MCTH Medical Connections Holdings Inc (GM)

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

Form 10-KSB

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Fiscal Year Ended December 31, 2007

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the Transition Period from_________to__________

Commission File Number 333-72376

MEDICAL CONNECTIONS HOLDINGS, INC.
Exact Name of Registrant as Specified in its Charter)

 Florida 65-0920373
------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. employer
 incorporation or organization) identification number)

Registrant's Telephone Number, Including Area Code: (561) 353-1110

Securities Registered Pursuant to Section 12(b) of the Act: NONE

Securities Registered Pursuant to Section 12(g) of the Act: NONE

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Check whether the registrant is a shell company Yes [ ] No [X]

State issuer's revenue for its most recent fiscal year, $4,829,285

Of the 24,473,501 shares of common stock of the registrant issued and outstanding as of March 31, 2008 17,729,021 shares were held by non-affiliates. The aggregate market value of the voting stock held by non-affiliates of the registrant computed by reference to the closing bid price of our Common Stock as reported on the OTC Bulletin Board on March 31, 2008 was approximately $35,458,042

This Form 10-KSB contains "forward-looking statements" relating to Medical Connections Holdings, Inc. ("Medical Connections "we", "our", or the "Company") which represent our current expectations or beliefs including, but not limited to, statements concerning our operations, performance, financial condition and growth. For this purpose, any statements contained in this Form 10-KSB that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "anticipate", "intend", "could", "estimate", or "continue" or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel, variability of quarterly results, and our ability to continue our growth strategy and competition, certain of which are beyond our control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Overview and History

Medical Connections Holdings, Inc. (f/k/a Webb Mortgage Depot, Inc.) was incorporated in the state of Florida on May 11, 1999. Prior to the acquisition of Medical Connections, Inc. the company operated as a mortgage company and generated revenues by originating mortgage loans that were funded by third parties. Because the Company is now exclusively focused on the medical staffing industry, we no longer provide these services.

On December 27, 2005, we closed on a share for share exchange agreement with Medical Connections, Inc. whereby the Company acquired all of the issued and outstanding shares of common stock of Medical Connections, Inc. In connection therewith, our prior officers and directors tendered their resignation and Joseph Azzata and Anthony Nicolosi, officers and directors of Medical Connections Inc., became officers and directors of Medical Connections Holdings, Inc.

Capitalization.

On March 31, 2008 we amended our articles of incorporation, authorizing us to issue up to 70,000,000 shares of common stock at a par value of $0.001 per share. We are also authorized to issue up to five million shares of total preferred stock. As of March 31, 2008 there were 24,473,501 shares of our Common Stock issued and outstanding and 110,948 Series A preferred shares issued and outstanding. Each Series A Preferred Share may be exchanged at any time for nineteen (19) shares of the Company's $.001 par value Common Stock. Until such shares of Series A Preferred Shares are exchanged for the Company's Common Shares, each holder of a Series A Preferred Share shall be entitled to one vote per share on all matters which are brought to a vote of the holders of our Common Stock. Holders of the Series A Preferred Stock will have no other rights or preferences. We have also ratified the issuance of a total of 1,000,000 shares of Series B preferred Stock. The Series B preferred stock will entitle the holders thereof to ten (10) votes per share on all matters brought to a vote of the holders of our Common Stock. Holders of the Series B Preferred Stock will have no other rights or preferences.

We have authorized the issuance of 500,000 Series B Preferred Shares to both Mr. Azzata and Mr. Nicolosi (one million shares of Series B preferred in total). As a result of their ownership of the Series B shares and their significant ownership of the common shares, Mr. Azzata and Mr. Nicolosi will be able to control the business decisions of the Company.

On September 30, 2007 we obtained the written consent of the stockholders holding a majority of the outstanding voting rights of the Company to amend our certificate of incorporation to increase the number of shares of capital stock we are authorized to issue. The amended articles contemplate the authorization of 75 million shares consisting of 5 million shares of preferred stock (which has been previously authorized) and 70 million shares of common stock, $.001 par value. The amendment became effective April 1, 2008 when it was filed with the Florida Secretary of State.

Medical Connections, Inc.

Medical Connections is a national provider for medical recruitment and staffing services. Established in 2002 to satisfy the increasing need for qualified healthcare professionals, the Company's business is to identify, select and place the best executive allied health specialists, pharmacists, physicians, nurses and hospital management executives. The Company provides recruiting and staffing services for permanent and temporary positions, with an option for the clients and candidates to decide the best formula for working together. Following the changing dynamics of the healthcare recruiting market, Medical Connections has shifted its niche to emphasize the recruitment of allied health specialists. This shift resulted in a significant increase in placements for physical and occupational therapists. The Company's future growth will be based on a disciplined recruiting policy of securing the best recruiters in the medical field. The key personnel of the company have more than 30 years combined experience in the medical recruiting profession. Currently Medical Connections employs 45 people and 60 medical professionals. Medical Connections is attempting to position itself as a recruiter for permanent positions in the field of allied health, and in furtherance thereof, has secured a roster of clients in both for-profit and not-for-profit organizations.

According to the American Staffing Association the market size of the health care recruiting business is approximately $11 billion a year. As Medical Connections grows, management will attempt to leverage its success to increase market presence. In addition to its internal growth, Medical Connections may acquire other staffing and recruitment companies engaged in the healthcare recruiting business. There are currently no targeted acquisitions, nor there any assurance that we will be able to locate an acquisition candidate, or if identified, we will have sufficient financing to secure the acquisition.

THE HEALTHCARE STAFFING INDUSTRY

As a healthcare recruiting and staffing company, Medical Connections, Inc. is directly affected by the market dynamics of supply and demand for medical specialists. Governmental and private sector research has shown that a combination of economic, political and educational conditions has created a growing demand for more healthcare providers than the country has been able to generate.

In 2006 overall staffing industry revenues totaled $94.8 billion, a growth of 16% from 2005 to 2006. The medical staffing industry doubled its revenue in the 10-year period between 1996 and 2006 from $ 5.3 Billion to $10.6 Billion. Stable growth is projected to reach $20.4 billion by 2014. After dropping for several years, permanent placement revenues have increased by nearly 36% in 2006, to an estimated $8.4 billion.

The Bureau of Labor Statistics has projected that the growth rate of new jobs in the health care professions will be 28.8% until 2010. This is twice the rate of job growth in non-healthcare professions. The Bureau of Labor Statistics also predicts a need for 5.3 million health care workers to fill job openings created by departures and new positions.

Management believes that the data above suggests two major trends in the US labor market: increasing demand and shortage in supply.

DEMAND FACTORS:

INCREASING NEED FOR HEALTH CARE PROFESSIONALS

THE COMPANY'S CURRENT AND FUTURE STRATEGIES ARE BASED UPON THE

FOLLOWING STATISTICAL AND DEMOGRAPHIC DATA: US CENSUS BUREAU

AGING POPULATION: According to the U.S. Census Bureau, the United States population will increase 12% by 2020. In 2006, the population above 50 years old accounted for 70% of healthcare spending, As more baby boomers approach retirement, those health care expenses will increase, reaching a projected $ 3.6 trillion by 2014.

HIGH STRESS: Stress is a factor in more than 75 percent of all illnesses and diseases today.

OBESITY AND SEDENTARY LIFE STYLE: Nearly two-thirds of adults in the United States are overweight, and 30.5 percent are obese. Approximately 300,000 adult deaths in the United States each year are attributable to unhealthy dietary habits, physical inactivity or sedentary behavior. .

TECHNOLOGY DEMANDS: The pace of technological advancement in US healthcare is increasing faster than the education of the people who are using it. This creates additional pressure for hospitals to find skilled employees to operate new diagnostic or treatment machines. It also increases the demand for highly educated, technology savvy healthcare specialists.

CULTURAL DIVERSITY: The United States has been a multicultural country from its inception. In recent decades it became more and more important to provide medical services in other languages (Spanish, Creole, etc.). This need drives the constantly increasing demand for bilingual healthcare specialists.

LEGAL AND REGULATORY FACTORS: Recent governmental mandates have further increased the demand for qualified healthcare professionals. Staffing Ratios:
Several legislative initiatives were introduced in many states, mandating a staffing ratio for nurses. While California is the only state to have passed such initiative, it is expected however, that staffing ratio laws will be ratified in states throughout the country and may be initiated at the federal level as well. Professional associations for Physical Therapists and other allied health specialists are also lobbying for similar legislation, which will increase the demand for more professionals in those fields.

SUPPLY FACTORS: US CENSUS BUREAU

SHORTAGE OF QUALIFIED MEDICAL PERSONNEL

An aging population in the United States will increase the need for skilled medical professionals. Between 2005 and 2015, the number of people 65 and older is expected to increase 26 percent. Meanwhile, the population of 40 to 54 year-olds will shrink by 5 percent.

The core focus of Medical Connections business is to satisfy the demand for the professions most severely affected by this aging population. The following data shows how the different healthcare professions are affected by lack of specialists.

HIGHLY QUALIFIED REGISTERED NURSES AND EXECUTIVE NURSES

o Registered Nurses and Executive Nurses make up the largest projected shortage need area in healthcare.

o There will be more than one million new and replacement nurses needed by 2012.

ALLIED HEALTH PROFESSIONAL SHORTAGE

The allied/other temporary staffing market is estimated to be a $3.7 billion industry. As of 2004 it has averaged 9% per annum growth and is expected to continue this growth rate through 2014. An estimated daily average of 70,000 temporary workers is employed in this skill set, making up almost half of total temporary healthcare staffing.

o Vacancy rates range from 12 to 15 percent among health care companies.

o Today's shortage is expected to worsen over the next 20 years.

Management believes that allied staffing is perhaps the most attractive field for emerging companies in the healthcare staffing industry. It is one of the least concentrated of the four sectors of healthcare staffing. The top 21 companies account for $5.3 billion or nearly one half of the total healthcare staffing revenue. Segmentation, with small companies comprising the largest part of allied health staffing, opens opportunities to new-comers in the field. It also includes many specialties with low penetration rates (the percentage of temporary staffing versus total of positions in the company), indicating that there will be a significant growth.

We believe that the following health professionals are in the highest demand:

o Pharmacists

o Radiology Technologists

o Respiratory Therapists

o Occupational Therapists

o Physical Therapists

o Speech Language Therapists

o Laboratory Professionals

o Health Information Management Positions

These positions represent profit centers for hospitals and medical facilities as these facilities can then pass along these costs, plus a profit percentage.

PHARMACISTS SHORTAGE

The market for pharmacists and pharmacy technicians is also on the rise, reflecting expansion of pharmacies into grocery and department stores as well as Internet and mail-order sales.

PHYSICIANS SHORTAGE

Both the high demand and the shortage in supply for healthcare professionals, create an increasing demand for healthcare recruiting and staffing services. This growing demand and diminished supply helps drive the need for staffing agencies to fill vacancies.

INDUSTRY TRENDS

o High demand for qualified health care professionals

o Shortages in virtually every profession in the medical fields

o Need for more flexibility in the hiring process, which increases the need for temporary and per diem staffing

o High level of spending to find the right candidate

o Constant increase of medical professional wages, which makes those professions more attractive for potential candidates

o Expansion of medical subspecialties requires more practitioners

GOVERNMENTAL AND PRIVATE SECTOR HEALTH CARE SPENDING:

o Health care spending in the United States has grown rapidly since the 1960s, at an average rate of 10% a year.

o In 2007, $2.2 trillion was spent on health care in the United States.

o Spending on health care currently accounts for about 16.2 percent of Gross Domestic Product (GDP).

THE COMPANY'S CORE BUSINESS

Medical Connections' goal is to expand its business operations by placing the most talented specialists in the medical profession, which allows us to service the critical shortage in the healthcare industry.

BUSINESS MODEL FOUNDATIONS

Based on the specific characteristics of the growing market, and the concrete set of skills of its leadership team, Medical Connections' goal is to attract highly professional recruiters by offering them a competitive commission rate for selecting and placing the best healthcare professionals, company incentive and benefit programs as well as a congenial work atmosphere where contributions and success are rewarded.

o Offer the medical specialists (employees) flexible solutions to increase their competitive advantage in the marketplace while creating loyalty to the company.

o Create a cost effective value proposition for its clients and offer them fast and high quality solutions in order to insure a long-term profitable relationship between Medical Connections and its valued customers.

o Develop, maintain and improve several highly specialized, technologically advanced web based solutions to improve the medical recruitment process and thus to improve the overall profitability for the Company and its clients.

o Commit to high standards, quality of service and fair recruiting practices in order to maintain an image of professionalism and to become a first choice for healthcare staffing and recruiting nationwide and even worldwide.

The foregoing business model assumes that we are able to operate on a profitable basis beginning in 2009 and that there will be sufficient working capital available for future financing needs. There can be no assurance that we will be able to operate profitably or obtain financing to fund future growth.

REVENUE STREAMS

MEDICAL CONNECTIONS TRADITIONAL STREAMS OF REVENUE INCLUDE:

o PERMANENT PLACEMENT HIRES: This activity includes the hiring of allied health professionals, nurses, physicians, pharmacists and other medical personnel to be employed in healthcare or research facilities. Under this arrangement, Medical Connections receives a placement fee ranging from 10% to 30% of the employee's initial annual salary, or a negotiated fee, which is predetermined based upon medical specialty. As part of the revenue of Medical Connections, these streams represent significantly higher gross profits.

o CONTRACT APPOINTMENTS: Represents an attractive employment option and temporary hires (typically, 13 week contracts) made by healthcare facilities to economically cover short staffing during periods of high seasonal activity, vacations, leaves of absence, etc. This also includes contracts for what is commonly known as "travel positions", which for allied health professionals, nurses or physicians who are willing to take temporary assignments outside their home region. Under this arrangement, Medical Connections is the employer of record for the healthcare professional and the healthcare facility remits a fee to the Company that includes all employment overhead as well as a surcharge for the service. The revenue from this activity comes from the commission and surcharge for the service. This activity is forecasted to represent 75% of all revenue of the Company, following the dynamics of the medical staffing industry.

o TEMPORARY TO PERMANENT MODEL - CHOICES PROGRAM: This program is a shorter version of the contract appointments, which provides permanent placement hires with greater flexibility, if the healthcare professional and the hiring entity desire so.

ADDITIONAL REVENUE STREAMS

POTENTIAL ACQUISITIONS: We may expand our operations through the acquisition of other medical staffing or placement agencies Acquisitions would enable us to increase revenues and integrate the acquired Company's operations into our existing business. If successful, we will be able to extend our market presence. We also recognize the importance of staying on the edge of technology in the medical recruiting field. However, technological advances may make it cost effective to acquire or form a strategic alliance with another entity specializing in developing health care staffing software.

FEE STRUCTURE FOR THE HEALTHCARE STAFFING AND RECRUITING INDUSTRY

CONTINGENCY FEES: This is a service fee, calculated in percentages, accordingly to the base salary to be earned by the candidate that the client employs during candidate's first twelve months of employment. The industry standard is full payment within 30 days of the start of employment.

CONTRACT FEES: This fee is established between the client and Medical Connections, which covers the services for temporary staffing hires and the hourly/weekly salary for the employed candidate. Medical Connections will be paid every two weeks from the existing client. The profitability from those fees is ranging between 9 to 22 percent for Medical Connections.

RETAINER: The retainer fees are a fixed amounts, and agreed upon between Medical Connections and the client which are paid for finding the right candidate. There are several hybrid forms of retained searches, including: (1) one half the fee is paid at the commencement of the search assignment, expenses are billed monthly throughout the course of he search, and the balance is due when the client offers a position to the Medical Connections' candidate and both client and candidate reach a contractual agreement of employment; and (2) one third of the fee is paid in advance, one third at 30 days, and one third at 60 days, regardless of when the assignment is actually filled. .

RETINGENCY: This is a combined retainer/contingency fee, which is paid in small monthly installments from the commencement of the search assignment, with any balance due when the client offers Medical Connections' candidate a position and they reach a contractual agreement of employment.

FLAT RATE: This is a fixed amount of service fee for large amount of search assignments, and which is agreed upon between the client and Medical Connections. Large companies often leverage their ability to place dozens of job orders in the same time by requiring staffing and recruiting companies to perform search services for a flat rate per position. This is normally a result of a large number of positions they are seeking to fill.

BUSINESS AND MARKETING STRATEGIES

THE FOLLOWING ARE THE KEYS TO THE COMPANY'S GROWTH:

o Implement well designed programs and tools to train staff and build professional networks.

o Implement professional diversified recruiting programs, based on full usage of the existing resources

o Flexibly integrate technology and resources in the development of an organizational database to support the recruiting and staffing process.

o Develop and manage the contracting process for outsource services and partnerships.

o Evaluate staffing, retention, and exit trend information and recommend solutions and support programs that address current business needs.

o Ensure that staffing practices and policies are consistently applied and are compliant with all state and federal regulations.

TARGET MARKET

o The target market for Medical Connections is the vast array of non-for-profit and for-profit organizations, companies and healthcare institutions, as well as all medical research facilities in the United States. Other recruiting companies or individual recruiters are also an alternative market for Medical Connections programs, such as split-fee agreements and franchise development

o Companies, which are hired by the hospitals to outsource the facilities HR departments,: are a natural market for the services of Medical Connections, and at this point they represent 40% of the client base for placements.

o Smaller medical recruiting companies and individual recruiters to offer them cost effective technological solutions for their businesses, as well as split agreement partnerships.

MARKETING STRATEGY

The success of today's healthcare staffing and recruiting is based on how fast and effectively candidate talent is attracted to use the services of the company. Therefore, our marketing efforts are focused on:

o Continue to develop, increase and maintain Medical Connections brand name recognition and positioning it as a high quality recruiting company.

o Attract the best talent in medical recruiting to source candidates by positioning the company as premier place to work for top notch healthcare recruiters.

OUR CURRENT MARKETING CHANNELS INCLUDE:

TARGETED DIRECT MAILING to acquire narrow profiled databases of potential candidates.

o Medical Connections already has acquired and will continue to purchase lists of licensed healthcare professionals by specialty throughout the United States.

o Usage of Industry-based mailing lists of hospitals, healthcare facilities and appropriate research facilities to distribute site-specific corporate literature about Medical Connections' services.

LOCAL AND NATIONAL PRESS - emphasizing on concrete positions advertising for high profile clients

INTERNET PORTALS - using specialized medical job boards, the Company has thousands of healthcare positions advertised across the Internet

USE OF SPECIALIZED ONLINE AND OFF-LINE PUBLICATIONS to attract more active small companies and individuals to contribute to the sourcing of candidates.

TRADESHOW AND CONFERENCE PRESENTATIONS: The Company will target healthcare industry tradeshows and professional conferences and participate with vendor exhibits and keynote speaking engagements

USE TARGETED PRINT AND INTERNET-BASED ADVERTISING to establish the Medical Connections brand, and continually solicit new client contracts and enlarge the employment candidate pool.

TELEPHONE MARKETING: Medical Connections will directly contact potential candidates via telephone for sourcing and selecting the best medical professionals.

INTERNET SEARCH ENGINE OPTIMIZATION: Medical Connections will use the best practices in SEO (Search Engine Optimization) and online advertising, by implementing the most advanced technology in this area. The Company already uses effectively GOOGLE ad words for advertising physical therapists' positions and will soon expand this practice to ads for additional professions.

COMPETITION

The confluence of demographic, legislative, and financial factors has given a rise to a highly fragmented market sector estimated at 6,000 nationally broadly specializing in medical staffing and recruiting. We compete against large multi-bullion dollar corporations as well as small regional companies. We believe the following trends characterize Medical Connections' competition in the field of temporary staffing:

o High concentration of companies providing temporary staffing:

o In 2007, there were 21 healthcare staffing companies each of which had annual revenue in excess of $50 million

o 10 companies account for nearly a third of the total healthcare staffing revenue

Even though the tendency is concentration, the big majority of healthcare staffing companies are relatively small. The trend of concentrating recruiting companies follows the same trend as in staffing firms. This is more pronounced in nurse recruiting, while allied health, science and pharmacy recruiting remain vastly fragmented.

Some of our competitors who focus primarily in the medical recruitment and staffing fields include:

AMN Healthcare Services, Inc., (NYSE: AHS), a leading temporary healthcare staffing company that is the largest nationwide provider of travel nurse staffing services. The company recruits nurses and allied health professionals, nationally and internationally and places them on temporary assignments, of variable lengths, at acute-care hospitals and healthcare facilities throughout the United States.

Cross Country Healthcare, Inc. (NASDAQ: CCRN)is a leading provider of healthcare staffing services in the United States as well as a provider of human capital management services.

Medical Staffing Network Holdings, Inc. (NYSE: MRN) is the largest provider of per diem nurse staffing services in the United States. The Company also provides travel nurse staffing services and is a leading provider of allied health professionals, including radiology specialists, diagnostic imaging technicians and clinical laboratory technicians.

On Assignment, Inc., (NASDAQ: ASGN) is a provider of skilled temporary professionals to clients in the science and healthcare industries. The Company provides clients in these markets with short-term or long-term assignments of temporary professionals and temporary-to-permanent placement of these professionals.

Other large big medical staffing and recruiting companies include CompHealth Group, Inc., eliStaf Healthcare Inc., Maxim Healthcare Services Inc., and Nursefinders Inc.

STRATEGIC ALLIANCES

Another base for the Company's ongoing growth is its strategic alliances with medical facilities and companies. We believe that one of the keys to our success and our ability to expand our operations is the recent certification that we received from the Joint Commission Health Care Staffing Certification Organization (this organization is more commonly known as the "Joint Commission"). The Joint Commission is an independent, not-for profit organization that accredits and certifies health care organizations and programs in the United States. Certification by the Joint Commission is recognized nationwide as a symbol of quality that reflects an organization's commitment to meeting performance standards. Since 1951 the Joint Commission has maintained state-of-the-art standards that focus on improving the quality and safety of care provider's organizations.

Certification by the Joint Commission demonstrates our commitment to excellence and provides the public with meaningful comparative performance data. Joint Commission membership demonstrates that we have met their high standards regarding patient care and professional training.

Joint Commission accreditation and certification benefits include:

o Strengthens community confidence in the quality and safety of care, treatment and services

o Provides a competitive edge in the marketplace

o Improves risk management and risk reduction

o Provides education on good practices to improve business operation

o Provides professional advice and counsel, enhancing staff education

o Enhances staff recruitment and development

o Recognized by select insurers and other third parties

o May fulfill regulatory requirements in select states.

Most importantly Joint Commission accreditation opens our staffing services to a broad range of health care facilities that require Joint Commission membership before they will consider utilizing the services of any medical staffing agencies. We believe that there are very few medical staffing agencies of our size which have Joint Commission certification. In addition, our size will enable us to readily adapt to changing market conditions and standards to continue to meet ongoing Joint Commission certification.

Licensing:

We are currently licensed to do business throughout the continental United States. As such we can respond to client needs throughout the country. We can offer medical professionals participating in our travel program the opportunity to move from various facilities throughout the country without the worry that Medical Connections is not properly licensed. For those organizations with medical facilities in different states, we can offer a qualified candidate the opportunity to move throughout that company's organization.

REGULATION

The healthcare industry is subject to extensive and complex federal and state laws and regulations related to professional licensure, conduct of operations, payment for services and payment for referrals. Our operations are subject to applicable state and local regulations governing the provision of temporary staffing that require staffing companies to be licensed or separately registered. These regulations also require hospitals to maintain minimum staffing requirements which facilitate the implementation of our business plan.

For example, hospitals certified to participate in Medicare are required to "have adequate numbers of licensed registered nurses, licensed practical (vocational) nurses, and other personnel to provide nursing care to all patients as needed". Reductions in nursing budgets have resulted in fewer nurses working longer hours, while caring for sicker patients.

There are three general approaches to providing sufficient nurse staffing. The first approach is the implementation of nurse staffing plans, with input from practicing nurses, to institute safe nurse to patient ratios that are based on patient need and other criteria. The second approach is legislation or regulations mandating specific nurse to patient ratios. The third approach is a combination of nurse staffing plans and legislated nurse to patient ratios.

There are proposed federal regulations that will require hospitals to set unit-by-unit nurse staffing levels in coordination with the direct care nursing staff and based on the unique needs of each unit and its patients.

Many states including California, Florida, Illinois and New Jersey have enacted rules and regulations for staffing requirements.

To date, we have not experienced any material difficulties in complying with such regulations. Some states require state licensure for businesses that employ and/or assign healthcare personnel to provide healthcare services on-site at hospitals and other healthcare facilities. Most of the contract healthcare professionals that we employ are required to be individually licensed or certified under applicable state laws. We take reasonable steps to ensure that our contract professionals possess all necessary licenses and certifications in all material respects maintaining profitability.

RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE BUYING SHARES OF OUR COMMON STOCK. ADDITIONAL RISKS AND UNCERTAINTIES NOT CURRENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE ADVERSE EVENTS DESCRIBED IN THIS RISK FACTORS SECTION ACTUALLY OCCUR, OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY AFFECTED, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU MIGHT LOSE ALL OR PART OF YOUR INVESTMENT. WE HAVE HAD OPERATING LOSSES TO DATE AND CANNOT ASSURE THAT WE WILL BE PROFITABLE IN THE FORESEEABLE FUTURE. WE MAKE VARIOUS STATEMENTS IN THIS SECTION WHICH CONSTITUTE "FORWARD-LOOKING" STATEMENTS UNDER SECTION 27A OF THE SECURITIES ACT.

RISKS ASSOCIATED WITH THE COMPANY'S PROSPECTIVE BUSINESS AND OPERATIONS

IT IS UNLIKELY THAT WE WILL BE ABLE TO SUSTAIN PROFITABILITY IN THE FUTURE.

The Company incurred significant losses in 2007 and there can be no assurance that we will be able to reverse this trend. Even if we are able to successfully expand our operations, there can be no assurance that we will be able to operate profitably.

It is critical to the Company's success that we continue to devote financial resources to sales and marketing and developing brand awareness. As a result, we expect that our operating expenses will increase significantly during the next several years, especially in sales and marketing. As we increase spending, there can be no assurance that we will be able to continue to operate on a profitable basis. As a result, we may not be able to sustain profitable operations, or if we do continue to achieve profitability in any period, we may not be able to sustain or increase profitability on a quarterly or annual basis.

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS ISSUED A GOING CONCERN OPINION.

Due to our operating losses and deficits, our independent registered public accounting firm in their financial statements has raised substantial doubts about our ability to continue as a going concern. If we are not able to continue as a going concern, our operations will terminate and any investment in the Company will likely become worthless.

RISKS RELATED TO OUR MEDICAL STAFFING BUSINESS.

IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED CONTRACT PROFESSIONALS TO MEET STAFFING DEMANDS, OUR BUSINESS COULD BE NEGATIVELY IMPACTED.

Our business is substantially dependent upon our ability to attract and retain healthcare professionals who possess the skills, experience and, as required, licenses to meet the specified requirements of our clients. We compete for such contract professionals with other temporary staffing companies and with our clients and potential clients. Currently, there is a shortage of qualified nurses in most areas of the United States. Competition for nursing personnel is increasing and salaries and benefits have risen. Further, there can be no assurance that qualified healthcare professionals will be available to us in adequate numbers to meet staffing requests. Moreover, our contract professionals are often hired to become regular employees of our clients. Attracting and retaining contract professionals depends on several factors, including our ability to provide contract professionals with attractive assignments and competitive benefits and wages. The cost of attracting and retaining contract professionals may be higher than we anticipate and, as a result, if we are unable to pass these costs on to our clients, our likelihood of achieving or maintaining profitability could decline. If we are unable to attract and retain a sufficient number of contract professionals to meet client demand, we may be required to forgo staffing and revenue opportunities, which may hurt the growth of our business.

GROWTH OF OUR BUSINESSES IS SUBSTANTIALLY DEPENDENT UPON OUR ABILITY TO ATTRACT, DEVELOP AND RETAIN QUALIFIED AND SKILLED HEALTH CARE PROFESSIONALS.

A key component of our ability to grow our lines of business includes our ability to attract, develop and retain qualified health care professionals, particularly persons with industry experience. The available pool of qualified candidates is limited. We cannot assure that we will be able to recruit, develop and retain qualified candidates in sufficient numbers or that our staffing consultants will achieve productivity levels sufficient to enable growth of our business. Failure to attract and retain productive staffing consultants could adversely affect our business, financial condition and results of operations.

THE COSTS OF ATTRACTING AND RETAINING QUALIFIED HEALTHCARE PROFESSIONALS MAY RAISE MORE THAN WE ANTICIPATE.

We compete with hospitals and other healthcare staffing companies for qualified healthcare professionals. Because there is currently a shortage of qualified healthcare professionals, competition for these employees is intense. To induce healthcare professionals to sign on with them, our competitors may increase hourly wages or other benefits. If we do not raise wages or other benefits in response to such increases by our competitors, we could face difficulties attracting and retaining qualified healthcare professionals. In addition, if we raise wages in response to our competitors' wage increases and are unable to pass such cost increases on to our clients, our margins could decline.

OUR BUSINESS IS DEPENDENT UPON THE PROPER FUNCTIONING OF OUR INFORMATION

SYSTEMS IN A COST EFFECTIVE MANNER.

The operation of our business is dependent on the proper functioning of our information systems. In 2007, we continued to upgrade our information technology systems. , including PeopleSoft, an enterprise-wide information system. Critical information systems used in daily operations identify and match staffing resources and client assignments, track regulatory credentialing, manage scheduling and also perform billing and accounts receivable functions. If the systems fail to perform reliably or otherwise does not meet our expectations, or if we fail to successfully complete the implementation of other modules of the system, we could experience business interruptions that could result in deferred or lost sales. Our information systems are vulnerable to fire, storm, flood, power loss, telecommunications failures, physical or software break-ins and similar events. If our information systems fail or are otherwise unavailable, these functions would have to be accomplished manually, which could impact our ability to identify business opportunities quickly, to pay our staff in a timely fashion and to bill for services efficiently.

THE TEMPORARY STAFFING INDUSTRY IS HIGHLY COMPETITIVE AND THE SUCCESS AND FUTURE GROWTH OF OUR BUSINESS DEPEND UPON OUR ABILITY TO REMAIN COMPETITIVE IN OBTAINING AND RETAINING TEMPORARY STAFFING CLIENTS.

The medical staffing industry is highly competitive and fragmented with limited barriers to entry. We compete in national, regional and local markets with full-service agencies and in regional and local markets with specialized temporary staffing agencies. Some of our competitors have significantly greater marketing and financial resources than we do. Our ability to attract and retain clients is based on the value of the service we deliver, which in turn depends principally on the speed with which we fill assignments and the appropriateness of the match based on clients' requirements and the skills and experience of our contract professionals. Our ability to attract skilled, experienced contract professionals is based on our ability to pay competitive wages, to provide competitive benefits and to provide multiple, continuous assignments, thereby increasing the retention rate of these employees. To the extent that competitors seek to gain or retain market share by reducing prices or increasing marketing expenditures, we could lose revenues and our gross and operating margins could decline, which could seriously harm our operating results and cause the trading price of our stock to decline. As we expand into new geographic markets, our success will depend in part on our ability to gain market share from competitors. We expect competition for clients to increase in the future, and the success and growth of our business depends on our ability to remain competitive.

IMPROPER ACTIVITIES OF OUR CONTRACT PROFESSIONALS COULD RESULT IN DAMAGE TO OUR BUSINESS REPUTATION, DISCONTINUATION OF OUR CLIENT RELATIONSHIPS AND EXPOSURE TO LIABILITY.

We may be subject to possible claims by our clients related to errors and omissions, misuse of proprietary information, discrimination and harassment, theft and other criminal activity, malpractice and other claims stemming from the improper activities or alleged activities of our contract professionals. We do carry general liability insurance, with up to five million dollars of coverage to protect us against these possible claims and the damages we may incur as a result thereof. Claims raised by clients stemming from the improper actions of our contract professionals, even if without merit, could cause us to incur significant expense associated with the costs or damages related to such claims. Further, such claims by clients could damage our business reputation and result in the discontinuation of client relationships.

CLAIMS AGAINST US BY OUR CONTRACT PROFESSIONALS FOR DAMAGES RESULTING FROM THE NEGLIGENCE OR MISTREATMENT BY OUR CLIENTS COULD RESULT IN SIGNIFICANT COSTS AND ADVERSELY AFFECT OUR RECRUITMENT AND RETENTION EFFORTS.

We may be subject to possible claims by our contract professionals alleging discrimination, sexual harassment, negligence and other similar activities by our clients. We cannot assure that our current liability insurance coverage will be adequate or will continue to be available in sufficient amounts to cover damages or other costs associated with such claims. Claims raised by our contract professionals, even if without merit, could cause us to incur significant expense associated with the costs or damages related to such claims. Further, any associated negative publicity could adversely affect our ability to attract and retain qualified contract professionals in the future.

DEMAND FOR OUR SERVICES IS SIGNIFICANTLY IMPACTED BY CHANGES IN THE GENERAL LEVEL OF ECONOMIC ACTIVITY AND CONTINUED PERIODS OF REDUCED ECONOMIC ACTIVITY COULD NEGATIVELY IMPACT OUR BUSINESS AND RESULTS OF OPERATIONS.

Demand for the temporary staffing services that we provide is significantly impacted by changes in the general level of economic activity, particularly any negative effect on healthcare, research and development and quality control spending. As economic activity slows, many clients or potential clients for our services reduce their usage of and reliance upon temporary professionals before laying off their regular, full-time employees. During periods of reduced economic activity, we may also be subject to increased competition for market share and pricing pressure. As a result, continued periods of reduced economic activity could have a material adverse impact on our business and results of operations.

DECREASES OF IN-PATIENT ADMISSIONS AT OUR CLIENTS' FACILITIES MAY ADVERSELY AFFECT THE PROFITABILITY OF OUR BUSINESS.

The general level of in-patient admissions at our clients' facilities significantly affects demand for our temporary healthcare staffing services. When a hospital's admissions increase, temporary employees are often added before full-time employees are hired. As admissions decrease, clients may reduce their use of temporary employees before undertaking layoffs of their regular employees. We also may experience more competitive pricing pressure during periods of in-patient admissions downturn. In addition, if a trend emerges toward providing healthcare in alternative settings, as opposed to acute care hospitals, in-patient admissions at our clients' facilities could decline. This reduction in admissions could adversely affect the demand for our services and our profitability.

WE DO NOT HAVE LONG-TERM OR EXCLUSIVE AGREEMENTS WITH OUR TEMPORARY STAFFING CLIENTS AND GROWTH OF OUR BUSINESS DEPENDS UPON OUR ABILITY TO CONTINUALLY SECURE AND FILL NEW ORDERS.

We do not have long-term agreements or exclusive guaranteed order contracts with our temporary staffing clients. The success of our business depends upon our ability to continually secure new orders from clients and to fill those orders with our contract professionals. Our agreements do not provide for exclusive use of our services, and clients are free to place orders with our competitors. As a result, it is imperative to our business that we maintain positive relationships with our clients. If we fail to maintain positive relationships with these clients, we may be unable to generate new contract staffing orders, and the growth of our business could be adversely affected.

FLUCTUATION IN PATIENT OCCUPANCY RATES AT CLIENT FACILITIES COULD ADVERSELY AFFECT DEMAND FOR SERVICES OF OUR HEALTHCARE STAFFING SEGMENT AND OUR RESULTS OF OPERATIONS.

Client demand for our Healthcare Staffing segment services is significantly impacted by changes in patient occupancy rates at hospitals and healthcare clients' facilities. Increases in occupancy often result in increased client need for contract professionals before full-time employees can be hired. During periods of decreased occupancy, however, hospitals and other healthcare facilities typically reduce their use of contract professionals before laying off their regular, full-time employees. During periods of decreased occupancy, we may experience increased competition to service clients, including pricing pressure. Occupancy at certain healthcare clients' facilities also fluctuates due to the seasonality of some elective procedures. Periods of decreased occupancy at client healthcare facilities could materially adversely affect our results of operations.

THE LOSS OF KEY MEMBERS OF OUR SENIOR MANAGEMENT TEAM COULD ADVERSELY AFFECT THE EXECUTION OF OUR BUSINESS STRATEGY AND OUR FINANCIAL RESULTS.

We believe that the successful execution of our business strategy and our ability to build upon the restructuring we have undertaken depends on the continued employment of key members of our senior management team. If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Therefore, our business may be severely disrupted, and we may incur additional expenses to recruit and retain new officers and our business could be materially adversely affected.

FUTURE CHANGES IN REIMBURSEMENT TRENDS COULD HAMPER OUR HEALTHCARE STAFFING SEGMENT CLIENTS' ABILITY TO PAY US.

Many of our staffing clients are reimbursed under the federal Medicare program and state Medicaid programs for the services they provide. In recent years, federal and state governments have made significant changes in these programs that have reduced reimbursement rates. In addition, insurance companies and managed care organizations seek to control costs by requiring that healthcare providers, such as hospitals, discount their services in exchange for exclusive or preferred participation in their benefit plans. Future federal and state legislation or evolving commercial reimbursement trends may further reduce, or change conditions for, our clients' reimbursement. Limitations on reimbursement could reduce our clients' cash flows, hampering their ability to pay us. In addition, insurance companies and managed care organizations seek to control costs by requiring that healthcare providers, such as hospitals, discount their services in exchange for exclusive or preferred participation in their benefit plans. Future federal and state legislation or evolving commercial reimbursement trends may further reduce, or change conditions for, our clients' reimbursement. Limitations on reimbursement could reduce our clients' cash flows, hampering their ability to pay us.

HEALTHCARE REFORM COULD NEGATIVELY IMPACT OUR BUSINESS OPPORTUNITIES, REVENUES AND GROSS AND OPERATING MARGINS.

The U.S. and state governments have undertaken efforts to control increasing healthcare costs through legislation, regulation and voluntary agreements with medical care providers and drug companies. In the recent past, the U.S. Congress has considered several comprehensive healthcare reform proposals. The proposals were generally intended to expand healthcare coverage for the uninsured and reduce the growth of total healthcare expenditures. While the U.S. Congress did not adopt any comprehensive reform proposals, members of Congress may raise similar proposals in the future. If any of these proposals are approved, hospitals and other healthcare facilities may react by spending less on healthcare staffing, including nurses. If this were to occur, we would have fewer business opportunities, which could seriously harm our business.

Furthermore, third-party payors, such as health maintenance organizations, increasingly challenge the prices charged for medical care. Failure by hospitals and other healthcare facilities to obtain full reimbursement from those third-party payors could reduce the demand or the price paid for our staffing services.

WE OPERATE IN A REGULATED INDUSTRY AND CHANGES IN REGULATIONS OR VIOLATIONS OF REGULATIONS MAY RESULT IN INCREASED COSTS OR SANCTIONS THAT COULD REDUCE OUR REVENUES AND PROFITABILITY.

Our organization is subject to extensive and complex federal and state laws and regulations including but not limited to; professional licensure, payroll tax regulations, conduct of operations, payment for services and payment for referrals. If we fail to comply with the laws and regulations that are directly applicable to our business, we could suffer civil and/or criminal penalties or be subject to injunctions or cease and desist orders.

Extensive and complex laws that apply to our hospital and healthcare facility clients, including laws related to Medicare, Medicaid and other federal and state healthcare programs, could indirectly affect the demand or the prices paid for our services. For example, our hospital and healthcare facility clients could suffer civil and/or criminal penalties and/or be excluded from participating in Medicare, Medicaid and other healthcare programs if they fail to comply with the laws and regulations applicable to their businesses. In addition, our hospital and healthcare facility clients could receive reduced reimbursements or be excluded from coverage because of a change in the rates or conditions set by federal or state governments. In turn, violations of or changes to these laws and regulations that adversely affect our hospital and healthcare facility clients could also adversely affect the prices that these clients are willing or able to pay for our services.

RISKS RELATING TO OWNERSHIP OF OUR SECURITIES

WE ARE SUBJECT TO EVOLVING CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE REGULATIONS THAT MAY RESULT IN ADDITIONAL EXPENSES AND CONTINUING UNCERTAINTY REGARDING THE APPLICATION OF SUCH REGULATIONS.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related rules and regulations, are creating uncertainty for public companies. We are presently evaluating and monitoring developments with respect to new and proposed rules and cannot predict or estimate the amount of the additional compliance costs we may incur or the timing of such costs. These new or changed laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by courts and regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Maintaining appropriate standards of corporate governance and public disclosure may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In addition, if we fail to comply with new or changed laws, regulations and standards, regulatory authorities may initiate legal proceedings against us and our business and our reputation may be harmed.

We also expect these new rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as executive officers.

We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

OUR SHARES MAY HAVE LIMITED LIQUIDITY.

A substantial portion of the Company's shares of common stock will be closely held by certain insider investors. Consequently, the public float for the shares may be highly limited. As a result, should you wish to sell your shares into the open market you may encounter difficulty selling large blocks of your shares or obtaining a suitable price at which to sell your shares.

OUR STOCK PRICE MAY BE VOLATILE, WHICH MAY RESULT IN LOSSES TO OUR STOCKHOLDERS.

The stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies quoted on the Over-The-Counter Bulletin Board such as ours generally have been very volatile and have experienced sharp share price and trading volume changes. The trading price of our common stock is likely to be volatile and could fluctuate widely in response to many of the following factors, some of which are beyond our control:

[ ] variations in our operating results;

[ ] changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;

[ ] changes in operating and stock price performance of other companies in our industry;

[ ] additions or departures of key personnel; and

[ ] future sales of our common stock.

Domestic and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock. In particular, following initial public offerings, the market prices for stocks of companies often reach levels that bear no established relationship to the operating performance of these companies. These market prices are generally not sustainable and could vary widely. In the past, following periods of volatility in the market price of a public company's securities, securities class action litigation has often been initiated.

OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER OWN A SUBSTANTIAL PORTION OF OUR OUTSTANDING COMMON STOCK, INCLUDING ALL OF OUR SERIES B SHARES WHICH GRANT THE HOLDERS THEREOF SUPERMAJORITY VOTING RIGHTS. AS A RESULT THIS WILL ENABLE THEM TO INFLUENCE MANY SIGNIFICANT CORPORATE ACTIONS AND IN CERTAIN CIRCUMSTANCES MAY PREVENT A CHANGE IN CONTROL THAT WOULD OTHERWISE BE BENEFICIAL TO OUR STOCKHOLDERS.

Our chief executive officer and our president control substantially all of our outstanding shares of common stock. Specifically, Mr. Azzata and Mr. Nicolosi acting together could have a substantial impact on matters requiring the vote of the stockholders, including the election of our directors and most of our corporate actions. This control could delay, defer or prevent others from initiating a potential merger, takeover or other change in our control, even if these actions would benefit our stockholders and us. This control could adversely affect the voting and other rights of our other stockholders and could depress the market price of our common stock.

WE MAY BE EXPOSED TO POTENTIAL RISKS RELATING TO OUR INTERNAL CONTROLS OVER FINANCIAL REPORTING AND OUR ABILITY TO HAVE THOSE CONTROLS ATTESTED TO BY OUR INDEPENDENT AUDITORS.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX 404"), the Securities and Exchange Commission adopted rules requiring small business issuers, such as our company, to include a report of management on the company's internal controls over financial reporting in their annual reports. Presently, we will become subject to compliance with SOX 404 for our fiscal year ending December 31, 2008 the independent registered public accounting firm auditing our financial statements must also attest to and report on management's assessment of the effectiveness of our internal controls over financial reporting as well as the operating effectiveness of our internal controls. While we have yet to begin evaluating our internal control systems in order to allow our management to report on, and our independent auditors attest to, as presently required. During 2008 we expect to expend significant resources in developing the necessary documentation and testing procedures required by SOX
404. In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remedy in a timely manner or we are unable to receive a positive attestation from our independent auditors with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements and our ability to obtain financing as needed could suffer.

OUR COMMON SHARES ARE THINLY TRADED AND, YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO SELL YOUR SHARES TO RAISE MONEY OR OTHERWISE DESIRE TO LIQUIDATE SUCH SHARES.

The Company cannot predict the extent to which an active public market for its common stock will develop or be sustained. Our common stock has historically been sporadically or "thinly-traded" on the "Over-The-Counter Bulletin Board," meaning that the number of persons interested in purchasing our common stock at or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.

The market price for our common stock is particularly volatile given our status as a relatively small company with a small and thinly traded "float". This could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect

to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

WE DO NOT ANTICIPATE PAYING ANY CASH DIVIDENDS.

We presently do not anticipate that we will pay any dividends on any of our capital stock in the foreseeable future. The payment of dividends, if any, would be contingent upon our revenues and earnings, if any, capital requirements, and general financial condition. The payment of any dividends will be within the discretion of our Board of Directors. We presently intend to retain all earnings, if any, to implement our business plan; accordingly, we do not anticipate the declaration of any dividends in the foreseeable future.

THE APPLICATION OF THE "PENNY STOCK" RULES COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND INCREASE YOUR TRANSACTION COSTS TO SELL THOSE SHARES.

As long as the trading price of our common shares is below $5 per share, the open-market trading of our common shares will be subject to the "penny stock" rules. The "penny stock" rules impose additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of securities and have received the purchaser's written consent to the transaction before the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the broker-dealer must deliver, before the transaction, a disclosure schedule prescribed by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks.

These additional burdens imposed on broker-dealers may restrict the ability or decrease the willingness of broker-dealers to sell our common shares, and may result in decreased liquidity for our common shares and increased transaction costs for sales and purchases of our common shares as compared to other securities.

VOLATILITY IN OUR COMMON SHARE PRICE MAY SUBJECT US TO SECURITIES LITIGATION.

The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources.

A SALE OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK MAY CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE.

If our stockholders sell substantial amounts of our common stock in the public market, including shares issued upon the conversion of outstanding debentures, the exercise of outstanding options or warrants, the market price of our common stock could fall. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. In addition, recipients of our Series A preferred shares who convert those shares into shares of our Common Stock may, sell these shares, if eligible, pursuant to Rule 144.

WE MAY NEED ADDITIONAL CAPITAL, AND THE SALE OF ADDITIONAL SHARES OR OTHER EQUITY SECURITIES COULD RESULT IN ADDITIONAL DILUTION TO OUR STOCKHOLDERS.

We will require additional cash resources to expand our business operations and fully implement our business plan, including any investments or acquisitions we may decide to pursue. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

ITEM 2. DESCRIPTION OF PROPERTIES.

Our corporate headquarters are located at 2300 Glades Road, Suite 202E Boca Raton, Florida 33431. We operate Medical Connections, Inc. from this office. We lease approximately 4,500 square feet of space. Our monthly rent is $13,400. Our current lease runs through May 2010. We believe that this space is sufficient to handle our immediate operating needs. Should we require additional space, sufficient office space is available at a similar rental costs.

We also own a property located in Statesville, North Carolina. The property is a custom built home situated on the main channel of Lake Norman, one of the largest freshwater lakes in the state. The home has approximately 2,500 square feet of space, four bedrooms and 2.5 bathrooms, with a finished full basement, garage, workshop and wrap around covered porches and decks which overlook the lake and a finished dock and pier. The property was an asset from the reverse merger.

ITEM 3. LEGAL PROCEEDINGS.

In April 2005 our subsidiary Medical Connections, Inc. was sued by HMS, Inc. in the 17th Judicial Circuit for Broward County (Case No. 05-05442). T HMS alleges civil conspiracy, breach of contract, negligent supervision, tortuous interference with a business relationship and unjust enrichment. No specific dollar amount is requested other than it is in excess of the jurisdictional floor of $15,000. The suit arises from the actions of a former independent contractor who allegedly misappropriated a client data base. Since the filing of the complaint, there has been limited activity. While we believe that we have meritorious defenses to this action, there can be no assurance that we will be successful in defending this matter.

In 2006, the state of Ohio entered a cease and desist order against Medical Connections Inc. in connection with the sale of unregistered securities which took place in August 2005. On April 7, 2008 the Company received the final order of the Ohio Division of Securities, stating that the Division's action against the Company is terminated.

In 2007, a former employee filed a lawsuit against us in the 17th Judicial Circuit for Broward County (Case No. 07-17972(04). A counterclaim was filed in conjunction therewith. Without admitting any wrongdoing, this litigation has been settled. The amount of the settlement did not have a material impact on our business operations.

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

None.

PART II

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

A. Market Information

Our common stock trades on the NASDAQ Over-the-Counter-Bulletin Board under the symbol ("MCTH"). There is a very limited market for our common stock, with very limited trading activities. The reported bid quotations reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

The high and low bid price for those periods in which quotes are available is set forth below:

 High Low
 ------ ------
2006

First Quarter $25.00 $6.00
Second Quarter $ 6.00 $6.00
Third Quarter $ 6.00 $6.00
Fourth Quarter $ 4.50 $3.50

2007

First Quarter $ 3.80 $1.75
Second Quarter $ 2.00 $1.55
Third Quarter $ 2.00 $1.55
Fourth Quarter $ 2.25 $1.80

2008

Through March 31, 2008 $ 2.60 $1.55

B. Holders

As of March 31, 2008 there were 607 stockholders of record of our Common Stock.

Our transfer agent is Interwest Transfer Company. Their mailing address is 1981 east 4800 south, Salt Lake City, UT 84117 and their telephone number is (801)272-9294.

C. Dividends

We have not paid any cash dividends on our common stock since the date of our incorporation and we do not anticipate paying any cash common stock dividends in the foreseeable future. We anticipate that any earnings will be retained for development and expansion of our businesses. Future dividend policy will depend upon our earnings, financial condition, contractual restrictions and other factors considered relevant by our Board of Directors and will be subject to limitations imposed under Florida law.

As of March 31, 2008, the Company has 110,948 shares of our Series A Convertible Preferred Stock issued and outstanding.

As of March 31, 2008, the Company has 1,000,000 shares of Series Preferred Stock authorized at $0.001 par value and 1,000,000 issued and outstanding.

D. Equity Compensation Plans

In January 2006, we authorized the issuance of up to 50,000 shares of our Common Stock pursuant to our 2006 Stock Incentive and Compensation Plan. To date 15,000 shares of our common stock have been issued under the plan

E. Sale of Unregistered Securities

The Company authorized a dividend of its Series A Convertible Preferred Stocks to the holders of record of its common stock on July 3, 2006 (the "Record Date"). On July 10, 2006 a total of 532,680 shares of our Series A Preferred Stock was issued to the record holders as of the Record Date. Each holder of the Series A Preferred Stock may convert each share of Preferred Stock into nineteen
(19) shares (the "Conversion Ratio") of the Company's Common Stock at any time following December 31, 2006. The Conversion Ratio is subject to adjustment in the event of any recapitalization or reorganization. The Holders of the Series A Preferred Stock will be required to tender the Series A Preferred Stock Certificate to the Company for redemption prior to issuance of any shares of Common Stock. As of March 31, 2008, a total of 431,132 shares of Series A Preferred Stock have been converted into 6,703,846 shares of our Common Stock of which 414,050 shares were converted during 2007.

On January 27, 2007 we issued 1,000,000 shares of our Common Stock, to an employee, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 380,000. For the fair market value per share the Company relied upon a third party evaluation. A compensation expense of $380,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in
Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On June 4, 2007 we issued 25,000 shares of our Common Stock, to an employee, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 9,500. Also, 25,000 shares were issued to an advisor, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 9,500. For the fair market value per share the Company relied upon a third party evaluation. A compensation expense of $19,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On June 18, 2007 we issued 100,000 shares of our Common Stock, to an employee, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 38,000. For the fair market value per share the Company relied upon a third party evaluation. A compensation expense of $38,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in
Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On August 9, 2007 we issued 100,000 shares of our Common Stock to certain employees for services rendered. The Common Stock was valued at $ 0.38 per share, the fair market value at the date of issuance. . For the fair market value per share the Company relied upon a third party evaluation. A compensation expense of $38,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On October 8, 2007 we issued 500,000 shares of our Common Stock to a non-employee for services rendered. The Common Stock was valued at $ 0.24 per share, the fair market value at the date of issuance. A charge of $120,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On December 27, 2007 we issued 400,000 shares of our Common Stock to certain employees for services rendered. The Common Stock was valued at $ 0.24 per share, the fair market value at the date of issuance. A charge of $84,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

During 2007 the Company converted 414,050 shares of its preferred stock into 7,866,950 shares of its common stock per the Preferred Stock Agreement. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

During 2007 the Company issued 4,746,075 shares of its common stock and 8,949,600 warrants to purchase an equal number of shares of common stock at for total net proceeds of $4,901,425. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

The securities issued in the foregoing transactions were made in reliance upon an exemption from registration under Rule 701 promulgated under
Section 3(b) of the Securities Act and or Section 4(2) of the Securities Act. Alternatively, these issuances of securities were undertaken under Rule 506 of Regulation D under the Securities Act of 1933, as amended, by the fact that:

-- the sale was made to a sophisticated or accredited investor, as defined in Rule 502;

-- we gave the purchaser the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which we possessed or could acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished;

-- at a reasonable time prior to the sale of securities, we advised the purchaser of the limitations on resale in the manner contained in Rule
502(d)2; and

-- neither we nor any person acting on our behalf sold the securities by any form of general solicitation or general advertising;

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS

The statements contained in this report that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects upon the Company. There can be no assurance that future developments affecting the Company will be those anticipated by management. Actual results may differ materially from those included in the forward-looking statements.

Readers are also directed to other risks and uncertainties discussed in other documents filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.

General

The Company generates revenues primarily from three separate sources:
permanent placement hires, contract appointments and a temporary to permanent model. We continue to expand each of these areas.

YEAR ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31, 2006

Revenues increased from $2,214,800 to $4,829,285. The two main components of revenue are permanent placement hires, including temporary to permanent, and contract appointments. Revenues from permanent placement increased 12% to $1,152,853 over the prior year to $1,030,962. This increase was a result of the Company's continued disciplined recruiting policy of securing the best recruiters in the medical field. The revenue from contract appointments increased 211% from $1,183,839 in 2006 to $3,676,432 in 2007. This increase was the result of continued expansion in the attractive employment option and temporary hires (typically, 13 week contracts) made by healthcare facilities to economically cover short staffing during periods of high seasonal activity, vacations, leaves of absence, etc. The cost of the contract appointments revenue also increased from $1,014,061 in 2006 to $3,046,874 a 200% increase. These costs represent the personnel salaries including benefits, temporary housing and travel costs. The net profits from contract appointments increased from $169,778, (14% of revenue) in 2006 to $629, 588, (17% of revenue) in 2007.

Sales and Marketing Expenses were $457,079 in 2007, which increased from $275,911 in 2006. The increase in costs represents an expanded presence on internet web pages and job posting boards.

General and Administrative expenses increased to $7,049,346 in 2007 from $3,936,950 in 2006. During 2007 the Company doubled its recruiting staff resulting in the increased placements and revenue.

Other (income) and expenses net, was $784,069 of net expense in 2007 compared to a net other (income) of $(364,548) in 2006. Part of this change was the recording of a lower net gain on valuation of the derivative liability of $121,399 in 2007 compared to a net gain of $544,418 in 2006. In addition interest expense increased from $180,795 in 2006 to $932,645 in 2007 as a result of recording the amortization of the discount on the Convertible Debentures of $536,029 as interest expense. The remaining increase in interest expenses relates to interest on convertible debentures, which bear interest from 6% to 8% and on other debt and Notes Payable.

Net (Loss) for the year ended December 31, 2007 was $(6,508,083) as compared to $(2,647,574) in 2006.

Liquidity and Capital Resources

Due to the operating losses and deficits, our independent auditors in their financial statements have raised doubts about our ability to continue as a going concern. Despite these historical losses, management believes that it will be able to satisfy ongoing operating expenses. If revenues from operations are insufficient to meet these obligations, management will seek to obtain third party financing. There can be no assurance that any financing will be available, or if available, will be offered on terms that will not adversely impact our shareholders.

As of December 31, 2007 total current assets were $2,117,851 as compared to $335,130 in 2006. The increase in total current assets is primarily attributable to a increase in cash from $96,252 to $1,319,944 in 2007. The remaining increase was from accounts receivable from $238,878 to $797,907, which is in turn attributable to our growing operations.

Our other assets include our office equipment and the house located in North Carolina which we rent for seasonal use. The home was originally purchased by Byron Webb, our former president, and subsequently transferred to the Company, and is valued at $647,432. All other assets which we have categorized as Property and Equipment are office furniture, equipment and software directly related to the operations of Medical Connections, Inc.

CRITICAL ACCOUNTING POLICIES

Use of Estimates: The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Income (Loss) per share: Basic loss per share excludes dilution and is computed by dividing the loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the loss of the Company. Diluted loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding for the period and dilutive potential common shares outstanding unless consideration of such dilutive potential common shares would result in anti-dilution. Common stock equivalents were not considered in the calculation of diluted loss per share as their effect would have been anti-dilutive for the periods ended December 31, 2007 and 2006.

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements. We do not anticipate entering into any off-balance sheet arrangements during the next 12 months.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115." SFAS 159 permits entities to choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings at each subsequent reporting date. The fair value option (i) may be applied instrument by instrument, with certain exceptions, (ii) is irrevocable (unless a new election date occurs) and (iii) is applied only to entire instruments and not to portions of instruments. SFAS 159 is effective for the Corporation on January 1, 2008 and is not expected to have a significant impact on the Company's financial statements

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

ITEM 7. FINANCIAL STATEMENTS.

MEDICAL CONNECTIONS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS

 CONTENTS

 PAGE
 -----
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRMS F-1-F-2

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2007 F-3

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS
 ENDED DECEMBER 31, 2007 AND 2006 F-4

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
 DECEMBER 31, 2007 AND 2006 F-6-F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-8-F-16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Medical Connections Holdings, Inc.
2300 Glades Road, Suite 202E
Boca Raton, FL 33431

We have audited the accompanying consolidated balance sheet of Medical Connections Holdings, Inc., as of December 31, 2006, and the related consolidated statements of operations, stockholders' deficit and cash flows for year ended December 31, 2006. Medical Connections Holdings, Inc.'s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Medical Connections Holdings, Inc., as of December 31, 2006, and the results of its operations and its cash flows for year ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 10 to the financial statements, the Company did not generate sufficient cash flows from revenues during the year ended December 31, 2006, to fund its operations. Also at December 31, 2006, the Company had negative net working capital of $1,307,959. The Company's net working capital position has continued to deteriorate into the first quarter of 2007. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in regard to these matters is also described in Note 10. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.
------------------------------------------------
Bagell, Josephs, Levine & Company, L.L.C.
Marlton, NJ 08053
March 31, 2007

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Medical Connections Inc.

We have audited the accompanying balance sheet of Medical Connections Inc. (the "Company"), a Florida corporation, as of December 31, 2007, and the related statements of operations, changes in stockholders' equity, and cash flows for the year ended December 31, 2007, respectively. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Medical Connection, Inc. at December 31, 2007 and the results of their operations and their cash flows for the year ended December 31, 2007, respectively in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the financial statements, the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses from operations raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 10. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

/s/ DE MEO, YOUNG, MCGRATH, CPA
---------------------------------
De Meo, Young, McGrath, CPA

Fort Lauderdale, Florida
April 4, 2008

MEDICAL CONNECTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 2007

ASSETS
CURRENT ASSETS

Cash $ 1,319,944
Accounts Receivable, net 797,907
Prepaid Expenses 37,806
 ------------
Total Current Assets 2,155,658

PROPERTY AND EQUIPMENT
Property and Equipment 295,800
 Less: Accumulated Depreciation 119,671
 ------------
 Net Property and Equipment 176,129

OTHER ASSETS
Security Deposit 28,540
Investment 647,432
 ------------
TOTAL ASSETS $ 3,007,758
 ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

Accounts Payable $ 89,537
Accrued Expenses 220,555
Liability for Stock to be issued 65,056
Loan Payable 370,086
Total Current Liabilities 745,234
 ------------
TOTAL LIABILITIES 745,234

STOCKHOLDER'S EQUITY
 Preferred Stock "A" $.001 par value; 1,000,000
 shares authorized, 118,630 shares issued and
 outstanding at December 31, 2007 119
 Preferred Stock "B" $.001 par value; 1,000,000
 shares authorized, 1,000,000 shares issued and
 outstanding at December 31, 2007 1,000
 Common Stock, $0.001 par value, 25,000,000
 shares authorized, 22,487,320 shares issued and
 outstanding at December 31, 2007 22,487
 Additional Paid in Capital 20,529,198
 Accumulated Deficit (18,290,280)
 ------------
TOTAL STOCKHOLDERS' EQUITY 2,262,524
 ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,007,758

See the Accompanying Notes to the Consolidated Financial Statements

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 2007 2006
 ------------- --------------
Revenue $ 4,829,285 $ 2,214,800

Direct Costs of Revenue 3,046,874 1,014,061
Sale and Marketing Expenses 457,079 275,911
General and Administrative Expenses 7,049,346 3,936,950
 ------------- --------------
Total Operating Expenses 10,553,299 5,226,922
 ------------- --------------

LOSS FROM OPERATIONS (5,724,014) (3,012,122)

OTHER (INCOME) EXPENSE
Interest Expense 932,645 180,795
Interest Income (27,237) (925)
Other Income: Gain-revaluation of derivatives (121,339) (544,418)
 -- --
 ------------- --------------
Total Other (Income) Expenses, net 784,069 (364,548)
 ------------- --------------


LOSS BEFORE TAX BENEFITS (6,508,083) (2,647,574)

Tax Benefits -- --
 ------------- --------------

NET (LOSS) $ (6,508,083) $ (2,647,574)
 ============= ==============


Net Loss per common share - basic and
 fully diluted: $ (0.57) $ (1.75)
 ============= ==============

Weighted average common shares outstanding -
 basic and fully diluted 11,449,205 1,511,060
 ============= ==============

See the Accompanying Notes to the Consolidated Financial Statements

MEDICAL CONNECTIONS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 ADDITIONAL
 PREFERRED STOCK "A" PREFERRED STOCK B COMMON STOCK PAID - IN ACCUMULATED SUBSCRIPTION
DESCRIPTION SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT RECEIVABLES TOTALS
-------------------- -------- ------- ---------- -------- ---------- -------- ----------- ------------ ----------- -----------
BALANCE, December 31,
 2005 -- $ -- -- $ -- 476,880 $ 477 $ 2,418,171 $ (2,954,911) $ (6,000) $ (542,263

Common Stock issued
 for conversion -- -- -- -- 30,200 30 30,170 -- -- 30,200

Common Stock issued
 for liability -- -- -- -- 844,828 845 843,983 -- -- 844,828

Common Stock issued for
 convertible debt -- -- -- -- 1,015,455 1,015 608,258 -- -- 609,273

Warrants issued in
 association with
 convertible debt -- -- -- -- -- -- 55,168 -- -- 55,168

Preferred Stock issued
 for dividend
 and liability 532,680 533 -- -- -- -- 6,379,179 (6,179,712) -- 200,000

Preferred Stock
 issued for
 compensation -- -- 1,000,000 1,000 -- -- 379,000 -- -- 380,000

Write off of
 subscription
 receivable -- -- -- -- -- -- -- -- 6,000 6,000

Common Stock issued
 for compensation -- -- -- -- 140,000 140 72,860 -- -- 73,000

Net loss for the
 year -- -- -- -- -- -- -- (2,647,574) -- (2,647,574)
 -------- ------- ---------- -------- ---------- -------- ----------- ------------ -------- -----------

BALANCE, DECEMBER 31,
 2006 532,680 533 1,000,000 1,000 2,542,363 $ 2,542 $10,811,254 $(11,782,197) $ -- $ (966,868)

Common Stock issued
 for cash -- -- -- -- 4,746,075 4,746 3,308,847 -- -- 3,313,593

Warrants issued -- -- -- -- -- -- 1,587,832 -- -- 1,587,832

Common Stock issued
 for Preferred "A" (414,050) (414) -- -- 7,866,950 7,867 (7,453) -- -- --

Common Stock issued
 for liability -- -- -- -- 844,828 845 843,983 -- -- 844,828

Common Stock issued
 for convertible
 debt -- -- -- -- 5,181,932 5,182 4,028,738 -- -- 4,033,920

Warrants issued in
 association with
 convertible debt -- -- -- -- -- -- 82,203 -- -- 82,203

Common Stock issued
 for compensation -- -- -- -- 2,150,000 2,150 717,777 -- -- 719,927

Net loss for the
 year -- -- -- -- -- -- -- (6,508,083) -- (6,508,083)
 -------- ------- ---------- -------- ---------- -------- ----------- ------------ -------- -----------

BALANCE, DECEMBER 31,
 2007 118,630 $ 119 1,000,000 $ 1,000 22,487,320 $ 22,487 $20,529,198 $(18,290,280) $ -- $ 2,262,524)
 ======== ======= ========== ======== ========== ======== =========== ============ ======== ===========

See the Accompanying Notes to the Consolidated Financial Statements

MEDICAL CONNECTIONS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

 2007 2006
 ----------- -----------
OPERATING ACTIVITIES
 Net (loss) $(6,508,083) $(2,647,574)

Adjustments to reconcile net (loss) to net cash
provided by operating activites:
 Amortization of debt discount 536,029 69,728
 Depreciation 49,051 48,488
 Other gains -- (472,342)
 Write off of subscription receivable -- 6,000
 Provision for bad debt -- 100,000
 Preferred stock issued for compensation -- 380,000
 Common stock issued for compensation 719,927 97,500
 Increase in fair value derivative (121,339) --

Changes in assets and liabilities
 Accounts receivable (559,029) (193,122)
 Prepaid Expenses (37,806) --
 Security deposit -- 4,673
 Accounts payable and accrued expenses 202,016 78,076
 ----------- -----------

 Total adjustments 788,849 119,001
 ----------- -----------

NET CASH (USED IN) OPERATING ACTIVITIES (5,719,234) (2,528,573)
 ----------- -----------

INVESTING ACTIVITIES
 Acquisition of property and equipment (100,606) (41,151)
 ----------- -----------
Net cash (used in) investing activites (100,606) (41,151)

FINANCING ACTIVITIES
 Proceeds from insurance of common stock 4,901,425 712,964
 Increase in mortgage payable -- 9,452
 Payment on promissory note (40,000) (23,112)
 Proceeds from issuance of convertible debentures 2,334,283 1,819,205
 Proceeds from loan payable 370,086 100,000
 Payment on loan payable (459,452) (60,000)
 Liability for stock to be issued (15,000) --
 Decrease in line of credit (47,810) (190)
 ----------- -----------

Net cash provided by financing activities 7,043,532 2,558,319
 ----------- -----------

Change in cash and cash equivalents 1,223,692 (11,405)

Cash and cash equivalents
 at beginning of year 96,252 107,657
 ----------- -----------

Cash and cash equivalents
 at end of year $ 1,319,944 $ 96,252
 =========== ===========

See the Accompanying Notes to the Consolidated Financial Statements

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
(CONTINUED)

 2007 2006
 ---------- --------
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION:

Cash paid during the period for:

Interest $ 110,104 $ 21,506
 =========== ========
Preferred Stock issued for compensation $ -- $380,000
 =========== ========
Common Stock issued for compensation $ 725,063 $ 97,500
 =========== ========
Common Stock issued for debt conversion $ 4,033,290 $639,473
 =========== ========

Common Stock issued for liability over cash received $ -- $131,864
 =========== ========

See the Accompanying Notes to the Consolidated Financial Statements

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Medical Connections Holdings, Inc., and subsidiaries, (the "Company") is an employment and executive search firm that will provide recruiting services to its clients within the healthcare and medical industries. The Company was formed in Florida for the purpose of specializing in the recruitment and placement of healthcare professionals in a variety of employment settings.

Medical Connections Holdings, Inc. has emerged as the parent company of Medical Connections, Inc., which replaced the Webb Mortgage Depot, Inc.

Medical Connections Holdings, Inc. trades on the NASDAQ OTC B/B as a fully reporting company under the ticker symbol MCTH.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Medical Connections Holdings, Inc., and its wholly-owned subsidiaries. All material inter-company transactions and balances have been eliminated in consolidation..

USE OF ESTIMATES

The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consists principally of currency on hand, demand deposits at commercial banks, and liquid investment funds having a maturity of three months or less at the time of purchase.

The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation up to $100,000.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts are written off when management determines that an account is uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is determined to reduce the Company's receivables to their carrying value, which approximates fair value. The allowance is estimated based on historical collection experience, specific review of individual customer accounts, and current economic and business conditions. Historically, the Company has not incurred any significant credit related losses.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

PROPERTY PLANT AND EQUIPMENT

Equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, three to five years. Reviews are regularly performed to determine whether facts and circumstances exist that indicate the carrying amount of assets may not be recoverable or the useful life is shorter than originally estimated. The Company assesses the recoverability of its equipment by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.

If assets are determined to be recoverable, but the useful lives are shorter than originally estimated, the net book value of the assets is depreciated over the newly determined remaining useful lives. When equipment is retired or otherwise disposed of, the cost and related accumulated preciation are removed from the accounts and the resulting gain or loss is included in operations.

ADVERTISING

The Company's policy is to expense the costs of advertising and marketing as they are incurred. Advertising expense for the years ended December 31, 2007 and 2006 was $457,079 and $275,911 respectively.

START-UP COSTS

In accordance with the American Institute of Certified Public Accountants Statement of Position 98-5, "Reporting on the Costs of Start-up Activities", the Company expenses all costs incurred in connection with the start-up and organization of the Company.

INCOME TAXES

The Company has adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes. The Statement requires an asset and liability approach for financial accounting and reporting of income taxes, and the recognition of deferred tax assets and liabilities for the temporary differences between the financial reporting bases and tax bases of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled.

STOCK-BASED COMPENSATION

Employee stock awards under the Company's compensation plans are accounted for in accordance with Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees", and related interpretations. The Company provides the disclosure requirements of Statement of Financial Accounting Standards No. 123,"Accounting for Stock-Based Compensation" ("SFAS 123"), and related interpretations. Stock-based awards to non-employees are accounted for under the provisions of SFAS 123 and the company has adopted the enhanced disclosure provisions of SFAS No. 148 "Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of SFAS No. 123".

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

The Company measures compensation expense for its employee stock-based compensation using the intrinsic-value method. Under the intrinsic-value method of accounting for stock-based pensation, when the exercise price of options granted to employees is less than the estimated fair value of the underlying stock on the date of grant, deferred compensation is recognized and is amortized to compensation expense over the applicable vesting period. In each of the periods presented, the vesting period was the period in which the options were granted.

The Company measures compensation expense for its non-employee stock-based compensation under the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) Issue No. 96-18, "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of the Company's common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital.

COMMON STOCK ISSUED FOR OTHER THAN CASH

Services purchased and other transactions settled in the Company's common stock are recorded at the estimated fair value of the stock issued if that value is more readily determinable than the fair value of the consideration received.

EARNINGS (LOSS) PER SHARE OF COMMON STOCK

Income (Loss) per share: Basic loss per share excludes dilution and is computed by dividing the loss attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the loss of the Company. Diluted loss per share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding for the period and dilutive potential common shares outstanding unless consideration of such dilutive potential common shares would result in anti-dilution. Common stock equivalents were not considered in the calculation of diluted loss per share as their effect would have been anti-dilutive for the periods ended December 31, 2007 and 2006.

REVENUE RECOGNITION

The Company records its transactions under the accrual method of accounting whereby income recognized when the services are rendered and collection is reasonably assured.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount reported in the balance sheets for cash and cash equivalents, loans payable, line of credit, convertible debentures, promissory note, mortgage payable, and liability for stock to be issued approximate fair value because of the immediate or short-term maturity of these financial instruments.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

RECLASSIFICATIONS

Certain amounts at the December 31, 2006 were reclassified to conform to the 2007 presentation. These reclassifications had no effect on net loss for the periods presented.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115." SFAS 159 permits entities to choose to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings at each subsequent reporting date. The fair value option (i) may be applied instrument by instrument, with certain exceptions, (ii) is irrevocable (unless a new election date occurs) and (iii) is applied only to entire instruments and not to portions of instruments. SFAS 159 is effective for the Corporation on January 1, 2008 and is not expected to have a significant impact on the Company's financial statements

NOTE 3- PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, 2007:

 2007
 ---------
Leasehold Improvements $ 54,512
Office Furniture 107,995
Office Equipment 133,293
 ---------
 Total 295,800
Less: Accumulated Depreciation (119,671)
 ---------
 Net Book Value $ 176,129
 =========

Depreciation expense for the years ended December 31, 2007 and 2006 was $49,051 and $48,488 respectively.

NOTE 4- LIABILITY FOR STOCK TO BE ISSUED

As of December 31, 2007, the Company has a liability of $65,056 from the purchase of its common stock. Upon the issuance of the common stock the liability will be removed. The Company believes that the stock will be issued with in the next twelve months.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

NOTE 5 NOTE PAYABLE

The Company entered into an agreement to sell selective accounts receivable invoices. The Company would receive 90% of the invoice value at the time of sale and be subject to a discount rate of 1.50%, of the net amount if the invoice sold was paid within 40 days and with an additional discount of 0.50% for each additional 15 days an invoice remains unpaid. If the invoice remains unpaid after 90 days the Company will be charged back for the unpaid amount, then the Company will begin collection procedures. At December 31, 2007 there was $370,086 as Loan Payable.

NOTE 6- CONVERTIBLE DEBENTURES

In 2006 convertible debentures bear interest at rates ranging from 6% to 8% and are due on various dates during 2006 unless converted into common stock, at the option of the Company. In accordance with Statement of Financial Accounting Standards No. 133, `Accounting for Derivative Instruments and Hedging Activities', ("FASB 133"), we determined that the conversion feature of the convertible debentures met the criteria of an embedded derivative and therefore the conversion feature of the debt needed to be bifurcated and accounted for as a derivative. Due to the reset provisions of the convertible debentures, the debt does not meet the definition of "conventional convertible debt" because the number of shares which may be issued upon the conversion of the debt is not fixed. Therefore, the conversion feature fails to qualify for equity classification under EITF 00-19, and must be accounted for as a derivative liability.

The $3 million convertible debentures were stripped of their conversion feature due to the accounting for the conversion feature as a derivative, which was recorded using the residual proceeds method, whereby any remaining proceeds after allocating the proceeds to the warrants and conversion option would be attributed to the debt. The beneficial conversion feature (an embedded derivative) included in these convertible debentures resulted in an initial debt discount of $847,163. During 2007, we revalued this derivative liability. For the year ended December 31, 2007, after adjustment, we recorded a net gain on valuation of the derivative liability of $121,399. The associated warrants are exercisable for 6,763,466 shares of common stock at an exercise price of $1.00 per share. The warrants, which expire on December 31, 2009, were assigned a value of $137,371, estimated using the Black-Scholes valuation model. The following assumptions were used to determine the fair value of the warrants using the Black-Scholes valuation model: a term of 3.5 years, risk-free rate of between 4.00% and 6.00%, volatility of 40% to 136%, and dividend yield of zero. In accordance with EITF No. 00-19, EITF No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, the values assigned to the debenture, conversion feature and the warrants were allocated based on their fair values. The amount allocated as a discount on the convertible debentures for the value of the warrants and conversion option was amortized to interest expense, using the effective interest method, over the term of the convertible debentures. For the year ended December 31, 2007, amortization of the discount on debenture amounted to $536,029 which is included in interest expense. On December 6, 2007 all of the outstanding convertible debentures were converted into 5,181,932 shares of the Company's common stock.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

NOTE 7 - STOCKHOLDERS' EQUITY

PREFERRED STOCK - A

As of December 31, 2007, the Company has 1,000,000 shares of Preferred Stock A authorized at $0.001 par value and 118,630 issued and outstanding. The Company authorized a dividend of its Series A convertible preferred stock to the holders of record of its common stock on July 3, 2006 (the "Record Date"). On July 10, 2006 a total of 532,680 shares of our Series A preferred Stock were issued to the record holders as of the Record Date. Each holder of the Series A Preferred Stock may convert each share of Preferred Stock into nineteen (19) shares (the "Conversion Ratio") of the Company's Common Stock at any time following December 31, 2006. The Conversion Ratio is subject to adjustment in the event of any recapitalization or reorganization. The Holders of the Series A Preferred Stock will be required to tender the Series A Preferred Stock Certificate to the Company for redemption prior to issuance of any shares of Common Stock. As of March 31, 2008, a total of 431,132 shares of Series A Preferred Stock have been converted into 6,703,846 shares of our Common Stock of which 414,050 shares were converted during 2007.

PREFERRED STOCK - B

As of December 31, 2007, the Company has 1,000,000 shares of Preferred Stock B authorized at $0.001 par value and 1,000,000 issued and outstanding.

COMMON STOCK

As of December 31, 2007, the Company has 25,000,000 shares of common stock authorized at $0.001 par value and 22,487,320 issued and outstanding.

The following details the stock transactions for the twelve months ended December 31, 2007:

On January 27, 2007 we issued 1,000,000 shares of our Common Stock, to an employee, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 380,000. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On June 4, 2007 we issued 25,000 shares of our Common Stock, to an employee, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 9,500. Also, 25,000 shares were issued to an advisor, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 9,500. The Company relied upon the exemption from registration contained in
Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On June 18, 2007 we issued 100,000 shares of our Common Stock, to an employee, for services rendered, at $ 0.38 per share fair market value, for a total cost of $ 38,000. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

On August 9, 2007 we issued 100,000 shares of our Common Stock to certain employees for services rendered. The Common Stock was valued at $ 0.38 per share, the fair market value at the date of issuance. A charge of $38,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On October 8, 2007 we issued 500,000 shares of our Common Stock to a non-employee for services rendered. The Common Stock was valued at $ 0.24 per share, the fair market value at the date of issuance. A charge of $120,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

On December 27, 2007 we issued 400,000 shares of our Common Stock to certain employees for services rendered. The Common Stock was valued at $ 0.24 per share, the fair market value at the date of issuance. A charge of $84,000 has been included in the consolidated statement of operations for the year ended December 31, 2007. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

During 2007 the Company converted 414,050 shares of its preferred stock into 7,866,950 shares of its common stock per the Preferred Stock Agreement. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

During 2007 the Company issued 4,746,075 shares of its common stock and 8,949,600 warrants to purchase an equal number of shares of common stock for total net proceeds of $4,901,425. The Company relied upon the exemption from registration contained in Section 4(2), as the recipient was deemed to be sophisticated with regard to an investment in the Company.

NOTE 8 - PROVISION FOR INCOME TAXES

The Company accounts for income taxes using the liability method. At December 31, 2007 deferred tax assets consist of the following:

 2007
 -----------

Deferred tax asset $ 4,200,000
Less: valuation allowance (4,200,000)
 -----------
Net deferred tax assets $ 0
 ===========

As of December 31, 2007, the Company had accumulated deficits approximating $12,000,000 available to offset future taxable income through 2025. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in the future period.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

NOTE 9- OPERATING LEASES

The Company leases office space under a sixty-three month lease commencing January 1, 2005 with a renewal option for a five-year period. The lease did not take effect until March 2005 due to delays in construction. Monthly payments under the current lease are $13,398. According to the lease; the rent will increase by 3% each year. The Company is required to pay property taxes, utilities, insurance and other costs relating to the leased facilities.

The following is a schedule, by years, of future minimum rental payments required under this operating lease that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2006;

For the periods ended Amount
December 31, Estimated
----------------------------------- ---------
2008 $ 160,772
2009 165,595
2010 42,264
 ----------
Total minimum payments required $ 368,631
 ==========

NOTE 10 - GOING CONCERN

The accompanying consolidated financial statements have been prepared in accordance with accounting principals generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has sustained operating losses, and has little recurring revenues to sustain its operations. The revenue stream is not sufficient to fund expenses at this time. These items raise substantial doubt about the Company's ability to continue as a going concern.

In view of these matters, realization of the assets of the Company is dependent upon the Company's ability to meet its financial requirements and the success of future operations. These consolidated financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

The Company's continued existence is dependent upon its ability to generate sufficient cash flows from equity financing and product revenues.

The Company has issued stock and convertible debentures to continue to fund company operations.

NOTE 11 - CONTINGENCIES

Legal Proceedings:

The Company and certain of its subsidiaries are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot state what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, management believes that current reserves, determined in accordance with SFAS No. 5, "Accounting for Contingencies" (SFAS
5), are adequate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the Company's consolidated financial condition or results of operations.

MEDICAL CONNECTIONS HOLDINGS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2007

NOTE 12 - SUBSQUENT EVENT

On September 30, 2007 the Company obtained the written consent of the stockholders holding a majority of the outstanding voting rights of the Company to amend the Company's articles of incorporation to provide for the issuance of 75 million shares of capital stock including 5 million (5,000,000) shares of total preferred stock (which has been previously authorized) and 70 million (70,000,000) shares of common stock, $.001 par value.

The certificate of amendment to the articles of incorporation was filed with the Florida Secretary of State on March 31, 2008.

On January 23, 2008, the Company entered into an Asset Purchase and Sale Agreement (the "Agreement") with Medical Staffing Direct, Inc. ("MSD") to sell and assign to the Company certain assets consisting of $150,000 in cash (less $25,000 which will be used by MSD to pay expenses related to this transaction) and $400,000 in accounts receivable (the "Assets").

In consideration for the transfer of the Assets, the Company was to issue to the holders of the MSD 8% subordinated secured convertible promissory notes (the "Note holders") a total of 1,310,344 Company units, each unit consisting of one share of common stock and two common stock purchase warrants with an exercise price of $0.75 per share.

The transaction was contingent upon and subject to MSD securing the required consents from the Note holders by March 31, 2008.

MSD has not secured the required consent as of the above date and as a result an amendment was entered into on April 14, 2008extending March 31, 2008 date to May 30, 2008

NOTE 13 - INTERENAL CONTROLS

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX 404"), the Securities and Exchange Commission adopted rules requiring small business issuers, such as our company, to include a report of management on the company's internal controls over financial reporting in their annual reports. Presently, we will become subject to compliance with SOX 404 for our fiscal year ending December 31, 2008 the independent registered public accounting firm auditing our financial statements must also attest to and report on management's assessment of the effectiveness of our internal controls over financial reporting as well as the operating effectiveness of our internal controls. While we have yet to begin evaluating our internal control systems in order to allow our management to report on, and our independent auditors attest to, as presently required. During 2008 we expect to expend significant resources in developing the necessary documentation and testing procedures required by SOX
404. In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remedy in a timely manner or we are unable to receive a positive attestation from our independent auditors with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements and our ability to obtain financing as needed could suffer.

ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

On June 20, 2007, Bagell, Josephs, Levine & Co. ("BJL") was dismissed as our independent auditor and independent registered public accounting firm. Concurrently therewith, the Company's Board of Directors approved the engagement of DeMeo, Young and McGrath ("DYM"), as the Company's independent auditor and independent registered public accounting firm.

The report issued by BJL in connection with our audits for the years ended December 31, 2006 and 2005 did not contain an adverse opinion or a disclaimer of opinion, nor was either such report qualified or modified as to uncertainty, audit scope, or accounting principles, except that the Company's report for the years ended December 31, 2006 and 2005 included an explanatory statement wherein BJL expressed substantial doubt about our ability to continue as a going concern. There were no disagreements with BJL on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of the Company, would have caused the Company to make a reference to the subject matter of such disagreement in connection with its audited report or interim financial statements for the periods ended March 31, 2007.

ITEM 8A. CONTROL AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of December 31, 2007, the end of the period covered by this Annual Report, our management concluded its evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Annual Report, is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and to reasonably assure that such information is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the evaluation date, our Chief Executive Officer concluded that we maintain disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and that such information is accumulated and communicated to our management, including the Chief Executive Officer, to allow timely decisions regarding required disclosure.

Except as set forth below, we have not made any significant changes to our internal controls subsequent to the Evaluation Date. We have not identified any significant deficiencies or material weaknesses or other factors that could significantly affect these controls, and therefore, no corrective action was taken. As of the evaluation date, our Chief Executive Officer concluded that additional controls are required in the control of our checking account. Specifically, it was decided that all payments in excess of $1,000 must be approved by at least two individuals, including one of the Company's officers. While management does not believe that there were any improprieties with the handling of corporate funds, requiring approval from a second source above a threshold amount will insure that corporate funds are allocated as required.

PART III

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

The name, age, position and date of appointment of the Company's directors and executive officers are as follows:

 Name Age Position(s) Appointed
--------------------------------------------------------------------------------

Joseph Azzata 47 CEO/DIRECTOR December 2005

Anthony Nicolosi 37 PRESIDENT/DIRECTOR December 2005
 CFO February 2008

Luke Jansen 43 VICE PRESIDENT December 2005

JOSEPH J. AZZATA, (47) Chief Executive Officer/Director. For nearly ten years, Mr. Azzata has been in the investment banking and brokerage industry, and in 1998 co-founded the firm of Emerson Bennett & Associates, Inc., of Fort Lauderdale, Florida, serving as COO. Emerson Bennett was later acquired by Cardinal Capital Management, Inc. In 2002 Mr. Azzata co-founded Medical Connections and serves as Chief Executive Officer/Director. As CEO Mr. Azzata continue to work on future strategic plans for the Company.

ANTHONY J. NICOLOSI, (37) President /Director and Chief Financial Officer With more than 12 years experience in investment banking and brokerage, Mr. Nicolosi previously served as president and CEO of Capital Market Partners, Inc. in Pompano Beach, Florida. Mr. Nicolosi also served as a Financial Executive with Citicorp Investment Services of Dania Beach, Florida. Mr. Nicolosi is responsible for supervising the operations of the Florida office and assuming responsibility for day-to-day operations including the execution of all policy objectives within budgetary guidelines. Until such time as the Company can identify and retain a full time Chief Financial Officer, Mr. Nicolosi has assumed that position. Mr. Nicolosi attended Southern Connecticut University for two years and Florida Atlantic University for two years.

LUKE JANSEN (42) is has more than 15 years of managerial experience. Prior to joining Medical Connections, Inc., Mr. Jansen was the President of National Allied Consultants (a specialized allied health company), supporting the permanent recruiting needs of facilities throughout the country. Prior thereto, he served as the Director of the Radiology Division for CompHealth Inc., where he led a team of recruiters. He also was Director of Physician Recruitment for Sea Change Inc., a national physician placement firm. Mr. Jansen holds a BS in Management from Albright University, and is currently working towards an MBA degree at Palm Beach Atlantic University.

Involvement in Certain Legal Proceedings

In 2005, the state of Pennsylvania issued a Cease and Desist order for selling unregistered securities without filing for an exemption against Anthony Nicolosi, Joseph Azzata and Medical Connections, Inc. The summary order was RESCINDED as to respondents Medical Connections, Inc., Joseph J. Azzata, Anthony J. Nicolosi resulting in a 90 day bar from calling Pennsylvania, and $10,000 in legal and administrative costs.

On November 30, 2005 Mr. Azzata entered into a Letter of Acceptance, Waiver and Consent ("AWC") with the NASD. Without admitting or denying the allegations or findings and solely for the purpose of the proceeding with the NASD, prior to a hearing and without an adjudication of any issue of law or fact, Mr. Azzata agreed to the entry of findings that from about December 2002 through about July 2003, while a registered representative at NASD member Cardinal Capital Management, Inc., and under the supervision of Cardinal Capital Management, Mr. Azzata engaged in the unregistered offer and sale of 468,439 shares of CC.Net in violation of Section 5 of the Securities Act of 1933. In addition, Mr. Azzata failed to appear to give testimony as requested. Mr. Azzata consented to the imposition, as a sanction, of a bar from association with any NASD member in all capacities.

Except as indicated above, no event listed in Sub-paragraphs (1) through (4) of Subparagraph (d) of Item 401 of Regulation S-B, has occurred with respect to any of our present executive officers or directors or any nominee for director during the past five years which is material to an evaluation of the ability or integrity of such director or officer.

Our current directors serve for a term of one (1) year, or until their successors are elected and qualified.

Code of Ethics

The Company has recently adopted a Code of Ethics that meets the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We will provide to any person without charge, upon request, a copy of such Code of Ethics. Persons wishing to make such a request should contact Joseph Azzata our chief executive officer at our corporate headquarters located at 2300 Glades Road, Suite 202E Boca Raton, Florida. 33431.

Audit Committee Financial Expert

No member of our board of directors qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B.

We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances. In addition, we currently do not have nominating,

compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to have such committees because it believes the functions of such committees can be adequately performed by our board of directors. Further, we are currently quoted on the OTC Bulletin Board, which does not have any listing requirements mandating the establishment of any particular committees.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

We have no equity securities registered under Section 12(g) of the Securities Exchange Act of 1934, and accordingly, our officers, directors and principal stockholders are not required to file reports under Section 16(a) of the Exchange Act. Nonetheless, both Mr. Azzata and Mr. Nicolosi have filed the required reports as if the Company were subject to the reporting requirements of the Exchange Act.

ITEM 10. EXECUTIVE COMPENSATION.

The following table discloses compensation paid during the fiscal year ended December 31, 2007 to (i) the Company's Chief Executive Officer, and (ii) individual(s) who were the only executive officers, other than the Chief Executive Officer, serving as executive officers at the end of 2007 whose total salary and bonus exceeded $100,000 (the "Named Executive Officers"). No restricted stock awards, long-term incentive plan payouts or other types of compensation, other than the compensation identified in the chart below, were paid to these executive officers during these fiscal years.

 NONQUALIFIED
 STOCK OPTION NON-EQUITY DEFERRED ALL OTHER
 NAME AND PRINCIPAL FISCAL SALARY BONUS AWARDS AWARDS INCENTIVE PLAN COMPENSATION COMPENSATION
 POSITION YEAR ($) ($) ($) ($) COMPENSATION ($) EARNINGS ($) ($) (2) TOTAL ($)
-------------------- ------ ------- ------- -------- -------- ------------------ ------------- ------------- ---------

NAME AND SALARY BONUS STOCK
POSITION YEAR ($) ($) AWARD DIVIDEND
------------------ ---------- ---------- ---------- ----------
Joseph Azzata CEO 2007 $222,000 $ 100,000
 2006 150,000 30,000 (3)
 2005 108,000 80,500 (2)

Anthony Nicolosi, Pres. 2007 222,000 100,000
 2006 150,000 30,000 (3)
 2005 108,000 80,500 (2)

Luke Jansen, VP 2007 138,000 20,000
 2006 138,000 -0- (3)

(2) Before our acquisition of Medical Connections, Inc., Joseph Azzata and Anthony Nicolosi, the founders of Medical Connections, Inc. received a salary of $108,000 per year. They were also paid a quarterly bonus of $25,000 during the first three quarters of the year and bonus of $5,500 for the fourth quarter of 2005. During 2006, both Mr. Azzata and Mr. Nicolosi will receive a base salary of up to $200,000 per year.

(3) During 2006 we declared a stock dividend of our Series A preferred Shares. As a result of this stock dividend, both Mr. Nicolosi and Mr. Azzata received 164,475 shares of our Series A Preferred Shares and Mr. Jansen received 8,224 shares of our Series A Preferred Shares.

Bonuses and Deferred Compensation

We do not have any bonus, deferred compensation, stock option or retirement plan. Such plans may be adopted by us at such time as deemed reasonable by our board of directors. We do not have a compensation committee; all decisions regarding compensation are determined by our board of directors. The quarterly founder's share bonuses were paid to Mr. Azzata and Mr. Nicolosi as the founders of Medical Connections, Inc. There will be no further founder share bonuses as a result of the acquisition of Medical Connections, Inc.

DIRECTORS' COMPENSATION

Our directors are reimbursed for reasonable expenses incurred in connection with attendance at meetings of the Board and of Committees of the Board; however, they do not receive any additional compensation for their services as directors. Accordingly, it may be necessary for us to compensate newly appointed directors in order to attract a quality governance team. At this time the Company has not identified any specific individuals or candidates nor has it entered into any negotiations or activities in this regard.

STOCK OPTIONS GRANTED IN LAST FISCAL YEAR

During the fiscal years ended December 31, 2007 and 2006, we did not grant any options to any of our officers or directors. During fiscal 2007 and 2006, none of our officers or directors exercised any options.

EMPLOYMENT AGREEMENTS

Our current executive officers, Anthony Nicolosi, Joseph Azzata, are all employed pursuant to employment agreements with the Company. Currently, both Mr. Nicolosi and Mr. Azzata receive an annual salary of $200,000. Mr. Cammarano receives an annual compensation of $96,000.

In addition to the annual compensation our officers receive health insurance coverage.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

SECURITY OWNERSHIP OF MANAGEMENT & CERTAIN BENEFICIAL OWNERS

The following table sets forth information regarding the beneficial ownership of our shares of common stock at March 31, 2008 by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our executive officers and directors as a group. Unless otherwise specified, we believe that all persons listed in the table possess sole voting and investment power with respect to all shares of our common stock beneficially owned by them. As of March 31, 2008 we had approximately 24,473,501 shares of common stock issued and outstanding not including a total of 2,108,012 shares which are issuable on the conversion of the 110,948 shares of our Series A Preferred Shares which are currently issued and outstanding. Upon the conversion of all Series A Preferred Shares, there will be a total of approximately 26,581,513 shares of our Common Stock issued and outstanding excluding any shares issued as a result of this offering.

 NUMBER OF SHARES
NAME BENEFICIALLY OWNED (A) PERCENT OF CLASS
--------------- ---------------------- ----------------
Joseph Azzata 3,289,500 12.4%

Anthony Nicolosi 3,289,500 12.4%

Luke Jansen 164,480 *

(All executive officers) 6,743,480 25.4%

(a) Assumes conversion of all Series A shares.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Except as described below, none of the following persons has any direct or indirect material interest in any transaction to which we are a party during the past two years, or in any proposed transaction to which the Company is proposed to be a party:

(A) any director or officer;

(B) any proposed nominee for election as a director;

(C) any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or

(D) any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary.

We have also entered into employment agreements with our current executive officers Anthony Nicolosi and Joseph Azzata which provide for annual compensation of $300,000. Each of them may also receive discretionary bonuses.

Subsequent Events

In February 2008, the Board of Directors terminated Brian Quillen the Board of Directors terminated Brian Quillen as the Company's Chief Financial Officer. Since his termination, Mr. Nicolosi has assumed the role of Chief Financial Officer until such time as the Company can hire a new Chief Financial Officer.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits:

A list of exhibits required to be filed as part of this Annual Report is set forth in the Index to Exhibits, which immediately precedes such exhibits and is incorporated herein by reference.

(b) Reports on Form 8-K

During the fourth quarter of 2007, no reports on Form 8-k were filed with the Securities and Exchange Commission.

ITEM 14. PRINCIPLE ACCOUNTANT FEES AND SERVICES

AUDIT FEES. The aggregate fees billed for professional services rendered was $38,000 and $42,500 for the audit of our annual financial statements for the fiscal years ended December 31, 2007 and 2006, respectively, and the reviews of the financial statements included in our Forms 10-QSB for those fiscal years.

AUDIT-RELATED FEES. The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and not reported under the caption "Audit Fee."

TAX FEES. No fees were billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning services.

ALL OTHER FEES. Other than the services described above, there were no other services provided by our principal accountants for the fiscal years ended December 31, 2007 and 2006.

We have no formal audit committee. However, our entire Board of Directors (the "Board") serves in the capacity of the audit committee. In discharging its oversight responsibility as to the audit process, the Board obtained from the independent auditors a formal written statement describing all relationships between the auditors and us that might bear on the auditors' independence as required by Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees." The Board discussed with the auditors any relationships that may impact their objectivity and independence, including fees for non-audit services, and satisfied itself as to the auditors' independence. The Board also discussed with management and the independent auditors the quality and adequacy of its internal controls. The Board reviewed with the independent auditors their management letter on internal controls.

The Board discussed and reviewed with the independent auditors all matters required to be discussed by auditing standards generally accepted in the United States of America, including those described in Statement on Auditing Standards No. 61, as amended, "Communication with Audit Committees". The Board reviewed the audited consolidated financial statements of the Company as of and for the year ended December 31, 2006 with management and the independent auditors. Management has the responsibility for the preparation of the Company's financial statements and the independent auditors have the responsibility for the examination of those statements. Based on the above-mentioned review and discussions with the independent auditors and management, the Board of Directors approved the Company's audited consolidated financial statements and recommended that they be included in its Annual Report on Form 10-KSB for the year ended December 31, 2007, for filing with the Securities and Exchange Commission.

SIGNATURES

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

MEDICAL CONNECTIONS HOLDINGS, INC.

Date: April 10, 2008


 By: /s/ Joseph Azzata
 ------------------------------
 Joseph Azzata,
 CEO and Director

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.

By: /s/ Joseph Azzata Date: April 14, 2008
 ----------------------------
 Joseph Azzata
 CEO/ Director


/s/ Anthony Nicolosi Date: April 14, 2008
--------------------------------
 Anthony Nicolosi
 President/CFO/Director

INDEX TO EXHIBITS

NUMBER EXHIBIT NAME AND/OR IDENTIFICATION OF EXHIBIT
---------- ---------------------------------------------
3.1 Articles of Incorporation filed with the Florida Secretary of
 State on May 11, 1999 (incorporated by reference to Exhibit 3.1 of
 our registration statement on Form SB-2 filed with the SEC on
 October 29, 2001).

3.2 Amendment to Articles of Incorporation filed with the Florida
 Secretary of State on June 25, 1999 (incorporated by reference to
 Exhibit 3.2 of our registration statement on Form SB-2 filed with
 the SEC on October 29, 2001).

3.3 Articles of Amendment to Articles of Incorporation filed with the
 Florida Secretary of State on August 10, 1999 (incorporated by
 reference to Exhibit 3.3 of our registration statement on Form
 SB-2 filed with the SEC on October 29, 2001).

3.4 Articles of Share Exchange of Webb Mortgage Depot, Inc. with Webb
 Mortgage Services Corporation and Webb Mortgage Corp. filed with
 the Florida Secretary of State on March 13, 2000 (incorporated by
 reference to Exhibit 3.4 of our registration statement on Form
 SB-2 filed with the SEC on October 29, 2001) (incorporated by
 reference to Exhibit 3.4 of our registration statement on Form
 SB-2 filed with the SEC on October 29, 2001).

3.5 Bylaws (incorporated by reference to Exhibit 3.5 of our
 registration statement on Form SB-2 filed with the SEC on October
 29, 2001).

3.6 Amendment to the Articles of Incorporation filed with the Florida
 Secretary of State (incorporated by reference to Form 8-k filed on
 December 29, 2005.

3.7* Amendment to the Articles of Incorporation filed with the Florida
 Secretary of State on March 31, 2008

3.8* Code of Ethics

4.1* Form of Convertible Debenture

4.2* Form of Warrant

10.1 Share for Share Exchange Agreement between the Company and Medical
 Connections, Inc. filed as an exhibit on Schedule A to the
 Company's Definitive Proxy statement filed with the Securities and
 Exchange Commission on October 7, 2005.

10.2* Employment Agreement between the Company and Anthony Nicolosi

10.3* Employment Agreement between the Company and Joseph Azzata

31.1* Certificate of the Chief Executive Officer pursuant Section 302 of
 the Sarbanes-Oxley Act of 2002

31.2* Certificate of Chief Financial Officer pursuant to Section 302 of
 the Sarbanes-Oxley Act of 2002

32 .1* Certificate of the Chief Executive Officer pursuant to Section 906
 of the Sarbanes-Oxley Act of 2002

32 .2* Certificate of the Chief Financial Officer pursuant to Section 906
 of the Sarbanes-Oxley Act of 2002

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

* Filed Herewith

Medical Connections (GM) (USOTC:MCTH)
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