consideration for the sale of such rights and the other benefits provided under
      the purchase and settlement agreement,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. As of
      November 30, 2006, the Company received $900,000 of payments from Breckenridge
      pursuant to the purchase and settlement agreement. See Notes 4, 7 and
      13.




On
      February 21, 2006, the Company entered into a settlement agreement and release
      with its former independent registered public accounting firm, Rosenberg, Rich,
      Baker, Berman & Company (“Rosenberg”), pursuant to which Rosenberg paid the
      Company the sum of $425,000. See Notes 4 and 13.




On
      November 22, 2006, the Company entered into a settlement agreement and release
      with Syntho Pharmaceuticals Inc. (“Syntho”) and its principal owner, Muhammed
      Malik (collectively, the “Syntho Group”) and Intermax Pharmaceuticals, Inc.
      (“Intermax”) relating to the Company’s exclusive right to distribute the hormone
      replacement therapy drug, Syntest. As part of the settlement reached by the
      parties, the Syntho Group agreed to pay the Company an aggregate of $3,100,000
      (the “Settlement Amount”) as follows: (1) $250,000 was paid upon the execution
      of the settlement agreement; (2) $100,000 will be paid on the 27 th day of
      each month for a 3 month period commencing on December 27, 2006 and ending
      on
      February 27, 2007 and (3) $2,550,000 will be paid on or before March 27, 2007.
      A
      portion of the Settlement Amount, $2,850,000, is secured by a first priority
      mortgage on real property owned by the spouse of Muhammed Malik. See Notes
      4 and
      13.




F-8


Management
      believes the funds received in connection with the issuance of the Debentures
      and the sale of common stock and the proceeds received from the settlement
      agreements with Breckenridge, Rosenberg and the Syntho Group, together with
      funds currently available to the Company, will be sufficient to support planned
      operations through January 1, 2008. Management believes that the Company will
      require additional capital to complete the development of the HCMS and to be
      able to acquire additional products and technologies.




**3.**
            **Limitation
                on Financial Reporting**




On
      March
      21, 2003, the Company terminated the employment of its four senior officers
      as
      follows: Joseph A. Sanpietro, President and Chief Executive Officer; Vincent
      J.
      Sanpietro, Chief Operating Officer; Laurence M. Simon, Chief Financial Officer;
      and Lawrence P. Marasco, Vice President of Sales (collectively, the “Former
      Officers”) due to corporate mismanagement in the form of accounting
      irregularities and securities fraud during the fiscal years ended October 31,
      2002 and 2001. Shortly thereafter, Joseph A. Sanpietro and Vincent J. Sanpietro
      resigned from the Company’s Board of Directors. At the time of their
      termination, each of the former officers was the subject of an investigation
      by
      the United States Department of Justice (“USDJ”) and the Securities and Exchange
      Commission (“SEC”). As a result of the investigation by the USDJ, on August 19,
      2003, each of the Former Officers pled guilty to conspiring to inflate the
      revenue and earnings of the Company and/or obstruction of justice. In addition,
      on August 19, 2003, each of the Former Officers agreed to a consent decree
      with
      the SEC.




The
      Company’s current management commenced an extensive review of the financial
      statements and information disclosed in the Company’s annual report on Form
      10-KSB for the fiscal year ended October 31, 2001 and the Company’s quarterly
      reports on Forms 10-Q and 10-QSB filed with the SEC in 2002 and 2001,
      respectively. As a result, the current management of the Company concluded
      that
      the financial statements and other information disclosed in the Company’s
      quarterly reports on Forms 10-Q and 10-QSB filed with the SEC in 2002 and 2001,
      respectively, and disclosed in the Company’s annual report on Form 10-KSB for
      the fiscal year ended October 31, 2001, could not be relied upon due to the
      Company’s inability to adequately verify such information because of incomplete
      or missing data. Consequently, the Company amended its quarterly reports for
      the
      quarters ended January 31, 2001, April 30, 2001, July 31, 2001, January 31,
      2002, April 30, 2002 and July 31, 2002, and its 2001 annual report, by removing
      all of the information previously contained therein. In addition, the
      financial statement and notes thereto for the fiscal year ended October 31,
      2002, included in the Company’s annual report on Form 10-KSB for the fiscal year
      ended October 31, 2002, consisted
      only of a balance sheet as of October 31, 2002 and the related footnotes. Since
      a complete set of financial statements for the above noted periods were not
      presented by the Company, no assurance can be given that the SEC will not take
      an enforcement action or other action against the Company. Any such action
      by
      the SEC could have significant adverse consequences to the Company.




In
      addition, as a result of the above noted limitations on financial reporting,
      the
      Company’s quarterly reports on Form 10-QSB for the quarters ended January 31,
      2003, April 30, 2003 and July 31, 2003 and the Company’s annual report on Form
      10-KSB for the fiscal year ended October 31, 2003, do not include the required
      comparative financial information related to the fiscal year ended October
      31,
      2002. Since those reports do not contain the required comparative financial
      information, no assurance can be given that the SEC will not take an enforcement
      action or other action against the Company. Any such action by the SEC could
      have significant adverse consequences to the Company.




F-9


**4.**
            **Legal
                Proceedings**




As
      a
      result of the actions of the Former Officers and other business matters, the
      Company, the Former Officers and/or certain former directors became involved
      in
      several separate legal proceedings.




***Government
      Proceedings and Investigations***




SEC
      Investigation .
      On
      February 21, 2002, the SEC commenced an investigation and review of Medi-Hut’s
      filings with the SEC and its financial disclosures in general, as well as the
      sufficiency of the Company’s system of internal accounting controls. On August
      19, 2003, the SEC’s investigation into the Company resulted in the commencement
      of an action against Medi-Hut and the Company’s former President and Chief
      Executive Officer, Joseph A. Sanpietro, former Chief Financial Officer, Laurence
      M. Simon, and former Vice President of Sales, Lawrence P. Marasco. Without
      admitting or denying the allegations of the complaint, the Company consented
      to
      a final judgment against it and is permanently restrained from making any untrue
      or misleading disclosures, whether such disclosures are in a report filed with
      the SEC or are contained in a press release or other general public disclosure,
      and must make and keep accurate books, records and accounts and maintain a
      system of internal accounting control sufficient to ensure fair and accurate
      financial disclosure.




FBI
      Investigation. ****** On
      November 22, 2002, the Federal Bureau of Investigation (“FBI”) executed a search
      warrant and removed certain documents and computers from the Company’s premises.
      The Company was not advised of the reasons for the FBI’s actions. As of November
      30, 2006, no indictments or charges have been issued against the
      Company.




Guilty
      Pleas of Former Officers and Directors. ** On
      August
      19, 2003, the USDJ investigation resulted in the guilty pleas of Joseph A.
      Sanpietro, Laurence M. Simon and Lawrence P. Marasco to conspiracy to inflate
      the revenue and earnings of the Company and lying to investigators. In addition,
      Vincent J. Sanpietro pled guilty to obstruction of justice. The Company no
      longer has any business relationships with these former officers and
      directors.





***Litigation***





Class
      Action Lawsuits. **** Beginning
      in February 2002, the Company and certain of its former officers and directors
      were named in an aggregate of eleven class action lawsuits filed in the United
      States District Court for the District of New Jersey. The lawsuits alleged
      that,
      among other contentions, the Company and certain of its former officers and
      directors failed to disclose a related party transaction between the Company
      and
      the Company’s former Vice President of Sales, in its periodic reports filed with
      the SEC. On January 13, 2003, the class action lawsuits filed against the
      Company in 2002 were consolidated.




F-10


On
      July
      11, 2003, the Company and Executive Risk Indemnity, Inc. (“Executive Risk”), the
      insurance company that provided the Company with its director and officer
      insurance coverage for a portion of the class period, reached an agreement
      whereby Executive Risk paid $475,000 to the Company. In exchange for the
      $475,000 payment, the Company agreed to terminate the director and officer
      insurance coverage provided by Executive Risk and release and hold harmless
      Executive Risk for any claims for coverage which could be made by any former
      director or officer.




On
      August
      18, 2003, the Company reached settlement of the consolidated class action
      lawsuit, which was subject to the approval of the United States District Court
      for the District of New Jersey. As part of the settlement, the Company agreed
      to
      pay $400,000 in cash to the plaintiffs and issue 861,990 shares of Medi-Hut
      common stock (fair value of approximately $129,299 as of August 18, 2003) which
      was equivalent to six percent of Medi-Hut’s issued and outstanding shares of the
      Company’s common stock on the date the settlement was reached. The Company
      utilized the $475,000 received from Executive Risk to fund the settlement and
      to
      offset a portion of the legal costs and expenses incurred by the Company in
      connection with the consolidated class action lawsuit.




On
      September 12, 2003, the complaint filed in the consolidated class action lawsuit
      against the Company and the other defendants was amended. The amended class
      action complaint included additional information, including information
      regarding the alleged improper conduct of certain former officers and directors
      of the Company.




On
      January 12, 2004, the United States District Court for the District of New
      Jersey issued a Preliminary Approval Order and issued its final approval of
      the
      settlement on May 3, 2004.




Syntest
      Litigation .
      On
      April 18, 2003, Scott Schrader (“Schrader”) and his affiliates, namely Schrader
& Associates, LLC (“Schrader Associates”), Bluegrass Drug LLC (“Bluegrass”)
      and Medpharm Corporation (“Medpharm”) (collectively, the “Schrader Group”)
      commenced three separate actions in Kentucky against the Company alleging,
      among
      other things, that the Company breached the brokerage agreement entered into
      by
      the Company and members of the Schrader Group. In its complaint, the Schrader
      Group sought unspecified monetary damages.




On
      May
      12, 2003, the Company commenced an action in the United States District Court
      for the Eastern District of New York against the Syntho Group, Breckenridge
      and
      its principal owner, Larry Runsdorf (collectively, the “Breckenridge Group”),
      and the Schrader Group relating to the Company’s exclusive right to distribute
      the hormone replacement therapy drug, Syntest, under an agreement with Syntho
      which expires no earlier than November 2006 (the “Syntest Agreement”). In its
      complaint, the Company alleged, among other things, that Syntho permitted
      Breckenridge, Medpharm and Bluegrass to distribute Syntest in violation of
      the
      Syntest Agreement and that Schrader Associates, which had been appointed by
      the
      Company as the exclusive broker with respect to sales of Syntest to drug
      wholesalers, chain drug stores and managed care companies, offered discounts,
      incentives and rebates to customers of the Company without the Company’s
      authorization.




On
      May
      12, 2003, Breckenridge commenced an action against the Company in the United
      States District Court for the Southern District of Florida, alleging that the
      Company was interfering with plaintiff’s alleged exclusive rights to distribute
      Syntest. This action was later moved to the United States District Court for
      the
      Eastern District of New York.




F-11


In
      June
      2003, the Syntho Group filed an answer to the Company’s complaint which
      contained counterclaims against the Company for alleged: (1) breach of contract,
      (2) failure to pay for product, (3) tortious interference with Syntho’s
      agreement with Breckenridge, and (4) conversion of property.




On
      April
      21, 2004, the Company entered into a settlement agreement and limited release
      with the Schrader Group. Pursuant to this agreement, the Company and the
      Schrader Group agreed to dismiss with prejudice the actions which were pending
      in the United States District Court for the District of Kentucky and the actions
      against each other which were pending in the United States District Court for
      the Eastern District of New York. As part of the settlement reached by the
      Company and the Schrader Group, the Schrader Group paid to the Company a cash
      payment of $375,000. In addition, the parties released each other from certain
      claims arising out of the distribution and sale of Syntest. See Note
      13.




Litigation
      Against Certain Former Officers and Directors and Others. On
      December 4, 2003, the Company commenced litigation in the Superior Court of
      New
      Jersey against the Former Officers and a former director, Healthgen
      Distributors, Inc. (formerly known as Larval Corp.), Kinray, Inc. and Santi
      Grieco, an officer of Kinray, Inc. In its complaint, the Company alleged that
      the Former Officers caused the Company to suffer significant damage and incur
      substantial costs by engaging in a scheme to overstate the Company’s revenues
      and earnings through fraudulent accounting practices. The Company also alleged
      in its complaint that these former officers and directors, in furtherance of
      their scheme to defraud, filed materially false and misleading documents with
      the SEC and disseminated materially false and misleading information to the
      general public, investors and financial advisors and brokers. In addition to
      the
      foregoing, the Company alleged in its complaint that the Former Officers, with
      the assistance of Larval, an entity controlled by Lawrence P. Marasco, Kinray,
      Inc., a New York based pharmaceutical distributor, and Santi Grieco, an officer
      of Kinray, Inc., committed violations of state and federal laws prohibiting
      forgery and fraudulent practices and otherwise participated in “racketeering
      activity” as that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1.




In
      addition, as set forth in the complaint, the Company sought payment of a
      promissory note in the principal amount of $575,000 issued to it by former
      officer and director, Robert S. Russo, plus all accrued interest thereon. The
      promissory note, due and payable on October 24, 2003, was issued by Mr. Russo
      as
      payment for 100,000 shares of the Company’s common stock which he purchased in a
      private placement by the Company during the fall of 2001. The Company also
      sought to recover damages from Mr. Russo for his alleged breach of fiduciary
      duties to the Company during the time he was serving as an officer of the
      Company.




On
      February 4, 2004, the Company entered into a settlement and release agreement
      with Vincent J. Sanpietro. In exchange for a one time payment of $20,000, the
      return of 554,800 shares of the Company’s common stock and certain other
      non-monetary considerations, the Company agreed to discharge its claims against
      Mr. Sanpietro. The Company recorded other income of $20,000 related to the
      cash
      received by the Company in connection with the settlement and retired the common
      stock returned.




F-12


On
      April
      14, 2004, the Company entered into a settlement and release agreement with
      Joseph A. Sanpietro. In exchange for a one-time payment of $60,000 and the
      return of 3,179,200 shares of the Company’s common stock and certain other
      non-monetary consideration, the Company agreed to discharge its claims against
      Mr. Sanpietro. The Company recorded other income of $60,000 related to the
      cash
      received by the Company in connection with the settlement and retired the common
      stock returned.




On
      May
      14, 2004, the Company entered into a settlement and release agreement with
      Mr.
      Russo. In exchange for a one-time payment of $300,000 to satisfy a stock
      subscription receivable, the return of 125,000 shares of the Company’s common
      stock and other non-monetary consideration, the Company agreed to discharge
      its
      claims against Mr. Russo. The Company subsequently retired the common stock
      returned.




On
      July
      6, 2004, the Company amended the complaint against certain of its former
      officers and directors and others and commenced litigation against Muhammed
      Malik, Intermax Pharmaceuticals, Inc. (“Intermax”) and Syntho. In its complaint,
      Medi-Hut alleges that Muhammed Malik, in his capacity as a consultant to the
      Company and as President of Intermax and Syntho: (1) provided substantial
      assistance to the former officers and certain former directors of the Company
      in
      carrying out the scheme to overstate Medi-hut’s revenues and earnings through
      fraudulent accounting practices; (2) committed violations of state and federal
      laws prohibiting forgery and fraudulent practices; and (3) otherwise
      participated in “racketeering activity” as that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1. The defendants in this action have counterclaimed against the Company
      for alleged: (1) breach of contract, (2) breach of implied covenant of good
      faith and fair dealing, (3) fraud, (4) misrepresentation, (5) fraudulent
      concealment, (6) violation of the New Jersey Consumer Fraud Act, (7) conversion,
      and (8) failure to pay for delivered product.




On
      September 16, 2004, the Company entered into a settlement agreement and release
      with Lawrence P. Marasco. As part of the settlement, Mr. Marasco paid to the
      Company the sum of $60,000, returned 405,000 shares of the Company’s common
      stock and agreed to provide certain other non-monetary consideration. The
      Company recorded other income of $60,000 related to the cash received by the
      Company in connection with the settlement and retired the common stock returned.
      See Note 13.




Litigation
      Against Former Accounting Firms. On
      January 9, 2004, the Company commenced litigation against two of its former
      accounting firms, Rosenberg, which served as the Company’s independent
      registered public accounting firm from February 1998 to March 2003, excluding
      a
      three week period in early 2002, and Koenig, Russo & Associates (“Koenig”),
      an accounting consultant engaged by Medi-Hut to review various tax documents,
      financial statements and filings by the Company with the SEC. Robert S. Russo,
      a
      former officer and director of the Company and a defendant in litigation
      commenced by the Company against certain of its former officers and directors
      in
      December 2003, is a principal of Koenig. In its complaint, the Company alleged
      that Rosenberg and Koenig, through their negligence and accounting malpractice,
      caused the Company to suffer significant damage and incur substantial costs.
      The
      Company alleged in its complaint that as a result of such negligence and
      accounting malpractice, Rosenberg and Koenig failed to detect or simply ignored
      a scheme by certain of the Company’s former officers and directors to overstate
      Medi-Hut’s revenues and earnings through fraudulent accounting practices, which
      had a devastating impact on the Company. The Company also alleged in its
      complaint that, as a result of their negligence and accounting malpractice,
      Rosenberg and Koenig failed to uncover and/or disclose the materially false
      and
      misleading financial information contained in the periodic reports filed by
      the
      Company with the SEC and otherwise disseminated to the general public, investors
      and financial advisors and brokers.




F-13


On
      May
      14, 2004, the Company entered into a settlement and release agreement with
      Koenig. In exchange for mutual releases among other things, the Company agreed
      to discharge its claims against Koenig. See Note 13.




Lexington
      Insurance Lawsuit. On April
      14, 2004, a complaint was served on the Company by National Union Fire Insurance
      Co. (“National Union”) in the United States District Court for the District of
      New Jersey. On January 19, 2005, the complaint was amended by National Union
      in
      order to properly state the name of the plaintiff as Lexington Insurance Company
      (“Lexington”). In this action, Lexington alleged that the Company owes it
      $235,000, representing unpaid insurance premiums. See Note 13.




**5.**
            **Summary
                of Significant Accounting
                Policies**




***Principles
      of Consolidation***




The
      consolidated financial statements include the accounts of the Company and its
      wholly owned subsidiary. All significant intercompany accounts and transactions
      have been eliminated in consolidation.




***Use
      of Estimates***




The
      preparation of the consolidated financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the consolidated financial statements and the
      reported amounts of revenues and expenses during the reporting periods.
      Significant estimates relied upon in preparing the consolidated financial
      statements include allowances for accounts receivable, expected future cash
      flows used to evaluate the recoverability of long-lived assets, any contingent
      liabilities, and utilization of the Company’s net deferred tax assets and
      related valuation allowance.




Although
      the Company regularly assesses these estimates, actual results could differ
      materially from these estimates. Changes in estimates are recorded in the period
      in which they become known. The Company based its estimates on historical
      experience and various other assumptions that it believes to be reasonable
      under
      the circumstances. Actual results may differ from management’s estimates if past
      experience or other assumptions do not turn out to be substantially accurate.




***Cash
      and Cash Equivalents***




The
      Company considers all highly liquid investments with an original maturity (at
      date of purchase) of three months or less to be cash equivalents. Cash and
      cash
      equivalents consist of cash on deposit with banks and money market instruments.
      The Company places its cash and cash equivalents with established U.S. financial
      institutions.




F-14


***Concentration
      of Credit Risk***




The
      Company has no significant off balance sheet risk such as foreign exchange
      contracts, option contracts or other foreign hedging arrangements. The Company’s
      financial instruments that are exposed to concentration of credit risks consist
      primarily of cash and cash equivalents, trade account receivables and notes
      receivable. The Company maintains its cash and cash equivalents in bank accounts
      which, at times, exceed federally insured limits. The Company invests its cash
      in high-quality money market instruments and  has
      not
      experienced any losses in such accounts and accordingly believes it is not
      exposed to significant credit risk on cash and cash equivalents.




The
      Company extends credit to its customers pursuant to contract terms in the normal
      course of business and performs ongoing credit evaluations. The Company
      generally has not experienced any material losses related to trade receivables
      from individual customers. As of October 31, 2004, Union County Orthopaedic
      Group accounted for 100% of accounts receivable, which amount was collected
      in
      full subsequent to October 31, 2004. For the fiscal year ended October 31,
      2004,
      Rugby Laboratories, Inc. accounted for approximately 82% of net sales.




As
      of
      October 31, 2003, Rugby Laboratories, Inc. accounted for approximately 90%
      of
      accounts receivable. Subsequent to October 31, 2003, all accounts receivable
      were collected in full. For the fiscal year ended October 31, 2003, McKesson
      Corporation, 824 Drug Inc., Breckenridge and Eckerd Corporation accounted for
      approximately 28%, 14%, 14% and 13% of net sales, respectively.




***Accounts
      Receivable and Revenue Recognition***




The
      Company records trade receivables when revenue is recognized. Trade receivables
      are periodically evaluated for collectibility based upon past credit history
      with customers and their current financial condition. Those accounts that are
      doubtful of collection are included in the allowance. Trade receivables are
      charged off when there is certainty as to their being uncollectible. Trade
      receivables are considered delinquent when payment has not been made within
      sales terms.




The
      Company also records a provision for estimated sales returns and allowances
      on
      product sales in the same period as the related revenues are recorded. These
      estimates are based on the specific facts and circumstances of particular
      orders, analysis of credit memo data and other known factors. If the data the
      Company uses to calculate these estimates does not properly reflect reserve
      requirements, then a change in the allowances would be made in the period in
      which such a determination is made.




No
      accounts receivable reserves were necessary for doubtful accounts and for sales
      returns and allowances on product sales at October 31, 2004 and
      2003.




The
      Company recognizes product revenue upon shipment, provided that there is
      persuasive evidence of an arrangement, there are no uncertainties regarding
      acceptance, the sales price is fixed or determinable and collection of the
      resulting receivable is probable.




F-15


***Inventory***




Inventory
      is stated at the lower of cost (first-in, first-out basis) or market. Inventory
      that is deemed obsolete or defective is written off. A provision is made for
      any
      excess or potentially obsolete inventories. As of October 31, 2004, the Company
      had no inventory since it either sold or disposed of all products as a result
      of
      its decision to discontinue all remaining product sales during the fiscal year
      ended October 31, 2004.




***Concentration
      of Suppliers***




As
      of
      October 31, 2004, the Company had no suppliers with balances greater than 10%
      of
      accounts payable. For the fiscal year ended October 31, 2004, Calatex, Inc.
      and
      Triad Group, Inc. accounted for approximately 46% and 39%, respectively, of
      total purchases.




As
      of
      October 31, 2003, the Company had no suppliers with balances greater than 10%
      of
      accounts payable. For the fiscal year ended October 31, 2003, Syntho and Kinray,
      Inc. accounted for approximately 60% and 19%, respectively, of the Company’s
      purchases of product.




***Property
      and Equipment***




Property
      and equipment are stated at cost, less accumulated depreciation and
      amortization. Depreciation is computed using the straight-line method over
      the
      estimated useful lives of the respective assets which average from 3-7 years.
      Leasehold improvements are amortized over the lesser of the lease term or the
      estimated useful lives of the related assets, generally 5 years. Expenditures
      for repairs and maintenance are expensed as incurred. Gross assets as of October
      31, 2004 and 2003 amounted to approximately $95,451 and $103,787, respectively,
      and accumulated depreciation amounted to approximately $52,939 and $22,921,
      respectively. The net book value as of October 31, 2004 and 2003 of $42,512
      and
      $80,866, respectively, is included in other assets.




***Intangible
      Assets and Other Long-Lived Assets***




The
      Company assesses the impairment of its intangible assets that have a defined
      life and other long-lived assets in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets” (“SFAS 144”). Pursuant to SFAS 144, the Company
      identifies and records impairment losses, as circumstances dictate, on
      long-lived assets used in operations when events and circumstances indicate
      that
      the assets might be impaired and the discounted cash flows estimated to be
      generated by those assets are less than the carrying amounts of those assets.
      In
      the event that assets are found to be carried at amounts which are in excess
      of
      estimated future cash flows, the assets will be adjusted for impairment to
      a
      level commensurate with the discounted cash flow analysis of the underlying
      assets. The Company did not record any such impairment charges during the fiscal
      years ended October 31, 2004 or 2003.




***Income
      Taxes***




The
      Company provides for deferred income taxes in accordance with SFAS No. 109,
      “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires an asset and
      liability approach for financial accounting and reporting for income taxes
      based
      on tax effects of differences between the financial statement and tax bases
      of
      assets and liabilities, based on enacted rates expected to be in effect when
      such basis differences reverse in future periods. Deferred tax assets are
      periodically reviewed for realizability. Valuation allowances are recorded
      when
      realizability of deferred tax assets is not likely.




F-16


***Stock-Based
      Compensation***




As
      permitted under the SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”), which
      replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes
      Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
      Employees” (“APB 25”), the Company applies the intrinsic value method prescribed
      in APB 25 to measure compensation expense for stock-based awards to employees
      and thus, recognizes no stock-based compensation expense for options granted
      with exercise prices equal to or greater than the fair value of the Company’s
      common stock on the date of grant. The Company records deferred stock-based
      compensation when the deemed fair value of the Company’s common stock for
      financial accounting purposes exceeds the exercise price of the stock options
      on
      the date of grant. Any such deferred stock-based compensation is amortized
      over
      the vesting period of the individual options.




The
      Company accounts for options granted to non-employees under SFAS 123 and
      Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity
      Investments that are Issued to Other than Employees for Acquiring, or in
      Conjunction with Selling Goods or Services” (“EITF 96-18”), and may be subject
      to periodic re-valuation over their vesting terms. The resulting stock-based
      compensation expense is recorded over the service period in which the
      non-employee provides services to the Company.




During
      the fiscal year ended October 31, 2004, the Company granted 235,000 options
      to
      purchase common stock to employees. No stock-based compensation is reflected
      in
      the net loss for the fiscal year ended October 31, 2004 as all options granted
      had an exercise price equal to the market value of the underlying common stock
      on the date of grant. During the fiscal year ended October 31, 2004, the Company
      recognized a total of $40,759 of consulting and amortization expense related
      to
      the warrants issued to Century Capital on February 1, 2003 and May 14, 2004
      and
      a total of $78,283 of amortization expense related to the warrants issued to
      the
      Company’s directors, other than David R. LaVance and Thomas S. Gifford, on July
      24, 2003 and May 14, 2004. See Note 10.




The
      Company did not grant any options to employees during the fiscal year ended
      October 31, 2003. During the fiscal year ended October 31, 2003, the Company
      recognized a total of $681,094 of consulting expense related to the warrant
      issued to Century Capital on February 1, 2003. In addition, during the fiscal
      year ended October 31, 2003, the Company recognized a total of $21,040 of
      amortization expense related to the warrants issued to the Company’s directors,
      other than David R. LaVance and Thomas S. Gifford, on July 24, 2003 and $7,480
      of compensation expense related to options granted to an employee in the prior
      fiscal year. See Note 10.




F-17


The
      following table illustrates the effect on net loss and loss per share if the
      fair value based method had been applied to all awards.




**Years
                Ended**
              **October
                31,****2004**
            
            **2003**Reported
                net loss
            
            $
            (2,040,849
            )
            $
            (2,437,036
            )Stock-based
                employee compensation expense included in net loss, net of related
                tax
                effects
            
            
            --
            
            
            7,480Stock-based
                employee compensation determined under the fair value based method,
                net of
                related tax effects
            
            
            (5,380
            )
            
            (9,263
            )Pro
                forma net loss
            
            $
            (2,046,229
            )
            $
            (
                2,438,819
            )Basic
                and diluted net loss per share:As reported
            
            $
            (0.15
            )
            $
            (0.17
            )Pro forma
            
            $
            (0.15
            )
            $
            (0.17
            )





***Net
      Loss Per Common Share***




Basic
      net
      loss per share is computed by dividing the net loss available to common
      shareholders by the weighted average number of common shares outstanding.
      Diluted earnings per share reflect, in periods in which they have a dilutive
      effect, the impact of common shares issuable upon exercise of stock options
      and
      warrants provided that the exercise price of the stock options and warrants
      is
      less than the fair market value of the common stock. In periods where a net
      loss
      exists, diluted net loss per share is calculated using basic common shares
      outstanding since including potential common shares from the exercise of stock
      options and warrants would be anti-dilutive. During the fiscal years ended
      October 31, 2004 and 2003, the Company incurred a net loss. Accordingly, the
      weighted average number of shares outstanding for both the basic and the diluted
      net loss per share computation is the same. As of October 31, 2004, total
      potential dilutive securities included 2,709,166 shares of common stock subject
      to warrants and 248,200 shares of common stock subject to options. As of October
      31, 2003, total potential dilutive securities included 2,880,000 shares of
      common stock subject to warrants and 13,200 shares of common stock subject
      to
      options.




***Recent
      Accounting Pronouncements***




In
      October 2004, the Financial Accounting Standards Board (the “FASB”) concluded
      that the proposed SFAS 123R *,* which
      would require all companies to measure compensation cost for all share-based
      payments, including employee stock options, at fair value, would be effective
      for public companies (except small business issuers as defined in SEC Regulation
      S-B) for interim or annual periods beginning after June 15, 2005. The Company,
      as a small business issuer, will not have to adopt SFAS 123R until the fiscal
      year ending October 31, 2007. The Company does not expect SFAS 123R to have
      a
      material impact on its consolidated results of operations or financial
      condition.




In
      November of 2004, the FASB issued SFAS No. 151, “Inventory Costs” (“SFAS 151”),
      which amends the guidance in Accounting Research Bulletin No. 43, Chapter 4,
      “Inventory Pricing” (“ARB 43”), to clarify the accounting for abnormal amounts
      of idle facility expense, freight, handling costs and wasted material
      (spoilage). This statement requires that those items be recognized as
      current-period charges regardless of whether they meet the criterion of “so
      abnormal” as stated in ARB 43. Additionally, SFAS 151 requires that allocation
      of fixed production overheads to the costs of conversion be based on the normal
      capacity of the production facilities. The Company is required to adopt the
      provisions of SFAS 151 in the first quarter of 2006. The Company does not expect
      SFAS 151 to have a material impact on its consolidated results of operations
      or
      financial condition.




F-18


In
      December of 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets
      - An Amendment of APB Opinion No. 29” (“SFAS 153”). SFAS 153 eliminates the
      exception for nonmonetary exchanges of similar productive assets and replaces
      it
      with a general exception for exchanges of nonmonetary assets that do not have
      commercial substance. SFAS 153 is effective for fiscal years beginning after
      June 15, 2005 and is required to be adopted by the Company in the first quarter
      of 2006. The Company does not expect SFAS 153 to have a material impact on
      its
      consolidated results of operations or financial condition.




The
      FASB
      has issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS
      154”), replacing APB Opinion No. 20, “Accounting Changes.” Among other changes,
      SFAS 154 requires that a voluntary change in accounting principle be applied
      retrospectively with all prior period financial statements presented on the
      new
      accounting principle, unless it is impracticable to do so. SFAS 154 also
      provides that (1) a change in method of depreciating or amortizing a long-lived
      nonfinancial asset be accounted for as a change in estimate (prospectively)
      that
      was effected by a change in accounting principle, and (2) correction of errors
      in previously issued financial statements should be termed a “restatement.” The
      new standard is effective for accounting changes and correction of errors made
      in fiscal years beginning after December 15, 2005. Early adoption of this
      standard is permitted for accounting changes and correction of errors made
      in
      fiscal years beginning after June 1, 2005. The Company does not expect SFAS
      154
      to have a material impact on its consolidated results of operations or financial
      condition.




In
      July
      2006, the FASB issued FASB Interpretation No. 48, “ Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement No.
      109 ” (“FIN
      48” ),
      which
      clarifies the accounting and disclosure for uncertain tax positions, as defined.
      FIN 48 seeks to reduce the diversity in practice associated with certain aspects
      of the recognition and measurement related to accounting for income taxes.
      This
      interpretation is effective for fiscal years beginning after December 15, 2006.
      The Company is assessing FIN 48 and has not yet determined the impact that
      the
      adoption of FIN 48 will have on its consolidated results of operations or
      financial condition.





In
      September 2006, the FASB issued SFAS No. 157, “ Fair
      Value Measurements” (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value, and expands disclosure requirements regarding fair value measurement.
      Where applicable, this statement simplifies and codifies fair value related
      guidance previously issued within United States of America generally accepted
      accounting principles. SFAS 157 is effective for financial statements issued
      for
      fiscal years beginning after November 15, 2007, and interim periods within
      those
      fiscal years. The Company is currently reviewing SFAS 157 and has not yet
      determined the impact that the adoption of SFAS 157 will have on its
      consolidated results of operations or financial condition




F-19


**6.**
            **Medi-Hut
                International**




***Note
      Receivable - Related Party***




On
      November 16, 2000, the Company entered into a joint venture agreement with
      COA
      International Ind., Inc. (“COA”), a corporation organized and existing under the
      laws of the Republic of Korea (“Korea”), to establish Medi-Hut International
      (Mfg.) Co., Ltd. (“Medi-Hut International”. This investment was written off as
      of October 31, 2002.




On
      September 18, 2003, the Company entered into a loan agreement with Medi-Hut
      International, its joint venture partner, to memorialize certain financial
      assistance that Medi-Hut had been providing to Medi-Hut International during
      the
      period from June 7, 2002 through February 28, 2003. In June 2002 and February
      2003, the Company provided Medi-Hut International with $300,000 and $150,000,
      respectively, in working capital to fund the Medi-Hut International operations.
      Effective June 7, 2002, the Company and Medi-Hut International entered into
      a
      loan agreement (the “MHI Loan Agreement”) pursuant to which Medi-Hut
      International agreed to repay the principal plus accrued interest to the Company
      as follows: $75,000 on December 31, 2004; $125,000 on December 31, 2005,
      $125,000 on December 31, 2006 and $125,000 on or before December 31, 2007.
      Interest accrues at a rate of 4% per annum through December 31, 2004; 5% per
      annum for the period January 1, 2005 through December 31, 2005 and 6% per annum
      after January 1, 2006. As of the fiscal year ended October 31, 2004, the Company
      determined that the outstanding balance of the note receivable due from Medi-Hut
      International was not collectable due to the financial condition of Medi-Hut
      International and accordingly has written off the note receivable. As of October
      31, 2003, the Company had reserved for the entire balance of principal
      ($450,000) and interest ($20,477) due to the financial condition of Medi-Hut
      International.




***Return
      of Defective Inventory***




On
      September 18, 2003, the Company entered into an agreement with Medi-Hut
      International to return to Medi-Hut International certain 3cc Elite Safety
      Syringes manufactured by Medi-Hut International that were determined to be
      defective. Pursuant to the agreement, the Company returned $220,855 of Elite
      Safety Syringes to Medi-Hut International. Medi-Hut International agreed to
      reimburse the Company $220,855 by granting the Company a 5% discount off of
      the
      purchase price for each future shipment of Elite Safety Syringe products until
      the obligation was repaid by Medi-Hut International. As of October 31, 2004
      and
      2003, none of the $220,855 had been reimbursed to the Company since the Company
      had not ordered any Elite Safety Syringes.




***Non-Exclusive
      License Agreement***




On
      September 18, 2003, the Company, COA and Medi-Hut International entered into
      an
      agreement under which the Company granted a non-exclusive license to Medi-Hut
      International to make, manufacture and export the Elite Safety Syringe. The
      territorial boundary of this license is limited to within Korea. In accordance
      with the license, Medi-Hut International must obtain the Company’s permission
      prior to any sales to a third party. Medi-Hut International is to pay to the
      Company a royalty based upon the total net sales under the license. The royalty
      amount is to be negotiated in good faith at the time of such sales.




F-20


**7.**
            **Distribution
                Rights**




On
      November 20, 2001, as amended on February 7, 2002 and April 3, 2002, the Company
      entered into an exclusive license agreement with Syntho. Pursuant to the Syntest
      Agreement, the Company acquired the exclusive distribution rights to Syntest,
      a
      hormone replacement therapy drug manufactured by Syntho. The Company paid Syntho
      $2,500,000 and agreed to purchase the Syntest product at a price per unit as
      agreed upon by the parties. The term of the Syntest Agreement was for a period
      of five years commencing with the first commercial sale of the Syntest product,
      which occurred on October 14, 2002.




In
      March
      2003, regular sales of Syntest ceased when Syntho refused, beginning in January
      2003, to sell any additional product to the Company resulting in the
      commencement of litigation by the Company against Syntho and other parties
      on
      May 12, 2003. The Company’s initial investment of $2,500,000 was to be amortized
      over the five year life of the Syntest Agreement, commencing on October 14,
      2002
      which was the date of the first commercial sale of the product. On October
      17,
      2005, the Company sold its distribution and other rights and business with
      respect to Syntest, to Breckenridge. In consideration for the sale of such
      rights and the other benefits provided under the purchase and settlement
      agreement between Breckenridge and the Company,  Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. The
      difference between the original purchase price of $2,500,000 and the amount
      received through the sale of the distribution rights to Breckenridge had been
      written off during the fiscal year ended October 31, 2002. As of November 30,
      2006, the Company received $900,000 of payments from Breckenridge pursuant
      to
      the purchase and settlement agreement. See Note 13.




**8.**
            **Income
                Taxes**




Significant
      components of the Company’s deferred tax assets as of October 31, 2004 and 2003
      are shown below. In determining the realizability of the Company’s deferred tax
      assets, the Company considered numerous factors, including historical
      profitability, estimated future taxable income and the industry in which it
      operates. At October 31, 2004 and 2003, a valuation allowance was recorded
      to
      fully offset the net deferred tax asset, as it was determined by management
      that
      the realization of the deferred tax asset was not likely to occur in the
      foreseeable future. The change in the valuation allowance for fiscal 2004 was
      an
      increase of $597,795 attributable primarily to net operating losses.





F-21




**Years
                Ended**
              **October
                31,****2004**
            
            **2003**Net
                operating loss
            
            $
            3,001,252
            
            $
            1,839,403Write-down
                of impaired assets
            
            
            2,106,569
            
            
            2,106,569Reserve
                on note receivable - related party
            
            
            --
            
            
            187,909Accrual
                for class action lawsuit settlement
            
            
            --
            
            
            211,402Other
                reserves
            
            
            --
            
            
            18,038Depreciation
                and amortization
            
            
            139,723
            
            
            27,555Consulting
                expense related to warrants
            
            
            6,366
            
            
            272,029Other
            
            
            36,379
            
            
            29,589Total
                gross deferred tax assets
            
            
            5,290,289
            
            
            4,692,494Valuation
                allowance
            
            
            (5,290,289
            )
            
            (4,692,494
            )Net
                deferred tax assets
            
            $
            --
            
            $
            --





As
      of
      October 31, 2004, the Company had federal and state operating losses of
      approximately $8,055,023 and $8,036,595, respectively, which will expire as
      follows:





**Federal**
            
            **State****Year
                Expiring**
            
            **Amount**
            
            **Year
                Expiring**
            
            **Amoun****t**2021
            
            $
            980,973
            
            
            2008
            
            $
            966,9062022
            
            
            1,373,163
            
            
            2009
            
            
            1,373,1632023
            
            
            2,745,837
            
            
            2010
            
            
            2,745,8372024
            
            
            2,955,050
            
            
            2011
            
            
            2,950,689$
            8,055,023
            
            
            
            
            $
            8,036,595





Utilization
      of the net operating loss carryforwards may be subject to a substantial annual
      limitation due to the ownership change limitations provided by the Internal
      Revenue Code of 1986, as amended (the “Internal Revenue Code”), and similar
      state provisions. The Company has not performed a detailed analysis to determine
      whether an ownership change under Section 382 of the Internal Revenue Code
      occurred. The effect of an ownership change would be the imposition of an annual
      limitation on the use of net operating loss carryforwards attributable to
      periods before the change.




**9.**
            **Related
                Party Transactions**




David
      R.
      LaVance, the Company’s Chairman, President and Chief Executive Officer, and
      Thomas S. Gifford, the Company’s Executive Vice President, Chief Financial
      Officer (Treasurer) and Secretary, are principals of Century Capital. Effective
      February 1, 2005, the Company and Century Capital entered into an amended and
      restated Consulting Service Agreement, pursuant to which Messrs. LaVance and
      Gifford currently provide services to the Company as executive management.
      For
      the fiscal year ended October 31, 2004, the Company was billed $900,000 for
      consulting services rendered by Century Capital and the Company recorded
      $275,000 of consulting expense related to the annual bonuses due to Century
      Capital which consisted of $181,250 for the one year period commencing February
      1, 2003 and ending January 31, 2004 and $93,750 for the one year period
      commencing February 1, 2004 and ending January 31, 2005. During the fiscal
      year
      ended October 31, 2004, the Company also reimbursed Century Capital for expenses
      incurred in conjunction with performing the consulting services and issued
      Century Capital a warrant to purchase 700,000 shares of common stock. As of
      October 31, 2004, the Company owed Century Capital $246,620 for unpaid monthly
      fees, bonuses and expenses, of which $168,620 was paid by the Company subsequent
      to the fiscal year ended October 31, 2005.




F-22


For
      the
      fiscal year ended October 31, 2003, the Company was billed $688,500 for
      consulting services rendered by Century Capital and the Company recorded $93,750
      of consulting expense related to the annual bonus due to Century Capital for
      the
      one year period commencing February 1, 2003 and ending January 31, 2004. During
      the fiscal year ended October 31, 2003, the Company also reimbursed Century
      Capital for expenses incurred in conjunction with performing the consulting
      services and issued Century Capital a warrant to purchase 1,500,000 shares
      of
      common stock. See Note 10.




In
      May
      2004, the Company relocated its principal offices to 215 Morris Avenue, Spring
      Lake, New Jersey 07762, the location of Century Capital’s office, in order to
      reduce its monthly operating expenses and to more appropriately accommodate
      its
      current operations. The Company and Century Capital entered into a Shared
      Services Agreement whereby the Company rented three fully furnished, business
      equipped offices approximating 340 square feet inside Century Capital’s existing
      offices. This agreement commenced on May 1, 2004, has a month to month term
      that
      requires sixty day written notice to terminate and a monthly rental fee of
      $2,500. During the fiscal year ended October 31, 2004, the Company was billed
      $15,000 for rent pursuant to the Shared Services Agreement. As of the fiscal
      year ended October 31, 2004, the Company owed Century Capital $15,000 for rent,
      which amount remains outstanding.




The
      Company has a 44% stock ownership interest in Medi-Hut International, a Korean
      based joint venture company established to manufacture the Company’s Elite
      Safety Syringe. During November 2002 and January 2003, the Company purchased
      Elite Safety Syringes from Medi-Hut International for a total purchase price
      of
      $100,002. This amount was paid by the Company during November 2002 and February
      2003. As of the fiscal years ended October 31, 2004 and 2003, there were no
      accounts payable to Medi-Hut International.




Joseph
      A.
      Sanpietro is the Company’s founder and former Chief Executive Officer and
      Chairman whose employment was terminated by the Company on March 21, 2003.
      On
      March 28, 2003, the Company entered into a consulting agreement with Mr.
      Sanpietro in order to facilitate the transition of certain product knowledge
      and
      relationships to the Company’s new management team. The agreement had no term
      and services rendered by Mr. Sanpietro were billed to the Company at an hourly
      rate. The Company ceased using Mr. Sanpietro’s services in May 2003. For the
      fiscal year ended October 31, 2003, the Company was billed $20,815 for
      consulting services rendered by Mr. Sanpietro, which amounts were paid in full
      by the Company as of October 31, 2003. There were no amounts owed by the Company
      to Mr. Sanpietro as of the fiscal years ended October 31, 2004 and
      2003.




On
      April
      30, 2003, Mr. Sanpietro, assigned to the Company certain intellectual property
      owned by Mr. Sanpietro related to the Company’s Elite Safety Syringe. In
      exchange for nominal consideration, Mr. Sanpietro assigned to the Company patent
      number 5,562,626 and patent application number 09/488807.




F-23


James
      G.
      Aaron, a member of the Company’s Board of Directors as of the fiscal year ended
      October 31, 2003, is a shareholder of the law firm of Ansell Zaro Grimm &
Aaron, P.C., which provided legal services to Medi-Hut during the fiscal year
      ended October 31, 2003. For the fiscal year ended October 31, 2003, the Company
      was billed $16,920 for legal services rendered by Ansell, Zaro, Grimm &
Aaron, PC, which amounts were paid in full by the Company as of October 31,
      2003. There were no amounts owed by the Company to Ansell, Zaro, Grimm &
Aaron, PC as of the fiscal years ended October 31, 2004 and 2003.




Lawrence
      P. Marasco, the Company’s former Vice President of Sales and Marketing whose
      employment was terminated by the Company on March 12, 2003, was the sole
      officer, director and shareholder of Larval Corporation (“Larval”), a privately
      held wholesaler of pharmaceutical products, until February 12, 2002, when he
      transferred his ownership in Larval to his sister-in-law. During fiscal year
      ended October 31, 2003, the Company purchased product with a total purchase
      price of $25,164 from Larval and sold product to Larval for a total sales price
      of $430,678. As of the fiscal years ended October 31, 2004 and 2003, there
      were
      no accounts payable to Larval by the Company and no accounts receivable by
      the
      Company from Larval.




**10.**
            **Stockholders’
                Equity**




***Stock
      Option Plan***




On
      July
      5, 2002, the shareholders approved the Company’s 2002 Equity Incentive Plan (the
“Equity Incentive Plan”), effective as of January 1, 2002. The Equity Incentive
      Plan was placed into effect in order to promote the long-term success of the
      Company and to (1) encourage employees, independent directors and consultants
      of
      the Company to focus on critical long-term objectives, (2) encourage the
      attraction and retention of employees, independent directors and consultants
      with exceptional qualifications, and (3) link employees, independent directors
      and consultants directly to shareholders’ interests through increased stock
      ownership.




The
      Equity Incentive Plan provides for awards in the form of restricted shares,
      incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”) (ISOs and
      NSOs are sometimes collectively referred to as “Options”) and stock appreciation
      rights (“SARs”). The aggregate number of shares of common stock which may be
      awarded under the Equity Incentive Plan is two million (2,000,000).




Incentive
      Stock Options (ISOs)




Only
      employees of the Company are eligible to receive grants of ISOs. Unless
      otherwise provided in a stock option agreement, the first $100,000 of optioned
      shares that are part of an option grant and can be exercised first in a given
      year shall be considered ISOs, and the remainder shall be considered NSOs.
      The
      exercise price of an ISO may not be less then 100% of the fair market value
      of a
      share of common stock on the date of grant. The term of an ISO shall in no
      event
      exceed ten years from the date of grant.




F-24


Non-Statutory
      Stock Options (NSOs)




Employees,
      independent directors and consultants of the Company are eligible to receive
      grants of NSOs. Option grants to any optionee in a single fiscal year of the
      Company cannot cover more than 500,000 shares of common stock (750,000 shares
      of
      common stock for new employees in the fiscal year of the Company in which
      service as an employee first commences). Each individual stock option agreement
      shall specify the exercise price for the awards as determined by the Company’s
      Board of Directors (the “Board”). Options may be awarded in combination with
      SARs.




Automatic
      Option Grants to Independent Directors




Upon
      the
      conclusion of each annual meeting of the Company’s shareholders commencing in
      2002, each independent director who continues to serve on the Board after such
      annual meeting shall receive an NSO at the discretion of the Board. All NSOs
      granted to an independent director shall also become exercisable in full in
      the
      event of: (a) the termination of such independent director’s service because of
      death, total and permanent disability or retirement at or after age 65; or
      (b) a
      change in control with respect to the Company, with certain exceptions. The
      exercise price under all NSOs granted to an independent director shall be equal
      to 100% of the fair market value of a share of common stock on the date of
      grant. All NSOs granted to an independent director shall terminate on the
      earlier of (1) the 6 th anniversary of the date of grant or (2) the date 12 months after the termination
      of such independent director’s service for any reason. The Board may permit an
      independent director to elect to receive his or her annual retainer payments,
      if
      any, and/or meeting fees from the Company in the form of cash, NSOs, or
      restricted shares or a combination thereof, as determined by the
      Board.




Stock
      Appreciation Rights




SARs
      granted to any optionee in a single fiscal year cannot cover more than 500,000
      shares of common stock (750,000 shares of common stock for new employees in
      the
      fiscal year of the Company in which service as an employee first commences).
      Each SAR agreement shall specify the exercise price. SARs may be awarded in
      combination with Options, which may vary in accordance with a predetermined
      formula while the SARs are outstanding. A SAR may be included in an ISO only
      at
      the time of grant but may be included in an NSO at the time of grant or
      thereafter. Upon exercise of a SAR, the optionee shall receive from the Company
      (a) shares of common stock, (b) cash, or (c) a combination of common stock
      and
      cash, as the Board shall determine.




Restricted
      Shares




The
      holders of restricted shares shall have the same voting, dividend and other
      rights as the Company’s shareholders, subject to any special restrictions
      contained in the restricted share agreement.




The
      Equity Incentive Plan also contains customary protection against dilution.
      Options and SARs shall terminate immediately prior to the dissolution or
      liquidation of the Company. Unless the applicable agreement provides otherwise,
      in the event of any change in control, the vesting and exercisability of each
      outstanding award shall automatically accelerate so that each such award shall,
      immediately prior to the effective date of the change in control, become fully
      exercisable for all of the shares of common stock at the time subject to such
      award and may be exercised for any or all of those shares as fully-vested common
      stock, except under certain circumstances .




F-25


As
      of
      October 31, 2004, the Company had available to issue 1,765,000 options under
      the
      Equity Incentive Plan.




Prior
      to
      the adoption of the Equity Incentive Plan, the Company granted stock options
      to
      Laurence M. Simon, the Company’s former Chief Financial Officer, to purchase an
      aggregate of 20,000 shares of common stock at $6.75 per share. Options for
      3,680
      shares vested on December 31, 2001 and the remainder vested at a rate of 680
      common shares each month through December 31, 2003. Of these options, 6,800
      shares that were not vested terminated upon the Company’s termination of Mr.
      Simon’s employment on March 21, 2003.





Stock
      option transactions for employees during the fiscal years ended October 31,
      2004
      and 2003 were as follows:





**Option
                Shares**
            
            **Vested
                Shares**
            
            **Exercise
                Price**
              **Per
                Common**
              **Share**
            
            **Weighted**
              **Average**
              **Exercise
                Price**
              **Per
                Common**
              **Share**Balance,
                November 1, 2002
            
            
            20,000
            
            
            10,480
            
            $
            6.75
            
            $
            6.75Options
                vested during the year
            
            
            --
            
            
            2,720
            
            $
            6.75
            
            $
            6.75Exercised
                during the year
            
            
            --
            
            
            --
            
            
            --
            
            
            --Expired/terminated
                during the year
            
            
            (6,800
            )
            
            --
            
            $
            6.75
            
            $
            6.75Balance,
                October 31, 2003
            
            
            13,200
            
            
            13,200
            
            $
            6.75
            
            $
            6.75Options
                vested during the year
            
            
            235,000
            
            
            78,752
            
            $
            0.08
            
            $
            0.08Exercised
                during the year
            
            
            --
            
            
            --
            
            
            --
            
            
            --Expired/terminated
                during the year
            
            
            --
            
            
            --
            
            
            --
            
            
            --Balance,
                October 31, 2004
            
            
            248,200
            
            
            91,952
            
            $
            0.08
                & $6.75
            
            $
            0.43








Information
      with respect to employee stock options outstanding and employee stock options
      exercisable at October 31, 2004 is as follows:





**Exercise**
              **Price**
            
            **Number**
              **Outstanding**
            
            **Weighted**
              **Average**
              **Remaining**
              **Contractual**
              **Life
                (Years)**
            
            **Weighted**
              **Average**
              **Exercise
                Price**
              **Per
                Common**
              **Share**
            
            **Number**
              **Exercisable**
            
            **Weighted**
              **Average**
              **Exercise****Price**
              **Per
                Common**
              **Share**$0.08
            
            
            235,000
            
            
            9.2
            
            $
            0.08
            
            
            78,752
            
            $
            0.08$6.75
            
            
            13,200
            
            
            .1
            
            $
            6.75
            
            
            13,200
            
            $
            6.75248,200
            
            
            8.8
            
            $
            0.43
            
            
            91,952
            
            $
            1.04





No
      stock
      options were issued to non-employees during the fiscal years ended October
      31,
      2004 and 2003.





F-26


***Warrants
      to Purchase Common Stock***




Century
      Capital Warrant Dated February 1, 2003 .
      Pursuant to the Consulting Services Agreement, effective as of February 1,
      2003,
      between the Company and Century Capital, on February 1, 2003 a warrant to
      purchase 1,500,000 shares of common stock of the Company was issued to Century
      Capital. The warrant had a ten year term and was exercisable at $1.34 per share
      (the “Underlying Purchase Price”). The per share purchase price was subject to
      certain pricing adjustments which included an adjustment if the average closing
      price of the Company’s common stock over a period of thirty days was less than
      the then existing Underlying Purchase Price. 375,000 shares of common stock
      underlying the warrant vested immediately upon issuance with another 46,875
      shares vesting on and after the last day of each month commencing February
      28,
      2003 and ending January 31, 2005. Based upon the underlying features of the
      warrant agreement, management determined that the best estimate of fair value
      was to utilize the intrinsic value method using the ultimate lowest exercise
      price to account for the value of this warrant issuance. As such, the Company
      will record consulting expense as the warrant shares vest with the initial
      vesting of 375,000 warrant shares on February 1, 2003 and 46,875 warrant shares
      vesting at the end of each month from February 28, 2003 through January 31,
      2005.




The
      Underlying Purchase Price adjusted to $.08 per share as of May 14, 2004, the
      date when Century Capital exercised its right to purchase 937,500 shares of
      the
      Company’s common stock underlying the warrant. The $75,000 due from Century
      Capital to the Company as a result of the purchase of the 937,500 shares was
      forgiven by the Company as part of Century Capital’s bonus for the period
      February 1, 2003 through January 31, 2004.




For
      the
      fiscal years ended October 31, 2004 and 2003, the Company recorded $28,127
      and
      $681,094, respectively, of consulting expense associated with warrant shares
      that vested pursuant to the warrant. As of October 31, 2004, 937,500 shares
      underlying the warrant had been purchased, 421,875 shares underlying the warrant
      are available for purchase and 140,625 shares underlying the warrant remain
      unvested and are not yet available for purchase.




Century
      Capital Warrant Dated May 14, 2004 .
      On May
      14, 2004, the Company issued Century Capital ten year, non-cancelable warrant
      to
      purchase 700,000 shares of the Company’s common stock at a purchase price of
      $.04 per share. 100,000 shares of the Company’s common stock underlying the
      warrant became available for purchase as of May 14, 2004, with the remaining
      shares underlying the warrant available for purchase upon the achievement of
      specific milestones as follows: 100,000 shares became available for purchase
      upon the filing of the Company’s annual report on Form 10-KSB for the fiscal
      year ended October 31, 2002; 100,000 shares became available for purchase upon
      the filing of the Company’s quarterly reports on Form 10-QSB for the quarters
      ended January 31, 2003, April 30, 2003 and July 31, 2003; 100,000 shares became
      available for purchase upon the Company’s receipt of at least $500,000 in
      cumulative proceeds from the litigation against certain former officers,
      directors and others and/or the litigation against the Rosenberg and Koenig
      accounting firms; 100,000 shares shall be available for purchase upon the
      Company’s receipt of at least $2,000,000 in cumulative proceeds related to the
      Syntho litigation; 100,000 shares shall be available for purchase upon the
      Company becoming eligible to register its common stock pursuant to the
      Securities Act of 1933, as amended; and 100,000 shares shall be available for
      purchase upon the acquisition by the Company of a product or line of business.




F-27


The
      fair
      value of the warrant was estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 4.79%; volatility of 50.47%; and
      an
      expected life of 10 years. The warrant had a fair value of approximately $44,211
      on the date of issuance. For the fiscal year ended October 31, 2004, the Company
      recorded $12,632 of amortization expense associated with warrant shares that
      had
      vested pursuant to the warrant. As of October 31, 2004, 200,000 shares
      underlying the warrant are available for purchase and 500,000 shares underlying
      the warrant remain unvested and are not yet available for purchase.




Director
      Warrants Dated July 24, 2003 .
      On July
      24, 2003, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 800,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $.26
      per
      share until July 24, 2008. The shares of common stock underlying each warrant
      vest equally on and after the date of issue (66,666 shares), on and after the
      first anniversary date (66,666 shares) and on and after the second anniversary
      date (66,668 shares). The fair value of the warrants were estimated on the
      date
      of issuance using the Black-Scholes pricing model with the following weighted
      average assumptions: dividend yield of 0%; risk free interest of 3.08%;
      volatility of 105.64%; and an expected life of 5 years. The warrants had a
      fair
      value of approximately $155,138 at the date of issuance.




For
      the
      fiscal years ended October 31, 2004 and 2003, the Company recorded $63,226
      and
      $21,040, respectively, of amortization expense associated with warrant shares
      that had vested pursuant to the warrants.  As
      of
      October 31, 2004, an aggregate of 466,662 shares underlying the warrants are
      available for purchase and an aggregate of 133,334 shares underlying the
      warrants had been cancelled and an aggregate of 200,004 shares underlying the
      warrant remain unvested and are not yet available for purchase.




Director
      Warrants Dated May 14, 2004 .
      On May
      14, 2004, a warrant to purchase 200,000 shares of common stock of the Company
      was issued to each of its directors, other than Mr. LaVance and Mr. Gifford.
      An
      aggregate amount of 600,000 shares of common stock could be issued pursuant
      to
      these warrants. Each warrant has a five year term and is exercisable at $.04
      per
      share until May 14, 2009. The shares of common stock underlying each warrant
      vest equally on and after the date of issue (66,600 shares) and on and after
      the
      first anniversary date (133,400 shares).




The
      fair
      value of the warrants were estimated on the date of issuance using the
      Black-Scholes pricing model with the following weighted average assumptions:
      dividend yield of 0%; risk free interest of 3.92%; volatility of 50.47%; and
      an
      expected life of 5 years.  The
      warrants had an aggregate fair value of approximately $32,137 at the date of
      issuance. For the fiscal year ended October 31, 2004, the Company recorded
      $15,057 of amortization expense associated with warrant shares that had vested
      pursuant to the warrants. As of October 31, 2004, an aggregate of 466,662 shares
      underlying the warrants are available for purchase and an aggregate of 133,334
      shares underlying the warrants had been cancelled and an aggregate of 200,004
      shares underlying the warrant remain unvested and are not yet available for
      purchase.




F-28


Stock
      warrant transactions during the fiscal year ended October 31, 2004 and 2003
      were
      as follows (see Note 13):





**Warrant**
              **Shares**
            
            **Vested**
              **Shares**
            
            **Exercise
                Price**
              **Per
                Common**
              **Share**
            
            **Weighted**
              **Average**
              **Exercise
                Price**
              **Per
                Common**
              **Share**Balance,
                November 1, 2002
            
            
            580,000
            
            
            580,000
            
            
            $2.45
                - $6.75
            
            
            $5.73Warrants
                vested during the year
            
            
            2,300,000
            
            
            1,063,539
            
            
            $0.18
                - $0.26
            
            
            $0.13Exercised
                during the year
            
            
            --
            
            
            --
            
            
            --
            
            
            --Expired/terminated
                during the year
            
            
            --
            
            
            --
            
            
            --
            
            
            --Balance,
                October 31, 2003
            
            
            2,880,000
            
            
            1,643,539
            
            
            $0.02
                - $6.75
            
            
            $1.26Warrants
                vested during the year
            
            
            1,300,000
            
            
            1,162,298
            
            
            $0.04
            
            
            $0.04Exercised
                during the year
            
            
            (937,500
            )
            
            (937,500
            )
            
            $0.08
            
            
            $0.08Expired/terminated
                during the year
            
            
            (533,334
            )
            
            (400,000
            )
            
            $0.26
                & $6.75
            
            
            $5.13Balance,
                October 31, 2004
            
            
            2,709,166
            
            
            1,468,337
            
            
            $0.02
                - $4.50
            
            
            $0.32





Information
      with respect to warrants outstanding and warrants exercisable at October 31,
      2004 is as follows:





**Range
                of**
              **Exercise**
              **Prices**
            
            **Number**
              **Outstanding**
            
            **Weighted**
              **Average**
              **Remaining**
              **Contractual**
              **Life
                (Years)**
            
            **Weighted**
              **Average**
              **Exercise
                Price**
              **Per
                Common**
              **Share**
            
            **Number**
              **Exercisable**
            
            **Weighted**
              **Average**
              **Exercise
                Price**
              **Per
                Common**
              **Share**$0.02
                - $0.26
            
            
            2,529,166
            
            
            6.5
            
            
            $0.09
            
            
            1,288,337
            
            
            $0.12$2.45
                & $4.50
            
            
            180,000
            
            
            2.0
            
            
            $3.48
            
            
            180,000
            
            
            $3.482,709,166
            
            
            6.2
            
            
            $0.32
            
            
            1,468,337
            
            
            $0.51





***Issuances
      of Common Stock***





On
      March
      4, 2004, the Company issued 25,000 shares of common stock to Craig S. Arnold,
      the Company’s Executive Vice President - Sales and Marketing from January 2,
      2003 through August 6, 2003, pursuant to a termination and general release
      agreement dated September 5, 2003. The Company did not receive any proceeds
      from
      this issuance and recorded $5,000 of compensation expense based on the fair
      market value of the stock ($0.20 per share) on the date the agreement was
      executed (September 5, 2003).





On
      May
      14, 2004, the Company issued 1,875,000 shares of common stock to the principals
      of Century Capital related to the annual bonus due to Century Capital, pursuant
      to the Consulting Services Agreement, for the one year period commencing
      February 1, 2003 and ending January 31, 2004. The Company did not receive any
      proceeds from this issuance and recorded $150,000 of compensation expense based
      on the fair market value of the stock ($0.08 per share) on the date the bonus
      was awarded (May 14, 2004).





F-29


On
      May
      26, 2004, the Company issued 861,990 shares of common stock pursuant to the
      settlement agreement entered into on August 18, 2003 related to the consolidated
      class action lawsuit commenced against the Company during the fiscal year ended
      October 31, 2002. The shares of common stock were issued to the members of
      the
      class and the attorneys representing the class. The Company did not receive
      any
      proceeds from this issuance of common stock. See Note 4.





***Treasury
      Stock and Retirement of Common Stock***





On
      June
      6, 2002, the Company’s Board of Directors authorized the Company to purchase up
      to 1,500,000 shares of its common stock in the open market. On April 14, 2004,
      the Company retired 192,300 shares of common stock, which was recorded as
      treasury stock as of October 31, 2003, that it had purchased in the open market
      for total consideration of $419,523 during the fiscal years ended October 31,
      2003 and 2002.





On
      February 26, 2004, the Company retired 554,800 shares of common stock that
      was
      received pursuant to the settlement and release agreement entered into by the
      Company and Vincent J. Sanpietro on February 4, 2004. See Note 4.





On
      April
      14, 2004, the Company retired 3,179,200 shares of common stock that was received
      pursuant to the settlement and release agreement entered into by the Company
      and
      Joseph A. Sanpietro. See Note 4.





On
      June
      10, 2004, the Company retired 125,000 shares of common stock that was received
      pursuant to the settlement and release agreement entered into by the Company
      and
      Robert S. Russo on May 14, 2004. See Note 4.





On
      October 5, 2004, the Company retired 405,000 shares of common stock that was
      received pursuant to the settlement and release agreement entered into by the
      Company and Lawrence P. Marasco on September 16, 2004. See Note 4.





**11.**
            **Note
                Payable**




On
      February 2, 2004, the Company entered into a finance agreement with Amgro,
      Inc.
      (“Amgro”). Pursuant to the terms of the agreement, Amgro loaned the Company the
      principal amount of $84,000, which amount would accrue interest at a rate of
      7.25% per annum, in order to partially fund the payment of the premium of the
      Company’s director and officer liability insurance. The agreement required the
      Company to make nine monthly payments of $9,618, including interest, with the
      first payment due upon the execution of the agreement. As of October 31, 2004,
      there was no outstanding principal balance related to this finance agreement.




**12.**
            **Commitments**




***Consulting
      Agreement with Century Capital***




The
      Company entered into a Consulting Services Agreement with Century Capital,
      effective as of February 1, 2003, in order to engage Century Capital to provide
      (1) general corporate and business advisory services, (2) strategic business
      advisory services, and (3) financial advisory services to the Company. The
      Consulting Services Agreement was approved by the Board. The initial term of
      the
      Consulting Services Agreement was two years, which ended on January 31, 2005.
      All fees related to the Consulting Services Agreement were expensed by the
      Company during the period of the agreement. See Note 13 - Amended and Restated
      Agreement Dated February 1, 2005.




F-30


David
      R.
      LaVance and Thomas S. Gifford are the sole members of Century Capital. On March
      21, 2003, pursuant to the Consulting Services Agreement, the Board appointed
      Mr.
      LaVance as Chief Executive Officer of the Company, and Mr. Gifford as Executive
      Vice President and Chief Financial Officer of the Company. Mr. LaVance and
      Mr.
      Gifford were also appointed as directors of the Company to fill vacancies on
      the
      Board as of the same date. Mr. LaVance assumed the position of Chairman of
      the
      Board when he was appointed as a director.




During
      the initial term of the Consulting Services Agreement, Century Capital received
      a monthly consulting fee in the amount of $75,000 and was reimbursed for all
      reasonable and customary business expenses. The Company also issued Century
      Capital a ten year warrant to purchase 1,500,000 shares of the Company’s common
      stock (see Notes 10 and 13). In addition, for each one year period commencing
      on
      February 1 and ending on January 31 during the term of the Consulting Services
      Agreement, Century Capital was entitled to be paid a minimum annual cash bonus
      in an amount not less than $125,000. Century Capital was eligible to earn an
      annual bonus in excess of $125,000 at the discretion of the Board. As of October
      31, 2004 and 2003, the Company accrued $143,750 and $93,750, respectively,
      related to the minimum annual bonuses due to Century Capital pursuant to the
      original Consulting Services Agreement.




On
      May
      14, 2004, in lieu of the minimum annual cash bonus due Century Capital for
      the
      period that began on February 1, 2003 and ended on January 31, 2004, Century
      Capital agreed to accept the following: (1) $50,000 cash payment to be made
      on
      September 1, 2004; (2) 1,875,000 shares of the Company’s common stock (fair
      market value on the date of issuance was $150,000 based on the closing price
      of
      the Company’s common stock on that date) and (3) the forgiveness of $75,000
      (representing the exercise price) due to the Company from Century Capital
      related to the purchase by Century Capital of 937,500 shares of the Company’s
      common stock underlying the warrant issued to it on February 1, 2003 (see Note
      13 - Warrants to Purchase Common Stock).




Commencing
      July 1, 2004, Century Capital agreed to defer $25,000 of its monthly consulting
      fee for a three month period (through September 30, 2004) in an effort to
      minimize the Company’s cash burn. Century Capital later agreed to continue the
      $25,000 monthly deferment through January 31, 2005, at which point the total
      amount due and owing to Century Capital related to the deferment of its monthly
      consulting fee was $175,000.




During
      the entire term of the Consulting Services Agreement, Mr. LaVance and Mr.
      Gifford were treated as independent contractors for purposes of compensation,
      were not be paid any salary or compensation directly by the Company and did
      not
      participate in any of the Company’s employee benefit plans.




F-31


As
      provided in the original Consulting Services Agreement, Mr. LaVance and Mr.
      Gifford were added as covered parties under the Company’s directors’ and
      officers’ liability insurance policies (“D&O Policies”). The Company is
      required to maintain such D&O Policies while Mr. LaVance and Mr. Gifford
      hold positions as officers and/or directors of the Company and for a period
      of
      two years following termination of their service in such positions. The Company
      also agreed in the original Consulting Services Agreement to indemnify and
      hold
      harmless Century Capital and its representatives, including Mr. LaVance and
      Mr.
      Gifford, from and against any and all claims, demands, liabilities, obligations,
      losses, fines, and expenses, including reasonable attorneys’ and accountants’
fees and expenses incurred in connection with the Company’s failure to perform
      under the original Consulting Services Agreement or any threatened, pending
      or
      completed action, suit or proceeding arising out of Century Capital’s
      relationship, or the relationship of any Century Capital representative, with
      the Company.




***Operating
      Leases***




In
      July
      2002, the Company leased an office facility from Monmouth/Atlantic Realty
      Associates, L.L.C. under a non-cancelable operating lease that commenced on
      November 24, 2002 and was due to expire on November 24, 2007, with an option
      to
      renew for an additional five year term. The Company moved its corporate
      headquarters to this facility located in Wall Township, New Jersey in December
      2003. On May 6, 2004, in connection with the relocation of its principal
      offices, the Company and Monmouth/Atlantic Realty Associates, L.L.C. reached
      an
      agreement to terminate the remaining term of the existing lease (44 months
      resulting in a lease obligation of approximately $454,000 plus an additional
      $154,000 for common area charges) for a one-time payment by the Company of
      $100,000 plus the forfeiture of the $33,388 security deposit.




Annual
      future minimum lease obligations for property and equipment leased by the
      Company, as of October 31, 2004, are as follows:




Fiscal
                Year Ended October 31,2005
            
            $
            4,2962006
                and thereafter
            
            
            749Total
                Minimum Lease Payments
            
            $
            5,045


***Other
      Commitments***




On
      November 1, 2001, the Company entered into an employment agreement with its
      former Chief Financial Officer, Laurence M. Simon. The term of the employment
      agreement was two years and two months. The employment agreement provided that
      Mr. Simon would receive an annual salary of $100,000. In addition, Medi-Hut
      granted stock options to Mr. Simon for the purchase of an aggregate of 20,000
      shares of common stock at $6.75 per share. Options for 3,680 shares vested
      on
      December 31, 2001 and the remainder vested at a rate of 680 common shares each
      month through December 31, 2003. Of these options, 6,800 terminated upon the
      Company’s termination of Mr. Simon’s employment on March 21, 2003. The Company’s
      common stock had a fair value of $9.50 on the date the options were issued.
      Accordingly, pursuant to APB 25, the options had an intrinsic value of $55,000,
      which represents the difference between the fair market value of the Company’s
      stock on the date the options were issued and the exercise price of the options.
      The Company recorded the intrinsic value of the options as deferred compensation
      and amortized the deferred compensation pro rata in accordance with the vesting
      schedule of the options until Mr. Simon’s termination on March 21, 2003.




F-32


On
      December 14, 2001, the Company entered into an agreement with Bond-Brown Sales
      Design, LLC (“Bond-Brown”) to assist the Company in the identification and
      establishment of relationships with distributors for the Elite Safety Syringe.
      The agreement required the Company to pay Bond-Brown a minimum fee of $10,600
      per month for a minimum of six months commencing on January 21, 2002.
      Thereafter, the agreement continued on a month-to- month basis and was
      terminated by the Company in August 2003. As of October 31, 2004 and 2003,
      there
      were no amounts owed by the Company pursuant to this agreement.




On
      July
      1, 2002, the Company entered into a license agreement with Cuppy Medical
      Products, Inc. (“Cuppy”), which had a five year term. Pursuant to this license
      agreement, Cuppy granted Medi-Hut the exclusive, non-transferable license to
      manufacture, use, sell and distribute a patented safety engineered intravenous
      catheter system (the “Cuppy Catheter”) within the United States, United States
      Possessions, Canada and Mexico. The Company agreed to pay Cuppy an annual
      royalty of 6% of net sales of the Cuppy Catheter for a period of five years
      commencing July 1, 2002. In addition, upon execution of the license agreement,
      the Company paid $125,000 as an advance against future royalty payments, of
      which $85,000 was non-refundable and $40,000 was refundable in the event the
      Cuppy Catheter did not receive 510(k) premarket notification clearance from
      the
      United States Food and Drug Administration (the “FDA”). Further, the Company
      agreed to make annual non-refundable payments as advances against future
      royalties as follows: $25,000 on July 1, 2003, $40,000 on July 1, 2004, $65,000
      on July 1, 2005 and $85,000 on July 1, 2006. The license agreement also provided
      that, upon the notification of receipt of 510(k) premarket notification
      clearance from the FDA, the Company would grant and issue to Cuppy restricted
      shares of the Company’s common stock with a total fair market value of $125,000
      and afford the holder of the restricted shares with certain registration rights.
      On November 7, 2003, Cuppy terminated the license agreement with the Company
      due
      to the Company’s failure to make the $25,000 license payment that was due on
      July 1, 2003. The Company does not believe it has any further payment or other
      obligations under the terminated license agreement nor does it believe it will
      receive any refunds thereunder. As of October 31, 2004 and 2003, the Company
      had
      not accrued for any further payments due under this license
      agreement.




On
      March
      25, 2002, the Company and Making Distribution Intelligent, LLC (“MDI”) entered
      into a logistics services agreement pursuant to which MDI was engaged to
      warehouse the Company’s hormone replacement therapy drug, Syntest, ship the
      product pursuant to the Company’s instructions, bill the Company’s customers and
      provide customer service. The agreement, which commenced on March 25, 2002
      and
      was amended on June 17, 2002, required the Company to pay MDI a one-time fee
      of
      $15,000, a base monthly fee of $12,250 and a series of variable fees based
      on a
      per unit/case/pallet basis for receiving product, storing product, shipping
      product, invoicing customers and accepting returns. On August 29, 2003, the
      Company and MDI entered into a termination and mutual release agreement in
      which
      the parties agreed to terminate the remaining term of the March 25, 2002
      logistics services agreement (21 months resulting in an obligation of $257,250)
      for a one-time payment of $50,000. The parties also agreed to a mutual release
      of all potential claims against each other. As of October 31, 2004 and 2003,
      there were no amounts owed by the Company pursuant to this agreement.




F-33


**13.**
            **Subsequent
                Events**




***Consulting
      Agreements with Century Capital***




Original
      Agreement Dated February 1, 2003 .
      On
      November 1, 2004, Century Capital exercised warrants to purchase 621,876 shares
      of the Company’s common stock (421,876 shares pursuant to the warrant dated
      February 1, 2003 and 200,000 shares pursuant to the warrant dated May 14, 2004).
      The $16,438 due to the Company from Century Capital related to these warrant
      exercises were offset against deferred monthly consulting fees due to Century
      Capital. See Note 13 - Warrants to Purchase Common Stock.




On
      February 25, 2005, Century Capital agreed to accept 500,000 shares of the
      Company’s common stock as payment of the $50,000 due to Century Capital on
      September 1, 2004 (fair market value on the date of issuance was $15,000 based
      on the closing price of the Company’s common stock on that date). In addition,
      on February 25, 2005, Century Capital agreed to forgive $60,000 of the monthly
      deferred consulting fees in exchange for 600,000 shares of the Company’s common
      stock (fair market value on the date of issuance was $18,000 based on the
      closing price of the Company’s common stock on that date).




On
      February 25, 2005, Century Capital exercised its right to purchase 140,624
      shares of the Company’s common stock pursuant to the warrant dated February 1,
      2003. The $2,812 due to the Company from Century Capital as a result of this
      exercise was offset by the Company against deferred monthly consulting fees
      due
      to Century Capital. See Warrants to Purchase Common Stock.




On
      August
      25, 2005, the Company issued 1,000,000 shares of the Company’s common stock to
      Century Capital as payment of $50,000 of the deferred monthly consulting fees
      (fair market value of the common stock on the date of issuance was $40,000).
      See
      Amended and Restated Agreement dated February 1, 2005.




During
      the entire term of the original Consulting Services Agreement, Mr. LaVance
      and
      Mr. Gifford were treated as independent contractors for purposes of
      compensation, were not paid any salary or other compensation directly by the
      Company and neither of Mr. LaVance or Mr. Gifford participated in any of the
      Company’s employee benefit plans.




Amended
      and Restated Agreement Dated February 1, 2005 .
      Effective February 1, 2005, the original Consulting Services Agreement was
      replaced by an amended and restated Consulting Services Agreement. Pursuant
      to
      the amended and restated Consulting Services Agreement, Century Capital agreed
      to provide the services of Mr. LaVance and Mr. Gifford as the Company’s
      corporate officers. As provided in the amended and restated Consulting Services
      Agreement, Mr. LaVance will continue to serve as the Company’s President and
      Chief Executive Officer and Mr. Gifford will continue to serve as the Company’s
      Executive Vice President, Chief Financial Officer, Treasurer and Secretary.
      The
      amended and restated Consulting Services Agreement also provides that Mr.
      LaVance and Mr. Gifford will continue to be treated as independent contractors
      for the purposes of compensation, will not be paid any salary or other
      compensation directly by the Company and will not participate in the Company’s
      employee benefit plans.




F-34


The
      initial term of the amended and restated Consulting Services Agreement is one
      year, ending on January 31, 2006. Thereafter, the amended and restated
      Consulting Services Agreement shall continue until either party elects to
      terminate the amended and restated Consulting Services Agreement by providing
      sixty days written notice. As of November 30, 2006, neither the Company nor
      Century Capital has provided notice of termination. During the term of the
      amended and restated Consulting Services Agreement, Century Capital is entitled
      to receive a monthly consulting fee in the amount of $50,000 and is entitled
      to
      be reimbursed for all reasonable and customary business expenses. Century
      Capital is also entitled to receive an annual bonus in an amount not less than
      $125,000 upon the successful completion of to be determined objectives which
      are
      established by the independent members of the Board and Century
      Capital.




During
      the term of the amended and restated Consulting Services Agreement and for
      a
      period of twenty-four months after the termination of the amended and restated
      Consulting Services Agreement, Century Capital shall be entitled to receive
      a
      cash bonus upon the consummation by the Company of certain corporate
      transactions. The bonus compensation shall be an amount not less than 2.5%
      of
      the aggregate consideration to be paid in connection with a sale or acquisition
      of the Company or in connection with a change in control of the Company (which
      means a change in more than 50% of the issued and outstanding shares of the
      Company’s common stock). Century Capital shall be entitled to receive the bonus
      compensation for any corporate transaction which commences before, but is
      consummated after, the end of the twenty-four month period following the
      effective termination date of the amended and restated Consulting Services
      Agreement.




Upon
      the
      execution of the amended and restated Consulting Services Agreement, the Company
      issued Century Capital a ten year, non-cancelable warrant dated February 25,
      2005 to purchase 500,000 shares of the Company’s common stock at a purchase
      price of $.03 per share. The warrant had a fair value of $10,674 on the date
      of
      issuance. See Warrants to Purchase Common Stock.




On
      February 25, 2005, Century Capital exercised its right to purchase 250,000
      shares of the Company’s common stock pursuant to the warrant dated February 25,
      2005. On both May 20, 2005 and August 25, 2005, Century Capital exercised its
      right to purchase 62,500 shares of the Company’s common stock (125,000 shares in
      total) pursuant to the warrant dated February 25, 2005. The $3,750 due to the
      Company from Century Capital as a result of these exercises was offset by the
      Company against deferred monthly consulting fees due to Century Capital. See
      Warrants to Purchase Common Stock.




***Warrants
      to Purchase Common Stock***




Century
      Capital Warrant Dated February 1, 2003 . ** The
      Underlying Purchase Price adjusted to $.02 per share as of November 1, 2004
      when
      Century Capital exercised its right to purchase 421,876 shares of the Company’s
      common stock underlying the warrant. The $8,438 due to the Company from Century
      Capital as a result of this exercise was offset by the Company against monthly
      consulting fees due and owing to Century Capital that had been deferred for
      payment. On February 25, 2005, Century Capital exercised its right to purchase
      140,624 shares of the Company’s common stock underlying the warrant at $.02 per
      share. The $2,812 due to the Company from Century Capital as a result of this
      exercise was offset by the Company against monthly consulting fees due and
      owing
      to Century Capital that had been deferred for payment. As of February 28, 2005,
      all 1,500,000 shares underlying the warrant had been purchased.




F-35


Century
      Capital Warrant Dated May 14, 2004 . ** On
      November 1, 2004, Century Capital exercised its right to purchase 200,000 shares
      of the Company’s common stock underlying the warrant. Of the shares purchased,
      100,000 shares became available for purchase on May 14, 2004, the issuance
      date
      of the warrant, and the other 100,000 shares became available for purchase
      prior
      to November 1, 2004 as a result of the Company’s receipt of $500,000 of
      cumulative proceeds from the litigation against certain former officers,
      directors and others that was commenced on December 4, 2003. The $8,000 due
      to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against monthly consulting fees due and owing to Century Capital that
      had been deferred for payment.




On
      November 13, 2006, Century Capital exercised its right to purchase 300,000
      shares of the Company’s common stock underlying the warrant. Of the shares
      purchased, 100,000 shares became available for purchase on November 24, 2005,
      the date the Company filed its annual report on Form 10-KSB for the fiscal
      year
      ended October 31, 2002. In addition, 100,000 shares became eligible for purchase
      on May 27, 2006, the date the Company filed its quarterly reports on Form 10-QSB
      for the quarters ended January 31, 2003, April 30, 2003 and July 31, 2003 and
      the other 100,000 shares became available for purchase on November 10, 2006,
      the
      date the Company acquired the exclusive world-wide rights to develop, make
      and
      sell the HCMS. The $12,000 due to the Company from Century Capital as a result
      of this exercise was offset by the Company against monthly consulting fees
      due
      and owing to Century Capital that had been deferred for payment.




Century
      Capital Warrant Dated February 25, 2005 .
      Pursuant to the amended and restated Consulting Services Agreement, on February
      25, 2005, a warrant to purchase 500,000 shares of common stock of the Company
      was issued to Century Capital. The warrant has a ten year term and is
      exercisable at $.03 per share until February 25, 2015. The warrant vests as
      follows: (a) 250,000 of the shares of the Company’s common stock underlying the
      warrant became available for purchase as of February 1, 2005; (b) an additional
      20,833 of the shares underlying the warrant became available for purchase on the
      last day of each month commencing February 28, 2005 and ending December 31,
      2005
      and (c) 20,837 of the shares underlying the warrant became available for
      purchase on January 31, 2006. The warrant had a fair value of approximately
      $10,674 on the date of issuance.




On
      February 25, 2005, Century Capital exercised its right to purchase 250,000
      shares of the Company’s common stock underlying the warrant. The $7,500 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against amounts due and owing to Century Capital related to deferred
      monthly consulting fees. On both May 20, 2005 and August 25, 2005, Century
      Capital exercised warrants to purchase 62,500 shares of the Company’s common
      stock (125,000 shares in total). The $3,750 due to the Company from Century
      Capital as a result of these exercises was offset by the Company against
      deferred monthly consulting fees due to Century Capital.




On
      November 13, 2006, Century Capital exercised its right to purchase 125,000
      shares of the Company’s common stock underlying the warrant. The $3,750 due to
      the Company from Century Capital as a result of this exercise was offset by
      the
      Company against monthly consulting fees due and owing to Century Capital that
      had been deferred for payment.




F-36


Director
      Warrants Dated May 14, 2004. On
      February 25, 2005, John A. Moore, a current director of the Company, exercised
      his right to purchase 66,600 shares of the Company’s common stock underlying the
      warrant. The Company received gross proceeds of $2,664 from the issuance of
      these shares.




Director
      Warrants Dated February 25, 2005 .
      On
      February 25, 2005, a warrant to purchase 200,000 shares of common stock of
      the
      Company was issued to each of its directors, other than Mr. LaVance and Mr.
      Gifford. An aggregate amount of 400,000 shares of common stock could be issued
      pursuant to these warrants. Each warrant has a five year term and is exercisable
      at $.03 per share until February 25, 2010. The shares of common stock underlying
      each warrant vest equally on and after the date of issue (100,000 shares) and
      on
      and after the first anniversary date (100,000 shares). The warrants had an
      aggregate fair value of approximately $6,378 at the date of issuance. On
      February 25, 2005, John A. Moore, a current director of the Company, exercised
      his right to purchase 100,000 shares of the Company’s common stock underlying
      the warrant. The Company received $3,000 in connection with the issuance of
      these shares.




Consultant
      Warrant Dated May 11, 2005 .
      On May
      11, 2005, a warrant to purchase 100,000 shares of common stock of the Company
      was issued to Dr. William Sear, a consultant to the Company, for consulting
      services rendered by Dr. Sear to the Company. The warrant has a five year term
      and is exercisable at $.05 per share until May 11, 2010. All of the shares
      of
      common stock underlying the warrant vested on the date of issuance, May 11,
      2005. As of May 15, 2005, all 100,000 of the shares underlying the warrant
      had
      been purchased. The warrant had a fair value of approximately $2,847 at the
      date
      of issuance.




***Litigation***




Syntest
      Litigation .
      On
      October 17, 2005, the Company and Breckenridge entered into a purchase and
      settlement agreement pursuant to which the Company sold its distribution and
      other rights and business with respect to the hormone replacement drug, Syntest,
      to Breckenridge. In consideration for the sale of such rights and the other
      benefits provided under the purchase and settlement agreement, Breckenridge
      agreed to pay the Company an aggregate of $1,000,000 as follows: (1) $250,000
      was paid shortly after the execution of the purchase and settlement agreement,
      and (2) $50,000 will be paid on the first day of each month for a 15 month
      period commencing on November 1, 2005 and ending on January 1, 2007. Further,
      pursuant to the settlement agreement, the Company and Breckenridge dismissed
      their actions against each other and released each other from any further claims
      arising out of the distribution and sale of Syntest, except as provided under
      the purchase and settlement agreement. The Company reserved all of its rights
      to
      its claims for damages against the Syntho Group that were incurred by the
      Company as a result of the alleged breach by the Syntho Group of the Syntho
      Agreement and other wrongful actions by the Syntho Group. As of November 30,
      2006, the Company received $900,000 of payments from Breckenridge pursuant
      to
      the purchase and settlement agreement.




On
      February 22, 2006, the Company amended its complaint in this action to, among
      other things, include claims that Muhammed Malik, in his capacity as a
      consultant to the Company and as president of Intermax and Syntho, provided
      substantial assistance to the former officers and certain former directors
      of
      the Company in carrying out the scheme to overstate Medi-Hut’s revenues and
      earnings through fraudulent accounting practices and committed violations of
      state and federal laws prohibiting forgery and fraudulent practices and
      otherwise participated in “racketeering activity” as that term is defined in 18 U.S.C .
      §1961(1) and N.J.S.A .
      2C:41-1.




F-37


On
      April
      10, 2006, the Syntho Group counterclaimed against Medi-Hut and Century Capital,
      David R. LaVance and Thomas S. Gifford, as agents of Medi-Hut, for allegedly
      violating the Lanham Act and tortiously interfering with Syntho’s contractual
      relationship with Breckenridge.




On
      November 22, 2006, the Company, Century Capital, David R. LaVance and Thomas
      S.
      Gifford entered into a settlement agreement and release with the Syntho Group
      and Intermax. Pursuant to the settlement agreement, the Company and the Syntho
      Group agreed to dismiss with prejudice the actions against each other which
      were
      pending in the United States District Court for the Eastern District of New
      York
      and in the Superior Court of New Jersey (see Litigation Against Certain Former
      Officers and Directors and Others). In addition, the Syntho Group agreed to
      dismiss with prejudice the related actions against Century Capital, David R.
      LaVance and Thomas S. Gifford which were pending in the United States District
      Court for the Eastern District of New York and the Company and Intermax agreed
      to dismiss with prejudice the related actions against each other which were
      pending in the United States District Court for the Eastern District of New
      York
      and in the Superior Court of New Jersey. As part of the settlement reached
      by
      the parties, the Syntho Group agreed to pay the Company an aggregate of
      $3,100,000 (the “Settlement Amount”) as follows: (1) $250,000 was paid upon the
      execution of the settlement agreement; (2) $100,000 will be paid on the
      27 th day of
      each month for a 3 month period commencing on December 27, 2006 and ending
      on
      February 27, 2007 and (3) $2,550,000 will be paid on or before March 27, 2007.
      A
      portion of the Settlement Amount, $2,850,000, is secured by a first priority
      mortgage on real property owned by the spouse of Muhammed Malik. In the event
      that the Syntho Group defaults on the settlement agreement, the Syntho Group
      and
      Intermax will be responsible for all reasonable costs and expenses incurred
      by
      the Company as a result of the default, including any foreclosure related
      expenses associated with the real property which secures the first priority
      mortgage. In addition, upon a default by the Syntho Group, a consent judgment
      in
      favor of the Company in the amount of $4,000,000 will be entered into in the
      Superior Court of New Jersey against the Syntho Group and Intermax.




Litigation
      Against Certain Former Officers and Directors and Others . ** On
      November 29, 2004, the Company entered into a settlement agreement and release
      with Laurence M. Simon. In exchange for the return of 30,000 shares of the
      Company’s common stock and certain other non-monetary consideration, the Company
      agreed to dismiss its claims against Mr. Simon. The Company subsequently retired
      the common stock returned.




On
      January 19, 2005, the Company entered into a settlement agreement and release
      in
      connection with its action against Kinray, Inc. and its officer, Santi
      Greco.  As
      part
      of this settlement, Kinray, Inc. agreed to pay to the Company the sum of
      $300,000. This settlement was entered into without any admission of liability
      or
      any inferences of wrongdoing by any settling party.




In
      late
      2005 and early 2006, defendants Syntho and Muhammed Malik made motions to
      dismiss Medi-Hut’s claims based on the entire controversy doctrine and the
      principle of comity. These motions were denied. In April 2006, Syntho and
      Muhammed Malik sought leave to appeal the denial of their motion to dismiss
      on
      the principle of comity. This motion was also been denied.




F-38


On
      April
      6, 2006, the Company filed a second amended complaint in which it alleges that,
      among other things, it has suffered significant damages as a result of the
      Syntho Group’s breach of the distribution agreement between Syntho and Medi-Hut,
      pursuant to which Medi-Hut had exclusive rights to distribute Syntest, and
      the
      Syntho Group’s related conduct.




On
      November 22, 2006, the Company entered into a settlement agreement and release
      with the Syntho Group and Intermax pursuant to which the Company, the Syntho
      Group and Intermax agreed to dismiss with prejudice the actions against each
      other which were pending in the Superior Court of New Jersey. See Litigation
      -
      Syntest Litigation.




Litigation
      Against Former Accounting Firms .
      On
      February 21, 2006, the Company entered into a settlement agreement and release
      with Rosenberg. As part of the settlement, the parties released each other
      from
      all claims and Rosenberg paid the Company the sum of $425,000. This settlement
      was entered into without any admission of liability or any inferences of
      wrongdoing by any settling party.




Lexington
      Insurance Lawsuit . ** On
      March
      10, 2005, the Company filed a third party complaint against Universal Business
      Insurance, Inc. (“Universal”) and Brett D. Mayer (“Mayer”) in the United States
      District Court for the District of New Jersey. Universal was the retail broker
      that advised the Company during the Company’s business dealings with Lexington
      and Mayer was the individual employed by Universal that dealt directly with
      the
      Company. In its complaint, the Company alleged that Universal and Mayer were
      negligent and breached their fiduciary duty to the Company in providing services
      related to the Company’s procurement of directors and officers insurance.




On
      September 28, 2005, the Company and Lexington entered into an agreement in
      which
      Lexington agreed to dismiss its complaint against the Company and both Lexington
      and the Company agreed to release each other from any and all claims which
      could
      have been asserted as a result of the Lexington lawsuit. On October 13, 2005,
      the Company, Universal and Mayer entered into an agreement in which the Company
      agreed to dismiss its third party complaint against Universal and Mayer in
      exchange for a one time payment from Universal and Mayer of $8,500.




Loures
      Lawsuit .
      On
      January 18, 2005, a complaint was served on the Company, its former officers
      and
      certain of its former directors, by James J. Loures, Jr. and Christine Loures
      in
      the Superior Court of New Jersey. The plaintiffs allege that the Company, its
      former officers and certain of its former directors engaged in a scheme to
      inflate the Company’s revenues and earnings through a series of accounting
      irregularities and fraudulent financial disclosures during the period June
      2001
      through March 2003 which resulted in the plaintiff’s loss of approximately
      $120,000. The plaintiffs allegations are the same as those raised in the class
      action lawsuits discussed above. The plaintiffs were one of eight parties that
      opted out of the settlement related to the class action lawsuits.




On
      October 4, 2006, the Company filed a motion to dismiss the plaintiffs’ complaint
      for failure to comply with discovery requests in the time required by the court.
      On November 3, 2006, the court granted the Company’s motion and dismissed the
      complaint without prejudice.




F-39


***Other
      Agreements and Events***




Private
      Placement of Convertible Debentures .
      On May
      26, 2005, the Company closed on a private placement of Debentures. The gross
      proceeds received in connection with this private placement were $300,000.
      The
      Debentures have a 2 year term maturing on April 30, 2007 and bear interest
      at a
      rate of 8% per annum. Interest is payable in annual installments, beginning
      on
      May 1, 2006, in cash or, at the option of the Company, in shares of the
      Company’s common stock. If the Company elects to pay the interest in shares of
      the Company’s common stock, the number of shares issued as payment will be equal
      to the quotient of the unpaid interest divided by the market price of the
      Company’s common stock as defined in the Debentures. Up to 50% of the aggregate
      principal amount of the Debentures are immediately convertible into the
      Company’s common stock, at the option of the holders, at a conversion price of
      $0.10 per share. The remaining 50% of the aggregate principal amount of the
      Debentures are convertible into the Company’s common stock, at the option of the
      holders, at any time after May 1, 2006 at a conversion price of $0.20 per share.
      The market price of the Company’s common stock on the date of closing the
      transaction was $0.06 per share.




Private
      Placement of Common Stock .
      On
      August 25, 2005, the Company closed on a private placement of 4,000,000 shares
      of common stock. The gross proceeds received in connection with this private
      placement were $200,000 ($0.05 per share). Richard S. Rimer, a private investor,
      purchased 3,000,000 shares of the Company’s common stock for $150,000. John A.
      Moore, a director of the Company, purchased 1,000,000 shares of the Company’s
      common stock for $50,000. The market price of the Company’s common stock on the
      date of closing the transaction was $0.04 per share.




Common
      Stock Issued as Payment for Consulting Services .
      On
      February 25, 2005, the Company issued 1,100,000 shares of common stock, fair
      market value of $33,000 or $0.03 per share on the date of issuance, to the
      principals of Century Capital as payment for monthly consulting fees of $60,000
      and an annual bonus of $50,000 due and owing to Century Capital that had been
      deferred for payment.




On
      August
      25, 2005, the Company issued 1,000,000 shares of common stock, fair market
      value
      of $40,000 or $0.04 per share on the date of issuance, to the principals of
      Century Capital as payment for monthly consulting fees of $50,000 due and owing
      to Century Capital that had been deferred for payment.





Acquisition
      of the HCMS .
      On
      November 10, 2006, the Company entered into a technology license agreement
      (the
“License Agreement”) with The Research Foundation of State University of New
      York, for and on behalf of the University at Buffalo (the “Foundation”), Donald
      D. Hickey, M.D. (“Hickey”) and Clas E. Lundgren (“Lundgren”). The Foundation,
      Hickey and Lundgren shall be collectively referred to herein as the “Licensor.”




Pursuant
      to the License Agreement, the Licensor granted the Company the exclusive
      world-wide rights to develop, make and sell the HCMS, a minimally invasive
      two-balloon esophageal catheter system used to monitor cardiac performance.
      The
      term of the License Agreement commenced on November 10, 2006, the date of the
      License Agreement, and ends on the later of (i) the expiration date of the
      last
      to expire patent right related to the HCMS or (ii) ten years from the sale
      of
      the first HCMS product.




F-40


Under
      the
      License Agreement, the Company is required to pay the Licensor a royalty of
      5%
      on annual net sales, as defined in the License Agreement, subject to certain
      reductions as detailed in the License Agreement. Beginning with the first full
      year of sales of the HCMS in the United States and for two years thereafter,
      the
      Company is required to pay an annual minimum royalty of $100,000 to the Licensor
      against which any royalty on net sales paid in the same calendar year for sales
      in the United States will be credited. Further, beginning with the first full
      year of sales of the HCMS outside the United States and for two years
      thereafter, the Company is required to pay an annual minimum royalty of $100,000
      to the Licensor against which any royalty on net sales paid in the same calendar
      year for sales outside the United States will be credited. In addition, the
      Company is required to pay the Licensor 25% of all sublicensing revenue received
      by the Company in connection with the HCMS. The Company is also obligated to
      make milestone payments to the Licensor as follows: (i) first insertion of
      a
      catheter utilizing the HCMS in a human clinical trial - $75,000; (ii) first
      submission of the HCMS for regulatory approval in any country - $100,000; and
      (iii) first notice of regulatory approval to market the HCMS in any country
      -
      $150,000. Further, the Company will reimburse the Licensor a total of $264,300
      for patent costs incurred prior to the execution of the License Agreement as
      follows: $40,900 within five (5) days of the signing of the License Agreement;
      $80,000 on or before November 1, 2007 and $143,400 on or before November 1,
      2008. The $40,900 payment has been made by the Company in accordance with the
      License Agreement.




F-41




**INDEX
      OF EXHIBITS**




Exhibit
              No.
            Description
                of Exhibit




2.1
            Agreement
                and Plan of Reorganization between Medi-Hut Co., Inc. (“Medi-Hut”) and
                Indwest, Inc. dated January 28, 1998 (Incorporated by reference to
                Exhibit
                2 to Medi-Hut’s Registration Statement on Form 10-SB, File No. 0-27119,
                filed with the Securities and Exchange Commission (the “SEC”) on August
                23, 1999).




2.2
            Agreement
                and Plan of Reorganization between Medi-Hut and Vallar Consulting
                Corp.,
                dated January 10, 2000 (Incorporated by reference to Exhibit 2.1
                to
                Medi-Hut’s Current Report on Form 8-K, filed with the SEC on January 24,
                2000).




3.1
            Articles
                of Incorporation of Medi-Hut, filed in the office of the Secretary
                of
                State of Nevada on October 31, 2001 (Incorporated by reference to
                Exhibit
                3.1 to Medi-Hut’s Registration Statement on Form SB-2/A, Registration No.
                333-72504, filed with the SEC on November 27,
                2001).




3.2
            Bylaws
                of Medi-Hut (Incorporated by reference to Exhibit 3.4 to Medi-Hut’s
                Registration Statement on Form 10-SB, File No. 0-27119, filed with
                the SEC
                on August 23, 1999).




4.1
            Specimen
                stock certificate representing Medi-Hut’s common stock (Incorporated by
                reference to Exhibit 4.1 to Medi-Hut’s Annual Report on Form 10-KSB for
                the fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).




4.2
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Manor Oaks Capital
                Management (Incorporated by reference to Exhibit 4.2 to Medi-Hut’s Annual
                Report on Form 10-KSB for the fiscal year ended October 31, 2002,
                filed
                with the SEC on November 25, 2005).




4.3
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Chartwell Partners,
                LLP (Incorporated by reference to Exhibit 4.3 to Medi-Hut’s Annual Report
                on Form 10-KSB for the fiscal year ended October 31, 2002, filed
                with the
                SEC on November 25, 2005).




4.4
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Glenwood Partners,
                L.P. (Incorporated by reference to Exhibit 4.4 to Medi-Hut’s Annual Report
                on Form 10-KSB for the fiscal year ended October 31, 2002, filed
                with the
                SEC on November 25, 2005).




4.5
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Radiology for
                South
                Philadelphia Profit Sharing Plan (Incorporated by reference to Exhibit
                4.5
                to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




4.6
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Mark W. Cooper
                (Incorporated by reference to Exhibit 4.6 to Medi-Hut’s Annual Report on
                Form 10-KSB for the fiscal year ended October 31, 2002, filed with
                the SEC
                on November 25, 2005).




E-1




4.7
            Convertible
                Debenture for $50,000, dated May 1, 2005, issued to Richard Rimer
                (Incorporated by reference to Exhibit 4.7 to Medi-Hut’s Annual Report on
                Form 10-KSB for the fiscal year ended October 31, 2002, filed with
                the SEC
                on November 25, 2005).




10.1
            Joint
                Venture Agreement between Medi-Hut and COA International Industries,
                Inc.,
                dated November 16, 2000 (Incorporated by reference to Exhibit 10.8
                to
                Medi-Hut’s Registration Statement on Form SB-2, Registration No.
                333-72504, filed with the SEC on October 30, 2001).




10.2
            Distribution
                Agreement between Medi-Hut and Syntho Pharmaceuticals, Inc., dated
                November 20, 2001 (Incorporated by reference to Exhibit 10.2 to Medi-Hut’s
                Annual Report on Form 10-KSB for the fiscal year ended October 31,
                2002,
                filed with the SEC on November 25,
                2005).




10.3
            Amendment,
                dated February 7, 2002, to the Distribution Agreement, dated November
                20,
                2001, between Medi-Hut and Syntho Pharmaceuticals, Inc. (Incorporated
                by
                reference to Exhibit 10.3 to Medi-Hut’s Annual Report on Form 10-KSB for
                the fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).




10.4
            Amendment,
                dated April 3, 2002, to the Distribution Agreement, dated November
                20,
                2001, between Medi-Hut and Syntho Pharmaceuticals, Inc. (Incorporated
                by
                reference to Exhibit 10.4 to Medi-Hut’s Annual Report on Form 10-KSB for
                the fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).




10.5
            Medi-Hut
                Co., Inc. 2002 Equity Incentive Plan, adopted and effective January
                1,
                2002 (Incorporated by reference to Exhibit B of Medi-Hut’s definitive
                proxy statement, filed with the SEC on June 10, 2002).




10.6*
            Consulting
                Services Agreement, dated as of February 1, 2003, between Medi-Hut
                and
                Century Capital Associates, LLC (Incorporated by reference to Exhibit
                10.1
                to Medi-Hut’s Current Report on Form 8-K filed with the SEC on March 3,
                2003).




10.7*
            Amended
                and Restated Consulting Services Agreement, dated as of February
                1, 2005,
                between Medi-Hut and Century Capital Associates, LLC (Incorporated
                by
                reference to Exhibit 10.7 to Medi-Hut’s Annual Report on Form 10-KSB for
                the fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).




10.8*
            Warrant
                to purchase 1,500,000 shares of Medi-Hut common stock, dated February
                1,
                2003, issued to Century Capital Associates, LLC (Incorporated by
                reference
                as Exhibit 4.1 to Medi-Hut’s Current Report on Form 8-K filed with the SEC
                on March 3, 2003).




10.9*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated July
                24,
                2003, issued to James G. Aaron (Incorporated by reference to Exhibit
                10.9
                to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




E-2




10.10*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated July
                24,
                2003, issued to Richard E. Otto (Incorporated by reference to Exhibit
                10.10 to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




10.11*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated July
                24,
                2003, issued to John A. Moore (Incorporated by reference to Exhibit
                10.11
                to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




10.12*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated July
                24,
                2003, issued to Salvatore J. Badalamenti (Incorporated by reference
                to
                Exhibit 10.12 to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal
                year ended October 31, 2002, filed with the SEC on November 25,
                2005).




10.13*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated May
                14,
                2004, issued to Richard E. Otto (Incorporated by reference to Exhibit
                10.13 to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




10.14*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated May
                14,
                2004, issued to John A. Moore (Incorporated by reference to Exhibit
                10.14
                to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




10.15*
            Warrant
                to purchase 200,000 shares of common stock of Medi-Hut, dated May
                14,
                2004, issued to Salvatore J. Badalamenti (Incorporated by reference
                to
                Exhibit 10.15 to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal
                year ended October 31, 2002, filed with the SEC on November 25,
                2005).




10.16*
            Warrant
                to Purchase 700,000 shares of common stock of Medi-Hut, dated May
                14,
                2004, issued to Century Capital Associates, LLC (Incorporated by
                reference
                to Exhibit 10.16 to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal
                year ended October 31, 2002, filed with the SEC on November 25,
                2005).




10.17*
            Warrant
                to Purchase 500,000 shares of common stock of Medi-Hut, dated February
                25,
                2005, issued to Century Capital Associates, LLC. (Incorporated by
                reference to Exhibit 10.17 to Medi-Hut’s Annual Report on Form 10-KSB for
                the fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).




10.18*
            Warrant
                to Purchase 200,000 shares of common stock of Medi-Hut, dated February
                25,
                2005, issued to John A. Moore (Incorporated by reference to Exhibit
                10.18
                to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




10.19*
            Warrant
                to Purchase 200,000 shares of common stock of Medi-Hut, dated February
                25,
                2005, issued to Richard E. Otto (Incorporated by reference to Exhibit
                10.19 to Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended
                October 31, 2002, filed with the SEC on November 25,
                2005).




E-3




10.20
            Loan
                Agreement between Medi-Hut and Medi-Hut International, dated June
                7, 2002
                (Incorporated by reference to Exhibit 10.20 to Medi-Hut’s Annual Report on
                Form 10-KSB for the fiscal year ended October 31, 2002, filed with
                the SEC
                on November 25, 2005).




10.21
            Non-Exclusive
                License Agreement between Medi-Hut, COA International Industries,
                Inc.,
                Medi-Hut International and Young-Kil Shin, dated September 18, 2003
                (Incorporated by reference to Exhibit 10.21 to Medi-Hut’s Annual Report on
                Form 10-KSB for the fiscal year ended October 31, 2002, filed with
                the SEC
                on November 25, 2005).




10.22
            Memorandum
                of Understanding between Medi-Hut and Medi-Hut International Co.,
                Ltd,
                dated September 18, 2003 (Incorporated by reference to Exhibit 10.22
                to
                Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended October
                31, 2002, filed with the SEC on November 25, 2005).




10.23
            Shared
                Services Agreement, dated May 1, 2004, between Medi-Hut and Century
                Capital Associates LLC (Incorporated by reference to Exhibit 10.23
                to
                Medi-Hut’s Annual Report on Form 10-KSB for the fiscal year ended October
                31, 2002, filed with the SEC on November 25,
                2005).




10.24
            Technology
                License Agreement between The Research Foundation of State University
                of
                New York for and on behalf of University of Buffalo and Medi-Hut
                dated
                November 10, 2006 (Incorporated by reference to Exhibit 10.24 to
                Medi-Hut’s Current Report on Form 8-K filed with the SEC on November 14,
                2006).




14.1
            Chief
                Executive and Senior Financial Officer Code of Ethics (Incorporated
                by
                reference to Exhibit 14.1 to Medi-Hut’s Annual Report on Form 10-KSB for
                the fiscal year ended October 31, 2002, filed with the SEC on November
                25,
                2005).




21.1
            List
                of Subsidiaries of Medi-Hut.




31.1
            Section
                302 Certification of Chief Executive
                Officer.




31.2
            Section
                302 Certification of Chief Financial
                Officer.




32.1
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section
                1350.




32.2
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section
                1350.




*Constitutes
      a management contract under Section 601 of Regulation S-B.


E-4