UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A2
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2007
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
MEDICAL CONNECTIONS HOLDINGS, INC.
(Name of small business issuer in its charter)
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Florida
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333-72376
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65-0920373
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation)
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File Number)
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Identification No.)
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2300 Glades Road, Suite 202E Boca Raton, FL 33431
(Address of Principal Executive Office) (Zip Code)
(561) 353-1110
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
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No
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Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants 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.
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
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No
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State issuers revenue for its most recent fiscal year.
$4,829,285
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days.
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 A-2 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 A-2 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.
EXPLANATORY NOTE
Medical Connections Holdings, Inc. is filing this Amendment No. 2 to our Annual Report on Form 10-KSBA-2 for the fiscal year ended December 31, 2007 as filed with the U.S. Securities and Exchange Commission on April 15, 2008. This Amendment No. 2 is being filed to amend and restate the information provided under Item 8(a) of Part II. This Amendment No. 2 responds to the comments of the Staff of the Securities and Exchange Commission in connection with its review of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007.
This Amendment No. 2 does not affect the original financial statements or footnotes as originally filed. This Amendment No. 2 does not reflect events that have occurred after the original filing of the Annual Report on Form 10-KSB on April 15, 2008.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as a result of this Amendment No. 2, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, filed and furnished respectively, as exhibits to the original filing, have been re-executed and refiled as of the date of this Amendment No. 2 and are included as Exhibits 31.2, 31.2, 32.1 and 32.2 hereto.
This Amendment No. 2 should be read in conjunction with the original filing of our Annual Report on Form 10-KSB and our other filings made with the Securities and Exchange Commission subsequent to the filing of the original Annual Report on Form 10-KSB.
ITEM 8A(T).
CONTROLS AND PROCEDURES.
Based on the periodic review of our Annual Report by the Securities and Exchange Commission, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted and re-evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report (December 31, 2007), as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934 which require that (i) the information required to be disclosed by us in this Annual Report on Form 10-KSB was recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As amended, our management has determined that the Company failed to use the appropriate disclosure language requirements by Items 307 and 308T of Regulation S-K( 17 CFR 229.307 and 229.308T) with respect to the annual report that the registrant is required to file for a fiscal year end on or after December 15, 2007 but before December 15, 2008.
Therefore, in connection with the filing of this Amendment, our management including our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures were ineffective.
It is worth noting that management re-affirms its position that the financial statements included in the Form 10-KSB present fairly, in all material respects our financial position, results of operations and cash flows for the periods presented in conformity with generally accepted accounting principles.
Additionally, it should be noted that management has taken steps to address its disclosure controls requirements which include hiring an experienced Chief Financial Officer with SEC and public company experience in April 2008 and engaging experienced consultants to review Quarterly and Annual Reports to assist management in the review and preparation of financial statements and disclosures.
In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures. The Company is currently is in the process of further reviewing and documenting its disclosure controls and procedures, and its internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.
Managements Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
Under supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in Internal Control Integrated Framework.
As a result of the change on the disclosure controls conclusion in this Amendment, management has determined that the conclusion on ineffective disclosure controls affects the conclusion on internal controls over financial reporting because as part of the Companys external reporting process, the Company failed to use the appropriate disclosure checklists and procedures to ensure that the appropriate disclosures were included in our Annual Report. As such, our internal controls as of December 31, 2007, failed to reveal the breakdown in the disclosure process. Therefore, we have deemed that our internal controls procedures were ineffective. However, it is worth noting that the Amendment and modification in our conclusion did not change the Companys previously reported consolidated revenues, net income, income per share or other results of operations and did not require restatement of the basic consolidated financial statements (Balance Sheets, Statements of Income, Shareholders Equity and Cash Flows).
Therefore, as noted above, management has taken steps to address its disclosure controls requirements which included hiring an experienced Chief Financial Officer with SEC and public company experience in April 2008, and using experienced consultants to review Quarterly and Annual Reports to provide reasonable assurance that accurate, complete financial statements and disclosure requirements are presented in our Report filings.
This Annual Report does not include an audit or attestation report of our registered public accounting firm regarding our internal control over financial reporting. Our managements report was not subject to an audit or attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only managements report in this Annual Report.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
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. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Evaluation of Changes in Internal Controls over Financial Reporting
During the year ended December 31, 2007, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.
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.
Date: September 10, 2008
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MEDICAL CONNECTIONS HOLDINGS, INC.
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By:
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/s/ Joseph Azzata
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Joseph Azzata
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CEO and Director
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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.
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Signature
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Title
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Date
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/s/ Joseph Azzata
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CEO/ Director
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September 10, 2008
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Joseph Azzata
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/s/ Brian Neill
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Chief Financial Officer
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September 10, 2008
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Brian Neill
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/s/Anthony Nicolosi
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President/Director/Former CFO
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September 10, 2008
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Anthony Nicolosi
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INDEX TO EXHIBITS
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Number
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Exhibit Name and/or Identification of Exhibit
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3.1
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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).
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3.2
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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).
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3.3
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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).
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3.4
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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).
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3.5
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Bylaws (incorporated by reference to Exhibit 3.5 of our registration statement on Form SB-2 filed with the SEC on October 29, 2001).
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3.6
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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.
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3.7
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Amendment to the Articles of Incorporation filed with the Florida Secretary of State on March 31, 2008
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3.8
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Code of Ethics
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4.1
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Form of Convertible Debenture
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4.2
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Form of Warrant
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10.1
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Share for Share Exchange Agreement between the Company and Medical Connections, Inc. filed as an exhibit on Schedule A to the Companys Definitive Proxy statement filed with the Securities and Exchange Commission on October 7, 2005.
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10.2
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Employment Agreement between the Company and Anthony Nicolosi
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10.3
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Employment Agreement between the Company and Joseph Azzata
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31.1
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*Certificate of the Chief Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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*Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32 .1
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* Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32 .2
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* Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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*Enclosed herewith.
Medical Connections (GM) (USOTC:MCTH)
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