10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the fiscal year ended: June 30, 2006

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _______ to _______

Commission File Number: 000-51795

MEDirect Latino, Inc.

(Name of small business issuer in its charter)

Florida	20-1327083
(State or other jurisdiction of Incorporation)	(IRS Employer Identification Number)

2101 W Atlantic Blvd., Suite 101, Pompano Beach, FL 33069	954-321-3540
(Address of principal executive offices)	(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:NONE

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

Common Stock, $.0001 par value per share

(Title of class)

Cumulative Convertible Preferred Stock, $.0001 par value per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o Nox

Indicate by check mark whether the registrant: (1) has 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 o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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-K or any amendment to their Form 10-K. □

Indicate by check mark whether the registrant is a large accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o Accelerated filer o Non-accelerated filer x

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

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 last sold, or the average bid and asked price of such common equity as of September 30, 2006, was $34,638,659.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

The number of shares outstanding of each of the registrant’s classes of common equity: 16,951,739 as of June 30 2006

DOCUMENTS INCORPORATED BY REFERENCE: NONE

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PART I

Item 1. Business

Overview

MEDirect Latino, Inc. (the “Company” or “MEDirect”) was incorporated in 2002 for the purpose of developing its business model to operate as a national direct to consumer provider of medical products and services. The Company was a private non-registrant operating company until such time as it completed a Reorganization Agreement with Interaxx Digital Tools, Inc. (“IDT”). IDT was one of four stand alone companies resulting from a second joint plan of reorganization filed under Chapter 11 of the bankruptcy code. This reorganization was treated as a reverse merger and subsequent to the transaction; IDT changed its name to MEDirect Latino, Inc., as the new operating entity.

We are a federally licensed, direct-to-consumer, participating provider of Medicare Part B Benefits primarily focused on supplying diabetic testing supplies to the Hispanic Medicare-eligible community domestically and in Puerto Rico. We distribute diabetic diagnostic testing supplies and ‘quality of life’ enhancing products (i.e. heating pads, seat lifts and walking assistance devices) which address the healthcare needs of our customers who also have circulatory and mobility related afflictions resulting from diabetes. Products are distributed only in compliance with applicable federal and state laws governing distribution of such products.

We market our diabetes products directly to consumers primarily through targeted media and direct-response television advertising. Our patient service representatives are specifically trained to communicate with Medicare-eligible Hispanic patients suffering from diabetes, helping them to follow their doctors’ orders and manage their chronic disease. Our operating platforms enable us to efficiently collect and process required documents from physicians and patients and bill and collect amounts due from Medicare, other government agencies, third party payers as well as from patients. We believe that our proactive approach to diabetes management helps reduce the long-term complications and cost of the disease.

Business Strategies

Our principal strategy is to utilize direct-response marketing to the Hispanic community and to market our quality patient service, efficient patient care management and call center operation to grow our business. Our strategy is to focus on our core diabetes patient base serving our patients’ needs by providing diabetes supplies, prescription medications and other healthcare services.

Our advertising campaign has resulted in a significant increase in patient enrollment and has been the primary driver behind the growth in our active diabetes patient base. This strategy, combined with our proactive approach and high level of service that yields high patient retention rates, has resulted in solid revenue growth. We will continue to engage in a high level of effective television advertising in fiscal 2007 and evaluate from time to time the acquisition of other diabetes supply businesses. Also, we will be increasing our commitment to alternative methods of attracting new patients, such as health care professional and patient referrals, print advertising, direct mail and the Internet. We continue to seek opportunities to deliver new products to a broader patient base by leveraging our mail-order distribution system and software for billing and patient monitoring. To manage our growth effectively, we are continually improving our operations and information systems.

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We continue to evaluate from time to time opportunities for the acquisition of businesses and products to expand and complement our existing product lines in the chronic care industry, primarily the diabetes sector. In selecting and evaluating acquisition candidates, we examine the market potential for products that can be distributed through our existing marketing infrastructure and which utilize our strengths in marketing and distribution. We also continue to consider adding from time to time businesses, manufacturing capabilities and new products that capitalize upon our established brand franchise.

Available Information

Materials filed by us with the SEC are also available to the public to read and copy at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We are an electronic filer with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Our website address is www.medirectlatino.org.

Reportable Segments

Financial information relative to our reportable segment described below is set forth in Note 1 to our consolidated financial statements contained in Item 8 of Part II, “Consolidated Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

Diabetes

Through our diabetes segment we provide diabetes testing supplies and related products to our patients suffering from diabetes. We meet the needs of our diabetes patients by:

• providing mail order delivery of supplies directly to our patients’ homes;

• billing Medicare, other government agencies and/or private insurance companies directly for those diabetes related supplies that are reimbursable;

• providing medical call and contact center services and 24-hour telephone support to patients;

• providing technology solutions focused on electronic patient relationship management;

• using sophisticated software and advanced order fulfillment systems to efficiently provide diabetes related products.

Sales from this segment represent 100 % of total net revenues for the fiscal year ended June 30, 2006.

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Approximately 100% of our diabetes patients are covered by Medicare or other third party payors. As a result, changes to the Medicare program can impact our revenues and income. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Medicare Modernization Act”), which was signed into law on December 8, 2003, froze for the 2004 calendar year the reimbursement rates for diabetes testing supplies at the rates that were in effect for the 2003 calendar year. As of January 1, 2005, reimbursement rates for diabetes test strips and lancets were reduced by the percentage difference between the median amounts paid by the Federal Employees Health Benefit Program in the 2002 calendar year and the amount reimbursed by the Medicare program in the 2002 calendar year. The maximum downward adjustment for test strips and lancets for calendar year 2005 was 4.1% for diabetes test strips and 5.36% for lancets, but the actual percentage decrease in payment amounts for any particular provider depends on the geographic distribution of its patients. No further adjustments in reimbursement rates for test strips and lancets are expected through the end of calendar year 2006.

The Medicare Modernization Act further established a program for competitive bidding for certain covered items of durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”), which is currently expected to include certain diabetes testing supplies in certain areas of the United States referred to as Competitive Bid Areas (“CBAs”), beginning in calendar 2007. On May 1, 2006, the Centers for Medicare and Medicaid Services (“CMS”) published the proposed rule for the DMEPOS competitive bidding program. This proposed rule would implement DMEPOS competitive bidding programs throughout the United States in accordance with sections 1847(a) and (b) of the Social Security Act (the “Act”). This program would change the way that Medicare selects suppliers and pays for items in selected competitively bid product groups, under Part B of the Medicare program. By utilizing bids submitted by DMEPOS suppliers to establish applicable payment amounts and select suppliers that will exclusively furnish items included in competitively bid product groups in the CBAs. The competitively bid product groups will include those that CMS identifies as having the highest potential for Medicare program savings, and based on the proposed rule will likely include diabetes testing supplies. CMS expects to phase in these programs over a number of years, with the initial phase occurring in up to ten of the 50 largest metropolitan service areas (“MSAs”) in 2007 and 2008, an expansion in 2009 occurring in up to 80 large MSAs, and additional areas after 2009. CMS is also proposing to introduce a regional or national mail order DMEPOS competitive bidding program in 2010, which is expected to include diabetes testing supplies.

Government Regulation and Reimbursement

As a healthcare supplier, MEDirect is subject to extensive government regulation, including numerous laws directed at preventing fraud and abuse and laws regulating reimbursement under various government programs. The marketing, billing, documenting and other practices of healthcare companies are all subject to government scrutiny. To ensure compliance with Medicare and other regulations, regional health insurance carriers routinely conduct audits and request patient records and other documents to support claims submitted for payment of products shipped to patients. Similarly, government agencies periodically open investigations and obtain information from healthcare providers pursuant to the legal process. Violations of federal and state regulations can result in severe criminal, civil and administrative penalties and sanctions, including disqualification from Medicare and other reimbursement programs.

Healthcare is an area of rapid regulatory change. Changes in the laws and regulations and new interpretations of existing laws and regulations may affect permissible activities, the relative costs associated with doing business, and reimbursement amounts paid by federal, state and other third-party payers. We cannot predict the future of federal, state and local regulations or legislation, including Medicare and Medicaid statutes and regulations. Future legislative and regulatory changes could have a material adverse impact on us.

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Medicare

Medicare is a federally funded program that provides health insurance coverage for qualified persons age 65 or older and for some disabled persons. The majority of the products that we provide are reimbursable by Medicare, and are therefore subject to extensive regulation. Medicare payments are sometimes lower than the payments of other third-party payers, such as traditional indemnity insurance companies. Current Medicare reimbursement guidelines stipulate, among other things, that quarterly orders of diabetes supplies to existing patients be verified with the patients before shipment and that all doctors’ orders for supplies be re-validated every twelve months through the receipt of new doctors’ orders.

We accept assignment of Medicare claims, as well as claims with respect to other third-party payers, on behalf of our patients. We process claims, accept payments and assume the risks of delay or nonpayment. We also employ the administrative personnel necessary to transmit claims for product reimbursement directly to Medicare and private health insurance carriers. Medicare reimburses at 80% of the government-determined fee schedule amounts for reimbursable supplies, and we bill the remaining balance either to third-party payers or directly to patients.

Our compliance with Medicare regulations may be reviewed by federal or state agencies, including the United States Department of Health and Human Services’ Office of Inspector General (“OIG”), the Department of Justice (“DOJ”), and the United States Food and Drug Administration (“FDA”).

Health Insurance Portability and Accountability Act

Numerous federal and state laws and regulations, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), govern the collection, dissemination, use and confidentiality of patient-identifiable health information. As part of MEDirect’s provision of, and billing for, diabetes testing and pharmacy supplies, we are required to collect and maintain patient-identifiable health information. New health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant effect on the manner in which we handle healthcare related data and communicate with payers, and the cost of complying with these standards could be significant. If we do not comply with existing or new laws and regulations related to patient health information, we could be subject to criminal or civil sanctions.

Other Regulation

Numerous federal, state and local laws relating to controlled drug substances, safe working conditions, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances apply to portions of our operations. For example, the Drug Enforcement Administration (“DEA”) regulates controlled drug substances, such as narcotics, under the Controlled Substances Act and the Controlled Substances Import and Export Act. Manufacturers, distributors and dispensers of controlled substances must be registered and inspected by the DEA, and are subject to inspection, labeling and packaging, export, import, security, production quota, record keeping and reporting requirements. To the extent we engage in new activities or expand current activities into new states, the cost of compliance with applicable regulations and licensing requirements could be significant.

We believe that we are currently in compliance, in all material respects, with applicable federal, state and local statutes and ordinances regulating the discharge of hazardous materials into the environment. We do not believe we will be required to expend any material amounts in order to remain in compliance with these laws and regulations or that such compliance will materially affect our capital expenditures, earnings or competitive position.

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We also believe that we are currently in compliance, in all material respects, with other applicable federal, state and local statutes and ordinances regulating controlled drug substances, safe working conditions, and fire hazard control that apply to portions of our operations.

Compliance and Regulatory Affairs Department

Our Compliance and Regulatory Affairs Department works to ensure that we are compliant with applicable fraud and abuse laws and regulations and if violations occur, to promote early and accurate detection and prompt resolution. These objectives are achieved through education, monitoring, disciplinary action and other appropriate remedial measures. Each employee receives a compliance manual that has been developed to communicate our standards of conduct and compliance policies and procedures, as well as policies for monitoring, reporting and responding to compliance issues. The Compliance and Regulatory Affairs Department also works to ensure compliance with all federal, state and local laws and regulations applicable to our businesses, including licensing and certification requirements and requirements applicable to our businesses as federal healthcare program providers. The activities of our Compliance and Regulatory Affairs Department are managed under the guidance of MEDirect’s Chief Operating Officer acting as the Chief Compliance Officer and reporting directly to the Compliance Committee. We continually examine the capabilities and structure of our compliance program and make changes when deemed appropriate.

Competition

The markets we operate in are highly competitive. A number of our competitors and potential competitors have substantially greater capital resources, purchasing power and advertising budgets, as well as more experience in marketing and distributing products. Our competitors include:

• other durable medical equipment providers;

• retail pharmacies;

• healthcare product distributors;

• pharmacy benefit management companies; and

• prescription drug plans with in-house pharmacies.

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We believe that the principal competitive factors in the diabetes markets include the ability to identify and respond to patient needs, and the quality and breadth of product offerings. We believe that we compete effectively because of:

• MEDirect’s brand recognition, supported by Hispanic television advertising campaign;

• our centralized call center operations and personnel, specifically designed and trained to service the needs of Hispanic seniors with chronic diseases;

• our significant investment in employee training, computer systems and order processing systems to assure high quality patient service, cost-effective order processing, and regulatory compliance.

Major Customers

For the fiscal year ended June 30, 2006, no customer represented more than 10% of our consolidated revenues. However, most of our revenue does not come from the customers we service but through third party reimbursement, primarily Medicare. As of June 30, 2006, the amounts included in net accounts receivable due from Medicare were $1,616,756. One hundred percent (100%), of consolidated net revenues for the fiscal year ended June 30, 2006, were reimbursable by Medicare or third party payors for products provided to Medicare beneficiaries.

Major Products

For the fiscal year ended June 30, 2006, gross sales of diagnostic testing supplies and related products amounted to, $8,791,894, contractually adjusted to $6,730,906, in net sales from continuing operations for twelve months ended June 30, 2006 which is reimbursable under Medicare programs for products provided to Medicare beneficiaries and third party payors.

Accounts receivable allowances consist of an allowance for doubtful accounts, an allowance for product returns, and other sales allowances. As of June 30, 2006, accounts receivable allowances were $1,424,276 or 38% of gross accounts receivable.

Working Capital

Our Company requires material amounts of working capital to operate. We need to maintain an adequate inventory of diabetes testing supplies and prescription drugs so we can rapidly ship to meet our customer needs. However, third-party reimbursement generally takes longer than 30 days. Our gross accounts receivables at June 30, 2006 were $3,728,459, adjusted to $2,304,183 net of our allowance for doubtful accounts of $1,424,276, while our inventory was $84,006 and gross accounts payable was $1,974,080. We use cash flow from our businesses and credit facility to support our working capital needs.

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Intellectual Property

MEDIRECT which is referenced in this Annual Report on Form 10-K, is a registered trademark of MEDirect Latino, Inc. We also maintain several other registered trademarks, which we monitor on a regular basis.

Geographic Scope of Operations

In each of the last three fiscal years, our net revenues were generated in the United States. All of our operating assets are located in the United States.

Employees

As of June 30, 2006, we had 86 full-time employees. None of our employees are covered by collective bargaining agreements. We believe that our relations with our employees are good.

Item 1A. Risk Factors

Our business is subject to a number of risks. You should carefully consider the following risk factors, together with all of the other information included or incorporated by reference in this report, before you decide whether to purchase our common stock in the open trading market. The risks set out below are not the only risks we face. If any of the following risks occur, our business, financial condition and results of operations could be materially adversely affected. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

We have a history of losses, limited revenues and may not become profitable.

We are an early stage company. To date, we have limited revenues and limited assets and have experienced operating losses since inception. We had a net operating loss of $24.6 million for the year ended June 30, 2006 and an accumulated deficit of $28.9 million as of June 30, 2006. The actual operating loss from operations was approximately $6.0 million or 24%. The balance of the current year loss was attributable to the valuation of stock issued, and interest and finance costs of $18.6 million or 76%. For the periods presented in this report, the Company used the ‘Black Scholes’model to calculate stock valuations for options and warrants, in accordance with SFAS No. 123R. There can be no assurance that the Company will generate significant revenues in the future or that we will be able to generate sufficient cash flow to meet expenses. Although initial operations support the profit potential of the business model, there can be no assurance results of operations or our business strategy will achieve significant revenue or profitability in the near future.

Limited operating history makes an evaluation of MEDirect’s business difficult.

There is a limited amount of operating history, which makes it difficult to evaluate our current business and prospects or to accurately predict its future revenues or results of operations. The business model, and accordingly the revenue and income potential, is not fully proven. In addition, the Company is subject to risks and difficulties frequently encountered by early-stage operations. There can be no assurance that we will be able to adapt to these factors and our failure to do so will adversely affect our operations.

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We have a limited trading market for our securities and shareholders may not be able to sell at a particular time for a certain price.

Our limited market for trading creates an illiquid market for our securities. As such, shareholders may not be able to sell the amount of shares they wish to sell at any given time and, if they sell, the market price of the securities may be depressed.

The application of the “penny stock” rules could adversely affect the market price of our common shares and increase our 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 million or annual income exceeding $200,000 or $300,000 together with their spouses). 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 in 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 SEC 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 stock, and may result in decreased liquidity for our common stock and increased transaction costs for sales and purchases of our common stock as compared to other securities. These and other factors may make it difficult for our stockholders to sell their shares in the open market if and when eligible to do so. In addition, stock prices for many biotechnology companies fluctuate widely for reasons that may be unrelated to operating results. These fluctuations, as well as general economic, market and political conditions such as interest rate increases, recessions or military or political conflicts, may materially and adversely affect the market price of our common stock, thereby causing you to lose some or all of your investment.

We are relying on management to manage our growth strategy otherwise we may not become profitable.

Implementation of our growth strategy may impose significant strain on our management, operating systems and financial resources. Failure to effectively manage our growth or unexpected difficulties during expansion could have a negative impact on results of operations and financial conditions.

Our business is subject to government regulation and our success depends on our ability to maintain full compliance with applicable regulations.

The healthcare and products industry is subject to numerous federal, foreign, state and local government regulations including those relating to the sale of our products and services. We must comply with FDA, Medicare and HIPPA guidelines and regulations as well as laws and regulations governing our relationship with our employees, including minimum wage requirements, unemployment, overtime, workers’ compensation, working and safety conditions and citizenship requirements. Failure to comply with any or all of these regulations would adversely effect our operations and could cause our business to cease.

We are not profitable and the potential profitability of our business will decrease if recurring orders from our customers are not received.

The profitability of our business depends in large part on recurring and sustained reorders of products for the treatment and management of diabetes. Reorder rates are inherently uncertain due to several factors, many of which are outside the Company’s control, including changing customer preferences, customer transition to other competitors, customer transition to extended care facilities, customer mortality and general economic conditions. We generally incur losses and negative cash flow with respect to the first order from a new customer, due primarily to the marketing and regulatory compliance costs associated with initial customer qualification.

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If we cannot obtain our products for the treatment of diabetes at reasonable prices, our profits may decline.

The prices at which we purchase products for the treatment of diabetes are critical to our business. The reimbursement rate for each medical product is at a fixed price determined by Medicare. As such, our gross profit margin on each medical product is dependent upon the price at which we purchase the product from our contract manufacturers. If we are not able to obtain our medical products at competitive rates from our contract manufacturers, our profitability will be severely impaired.

We could experience significantly reduced profits if improved technologies that reduce or eliminate the need for consumable testing supplies are developed for glucose monitoring.

The majority of the consumable testing supplies are used to draw and test small quantities of blood for the purpose of measuring and monitoring glucose levels. Numerous research efforts are underway to develop more convenient and less intrusive glucose measurement techniques. The commercialization and widespread acceptance of new technologies that may eliminate or reduce the need for consumable testing supplies could negatively affect our operations. However, we presently know of no commercially viable alternative which would affect our market.

We could lose customers and revenues to new or existing competitors.

Although management believes that there is no significant direct competition in the Hispanic marketplace, competition from other sellers of direct-to-consumer diabetic products is intense and expected to increase. Many of our competitors and potential competitors are large companies with well-known names and substantial resources. These companies may develop products and services that are more effective or less expensive than any that we are developing or selling. They may also promote and market these products more successfully than we promote and market our products.

Our ability to achieve or maintain profitability will be constrained if we do not effectively manage our anticipated expansion of operations.

We expect to significantly increase our employee base as we further implement our business model and develop our product and service offerings. As we expand our operations, we expect to increase the size of our employee base which will require training and additional management duties. Our management and operations are likely to be strained by this anticipated growth.

Currently, the Company does not distribute any products or services which require a pharmacy license, however, if the Company where to distribute pharmaceutical drugs and Pharmacy licensing is delayed, our ability to generate revenues would be diminished.

Currently, we do not distribute any products or services which require a pharmacy license in any state or municipality. In general, if we were to seek pharmacy licensing to distribute pharmaceutical drugs, those pharmacy operations are regulated by each state.

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We could be liable for harm caused by products that we sell.

The sale of medical products entails the risk that users will make product liability claims. A product liability claim could be expensive. Our insurance may not provide adequate coverage against these claims; however, the Company requires every manufacture to name the Company as ‘additionally insured’ and requires each manufacture to have its general liability policy on file with the Company.

If our suppliers or we do not comply with applicable government regulations, we may be prohibited from selling our products.

The Food and Drug Administration and other regulatory agencies regulate many of the products that we are selling and will sell in the future. If any of these agencies mandate a suspension of production or sales of our products or mandate a recall, we may lose sales and incur expenses until we are in compliance with the regulations or change to another acceptable supplier.

Our quarterly revenues or operating results could vary, which may cause the market price of our common stock to decline.

We have experienced fluctuations in our quarterly operating results and anticipate that such fluctuations could continue. Results may vary significantly depending on a number of factors, including:

· Changes in reimbursement guidelines and amounts;

· Changes in regulations affecting the healthcare industry;

· Change in the mix or cost of our products;

· The timing of customer orders;

· The timing and cost of our advertising campaigns;

· The timing of the introduction or acceptance of new products and services offered by us or our competitors; and

· The availability of “just in time” inventory.

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We could experience significantly reduced revenues and profits if Medicare or other government programs change, delay or deny reimbursement.

Sales of our products for the treatment and management of diabetes depend on the continued availability of reimbursement of our customers by government and private insurance plans. Any reduction in Medicare or other government programs or private plan reimbursements currently available for our products would reduce our revenues. Without a corresponding reduction in the cost of such products, the result would be a reduction in our overall profit margins. Similarly, any increase in the cost of such products would reduce our overall profit margin unless there was a corresponding increase in Medicare or other government program reimbursement. Our profits could also be affected by the imposition of more stringent regulatory requirements for Medicare or other government program reimbursements or adjustments to previously reimbursed amounts.

If our suppliers or we do not comply with applicable government regulations, we may be prohibited from selling our products.

The majority of the products that we sell are regulated by the FDA and other regulatory agencies. If any of these agencies mandate a suspension of production or sales of our products or mandate a recall, we may lose sales and incur expenses until we are in compliance with the regulations or change to another acceptable supplier.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters are located in Pompano Beach, Florida in a 23,336 square foot office and warehouse facility. The lease is a five year lease commencing April 1, 2006 and the current payment is $18,756 with 5% annual increases in base rent. We consider our facility to be adequate for our current requirements.

The Company currently maintains offices in San Juan, Puerto Rico, which consists of 400 square feet and is staffed by provider relations personnel. The lease is a month to month lease and the current payment is $1,300 per month. We consider this facility to be adequate for our current operations.

On November 11, 2005 the Company entered into a three year lease of office equipment. The lease calls for a rental of $16,026 per year.

On June 9, 2006 the Company entered into a one year lease for a residential property in Lighthouse Point, Florida commencing June 10, 2006. The lease requires an annual rental of $36,000 per year, including real estate taxes. The lease provides for the lessee to have the right to terminate the lease after seven months by giving notice and paying a termination fee equal to one month rent. This lease has been terminated.

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On April 7, 2006 the Company entered into a one year lease for a residential property in Fort Lauderdale, Florida commencing April 8, 2006 for two major stockholders and executives of the Company. The lease requires an annual rental of $60,000 including property taxes. Rental expenses are charged against the amount allowed in the service agreements with the two executives for housing costs.

Item 3. Legal Proceedings

Datascension, Inc. v. MEDirect Latino, Case No. 32 103 00458 06, before the American Arbitration Association, Miami-Dade County, Florida. On or about June 8, 2006, Datascension, Inc. filed a Statement of Claim against the Company for breach of written contract, account stated, open book account, unjust enrichment and quantum meruit seeking damages in the amount of $212,061.28 for alleged unpaid services in connection with compiling marketing data, consisting primarily of telephone interviews of consumers. The Company has denied Datascension, Inc.’s claims and is vigorously defending this action. The Company has filed a Counterclaim for Datascension, Inc. in excess of $2,000,000.00 for breach of contract, fraud and negligence alleging due to Datascension, Inc.’s failure to provide the required services and damages as a result of said failure. This action is in the early stages and the Company is unable to opine about the likelihood of the outcome.

On or about May 2006, EKN Financial Services filed a Statement of Claim against MEDirect, Case No: L06-170 before the American Arbitration Association, New York, New York claiming breach of an agreement to act as a private placement agent for MEDirect during a given time frame. EKN is claiming the amount owed pursuant to the agreement is $300,000. Plaintiffs= claim is for breach of contract, MEDirect is vigorously defending this action and believed that EKN Financial has committed fraud by misrepresenting the date for which agreement was to begin.

On or about August 2006, Diagnostic Devices, Inc. (DDI) filed a complaint against MEDirect Latino, Raymond Talarico and Debra Towsley , Dr. Julio Pita, Thomas Erban, and Thomas Johansen, Case No: 06-15855CA22 in Miami-Dade County, Florida, 11^th Judicial Circuit, claiming MEDirect owes DDI approximately $183,536.84 for services rendered/provided. DDI is also attempting to seek treble damages in the amount of $550,611.00. DDI is a vendor. Currently pending are all defendants= Motion to Dismiss the Complaint. This complaint is for goods sold or delivered ;civil recovery from criminal wrongdoing. This case is currently in settlement discussion and it is believed it will result in same.

The Company may be involved in a litigation alleging breach of contract and other matters in connection with Ms. Melissa Rice, a former employee of the Company for approximately six (6) weeks. Ms. Rice sent a written demand letter for 100,000 shares of the Company, and $16,000 citing unpaid compensation. Ms. Rice has Company property and is refusing to return said property unless she received said compensation. The Company has denied Ms. Rice’s claim and has sent her a demand letter for the immediate return of the Company’s files, and is filing an action with the Florida Bar alleging violations of ethics and undue enrichment. Following, the Company may take additional action it deems necessary to recover the Company’s property.

The Company may be involved in litigation alleging breach of contract and other matters in connection with Ms. Melissa Rice, a former in-house counsel of the Company for approximately six (6) weeks.  Ms. Rice sent a written demand letter claiming 100,000 shares of the Company’s common stock and $16,000 in unpaid compensation.  Ms. Rice has Company property and is refusing to return said property unless she receives said compensation.  The Company has denied Ms. Rice’s claim and has sent her a demand letter for the immediate return of the Company’s property, and is filing an action with the Florida Bar alleging ethical violations including failure to honor attorney-client privilege. Following, the Company may take civil action for replevin and unjust enrichment.

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

No matters were submitted to a vote of our security holders during the last quarter of the fiscal year ended June 30, 2006

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a) Market Information

As of June 30, 2006, our common stock was held by 185 holders of record. Our common stock is traded on the NASDAQ National Daily Quotation Bureau Pink Sheets under the symbol MLTO.

The following table sets forth the high and low sales price per share of common stock on the National Daily Quotation Bureau Pink Sheets:

	Fiscal Year 2006
Quarter Ended	High		Low
June 30	$	4.05	$	3.00
March 31	$	6.12	$	5.76

	Fiscal Year 2005
Quarter Ended	High		Low
June 30 (1)	$	3.50	$	2.10
September 30	$	4.00	$	2.10
December 31	$	5.65	$	4.25

1. The shares were initially traded during the quarter ended June 30, 2005.

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(b) Holders

As of June 30, 2006 there were approximately 185 holders of the Company’s common stock.

(c) Dividends

We currently intend to retain any future earnings for use in the expansion of the business, and therefore do not intend to pay shareholder dividends. The declaration and payment of cash dividends, if any, will be at the discretion of the Board of Directors of the Company and will depend, among other things, on our earnings, capital requirements and financial condition.

(d) Securities authorized for issuance under equity compensation plans

Not applicable.

Item 6. Selected Financial Data

The following selected consolidated financial data should be read in conjunction with the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations included elsewhere in this Annual Report on Form 10-K. The balance sheet data as of June 30, 2006 and 2005 and the statements of operations data for the three years ended June 30, 2006 have been derived from the audited consolidated financial statements for such years, included elsewhere in this Annual Report on Form 10-K. The balance sheet data as of June 30, 2006 and 2005, has been derived from the audited consolidated financial statements for such years, not included in this Annual Report on Form 10-K. Furthermore, results for the year ended June 30, 2006 are not necessarily indicative of results that may be expected for our next fiscal year or any other future period and included nonrecurring, one time, conversions of preferred shares to common stock and the issuance of common shares at Fair Market Value (FMV), in accordance with SFAS No. 123R for services rendered by consultants, employees and shareholders. You should read carefully the financial statements included in this Form 10-K, including the notes to the financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The selected financial data in this section are not intended to replace the financial statements.

Fiscal Year Ended June 30,		2006		2005		2004
Statements of Operations Data:
NET revenues	$		6,730,906	$	278,598	$	109,261
Cost of sales			1,413,883		117,095		99,205
Advertising and promotion			4,387,648		152,657		107,339
Officers salaries & consulting fees-related parties			400,000		323,500		268,269
Officers benefits - related parties			11,809,215		296,000		96,100
Selling and administrative			10,108,236		865,625		608,485
Depreciation and amortization	$		79,694	$	41,455	$	26,503
Allowance for doubtful accounts			1,744,346		15,477		6,058
Interest and financing cost	$		1,372,472	$	1,029,400	$	67,895
Net Loss	$		(24,584,588)	$	(2,562,611)	$	(1,170,593)
Balance Sheet Data:
Current assets	$		2,508,427	$	51,606	$	36,440
Total assets			2,939,043		186,151		128,982
Current liabilities			3,255,303		1,987,662		701,426
Long-term liabilities			-0-		-0-		793,020
Total stockholders’ deficit	$		(316,260)	$	(1,801,511)	$	(1,365,464)

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion and analysis should be read in conjunction with “Selected Financial Data” and our financial statements and related notes thereto included elsewhere in this registration statement. Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this registration statement should be read as applying to all related forward-looking statements wherever they appear in this registration statement. Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause our actual results to differ materially from those anticipated include those discussed in “Risk Factors,” “Business” and “Forward-Looking Statements.”

Results of Operations

From Inception to June 30, 2006

Revenues.

Revenues until April, 2005 were derived solely through our direct response, television test marketing in four geographic areas, and totaled approximately $350,000. In March, 2005, we substantially increased our gross revenues due to the launch of our media campaign in Puerto Rico, and our national launch on September 20, 2005.

We tested our direct response, television advertising marketing plan, message and internal protocols in select targeted markets domestically and in Puerto Rico from the fourth quarter, 2003, through the fourth quarter, 2004. Based on confirmative data, we launched our Puerto Rico advertising initiatives in the first quarter, 2005, which continues today. We initiated our direct response national marketing campaign on Telemundo Television Network with our commercial airing nationally on September 20, 2005. Based on successful domestic testing of our media, message and internal protocols, we commenced our national network direct response advertising initiatives. The following sets forth the gross revenues realized by the Company from our operation since the launch of our media campaigns in Puerto Rico and nationally;

2006 Fiscal Quarterly results are as follows:

§ First Quarter fiscal 2006 gross sales was $534,263 contractually adjusted to $424,244 up 420% over Fourth Quarter 2005 net sales.

§ Second Quarter fiscal 2006 gross sales was $1,555,237 contractually adjusted to $1,006,952 up 137% over First Quarter 2006 net sales.

§ Third Quarter fiscal 2006 gross sales was $2,714,276 contractually adjusted to $1,887,800 up 87% over Second Quarter 2006 net sales.

§ Fourth Quarter fiscal 2006 gross sales was $3,988,118 contractually adjusted to $3,411,910 up 81% over Third Quarter 2006 net sales.

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Gross Margins.

During the year ended June 2006, gross margins increased from 74% to 79%. We expect that our gross margin for the foreseeable future will be maintained at current levels primarily as a result of the continued expected increase in net revenues and more favorable terms from our suppliers, which offset the Medicare reimbursement reductions for diagnostic testing supplies that went into effect January 1, 2005. No further adjustments in reimbursement rates for test strips and lancets are expected through the end of calendar year 2006.

Selling, general and administrative.

SG&A expenses include the wages and salaries of administrative and sales personnel, as well as other general overhead costs not directly related to product costs. SG&A expenses for wages and salaries were approximately $275,000 from inception to March 2005. From April 2005 through December 2005, the Company averaged approximately $525,000 per quarter in such expenses. From January 2006 to June 2006 the Company averaged approximately $7.1 million per quarter in such expenses. These increases over the base period ended March 2005, were due to the increasing of our staffing to 86 employees as of June 2006, as well as the costs attributable to stock based compensation, to our publicly traded status, and our move to become a fully reporting company with the SEC.

Income from operations.

Gross sales revenue from operations beginning in July, 2005, when significant sales began, through June, 2006 was $8,791,894 compared to $629,445 since we began operations in 2002 until June, 2005. This increase was primarily attributable to a launch of a media campaign in Puerto Rico in March 2005, and the national launch of our media on September 20, 2005. We have had losses since our existence began of $28.9 million, which includes the cost of the Fair Market Value (FMV) of stock issued to consultants, employees and shareholders as well as financing costs of options issued totals approximately $19.4 million.

Interest and financing cost.

The Company incurred interest and financing costs for year ended June 30, 2006, 2005 and 2004 of $1,372,472, $1,029,400 and $67,895 respectively.

Income tax expense.

The Company has incurred net operating losses since inception. At June 30, 2005 the Company had a net operating loss carry forward amounting to approximately $1.7 million, increasing to approximately $27.2 million by June 30, 2006, for U.S. tax purposes which begin expiring in the year 2023.

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General Trends and Outlook 

We believe that our immediate outlook is extremely favorable, as we believe there is no other company competing with us on a nationwide basis in our market niche. However, there is no assurance that such national competitor will not arise in the future. We do not anticipate any major changes in the Medicare reimbursement regimen in 2007. We believe that 2007 will be a significant growth year, and besides the operational business strategies discussed above, we intend to implement the following plans in 2007 in order to maintain and expand our present growth rate.

We plan to increase our staff in San Juan, Puerto Rico with customer service representatives and logistical support personnel to expand current distribution services and reduce operating costs. Additionally, we plan, through this local presence, to expand reimbursement services to the Commonwealth’s dually eligible Medicare-Medicaid market. According to recent Commonwealth data, this expansion potentially adds over 200,000 customers to our market opportunity.

We may utilize this facility to directly distribute products to our Puerto Rican customers, which are currently being serviced from our 23,700 square foot office/warehouse facility in Florida.

On October 17, 2006 the Company accepted a non-binding loan proposal with Granite Creek Partners, a private investment fund, for a facility totaling $7.0 million, of which $5.0 million will be available at closing and the balance of $2.0 million on January 1, 2007.

Liquidity and Capital Resources 

Liquidity

Cash flows from operating activities.

Net cash used by operating activities since inception to June 30, 2006 has been approximately a negative $7.6 million due to the significant advertising and other operating expenses that we have incurred. Significant increases in the growth of the Company have resulted in material changes in the Allowance for Doubtful Accounts, Accounts Receivable, and Accounts Payable.

Preferred C Stock

The notes and loans payable to stockholders in the amount of $711,968.00 which were converted into Series C preferred stock were converted under the terms of a note dated July 25, 2002.  The terms of this note permitted the holders to convert their notes into any class of stock issued by the Company.  On July 2, 2004 the Board resolved to create Series C preferred stock specifically for the purpose of conversion of the aforementioned notes.  The note holders agreed to convert their notes in whole, or in part, at some future time, into shares Series C preferred stock at $0.95 per share.  Series C preferred stock allowed the preferred shareholders to convert the preferred shares, on issuance, into shares of common stock on a one for one basis. The Company’s articles of incorporation authorized the issuance of preferred shares prior to the issuance of the Preferred C shares. However, the designations associated with the issuance of the Preferred C shares were not filed at the time of their issuance. The Company has filed the designations for both the Series B and the Series C Preferred shares as of the date of this filing. Accordingly, such shares are deemed to be properly issued. Both the Series B and Series C Preferred shares were not recognized as properly issued until such time as the designations were filed.

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To determine if an embedded beneficial conversion feature was present in the Series C preferred stock, the Company utilized the guidance provided in EITF 98-5.  In determining a beneficial conversion feature under EITF 98-5 paragraph 5 , the embedded beneficial conversion feature present in convertible securities should be valued separately at issuance.  The value should be calculated at the commitment date as the difference between the conversion price, in this case $0.95, and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible (intrinsic value).  The estimate of fair value should be used based on the best information available in the circumstances if a quoted market price is not available.  Since the Company was privately held at July 2, 2004 and there were no recent sales of common stock to unrelated parties, the discounted present value of projected earnings was used to determine the fair value of the underlying common stock.  Based on this valuation technique, the Company determined that the fair value of the common stock, at the commitment date, was $0.20 per share.  Since the conversion price of the Series C preferred stock exceeded the fair value of the common stock, it was concluded that no beneficial conversion feature existed.

Capital expenditures.

Since our inception, the capital equipment purchased by us includes telecom equipment, computer equipment and business furniture and equipment. Total capital expenditures, from our inception to June 30, 2006, were approximately $554,000, of which approximately $220,000 represents leasehold improvements to the new facility.

Capital Resources 

Historically, we have relied upon common stock and preferred stock offerings, as well as subordinated loans from management and shareholders to pay our operating and media costs. All offerings were made in compliance with Regulation D and Section 4(2) of the Securities Act of 1933, as amended, where applicable.

Equity offerings or subordinated debt financings to date include:

Type of Offering	Amount of Offering		Offering Price Per Share (1)		Closing Date
Series A Preferred	$	329,604	$	2.50		12/2002
Debt Offering	$	645,800				07/2003
Series B Preferred	$	460,140	$	2.30		11/2004
Common Stock	$	754,456	$	2.00		03/2005
Debt Offering	$	537,000				09/2005
Common Stock	$	2,345,310	$	1.75		11/2005

⁽¹⁾ The Financial Statements reflect the diluted price per share. The dilution reflected in the financial statements takes into account all previously issued shares, the shares issued as part of each respective offering, and expenses incurred in the issuance of the shares.

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Contractual Obligations as of June 30, 2006	Total		Payments Made 2006		Payments Due 2007		Payments Due 2008-2011		Thereafter
Short-term debt	$	1,050,000	$	35,000	$	1,015,000		-0-		-0-
Lease Obligations	$	2,572,104		-0-	$	288,270	$	959,111	$	1,324,723

Off-Balance Sheet Arrangements

As of June 30, 2006, we had no off-balance sheet arrangements.

Critical Accounting Policies 

The preparation of our financial statements in conformity with GAAP requires us to make certain assumptions and estimates that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the use of assumptions and estimates inherent in the reporting process, actual results could differ from those estimates.

Revenue Recognition.

The Company is a federally licensed Part B participating provider to Medicare. A significant portion of devices usually is paid for by third parties such as Medicare, and various health insurance carriers under statutory provisions or other arrangements in amounts that can be significantly different from, and frequently less than, the entity’s establishment rates. The Company initially verifies the eligibility of the customer and the products are then shipped and billed simultaneously. We electronically bill Medicare and the claims are electronically reimbursed. Revenue is recognized when the products are shipped to the customer and are recorded at the net realizable amounts. Medicare and third party payors establish rates that we are paid. We invoice all third party payors when the products are shipped hence revenue is recognized. The provisions for contractual adjustments and discounts are recognized on an accrual basis and deducted from gross service revenue to determine net service revenue. We record revenue at the amounts expected to be collected from government agencies, other third-party payers and patients. Our billing system generates contractual adjustments based on government and third-party fee schedules for each product shipped; as a result estimates of contractual adjustments are not required. Revenues and receivables are booked net of contractual allowances on a product-by-product bases. Revenue recognition is delayed for product shipments for which we have not yet received the required written documentation until the period in which the documentation is collected and verified. We analyze various factors in determining revenue recognition, including a review of specific transactions, current Medicare regulations and reimbursement rates, historical experience and the credit-worthiness of patients. Revenue related to Medicare reimbursements is calculated based on government-determined reimbursement prices for Medicare-covered items. Contractual adjustments, discounts, and an allowance for uncollectibles are recorded to report the receivables for health care services at net realizable value. Returns occur occasionally when the patient either refuses the shipment or when we have an incorrect address. Bad debt expense is recorded for the uncollectible receivables.  

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Allowance for Doubtful Accounts.

We prepare our allowance for doubtful accounts receivable based on our past experience of historical write-offs, our current customer base and our review of past due accounts. We are constantly reviewing and analyzing our collection efforts. The typical time it takes to collect from Medicare is 30 to 60 days, if each part of the process is exact. If a charge is initially rejected by Medicare it can generally take an extended period of time to investigate and resolve before payment is received It can take up to 180 days to collect from some insurance companies and as little as 30 days with others. The Company’s current accounting policy is to provide a minimum allowance equal to a percentage based on historical data. We believe this estimate, although higher than industry standards, is justified because of the Company’s youth and growth rate. Due to the numerous minor outstanding balances from customers the Company does not find it cost effective to use the services of lawyers or collection agencies.

An analysis of the provision is as follows:

Year-End

	6/30/2006			6/30/2005			6/30/2004
Bad debt expense	$	1,744,346		$	15,477		$	6,058
Bad debt allowance	$	1,424,276		$	21,535		$	18,198
Bad debt expense as a percentage of net sales		26	%		6	%		6	%
Bad debt allowance as a percentage of receivables		38	%		34	%		57	%

The provision against receivables at June 30, 2006 increased due to the reimbursement cycle of secondary providers. The percentage provision against receivables increased due to increased amounts falling into the over 90 day receivable aging because of the reimbursement cycle of secondary providers, rebilling to Medicare and self pay receivables. Circumstances that give rise to rebillings include , if a claim submitted is denied, has errors in submission, or if the transmission was not received at Medicare. Also a rebill can occur if the claim is classified as claim not found or claim cannot be identified. Rebillings have no effect on the aging as the agings are aged from date of service and not date of billing. Rebillings are insignificant and not material at this time. There was no change in the company sales mix but larger sales resulted in an increased dollar amount of sales to secondary providers, rebilling to Medicare and self pay receivables, which required an increased allowance for doubtful accounts. Therefore, the percentage amount within the +90 day column increased which, conservatively necessitated an increase in the allowance.

Between June 30, 2004 and June 30, 2005 there was no actual write off of bad debts against the provision. The Company wrote off $341,535 for year ended June 30, 2006. The amount provided for each year/period was added to the existing provision.

Any change in estimates on the unsettled amounts from third-party payors would necessitate either an increase or decrease in the level of the overall allowance and a corresponding effect on net income. Only approximately 3% of the receivables are payable by third party payors. In view of this the Company believes that its accounting policy in this area is very conservative.

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An aging schedule of receivables at June 30, 2005 is as follows:
	Current	Over 30 Days	Over 60 Days	Over 90 Days	Total
	39,799	2,168	2,220	18,995	$63,182
An aging schedule of receivables at June 30, 2006 is as follows:
	Current	Over 30 Days	Over 60 Days	Over 90 Days	Total
	1,586,635	301,403	173,150	1,667,271	3,728,459

The Company’s accounting system does not currently allow an exact breakdown between the different payor mixes. This does not reduce the Company’s ability to obtain enough information to adequately allow for possible non-payments due to the fact that statistical information available shows that 70% of the Company’s business is with Medicare and a further 27% is with insurance companies, where payment is reasonably assured. The element where non-payment is most certain is therefore extremely small.

There is no set threshold amount and age for account balance write-offs. Any write-off is a decision of senior management. Any write offs occur on an account by account basis. The write off process is manual and is not computer generated where automatic write-offs would be generated by the system.

Impairment of Long-lived Assets.

We review long-lived assets for impairment when triggering events occur suggesting deterioration in the assets recoverability or fair value. Recognition of an impairment charge is required if future expected net cash flows are insufficient to recover the carrying value of the asset. Our forecast of future cash flows used to perform impairment analysis includes estimates of future revenues and profitability based on our historical results and analysis of future Medicare reimbursement which is fundamental in assessing demand for our services. If we are unable to achieve these cash flows, our estimates would be revised, potentially resulting in an impairment charge in the period of revision.

Depreciable Lives of Property, Plant and Equipment.

Our property, plant and equipment are capitalized at historical cost and depreciated over the useful life of the asset. Our estimation of this useful life is based on circumstances that exist in the healthcare industry and information available at the time of the purchase of the asset. As circumstances change and new information becomes available, these estimates could change. We amortize these capitalized items using the straight-line method. Capital assets are depreciated over their useful lives ranging from three to seven years, depending on the classification of the asset.

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Tax Accounting.

We account for our income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires the recognition of amounts of taxes payable or refundable for the current year and an asset and liability approach in recognizing the amount of deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our financial statements or tax returns. We determine deferred taxes by identifying the types and amounts of existing temporary differences, measuring the total deferred tax asset or liability using the applicable tax rate and reducing the deferred tax asset by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Our methodology for recording income taxes requires judgment regarding assumptions and the use of estimates, including determining our annual effective tax rate and the valuation of deferred tax assets, which can create variance between actual results and estimates. The process involves making forecasts of current and future years’ taxable income and unforeseen events may significantly affect these estimates. Those factors, among others, could have a material impact on our provision or benefit for income taxes.

Stock Based Compensation.

In accordance with SFAS No. 123R, the account for stock issued to employees, shareholders and third parties for services rendered at fair value.

Preferred C Stock Conversion

Notes payable and accrued consulting fees were converted to Preferred C Stock at $0.95 per share. This was in excess of the price per share of Common Stock issued for cash during that fiscal year, based on the rights and preferences attributable to the Preferred C Stock which ranked superior to Common Stock. The Company believes that the value of $0.95 per share for Preferred C Stock represents its fair value for conversion purposes.

The notes and loans payable to stockholders in the amount of $711,968.00 which were converted into Series C preferred stock were converted under the terms of a note dated July 25, 2002.  The terms of this note permitted the holders to convert their notes into any class of stock issued by the Company.  On July 2, 2004 the Board resolved to create Series C preferred stock specifically for the purpose of conversion of the aforementioned notes.  The note holders agreed to convert their notes in whole, or in part, at some future time, into shares Series C preferred stock at $0.95 per share.  Series C preferred stock allowed the preferred shareholders to convert the preferred shares, on issuance, into shares of common stock on a one for one basis.

To determine if an embedded beneficial conversion feature was present in the Series C preferred stock, the Company utilized the guidance provided in EITF 98-5.  In determining a beneficial conversion feature under EITF 98-5 paragraph 5 , the embedded beneficial conversion feature present in convertible securities should be valued separately at issuance.  The value should be calculated at the commitment date as the difference between the conversion price, in this case $0.95, and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible (intrinsic value).  The estimate of fair value should be used based on the best information available in the circumstances if a quoted market price is not available.  Since the Company was privately held at July 2, 2004 and there were no recent sales of common stock to unrelated parties, the discounted present value of projected earnings was used to determine the fair value of the underlying common stock.  Based on this valuation technique, the Company determined that the fair value of the common stock, at the commitment date, was $0.20 per share.  Since the conversion price of the Series C preferred stock exceeded the fair value of the common stock, it was concluded that no beneficial conversion feature existed.

-23-

Recently Issued Accounting Pronouncements 

In May 2005, the FASB issued SFAS No. 154 “Accounting Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB statement No. 3” which is the result of the FASB’s project to reduce differences between U.S. and international accounting standards. SFAS No. 154 requires retrospective application to prior periods' financial statements of changes in accounting principles, unless it is impracticable2005. The Company has not yet determined the impact of applying the provisions of SFAS No. 154.

In September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements” which defines fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has not yet determined the impact of applying the provisions of SFAS No. 157.

Effect of Inflation 

We do not believe that inflation has had a material effect on our business, results of operations or financial condition during the past two years.

Qualitative and Quantitative Disclosure about Market Risk 

We have not entered into any hedging agreements or swap agreements. Our principal market risk is the risk related to our customers and Medicare. (See “Risk Factors”)

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

None.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

MEDirect Latino, Inc.

We have audited the accompanying consolidated balance sheets of MEDirect Latino, Inc. and its Subsidiaries (the “Company”) as of June 30, 2006 and 2005 and the related consolidated statements of operations, shareholders’ deficit, and cash flows for each of the years in the three-year period ended June 30, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the 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 audits 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to the above present fairly, in all material respects, the financial position of the Company as of June 30, 2006 and 2005, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2006, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 16 to the consolidated financial statements, the Company’s inability to obtain outside long term financing and recurring losses from operations raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are also described in Note 16 to the consolidated financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

//Berkovits, Lago & Company, LLP

Fort Lauderdale, Florida

October 18, 2006

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Item 8. Financial Statements and Supplementary Data

MEDIRECT LATINO, INC.

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2006 AND 2005

ASSETS
		2006			2005
Current assets:					Restated
Cash	$	77,681		$	202
Accounts receivable, net of allowance for doubtful accounts of $1,424,276 and $21,535
as of 2006 and 2005, respectively		2,304,183			41,647
Inventories		84,006			8,596
Prepaid expenses and other current assets		42,557			1,161
Total current assets		2,508,427			51,606
Property, plant and equipment, net		401,908			123,185
Other assets:
Deposits and other assets		28,708			11,360
Total assets	$	2,939,043		$	186,151
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Cash overdraft	$	-		$	17,075
Accounts payable trade		1,974,080			89,426
Accrued expenses payable - related parties		117,900			-
Accrued expenses payable		148,323			231,008
Derivative financial instruments		-			943,104
Notes payable		1,015,000			707,049
Total current liabilities		3,255,303			1,987,662
Stockholders' deficit:
Series A convertible preferred units, no par value, 1,000,000 and 1,200,697 shares authorized,
issued and outstanding at June 30, 2006 and 2005, respectively		-			-
Convertible preferred stock - $.0001 par value, 3,000,000 shares authorized,
-0- and 426,653 shares preferred B issued and outstanding at June 30, 2006 and 2005, respectively		-			43
746,133 shares preferred C issued and outstanding at June 30, 2006 and 2005, respectively		75			75
Common stock - $.0001 par value, 50,000,000 shares authorized, 16,951,739 and 9,565,339
shares issued and outstanding at June 30, 2006 and 2005, respectively		1,695			957
Additional paid-in capital (this includes amounts totaling $4,800,100 for stock options)		28,604,649			2,535,505
Accumulated deficit		(28,922,679	)		(4,338,091	)
Total stockholders' deficit		(316,260	)		(1,801,511	)
Total liabilities and stockholders' deficit	$	2,939,043		$	186,151

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MEDIRECT LATINO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED JUNE 30, 2006, 2005 AND 2004

		2006			2005			2004
					Restated			Restated
Sales - net	$	6,730,906		$	278,598		$	109,261
Cost of goods sold		1,413,883			117,095			99,205
Gross profit		5,317,023			161,503			10,056
Operating expenses:
Advertising and promotion		4,387,648			152,657			107,339
Officers salaries and consulting fees - related parties		400,000			323,500			268,269
Officers benefits - related parties		11,809,215			296,000			96,100
Selling and administrative		10,108,236			865,625			608,485
Depreciation and amortization		79,694			41,455			26,503
Bad debt expense		1,744,346			15,477			6,058
Interest and financing cost		1,372,472			1,029,400			67,895
Total operating expenses		29,901,611			2,724,114			1,180,649
Net loss	$	(24,584,588	)	$	(2,562,611	)	$	(1,170,593	)
(Loss) per common share:
Basic	$	(2.27	)	$	(0.36	)	$	(0.20	)
Weighted average common and common equivalent
shares outstanding:
Basic		10,827,936			7,194,963			5,765,387

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MEDIRECT LATINO, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED JUNE 30, 2006, 2005 and 2004

																						Additional
	Preferred A stock					Preferred A Units				Preferred B Stock					Preferred C Stock			Common Stock				Paid-In			Accumulated
	Shares			Amount		Shares			Amount	Shares			Amount		Shares		Amount	Shares		Amount		Capital			Deficit			Total
																									Restated
Balance June 30, 2003	414,500		$	41		-		$	-	-		$	-		-	$	-	5,500,000	$	550	$	329,013		$	(604,887	)		(275,283	)
Shares issued for cash	8,000			1		-			-	-			-		-		-	-		-		80,268			-			80,269
Fair value of stock options	-			-		-			-	-			-		-		-	-		-		100			-			100
Issuance of founders' shares	-			-		-			-	-			-		-		-	433,000		43		-			-			43
Net loss	-			-		-			-	-			-		-		-	-		-		-			(1,170,593	)		(1,170,593	)
Balance June 30, 2004 (see note 17)	422,500			42		-			-	-			-		-		-	5,933,000		593		409,381			(1,775,480	)		(1,365,464	)
Conversion to common stock	(246,000	)		(25	)	-			-	-			-		-		-	301,761		30		(5	)		-			-
Conversion to preferred B stock	(176,500	)		(17	)	-			-	276,653			28		-		-	-		-		(11	)		-			-
Fair value of stock options	-			-		-			-	-			-		-		-	-		-		200,000			-			200,000
Issuance of founders' shares	-			-		-			-	-			-		-		-	954,000		96		(96	)		-			-
Stockholders' debt and accrued
liabilities converted	-			-		-			-	-			-		746,133		75	-		-		711,893			-			711,968
Shares issued in connection
with merger	-			-		1,200,697			-	-			-		-		-	739,573		74		(74	)		-			-
Shares issued for cash	-			-		-			-	-			-		-		-	1,637,005		164		754,292			-			754,456
Shares issued for cash	-			-		-			-	150,000			15		-		-	-		-		460,125			-			460,140
Net loss	-			-		-			-	-			-		-		-	-		-		-			(2,562,611	)		(2,562,611	)
Balance June 30, 2005 (see note 17)	-			-		1,200,697			-	426,653			43		746,133		75	9,565,339		957		2,535,505			(4,338,091	)		(1,801,511	)
Conversion to common stock	-			-		-			-	(426,653	)		(43	)	-		-	490,312		49		63,653			-			63,659
Conversion to common stock	-			-		(200,697	)		-	-			-		-		-	200,697		20		(20	)		-			-
Fair value of stock options	-			-		-			-	-			-		-		-	-		-		4,600,000			-			4,600,000
Shares issued for cash	-			-		-			-	-			-		-		-	2,275,026		227		5,826,889			-			5,827,116
(Net of costs and expenses directly related
to stock offering of $400,000)
Exercise of stock warrants	-			-		-			-	-			-		-		-	440,344		44		2,131,221			-			2,131,265
Shares issued to third parties																									-
for services	-			-		-			-	-			-		-		-	2,261,331		226		5,341,643						5,341,869
-
Shares issued to employees
for services	-			-		-			-	-			-		-		-	205,240		21		992,695			-			992,716
Shares issued to major stockholders'
for services	-			-		-			-	-			-		-		-	1,513,450		151		7,113,063			-			7,113,214
Net loss	-			-		-			-	-			-		-		-	-		-		-			(24,584,588	)		(24,584,588	)
Balance June 30, 2006	-		$	-		1,000,000		$	-	-		$	-		746,133	$	75	16,951,739	$	1,695	$	28,604,649		$	(28,922,679	)	$	(316,260	)

-28-

MEDIRECT LATINO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2006, 2005 AND 2004

		2006			2005			2004
					Restated			Restated
Cash flows from operating activities:
Net loss	$	(24,584,588	)	$	(2,562,511	)	$	(1,170,593	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		79,694			41,455			26,503
Interest and financing cost		1,251,820			1,010,319			16,229
Bad debt expense		1,744,346			15,477			6,058
Stock issued for services		13,447,799			118,738			-
Fair value of stock options		4,600,000			200,000			100
Amortization of debt issue expenses		-			52,585			-
Change in assets and liabilities
Decrease (Increase) in
Accounts receivable		(4,006,882	)		(43,640	)		(19,542	)
Inventories		(75,410	)		11,404			(20,000	)
Prepaid expenses and other current assets		(41,396	)		1,381			(422	)
Deposits and other assets		(17,348	)		(9,240	)		-
(Decrease) Increase in
Accounts payable		1,884,654			(19,679	)		83,405
Accrued expenses - related parties		117,900			-			241,306
Accrued expenses		(82,685	)		27,646			203,362
Net cash used in operating activities		(5,682,096	)		(1,156,065	)		(633,594	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(358,417	)		(74,218	)		(64,547	)
Net cash used in investing activities		(358,417	)		(74,218	)		(64,547	)
Cash flows from financing activities:
Proceeds from sale of preferred stock		-			460,140			80,312
Proceeds from sale of common stock		5,827,116			754,456			-
Proceeds from short-term debt		1,637,000			15,475			202
Repayment of short-term debt		(639,075	)		-			-
Proceeds from long-term debt		-			-			593,214
Repayment of long-term debt		(707,049	)		-			-
Proceeds from shareholder loans		-			-			24,827
Net cash provided by financing activities		6,117,992			1,230,071			698,555
Net increase (decrease) in cash		77,479			(212	)		414
Cash at beginning of year		202			414			-
Cash at end of year	$	77,681		$	202		$	414
Supplementary disclosure of cash flow information:
Non-cash investing and financing activities:
Note payable to stockholders for professional fees and interest	$	-		$	-		$	16,229
Interest converted to notes payable	$	-		$	67,315		$	-
Interest on conversion of preferred 'B' stock to common stock	$	63,659		$	-		$	-
Financing cost attributable to recording fair value of stock warrants	$	1,188,161		$	943,104		$	-
Fair value of stock warrants converted from debt to equity	$	2,131,265		$	-		$	-
Stockholders' debt and accrued liabilities converted to preferred stock	$	-		$	711,968		$	-
Fair value of stockholders' stock options	$	4,600,000		$	200,000		$	100
Stock issued for services	$	13,447,799		$	118,738		$	-
Shareholder loan receivable converted to accrued expenses - related parties	$	52,005		$	-		$	-
Interest paid	$	177,477		$	-		$	-

-29-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies

Organization

MEDirect Latino, Inc. (the "Company") was incorporated during July 2002 under the laws of the State

of Florida for the purpose of developing its business model to operate as a national direct to consumer

provider of medical products. The Company was a private non-registrant operating company until

such time as it completed a Reorganization Agreement with Interaxx Digital Tools, Inc. ("IDT").

"IDT" was one of four stand-alone companies resulting from a second joint plan of reorganization

filed under Chapter 11 of the Bankruptcy Code. The acquisition of Interaxx Digital Tools, Inc. was

was treated as a reverse acquisition for financial reporting purposes. As such, our financial statements

have been prepared as MEDirect Latino, Inc. as the acquirer. We have retroactively restated the

stockholders' deficit section of our balance sheet to reflect the reverse acquisition.

The accompanying consolidated financial statements include the accounts of the Company and its wholly

owned subsidiary "Hispanic Research and Marketing, Inc". Intercompany transactions and balances have been

eliminated in consolidation.

The Company operates in only one business segment.

Recent Accounting Pronouncements

In May 2005 , the FASB issued SFAS No. 154 "Accounting Changes and Error Corrections - a replacement

of APB Opinion No. 20 and FASB statement No. 3" which is the result of the FASB's project to reduce

differences between U.S. and international accounting standards. SFAS No. 154 requires retrospective

application to prior periods' financial statements of changes in accounting principles, unless it is impracticable

to determine either the period-specific effects or the cumulative effect of the change. This Statement will be

effective for accounting changes and corrections of errors made in fiscal years beginning after December 15,

2005. The Company has not yet determined the impact of applying the provisions of SFAS No. 154.

In September 2006, the FASB issued SFAS No. 157 "Fair Value Measurements" which defines fair value

in generally accepted accounting principles, and expands disclosures about fair value measurements. This

Statement applies under other accounting pronouncements that require or permit fair value measurements.

This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007,

and interim periods within those fiscal years. The Company has not yet determined the impact of applying

the provisions of SFAS No. 157.

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

amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements. Estimates also affect the reported amounts of revenue and expenses during the reported period.

Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less as

cash equivalents.

Derivative Financial Instruments

The SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities", as amended, requires

companies to recognize all derivatives as either assets or liabilities in the balance sheet at fair value. Stock

warrants issued by the Company have been periodically adjusted to fair value using the "Black Scholes"

module in accordance with SFAS No. 123R " Share Based Payments".

-30-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies (continued)

Accounts Receivable

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible portion. This

estimate is based on historical collection experience and a review of the current status of trade receivables. There

is no set threshold amount or age for account receivable write-offs, any decision is made by senior management

on an account by account basis. Receivables are generally considered for write-off after they have been

outstanding for time periods in excess of 180 days.

Stock Based Compensation

The Company authorized restricted stock and stock options to employees, major shareholders and third parties.

The expense for these equity-based incentives is based on their fair value at date of grant in accordance with SFAS

No. 123R "Share Based Payments". The fair value of each stock option granted is estimated on the date of grant

using the "Black Scholes" pricing model.The pricing model requires assumptions such as the expected life of the stock

option and expected volatility of the Company's stock over the expected life, which significantly impact the assumed

value. The Company uses historical data to determine these assumptions and if these assumptions change significantly

for future grants, share-based compensation expense will fluctuate in future years.

Inventories

Inventories, consisting primarily of medical supplies, are stated at the lower of cost (principally determined

by the first-in, first-out method) or market.

Property, Plant and Equipment

Property plant and equipment is carried at cost less accumulated depreciation and includes expenditures which

substantially increase the useful lives of property and equipment. Maintenance and repairs are charged to

expense as incurred. When property and equipment is retired or otherwise disposed of, the related costs and

accumulated depreciation are removed from the respective accounts and any gain or loss on the disposition

is credited or charged to income

Depreciation is computed using the straight-line method based on the estimated useful lives of the individual

assets which range from 3-7 years.

Leasehold improvements are carried at cost less accumulated amortization and is amortized on a straight-line

basis over the 4-year term of the respective lease.

Revenue Recognition

The Company is a federally licensed Part B participating provider to Medicare. A significant portion of

products sold usually is paid for by third parties such as Medicare, and various health insurance carriers under

statutory provisions or other arrangements in amounts that can be significantly different from, and frequently

less than, the entity's established rates. Revenue is recognized when the products are shipped to the

customer, and are recorded at the net Medicare allowable amounts. The provision for contractual adjustments

(that is the difference between established rates and third-party payor payments) and discounts (that is, the

difference between established rates and the amount collectible) are recognized on an accrual basis and

deducted from gross revenue to determine net revenue. Contractual adjustments, discounts, and an allowance

for uncollectibles are recorded to report the receivables for health care services at net realizable value. The

Company accepts returns for shipments to an incorrect address or if the shipment is declined by the customer.

Shipping and Handling Costs

The Company defines shipping and handling costs as only those costs incurred for a third-party shipper to

transport products to the customer. These costs are not material and are included under general and

administrative expense within the Statement of Operations.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are

recognized for the future tax consequences attributable to differences between the financial statement carrying

amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for

deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is

more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be

recognized under the preceding criteria, valuation allowances must be established. Deferred tax assets and

liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which

those temporary differences are expected to be recovered or settled.

-31-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Summary of Significant Accounting Policies (continued)

Earnings Per Share

Basic per share results for all periods presented were computed based on the net earnings for the respective periods.

The weighted average number of common shares outstanding during the period was used in the calculation of basic

earnings per share.

Long-Lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used in the business, other

than assets held for sale when events and circumstances warrant, generally in conjunction with the annual business

planning cycle. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the

amount by which the carrying value exceeds the fair market value for assets to be held and used. Fair market value

is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved.

Long-lived assets to be disposed of other than by sale are considered held and used until disposed of.

Note 2. Accounts Receivable, Net

At June 30, 2006 and 2005 the Company was due $2,304,183 and $41,647, respectively, from customers, which

is net of an allowance for doubtful accounts of $1,424,276 and $21,535 respectively. The customer base is Medicare

Eligible Part B beneficiaries, and includes Secondary Insurance providers who provide Medicare Part B benefits

to the Company's customers. Billings typically involve the submission of claims to multiple providers whose

payment of claims may be contingent upon payment or denial by another payor. It could take up to 18 months

from the initial billing date. In accordance with applicable regulatory requirements, we make all reasonable and

appropriate efforts to collect our accounts receivable including deductibles and co-payments. Our policy states

that after payment of the primary insurance, then the secondary insurance is billed and upon payment from the

secondary insurance the difference is written off. If the secondary insurance does not pay, the patient is billed

for the unpaid balance. We then generate statements on a monthly basis and attempt to collect per the applicable

regulatory requirements.

The following schedule summarizes the allowance for doubtful accounts:

		Additions
		Balance		Charged to
		Beginning		Costs and				Balance End
		of Period		Expenses		Deductions		of Period
June 30, 2004	$	-	$	6,058	$	-	$	6,058
June 30, 2005	$	6,058	$	15,477	$	-	$	21,535
June 30, 2006	$	21,535	$	1,744,346	$	341,605	$	1,424,276

Note 3. Property, Plant and Equipment

The Company's property, plant and equipment at June 30, 2006 and 2005, consisted of the following:

		2006			2005
Furniture, fixtures and equipment	$	274,316		$	138,987
Leasehold improvements		280,110			57,022
		554,426			196,009
Less: Accumulated depreciation and amortization		(152,518	)		(72,824	)
	$	401,908		$	123,185

For the years ended June 30, 2006, 2005 and 2004 depreciation and amortization

totaled $79,694, $41,455 and $26,503, respectively.

-32-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4. Notes Payable

During July 2004, the Company renegotiated certain private investors senior secured notes originally bearing interest

at 12% per annum, with total interest payable in equal monthly installments between February, 2005 and July, 2005,

and collateralized by the assets of the Company. The notes further allow for the holders to subscribe for and purchase

warrants for up to 4% of the fully-diluted Common Shares of the Company (see note 7). The terms of the renegotiation

extended the maturity date to September 30, 2005 and included accrued interest of $61,248. At June 30, 2006 and 2005

the principle balance due under the notes totaled $-0- and $707,049, respectively. Accrued interest totaled $-0- and

$77,287 at June 30, 2006 and 2005, respectively. On November 25, 2005 the notes were purchased by Jepera

Investments, Inc. The Company agreed to pay Jepera Investments, Inc. on or before December 1, 2005 the total sum

of $812,996 and issue 440,344 shares of unrestricted Common Shares of the Company as a full and final settlement

of all amounts due, including interest and penalties. The Company made payment for all amounts due for principle

and interest on December 5, 2005.

During July to October, 2005 the Company became obligated to certain private investors under a promissory note

totaling $587,000, unsecured and bearing interest at 10% per annum from November 1, 2005. The note matures at

the time of any receipt of private or other funding in excess of $5 million, or on December 31, 2007, whichever is

earlier. The Company made payment for all amounts due for principal and interest during March, 2006.

During January, 2006 to June, 2006 the Company became obligated to certain private investors under

promissory notes totaling $1,015,000 unsecured and bearing interest at 10% per annum. The notes mature

at the time of any receipt of private funding in excess of $1.5 million, or during January and May, 2007. Accrued

interest with respect of these notes totaled $20,417 at June 30, 2006.

Note 5. Related Party Transactions

At June 30, 2005 the Company had a convertible note payable to a shareholder totaling $224,515 including

accrued interest of $41,515 which was converted, on a dollar for dollar basis, into preferred C stock at June 30,

2005 (see note 10). The note was for obligations relating to the preparation of a business plan during the year

ended June 30, 2003, with interest at 12.5% per annum, repayable in 48 monthly installments of $4,864. The

note was collateralized by all property plant and equipment. The note was convertible into any outstanding

series of common or preferred stock at any time the note was outstanding, at a par value of $0.10 per share and

has priority interest to all other issued debt. During the years ended June 30, 2006 and 2005, the Company had

incurred interest on the note totaling $-0- and $6,066, respectively.

The Company had loans payable to a shareholder totaling $24,827 relating to monies advanced during the year

ended June 30, 2004. The loan was interest free, repayable on demand and was converted to preferred C stock

at June 30, 2005 (see note 10).

Consulting and legal services were provided to the Company by two shareholders. During the years ended

June 30, 2006 and 2005 payments totaled $-0- and $39,245, respectively.

An organization which is owned by a major stockholder provided consulting services to the Company during the

years ended June 30, 2006 and 2005 totaling $-0- and $60,360, respectively.

In December, 2002, the Company entered into a service agreement with a major shareholder for the

provision of consulting services to the Company. The terms of the agreement provide for aggregate payments

of $60,000 per annum until such time as the Company enters into operations, $120,000 for the first year of

operations, with annual increases thereafter of $40,000 or 3% of gross sales, whichever is greater. The

agreement also provided for the payment of various expenses, including housing expenses of $4,000 per

month, health insurance, and life insurance in the amount of $5 million. As additional compensation the

shareholder is allocated each year 500,000 shares of stock in the form of stock options, at par value.

(see note 6). Should the Company undertake any Stock Option Plan without the approval of the shareholder

it will be deemed in default of the agreement and make a one time payment of $25 million and 5 million shares.

The agreement lasts for a period of ten years, with the said term extendable at the discretion of the shareholder,

and provides for 52 weekly payments each year. The service agreement was terminated on June 30, 2006.

-33-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Related Party Transactions (continued)

In December, 2002, the Company entered into a service agreement with another major shareholder for the

provision of consulting services to the Company. The terms of the agreement provide for aggregate payments

of $60,000 per annum until such time as the Company enters into operations, $120,000 for the first year of

operations, with annual increases thereafter of $40,000 or 3% of gross sales, whichever is greater. The

agreement also provided for the payment of various expenses, including housing expenses of $4,000 per

month, health insurance, and life insurance in the amount of $5 million. As additional compensation the

shareholder is allocated each year 500,000 shares of stock in the form of stock options, at par value.

(see note 6). Should the Company undertake any Stock Option Plan without the approval of the shareholder

it will be deemed in default of the agreement and make a one time payment of $25 million and 5 million shares.

The agreement lasts for a period of ten years, with the said term extendable at the discretion of the shareholder,

and provides for 52 weekly payments each year. The service agreement was terminated on June 30, 2006.

Accrued consulting fees totaled $117,900 and $-0- at June 30, 2006 and 2005, respectively, after deducting

payments totaling $337,241 and $331,598, respectively. At June 30, 2005 accrued consulting fees totaling

$462,626 were converted to preferred C stock (see note 10).

An assessment was carried out by a construction company owned by a close relative of the Company

president into the suitability of enlarged facilities to house the Company's operations. At June 30, 2006

a total of $43,590 had been capitalized to leasehold improvements.

On November 9, 2005 the Company entered into a consulting agreement with a shareholder to provide

assistance in all due diligence requirements in connection with a private placement funding by a major

financial institution and to further acts as liaison with the Company's legal counsel. The terms of the

agreement calls for a payment of $15,000. During the year ended June 30, 2006 a total of $15,000 was

expensed.

During the year ended June 30, 2006 the Company issued to three major shareholders 1,513,450 shares

of restricted common stock for services rendered (see note 10).

Note 6. Stock Options

Under service agreements with two major stockholders and executives (see note 5) the Company has allocated

500,000 shares of stock in the form of stock options to each stockholder at December 31, 2005, 2004 and

2003, respectively, at par value of $.0001 per share. There is no set term for the options.

The Company has adopted the "Black Scholes" model to book the estimated fair value of the stock options

and has followed the provisions of SFAS No. 123R. The following assumptions were made in estimating

fair value:

	Risk-free interest rate	4.18%
	Expected volatility	48%
	Estimated life	5 years
At June 30, 2006 three million options had been granted to the two stockholders, with no options being
exercised and compensation cost totaled $4,600,000 and $200,000 for the years ended June 30, 2006 and 2005,
respectively. At June 30, 2006 the Company had only three million options outstanding.

-34-

MEDIRECT LATINO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Derivative Financial Instruments
At June 30, 2005 the Company had outstanding warrants to purchase 440,344 shares of unrestricted Common
Shares, respectively, based on 4% of the fully-diluted Common Shares of the Company at an exercise price of
$0.01 per "Warrant Share" up to July 18, 2009 (see note 4). The Company adopted the provisions of SFAS
No. 123R to compute an estimated fair value of $943,104 for the stock warrants using the "Black Scholes"
model at June 30, 2005 and reserved 440,344 shares for the exercise of the stock warrants. The following
assumptions were made in estimating fair value:
	Risk-free rate	3.72%
	Volatility	76%
On December 1, 2005 the holders of the "Warrant Shares" purchased 440,344 shares of unrestricted Common
Shares. The Company adopted the provisions of SFAS No. 123R to compute a fair value of $2,131,265
(see note 10).
Note 8. Commitments
On July 10, 2003 the Company entered into a five year lease, with a three year option, for approximately
6,000 square feet of office and warehouse facilities in Plantation, Florida. The lease requires a minimum
rental of $36,000 per year for the first year and provides for an increase of 5% on the anniversary of the
lease throughout the term, including the option period. Additionally, the landlord is entitled to sales tax and
its pro-rata share of all real estate taxes and common area costs. The lease was terminated by mutual agreement
on February 8, 2006.
On February 8, 2006 the Company entered into a five year lease, with a five year option, commencing April 1, 2006,
for approximately 23,000 square feet of office and warehouse facilities in Pompano Beach, Florida. The lease
requires a minimum rental of $151,684 per year for the first year and provides for an increase of 5% on the
anniversary of the lease throughout the term, including the option period. Additionally, the landlord is entitled to
sales tax and its pro-rata share of all real estate taxes and common area costs.
On November 21, 2005 the Company entered into a six month lease for an office in Puerto Rico which acts as a
call center. The lease calls for a monthly rental of $1,300. The lease expired in May 2006 and the office is currently
being rented on a month to month basis.
On November 11, 2005 the Company entered into a three year lease of office equipment. The lease calls for a rental
of $16,026 per year.
On June 9, 2006 the Company entered into a one year lease for a residential property in Lighthouse Point, Florida
commencing June 10, 2006. The lease requires an annual rental of $36,000 per year, including real estate taxes. The
lease provides for the lessee to have the right to terminate the lease after seven months by giving notice and paying
a termination fee equal to one months rent.
On April 7, 2006 the Company entered into a one year lease for a residential property in Fort Lauderdale, Florida
commencing April 8, 2006 for two major stockholders and executives of the Company. The lease requires an annual
rental of $60,000 including property taxes. Rental expenses are charged against the amount allowed in the service
agreements with the two executives for housing costs (see note 5).
Rent charged to operations in the years ended June 30, 2006, 2005 and 2004 totaled $121,496, $59,195 and $49,386,
respectively.

-35-

		MEDIRECT LATINO, INC.
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Commitments and Contingencies (continued)
The following is a schedule of approximate minimum future rentals on the non-cancelable operating
leases:

Year ending June 30,
	2007		288,270
	2008		237,950
	2009		235,337
	2010		238,466
	2011		247,358
	Thereafter		1,324,723
		$	2,572,104

Note 9. Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist

primarily of cash and accounts receivable. The approximate mix of receivables from patients and

third-party payers was as follows:

		June 30,			June 30,
		2006			2005
Medicare		1,616,756			22,114
Other		2,111,703			41,068
		3,728,459			63,182
Less allowance for doubtful accounts		(1,424,276	)		(21,535	)
	$	2,304,183		$	41,647

Note 10. Stockholders' Equity

Common stock has no preemptive or other subscription rights, and there is no conversion or redemptive

rights associated with the common stock. Stockholders' have one vote per share on all matters and in the

event of liquidation of the Company, will share equally in any balance of the Company's assets available

for distribution to them after satisfaction of creditors and preferred shareholders.

Preferred stock has priority interests to all other stock as regards to dividend rights, redemption rights,

conversion, rights, voting rights and rights on dissolution and winding up of the affairs of the Company.

The holder of any share of preferred stock shall have the right, at their option at any time, to convert any

such shares, plus any accrued dividends, into such number of fully paid shares of common stock. After

conversion the Company will issue to the holder of each preferred share, one share of common stock for

each preferred share converted. Dividends on the series B and C preferred stock shall accrue from the

date of original issuance, on a cumulative basis, at the rate of 12% and 6%, respectively, payable in each

calendar year only if determined and declared by the Board of Directors. At June 30, 2005 stockholders,

notes, loans and accrued liabilities totaling $711,968 were converted into series C preferred stock on a one

for one basis (see note 5).

-36-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Stockholders' Equity (continued)

The following schedule summarizes the conversion into series C preferred stock:

Note payable	$	224,515
Loan payable		24,827
Accrued consulting fees		462,626
	$	711,968

During the year ended June 30, 2006 a total of 426,653 shares of preferred B stock was converted into 490,312

shares of common stock, with interest of $63,653 being expensed. During the years ended June 30, 2006 and

2005 no dividend was declared on the preferred C stock.

During the years ended June 30, 2006 and 2005 the Company issued -0- and 954,000 founders shares,

respectively at the par value of $.0001 per share. These shares were authorized at the time of the formation

of the Company. These shares were issued as partial payment for the preparation of a business plan for the

Company. This accounting treatment was adopted because the Company was in the development stage and

had incurred significant losses at the time the shares were issued. Par value was deemed to be the fair value of

the stock at the time of issue.

At June 30, 2006 the Company had outstanding 1,000,000 series A convertible preferred units which

consisted of A, B and C warrants with the right to common stock, at prices of $3.50, $5.50, and

$7.50, respectively, per share. Warrant exercise provisions are that for each two warrants exercised the

holder shall receive three shares of tradable common stock. The A, B and C warrants expired on April 14,

2005, August 16, 2005, and November 15, 2005, respectively. The A convertible preferred units expired

on March 14, 2006 but remain available for conversion to restricted common stock on a one for one basis.

During the year ended June 30, 2006 a total of 200,697 units were converted to common stock. The bankruptcy

court set aside 300,000 additional units for employees which are outstanding but not yet issued. The A, B and C

warrants which attach to these units, at prices of $3.50, $5.50 and $7.50 will be exercisable and due to expire

on April 15, 2007, August 15, 2007 and November 15, 2007, respectively.

On October 1, 2005 the Company entered into a "Private Placement Common Stock Offering". The terms

of the offer allow the Company to raise a maximum of $1,575,000 by issuing 900,000 shares of common

stock at the price of $1.75 per share. The offer was over-subscribed with a total of $2,295,310 being

received and 1,311,471 shares issued. Under the terms of the agreement the Company paid finders fees

totaling $229,531 and expensed the fair market value totaling $285,298 of 54,865 bonus shares issued.

During February, 2006 the Company entered into a "Private Placement Common Stock Offering" with

$3,391,806 being received and 877,841 shares of common stock issued at the price of $3.87 per share.

Under the terms of the agreement the Company paid finders fees totaling $392,362 and expensed the

fair market value totaling $504,934 of 78,896 bonus shares issued.

During the year ended June 30, 2006 the Company issued 2,261,331 shares of restricted common

stock to third parties for services rendered and expensed the fair market value totaling $5,341,869 at prices

ranging from $5.95 to $1.90 per share.

During the year ended June 30, 2006 the Company issued 1,513,450 shares of restricted common

stock to major shareholders for services rendered and expensed the fair market value totaling $7,113,214

at $4.70 per share.

-37-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Stockholders' Equity (continued)

During the year ended June 30, 2006 the Company issued 205,240 shares of restricted common

stock to employees for services rendered and expensed the fair market value totaling $992,716 at

prices ranging from $5.95 to $4.70 per share.

During the year ended June 30, 2006 the holders of "Warrant Shares" purchased 440,344 shares

of unrestricted Common Shares. The company expensed the fair value of these shares totaling $2,131,265

at $4.84 per share (see note 7).

During the year ended June 30, 2006 the Company issued 2,500,000 shares of Class A common

stock to three major shareholders. Each share entitles the holder to ten (10) votes for each share held

On June 30, 2006 by a vote of the board of directors this class of shares were retired (see note 5).

Note 11. Provision for Income Taxes

The approximate provision for federal income taxes as of June 30, 2006, 2005 and 2004 consists of

the following:

		2006			2005			2004
Current (benefit)	$	(9,942,000	)	$	(939,000	)	$	(301,000	)
Valuation allowance		9,942,000			939,000			301,000
	$	-		$	-		$	-

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant

approximate components on the net deferred taxes, at June 30, 2006, 2005 and 2004 are as follows:

		2006			2005			2004
Deferred tax assets:
Net operating loss carry forward	$	(11,127,000	)	$	(1,327,000	)	$	(401,000	)
Valuation allowance		11,127,000			1,327,000			401,000
Total net deferred tax assets	$	-		$	-		$	-
		2006			2005			2004
Deferred tax assets:
Federal net operating loss carryforward	$	9,543,000		$	951,000		$	621,000
State net operating loss carryforward		1,577,000			227,000			97,000
Depreciation		7,000			-			-
Total deferred tax assets		11,127,000			1,178,000			718,000
Deferred tax liability:
Depreciation		-			(2,000	)		(8,000	)
Total deferred tax liability		-			(2,000	)		(8,000	)
Net deferred tax assets before valuation allowance		11,127,000			1,176,000			710,000
Valuation allowance		(11,127,000	)		(1,176,000	)		(710,000	)
Net deferred tax assets	$	-		$	-		$	-

-38-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Provision for Income Taxes (continued)

SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets reported, if any,

based on the weight of evidence that it is more likely than not that some portion or all of the deferred

tax assets will not be realized. Management has determined that a valuation allowance of $11,127,000

at June 30, 2006 is necessary to reduce the deferred tax assets to the amount that will more

likely than not be realized. The change in the valuation allowance during the year ended June 30,

2006 was $9,951,000.

The Company has incurred net operating losses since inception. At June 30, 2006 the Company

had a net operating loss carry forward amounting to approximately $27.2 million for U.S. tax purposes

which begin expiring in the year 2023.

The federal statutory tax rate reconciled to the effective tax rate during the years ended

June 30, 2006, 2005 and 2004 is as follows:

	2006		2005		2004
Tax at U.S. statutory rate	35.0	%	35.0	%	35.0	%
State tax rate, net of federal benefits	5.5	%	5.5	%	5.5	%
Change in valuation allowance	-40.5	%	-40.5	%	-40.5	%
	0.0	%	0.0	%	0.0	%

Note 12. Advertising

The Company expenses advertising costs as incurred. During the years ended June 30, 2006, 2005,

and 2004, the amount expensed totaled $4,387,648, $152,657 and $107,339 respectively.

Note 13. Major Customers

Sales to patients covered by Medicare amounted to approximately 70% of total sales for the year ended

June 30, 2006. The loss of Medicare reimbursements could have a material adverse impact on the Company's

operations.

Note 14. Litigation

On or about August 2006, Diagnostic Devices, Inc. (a supplier of medical products) filed a complaint against

the Company and its directors. The Company has currently recorded a payable for $56,962. The plaintiff has

claimed a total of approximately $180,000 for breach of contract, including approximately $35,000 in legal

fees and has additionally asked the court to award treble damages. The case is currently in settlement discussion.

Management is of the opinion that the outcome of this case will not have a material impact.

On or about June 8, 2006, Datascension, Inc. filed a statement of claim against the Company before the American

Arbitration Association in Miami-Dade, Florida. The claim alleges breach of written contract, account stated, open

book account, unjust enrichment and quantum meruit seeking damages in the amount of $212,061 for alleged unpaid

services in connection with compiling marketing data, consisting primarily of telephone interviews of consumers.

The Company has denied Datascension, Inc's. claims and is vigorously defending the action. The Company has

filed a Counterclaim against Datascension, Inc. in excess of two million dollars for breach of contract, fraud and

negligence alleging due to Datascension, Inc's. failure to provide the required services and damages as a result of

said failure. This action is in the early stages and the Company is unable to opine about the likelihood of the outcome.

On or about May 2006, EKN Financial Services filed a complaint against the Company before the American

Arbitration Association in New York claiming breach of an agreement to act as a private placement agent for the

Company during a given time frame. The plaintiff is claiming the amount owed pursuant to the agreement is

$300,000. The Company is vigorously defending this action and believes that the plaintiff has committed fraud

by misrepresenting the date at which the agreement was to commence. The outcome of this case cannot be

predicted at this time.

-39-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14. Litigation (continued)

The Company may be involved in litigation alleging breach of contract and other matters in connection with a

former in-house counsel of the Company for approximately six (6) weeks. The former in-house counsel sent a

written demand letter claiming 100,000 shares of the Company's common stock and $16,000 in unpaid

compensation. The Company has denied the claim and has sent a demand letter for the immediate return of the

Company's property and is filing an action with the Florida Bar alleging ethical violations including failure to

honor attorney-client privilege. Following which the Company may take civil action for replevin and unjust

enrichment.

Note 15. Fair Value of Financial Instruments

The Company's financial instruments are accounts receivable, accounts payable, accrued expenses, and notes

payable. The recorded values of accounts receivable, accounts payable, and accrued expenses approximate their fair

values based on their short-term nature. The fair value of notes payable is based on current rates at which the

Company could borrow funds with similar remaining maturities, and the carrying amount approximates fair value.

Note 16. Going Concern

The accompanying financial statements have been prepared on a going concern basis. The Company had a net

operating loss of $24.6 million for the year ended June 30, 2006 and an accumulated deficit of $28.9 million. The

Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to

meet its obligations and repay its liabilities arising from normal business operations when they become due, to fund

possible acquisitions, and to generate profitable operations in the future. The Company plans to continue to provide

for its capital requirements by issuing additional equity securities and debt. The Company has accepted a

non-binding loan proposal with a private investment fund, for a facility totaling $7.0 million, of which $5.0 million

will be available at closing and the balance of $2.0 million on January 1, 2007. The outcome of these matters

cannot be predicted at this time and there are no assurances that if achieved, the Company will have

sufficient funds to execute its business plan or generate positive operating results.

These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern

The financial statements do not include any adjustments to the amounts and classification of assets and liabilities that

may be necessary should the Company be unable to continue as a going concern.

Note 17. Restatement of Financial Statements

The Company has reclassified various operating costs. During the years ended June 30, 2005, and 2004 officers

salaries, consulting fees and benefits have been separately disclosed. These amounts had previously been included

within selling and administrative expense.

The Company has adopted the provisions of SFAS No. 123R to compute an estimated fair value for stock warrants

issued using the "Black Scholes" module during the year ended June 30, 2006.

The Company has adopted the provisions of SFAS No. 123R to compute an estimated fair value for stock options

granted to two major stockholders and executives during the years ended June 30, 2005 and 2004.

			Adjustment
	As filed		to restate		Restated
Balance sheet data as at June 30, 2005
Derivative financial instruments	-		943,104		943,104
Additional paid-in capital	2,335,405		200,100		2,535,505
Accumulated deficit	(3,194,887	)	(1,143,204	)	(4,338,091	)

-40-

MEDIRECT LATINO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 17. Restatement of Financial Statements (continued)

					Adjustment
		As filed			to restate			Restated
Statement of operations for the year
ended June 30, 2004
Officers salaries and consulting fees - related parties	$	-		$	268,269		$	268,269
Officers benefits - related parties		-			96,100			96,100
Selling and administrative		972,754			(364,269	)		608,485
Net loss		(1,170,493	)		(100	)		(1,170,593	)
Statement of operations for the year
ended June 30, 2005
Officers salaries and consulting fees - related parties	$	-		$	323,500		$	323,500
Officers benefits - related parties					296,000			296,000
Selling and administrative		1,285,125			(419,500	)		865,625
Interest and financing costs		86,296			943,104			1,029,400
Net loss		(1,419,507	)		(1,143,104	)		(2,562,611	)
Basic loss per share		(0.20	)		(0.16	)		(0.36	)

-41-

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of June 30, 2006. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2006, our disclosure controls and procedures were (1) designed to ensure that material information relating to MEDirect is accumulated and communicated to MEDirect’s chief executive officer and chief financial officer by others within the entity, particularly during the period in which this report was being prepared, and (2) effective, in that they provide reasonable assurance that information required to be disclosed by MEDirect in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting: The management of MEDirect is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of MEDirect’s principal executive and principal financial officers and effected by MEDirect's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

·Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of MEDirect;

·Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of MEDirect are being made only in accordance with authorizations of management and directors of MEDirect; and

·Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of MEDirect’s assets that could have a material impact on the financial statements.

MEDirect’s internal control over financial reporting was designed to provide reasonable assurance to its management and Board of Directors regarding the preparation and fair presentation of published financial statements. Internal control over financial reporting, no matter how well designed, has inherent limitations which may not prevent or detect misstatements. Therefore, even those internal controls over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

-42-

MEDirect’s management assessed the effectiveness of MEDirect’s internal control over financial reporting as of June 30, 2006. Based on their assessment, MEDirect’s management determined that, as of June 30, 2006, MEDirect’s internal control over financial reporting is effective.

Changes in Internal Control over Financial Reporting

No change in MEDirect’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) occurred during the quarter ended June 30, 2006 that has materially affected, or is reasonably likely to materially affect, MEDirect’s internal control over financial reporting.

Item 9B. Other Information

None.

-43-

PART III

Item 10. Directors and Executive Officers of the Registrant

The following table sets forth information regarding our directors and executive officers:

Name	Age		Position
Debra L. Towsley		53	President and Director
Raymond J. Talarico		45	Executive Vice-President and Chairman of the Board of Directors
Charles W. Hansen, III		55	Chief Operating Officer and Director

Debra L. Towsley currently serves as President and Director of MEDirect Latino, Inc. and is a founding member since the Company’s inception in 2001. For the previous five years, Ms. Towsley has been responsible for participating in and managing the Company’s research, business plan creation, financial plan, budgeting, forecasting, marketing plan, fund raising, shareholder services, human resources, contract negotiations, business support services, vendors, office set up, strategic business alliances, media relations and overall corporate and administrative management. Prior to founding MEDirect Latino Inc. in 2001, Ms. Towsley was Vice-President of Business Development for Sci-Fi MegaPlex, Inc. from 1998 to 2000. From 1998 to 1999, she was Director of Strategic Alliance Marketing for Universal Studios, in Orlando overseeing the marketing plan for the grand opening of Islands of Adventure and City Walk projects, a $1.5 billion dollars theme park expansion. From 1994 to 1998, Ms. Towsley was Executive Director of Development for Cox Radio Group and was responsible for producing non-traditional revenue streams through interactive marketing projects and strategic alliances. In 1993 and 1994, Ms. Towsley held the position of Director of Marketing for Blockbuster Video in the State of Florida overseeing the marketing for the opening of 74 stores in an 18 month period.

Raymond J. Talarico currently serves as Executive Vice-President and Chairman. He is a founding member of the Company since inception in 2001. Mr. Talarico served as interim CEO for the Company previous to 2006 and has been responsible for business plan authorship, financial forecasting, budgeting, shareholder relations, fund raising, contract negotiations, business development, research and overall corporate and administrative guidance. Prior to MEDirect Latino, Mr. Talarico was Chairman of the Fort Lauderdale, Florida based Sci-Fi MegaPlex, Inc. from 1998 to 2000, a Company founded around the genre of science fact, fiction and fantasy. Sci-Fi’s national expansion began with the opening of retail stores in major markets such as Orlando and Atlanta and was in construction development in Puerto Rico’s Plaza Las Americas and seven other major markets. Mr. Talarico resigned as Chairman of Sci-Fi MegaPlex in September 2000. In the matter of Softnet, Inc. and Sci-Fi Megaplex, the State of Wisconsin issued an order whereby Mr. Talarico was prohibited from selling securities to residents of Wisconsin until such securities were either registered or sold pursuant to applicable exemptions. In May 2004, a response and request for hearing was filed with Wisconsin representing that Mr. Talarico had resigned as an officer and director of Softnet prior to the date of sale in Wisconsin and did not have knowledge of or participate with the sale of securities (notes). Wisconsin indicated that there could be no hearing since the request for hearing was not filed within 30 days of the issuance of the order. Mr. Talarico did not receive the order within the 30 day period and was unable to request a hearing to present information demonstrating his lack of involvement. Therefore, the orders were final.

Charles W. Hansen III currently serves as Chief Operating Officer and Director of MEDirect Latino and joined the Company in 2002. Mr. Hansen’s responsibilities include market research, creation of marketing plans, media relations, administrative oversight, human resource development, shareholder relations, public relations, contract negotiations, vendor relations and new business development. In 2000 and 2001, Mr. Hansen served as president and chief operating officer of eComeCom.com, a public company designed to assist small to medium companies capitalize on strategic and competitive advantages in the industry. He also assisted companies in the process of becoming publicly traded, advising on corporate structuring, methods of debt and equity financing and locating strategic partners. Previously, Mr. Hansen served as Vice President, NBC Group Station Sales in New York, General Sales Manager for WPTV TV (NBC) West Palm Beach and Sales Manager for PAX TV as part of the networks

The directors hold office until the next annual meeting of the shareholders and until their successor(s) have been duly elected or qualified.

-44-

Resignation of Directors

On October 18, 2006, the Company accepted the resignations of Tomas Erban, Tomas Johansen and Julio Pita. A report on Form 8-K was filed on October 18, 2006, in connection with the resignations and is incorporated by reference herein.

The basis of this disagreement was with Ms. Towsley and Mr. Talarico with respect to the management of the Company. A letter from legal counsel of the resigned directors referenced outstanding concerns, the most significant of which, were concerns of possible misstatements of the Company’s financials. The Company’s auditor confirmed to the directors of the Company that the audit of the Company’s financial statements revealed no irregularities in accounting methods, controls or procedures. Although this was brought to the attention of the directors, the resigning directors elected to tender their resignations and declined to reconsider stating more accurately, the basis of their respective resignations. The remaining directors urged the resigning directors to reconsider their positions following the telephone conference prior to the 8-K filing and to consider material information confirmed by the Company’s peer review auditors that no irregularities existed. Considering the refusal of the resigned directors to restate the basis of their resignations more accurately, the Company timely filed the Report on Form 8-K to meet its reporting obligations.

Section 16(a) Beneficial Owner Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that the Company’s directors, executive officers, and persons who own more than 10% percent of a registered class of the Company’s equity securities, or file with the Securities and Exchange Commission (SEC), initial reports of ownership and report of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file.

Code of Ethics

The Company has adopted a code of ethics for all of the employees, directors and officers which is attached to this Annual Report as Exhibit 14.1.

-45-

Item 11. Executive Compensation

The following table sets forth information relating to the compensation awarded to, earned by or paid to our executive officers whose individual compensation exceeded $100,000 during fiscal 2006, 2005 and 2004 for services rendered to us.

	Annual Compensation
							Other Annual
	Fiscal						Compensation		All Other
Name and Principal Position	Year		Salary($)		Bonus($)		($)		Compensation
Debra L. Towsley, President		2006		53,654		—		48,000		2,535,003
		2005		5,192		—		48,000		154,808
		2004		32,308		—		48,000		87,692
Raymond J. Talarico, EVP & Chairman		2006		49,039		—		48,000		2,539,618
		2005		0		—		48,000		160,000
		2004		0		—		48,000		120,000
Charles Hansen III. COO		2006		49,039		—		0		1,645,000
		2005		577		—		0		-0-
		2004		28,269		—		0		-0-

We may hire additional executive employees and/or change the compensation paid to and benefits received by our current executive employees, as our Board of Directors deems advisable or necessary. We plan to reimburse our executive employees for all travel expenses incurred in connection with the business of the Company. To date, the Company’s Board of Directors has not adopted any retirement, pension, profit sharing or other similar programs for our executive employees.

Options granted in the last fiscal year

The following table sets forth information relating to the options awarded to, earned by or paid to the executive officers set forth below per the compensation agreements in place during fiscal 2006, 2005 and 2004 for services rendered.

	Fiscal
Name and Principal Position	Year		Number Options		Exercise Price
Debra L. Towsley, President		2006		500,000		.001
		2005		500,000		.001
		2004		500,000		.001
Raymond J. Talarico, EVP& Co-Chairman		2006		500,000		.001
		2005		500,000		.001
		2004		500,000		.001

-46-

Fiscal year-end option values

During the fiscal year ending June 30, 2006, no executive officer or director exercised any options to purchase shares of common stock.

Directors Remuneration

As of June 30, 2006, directors were not paid a fee for serving on the board.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth as of June 30, 2006, information with respect to (a) each person, (including “group”) as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, whose known to the Company to be a beneficial owner of more than 5% of outstanding common stock of the Company, and (b) the number or percentage of the Company’s common stock owned by (a) each of the directors and the executive officers named in the Summary Compensation Table above, and (b) all of the directors and executive officers of the Company as a group. The Company believes that unless otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares beneficially owned. The following table sets forth certain information regarding the beneficial ownership of the Company’s common stock as of the date of this Report by (i) each person known to the Company of having beneficial ownership of more than 5% of the Company’s common stock (ii) existing shareholders, (iii) and all others as a group.

Title of Class	Name and Address of Beneficial Owner (1)	Number of Shares	Percent of Class
Common	Debra L. Towsley 2101 W Atlantic Blvd., Ste 101, Pompano Beach, FL 33069	3,060,020 (2)	18.06%
Common	Raymond J. Talarico 2101 W Atlantic Blvd., Ste 101, Pompano Beach, FL 33069	3,060,020 (2)	18.06%
Common	Charles W. Hansen, III 2101 W Atlantic Blvd., Ste 101, Pompano Beach, FL 33069	1,127,021	6.65%
Common	TBeck Capital Inc. 5950 SW 135th Terrace, Miami Florida 33156	1,800,000 (3)	10.62%
	All officers and directors as a group (6 persons)	7,247,061	42.76%

-47-

⁽¹⁾ As used in this table, “beneficial ownership” means the sole or shared power to vote or to direct the voting of a security or the sole or shared investment power with respect to a security (i.e., the power to dispose of or to direct the disposition of a security)

⁽²⁾ Includes shares of common stock received on the conversion of Preferred C shares which were issued as a result of accrued compensation to be received under the Service Agreements referred to herein.

⁽³⁾ TBeck Capital is owned and controlled by Ronald G. Williams and Tracie Williams.

Item 13. Certain Relationships and Related Transactions

At June 30, 2005 the Company had a convertible note payable to a shareholder totaling $224,515 including accrued interest of $41,515 which was converted, on a dollar for dollar basis, into preferred C stock at June 30, 2005 (see note 10). The note was for obligations relating to the preparation of a business plan during the year ended June 30, 2003, with interest at 12.5% per annum, repayable in 48 monthly installments of $4,864. The note was collateralized by all property plant and equipment. The note was convertible into any outstanding series of common or preferred stock at any time the note was outstanding, at a par value of $0.10 per share and has priority interest to all other issued debt. During the years ended June 30, 2006 and 2005, the Company had incurred interest on the note totaling $-0- and $6,066, respectively.

The Company had loans payable to a shareholder totaling $24,827 relating to monies advanced during the year ended June 30, 2004. The loan was interest free, repayable on demand and was converted to preferred C stock at June 30, 2005.

Consulting and legal services were provided to the Company by two shareholders. During the years ended June 30, 2006 and 2005 payments totaled $-0- and $39,245, respectively.

An organization which is owned by a major stockholder provided consulting services to the Company during the years ended June 30, 2006 and 2005 totaling $-0- and $60,360, respectively.

In December 2002, the Company entered into a service agreement with a major shareholder for the provision of consulting services to the Company. The terms of the agreement provide for aggregate payments of $60,000 per annum until such time as the Company enters into operations, $120,000 for the first year of operations, with annual increases thereafter of $40,000 or 3% of gross sales, whichever is greater. The agreement also provided for the payment of various expenses, including housing expenses of $4,000 per month, health insurance, and life insurance in the amount of $5 million. As additional compensation the shareholder is allocated each year 500,000 shares of stock in the form of stock options, at par value. (see note 6). Should the Company undertake any Stock Option Plan without the approval of the shareholder it will be deemed in default of the agreement and make a one time payment of $25 million and 5 million shares. The agreement lasts for a period of ten years, with the said term extendable at the discretion of the shareholder, and provides for 52 weekly payments each year. The service agreement was terminated on June 30, 2006.

In December 2002, the Company entered into a service agreement with another major shareholder for the provision of consulting services to the Company. The terms of the agreement provide for aggregate payments of $60,000 per annum until such time as the Company enters into operations, $120,000 for the first year of operations, with annual increases thereafter of $40,000 or 3% of gross sales, whichever is greater. The agreement also provided for the payment of various expenses, including housing expenses of $4,000 per month, health insurance, and life insurance in the amount of $5 million. As additional compensation the shareholder is allocated each year 500,000 shares of stock in the form of stock options, at par value (see note 6). Should the Company undertake any Stock Option Plan without the approval of the shareholder it will be deemed in default of the agreement and make a one time payment of $25 million and 5 million shares. The agreement lasts for a period of ten years, with the said term extendable at the discretion of the shareholder, and provides for 52 weekly payments each year. The service agreement was terminated on June 30, 2006.

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Accrued consulting fees totaled $117,900 and $-0- at June 30, 2006 and 2005, respectively, after deducting payments totaling $337,241 and $331,598, respectively. At June 30, 2005 accrued consulting fees totaling $462,626 were converted to preferred C stock.

An assessment was carried out by a construction company owned by a close relative of the Company president into the suitability of enlarged facilities to house the Company's operations. At June 30, 2006 a total of $43,590 had been capitalized to leasehold improvements.

On November 9, 2005 the Company entered into a consulting agreement with a shareholder to provide assistance in all due diligence requirements in connection with a private placement funding by a major financial institution and to further acts as liaison with the Company's legal counsel. The terms of the agreement calls for a payment of $15,000. During the year ended June 30, 2006 a total of $15,000 was expensed.

During the year ended June 30, 2006 the Company issued to three major shareholders 1,513,450 shares of restricted common stock for services rendered.

Item 14. Principal Accounting Fees and Services

The following table presents aggregate fees for professional services rendered by our principal accounting firm, Berkovits, Lago & Company for the audit of our annual consolidated financial statements for the years ended June 30, 2004, June 30, 2005 and June 30, 2006.

	For the Year Ended
	June 30,		June 30,		June 30,
	2004		2005		2006
Audit fees (1)	$	11,440	$	40,250	$	38,900
Other Audit-related fees (2)		-0-		-0-		-0-
Tax fees (3)		-0-		5,560-		0
All other fees		-0-		-0-		-0-
Total fees	$	11,440-	$	45,810	$	38,900

(1)	Audit fees are comprised of annual audit fees, quarterly review fees, comfort letter fees, consent fees, fees associated with the review of prospectuses and consultation fees on accounting issues.
(2)	Other audit-related fees for fiscal year 2004, 2005 and 2006.
(3)	Tax fees are comprised of tax compliance and consultation fees.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)Documents filed as part of this report:

1.The following Financial Statements of the Company are included in Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of June 30, 2005 and June 30, 2006.

    Consolidated Statements of Operations for the Years Ended June 30, 2004, 2005 and 2006.

    Consolidated Statements of Shareholders” Deficit, for the Years Ended June 30, 2004, 2005 and 2006

    Consolidated Statements of Cash Flows for the Years Ended June 30, 2004, 2005, and 2006.

    Notes to Consolidated Financial Statements

2.Schedules to Financial Statements:

All financial statement schedules have been omitted because they are either inapplicable or the information required is provided in the Company’s Consolidated Financial Statements and Notes thereto, included in Part II, Item 8 of this Annual Report on Form 10-K

3.See Index to Exhibits on page___ of this report.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MEDirect Latino, Inc.
Date:	By:	/s/ Debra L. Towsley
		Debra L. Towsley
		President/CEO and Director (Principal Executive Officer)

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

Date:	By:	/s/ Debra L. Towsley
		Debra L. Towsley
		President/CEO and Director (Principal Financial and Accounting Officer)

Date:	By:	/s/ Raymond J. Talarico
		Raymond J. Talarico
		Executive Vice President Chairman of the Board of Directors

Date:	By:	/s/ Charles W. Hansen, III
		Charles W. Hansen, III
		Chief Operating Officer, Director

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EXHIBIT	DESCRIPTION
3	3.1 Articles of Incorporation of Interaxx Digital Tools, Inc. dated December 30, 2002 (1)
	3.2Articles of Amendment of Interaxx Digital Tools, Inc. amending name to Latino RX Direct, Inc., dated November 3, 2004 (1)
	3.3Amended and Restated Articles of Latino RX Direct amending name to MEDirect Latino, Inc., dated February 10, 2005 (1)
	3.4Articles of Amendment of MEDirect Latino, Inc. dated February 3, 2006 (1)
	3.5Articles of Amendment of MEDirect Latino, Inc. dated October 10, 2006
	3.6Bylaws (1)
10	10.1Service Agreement (Consulting) between MEDirect Latino and Debra L. Towsley, dated December 2, 2002 (2)
	10.2Service Agreement (Consulting) between MEDirect Latino and Raymond J. Talarico, dated December 2, 2002 (2)
	10.3Office/Warehouse Lease Agreement dated February 8, 2006
14	Code of Ethics
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 905of the Sarbanes-Oxley Act of 2002

1. Incorporated by reference to our Registration Statement on Form 10 filed February 17, 2006, file # 0-51795

2. Incorporated by reference to our Registration Statement on Form 10 filed March 24, 2006.

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EX-3.5

Exhibit 3.5

ARTICLES OF AMENDMENT

TO THE

ARTICLES OF INCORPORATION

OF

MEDIRECT LATINO, INC.

Document Number: P03000000129

Pursuant to the provisions of Section 607.1006, Florida Statutes, this Florida profit corporation adopts the following articles of amendment to its articles of incorporation:

FIRST: The following Articles are being amended:

Article IV:(a)The total number of capital stock which this Corporation is authorized to issue

is 59,000,000 shares, of which:

(i) 55,000,000 shares shall be designated as Common Stock, of which:

(A) 50,000,000 shares shall be Common Stock, par value of $.0001 per share; and

(B) 5,000,000 shares shall be designated as Class A Common Stock, par value of $.0001 per share. The Class A Common shares entitle the holder to ten (10) votes per share on all matters brought before the Board. The Class A Common shares shall have no market value and are intended through their issuance to insure the continuity of management.

(ii) 4,000,000 shares shall be designated as Preferred Stock, and shall have a par value of $.0001 per share, which consists of 1,000,000 shares of Series A Cumulative Preferred Stock (the “Series A Preferred Stock”) and 2,000,000 shares of Series B Convertible Preferred Stock and 1,000,000 shares of Series C Convertible Preferred Stock which consist of:

(A) 2,000,000 shares shall be designated as Series B Convertible Preferred Stock which shall have preference over common shares in the event of liquidation or winding up of the affairs of the Corporation. The Preferred B shares pay a 12% annual dividend and may be converted into shares of the Corporation’s common stock on a one for one basis at the time of conversion.

(B) 1,000,000 shares shall be designated as Series C Convertible Preferred Stock which shall have preference over common shares in the event of liquidation or winding up of the affairs of the Corporation. The Preferred C shares pay a 6% annual dividend and may be converted into shares of the Corporation’s common stock on a one for one basis at the time of conversion.

(the remainder of Article IV remains the same)

SECOND: Adoption of Amendments (Check One):

: The amendments were approved by the shareholders. The number of votes cast for amendments were sufficient for approval.

G The amendments were approved by the shareholders through voting groups. The following statement must be separately provided for each voting group entitled to vote separately on the amendment(s):

AThe number of votes cast for amendment(s) was/were sufficient for approval by ___________________ (voting group).@

G The amendments were adopted by the board of directors without shareholder action and shareholder action was not required.

G The amendments were adopted by the incorporators without shareholder action and shareholder action was not required.

The adoption date is October 6, 2006.

IN WITNESS WHEREOF, the undersigned has executed these Articles of Amendment to the Articles of Incorporation this 6^th day of October, 2006.

By:	/s/ Debra L. Towsley
	President

By:	/s/ Charles Hansen, III
	Chief Operating Officer

EX-14.1

Exhibit 14.1

CODE OF ETHICS FOR FINANCE PROFESSIONALS

In my role as a finance professional of MEDirect Latino, Inc., I certify to you that I adhere to and advocate the following principles and responsibilities governing my professional and ethical conduct.

To the best of my knowledge and ability:

1.I act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.

2. I provide constituents with information that is accurate, complete, objective, relevant, timely and understandable.

3.I comply with rules and regulations of federal, state, provincial and local governments, and other appropriate private and public regulatory agencies.

4. I act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing my independent judgment to be subordinated.

5.I respect the confidentiality of information acquired in the course of my work except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of my work is not used for personal advantage.

6.I share knowledge and maintain skills important and relevant to my constituents’ needs.

7.I proactively promote ethical behavior as a responsible partner among peers in my work environment.

8.I achieve responsible use of and control over all assets and resources employed or entrusted to me.

9.I report known or suspected violations of this Code in accordance with MEDirect Latino, Inc.'s rules of procedure through the compliance hotline, a supervisor or a human resources representative.

10.I am accountable for adhering to this Code.

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

[Signature]

EX-31

Exhibit 31

Rule 13a-14(a)/15d-14(a) Certification

I, Debra Towsley, certify that:

1.I have reviewed this annual report on Form 10-K of MEDirect Latino, Inc.,

2.Based on my knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statement and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.I am responsible for establishing and maintaining disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and 15d-15(e) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made know to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations, and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Debra Towsley
	Principal Executive Officer, Principal Financial and Accounting Officer

EX-32

Exhibit 32

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of MEDirect Latino, Inc. (the “Company”) for the fiscal year ended June 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Debra L. Towsley as Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 12, 2006

___________________________

Debra L. Towsley

Chief Executive Officer

And Chief Financial Officer

A signed original of this written statement required by Section 1350 of Title 18 of the United States Code has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-10.3

OFFICE/WAREHOUSE LEASE AGREEMENT

This lease made and entered into at Broward County, Florida, the 8™ day of February, 2006 by and between POMPANO/LINCOLN INDUSTRIAL, LTD., hereinafter called "LANDLORD", and MEDIRECT LATINO, INC. hereinafter called "TENANT", the terms "LANDLORD" and "TENANT" being intended to include the permitted successors and permitted assigns of the original parties and the heirs, legal representatives, permitted successors and permitted assigns of the respective persons who from time to time are LANDLORD and TENANT, wherever the context of this Lease so requires or admits.

WITNESSETH:

That the LANDLORD, for and in consideration of the rents herein reserved to be paid by the TENANT, for and hi consideration of the covenants to be kept and performed by the TENANT, does hereby lease, let and demise unto the TENANT, the following warehouse unit/or units situated in Broward County, Florida, and described as follows: Address: 2101 W. Atlantic Blvd. Suites #101 and #106, Pompano Beach, FL 33069

The premises are deemed to be 23,336 square feet for purposes of all calculations and payments hereunder, regardless of measurement method or variance in actual square footage.

 1.ACCEPTANCE OF DEMISE. BY TENANT: The TENANT, in consideration of the demise of said property by the LANDLORD, and for the further considerations herein set out, has rented, leased and hired, and does hereby rent, lease and hire the said property from the LANDLORD, on the terms and conditions hereinafter stated.

 2.DURATION OF TERM:

  A.The Primary Term and duration of the Lease shall be for a period of 5 years, commencing the 1" day of April, 2006

(the "Commencement Date").

  B.Provided the TENANT has not defaulted under the terms of this Lease, the TENANT shall have the right, privilege

and option of extending this Lease for an additional period of 5 years (hereinafter referred to as Secondary Term) commencing

upon the termination date of the Primary Term set forth above. The TENANT shall exercise its option for the Secondary Term of

this Lease by delivering written notice to the LANDLORD at least 180 days prior to, and no more than 210 days prior to, the

expiration of the Primary Term by Certified Mail.

 3.AMOUNT OF RENT AND MANNER OF PAYMENT:

  A.The TENANT shall pay unto the LANDLORD the minimum rent for the Primary Term of this Lease the total rental

in the sum of $838,229.12 Dollars, said sum to be paid monthly in advance as follows:

Year 1 - $12,640.33 per month plus applicable sales and use tax

Commencing Year 2 and annually thereafter the base rent shall increase by 5%, including option periods.

  B.In the event the commencement date is adjusted by reason of construction, rent shall be paid and pro rated to the first

day of the following month in order that rent shall always be paid monthly in advance, on or before the first day of each month.

  C.In addition to the payments of minimum rent to the LANDLORD, the TENANT shall also pay the following, as and

for, and hereby defined as "additional rent":

   (I) REAL ESTATE TAXES: TENANT agrees to pay its proportionate share of the real estate taxes during the term of this Lease and any renewal or extension thereof, including any period during which TENANT shall transact business in the Demised Premises prior to the commencement of the term of this Lease. For the purposes of this Article, the term "Real Estate Taxes" shall include all real estate taxes, assessments, water and sewer charges, betterment assessments, sales and/or rent taxes, special assessments, other governmental impositions and charges of every kind and nature whatsoever, extraordinary as well as ordinary, foreseen and unforeseen and each and every installment thereof which shall or may, during the Lease term, be levied, assessed, imposed, become due and payable, or liens upon or arising in connection with the use, occupancy or possession of or grow due or payable out of, or for, the POMPANO/LINCOLN INDUSTRIAL, LTD or any part thereof, and all costs incurred by LANDLORD in contesting, litigating or negotiating the same with the governmental authority- TENANTS proportionate share shall be computed by multiplying the total amount of the real estate taxes each year by a fraction, the numerator of which shall be the gross leasable area of the Demised Premises and the denominator of which is the gross leasable area of all building or portions thereof (including the Demised Premises) occupied by TENANT in the POMPANO/LINCOLN INDUSTRIAL, LTD determined as of the Commencement Date of the Lease and thereafter as of the beginning of the calendar year in which such taxes are paid. TENANT hereby waives any right it may have by statute or otherwise to protest real estate taxes to any public taxing authority. Nothing herein contained shall be construed to include as a tax which shall be the basis of real estate taxes, any inheritance, estate, succession, transfer, gift, franchise, corporation, income or profit tax or capital levy that is or may be imposed upon LANDLORD; provided, however, that if at any time after the date hereof, the methods of taxation shall be altered so that in lieu of or as a substitute for the whole or any part of the taxes now levied, assessed or imposed (a) a tax on the rents received from such real estate, or (b) a license fee measured by the rents receivable by LANDLORD which is otherwise measured by or based in whole or in part upon the POMPANO/LINCOLN INDUSTRIAL, LTD or any portion thereof, or (c) an income or franchise tax, then the same shall be included in the computation of real estate taxes hereunder, computed as if the amount of such tax or fee so payable were that due if the POMPANO/LINCOLN INDUSTRIAL, LTD were the onJy property of LANDLORD subject thereto.

    A. TENANT agrees to pay to the LANDLORD the sum of $23,336.00 Dollars per annum payable in monthly installments of $1,944.67 on the first day of each calendar month as its estimated payment of Real Estate taxes until the POMPANO/LINCOLN INDUSTRIAL, LTD is assessed as substantially completed. For each year thereafter TENANT shall pay LANDLORD monthly one-twelfth (1/12) of the amount of the TENANT'S proportionate tax liability based on the actual taxes for the preceding calendar year. LANDLORD shall notify TENANT in writing of the actual amount due by TENANT for the preceding calendar year when determined. Any amount paid by TENANT which exceeds the true amount due shall be credited on the next succeeding payment due pursuant to this Section. If TENANT has paid less than the true amount due, TENANT shall pay the difference within ten (10) days of receipt of notice from LANDLORD. If the term of this Lease shall begin or end other than on the first or last day of a calendar year, these charges shall be billed and adjusted on the basis of such fraction of a calendar year. Should the taxing authorities include in such real estate taxes, machinery, equipment, fixtures, inventory or other personal property or assets of the TENANT, then TENANT shall also pay its proportionate share of the entire real estate taxes for such items.

   B. TENANT shall pay to LANDLORD, together with each installment of Rent, all sales or rent taxes from time to time imposed in connection with rents paid by TENANT under this Lease.

   4. COMMON AREAS:

 A. LANDLORD shall make available within or adjacent to the POMPANO/LINCOLN INDUSTRIAL, LTD such Common Areas, together with any Common Areas made available by means of cross easements and/or reciprocal construction, operating and easement agreements, as LANDLORD shall, from time to time, deem to be appropriate for the POMPANO/LINCOLN INDUSTRIAL, LTD and LANDLORD shall operate and maintain such Common Areas for their intended purpose. TENANT shall have the non-exclusive right during the term of this Lease to use (for their intended purposes) the Common Areas for itself, its employees, agents, customers, invitees, licensees and concessionaires subject, however, to the provisions of this Article.

B. All Common Areas shall be subject to the exclusive control and management of LANDLORD, and LANDLORD shall have the right, at any time and from time to time, to establish, modify, amend and enforce uniform rules and regulations with respeql. to the common Areas and the use thereof. TENANT agrees to abide by and conform with such rules and regulations upon notice thereof, to cause its concessionaires, invitees and licensees and its and their employees and agents, to abide and conform. LANDLORD shall have the right (a) to close, if necessary, all or any portion of the Common Areas to such extent as may in the opinion of LANDLORD'S counsel be reasonably necessary to prevent a dedication or public taking thereof or the accrual of any rights of any person or of the public therein, (b) to close temporarily all or any portion of the Common Areas to discourage non-customers' use, (c) to use portions of the Common Areas while engaged in making additional improvements or repairs or alterations to the POMPANO/LINCOLN INDUSTRIAL, LTD, (d) to transfer, in whole or in part, any of LANDLORD'S rights and/or obligations under this Article, to any other TENANT(s) sub-TENANT(s) or other occupant(s) of the POMPANO/LINCOLN INDUSTRIAL, LTD or to such other party(ies) or designee(s) as LANDLORD may from time to time determine, and (e) to do and perform such other acts (whether similar or dissimilar to the foregoing) in, to and with respect to, the Common Areas as in the use of good business judgment LANDLORD shall determine to be appropriate for the POMPANO/LINCOLN INDUSTRIAL, LTD. TENANT agrees to cause its officers, employees, agents, licensees and any concessionaires to park their respective automobiles, trucks and other vehicles only in such parking places in the Common Areas designated by the LANDLORD from time to time as the employee parking area. TENANT shall not at any time interfere with the rights of LANDLORD and other TENANTS, their officers, employees, agents, licensees, customers, invitees and concessionaires, to use any part of the parking areas and other Common Areas.

C. In consideration of LANDLORD'S agreement to operate and maintain the Common Areas, TENANT covenants and agrees to pay TENANT'S Pro Rata Share of the Common Area Costs (as such terms are defined below) for each Lease Fiscal Year. LANDLORD shall notify TENANT from time to time of the amount which LANDLORD estimates will be the amount of the Common Area Costs for such Lease Fiscal Year and TENANT shall pay to LANDLORD the sum of $37,337.60 Dollars per annum payable in monthly installments of $3,111.47 on the first day of each calendar month as its estimated payment of Common Area Costs until the POMPANO/LINCOLN INDUSTRIAL, LTD is assessed as substantially completed. For each year thereafter TENANT shall pay LANDLORD monthly one-twelfth (1/12) of the amount of the TENANT'S proportionate Common Area Costs based on the actual Common Area Costs for the preceding calendar year. LANDLORD shall submit to TENANT annually a statement showing the Common Area Costs to be paid by TENANT with respect to such year, the amount heretofore paid by TENANT during such Lease Fiscal and the amount of the resulting balance due thereon, or overpayment thereof, as the case may be. Appropriate adjustment shall thereupon be made between the parties, on demand, on the basis of such statement. Each statement shall be binding upon TENANT, its successors and assigns, as to the matters set forth therein, if no objection is raised with respect thereto within thirty (30) days after submission of each statement to TENANT. TENANT shall have the right, at TENANT'S expense, to examine LANDLORD'S books and records at the offices of LANDLORD during ordinary business hours not more than once in each Lease Fiscal Year for the purpose of verifying the matters set forth in the statement for the immediately preceding Lease Fiscal Year.

   (1)"Common Area Costs" shall mean the total costs and expenses incurred by LANDLORD, its agents and/or designees for operating, maintaining, repairing and/or replacing all or any part of the Common Areas (and any installation therein, thereon, thereunder, or thereover), which costs and expenses shall include, but shall not be limited to, the following: the total costs and expenses incurred in cleaning, planting, replanting and maintaining the landscaping of the common facilities of the POMPANO/LINCOLN INDUSTRIAL, LTD; the cost of all LANDLORD'S insurance, including, but not limited to, fire and other casualty, bodily injury, public liability, property damage liability, automobile parking lot liability insurance, sign insurance, workmans compensation insurance and other insurance carried by LANDLORD for the Common Areas; assessments; repairs; repaving; line repainting; exterior repainting; rental and maintenance of signs and equipment; lighting; sanitary control; removal of trash, rubbish, garbage and other refuse; depreciation of machinery and equipment used in such maintenance; depreciation of roof and paved areas; repair and/or replacement of on-site water lines, electric lines, gas lines, sanitary sewer lines and storm water lines; all electrical, water, sewer or other utility charges for serving the Common Areas (including any on-site and/or off-site sanitary treatment plant(s) serving the POMPANO/LINCOLN INDUSTRIAL, LTD and all pipes leading to and from same); Management Fees and the cost of personnel to implement such services, including the directing of parking; wages and salaries (including employee benefits, unemployment insurance and social security payments) of any personnel necessary to implement the operation, maintenance and repairs of the POMPANO/LINCOLN INDUSTRIAL, LTD (excluding the cost of any work performed at LANDLORD'S home office); personal property taxes, sales and use taxes on material, equipment, supplies and services; fees for required licenses and permits; fire, security and police protection, sprinkler system; public address system(s);

public toilets; reasonable straight line of depreciation of, and rental charges for, movable equipment; supplies, material and labor.

   (2)"Lease Fiscal Year" means each period of January 1 through December 31 during the term hereof except that the first Lease Fiscal Year shall be the period from the commencement of the term hereof through the December 31 next following the commencement date and the last Lease Fiscal Year shall be the period from the January 1 next preceding the termination date to and including the termination date of the lease term.

   (3)"TENANT'S Pro-rata Share" is defined as a fraction, the numerat

or of which is the gross leasable area of the Demised Premises and the denominator of which is the gross leasable area of all buildings or portions thereof (including the Demised Premises) occupied by TENANTS in the POMPANO/LINCOLN INDUSTRIAL, LTD. All amounts due and payable under this Article 3, whether minimum Rent, Common Area Maintenance, Real Estate Tax, or Sales Tax, are hereby deemed and

defined, as "Rent".

 4.TENANTS SUBORDINATION TO MORTGAGE:

It is specifically understood and agreed by and between the LANDLORD and the TENANT that the LANDLORD may from time to time secure mortgages on the Demised Premises from a bank, savings and loan association, insurance company or other lender; and that this Lease is and shall be subordinate to the lien of any mortgages; and the TENANT agrees that it will execute and or provide as the case may be such subordination and other documents, including but not limited to estoppel certificates and financial statements, or agreements as may be requested or required by such lenders; however, that the mortgage and/or subordination agreement, as the lender may direct, shall contain a provision which states, in effect, that the TENANT shall not be disturbed in its possession and occupancy of the Demised Premises during the term of this Lease, notwithstanding any such mortgage or mortgages, provided that the TENANT shall comply with and perform its obligations hereunder.

 5.COVENANTS OF THE TENANT: The TENANT hereby covenants and agrees with the LANDLORD as follows:

  A.That it will promptly pay the rent as herein specified without notice.

  B.That it will keep the interior portion of the demised premises and the improvements placed therein in a good state of repair, and it will be responsible for all repairs and replacements including the painting, maintenance and interior repairs to the interior of the building including all windows, doors and openings, all electrical, heating, plumbing, air conditioning and other systems installed within or without of the building. It is intended that the LANDLORD will maintain the exterior masonry of the

building and roof area only, and the TENANT shall maintain everything else. It is acknowledged, however, that if TENANT installs and maintains T.V. antennas, air conditioning and/or signs, lighting, and/or other equipment, objects or materials and the like, on the roof of the premises (and such installation shall be only on the roof directly over the premises leased by the TENANT), the TENANT shall be solely responsible for all of said area over the Demised Premises and any other area affected by the installation or maintenance work thereon.

  C.INDEMNITY AND INSURANCE:

   (I) TENANT agrees to save LANDLORD harmless from, and indemnify LANDLORD against, and covenants not to sue LANDLORD for, to the extent permitted by law, any and all injury, loss or damage and any and all claims of injury, loss or damage, of whatever nature (a) caused by or resulting from, or claimed to have been caused by or to have resulted from, any act, omission or negligence of LANDLORD, by TENANT or anyone claiming under TENANT (including, but without limitation subtenants and concessionaires of TENANT and, employees and contractors of TENANT or its subtenants or concessionaires), no matter where occurring and (b) occurring upon or about the Demised Premises, including but not limited to common areas, parking lots, landscaped areas, no matter how caused, all of the foregoing REGARDLESS OF ANY NEGLIGENCE ON LANDLORD'S PART. This covenant, indemnity and hold harmless agreement shall include indemnity against all costs, expenses and liabilities incurred in connection with any such injury, loss or damage or any such claim, or any proceeding brought thereon or the defense thereof. If TENANT or anyone claiming under TENANT, or the whole or any other part of the property of TENANT or anyone claiming under TENANT shall be injured, lost or damaged by theft, fire, water or steam or in any other way or manner, whether similar or dissimilar to the foregoing, no part of said injury, loss or damage is to be borne by LANDLORD. TENANT covenants not to sue LANDLORD for, and agrees that LANDLORD shall not be liable to TENANT or anyone claiming under TENANT for any injury, loss or damage that may be caused by or result from the fault or negligence of any persons occupying adjoining premises or any other part of the Entire Premises, or as the result of criminal acts by third parties, regardless of forseeability.

   (2) TENANT will maintain general comprehensive public liability insurance, with respect to the Demised Premises and its appurtenances, naming LANDLORD and TENANT as insureds, in amounts not less than One Million (SI,000,000.00) Dollars with respect to injuries to any one person and not less than One Million (SI,000,000.00) Dollars with respect to injuries suffered in any one accident, and not less than One Million ($1,000,000.00) Dollars with respect to property, said policy to apply as the primary source of recovery in the event of any occurrence, loss, or damage. TENANT will keep all plate glass insured naming LANDLORD and TENANT as insured as their interest may appear. LANDLORD may, from time to time, increase the amount of such Public Liability Insurance coverage by giving ninety (90) days prior written notice thereof to TENANT, in which event, all subsequent policies acquired by TENANT shall conform to the new insurance requirements. TENANT shall deliver to LANDLORD the policies of such insurance, or certificates thereof, at least fifteen days prior to the commencement of the term of this lease, and each renewal policy or certificate thereof, at least fifteen (15) days prior to the expiration of the policy it renews. In the event TENANT does not deliver the policies and certificates of insurance to LANDLORD as aforesaid, LANDLORD shall have the right to purchase said insurance on behalf of TENAK7, and upon submission to TENANT of a bill for the amount paid by LANDLORD, TENANT shall remit within five (5) days of receipt of said statement the amount owed, together with interest thereon at a rate equal to the highest rate allowed by law to be charged by LANDLORD per annum.

  D.That TENANT may not assign this Lease, or let, underlet, or sublet, the whole or any part of said premises without the written consent of the LANDLORD, which consent shall not be unreasonably withheld. No assignment or subletting shall exonerate TENANT from its' obligations hereunder.

  E.That TENANT will not occupy or use said premises, nor permit the same to be occupied or used for any business which is unlawful. That it will comply with all lawful requirements of the Board of Health, Police Department, Fire Department. Municipal, County, State, Federal and any and all other agents, agencies or authorities respecting the manner in which it uses the leased, premises.

  F.That at the expiration of said term or any extension or renewal thereof, it will quit and surrender the demised premises in a good and substantial state of repair, reasonable wear and tear excepted. The TENANT shall be responsible for any damage created by reason or by virtue of the conduct of its business; and shall return the demised premises in its original state (original state means the condition of the premises on the date tenant first occupied the premises regardless of the date of this

lease or the commencement date of this lease), reasonable wear and tear excepted.

  G.That TENANT shall not use the premises for any purpose which may increase the standard rate of fire, windstorm, extended coverage and liability insurance; that in the event standard rates of insurance cannot be obtained by reason of the TENANT'S use of the demised premises, then and in that event, the TENANT shall, forthwith upon notice, at LANDLORD'S option, either desist from said unacceptable use and/or pay such additional insurance premiums.

  H. That not withstanding the terminology contained in sub-paragraph B above, or elsewhere in this Lease Agreement, signs shall not be erected and/or attached to any portion of the demised premises without the express written consent of the LANDLORD. TENANT acknowledges that the LANDLORD demands uniformity and the sole discretionary right to determine the size, materials and lighting thereof: and accordingly, the LANDLORD may at its option, order and have installed the signs from one source, same to be at the sole cost and expense of the TENANT; provided, however, that the TENANT shall first approve same. Violation of this restriction shall allow LANDLORD to remove such signs without notice and at cost of TENANT.

  I. That TENANT shall not use the interior and/or exterior portion of the demised premises, or any portion of the common areas, parking lot, landscaped areas, or other portions of the property so as to cause any noise, noxious odors, accumulation of materials, supplies, equipment vehicles, waste, discharge or accumulation or storage of hazardous waste, or garbage, vibrations, damage or any other disturbance or nuisance whatsoever which may create undue annoyance or hardship to another TENANT of the LANDLORD, and/or to the LANDLORD and/or a hazard or element of waste to LANDLORD'S property. The TENANT shall not make any change to the exterior and/or interior portion of the building without the express written consent of the LANDLORD, and particularly the TENANT will not cause anything to be done which may impair the overall appearance of the LANDLORD'S building. Although the demised premises is intended to include the exterior walls and parking spaces immediately in front of the premises, the TENANT covenants that it shall not use the exterior portion of the demised premises except for parking and ingress and egress. The TENANT shall not cause the access street or streets in the POMPANO/LINCOLN INDUSTRIAL, LTD to be blocked so as to cause any disruption of traffic by reason of loading, deliveries, etc.

  J. That TENANT accepts the demised premises in its present ("as is") condition, except as depicted on Exhibit "B" of this lease. In the event that the demised premises have not been completely constructed as of the execution of the Lease, then in that event, the TENANT acknowledges that TENANT has inspected the plans and specifications and accepts substantial completion of same pursuant to the plans; there being no further representations or warranty by LANDLORD.

  K. That the LANDLORD or LANDLORD'S agent may at any reasonable time enter and view said premises and make repairs, if LANDLORD should elect to do so.

  L. That the TENANT takes all risk of any damage to TENANT'S property that may occur by reason of water or the bursting or leaking of any pipes or waste water about said premises, or from any act of negligence of any co-tenant or occupants of the building, or of any other person, or fire, or hurricane, or other act of God, or from any cause whatsoever.

  M. That TENANT covenants not to sue LANDLORD for, and shall indemnify and save harmless the said LANDLORD from and against any and all claims, suits, actions, damages, and/or causes of action arising during the term of this Lease for any personal injury, loss of life and/or damage to property sustained in or about the leased premises, by reason or as a result of the TENANT'S occupancy thereof, and from and against any orders, judgments, and/or decrees which may be entered thereon, and from and against all cost, counsel fees, expenses and liabilities incurred in and about the defense of any such claim and the investigation thereof, REGARDLESS OF ANY NEGLIGENCE ON LANDLORD'S PART.

6.COVENANTS OF THE LANDLORD: The LANDLORD hereby covenants and agrees with the TENANT as follows:

 A. That TENANT on paying the rental and performing the covenants herein agreed to by it to be performed shall remain peaceably and quietly in possession, have, hold and enjoy the demised premises for the said term(s). The LANDLORD, however, shall not be responsible to the TENANT if any prior TENANT shall refuse to vacate the premises upon the expiration of such TENAT^TS leasehold estate.

7.ADDITIONAL MUTUAL COVENANTS: The following stipulations and agreements are expressly understood by

both the LANDLORD and the TENANT and they do hereby agree to abide by them:

 A.That upon the breach of any of the covenants, conditions and stipulations herein contained to be kept and performed by the TENANT, the LANDLORD may immediately without notice and without the necessity of legal process re-enter said premises, and thereupon, at the LANDLORD'S option, said lease shall forthwith be terminated and/or the LANDLORD may exercise any of the options herein provided for the LANDLORD'S benefit in case of default on the part of the TENANT.

 B.Fire or other Casualty: If the building is so damaged by fire or other casualty that the Premises are rendered unfit for occupancy (whether or not the premises are damaged), then, at either party's option, the term of this Lease, upon written notice from such party given within 30 days after the occurrence of such damage, shall terminate as of the date of the fire or other casualty. In such case, Tenant shall pay the rent apportioned to the time of such termination, and Landlord may enter upon and repossess the Premises without further notice. If neither party elects to terminate the term of this Lease, Landlord will repair the building to the extent that Landlord receives insurance proceeds there for, and Landlord may enter and possess the Premises for that purpose. While Tenant is deprived of the Premises, rent shall be suspended in proportion to the number of square feet of the

premises rendered untenantable. If the Premises or the building shall be damaged to that such damage does not render the premises unfit for occupancy. Landlord will repair whatever portion of the Premises or of the building that may have been damaged, and Tenant will continue in possession, and rent will be apportioned or suspended to the extent that the Premises are partially untenantable as a result of the damage. In the event Landlord elects to repair or rebuild the Premises pursuant to this paragraph, Tenant agrees to furnish Landlord with all insurance proceeds which Tenant recovers for damage to any Standard Building Finishes and Work, excluding improvements paid for by Tenant. The reconstruction of the Premises beyond Standard Building Finishes and Work shall be Tenant's sole responsibility, at Tenant's option. Despite any other provisions of this article 7.B., if any damage is caused by or results from the gross negligence or intentional act of Tenant, those claiming under Tenant, or Tenant's employees, or invitees, rent shall not be suspended or apportioned, and Tenant shall pay, as additional rent upon demand, the cost of any repairs, made or to be made, as a result of such damage.

 C. SECURITY DEPOSITS: LANDLORD acknowledges the receipt of, subject to clearance SI 8,758.26 due upon signing this lease as security deposit for the performance of TENANT'S obligations under this Lease. LANDLORD is not obligated to apply the security deposit for rent or charges in arrears or damages for the TENANTS failure to perform or otherwise breach this Lease, the LANDLORD may do so at its option. The LANDLORD'S right to possession of the premises for non-payment of rent or for any other reason shall not be affected in any way by the LANDLORD holding the security. Tenant agrees that if it fails to make any payment in accordance with the above schedule on a timely basis, any money received by Landlord from Tenant shall first be applied toward Security Deposit due and the balance shall then be applied towards rent due, regardless of any legend or memo on the front or back of any check, and regardless of any letter, note or memo accompanying any check.

 D.That the covenants and agreements contained in this Lease are interdependent and are binding on the parties hereto, their successors and assigns. This Lease has been prepared in several counterparts, each of which said counterpart, when executed, shall be deemed to be an original hereof. There shall be no construction or interpretation of this Lease favorable or unfavorable to either party by virtue of its' preparation by LANDLORD. The parties hereby waive any right to trial by jury. In the event of any litigation, the prevailing party shall recover reasonable attorney fees and costs incurred. Any claim whatsoever that TENANT may have against LANDLORD shall not be asserted as a counterclaim by TENANT in an eviction action commenced by LANDLORD, but rather shall be brought by TENANT as a separate action.

 E.That if the TENANT shall not pay the rents herein reserved at the time and in the manner stated, or shall fail to keep and perform any other condition, stipulation or agreement herein contained on the part of the TENANT to be kept and performed, or in the event that any petition or suit shall be filed by or against the TENANT under the bankruptcy laws (state or federal) or make an assignment for the benefit of creditors, or should there be appointed a Receiver to take charge of the premises either in the state courts, or in the federal courts, then in any of such events, the LANDLORD may, at LANDLORD'S option, terminate and end this Lease and re-enter upon the property, whereupon the term hereby granted and at the LANDLORD'S option, all right, title and interest under it, shall end and the TENANT become a TENANT at sufferance, or else, said LANDLORD may, at LANDLORD'S option, elect to declare the entire rent for the balance of the term due and payable forthwith, and may proceed to collect the same by distress or otherwise, and thereupon said term shall terminate, at the option of the LANDLORD or else and said LANDLORD may take possession of the premises and rent the same for the account of the TENANT, the exercise of any of which options herein contained shall not be deemed the exclusive LANDLORD'S remedy, the expression "entire rent for the balance of the term" as used herein, shall mean all of the rent prescribed to be paid by the TENANT unto the LANDLORD for the full term of the Lease; less, however, any payments that shall have been made on account of and pursuant to the terms of said Lease. LANDLORD shall immediately be entitled to relief from the automatic stay provided by Section 362 of the bankruptcy code, irrespective of the requirement of Section 362, and LANDLORD shall not be obligated to satisfy those requirements in order to obtain relief. This provision is a material inducement to LANDLORD entering into this Lease.

 F.That at LANDLORD'S option if the TENANT shall abandon, vacate or remove the major portion of the goods, wares, merchandise, machinery, equipment and any other material held on these premises in the course of business, usually kept on said premises when the same is open for business and shall cease doing business in said premises, then and in such event, this Lease shall immediately become canceled and null and void and all payments made by said TENANT shall be retained by the LANDLORD as payment in full for the period of time the premises are occupied by the TENANT and TENANT shall not be entitled to any monies to paid by it, even though such payment is for time subsequent to such closing of the premises and removal of the goods, wares, merchandise, machinery, equipment, etc.

 G.TENANT agrees that in case of the failure of the said TENANT to pay the rent herein reserved when the same shall become due and it becomes necessary for the LANDLORD to collect said rent through an attorney, the TENANT will further pay a reasonable attorney's fee together with all costs and charges thereof.

 H. That if TENANT shall hereafter install, at its expense, any shelving, lighting and other fixtures, unit heaters, portable air conditioning units, portable partitions or any trade fixtures, or if TENANT shall hereafter install or apply any advertising signs or other standard identifications of TENANT, any article so installed or any identification so applied shall be the property of TENANT, which TENANT may remove at the termination of this Lease, provided that in such removal TENANT shall repair any damage occasioned to the demised premises, in good workman-like manner. The TENANT shall not remove any fixtures, equipment, or additions which are normally considered to be affixed to the realty, such as, but not limited to, electrical conduit and wiring, panel or circuit boxes, terminal boxes, partition walls, paneling, central air conditioning and ducts, plumbing fixtures, or any other equipment or material affixed to the structure.

 I. That LANDLORD shall have the right to affix a reasonable sign to the premises six months prior to the termination of the Lease advertising same for rent and the LANDLORD shall have the right to exhibit the premises during said six months, provided that same is during business hours and not more frequently than once every day.

 J. That notices as herein provided shall be given by registered or certified mail, return receipt requested, to the LANDLORD at: POMPANO/LINCOLN INDUSTRIAL, LTD, 5009 N. Hiatus Road, Sunrise, FL 33351 and to the TENANT at the demised premises, except that three day notices for nonpayment of Rent may be hand delivered or posted. The address for giving said notices may be changed by the LANDLORD or TENANT in writing, at the addresses set forth herein, or as modified.

 K. That any provision herein contained which shall appear to be intended to survive the expiration of this Lease shall survive such expiration date.

 L. That the TENANT shall use and occupy the premises for health care and related business and for no other purpose.

 M, Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present a health risk to persons who are exposed to it over time. Levels of radon that exceed Federal and State Guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing can be obtained from your county public health unit.

 N. Condemnation: If the whole or a substantial part of the building is taken or condemned for public use, Tenant shall have no claim against Landlord, and shall have no claim to any portion of the amount that may be awarded to Landlord as damages or paid as a result of such condemnation, including any right of Tenant to damages for loss of its leasehold. All rights of Tenant to damages therefore are hereby assigned by Tenant to Landlord. The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, business dislocation damages, or for any other award which would not reduce the award payable to Landlord. Upon the date the right to possession vests in the condemning authority, this lease shall cease and terminate with rent adjusted to such date, and Tenant shall have no claim against Landlord for the value of any unexpired term of this lease.

 O. No legend or memo on the front or back of any check, and no letter, note or memo accompanying any check, and LANDLORD'S physical acceptance (and endorsement and deposit, as the case may be) shall in any way constitute an accord and satisfaction between the parties, a waiver or forfeiture by LANDLORD, or a novation of this lease, when the amount tendered by TENANT is less than the amount actually due under this lease.

 P. TENANT agrees to pay a late charge fee of seven (7%) percent of the monthly rent for any monthly payment received by LANDLORD after the fifth (5th) day of the month on which the rental payment is due. This late charge fee is hereby deemed "Rent". If any payment of rent, or additional rent, is made by check, and the check is dishonored for any reason, including but not limited to insufficient funds or uncollected funds, TENANT shall reimburse LANDLORD with cash or a cashier's check in the amount of the dishonored check, plus a dishonored check fee in the amount of 7%. This 7% dishonored check fee is hereby defined and deemed as "rent" hereunder.

 Q. RULES AND REGULATIONS FOR COMMON AREAS (See attached Exhibit "A"):

 R. CONSTRUCTION LIENS: Landlord's fee simple interest shall not be subject to any liens whatsoever for any improvements made by Tenant. Tenant covenants and agrees that it has no power to incur any indebtedness giving a lien of any kind upon the right, title and interest of Landlord in and to the Lease Premises, and that no person shall ever be entitled to any lien, directly or indirectly, derived through or under the Tenant, or its agents, servants, or account of any act or omission of said Tenant. All persons contracting with the Tenant or furnishing materials and labor to Tenant, or its agents or servants, as well as all other persons whomsoever shall be bound by the provisions of this Lease. Should any lien be filed, Tenant shall discharge same within thirty (30) days thereafter, by paying the same. Tenant shall not be deemed to be the agent of Landlord so as to confer upon a laborer bestowing labor upon the Leased Premises, or upon a materialman who furnishes material incorporated into the construction of improvements upon the Leased Premises, a mechanic's lien upon Landlord's estate under the provisions of Chapter 713, Florida Statutes, and subsequent revisions thereof. If requested by Landlord, Tenant agrees to execute a short form Memorandum of Lease which Landlord may record in the Public Records of Broward County, Florida which shall state, hi accordance with Chapter 713, Law of the State of Florida, that Tenant has no power to incur any liens whatsoever.

 8. PREPARATION OF THE LEASED PREMISES:

  A.LANDLORD: LANDLORD shall, at its sole cost and expense paint and carpet those areas of the Premises delineated in the cross hatch drawing attached hereto as Exhibit "B", perform repairs to the air conditioning units on the Premises as of the date of this Lease and perform any electrical or lighting problems LANDLORD discovers on the Premises as of the date of this Lease. LANDLORD estimates that the above repairs shall be completed by the Commencement Date, but any delay in completing said improvements, except delays caused by LANDLORD, shall not delay TENANT'S obligations to pay rent and additional rent pursuant to the terms of this Lease nor be deemed a termination of this Lease. Landlord shall not be responsible for any other repairs other than is stated in this Lease and except for the items delineated in this paragraph 8(A), TENANT accepts the Premises in their present AS-IS condition. LANDLORD shall have no responsibility or liability for any loss or damage to any fixtures, equipment or personal property of any kind installed or left in the Premises as a result of TENANT' entry on and occupancy of the Premises prior to the completion of the above repairs. TENANT acknowledges that LANDLORD would not have funded the cost of the repairs, but for TENANT'S agreement to perform all the terms, conditions and agreements to be performed by TENANT under this Lease for the entire Lease Term. Accordingly, upon termination of this Lease which is the result of TENANT'S failure to perform it operating covenant or any other obligation hereunder, or any rejection of this Lease by TENANT, or trustee, in any bankruptcy proceeding, TENANT shall, to the extent permitted by the bankruptcy court, if applicable, promptly reimburse LANDLORD for the net unamortized portion of the LANDLORD'S cost of repairs which liability shall be in addition to any liability which TENANT may have, if any, for rentals that would have been payable over the remaining portion of the Lease Term. For the purposes hereof the LANDLORD'S cost of repairs shall be amortized on a straight line basis over the initial term of the Lease.

  B.TENANT:

   (1) TENANT'S Work: The TENANT shall, at its sole cost and expense, perform all work necessary to complete the Premises for the purpose delineated in this Lease (the "TENANT’s Work"). TENANT’s failure to complete TENANT’s Work on or before the Commencement Date, shall not delay the payment of Rent, additional rent or any other charges hereunder.

   (2) Plans for TENANT'S Work: Approvals: Prior to commencement of any TENANT'S Work, TENANT shall deliver to LANDLORD, for LANDLORD'S review and approval, TENANT'S plans and specifications for TENANT'S Work. TENANT Work cannot commence until LANDLORD has approved said plans and specifications, said approval shall not be unreasonably withheld or delayed. Except as otherwise expressly set forth in this Lease, all permits necessary for the performance of TENANT’s Work shall be obtained by TENANT at its sole cost and expense, provided that LANDLORD agrees to reasonably cooperate with TENANT if necessary or desirable to obtain any such permit. TENANT shall apply for all building permits and other governmental approvals for the Premises (the "Approvals") upon LANDLORD'S approval of TENANT’s Plans. TENANT agrees to use good faith, diligent efforts to obtain said building permits and approvals and TENANT may not commence TENANT'S Work prior to obtaining the Approvals and providing a copy of same to LANDLORD.

   (3)Construction of TENANT'S Work: Prior to the commencement of the TENANT’s Work, TENANT shall deliver to LANDLORD a copy of its executed construction contract with its contractor for the construction of the TENANT’s Work; certificates of the insurance required to be obtained by TENANT hereunder, and a copy of the building permit and all Approvals. TENANT shall cause the TENANT’s Work to be constructed in accordance with the TENANT’s plans and specifications previously submitted to and approved by LANDLORD. TENANT expressly acknowledges that TENANT shall be responsible for providing, at TENANT’s sole cost and expense, security service to the Premises during the course of the TENANT’s Work. All work to be performed by TENANT shall be performed by a contractor selected by TENANT, and approved by LANDLORD in its reasonable discretion ("TENANT’s Contractor"). All work on the TENANT’s Work by TENANT shall be done in a first-class, good and workmanlike manner. TENANT’s Work shall not unreasonably interfere with the performance of construction or other work by LANDLORD or any other tenant of the building where the Premises are located ("Building"), or unreasonably impede vehicular or pedestrian ingress or egress to or from the Building or any part thereof. LANDLORD acknowledges that LANDLORD shall not require TENANT, nor the TENANT'S Contractor or any subcontractors of the TENANT Contractor, to be obligated to use union or other labor subject to any collective bargaining agreement. From and after TENANTS commencement of construction of the TENANTS Work, when and as set forth above, TENANT shall thereafter diligently prosecute such construction to completion. After LANDLORD'S approval of the TENANT'S plans and specifications, no material change shall be made therein except with the prior written consent of LANDLORD, which consent shall not be unreasonably withheld or delayed. LANDLORD'S consent shall not be required in connection with any change which does not change the exterior of the Premises, any change which does not constitute a material change to the architectural or design concept of the interior of the Premises, or any other change which does not affect the structure or any mechanical or utility systems serving the Premises and which does not cost in excess of $500 per change or $5,000 in the aggregate. TENANT’s construction may vary from the requirements of the TENANTS Plans if the variances are required by the building permit or applicable legal requirements. TENANT shall complete construction of the TENANTS Work in substantial accordance with the TENANTS Plans and open for business to the public not later than the Commencement Date ("Completion Date"). The term "substantially completed", when used in connection with the term "TENANT'S Work", shall mean that the TENANTS Architect shall have certified to LANDLORD that TENANTS Work has been constructed in substantial accordance with the approved TENANTS Plans, and an unconditional certificate of occupancy, or an occupational license, whichever is applicable, has been issued for the Permitted Use of the Premises. TENANT may not commence its Permitted Use of the Premises until it has received said unconditional certificate of occupancy or occupational license. Within 5 days after Completion Date, TENANT shall deliver to LANDLORD the following: (i) an affidavit made by an executive officer of TENANT on behalf of TENANT stating that the TENANT'S Work has been substantially completed in compliance with the terms and provisions of this Lease and the plans and specifications approved by LANDLORD, and that no financing statements or other instruments creating security interests under the Uniform Commercial Code are outstanding or have been filed, it being intended that any such affidavit may be relied upon by LANDLORD and that any inaccuracy therein shall be and be deemed to be a default hereunder unless the condition which rendered such statement untrue is cured in a manner which renders such statement true, after ten day's notice and opportunity to cure; (ii) an affidavit of TENANT'S Contractor performing TENANT'S Work stating that all subcontractors, laborers and materialmen who have performed work on or furnished material to the Premises (whose names and addresses shall be recited in the affidavit) have been paid in full and that all liens therefore that have been or might be filed have been discharged of record or waived or bonded; (iii) executed full and final releases and waivers of lien with respect to the Premises from TENANT'S Contractor and all subcontractors and materialmen who have performed work on or furnished material to the Leased Premises, acceptable to LANDLORD in form and content; (iv) all certificates and approvals with respect to the work performed by TENANT or on TENANT'S behalf that may be required by any governmental authorities as a condition for the issuance to LANDLORD or TENANT of any occupancy certificate for the Premises, together with a copy of any occupancy certificate or occupational license issued by the proper governmental authority for the Premises, which occupancy certificate shall be obtained by TENANT at its cost and expense; and (v) a set of "as-built" plans. TENANT covenants that the TENANT’S Work shall comply with all applicable governmental regulations, codes and ordinances of the City of Pompano Beach, Broward County and the State of Florida, the United States of America and all other governmental agencies having jurisdiction over the Building, including without limitation, the Americans with Disabilities Act. LANDLORD reserves the right, at all reasonable times upon reasonable written notice to TENANT, to enter the Premises and inspect TENANT'S Work in progress for the purpose of verifying conformity of TENANT'S Work with the approved TENANT'S Plans, provided that any such entrance and inspection shall be accomplished in such manner as to not unreasonably interfere with or delay TENANTS construction of the TENANT'S Work. The TENANTS Work shall comply with all of the reasonable terms and provisions of any insurance policy covering or applicable to the Premises and with the reasonable requirements of any national or local Board of Fire Underwriters (or any other insurance body exercising similar functions) having jurisdiction as to the Premises. LANDLORD shall have no liability with respect to TENANTS materials or equipment stored in the Premises, except for the intentional acts of LANDLORD, its agents, contractors or employees. LANDLORD shall have no responsibility or liability for any loss or damage to any fixtures, equipment or personal property of any kind installed or left in the Premises, and TENANTS entry on and occupancy of the Premises prior to commencement of the Term shall be governed by and subject to all provisions, terms, covenants, agreements and conditions of this Lease and TENANT shall be responsible for the payment of utility charges from and after the date of this Lease. TENANT shall reasonably perform and cause TENANTS contractor and subcontractors to reasonably perform TENANT'S Work in a manner so as not to damage the Building, nor interfere with or hinder other tenants in the conduct of their business, and so as not to damage, or unreasonably delay or interfere with the prosecution or completion of any work being performed by LANDLORD or its contractors in the Premises or in or about any other portion of the Building, and shall comply with all reasonable construction procedures and regulations hereafter prescribed by LANDLORD in its reasonable business judgment. If TENANT fails to comply with its obligations set forth in the preceding sentence, within 10 days after notice from LANDLORD to comply, LANDLORD, in its reasonable discretion, shall have the right to give written notice to TENANT to suspend any construction work at any time being performed by or on behalf of TENANT in the Premises. Upon receipt of such notification from LANDLORD to TENANT to cease any such work, as aforesaid, TENANT shall, if requested by LANDLORD, forthwith remove from the Premises all agents, employees and contractors of TENANT performing such work until such time as LANDLORD shall have given its consent for the resumption of such construction work and TENANT shall have no claim for damage of any nature whatsoever against LANDLORD in connection therewith, nor shall TENANT be entitled to any reduction or abatement of Rent or any other charges due under this Lease. Prior to the commencement of the TENANTS Work and until the last to occur of (a) the completion of the TENANTS Work, or (b) the Commencement Date, TENANT shall maintain, or cause to be maintained insurance in builder's risk or similar form, naming LANDLORD and any mortgagee of LANDLORD'S interest in the Building (herein called a "Mortgagee") as an additional insured as its interests may appear, against loss or damage by fire, vandalism and malicious mischief and such other risks as are customarily covered by the so-called extended coverage endorsement, covering all of the TENANTS Work, and ail materials stored at the site of the TENANTS Work, in the full insurable value thereof by a reputable insurance company licensed to do business in the State of Florida, all in accordance with paragraph 5(C)(2) of this Lease. In addition, TENANT agrees to require the TENANTS Contractor and all other contractors and subcontractors engaged in the performance of the TENANTS Work to effect and maintain and deliver to TENANT and LANDLORD certificates evidencing the existence of, prior to the commencement of the TENANTS Work and until completion thereof the following insurance coverages:

    (a)Worker's Compensation Insurance - in accordance with the laws of the State of Florida, in amounts required by law.

    (b)Comprehensive General Liability Insurance naming TENANT and LANDLORD as additional insureds, with combined limits per person and per occurrence as reasonably required by LANDLORD. Fire and extended coverage insurance, with fire and water damage legal liability coverages as reasonably required by LANDLORD.

All such insurance shall provide, and certificates thereof shall state, that the same is non-cancelable and non-amendable without at least thirty (30) days prior written notice to LANDLORD.

  (4)Noncompliance by TENANT: Notwithstanding notice and cure periods to the contrary contained in this Lease, in the event that TENANT (i) fails to comply with the provisions of this paragraph 8 hereof beyond applicable notice and cure periods, or (ii) fails to promptly commence construction of the TENANTS Work, or (Hi) fails to diligently and continuously prosecute the TENANT'S Work to completion, then, in any of such events, LANDLORD shall have the right to terminate this Lease upon twenty (20) days prior written notice to TENANT; provided, however, in the event that TENANT commences to correct such failure within said twenty (20) day period and thereafter diligently, continuously and with good faith prosecutes the cure thereof, this Lease shall not terminate and shall remain in full force and effect in accordance with the terms and provisions thereof but the foregoing shall not delay the Commencement Date or any obligation of TENANT to pay Rent

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals on the day and year first above written.

WITNESSES:LANDLORD:

	MEDIRECTLATINO.INC
Date: October 6, 2006	By:	/s/ Debra Towsley
		President

	Sara Skicone Corp.
Date: October 6, 2006	By:	/s/ Steven A Cooperman
		President

ADDENDUM TO LEASE BETWEEN LANDLORD - POMPANO/LINCOLN INDUSTRIAL, LTD. AND TENANT - MEDIRECT LATINO, INC.

(2101 W. Atlantic Boulevard, Suite #101 and #106, Pompano Beach, FL 33069)

February 8,2006

This addendum sets forth additional provisions between LANDLORD - POMPANO/LINCOLN INDUSTRIAL, LTD. and TENANT - MEDIRECT LATINO, INC. In the event of any conflict between this Addendum and the Lease, then the provisions set forth in this Addendum shall prevail.

 1.Upon Lease execution, TENANT shall pay to LANDLORD:

  1) 1 Month Security- $ 18,758.26- Due upon Lease signing.

 2.Tenant's regular monthly payment for year 1 is below:

$ 12,640.33	-Base Rent
$ 1,944.67	-Estimated Real Estate Taxes
S 3.111.47	-Estimated Common Area Costs
$17,696.47
$ 1.061.79	-Sales and Use Tax (Currently 6%)
S18,758.26	-Regular Monthly payment Year 1

 4.Tenant is entitled to the use of 67 parking spaces.

Tenant will be permitted to relocate the one air conditioning unit located on the west side of its current warehouse at

1551 NW 65th Avenue, Plantation into the new location at 2101 W. Atlantic Boulevard, Suite #101 & #106. Tenant shall bear the sole cost of this relocation and any permits or governmental approvals required for same.

	MEDIRECTLATINO.INC
Date: October 6, 2006	By:	/s/ Debra Towsley
		President

	Sara Skicone Corp.
Date: October 6, 2006	By:	/s/ Steven A Cooperman
		President

A copy of your driver's license is required upon signing.

Exhibit "A"

RULES AND REGULATIONS FOR COMMON AREAS:

(1) TENANT agrees as follows:

 (a) All loading of goods shall be done only at such time, in the areas, and through the entrances, designated for such purposes by LANDLORD.

 (b) All garbage and refuse shall be deposited in the kind of container specified by LANDLORD, and shall be placed outside of the premises for collection in the manner and at the times and places specified by LANDLORD. Under no circumstances shall any garbage, trash, refuse or any other material be brought back from other locations for disposal. Only materials used or produced on-site will be permitted within the collection containers. Tenant is solely responsible for the actions of employees, contractors, and customers.

 (c) No loudspeakers, televisions, phonographs, radios or other devices shall be used in a manner so as to be heard or seen outside of the premises without prior written consent of the LANDLORD.

 (d) The outside areas immediately adjoining the premises shall be kept clean and free from dirt and rubbish by TENANT to the satisfaction of the LANDLORD, and TENANT shall not place or permit any obstruction or merchandise in such areas, nor conduct any business therefrom.

 (e) TENANT may not change (whether by alteration, replacement, rebuilding, or otherwise) the exterior color and/or architectural treatment of the demised premises or of the building in which the same are located, or any part thereof.

 (f) TENANT must obtain and maintain in effect all permits and licenses necessary for the operation of TENANTS business.

 (g) TENANT shall not burn any trash or garbage of any kind in and about the premises or Industrial Park.

 (h) TENANT shall at all times maintain an adequate number of suitable fire extinguishers on the premises for use in the case of fire, including electrical or chemical fires.

 (i) TENANT agrees that the LANDLORD may designate specific areas in which vehicles owned or operated by TENANTS employees must park, and LANDLORD may, if necessary for the convenience of parking for customers or other tenants, prohibit the parking of such vehicles in any part of the common areas.

 (j) The plumbing facilities shall not be used for any purpose other than for which they were constructed, and no foreign

substance of any kind shall be thrown therein, and the expense of any breakage, stoppage, or damage resulting from a violation of this provision shall be borne by TENANT.

 (k) TENANT shall keep the premises free from nuisance, noises or odors objectionable to the public, to other tenants, and to LANDLORD.

 (l) No air conditioner may be installed or placed on the building or premises at any time, without the express written permission of LANDLORD, and the air conditioning shall remain as pan of the building.

 (m) No substance of any kind shall be poured down any interior/exterior drains.

(2) PARKING AREAS:

 (a) No outside storage is permitted.

 (b) No overnight parking of cars is permitted.

 (c) All trash, debris, automotive parts and/or tools must be kept inside Tenant's premises at all times.

 (d) The only vehicles permitted to park on the exterior are:

  1. Personal and employee vehicles driven to work

  2. Customer vehicles being picked up that same day.

 (e) It is required that you leave available, in front of your unit, open parking spaces for customers dropping off vehicles for repair.

 (f)All vehicles on the exterior must have a current and valid license plate - with no visible auto body work necessary.

 (g) All repairs MUST be done within your leased premises.

 (h) NO DOUBLE PARKING.

 (i) Boats are not permitted to be parked outside at anytime whatsoever.

 (j) No stopping or standing in Fire Lanes.

 (k) Do not block any Tenants roll up door.

LANDLORD reserves the right from time to time to suspend, amend or supplement the foregoing rules and regulations, adopt and promulgate additional rules and regulations applicable to the premises. Notice of such rules and regulations and amendments and supplements thereto, if any, shall be given to the TENANT. Non-compliance with rules and regulations shall be considered a default under this lease. LANDLORD shall have no liability, for violation by any other TENANT of the Industrial Park, of any rules and regulations, nor shall such violation, or the waiver thereof, excuse TENANT from compliance. Your failure to comply will result in the termination of your lease and subsequent eviction.

Respectfully Management

SECOND ADDENDUM TO OFFICE/WAREHOUSE LEASE AGREEMENT

This Second Addendum dated this 9 day of March, 2006, by and between POMPANO/LINCOLN INDUSTRIAL, LTD., (hereinafter called "Landlord"), and MEDIRECT LATINO, INC. (hereinafter called "Tenant")

WITNESSETH:

WHEREAS, onfr1 2006, Landlord and Tenant entered into an Office/Warehouse Lease Agreement (hereinafter the "Lease") for the premises located at 2101 W. Atlantic Boulevard, Suites 101 and 106, Pompano Beach, Florida 33069 (hereinafter the "Premises"); and

WHEREAS, pursuant to the Lease, Landlord and Tenant agreed that Landlord, at its sole cost and expense would paint and carpet those areas of the Premises delineated in the cross hatch drawing attached as Exhibit "B" to said Lease; and

WHEREAS, Tenant has requested that Tenant carpet those areas of the Premises delineated in the cross hatch drawing attached as Exhibit "B" in the Lease at its sole cost and expense; and

WHEREAS, Landlord has agreed to provide Tenant with a $1 1,026.25 credit payable upon submission by Tenant of invoices evidencing installation of the carpet on the Premises.

NOW, THEREFOR, in consideration of the foregoing and other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 1.The above recitals are true, correct and incorporated herein.

 2.The first sentence of paragraph -8(A) of the Lease is hereby deleted and

replaced with the following:

Landlord shall, at its sole cost and expense paint those areas of the Premises delineated in the cross hatch drawing attached hereto as Exhibit "B", perform repairs to the air conditioning units on the Premises as of the date of the Lease and perform any electrical or lighting problems Landlord has discovered on the Premises as of the date of the Lease.

 3.Landlord shall pay Tenant the sum of $1 1,026.25 upon submission by Tenant

to Landlord of invoices from a carpet installer evidencing that Tenant has carpeted those areas

of the Premises delineated in the cross hatch drawing attached as Exhibit "B" to the Lease and

the cost of same is $1 1,026.25 or greater.

 4. If there is any conflict between the terms of this Second Addendum and the terms of the Lease, then the terms of this Second Addendum shall control. Any provision in the Lease unaffected by this Second Addendum shall remain in full force and effect.

IN WITNESS WHEREOF the parties have set their hands and seals on the date first written above.

Witnesses:

LANDLORD:

	Sara Skicone Corp.
Date: October 6, 2006	By:	/s/ Steven A Cooperman
		President

TENANT:

	MEDIRECTLATINO.INC
Date: October 6, 2006	By:	/s/ Debra Towsley
		President