CC Filed by Filing Services Canada Inc. 403-717-3898

Burnaby, British Columbia
V5H 4M2
(Address of principal executive offices) Zip Code)

Securities registered under Section 12(g) of the Exchange Act: Common Shares, no par value

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

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

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the issuer’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

Indicate by check mark whether the issuer 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 sold, or the average bid and asked price of such common equity, as of April 3, 2008, was US$0.08

The number of shares outstanding of each of the Issuer’s classes of equity as of April 3, 2008, was 44,781,445 common shares.

Except for statements of historical fact, certain information contained herein constitutes “forward-looking statements,” within Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify the forward-looking statements by Visiphor Corporation’s (“Visiphor” or the “Company”) use of the words such as “may,” “will,” “should,” “could,” “expect,” “plan,” “estimate,” “predict,” “potential,” “continue,” “believe,” “anticipate,” “intend,” “expect,” or the negative or other variations of these words, or other comparable words or phrases. Forward-looking statements in this Annual Report include, but are not limited to: the Company’s expectation that revenues will increase during the year, the Company’s ability to accelerate the timeline of procuring government contracts; management’s belief that the revenues from the Company’s future sales combined with current accounts receivable, work in progress and contracted orders will be sufficient to fund its consolidated operations; and management’s belief that the Company’s operational restructuring will lead to growth in future years and align expenses to revenue in the future; the Company’s belief that it will be able to increase revenue, particularly product revenue, by future investment in sales and product development in 2008 and that such revenues will continue to increase in the future as newly developed products and solutions continue to gain increasing customer acceptance; the Company anticipates that it will achieve growth in the U.S.; that increased investment in technology advances will result in the Company’s future success; the Company’s ability to fund its operations in the future resulting from new orders; new contracts to be entered into in the near future; the Company’s future operating expense levels.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or achievements of the Company to be materially different from any future results or achievements of the Company expressed or implied by such forward-looking statements. Such factors include, but are not limited to the following: the Company’s limited operating history; the Company’s need for additional financing; the Company’s history of losses; risks involving new product development; competition; the Company’s dependence on key personnel; risks involving lengthy sales cycles; dependence on marketing relationships; the Company’s ability to protect its intellectual property rights; risks associated with exchange rate fluctuations; risks of software defects; risks associated with product liability; the potential additional disclosure requirements for trades involving the Company’s issued common shares; the difficulty of enforcing civil liabilities against the Company or its Directors or officers under United States federal securities laws; the volatility of the Company’s share price; risks associated with certain shareholders’ exercising control over certain matters; the Company’s reduction in staff levels; and the other risks and uncertainties described in Exhibit 99.1 to this Annual Report.

Although the Company believes that expectations reflected in these forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, achievements or other future events. Moreover, neither the Company nor anyone else assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company is under no duty to update any of these forward-looking statements after the date of this Annual Report. You should not place undue reliance on these forward-looking statements.

The following table sets forth, for each period presented, the exchange rates at the end of such period, the average of the exchange rates on the last day of each month during such period and the high and low exchange rates during such period for one (1) Canadian dollar expressed in terms of one (1) United States dollar:

Exchange rates are based upon the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York. The noon rate of exchange on April 3, 2008 as reported by the United States Federal Reserve Bank of New York for the conversion of Canadian dollars into United States dollars was Cdn$1.00 = US$0.9829. The Company prepares its financial statements in Canadian Dollars. Unless otherwise indicated in this Annual Report, all references herein are to Canadian Dollars.

Visiphor is a software product and consulting services company that is in the business of helping enterprises by “connecting what matters”. The Company specializes in the development and deployment of solutions to the problem of integrating disparate business processes and databases. In so doing, the Company has developed a number of sophisticated products and specialized consulting skills. These have allowed Visiphor to gain industry recognition as a leader in providing advanced solutions to the “data disparity” problem that permeates the law enforcement, security, health care and financial services industries.

Visiphor’s software products consist of servers and applications that produce one-time software licensing revenues and recurring support revenues. The Company’s consulting services are highly specialized and focus on facilitating the solution to business integration related problems.

Visiphor develops and markets software products that simplify, accelerate, and economize the process of connecting existing, disparate databases. The Company’s technologies enable information owners to share data securely with internal lines of business applications and external stakeholders and business partners using any combination of text or imagery. This includes searching disconnected data repositories for information about an individual using only a facial image. This allows organizations to quickly create regional information sharing networks using any combination of text or imagery.

In addition to a suite of data sharing and integration products, Visiphor also has an award winning consulting team, Visiphor Consulting Services (“VCS”), that can provide services to organizations ranging from business process management support, development of an integration strategic plan, through to the design, development and implementation of a complete data sharing and integration solution for any combination of internal applications integration, business partner integration, process automation or workflow.

Using industry standard Web services, EXtensible Markup Language (“XML”) and Application Integration tools like Microsoft Biztalk® Server and Visiphor’s own Briyante Integration Environment (“BIE”); Visiphor delivers an economical approach to the design and implementation of reliable, real-time application interoperability.

Production deployments of the Company’s core integration technology — the Briyante Integration Environment — have demonstrated reductions in the time and risk associated with implementing and supporting federated access to physically and technologically disparate computers. The Company believes the broad ranging applicability of BIE into a variety of vertical markets such as health care, financial services, government services and telecommunications has been demonstrated by recent, successful deployments in the United States.

In June 2005, the Company changed its name from Imagis Technologies Inc. to Visiphor Corporation. This was done to convey that the business plan going forward would be based on “Visual Metaphors” (thus the name Visi-phor) for the delivery of data integration solutions for enterprise.

The Company was formed through the 1999 acquisition of Imagis Cascade Technologies Inc. (“Imagis Cascade”), which was founded in 1990 through the merger of two firms, one of which was engaged in the processing of satellite images and the other that was engaged in the development and marketing of an imaging-oriented jail admission/discharge information system.

In conjunction with the Royal Canadian Mounted Police (“RCMP”), Imagis Cascade developed a set of law enforcement and security software solutions culminating in the Computerized Arrest & Booking System (“CABS”). At the request of the RCMP, Imagis Cascade expanded into image and facial recognition to provide an easy and effective way to identify a suspect using only a photograph. Soon thereafter the Company initiated deployment of a

facial recognition-enabled regional arrest and booking data sharing network in Alameda County, Oakland, California using traditional system integration approaches.

In 2003, the Company merged its operations with Briyante Software Corp. (“Briyante”), a Company specializing in disparate database integration and service oriented architecture application development. Briyante’s reputation was solidified by its deployment of a Web Service-based data sharing network for the King County Sheriff’s Office (Seattle, Washington). The Company continues to use the Briyante brand name for the Company’s data integration technology.

In November 2005, Visiphor acquired the integration consulting firm Sunaptic Solutions Inc. (“Sunaptic”), which had an extensive collection of customer projects in the business integration area including a significant business process management practice. The Sunaptic organization has provided a significant contribution of technical expertise in the design, development and implementation of data sharing and integration solutions. Sunaptic also had an extensive client list that included several regional health authorities in British Columbia, Canada. With the acquisition of Sunaptic, the Company expanded its ability to offer a powerful set of products and services facilitating enterprise-level data, process, and application integration.

Today, Visiphor offers a product and services suite that facilitates the rapid integration of dissimilar information systems, enabling comprehensive access to sources of critical data without compromising the originating data-owner’s security protocols or requiring modifications to legacy systems. This ability to access external databases amplifies the power and range of the Company’s recognition and digital image matching technologies—technology that provides time and resource-saving tools for criminal investigations, surveillance, and security.

Combined, the Company’s core technologies bridge the gap between islands of disparate data, facilitating access to comprehensive information about persons of interest using any combination of text or imagery. The full set of capabilities in the Company allows Visiphor to offer a broad complement of integration solutions addressing a wide range of business process and integration problems.

Visiphor develops and markets robust software technologies and professional services for information sharing and biometric identification.

Visiphor’s products include a standards-based data integration toolkit, known as the Briyante Integration Environment. BIE is an advanced paradigm-shifting approach to the problem of disparate data integration and system interoperability. Classified as middleware software, BIE consists of a development toolkit and server: the Briyante Design Studio and the Briyante Integration Server, respectively. These elements work together to enable Visiphor, its business partners, and the Company’s clients to architect and deploy data sharing solutions quickly and easily.

While the need for information sharing and system interoperability is not new, data integration projects have historically required specialist resources to engage in laborious, proprietary, and risky point-to-point programming using low-level components and application program interfaces. In contrast, BIE enables the rapid creation, assembly, and deployment of decoupled Web Services. These Web Service components—when combined with common schema and the Microsoft .NET framework—can be “snapped” together into a useable solution, allowing the integrator to focus on business process flow within an application environment rather than on the lines of code or “glue” that creates the interoperability. The difference between “gluing” components and “snapping” services results in increased flexibility in computer system design. Furthermore, snapping services facilitates the rapid reconfiguration of the business process logic, saving significant time over previous methods.

Allowing developers to leverage new code along with pre-existing logic to build true composite applications;

Ensuring that customers and users can sidestep many of the typical challenges associated with data integration;

Reducing the complexity of political negotiations over data sharing by enabling extremely rapid implementation of governance decisions (typically measured in hours and days);

Allowing organizations to initiate the data sharing process with agreement on relatively few data elements, proving the concept and building trust between sharing partners; and

Iterating the delivery of the system one organization or one system at a time, allowing participants to realize political “wins” without exposing themselves to significant risk.

BIE ensures that each participating data sharing partner maintains full control over the data shared. The software provides a simple, control-panel interface to implement sharing permissions that reflect the organization’s governance decisions. This eliminates the issue of data ownership and location, which has proven to be a central stumbling block for data warehouse-oriented implementations.

The Company’s biometric facial recognition technology—which originated in the mathematics of advanced satellite image processing—enables one-to-many identification searches and one-to-one verification matches. To date, the technology is most effective as an identification tool capable of distilling large databases down to a smaller gallery of possible matches.

The technology consists of a series of components packaged within a Software Development Kit (“SDK”). These components find faces within a digital photograph or video stream and match those images to like-looking facial images stored within a database. This functionality is also available as a native component of the Company’s data sharing solutions. Qualified business partners can use the Company’s Facial Recognition SDK to build custom applications and devices to meet specific customer or market needs.

The technology can also be extended to whole image matching, enabling the detection and recognition of like-looking, non-facial imagery. For example, the technology has been deployed within Visiphor’s ChildBase software system (see “ChildBase” below) to facilitate the matching of “highly-similar” child pornography photographs and video clips.

Based on the aforementioned core technologies, Visiphor develops software solutions for specific market needs and verticals. Each solution highlights the Company’s intrinsic ability to enhance access to textual data through connections to facial and other biometric or non-biometric imagery.

Based on the aforementioned core technologies, Visiphor has developed a software suite for specific needs in the law enforcement and justice sector. The suite, based on a seven different modules, highlights the Company’s intrinsic ability to enhance access to textual and biometric data through connections to multiple, disparate systems.

The Intelligent Query Base Module, or InForce IQ, sits at the core of the Suite. Essentially a read-only system, InForce IQ offers Search & Locate functionality giving officers real-time access to critical information. Search parameters are created when a user enters person, incident or vehicle information in the intuitive user-interface. Then, with the click of a button, InForce IQ distributes the user’s query to multiple

underlying databases, which may include various Resource Management System (“RMS”) systems. A Visiphor implementation in Washington State, for example, integrates cross-jurisdictional RMS and jail management data in RAIN, the Regional Automated Information Network. The result is a vastly simplified Search & Locate process: an officer submits a distributed query through the IQ user-interface (“Search”), signaling behind-the-scenes technology to pull all matched records from multiple data sources (“Locate”).

Included in the InForce Suite Identity Module is Visiphor’s advanced facial recognition technology. Used to match mug shots, artist sketches, or computer generated images to repository data, the Identity Module has proven to be extremely useful in solving everyday crime investigations.

Valuable time savings are realized with automated digital line-ups. In a matter of seconds, the Line Ups Module generates a photo line-up using either text identifiers or close-match facial recognition algorithms that can be used for subject verification. Associated automatic audit trails ensure that legal challenges to identifications are kept to a minimum.

The InForce Crime Mapping Module provides officers with “just-in-time” tactical crime mapping functionality. Set mapping criteria based on specific crime types, time frames and location parameters based on latitudinal and longitudinal coordinates. Officers can use this tool tactically in the field while investigators take advantage of the strategic benefits of the InForce Crime Mapping Module from the office.

The Pre-Booking Module of the InForce Suite eliminates redundant and error-prone data entry while streamlining workflows. Its intuitive user-interface gives officers quick access to mission-critical offender data. Once ready to make an arrest, users simply copy existing data to create a new record with the click of a button. By re-using existing data, officers save valuable time in the field while avoiding unnecessary errors and inconsistencies common with new data entry.

With the Notifications Module, users can save a specific query and set up automatic repeat searches at a set time interval. When one of the subsequent automatic searches gets a hit, users instantly receive an email message alerting them to the newly discovered information for maximized efficiency.

Users can perform text-based searches from the palm of their hands with the InForce Suite Mobility Module. Combined with the Identity Module, users simply snap a picture of a subject with their mobile device and then query against multiple databases to locate subject information in real-time. Visiphor’s software is compatible with any PDA or hand-held device using the Windows Mobile 6 Professional or Standard Operating Systems.

ChildBase is an image-centric, seizure management and scene analysis application that uses advanced facial recognition and image matching to assist investigations and prosecution of seizures of child pornography.

With the acquisition of Sunaptic, Visiphor created a Consulting Services Division that can provide services to organizations ranging from business process management support and development of an integration strategic plan, through to the design, development and implementation of a complete data sharing and integration solution for any combination of internal applications integration, business partner integration, process automation or workflow. Using industry standard Web Services, XML and Application Integration tools like Microsoft Biztalk® Server and Visiphor’s own BIE, Visiphor delivers an economical approach to the design and implementation of reliable, real-time application interoperability.

The Company currently has more than 200 installations of its products around the world. These include King County RAIN Information Sharing Network (Washington), Contra Costa County (California), Charlotte-Mecklenburg Police Department (North Carolina), Alameda County (California), over fifty (50) RCMP detachments in Canada, the National Crime Squad of England and Wales (the “NCS”), the PRIME - BC mugshot sharing project for the Province of British Columbia, and other organizations/projects. Based on the aforementioned core technologies, Visiphor develops software solutions for specific market needs and verticals. Each solution highlights the Company’s intrinsic ability to enhance access to textual data through connections to facial and other biometric or non-biometric imagery.

For the past few years, government legislation in the United States and around the world has mandated two key improvements in information management: security and information sharing. The Company has found that the former cannot be effectively accomplished without the latter. Nevertheless, there remain a large number of information silos within and throughout government, law enforcement and security agencies, as well as with information systems in the healthcare, financial services, and energy sectors.

The merger with Briyante in November of 2003 brought a powerful capability to Visiphor and its customers. The Company can rapidly and cost-effectively deliver data integration and unified query solutions—incorporating these core capabilities with facial recognition and image matching when necessary—to address legislated market needs and priorities. The further acquisition of Sunaptic in November 2005 extended the Company’s capabilities to provide complete, end-to-end integration solutions that utilize both its own proprietary technology platforms and those of its partners.

The Company believes that a particularly significant opportunity exists for it to deliver information sharing systems between state and regional law enforcement agencies. The Company believes the following statistics, assembled from various third-party sources, support this assertion:

There are more than 45,000 police departments, courts, correctional institutions, national security agencies, district attorney, and prosecution offices in the United States. Of this, approximately 6,500 are large enough (more than 50 employees) such that an integrated justice solution would be beneficial to their operations (http://www.ojp.usdoj.gov/bjs/welcome.html)

Thirty-one percent of local police departments and 34% of sheriffs' offices in the U.S. used computers for inter-agency information sharing in 2003. This includes more than half of all local departments serving 25,000 or more residents, and more than half of all sheriffs' offices serving 250,000 or more residents. (US Department of Justice - Bureau of Justice Statistics;

In 2003, 55% of local police departments and 58% of sheriffs' offices in the U.S. used paper reports as the primary means to transmit criminal incident field data to a central information system, down from 86% and 87%, respectively, in 1997. During the same time period, use of computer and data devices for this purpose increased from 9% to 38% in local police departments and from 7% to 33% in sheriffs' offices.

(US Department of Justice - Bureau of Justice Statistics; http://www.ojp.usdoj.gov/bjs/sandlle.htm)

Gartner Forecast: AIM and Portal Software, Worldwide, 2005-2010 - March 2006. The application integration and middleware and portal market for license revenue is preliminarily estimated to have grown

2.9 percent to more than $6.4 billion in 2005. By 2010, the market is expected to grow to $7.3 billion, with a five-year compound annual growth rate of 2.6 percent.

Gartner Market Share and Forecast: AIM Software, Vertical Industries, Worldwide, 2003-2008 - 6 January 2005 Worldwide license revenue for application integration and middleware and portal software products grew 0.3 percent to $6.3 billion in 2003. The largest industry is financial services, with $1.3 billion in revenue, followed by services and discrete manufacturing.

While there is no current market leader providing XML-based middleware technology to law enforcement, several vendors have solutions that compete with the BIE. They include Crossflow Systems, Inc. of San Diego, California, Thinkstream, Inc. of Tigard, Oregon, Metatomix of Waltham, Mississippi, and IBM WebSphere system integrators. Visiphor also competes with existing point-to-point system integration companies and firms advocating proprietary data warehousing solutions. The Company believes that both of these approaches are falling out of favor with the market because they are costly and inefficient.

While there are several vendors that offer face recognition technology, there are essentially four main companies operating in this area, of which Visiphor is one. The other three category leaders are: Identix Incorporated of Minnetonka, Minnesota, Visage Technology of Littleton, Massachusetts (which recently acquired ZN Vision of Germany), and Cognitec Systems GmbH of Dresden, Germany.

Visiphor believes that it is the only vendor to combine face recognition and scene/image analysis functionality into a full suite of child identification, investigation, and recovery products. While Paris-based LTU Technologies competes with Visiphor’s scene recognition capabilities, at present this vendor does not have any face recognition capabilities within its product. Furthermore, the Company believes that the installation at the National Crime Squad (“NCS”), now known as Serious Organised Crime Agency (“SOCA”), represents the world’s largest repository of child abuse imagery, and each image has been encoded using Visiphor’s proprietary technology. The Company believes future deployments of its product in additional countries will benefit from the work already performed by the NCS.

With over a decade of experience in the Law Enforcement and Justice arena, Visiphor’s accumulated expertise has led to a fully-functional product offering, the InForce Suite. Visiphor’s original CABS solution has evolved to this multi-module system for today’s needs. The system is comprised of facial recognition and computerized line up technology, arrest and booking functionality, mobile device compatibility, and an automated notifications feature. Significantly, the modules of the InForce Suite work in combination with Visiphor’s data sharing platform.

There are several vendors who have commercially available products that have some similarities or overlapping functionality to Visiphor’s law enforcement software, including Printrak International, Anaheim, California (a subsidiary of Motorola), ImageWare Systems Inc., San Diego, California and Niche Technologies Inc., Winnipeg, Manitoba. However, Visiphor believes that its proprietary data sharing platform, combined with the cutting technologies of its partners, provide state and local agencies with a more robust, complete product solution with which to work than is available from these other vendors

There can be no assurance that the Company will be able to compete successfully against current or future competitors or alliances of such competitors, or that competitive pressures faced by the Company will not materially adversely affect its business, financial condition, operating results and cash flows. See “Risk Factors—Competition” below.

The Company’s success will depend upon its ability to protect its intellectual property rights. The Company relies principally on a combination of copyright, patent and trade secret laws, non-disclosure agreements and other contractual provisions to establish and maintain its proprietary rights.

As part of its confidentiality procedures, the Company generally enters into nondisclosure and confidentiality agreements with each of its key employees, consultants, and business partners and limits access to and distribution of its technology, documentation, and other proprietary information. In particular, the Company has entered into non-disclosure agreements with each of its employees and business partners. The terms of the employee non-disclosure agreements include provisions requiring assignment to the Company of employee inventions. In addition, the Company’s source code for its software products is maintained in a controlled environment within the technology and development group. For security purposes, a copy of the source code is maintained in lock-boxes at banks in Burnaby, British Columbia. There can be no assurance that the Company’s efforts to protect its intellectual property rights will be successful. Despite the Company’s efforts to protect its intellectual property rights, unauthorized third parties (including competitors) may, from time to time, copy or reverse engineer certain portions of the Company’s technology and use such information to create competitive products.

While policing the unauthorized use of the Company’s technology is difficult, the Company has taken steps to make it difficult for organizations to use its products without registering with the Company first. This includes requiring its customers to obtain computer-specific and IP address-specific registration codes that limit usage based on the software licensing agreement that is in place.

The Company has not registered any trademarks in Canada, the United States or elsewhere.

The Company’s personnel have considerable experience and expertise in the development of service-oriented application architecture using XML Web Services as well as considerable experience in advanced computer vision and imaging systems. The Company’s software product development personnel employ modular software architecture, object-oriented software development and graphical user interface design technologies to develop scaleable, modular products.

As of December 31, 2007, the Company’s research and development staff consisted of twenty-nine (29) employees, all of whom were located in the province of British Columbia.

During the fiscal years ended December 31, 2007 and December 31, 2006, the Company’s total expenditures for research and development (technology development in the consolidated financial statements) were $1,411,004 and $1,782,575, respectively. Management believes that timely and continuing product development is critical to the Company’s success and plans to continue to allocate significant resources to product development.

Visiphor employs multiple sales and distribution channels to effectively penetrate markets including:

Direct Sales Force (to identify and develop client opportunities, business partners and strategic relationships);

Visiphor employs business development and sales personnel whose duties include client opportunity development and the active recruitment of new business partners. Client opportunities are presented to the Company through marketing leads, prospecting and referrals. Sales executives are positioned with vertical market expertise and engage with the opportunities using a strategic selling approach. A monthly sales funnel management process is used to ensure that the quantity and quality of opportunities are aligned with the Company’s business goals. Technical sales support is integrated with the Company’s support services in order to provide current expertise to the field opportunities and position them for implementation. The sales and business development team provides assistance to existing partners in qualifying sales opportunities, conducting joint customer calls, writing proposals,

and performing analysis with the end customer. The sales team also recruits new partners to fulfill exposure opportunities, regional needs and provide additional implementation and delivery options.

One of Visiphor’s avenues of global distribution is through business partners. These partners are typically companies with products to which the Company’s data integration or imaging solutions add value, and who are already established and reputable suppliers in the appropriate vertical market. Using partners to promote and sell its products extends Visiphor’s network of direct sales people, gives the Company global visibility and ensures that customers receive high-quality local support. Under the business partner agreements, the business partners have agreed to sell the Company’s products as part of their standard product line. While they typically have designated territories, the business partners may sell the Company’s products anywhere they have opportunities, including Canada, the United States, and other countries. The Company provides training and ongoing support, through training and support programs, on product demonstration, operation, installation, and customer support to the business partners’ staff. The business partners have agreed to promote the Company’s products and maintain sales and support teams to handle these functions.

The Company also allows third-party vendors to integrate its products with their solutions in order to market complete solutions, provide implementation and customization services, provide technical support and maintenance on a continuing basis, and provide clients with software applications that can be bundled with the Company’s products to address specific industry and customer requirements.

The Company’s partner strategy focuses on driving revenue by combining internal strengths, business relationships, references, and experience with those of the Company’s partners to create compelling business solutions for end-users.

Visiphor has business partnerships with Microsoft Corp.; Tiburon Inc. (formerly CompuDyne Public Safety); SRA Orion Systems; Abbey Group; Hunter Research Inc.; Forensic Logic Inc.; CopLink and Total Computer Group.

The Company is continually evaluating potential strategic acquisition candidates. The acquisition of Sunaptic during 2005 is an example of such a strategic acquisition. There can be no assurance, however, that the Company will find such strategic acquisition candidates or if found, that an acquisition can be negotiated on acceptable terms to the Company.

Visiphor engages with strong systems integrators already entrenched in their respective regions, ensuring they are trained on the Company’s software (features/functionality) while providing them with the necessary tools to sell and support the end-user environment. The initial focus for the Company is on partners involved in state and local government public safety and law enforcement agencies. The Company is also in discussions with a few partner prospects regarding the expansion of its products and services into other market verticals outside of justice and public safety. There can be no assurance, however, that these discussions will result in agreements with such parties on terms acceptable to Visiphor.

The Company aims to get closer to technical contacts inside of each government level, including local, county, state, and federal government, to better understand their needs and how Visiphor can provide a rapid iteration of data-sharing via “pilot projects and/or proof of concept” proposals. If the Company can prove the ease of use, show the software’s viability and cost effectiveness, and demonstrate the real-time benefits to having access to the information, the Company may be able to shorten the sales timeline and push sales through the cycle.

The Company engages in projects where the need for data-sharing has already been identified, perhaps initiated in an RFI or RFP and where the Briyante tools encourage rapidly deployed solutions to the clients’ data sharing problems.

The Company provides pilot or proof of concept strategies to encourage ownership and adoption of the technologies as part of the Company’s “seeing-is-believing” strategy.

Visiphor has identified several key marketing strategies in its efforts to realize its growth and revenue objectives. These include:

Leveraging and building on its success in the law enforcement market by introducing new products, expanding its client base, and selling add-on products and services to current customers;

Identifying best-in-class application vendor partners that need Visiphor’s ability to rapidly deploy data sharing infrastructure to enhance their application’s effectiveness;

Using strategic partners to expand into new markets, including financial services and healthcare; and

The Company believes it has made significant progress in completing the groundwork necessary to achieve its growth plans. Specifically, the following elements are in place:

The Company has several complementary products and technologies and an expanding network of business partners ready to pursue opportunities as they arise.

The Company believes that it has established its position as a leading provider of software to the law enforcement market. This includes information sharing, identification technologies, and child protection.

The Company has completed and continues to expand on implementations of large scale workflow automation solutions and has established a track record for delivering these types of solutions,

The Company believes that its biometric identification technology is recognized as a market leader in face recognition and identification.

Visiphor facial recognition software has been successfully installed at a number of law enforcement agencies and achieved success in identifying offenders and suspects.

The Company believes it can leverage the success of its ChildBase application and relationship with a United Kingdom national police agency to promote other child identification and law enforcement applications.

Excellent customer references have been established, including the King County Sheriff’s Office, Charlotte Mecklenburg Police Department, Contra Costa County, and over 30 police departments and sheriff’s offices in Alameda County, California – the largest digital imaging system on the West Coast.

Visiphor’s products are available both as complete applications and as a series of components delivered within a software development kit that can be easily integrated into other products. Ease of integration ensures that new applications can be developed quickly to adapt to changing market needs.

The Company has the consulting expertise and scale to take on larger more demanding integration initiatives with customers either directly or through business partners.

As of December 31, 2007, the Company had 54 employees of which 40 were full-time employees, five were part-time, one was temporary and eight were contract staff. There were 29 employees in technology development (research and development), six employees in sales and marketing, two employees in customer support, eight in consulting services, and nine in management finance and administration. The Company’s success will depend in large part on its ability to attract and retain skilled and experienced employees. None of the Company’s employees are covered by a collective bargaining agreement, and the Company believes that its employee relations are good. See “Risk Factors – Dependence on Key Personnel.”

The Company’s financial statements are prepared in accordance with generally accepted accounting principles of Canada (“Canadian GAAP”) and Note 22 to the financial statements includes a reconciliation of the Company’s financial information from Canadian GAAP to generally accepted accounting principles of the United States (“U.S. GAAP”) and a discussion of the differences between Canadian GAAP and U.S. GAAP that affect the Company and its financial statements.

The price of the Company’s common shares is subject to the risks and uncertainties inherent in the Company’s business. You should consider the following factors as well as other information set forth in this Annual Report, in connection with any investment in the Company’s common shares. If any of the risks described below occurs, the Company’s business, results of operations and financial condition could be adversely affected. In such cases, the price of the Company’s common shares could decline, and you could lose all or part of your investment.

The Company commenced operations in March 1998. The Company incurred net losses of $2,490,207 and $6,678,371 in the years ended December 31, 2007 and December 31, 2006, respectively. The Company has never been profitable and there can be no assurance that, in the future, the Company will be profitable on a quarterly or annual basis.

The comment by the Independent Registered Chartered Accountants on the Company’s December 31, 2007 Financial Statements states that the Report of Independent Chartered Accountants is expressed in accordance with Canadian Reporting Standards. Had the report been expressed in accordance with standards of the Public Company Accounting Oversight Board (United States), the report would have included an explanatory paragraph that indicated the financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company believes it currently has cash sufficient to fund its operations through to December 31, 2008. The Company also has accounts receivable and has received orders that if completed will generate cash sufficient to fund its operations through December 31, 2008. The Company will need to raise additional funds through private placements of its securities or seek other forms of financing during the 2008 financial year (refer note 21). There can be no assurance that such financing will be available to the Company on terms acceptable to it, if at all. Failure to obtain adequate financing if necessary could result in significant delays in development of new products and a substantial curtailment of Visiphor’s operations. If the Company’s operations are substantially curtailed, it may have difficulty fulfilling its current and future obligations.

The Company’s financial results may vary from quarter to quarter based on factors such as the timing of significant orders and contract delivery and completion of projects. The Company’s revenues are not predictable with any significant degree of certainty and future revenues may differ from historical patterns. If customers cancel or delay orders, it can have a material adverse impact on the Company’s revenues and results of operations from quarter to quarter. Because the Company’s results of operations may fluctuate from quarter to quarter, you should not assume that you can predict results of operations in future periods based on results of operations in past periods.

Even though the Company’s revenues are difficult to predict, it bases its expense levels in part on future revenue projections. Many of the Company’s expenses are fixed, and it cannot quickly reduce spending if revenues are lower than expected. This could result in significantly lower income or greater loss than the Company anticipates for any given period. The Company will react accordingly to minimize any such impact such as a reduction in staff in order to decrease payroll expenses which is the largest expense for the Company. During 2007, the Company continued to align expenses to revenue and revenue forecasts in order to minimize net loss.

The Company expects that a significant portion of its future revenue will be derived from the sale of newly introduced products and from enhancement of existing products. The Company’s success will depend, in part, upon its ability to enhance its current products and to install such products in end-user applications on a timely and cost-effective basis. In addition, the Company must develop new products that meet changing market conditions, including changing customer needs, new competitive product offerings and enhanced technology. There can be no assurance that the Company will be successful in developing and marketing - on a timely and cost-effective basis, new products and enhancements that respond to such changing market conditions. If the Company is unable to anticipate or adequately respond in a timely or on a cost-effective basis to changing market conditions, to develop new software products and enhancements to existing products, to correct errors on a timely basis or to complete products currently under development, or if such new products or enhancements do not achieve market acceptance,

the Company’s business, financial condition, operating results and cash flows could be materially adversely affected. In light of the difficulties inherent in software development, the Company expects that it will experience delays in the completion and introduction of new software products.

The purchase of any of the Company’s software systems is often an enterprise-wide decision for prospective customers and requires the Company (directly or through its business partners) to engage in sales efforts over an extended period of time and to provide a significant level of education to prospective customers regarding the use and benefits of such systems. In addition, an installation generally requires approval of a governmental body such as municipal, county or state government, which can be a time-intensive process and require months before a decision is made. Due in part to the significant impact that the application of the Company’s products has on the operations of a business and the significant commitment of capital required by such a system, potential customers tend to be cautious in making acquisition decisions. As a result, the Company’s products generally have a lengthy sales cycle ranging from six (6) to twelve (12) months. Consequently, if sales forecasts from a specific customer for a particular quarter are not realized in that quarter, the Company may not be able to generate revenue from alternative sources in time to compensate for the shortfall. The loss or delay of a large contract could have a material adverse effect on the Company’s financial condition, operating results and cash flows. Moreover, to the extent that significant contracts are entered into and required to be performed earlier than expected, the Company’s future operating results may be adversely affected.

The Company’s performance and future operating results are substantially dependent on the continued service and performance of its senior management and key technical and sales personnel. The Company may need to hire a number of technical and sales personnel. Competition for such personnel is intense, and there can be no assurance that the Company can retain its key technical, sales and managerial employees or that it will be able to attract or retain highly qualified technical and managerial personnel in the future.

The loss of the services of any of the Company’s senior management or other key employees, or the inability to attract and retain the necessary technical, sales and managerial personnel could have a material adverse effect upon its business, financial condition, operating results and cash flows. The Company does not currently maintain “key man” insurance for any senior management or other key employees.

Staff turnover in the technology industry is common, however, with the Company’s past results, the risk of higher than normal turnover is increased. This staff turnover and reduction implemented in 2006 has placed an increased burden on the Company’s administrative, operational and financial resources and has resulted in increased responsibilities for each of its management personnel. As a result, the Company’s ability to respond to unexpected challenges may be impaired and it may be unable to take advantage of new opportunities.

Further, the changes in staff levels may reduce employee morale and may create concern among potential and existing employees about job security at the Company, which may lead to difficulty in hiring and increased turnover in its current workforce, and divert management’s attention. Any failure by the Company to properly manage this rapid change in workforce could impair its ability to efficiently manage its business to maintain and develop important relationships with third parties and to attract and retain customers. It could also cause the Company to incur higher operating costs and delays in the execution of its business plan or in the reporting or tracking of its financial results.

The Company’s products are also marketed by its business partners. The Company’s existing agreements with business partners are nonexclusive and may be terminated by either party without cause at any time. Such organizations are not within the control of the Company, are not obligated to purchase products from the Company and may also represent and sell competing products. There can be no assurance that the Company’s existing business partners will continue to provide the level of services and technical support necessary to provide a complete solution to its customers or that they will not emphasize their own or third-party products to the detriment of the Company’s products. The loss of these business partners, the failure of such parties to perform under agreements with the Company or the inability of the Company to attract and retain new business with the technical, industry and application experience required to market the Company’s products successfully could have a material adverse effect on the Company’s business, financial condition, operating results and cash flows.

Additionally, the Company supplies products and services to customers through a third-party supplier acting as a project manager or systems integrator. In such circumstances, the Company has a sub-contract to supply its products and services to the customer through the prime contractor. In these circumstances, the Company is at risk that situations may arise outside of its control that could lead to a delay, cost over-run or cancellation of the prime contract which could also result in a delay, cost over-run or cancellation of the Company’s sub-contract. The failure of a third-party supplier to supply its products and services or to perform its contractual obligations to the customer in a timely manner could have a material adverse effect on the Company’s financial condition, results of operations and cash flows.

The markets for the Company’s products are highly competitive. Numerous factors affect the Company’s competitive position, including supplier competency, product functionality, performance and reliability of technology, depth and experience in distribution and operations, ease of implementation, rapid deployment, customer service and price.

Certain of the Company’s competitors have substantially greater financial, technical, marketing and distribution resources than the Company. As a result, they may be able to respond more quickly to new or emerging technologies and changing customer requirements, or to devote greater resources to the development and distribution of existing products. There can be no assurance that the Company will be able to compete successfully against current or future competitors or alliances of such competitors, or that competitive pressures faced by it will not materially adversely affect its business, financial condition, operating results and cash flows. See also “Item 1 – Description of Business – Competition.”

The Company’s success will be dependent upon its ability to protect its intellectual property rights. The Company relies principally upon a combination of copyright, patent and trade secret laws, non-disclosure agreements and other contractual provisions to establish and maintain its rights. The source codes for the Company’s products and technology are protected both as trade secrets and as unpublished copyrighted works. As part of its confidentiality procedures, the Company enters into nondisclosure and confidentiality agreements with each of its key employees, consultants, distributors, customers and corporate partners, to limit access to and distribution of its software, documentation and other proprietary information. There can be no assurance that the Company’s efforts to protect its intellectual property rights will be successful. Despite the Company’s efforts to protect its intellectual property rights, unauthorized third-parties, including competitors, may be able to copy or reverse engineer certain portions of the Company’s software products, and use such copies to create competitive products.

Policing the unauthorized use of the Company’s products is difficult and, while the Company is unable to determine the extent to which piracy of its software products exists; software piracy can be expected to continue. In addition, the laws of certain countries in which the Company’s products are or may be licensed do not protect its products and intellectual property rights to the same extent as do the laws of Canada and the United States. As a result, sales of products by the Company in such countries may increase the likelihood that its proprietary technology is infringed upon by unauthorized third parties.

In addition, because third parties may attempt to develop similar technologies independently, the Company expects that software product developers will be increasingly subject to infringement claims as the number of products and competitors in the Company’s industry segments grow and the functionality of products in different industry segments overlap. There can be no assurance that third parties will not bring infringement claims (or claims for

indemnification resulting from infringement claims) against the Company with respect to copyrights, trademarks, patents and other proprietary rights. Any such claims, whether with or without merit, could be time consuming, result in costly litigation and diversion of resources, cause product shipment delays or require the Company to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to the Company or at all. A claim of product infringement against the Company and failure or inability of the Company to license the infringed or similar technology could have a material adverse effect on its business, financial condition, operating results and cash flows.

Because the Company’s reporting currency is the Canadian dollar, its operations outside Canada face additional risks, including fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange. The Company does not currently engage in hedging activities or enter into foreign currency contracts in an attempt to reduce the Company’s exposure to foreign exchange risks. In addition, to the extent the Company has operations outside Canada, it is subject to the impact of foreign currency fluctuations and exchange rate changes on the Company’s reporting in its financial statements of the results from such operations outside Canada. Since such financial statements are prepared utilizing Canadian dollars as the basis for presentation, results from operations outside Canada reported in the financial statements must be restated into Canadian dollars utilizing the appropriate foreign currency exchange rate, thereby subjecting such results to the impact of currency and exchange rate fluctuations.

Software products as complex as those offered by the Company frequently contain errors or defects, especially when first introduced or when new versions or enhancements are released. Despite product testing, the Company has in the past released products with defects in certain of its new versions after introduction and experienced delays or lost revenue during the period required to correct these errors. For example, the Company regularly introduces new versions of its software. There can be no assurance that, despite testing by the Company and its customers, defects and errors will not be found in existing products or in new products, releases, versions or enhancements after commencement of commercial shipments. Any such defects and errors could result in adverse customer reactions, negative publicity regarding the Company and its products, harm to the Company’s reputation, loss or delay in market acceptance or required product changes, any of which could have a material adverse effect upon its business, results of operations, financial condition and cash flows.

The license and support of products by the Company may entail the risk of exposure to product liability claims. A product liability claim brought against the Company or a third-party that the Company is required to indemnify, whether with or without merit, could have a material adverse effect on the Company’s business, financial condition, operating results and cash flows.

The Company’s share price has fluctuated substantially since the Company’s common shares were listed for trading on the TSX Venture Exchange and quoted on the Over-The-Counter Bulletin Board (“OTCBB”). The trading price of the Company’s common shares is subject to significant fluctuations in response to variations in quarterly operating results, the gain or loss of significant orders, announcements of technological innovations, strategic alliances or new products by the Company or its competitors, general conditions in the securities industries and other events or factors. In addition, the stock market in general has experienced extreme price and volume fluctuations that have affected the market price for many companies in industries similar or related to the Company and have been unrelated to the operating performance of these companies. These market fluctuations may adversely affect the market price of the Company’s common shares.

Certain Shareholders May Exercise Control over Matters Voted Upon by the Company's Shareholders

Certain of the Company’s officers, Directors and entities affiliated with the Company together beneficially owned a significant portion of the Company’s outstanding common shares as of December 31, 2007. While these shareholders do not hold a majority of the Company’s outstanding common shares, they will be able to exercise significant influence over matters requiring shareholder approval, including the election of Directors and the approval of mergers, consolidations and sales of the Company’s assets. This may prevent or discourage tender offers for the Company’s common shares.

If the trading price of Visiphor’s common shares is less than $5.00 per share, trading in its common shares may be subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock. Such additional disclosure includes, but is not limited to, U.S. broker-dealers delivering to customers certain information regarding the risks and requirements of investing in penny stocks, the offer and bid prices for the penny stock and the amount of compensation received by the broker-dealer with respect to any proposed transaction. The additional burdens imposed upon broker-dealers may discourage broker-dealers from effecting transactions in Visiphor’s common shares, which could reduce the liquidity of Visiphor’s common shares and thereby have a material adverse effect on the trading market for Visiphor’s securities.

Visiphor is a corporation incorporated under the laws of Canada. A number of the Company’s Directors and officers reside in Canada or outside of the United States. All or a substantial portion of the assets of such persons are or may be located outside of the United States. It may be difficult to effect service of process within the United States upon the Company or upon its Directors or officers or to realize in the United States upon judgments of United States courts predicated upon civil liability of the Company or such persons under United States federal securities laws. The Company has been advised that there is doubt as to whether Canadian courts would (i) enforce judgments of United States courts obtained against the Company or such Directors or officers predicated solely upon the civil liabilities provisions of United States federal securities laws, or (ii) impose liability in original actions against the Company or such Directors and officers predicated solely upon such United States laws. However, a judgment against the Company predicated solely upon civil liabilities provisions of such United States federal securities laws may be enforceable in Canada if the United States court in which such judgment was obtained has a basis for jurisdiction in that matter that would be recognized by a Canadian court.

Material weaknesses related to the operational ineffectiveness of internal control over financial reporting at December 31, 2007 that could impact the Company’s ability to report its results of operations and financial condition accurately.

The Company has identified material weaknesses in the operational effectiveness of its internal control over financial reporting as at December 31, 2007. See the Controls and Procedures section of this report. The Company continues to identify, develop and implement remedial measures and compensating procedures to address these material weaknesses. These material weaknesses, unless addressed, could potentially result in accounting errors as discussed in the Controls and Procedures sections of this report.

The Company’s head office in Burnaby, B.C. leases space under a sublease of 10,938 square feet which expires December 30, 2009. The monthly rent is $16,908. The second office in Vancouver which was under lease until Sept 30, 2008 was cancelled at no additional expense to the Company in February 2008.

The Company is not aware of being a party to any legal proceedings as of the date of this report, the adverse outcome of which in management’s opinion, individually or in the aggregate, would have a material effect on the Company’s results of operations or financial position.

During the quarter ended December 31, 2007, there were no matters submitted to a vote of the Company’s security holders.

Item 5. Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

The Company’s common shares, no par value, began trading on the TSX Venture Exchange under the symbol “CAP” on September 29, 1998. The Company changed its symbol to “NAB” on February 25, 1999, and changed its symbol to “WSI” following its consolidation of its share capital on November 26, 2003. On July 6, 2005, the Company changed its symbol to “VIS” following its change of name. The table below sets forth the reported high and low sales prices for the Company’s common shares for the quarterly periods ended from March 31, 2006 to December 31, 2007 (as reported on the TSX Venture Exchange). The last reported closing price of the Company’s common shares on the TSX Venture Exchange, the Company’s principal trading market, on April 3, 2008 was $0.09.

The Company’s common shares were also quoted on the OTCBB, under the symbol “IGSTF.OB”. On November 26, 2003, following its consolidation of its share capital, the Company changed its symbol to “IMTIF” and on July 6, 2005, the Company changed its symbol to “VISRF” following its change of name. The table below sets forth the reported high and low bid prices for the Company’s common shares on the OTCBB for the quarterly periods ended March 31, 2006 to December 31, 2007. These OTCBB quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. On April 3, 2008, the closing price of the Company’s common shares on the OTCBB was US$0.085.

As of April 3, 2008, there were 29 holders of record based on the records of the Company’s transfer agent. This number does not include beneficial owners of the Company’s common shares whose shares are held in the names of various securities brokers, dealers and registered clearing agencies.

The Company has never paid dividends on its common shares and does not intend to pay dividends on its common shares in the foreseeable future. The Board of Directors (the “Board”) of the Company intends to retain any earnings to provide funds for the operation and expansion of the Company’s business. See “Item 6—Management’s Discussion and Analysis.”

Other than as provided in the Investment Canada Act (Canada) (the “ICA”) and certain industry specific statutes imposing restrictions on ownership of businesses in Canada (for example, banking, customs and telecommunications, etc.), there is no limitation imposed by the laws of Canada or British Columbia to hold or vote the common shares of Visiphor. The following discussion summarizes the material features of the ICA for a non-Canadian who proposes to acquire a controlling number of the Company’s common shares. It is a general discussion only, and is not a substitute for independent advice from an investor’s own advisor, and it does not anticipate statutory or regulatory amendments.

A non-Canadian would acquire control of the Company for the purposes of the ICA if the non-Canadian acquired a majority of the Company’s common shares. The acquisition of less than a majority but more than one-third of the common shares would be presumed to be an acquisition of control of Visiphor unless it could be established that, on the acquisition, Visiphor was not controlled in fact by the acquirer through the ownership of the common shares.

Except in very limited situations, the ICA prohibits implementation of a “reviewable” investment by a non-Canadian, unless after review the Minister responsible for the ICA is satisfied that the investment is likely to be of net benefit to Canada. An investment in the Company’s common shares by a non-Canadian (other than a “WTO Investor” as that term is defined in the ICA and which term includes entities which are nationals of or are controlled by nationals of, member states of the World Trade Organization), when the Company was not controlled by a WTO Investor, would be reviewable under the ICA if:

the investment was a direct investment to acquire control of the Company and the value of the Company’s assets, as determined in accordance with the regulations promulgated under the ICA, was over $5 million, the investment was an indirect investment in the Company (i.e. the acquisition of control, directly or indirectly, of a corporation incorporated outside Canada which in turn controls the Company, directly or indirectly) and the value of the Company’s assets, as determined in accordance with the regulations promulgated under the ICA,

was between $5 million and $50 million and comprised more than 50% of the value of the assets of all entities whose control had been acquired in the international transaction, or

an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, regardless of the value of the assets of the Company. An investment in the common shares by a WTO Investor, or by a non-Canadian when the Company was controlled by a WTO Investor, would be reviewable under the ICA if:

the investment was an indirect investment in the Company and the value of the Company’s assets, as determined in accordance with the regulations promulgated under the ICA, was not less than $281 million (for 2007) and comprised more than 50% of the value of the assets of all entities whose control had been acquired in the international transaction, or

the Company (i) engages in the production of uranium or owns an interest in a producing uranium property in Canada, (ii) provides any financial service, (iii) provides any transportation service, or (iv) is a cultural business.

Certain transactions relating to the Company’s common shares would be exempt from the ICA, including:

an acquisition of the Company’s common shares by a person in the ordinary course of that person’s business as a trader or dealer in securities, and

an acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the ICA, and an acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Company, through the ownership of the common shares, remained unchanged.

The following summarizes the principal Canadian federal income tax considerations generally applicable to the holding and disposition of common shares of the Company by a holder (a) who, for the purposes of the Income Tax Act (Canada) (the “Tax Act”), is not resident in Canada, deals at arm’s length with the Company, holds the common shares as capital property and does not use or hold the common shares in the course of carrying on, or otherwise in connection with, a business in Canada, and (b) who, for the purposes of the Canada-United States Income Tax Convention (the “Treaty”), is a resident of the United States, has never been a resident of Canada, has not held or used (and does not hold or use) common shares in connection with a permanent establishment or fixed base in Canada, and who qualifies for the full benefits of the Treaty. Holders who meet all such criteria in clauses (a) and (b) are referred to herein as a “U.S. Holder” or “U.S. Holders”, and this summary only addresses such U.S. Holders. The summary does not deal with special situations, such as particular circumstances of traders or dealers, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark-to-market provisions of the Tax Act apply), or otherwise.

This summary is based on the current provisions of the Tax Act and the regulations thereunder, all proposed amendments to the Tax Act and regulations publicly announced by the Minister of Finance (Canada) to the date hereof, the current provisions of the Treaty and the current administrative practices of the Canada Revenue Agency. It has been assumed that all currently proposed amendments will be enacted as proposed and that there will be no other relevant change in any governing law, the Treaty or administrative policy, although no assurance can be given in these respects. This summary does not take into account provincial, U.S. or other foreign income tax considerations, which may differ significantly from those discussed herein.

This summary is not exhaustive of all possible Canadian income tax consequences. It is not intended as legal or tax advice to any particular U.S. Holder and should not be so construed. The tax consequences to a U.S. Holder will depend on that U.S. Holder’s particular circumstances. Accordingly, all U.S. Holders or prospective U.S. Holders should consult their own tax advisors with respect to the tax consequences applicable to them having regard to their own particular circumstances. The discussion below is qualified accordingly.

Dividends paid or deemed to be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross dividend (or 5% in the case of corporate shareholders owning at least 10% of the Company’s voting shares).

A U.S. Holder is not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a common share in the open market unless the share is “taxable Canadian property” to the holder thereof and even then only if the U.S. Holder is not entitled to relief under the Treaty.

A common share will be taxable Canadian property to a U.S. Holder if, at any time during the 60-month period ending at the time of disposition, the U.S. Holder or persons with whom the U.S. Holder did not deal at arm’s length (or the U.S. Holder together with such persons) owned 25% or more of the issued shares of any class or series of the Company. In the case of a U.S. Holder to whom common shares represent taxable Canadian property, no tax under the Tax Act will be payable on a capital gain realized on a disposition of such shares in the open market by reason of the Treaty unless the value of such shares is derived principally from real property situated in Canada. Management of the Company believes that the value of its common shares is not derived principally from real property situated in

Canada, and that no tax will be payable under the Tax Act on a capital gain realized by a U.S. Holder (as defined above) on a disposition of common shares in the open market.

ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMPANY’S COMMON SHARES

Certain of the information required by this Item 5 was previously reported by the Company on Forms 10-Q and Forms 8-K.

During the quarter ended December 31, 2007, there were no purchases of equity securities effected by the Company or any affiliated purchasers.

Visiphor is a software product and consulting services company that is in the business of helping enterprises by “connecting what matters”. The Company specializes in the development and deployment of solutions to the problem of integrating disparate business processes and databases. In so doing, the Company has developed a number of sophisticated products and specialized consulting skills. These have allowed Visiphor to gain industry recognition as a leader in providing advanced solutions to the “system disparity” problem that permeates the law enforcement, security, health care and financial services industries.

Visiphor’s products consist of servers and applications that produce one-time software licensing revenues and recurring support revenues. Its consulting services are highly specialized and focus on facilitating the solution to business integration related problems.

The Company develops and markets software products that simplify, accelerate, and economize the process of connecting existing, disparate databases. The Company’s technologies enable information owners to share data securely with internal line of business applications and external stakeholders and business partners using any combination of text or imagery. This includes searching disconnected data repositories for information about an individual using only a facial image. This allows organizations to quickly create regional information sharing networks using any combination of text or imagery.

In addition to a suite of data sharing and integration products, Visiphor also has a premier consulting team, Visiphor Consulting Services, that can provide services to organizations ranging from business process management support, development of an integration strategic plan, through to the design, development and implementation of a complete data sharing and integration solution for any combination of internal applications integration, business partner integration, process automation or workflow.

The Company derives a substantial portion of its revenues, and it expects to derive a substantial portion of its revenues in the near future, from sales of its software and services to a limited number of customers, and from the consulting segment of the business. Additional revenues are achieved through the implementation and customization of software as well as from the support, training, and ongoing maintenance that results from each software sale and from consulting services provided to clients. The Company’s success will depend significantly upon the timing and size of future purchase orders from its largest customers, from the ability to maintain relationships with its existing customer base and from new opportunities with future customers.

Typically, the Company enters into a fixed price contract with a customer for the licensing of selected software products and related services and time and materials based contracts for the delivery of specific services. The Company generally recognizes total revenue for software and services associated with a contract using percentage of completion method where such services (not including post-contract support) are considered to be essential to the functionality of the related software or constitute significant customization or modification of it. In these instances, the percentage-of-completion is based on the ratio of total costs incurred over the total estimated costs to complete the contract. Multiple element accounting usually applies to these and other contracts involving the delivery of software when post-contract support is bundled with the sale. Revenues from standalone services contracts are recognized as the services are delivered on a time and materials basis. Standalone sales of software licences (which may include installation where the installation is not considered to be essential to the functionality of the software) are recognized when the product is delivered and installed.

The Company’s revenue is dependent, in large part, on contracts from a limited number of customers. As a result, any substantial delay in the Company’s completion or delivery of a contract, the inability of the Company to obtain new contracts or the cancellation of an existing contract by a customer could have a material adverse effect on the Company’s results of operations. The loss of certain contracts could have a material adverse effect on the Company’s business, financial condition, operating results and cash flows. As a result of these and other factors, the Company’s results of operations have fluctuated in the past and may continue to fluctuate from period to period.

Concerns regarding security, terrorism and general law enforcement have increased awareness of and interest in products that have law enforcement or other security applications, including the products and services offered by Visiphor. There can be no assurance, however, that such trends will continue or will result in increased sales of the Company’s products and services.

Critical accounting policies are those that management believes are both most important to the portrayal of the Company’s financial conditions and results, and that require difficult, subjective, or complex judgements, often as a result of the need to make estimates about the effects of matters that involve uncertainty.

Visiphor believes the “critical” accounting policies it uses in preparation of its financial statements are as follows:

The Company recognizes revenue consistent with the SEC Staff Accounting Bulletin No. 104 and Statement of Position 97-2, “Software Revenue Recognition”. In accordance with this Statement, revenue is recognized, except as noted below, when all of the following criteria are met: persuasive evidence of a contractual arrangement exists, title has passed, delivery and customer acceptance has occurred, the sales price is fixed or determinable and collection is reasonably assured. Cash received in advance of meeting the revenue recognition criteria is recorded as deferred revenue.

When a software product requires significant production, modification or customization, the Company generally accounts for the arrangement using the percentage-of-completion method of contract accounting. Progress to completion is measured by the proportion that activities completed are to the activities required under each arrangement. When the current estimate on a contract indicates a loss, a provision for the entire loss on the contract is made. In circumstances where amounts recognized as revenue under such arrangements exceed the amount invoiced, the difference is recorded as accrued revenue receivable.

When software is sold under contractual arrangements that include post contract customer support (“PCS”), the elements are accounted for separately if vendor specific objective evidence (“VSOE”) of fair value exists for all undelivered elements. VSOE is identified by reference to renewal arrangements for similar levels of support covering comparable periods. If such evidence does not exist, revenue on the completed arrangement is deferred until the earlier of (a) VSOE being established or (b) all of the undelivered elements being delivered or performed, with the following exceptions: if the only undelivered element is PCS, the entire fee is recognized ratably over the PCS period, and if the only undelivered element is service, the entire fee is recognized as the services are performed.

The Company provides for estimated returns and warranty costs, which to date have been nominal, on recognition of revenue.

Up front payments for contract support and services revenue is deferred and is amortized to revenue over the period that the support and services are provided.

service potential of an intangible asset is capitalized as betterment. Costs incurred in the maintenance of the service potential of an intangible asset are expensed as incurred.

Intangible assets with finite useful lives are amortized over their useful lives. The assets are amortized on a straight-line basis at the following annual rates, which are reviewed annually:

Intangible assets with indefinite useful lives are not amortized and are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test compares the carrying amount of the intangible asset with its fair value, and an impairment loss is recognized in income for the excess, if any.

The preparation of financial statements in accordance with accounting principles generally accepted in Canada requires management to make estimates and assumptions, determinations of indicators of impairment and calculations of impairment losses that affect the amounts reported or disclosed in the financial statements. Actual amounts may differ from these estimates. Areas of significant estimate include, but are not limited to valuation of accounts receivable; estimated useful lives of equipment and intangible assets; valuation of acquired intangible assets; valuation of stock-based awards, fair valuation of liability and equity components of convertible debentures and the valuation allowance applied to reduce future income tax assets to their carrying amounts.

The Company has a stock-based compensation plan, which is described in note 13 to the Financial Statements. The Company accounts for all stock-based payments to employees and non-employees using the fair value based method. Under the fair value based method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measured.

The fair value of stock-based payments to non-employees is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the period and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date.

Under the fair value based method, compensation cost attributable to employee awards is measured at fair value at the grant date and recognized over the vesting period. Compensation cost attributable to awards to employees that call for settlement in cash or other assets is measured at intrinsic value and recognized over the vesting period. Changes in intrinsic value between the grant date and the measurement date result in a change in the measure of compensation cost. For awards that vest at the end of the vesting period, compensation cost is recognized on a straight-line basis; for awards that vest on a graded basis, compensation cost is recognized on a pro-rata basis over the vesting period.

Results of Operations for the three-month period and year ended December 31, 2007 compared to December 31, 2006:

The Company presents income excluding non-cash items and one-time unusual expenses which is a supplemental financial measure that is not required by, or presented in accordance with, generally accepted accounting principles. The Company presents income excluding non-cash items and one-time unusual expenses because the Company considers it an important supplemental measure of its operations as it provides an indicator of the Company’s progress towards achieving a cash flow from revenues that is equal to or greater than the cash expense level, and it enhances period-to-period comparability of the cash flow of the Company’s operations. This non-GAAP financial measure may not be comparable to the calculation of similar measures reported by other companies. This measure

has limitations as an analytical tool. It should not be considered in isolation, as an alternative to, or more meaningful than financial measures calculated and reported in accordance with GAAP. It should not be considered as an alternative to cash flow from operations determined in accordance with GAAP. Included below is a reconciliation of income excluding non-cash items and one-time unusual expenses, a non-GAAP financial measure, to cash flow used for operations, the most directly comparable financial measure calculated and reported in accordance with GAAP.

Based on the non-GAAP financial measure, the Company’s revenues generated $1,768,107 less cash than its expenses required for the year ended December 31, 2007, which is $2,207,014, or 56%, more than for the year ended December 31, 2006. The Company’s revenues generated $420,532 less cash than its expenses required for the three-month period ended December 31, 2007, which is $212,114, or 34%, more than for the three-month period ended December 31, 2006.

Visiphor’s total revenues for the three-month period ended December 31, 2007 were $1,040,572, which is 29% lower than the prior year level of $1,458,707. The year-to-date revenues decreased 33% to $4,303,095 over the prior year level of $6,383,383. The Company’s efforts to realign the Company’s operational expenses to a level that can be maintained in future periods has lead to a decreased investment in sales-related activities during the year. The Company’s management underwent operational restructuring and as a result of the additional internal focus occurring during this phase, management realized that revenue would be lower in 2007. The Company believes, however, that this operational restructuring will allow for future growth and help to ensure that expenses are better aligned with revenue in future periods. In 2008, with a more stable structure, the Company can focus on investing in sales and growing revenue through new products and the rebranding of existing products. Ultimately, the Company believes this will provide increased shareholder value and a more stable and scalable business.

Software Licensing and Related Services revenues were $53,578 for the three month period ended December 31, 2007 compared to the prior year’s level of $422,338, a decrease of 87%. Software Licensing and Related Services revenues were $377,795 for the year compared to the prior year’s level of $1,358,473, a decrease of 72%. The decreased software licensing and related services revenues were primarily due to staff shortages combined with delays in customer delivery acceptance schedules. With future investment in sales and product development, the Company expects that they will be able to increase revenue particularly product revenue.

Professional services revenues for the three-month period ended December 31, 2007 were $836,283 as compared to $812,070 in 2006 which is a 3% increase. Professional services revenues for the year ended December 31, 2007 decreased 19% to $3,393,298 as compared to $4,211,611 in 2006. Professional services revenues were significantly higher during the first quarter of 2006 as compared to the first quarter in 2007 due to the work completed in 2006 on the delivery of pre-acquisition contracts from 2005 in particular one from a large healthcare authority in British Columbia. The Company did not have a similar contract of that size in 2007. During the early parts of 2007, the Company continued to experience the financial effects of the common challenges of combining two businesses together even one year after the acquisition. Unexpected employee turnover increased during the early parts of 2007 which contributed to the decrease of professional services revenue. As the turnover decreased later in the year, the Company has been able to stabilize the business unit and focus on the delivery of projects. During 2007, the Company added new management to lead Delivery Services and this has increased the efficiency of the department which the Company believes will lead to increased revenue from the efficient delivery of projects particularly delayed projects.

Support revenue for the three-month period ended December 31, 2007 was 63% higher at $147,766 compared to $90,471 for 2006. Support revenue year-to-date was 21% higher at $525,366 than the prior year level of $435,165. As the Company continues to sell and complete more projects, its support revenue has continued to grow. Typically, for projects with a software component, the Company sells 12-month support agreements which renew every year. At the end of those terms the client has the choice of continuing or cancelling the support agreement.

As of March 5, 2008, Visiphor had work in process and contracted orders totalling approximately $2.2 million that are not recorded in the financial statements as at December 31, 2007. Consequently, Visiphor expects that revenues will increase during 2008 and will continue to increase as the Company’s current and newly developed products and solutions continue to gain increasing customer acceptance. The Company has been attracting new business opportunities in the U.S. market and anticipates significant growth in the U.S. There can be no assurance; however, that such future revenue or future growth will materialize or if such revenue or future growth does materialize that it will be significant.

Other revenues for the three-month period ended December 31, 2007 were $2,945, whereas other revenues of $133,828 were earned in the prior year. Other revenues year-to-date was $6,636 compared to $378,134 for 2006. The decrease was due to the fact that the Company did not sell any third party products to customers as was the case in the prior year.

Operating expenses totalled $1,521,554 for the three-month period ended December 31, 2007, which is 43% less than the 2006 operating expenses of $2,680,441 for the same period. The decreased costs were primarily due to the reduced salary expenses resulting from the operational restructuring the Company conducted in order to align expenses with revenues.

Operating expenses totalled $6,793,302 for the year ended December 31, 2007, which is 48% lower than the 2006 operating expenses of $13,061,754. The largest expense reductions were in professional services expenses, administrative expenses and amortization. These specific areas are discussed in the sections below.

Administrative costs for the three-month period ended December 31, 2007 were $206,140, which is 62% lower than for 2006 administrative costs of $548,816. Administrative costs for the year ended December 31, 2007 were $949,288, which is 63% lower than administrative costs for 2006 of $2,587,779. Administrative costs include staff salaries and related benefits and travel, consulting and professional fees, facility and support costs, shareholder, regulatory and investor relations costs. The decrease was primarily due to overall cost management.

The Company continued to improve its operational efficiencies during 2007, including consolidating its Vancouver and Burnaby, B.C. offices into the Burnaby head office locations, decreasing its executive compensation structure, replacing or removing certain management positions, and implementing general cost saving measures.

Staff levels approximately stayed the same from 55 employees at January 1, 2007 to 54 at December 31, 2007. Although staff levels stayed relatively the same at the end of the year compared as to the beginning of the year, during the year there were fluctuations which contributed to the challenges already faced by the Company. By the end of the year the Company believes that turnover has decreased to a normal level.

Bad debt recorded for the three-month period ended December 31, 2007 was $5,411 compared with $27,822 in the same period in 2006. For the year ended December 31, 2007, bad debts were $25,602 compared with $86,301 in the same period in 2006. Bad debts in both periods are due to write-offs of individual accounts in which the Company may not be confident on receiving payment and believes are uncollectible.

Cost of materials for the three-month period ended December 31, 2007 was $Nil compared to $180,432 for the same period in 2006. The costs for the year ended December 31, 2007 were $22,569 and $345,342 in 2006. During the year ended December 31, 2007, the Company utilized more internal resources in delivering projects as opposed to external resources, which had a significant impact on its cost of materials. In 2006 the Company’s cost of materials were also elevated because it expensed approximately $121,000 for sub-contracted services required for the security assessments for the King County RAIN project. The Company also significantly decreased the volume of third party software sold to customers.

Interest expense decreased 21% to $153,290 for the three-month period ended December 31, 2007 compared with the same three-month period in 2006 of $126,167. For the year ended December 31, 2007, interest expense increased by 68% to $495,336 compared to $294,055 in 2006. The increase in the current period is primarily due to increases in the principal amount of convertible debentures and loans payable outstanding during the year. Interest expense is expected to increase again in 2008 payable due to the fact that two new convertible debentures were issued during 2007.

The amortization expense decreased by 66% for the three-month period ended December 31, 2007 to $108,491 compared to $321,620 in 2006. For the year ended December 31, 2007, amortization expense decreased 75% to $465,464 compared to $1,850,535 in 2006. The decrease is primarily due to the elimination of the Briyante acquisition amortization, which became fully amortized in November 2006.

Sales and marketing expenses for the three-month period ended December 31, 2007 were $235,164 compared to $264,241 for 2006, a nominal decrease. The expenses related to sales and marketing decreased for the quarter as the Company continued to reduce costs and reduce spending on general sales and marketing activities.

Sales and marketing expenses for the year ended December 31, 2007 decreased 31% to $1,062,800 compared to $1,537,207 in 2006. As part of the Company’s overall cost-cutting efforts, there were reductions to the marketing salary expenses and general marketing activities for the year. Also with decreased sales, variable salary expenses such as commission were reduced. In 2008, as the Company continues to grow and build on its strategic plan, expenses related to sales and marketing expenses are expected to increase proportionately with revenue.

Costs for the professional services group for the three-month period ended December 31, 2007 were $503,295, which is a 38% decrease compared to costs of $817,938 in 2006.

Costs for the professional services group for the year ended December 31, 2007 were $2,361,239 which is 47% lower than costs for the Professional Services group of $4,464,292 in 2006.

The decrease is primarily related to the reduction in size of the professional services group and to the reduction and restructuring of the management of that group. In previous periods, group management responsibilities were shared by three executives whereas during the year ended December 31, 2007 the group was managed by one executive with the aid of the existing senior executive team.

Professional services is a relatively new department within the Company that was initiated in the second quarter of 2006. The professional services group is responsible for the installation of Visiphor’s products, business consulting services and training of Visiphor’s customers and business partners in the use of the Company’s products. It was primarily built upon the business integration of the consulting services group added through the acquisition of Sunaptic. The costs of this group include salaries, travel and general overhead expenses.

The technology development expenses for the three-month period ended December 31, 2007 were $331,138, which is 20% lower than the 2006 costs of $415,114. The technology development expenses for the year ended December 31, 2007 were $1,411,004, which is 21% lower than the 2006 costs of $1,782,575. These decreases were primarily due to employee turnover and reduced need to staff at prior levels as sales were lower in 2007. In 2008, as the Company continues to accomplish certain goals as part of the strategic plan, development efforts will increase. Management continues to believe that investments in technology advancements are crucial to the future success of Visiphor, and expects that costs will increase in future periods. Management expects that the increased revenues achieved as a result of the sale of products will allow development costs to increase further.

There were no restructuring charges in 2007. In January 2006 however, through the integration process with Sunaptic, the Company was able to streamline its operations and achieve operational efficiencies that allowed it to eliminate 16 employee positions. The Company had recorded a restructuring charge of $102,462 during the first quarter of 2006 for severance costs associated with the staff reductions.

Overall, the Company incurred a net loss for the three-month period ended December 31, 2007 of $480,982, or $0.01 per share, which is a 61% improvement compared with the net loss of $1,221,734 or $0.03 per share incurred during the three months ended December 31, 2006.

For the year ended December 31, 2007, the Company incurred a net loss of $2,490,207 or $0.06 per share, which is an improvement of 63% over the net loss of $6,678,371, or $0.15 per share incurred during the period ended December 31, 2006.

As of December 31, 2007, the Company has work in progress and contracted sales orders totalling $0.9 million that have not commenced installation and the revenue will not be recognised until future quarters. There can be no assurance, however, that such revenue will be collected or if any of such revenue from such work in progress and sales orders is collected that it will be significant or will be timely paid.

The Company’s changes in its net losses per quarter fluctuate according to the volume of sales and the achievements of reducing certain expenses. The Company is not aware of any significant seasonality affecting its sales. Although

there has been a general trend of increasing profitability, to date there has been no consistency from one quarter to the next. Past quarterly performance is not considered to be indicative of future results.

The Company’s aggregated cash on hand at the beginning of the three-month period ended December 31, 2007 was $111,619. The impact on cash after adjustment for non-cash items and changes to other working capital accounts in the period, resulted in a negative cash flow from operations of $205,217, as compared to a negative cash flow from operations of $255,332 for the same period in 2006. The Company repaid capital leases of $24,721 during the quarter ended December 31, 2007. The Company’s cash position increased for the three-month period by $16,804 at December 31, 2006 to $128,423 cash and cash equivalents on hand at December 31, 2007.

The Company’s aggregated cash on hand at the beginning of the year ended December 31, 2007 was $42,338. During the year, the Company received additional net funds of $66,666 through the issuance of common shares, $524,603 by issuance of a convertible debenture, $467,026 through loans, repaid loans in the amount of $407,693.

The Company used these funds primarily to finance its operations for the period. The impact on cash after adjustment for non-cash items and changes to other working capital accounts in the period, resulted in a negative cash flow from operations of $433,648as compared to a negative cash flow from operations of $2,602,248 for the same period in 2006. The Company also repaid capital leases of $97,631 during the year ended December 31, 2007 and purchased capital assets of $33,238. The Company’s cash position increased by $86,085 to $128,423 cash and cash equivalents on hand at December 31, 2007.

During the year there were no other private placements except for the two issuances of secured convertible debentures which are described below.

On July 14, 2006, the Company completed a private placement of an 8% convertible secured debenture in the principal amount of $1,600,000 maturing on December 15, 2009, convertible, subject to certain adjustments, at the price of $0.45 per common share, and (ii) of an “under-performance” performance warrant to purchase up to 2,350,000 common shares in the capital of the Company at a price of $0.30 per common share. The lender was Quorum Secured Equity Trust (“QSET”). The warrant is only issuable in the event that the 30-day weighted average trading price of the Company’s common shares has not exceeded $0.45 in at least one 30-day trading period on or before July 14, 2008. The warrant is exercisable at any time prior to 4:30 p.m. EST on December 15, 2009. The shares under the terms of the private placement, the debenture holder appointed a nominee to the Company’s Board.

In connection with the private placement, two Directors, of which one is also an officer of the Company, agreed to postpone and subordinate outstanding bridge loans to the Company in the amounts of $85,000 and US$400,000, respectively. As consideration, the Company issued a related promissory note secured by a second charge over the accounts receivable of the Company to each of the parties and the interest rate of such notes is 12%. The Company also repaid the balance of the other outstanding loans payable of $500,000.

During the month of May 2007, the Company issued a non-brokered private placement of a secured convertible debenture of $100,000. The lender was the same lender as the July 14, 2006 private placement. The terms of this debenture called for a conversion price of $0.10 on the $100,000 and also revised the conversion price of the July 2006 debenture to $0.25 and changed the exercise price of the under-performance warrants from $0.30 to $0.25.

During the month of December 2007, the Company issued a non-brokered private placement of a secured convertible debenture of $500,000. The lender was Quorum Investment Pool (“QIP”). The convertible debenture matures on December 13, 2012 and interest is payable on the outstanding principal amount at a rate of 8% per annum, payable quarterly beginning in March 2009 as the first year’s interest was paid in advance. The convertible debenture is also subject to certain debt covenants for example EBITDA and current ratio measurements. At the option of the holder, the principal amount outstanding under the convertible debenture may be converted into common shares at any time until maturity at a price of $0.10 per share. The Company has the right to force a conversion at any time after the third anniversary if the holder would receive an internal rate of return of 25%, not including interest paid to the conversion date, and the common shares of the Company are trading on the Toronto

Stock Exchange or TSX Venture Exchange with a minimum agreed trading volume. The Company's obligations under the convertible debenture are collateralized by a first charge on all of the Company’s assets. The Company agreed to pay the holder a structuring fee of $15,000 in respect of the placement.

On February 19, 2007, the Company settled debt owed to a vendor of the Company, through the issuance of 120,662 common shares at a deemed price of $0.40 per share and 120,662 warrants that expire on the third anniversary. The warrants allow the vendor the ability to acquire common shares for $0.50 in the first year and at $0.75 in the second year. This debt consisted of $48,265 worth of unpaid service fees. The common shares issued in settlement of the debt had a four-month hold period.

Management believes that the revenues from the Company’s futures sales combined with current accounts receivable, work in progress, and contracted orders will be sufficient to fund its consolidated operations through December 2008. If the accounts receivable are not collected, certain of the contracts are not completed, or the expected sales do not materialize, the Company will need to raise additional funds through private placements of its securities or seek other forms of financing during the 2008 financial year and the Company may no longer continue to be a going concern. There can be no assurance that such financing will be available to the Company on terms acceptable to it, if at all. Failure to obtain adequate financing if necessary could result in significant delays in development of new products and a substantial curtailment of the Company’s operations. If the Company’s operations are substantially curtailed, it may have difficulty fulfilling its current and future contract obligations.

Under Canadian GAAP, the net loss for the year ended December 31, 2007 was $2,490,207 whereas under U.S. GAAP the loss was $2,475,994. The difference of $14,213 for the year ended period is attributable to the difference that exists between Canadian and U.S. GAAP relating to the accounting for and subsequent accretion of the convertible debentures and the treatment of associated financing costs. Earnings per share under both Canadian and U.S. GAAP are the same.

Section 3862 replaces the disclosure requirements of previous Section 3861 Financial Instruments – Disclosure and Presentation and converges with International Financial Reporting Standards IFRS 7. This Section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007. The Company will adopt this Section in fiscal 2008.

Section 3863 is consistent with previous Section 3861 which was based on International Financial Reporting Standard IAS 32. This Section applies to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007. The Company will adopt this Section is fiscal 2008.

Handbook Section 1400, General Standards of Financial Statement Presentation, was amended to include the requirements for assessing the disclosing an entity’s ability to continue as a going concern from International Financial Report Standard IAS 1.

This section is applicable to interim and annual financial statements relating to fiscal years beginning or after January 1, 2008, with earlier adoption encouraged. The Company will adopt this section in fiscal 2008 but this will not have an impact on the financial statement disclosures as the Company is currently complying with this requirement.

Handbook Section 1535, Capital Disclosures, requires disclosure about capital and is harmonized with recently amended International Financial Reporting Standard IAS 1. The standard is applicable to all entitles, regardless of whether they have financial instruments.

Entities are required to disclose information about its objectives, policies and processes for managing capital, as well as its compliance with any externally imposed capital requirements, where they may exist.

This section is applicable to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007, with earlier adoption encouraged. The Company will adopt this Section in fiscal 2008.

Handbook Section 3064, Goodwill and Intangible Assets, replaces Hand book Section 3062, Goodwill and Other Intangible Assets

This Section establishes standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets. Certain items are specifically excluded from the scope of the Section including the initial recognition, measurement and disclosure of goodwill and intangible assets acquired in a business combination, the establishment of a new cost basis for intangible assets as part of a comprehensive revaluation, intangible assets held by an entity for sale in the ordinary course of business, non-current intangible assets classified as held for sale or included in a disposal group that is classified as held for sale, etc.

Rights under licensing agreements for items such as patents and copyrights are within the scope of this Section. This Section also applies to, among other things, expenditure on advertising, training, start-up and research and development activities. Research and development activities are directed to the development of knowledge. Therefore, although these activities may result in an asset with physical substance, for example, a prototype, the physical element of the asset is secondary to its intangible component, i.e., the knowledge embodied in it.

This Section applies to annual and interim financial statements relating to fiscal years beginning on or after October 1, 2008. Earlier adoption is encouraged. The Company will adopt this Section in fiscal 2009.

The impact that this Section will have on the Company’s financial position and results of operations is not known.

The Company is committed to the following payments for (i) operating lease payments on the building under lease, and (ii) capital lease payments for equipment under lease (excluding interest) over the next five years:

The Company’s head office in Burnaby, B.C. leases space under a sublease of 10,938 square feet which expires December 30, 2009. The monthly rent is $16,908. During the year, the Company also subleased office space in Vancouver, B.C. of 4,128 square feet with monthly rent of $7,000 which was to expire on September 29, 2008. This space was no longer used by the Company and had been sublet as of March 1, 2007 to cover the Company’s costs. On February 29, 2008 the landlord agreed to release all parties from the lease with no additional cost to Visiphor.

At December 31, 2007, the Company did not have any off-balance sheet arrangements.

We have audited the accompanying consolidated balance sheets of Visiphor Corporation and subsidiaries as of December 31, 2007 and 2006 and the related consolidated statements of operations and deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Visiphor Corporation and subsidiaries as of December 31, 2007 and 2006 and the results of their operations and their cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Comment by Independent Registered Chartered Accountants for US Readers on Canada-US Reporting Differences

The standards of the Public Company Accounting Oversight Board (United States) require the addition of an explanatory paragraph (following the opinion paragraph) when there are changes in accounting principles that have a material effect on the comparability of the Company’s consolidated financial statements, such as those discussed in Note 2, as well as when the consolidated financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going concern, such as those described in Note 1 to the consolidated financial statements. Although we conducted our audits in accordance with both Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States), our report to the shareholders dated April 3, 2008, is expressed in accordance with Canadian reporting standards, which do not require references to such change in accounting policies in the report of the independent chartered accountants when the change is properly accounted for and adequately disclosed in the financial statements, nor permit a reference to such events and conditions that cast substantial doubt on the Company’s ability to continue as a going concern in the report of the independent chartered accountants when these are adequately disclosed in the financial statements.

Visiphor Corporation (the “Company” or “Visiphor”) was incorporated under the Company Act (British Columbia) on March 23, 1998 under the name Imagis Technologies Inc. (the “Imagis”). On July 6, 2005 the Imagis changed its name to Visiphor Corporation and continued under the Canada Business Corporation Act. The Company operates in two segments: (i) being the development and sale of software applications, and (ii) solutions and the provision of business integration consulting services.

These financial statements have been prepared on a going concern basis which includes the assumption that the Company will be able to realize its assets and settle its liabilities in the normal course of business. For the year ended December 31, 2007, the Company incurred a loss from operations of $2,490,207 and a deficiency in operating cash flow of $433,648 In addition, the Company has incurred significant operating losses and net utilization of cash in operations in all prior periods. Accordingly, the Company will require continued financial support from its shareholders and creditors until it is able to generate sufficient cash flow from operations on a sustained basis. Failure to obtain ongoing support of its shareholders and creditors may make the going concern basis of accounting inappropriate, in which case the Company’s assets and liabilities would need to be recognized at their liquidation values. These financial statements do not include any adjustment due to this going concern uncertainty.

The Company prepares its financial statements in accordance with accounting principles generally accepted in Canada and, except as set out in Note 22, also complies, in all material respects, with accounting principles generally accepted in the United States. The financial statements reflect the following significant accounting policies:

On January 1, 2007, the Company adopted Canadian Institute of Chartered Accountants’ (“CICA”) Handbook, Section 1530, Comprehensive Income, CICA Section 3855 Financial Instruments – Recognition and Measurement, CICA Section 3251, Equity, CICA Section 3861, Financial Instruments – Disclosure and Presentation.

This section establishes the standards for recognizing and measuring financial instruments in the balance sheet and the standards for reporting gains and losses in the financial statements. Financial assets available for sale, assets and liabilities held for trading and derivative financial instruments have to be measured at fair value.

Cash and temporary investments are classified as financial assets held for trading and are measured at fair value. Gains and losses from periodic revaluation are recorded in net income.

Accounts receivable are classified as loans and receivables and are initially measured at fair value and subsequently revalued at amortized cost using the effective interest rate method.

Accounts payable, loans payable, related loans payable, accrued liabilities and capital lease obligations are classified as other liabilities and are initially measured at fair value and subsequently revalued at amortized cost using the effective interest rate method.

Convertible debentures are classified as long term debt and are accounted for by methods consistent with CICA Section 3855 and 3861. Deferred financing costs are netted against the debenture.

This section establishes reporting standards for the presentation and disclosure of financial instruments including derivatives in a given period.

This section establishes reporting standards for the presentation and disclosure of equity related items in a given period.

This section establishes reporting standards for the presentation and disclosure of comprehensive income in a given period. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events from non-owner sources. It includes all non-owner changes in equity.

Section 1506 establishes criteria for changing accounting policies together with the accounting treatment and disclosure of changes in accounting policies and estimates, and correction of errors. Under the new standard, accounting changes should be applied retrospectively unless otherwise permitted or required by the transitional provisions of a primary source of GAAP or where impracticable to determine. In addition, voluntary changes in accounting policy are made only when the change results in more relevant and reliable information. The Company has not made any voluntary changes in accounting policies since the adoption of the revised standard.

The Company determined that the adoption of CICA Sections 3855, 3861, 3251, 1506 and 1530 had no material impact to its financial statements for the years ended December 31, 2007 and 2006.

Handbook Section 1400, General Standards of Financial Statement Presentation, was amended to include the requirements for assessing and disclosing an entity’s ability to continue as a going concern from International Financial Report Standard IAS 1.

Handbook Section 3064, Goodwill and Intangible Assets, replaces Hand book Section 3062, Goodwill and Other Intangible Assets

The impact that this Section will have on the Company’s financial position and results of operations is not known.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Briyante Software Corp. (“Briyante”), since the date of its acquisition on November 25, 2003 until the date that it was wound up (November 1, 2005), Visiphor (US) Corporation since the date of incorporation (August 18, 2005) and Sunaptic Solutions Inc. (“Sunaptic”), since the date of its acquisition on November 18, 2005. All material inter-company accounts and transactions have been eliminated. Briyante was inactive when it was wound up.

The Company considers all highly liquid investments with a term to maturity of three months or less when purchased to be cash equivalents. Investments having a term in excess of three months, but less than one year, are classified as short-term investments.

Equipment is recorded at cost and is amortized over its estimated useful life on a straight-line basis at the following annual rates:

Leasehold improvements are amortized straight-line over the lesser of their lease term or estimated useful life.

Intangible assets acquired either individually or with a group of other assets are initially recognized and measured at cost. The cost of a group of intangible assets acquired in a transaction, including those acquired in a business combination that meet the specified criteria for recognition apart from goodwill, is allocated to the individual assets acquired based on their relative fair values. The cost of internally developed intangible assets is capitalized only when technical feasibility has been established, the asset is clearly defined and costs can be reliably measured, management has both the intent and ability to produce or use the intangible asset, adequate technical and financial resources exist to complete the development, and management can demonstrate the existence of an external market or internal need for the completed product or asset. Costs incurred to maintain the service potential of an intangible asset are expensed as incurred. No amounts have been capitalized to date in connection with internally developed intangible assets.

Intangible assets with finite useful lives are amortized over their useful lives. The assets are amortized on a straight-line basis at the following annual rates, which are reviewed annually:

The Company recognizes revenue consistent with Statement of Position 97-2, “Software Revenue Recognition”. In accordance with this Statement, revenue is recognized, except as noted below, when all of the following criteria are met: persuasive evidence of a contractual arrangement exists, title has passed, delivery and customer acceptance has occurred, the sales price is fixed or determinable and collection is reasonably assured. Cash received in advance of meeting the revenue recognition criteria is recorded as deferred revenue.

When software is sold under contractual arrangements that include post contract support (“PCS”), the elements are accounted for separately if vendor specific objective evidence (“VSOE”) of fair value exists for all undelivered elements. VSOE is identified by reference to renewal arrangements for similar levels of support covering comparable periods. If such evidence does not exist, revenue on the completed arrangement is deferred until the earlier of (a) VSOE being established or (b) all of the undelivered elements being delivered or performed, with the following exceptions: if the only undelivered element is PCS, the entire fee is recognized ratably over the PCS period, and if the only undelivered element is service, the entire fee is recognized as the services are performed.

The Company provides for estimated returns and warranty costs, which to date have been nominal, on recognition of revenue.

Up front payments for contract support and services revenue is deferred and is amortized to revenue over the period that the support and services are provided.

The preparation of financial statements in accordance with accounting principles generally accepted in Canada requires management to make estimates and assumptions, that affect the amounts reported or disclosed in the financial statements. Actual amounts may differ from these estimates. Areas of significant estimate include, but are not limited to valuation of accounts receivable; estimated useful lives of equipment and intangible assets; valuation of acquired intangible assets; valuation of stock-based awards, fair valuation of liability, determinations of indicators of impairment and calculations of impairment losses and equity components of convertible debentures and the valuation allowance applied to reduce future income tax assets to their carrying amounts.

The functional currency of the Company and its subsidiaries is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at exchange rates in effect at the balance sheet date. Revenues and expenses are translated using rates in effect at the time of the transactions. Foreign exchange gains and losses are included in expenses and are insignificant for all periods presented.

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, future 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. Future 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. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of substantive enactment. To the extent that it is not considered to be more likely than not that a deferred tax asset will be realized, a valuation allowance is provided.

The Company has a stock-based compensation plan, which is described in note 13. The Company accounts for all stock-based payments to employees and non-employees using the fair value based method. Under the fair value based method, stock-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measured.

Loss per share is calculated using the weighted average number of shares outstanding during the reporting period. This average includes common shares issued in a reporting period from their date of issuance. Diluted per share amounts are calculated by the treasury stock method whereby the assumed proceeds of dilutive exercisable instruments are applied to repurchase common shares at the average market price for the period. The resulting net issuance is included in the weighted average number for purposes of the diluted per share calculation. As all outstanding shares and warrants are anti-dilutive, there is no difference between basic and diluted loss per share.

Goodwill represents the excess of acquisition cost over fair value of net assets for acquired businesses. It has an indefinite useful life and is not amortized, but is tested annually for impairment. No impairment exists for 2006 or 2007. Factors considered for annual impairment tests include but are not limited to: acquisitions ability to continue to generate revenue, determinations of indicators of impairment such as reduced billings or reduced revenue, any foreseen future impact and Company’s ability to continue with aquiree’s business.


				Accumulated		Net book
2007		Cost		Amortization		Value
Computer hardware	$	767,551	$	628,229	$	139,322
Furniture and fixtures		259,603		191,265		68,338
Software		231,223		196,824		34,399
Tradeshow Equipment		69,162		66,106		3,056
Leasehold Improvements		136,688		76,264		60,424
	$	1,464,227	$	1,158,688	$	305,539

				Accumulated		Net book
2006		Cost		Amortization		Value
Computer hardware	$	710,927	$	511,676	$	199,251
Furniture and fixtures		259,603		152,902		106,701
Software		198,857		186,423		12,434
Tradeshow Equipment		69,162		63,478		5,684
Leasehold Improvements		136,688		46,052		90,636
	$	1,375,237	$	960,531	$	414,706

Included in computer hardware is $305,050 (December 31, 2006: $248,438) in cost and $219,073 (December 31, 2006: $153,680) of accumulated amortization related to computer hardware under capital lease.

Included in furniture and fixtures is $103,107 (December 31, 2006: $103,107) in cost and $55,138 (December 31, 2006: $34,517) of accumulated amortization related to furniture and fixtures under capital lease.

In 2005, the Company acquired 100% of the outstanding shares of a privately-held company, Sunaptic, for consideration of $3,189,333 plus acquisition costs of $218,300. The consideration consisted of $2,720,000 in cash and 1,066,666 common shares of the Company issued at fair value of $0.44 per share. The common shares issued by the Company were held in escrow, with 50% released on the 12-month anniversary of closing of the acquisition (November 18, 2006) and 50% to released on the 18-month anniversary of the closing of the acquisition, May 18, 2007. On November 18, 2006, 533,333 shares were released from escrow and on May 18, 2007, the remaining 533,333 shares were released from escrow.

On July 31, 2004, the Company entered into an agreement with a United Kingdom (“UK”) Company to form a jointly owned company, Imagis Technologies UK Limited (“Imagis UK”). Imagis UK was the exclusive distributor of Visiphor’s software products in the United Kingdom and a non-exclusive distributor on a world-wide basis. The Company’s initial investment in Imagis UK was recorded at a nominal amount of $1 and no significant gain or loss was ever realized. In early 2007, the Company notified the UK Company that it was in breach of the agreement and that all distribution rights had been revoked. The Company has written off its investment of $1.


				Accumulated		Net book
2007		Cost		Amortization		Value
Customer relationships	$	716,000	$	517,108	$	198,892
Briyante Technology		3,972,552		3,972,552		-
	$	4,688,552	$	4,489,660	$	198,892

				Accumulated		Net book
2006		Cost		Amortization		Value
Customer relationships	$	716,000	$	278,441	$	437,559
Briyante Technology		3,972,552		3,944,774		27,778
	$	4,688,552	$	4,223,215	$	465,337

Costs related to the issuance of the Company’s convertible debenture (see note 2) are netted against the carrying value of the convertible debentures and amortized into earnings over the life of the convertible debentures using the effective interest rate method. Prior to January 1, 2007, transaction costs were recorded as deferred charges in other assets and recognized in net earnings on a straight-line basis over the life of the convertible debentures. On adoption of CICA 3855 and CICA 3861, issue costs were adjusted to reflect the application of the effective interest rate method since the date of issue of the related convertible debentures.

Related party loans totaling $674,853 (December 31, 2006 - $551,160) are owed to officers and directors. Loans in the amount of $481,520 ($400,000 US and $85,000 CAD) are secured with a general charge against assets and bear interest at a rate of 12% per annum. Loans payable, denominated in U.S. dollars, are adjusted for foreign currency gains and losses each quarter. The remaining related party loans of $193,333 are unsecured and bear interest rates ranging from 0% to 12%.

Unsecured loans totaling $66,000 (December 31, 2006 - $200,000) are owed to an unrelated party bearing an interest rate of 12% per annum. These loans are due on demand.

Accounts payables include approximately $282,768 (December 31, 2006 - $250,000) of back payroll taxes and $107,700 (December 31, 2006 - $345,000) of income taxes related to the Sunaptic acquisition. The tax payables are currently being paid off in accordance with a payment plan with Canada Revenue Agency which will see the balance paid off by October 2008. The Company is in compliance with the terms of this payment plan.

The Company enters into capital leases from time to time in order to finance furniture, computer equipment, servers and other IT related items. The following is a table outlining the capital lease obligations for those purchases:

On July 12, 2006, the Company completed a non-brokered private placement consisting of a secured convertible debenture for $1,600,000. The convertible debenture matures on December 15, 2009 and interest is payable on the outstanding principal amount at a rate of 8% per annum, payable quarterly beginning in July 2007 as the first year’s interest was paid in advance. The convertible debenture is also subject to certain debt covenants. At the option of the holder, the principal amount outstanding under the convertible debenture may be converted into common shares at any time until maturity at a price of $0.45 per share. The Company has the right to force a conversion at any time after the third anniversary if the holder would receive an internal rate of return of 25%, not including interest paid to the conversion date, and the common shares of the Company are trading on the Toronto Stock Exchange or TSX Venture Exchange with a minimum agreed trading volume. In addition, the Company will issue 2,350,000 “under-performance” warrants if after the second anniversary of the debenture, the Company’s common shares are not trading at greater than $0.45 per share, based on a 30-day weighted average. Each warrant would entitle the holder to acquire one common share at any time on or before December 15, 2009 at $0.30 per share. The Company's obligations under the convertible debenture are collateralized by a first charge on all of the Company’s assets. The Company agreed to pay the holder a structuring fee of $48,000 in respect of the placement.

The convertible debenture was accounted for as a compound debt instrument and proceeds were allocated between debt and equity using the residual method whereby the debt component was valued and the residual was allocated to equity items.

The Company has determined the fair value of the liability portion of the convertible debenture upon issuance to be approximately $1.2 million using a net present value calculation. The fair value of the liability portion will be accreted to the convertible debenture face value of $1.6 million through interest expense charges computed at 18% per annum through December 15, 2009. The balance of the convertible debenture, approximating $353,000, has been credited to equity and represents the value ascribed to the conversion feature of the debenture with the contingent warrants. The financing expenses have also been separated into equity and debt components at the same ratio as the convertible debenture. The debt component has been classified as deferred financing costs and will be applied against income over the period of the financing, under interest expense. The financing costs for the equity component have been treated as a capital transaction and applied against the equity component.

During the month of May 2007, the Company completed a non-brokered private placement consisting of a secured convertible debenture for $100,000. The lender was the same lender as the July 14, 2006 private placement. The terms of this debenture called for a conversion price of $0.10 on the $100,000 and also revised the conversion price of the July 2006 debenture to $0.25 and changed the exercise price of the under-performance warrants (contingent warrants) from $0.30 to $0.25. The security is a general charge against the assets of the Company.

The Company has determined the fair value of the liability portion of the May 2007 convertible debenture upon issuance to be approximately $80,000 ($62,000 approx. net of costs) using a net present value calculation. The fair value of the liability portion will be accreted to the convertible debenture’s face value of $100,000 through interest expense charges computed at 21% per annum through December 15, 2009. The balance of the convertible debenture, approximating $20,000 ($15,000 approx. net of costs), has been credited to equity and represents the values ascribed to the conversion feature of the debenture. The financing expenses have also been separated into equity and debt components at the same ratio as the convertible debenture. The debt component has been classified as deferred financing costs and will be applied against income over the period of the financing, included in interest expense. The financing costs for the equity component have been treated as a capital transaction and applied against the equity component.

The contingent warrant modification had no material impact for Canadian or U.S. GAAP purposes.

During the month of December 2007, the Company completed a non-brokered private placement consisting of a secured convertible debenture of $500,000. The lender was Quorum Investment Pool (QIP). The convertible debenture matures on December 13, 2012 and interest is payable on the outstanding principal amount at a rate of 8% per annum, payable quarterly beginning in March 2009 as the first year’s interest was paid in advance. The convertible debenture is also subject to certain debt covenants.

At the option of the holder, the principal amount outstanding under the convertible debenture may be converted into common shares at any time until maturity at a price of $0.10 per share. The Company has the right to force a conversion at any time after the third anniversary if the holder would receive an internal rate of return of 25%, not including interest paid to the conversion date, and the common shares of the Company are trading on the Toronto Stock Exchange or TSX Venture Exchange with a minimum agreed trading volume. The Company's obligations under the convertible debenture are collateralized by a first charge on all of the Company’s assets. The Company agreed to pay the holder a structuring fee of $15,000 in respect of the placement.

The Company has determined the fair value of the liability portion of the convertible debenture upon issuance to be approximately $340,000 using a net present value calculation. The fair value of the liability portion will be accreted to the convertible debenture face value of $500,000 through interest expense charges computed at 20% per annum through December 13, 2012. The balance of the convertible debenture, approximating $163,000 ($134,000 approx. net of costs) has been credited to equity and represents the value ascribed to the conversion feature of the debenture. The financing expenses have also been separated into equity and debt components at the same ratio as the convertible debenture. The debt component has been classified as deferred financing costs and will be applied against income over the period of the financing, under interest expense. The financing costs for the equity component have been treated as a capital transaction and applied against the equity component.

During 2007, CICA Section 3855 and Section 3861 were adopted. The deferred financing costs which were being amortized throughout the term and any remaining prepaid interest amounts have now been netted against the convertible debenture as per the policy.

At December 31, 2007, the Company was in violation of EBITDA and current ratio covenants in relation to this convertible debenture, however, the Company has obtained a waiver of these covenants from the lender. The covenants apply each quarterly period and are assessed at that time. If the Company forecasts that they will be in violation in regards to the covenants in future periods then the Company will reclassify the convertible debentures to current liability even if the lender provides a waiver (EIC 59).

The following table summarizes the long-term cash commitments relating to the convertible debentures. The difference between the value of $1,640,382 as per the balance sheet and the $2,666,334 value as per the table below is related to the accretion of the debt and periodic cash interest payments.

50,000,000 preferred shares without par value, non-voting, issuable in one or more series


		Number of common shares		Amount
Balance, December 31, 2005		42,475,588	$	34,912,723

Issued during the period for cash:
Private Placements		600,000		270,000
Issued for settlement of accounts payable		918,525		413,336
Share issuance costs		-		(25,697)

Balance, December 31, 2006		43,994,113		35,570,362

Issued during the period for cash:
	Options exercised	666,670		99,320
Issued for settlement of accounts payable		120,662		48,264

Balance, December 31, 2007		44,781,445	$	35,717,946

At December 31, 2006, and December 31, 2007, the following warrants were outstanding:

The 120,662 warrants issued on February 19, 2007 for the settlement of an account payable of $48,265, carry an exercise price of $0.50 for the first year and $0.75 in the second year. The warrants expire on February 19, 2009.

On July 14, 2006, the Company issued a convertible debenture for proceeds of $1,600,000 (Note 12). Under the terms of the debenture, the Company will issue 2,350,000 ‘under-performance’ warrants if after the second anniversary of the debenture, the Company’s common shares are not trading at greater than $0.45 per share, based on a 30 day weighted average. Each warrant would entitle the holder to acquire one common share at any time up to December 15, 2009 at $0.30 per share. An amendment in May, 2007 changed the warrant exercise price to $0.25.

The Company has a stock option plan that was most recently re-approved at the Company’s annual general meeting of shareholders on May 11, 2007. Under the terms of the plan, the Company may reserve up to 8,956,289 common shares for issuance under the plan. The Company has granted stock options under the plan to certain employees, Directors, advisors and consultants. These options are granted for services provided to the Company. All existing options granted prior to November 25, 2003; expire five years from the date of grant. All options granted subsequent to November 25, 2003, expire three years from the date of the grant. All options vest one-third on the date of the grant, one-third on the first anniversary of the date of the grant and one-third on the second anniversary of the date of the grant.

A summary of the status of the Company’s stock options at December 31, 2007 and December 31, 2006 and changes during the periods ended on those dates are presented below:


		December 31, 2007			December 31, 2006
		Weighted Average				Weighted Average
		Shares		Exercise Price		Shares		Exercise Price
Outstanding, beginning of period		8,292,500	$	0.32		5,415,500	$	0.67
	Granted	3,755,533		0.09		5,246,468		0.25
	Exercised	(666,670)		0.10		-		-
	Cancelled	(4,501,753)		0.35		(2,369,468)		0.65
Outstanding, end of period		6,879,610	$	0.20		8,292,500	$	0.32

The following table summarizes information about stock options outstanding at December 31, 2007:


			Options Outstanding							Options Exercisable
Exercise price			Number of options		Weighted average remaining contractual life		Weighted average exercise price		Number of options			Weighted average exercise price
	$0.05		200,000		2.81		$0.05		66,667			$0.05
	$0.06		6,000		2.66		$0.06		2,000			$0.06
	$0.07		957,500		2.71		$0.07		319,167			$0.07
	$0.09		216,311		2.20		$0.09		72,104			$0.09
	$0.10		1,606,830		2.27		$0.10		124,501			$0.10
	$0.11		100,000		2.10		$0.11		33,333			$0.11
	$0.12		34,722		1.94		$0.12		23,148			$0.12
	$0.13		894,060		1.93		$0.13		596,040			$0.13
	$0.15		10,000		1.84		$0.15		6,667			$0.15
	$0.16		500		1.84		$0.16		333			$0.16
	$0.17		10,000		1.49		$0.17		6,667			$0.17
	$0.20		317,056		1.67		$0.20		211,371			$0.20
	$0.21		946,667		1.62		$0.21		631,111			$0.21
	$0.25		5,000		1.41		$0.25		3,333			$0.25
	$0.31		40,000		1.23		$0.31		26,667			$0.31
	$0.35		12,000		0.84		$0.35		8,667			$0.35
	$0.36		5,999		0.13		$0.36		5,999			$0.36
	$0.39		12,000		0.56		$0.39		12,000			$0.39
	$0.40		6,666		0.22		$0.40		6,666			$0.40
	$0.45		1,498,299		0.67		$0.45		1,340,077			$0.45

		6,879,610		1.81		$0.20		3,496,518			$0.27

The weighted average exercise price of employee stock options granted during the period ended December 31, 2007 was $0.09 (2006-$0.25) per share purchase option. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model using the following average inputs: volatility – 71% (2006-58%); risk free interest rate - 5% (2006-5%); option term - 3 years (2006-3 years); and dividend yield – nil (2006-nil). The total compensation expense of $209,855 (2006-$797,729) has been allocated to the expense account associated with each individual employee expense and credited to contributed surplus.

At December 31, 2007, accounts payable and accrued liabilities included $441,154 (at December 31, 2006 - $230,215) owed by the Company to directors, officers and companies controlled by directors and officers of the Company. These amounts are unsecured, non-interest bearing and payable on demand and consist of unpaid fees and expenses recorded at the exchange amount which is the amount agreed to by the parties.

The Company has a consulting agreement with Trivett Holdings Ltd., a Company controlled by Roy Trivett, the Company’s President and Chief Executive Officer. The contract consists of an annual fee of $200,000. The agreement extends for 12 months from January to December each year if renewed unless terminated. Either party may terminate the agreement on notice given not less than, in the case of Visiphor, six (6) months and in the case of Trivett Holdings Ltd, 1 month in advance. The six months’ notice from Visiphor is a severance allowance under the agreement. In September 2007, Trivett Holdings Ltd. agreed to take a reduction to the annual fee of $200,000 to $120,000 for the year.

The Company has a consulting agreement with AG Kassam and Associates, Inc., a Company controlled by Al Kassam, the Company’s Vice President, Delivery and Product. The contract consists of an annual fee of $166,000. The agreement extends for 12–month periods and is renewed automatically each year unless terminated in the manner provided for under the agreement. Either party may terminate the agreement on notice given not less than, in the case of Visiphor, 12 months and in the case of AG Kassam and Associates, Inc., one- months notice in advance. The twelve months’ notice from Visiphor is a severance allowance under the agreement. In September 2007, AG Kassam and Associates, Inc. agreed to take a reduction to the annual fee of $166,000 to $120,000 for the year.

Income tax expense differs from the amount that would be computed by applying the federal and provincial statutory income tax rates of 33% (2006 – 34.12%) to income before taxes.

The effective income tax rates differ from the Canadian statutory rates for the following reasons:


Canadian statutory rates			34.12%		34.12%
		$		$
Canadian federal and provincial taxes			(849,545)		(2,278,660)
Non-deductible items			169,374		866,841
Permanent and other differences			(79,849)		291,227
Effect of tax rate change			761,952		72,878
Non-capital losses expired			1,034,177		857,512
Changes in valuation allowance			(1,036,109)		190,202

		$	-	$	-
Future income tax assets:
	Non-capital losses carried forward	$	8,517,896	$	9,550,857
	Capital assets		321,835		366,311
	Financing costs		113,262		153,381
Future income tax liability
Intellectual property and other assets			(175)		(81,623)
Future income tax assets net			8,952,817		9,988,926
Less valuation allowance			(8,952,817)		(9,988,926)
Net future income tax assets and liabilities		$	-	$	-

In assessing whether the benefits of future tax assets will be realized, management considers whether it is more likely than not that some portion or all of the future tax assets will be realized. The ultimate realization of the future tax assets is dependant upon the generation of future taxable income during the periods in which those temporary differences become deductible.

As at December 31, 2007, the Company has non-capital loss carry forwards aggregating approximately $26,767,000 available to reduce taxable income otherwise calculated in future years. These losses expire as follows:

The Company is committed to the following operating lease and capital lease payments over the next five years:


Year		Equipment		Building		Total
	$		$		$
2008		103,562		218,203		321,765
2009		45,636		201,478		247,114
2010		17,030		-		17,030
2011		-		-		-
2012		-		-		-
	$	166,228	$	419,681	$	585,909

The Company’s head office in Burnaby, B.C. leases space under a sublease of 10,938 square feet which expires December 30, 2009. The monthly rent is $16,908. In March 2007, the Company found a tenant to sublease the office space in Vancouver, B.C. of 4,128 square feet with monthly rent of $7,000 which was the old Sunaptic office. The Sunaptic lease was to expire on September 29, 2008. This space was no longer used by the Company and had been sublet as of March 1, 2007 to cover the Company’s costs. Subsequent to the year end and on February 29, 2008, the landlord agreed to release all parties from the lease with no additional cost to Visiphor.

The Company recorded a restructuring charge of $102,462 during the first quarter of 2006 for severance costs associated with staff reductions due to the integration of its operations with those of its subsidiary, Sunaptic. There were no such charges recorded for the year ended December 31, 2007.

The fair value of the Company’s financial instruments, represented by cash, accounts receivable, accounts payable and accrued liabilities, and loans payable approximates their carrying values due to their ability to be promptly liquidated or their immediate or short term to maturity. The carrying value of the convertible debenture approximates fair value. Based on current interest rates relative to those implicit in the leases, the fair value of capital lease obligations is estimated to not be materially different from their carrying values.

The Company is exposed to credit risk only with respect to uncertainty as to timing and amount of collectibility of accounts receivable and accrued revenues. The Company’s maximum credit risk is the carrying value of accounts receivable.

Foreign currency risk is the risk to the Company’s earnings that arises from fluctuations in foreign currency exchange rates, and the degree of volatility of these rates. Management has not entered into any foreign exchange contracts to mitigate this risk.

The Company is not exposed to any interest rate risk on the convertible debenture as the rate is fixed.

The Company operates in two segments, being the development and sale of software applications and solutions and the provision of business integration consulting services. Management of the Company makes decisions about allocating resources based on these two operating segments.


		Software Sales and Related Services		Consulting Services		Total

Revenue	$	886,807	$	3,416,288	$	4,303,095

Operating Expenses		3,671,074		2,161,428		5,832,502
Interest Expense		323,202		172,134		495,336
Amortization of Capital Assets		125,626		73,394		199,020
Amortization of Intangibles		27,777		238,667		266,444
Total Expenses		4,147,679		2,645,623		6,793,302

Net Profit (Loss)	$	(3,260,872)	$	770,665	$	(2,490,207)

Total Assets	$	367,110	$	2,397,122	$	2,764,232
Intangible Assets
Goodwill	$	-	$	1,684,462	$	1,684,462
Other Intangible Assets	$	-	$	198,892	$	198,892
Equipment, net	$	192,864	$	112,675	$	305,539
Non-cash Stock-based Compensation	$	132,465	$	77,390	$	209,855
Additions to Capital Assets	$	60,253	$	35,201	$	95,454


		Software Sales		Consulting Services		Total

Revenue	$	1,967,497	$	4,415,886	$	6,383,383

Operating Expenses		7,304,924		3,612,240		10,917,164
Interest Expense		268,960		25,095		294,055
Amortization of Capital Assets		166,039		73,427		239,466
Amortization of Intangibles		1,198,997		412,072		1,611,069
Total Expenses		8,938,920		4,122,834		13,061,754

Net Profit (Loss)	$	(6,971,423)	$	293,052	$	(6,678,371)

Total Assets	$	1,099,190	$	2,820,057	$	3,919,247
Intangible Assets
Goodwill	$	-	$	1,684,462	$	1,684,462
Intellectual Property	$	27,778	$	-	$	27,778
Customer Relationships	$	-	$	238,667	$	238,667
Equipment, net	$	330,684	$	84,022	$	414,706
Non-cash Stock-based Compensation	$	649,363	$	148,366	$	797,729
Additions to Capital Assets	$	50,552	$	67,975	$	118,527

Substantially all revenue is derived from sales to customers located in Canada, the United States and the United Kingdom. Geographic information is as follows:

On March 12, 2008, the Company completed a non-brokered private placement consisting of a secured convertible debenture of $1,750,000. The lender was Quorum Investment Pool (QIP). The convertible debenture matures on March 11, 2012 and interest is payable on the outstanding principal amount at a rate of 8% per annum, payable quarterly beginning in March 2009 as the first year’s interest was paid in advance. The convertible debenture is also subject to certain EBITDA and current ratio debt covenants.

At the option of the holder, the principal amount outstanding under the convertible debenture may be converted into common shares at any time until maturity at a price of $0.10 per share. The Company's obligations under the convertible debenture are collateralized by a first charge on all of the Company’s assets. The Company agreed to pay the holder a structuring fee of $52,500 in respect of the placement.

Due to the fact that QIP, if all debt is converted into common shares, may own more than 20% of the Company or establish significant influence, shareholder approval is required. The Company received $800,000 immediately and the remaining $950,000 is held in a lawyers trust and will be disbursed once shareholder approval is obtained. The Company plans to have this vote before May 10, 2008.

These financial statements have been prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”) which differ in certain respects from accounting principles generally accepted in the United States (“U.S. GAAP”). Material issues that could give rise to measurement differences to these consolidated financial statements are as follows:

As described in note 13, the Company has granted stock options to certain employees, directors, advisors, and consultants. These options are granted for services provided to the Company. For Canadian GAAP purposes, the Company accounts for all stock-based payments to non-employees made subsequent to January 1, 2002 and to employees made subsequent to January 1, 2003 using the fair value based method.

Options granted to non-employees prior to January 1, 2002 are also required to be measured and recognized at their fair value as the services are provided and the options are earned.

During the years ended December 31, 2001 and 2002, the Company repriced certain options which were accounted for as variable options resulting in net increases in the Black-Scholes value of the underlying common share market price between repricing and exercise, expiring or forfeiture of the options.

An enterprise recognizes or, at its option, discloses, the impact on net loss of the fair value of stock options and other forms of stock-based compensation awarded to employees. While the Company has elected under U.S. GAAP to adopt fair value accounting for options awarded to employees on or after January 1, 2003, the Company has elected to continue to measure compensation cost for stock options granted to employees prior to January 1, 2003 by the intrinsic value method.

On January 1, 2006, the Company adopted Statement of Financial Account Standards (“SFAS”), “Share-Based Payment” (“SFAS 123(R)”), which requires the expensing of all options issued, modified or settled based on the grant date fair value over the period during which an employee is required to provide service (vesting period).

The Company adopted SFAS 123(R) using the modified prospective approach, which requires application of the standard to all awards granted, modified, repurchased or cancelled on or after January 1, 2006, and to all awards for which the requisite service has not been rendered as at such date. Since January 1, 2003, the Company has been following the fair value based approach prescribed by SFAS 123, as amended by SFAS 148, for stock option awards granted, modified or settled on or after such date. As such, the application of SFAS 123(R) on January 1, 2006 to all awards granted prior to its adoption did not have a significant impact on the financial statements. In accordance with the modified prospective approach, prior period financial statements have not been restated to reflect the impact of SFAS 123(R). The prospective adoption of this U.S. GAAP pronouncement creates no new differences with the Company’s stock compensation expense reported under Canadian GAAP.

Previously under U.S. GAAP, the Company accounted for its stock option plan under the principles of Accounting Principles Board Opinion No. 25 “Accounting for Stock Issued to Employees and Related Interpretations (“APB 25”). No compensation expense was recognized under APB 25 because the exercise price of the Company’s stock options equaled the market price of the underlying stock on the date of the grant.

During the year ended December 31, 2000, the Company issued convertible debentures with detachable warrants attached. For Canadian GAAP purposes, the issuance was considered to be of a compound debt and equity instrument and the proceeds were allocated between the two elements based on their relative fair values. For U.S. GAAP purposes, the consideration received was allocated between the debt and warrants resulting in a beneficial conversion option as the fair value of the shares issuable on conversion of the debt is in excess of the value at which such shares would be issuable based on the reduced carrying value of the debt element.

During the year ended December 31, 2000, the Company issued 200,000 warrants having an exercise price of $3.50 each for services rendered. In accordance with the Company’s accounting policies at that time, for Canadian GAAP purposes, no value has been assigned to these warrant issuances. For U.S. GAAP purposes, the fair value of these warrants would be determined based on The Black-Scholes option pricing model and recognized as the services are provided.

During 2006, the Company issued a convertible debenture with detachable contingent warrants. For Canadian GAAP purposes, the debenture was treated as a compound debt instrument and the debt component was allocated between debt and equity using the residual method whereby the debt was fair valued and the residual value was applied to equity (consisting of the conversion feature and contingent warrants) net of the pro rata issuance costs.

For U.S. GAAP purposes, the relative fair value method was applied to bifurcate the contingent warrants from the debt instrument whereby debt and contingent warrants were fair valued. Issuance costs were allocated proportionally to each component. The warrants were evaluated as equity as they contain no net cash settlement terms outside of the control of the Company. The conversion feature of the debt did not meet the requirements for bifurcation.

The fair value of the warrants has been estimated to be $129,593 using the Black-Scholes option pricing model using the following average inputs: volatility - 51%; risk free interest rate - 5% (2006-5%); option term – 1 5/12 years; and dividend yield – nil (2006-nil).

The subsequent convertible debentures issued in December 2007 and March 2008 did not have any contingent warrants.

The effect of these accounting differences on contributed surplus, the equity and debt components of the convertible debenture, deficit, net loss, and net loss per share are as follows:


			As at December 31, 2007					As at December 31, 2006
Contributed Surplus, Canadian GAAP	$		3,614,633		$			3,437,431
Cumulative stock based compensation (a)			1,380,198					1,380,198
Beneficial conversion options (b)			208,200					208,200
Warrants issued for services (c)			722,000					722,000
Contingent warrants (d)			129,593					129,593
Additional paid-in capital, U.S. GAAP	$		6,054,624		$			5,877,422

Equity Components of Convertible Debenture, Canadian GAAP		$		500,948		$			365,479
Equity components of convertible debenture (d)				(500,948)					(365,479)
Equity Components of Convertible Debenture, U.S. GAAP		$		-		$			-

Deferred financing charges, Canadian GAAP		$		-					71,142
Valuation differences (d)				181,545					32,604
Accretion differences (d)				(54,849)					(4,373)
Deferred financing charges, U.S. GAAP				126,696					99,373

Convertible debenture, Canadian GAAP		$		1,640,382		$			1,231,300
Valuation differences (d)				552,813					268,755
Accretion differences (d)				(78,614)					(25,131)
Convertible debenture, U.S. GAAP		$		2,114,581		$			1,474,924

Deficit, Canadian GAAP		$		(42,459,057)		$			(39,968,850)
Cumulative stock based compensation (a)				(1,380,198)					(1,380,198)
Beneficial conversion options (b)				(208,200)					(208,200)
Warrants issued for services (c)				(722,000)					(722,000)
Transition adjustment (note2a)				11,206					-
Convertible debenture (d)				23,765					20,758
Deficit, U.S. GAAP		$		(44,734,484)		$			(42,258,490)
	Twelve months ended December 31,
	2007										2006
Net Loss for the period, Canadian GAAP	$		(2,490,207)				$			(6,678,371)
Accretion on convertible debenture Canadian GAAP (d)			79,614							40,860
Deferred financing expenses deducted under Canadian GAAP (d)			-							11,206

Accretion on convertible debenture U.S. GAAP (d)			(37,337)							(15,729)
Deferred financing expenses under U.S. GAAP (d)			(39,270)							(15,579)

Net Loss for the period, U.S. GAAP	$		(2,487,200)							(6,657,613)

Net Loss per share, U.S. GAAP and Canadian GAAP – basic and diluted	$		(0.06)				$			(0.15)

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB staff issued a staff position that delayed the effective date of SFAS No. 157 for all non-financial assets and liabilities except for those recognized or disclosed annually. The FASB also issued FAS-157-1, “application of FASB Statement No. 157 to FASB Statement No. 13 and other Accounting Pronouncements that address Fair Value Measurements for Purposes of Lease Classifications or Measurements under SFAS Statement No. 13”. We are required to adopt the provision of SFAS 157, as applicable, beginning in fiscal year 2008. We are currently in the process of evaluating the expected effect of SFAS 157 on our results of operations and financial position.

FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities

In February 2007, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities” (“SFAS No. 159”). SFAS No. 159 permits an entity to choose to measure many financial instruments and certain items at fair value. The objective of this standard is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reporting earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. Entities will report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007, which for us would be our fiscal year beginning January 1, 2008. We are currently evaluating the impact that the adoption of SFAS No. 159 will have on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) replaces SFAS No. 141, “Business Combinations”, but retains the requirement that the purchase method of accounting for acquisitions be used for all business combinations. SFAS 141(R) expands on the disclosures previously required by SFAS 141, better defines the acquirer and the acquisition date in a business combination, and establishes principles for recognizing and measuring the assets acquired (including goodwill), the liabilities assumed and any non-controlling interests in the acquired business. SFAS 141(R) also requires an acquirer to record an adjustment to income tax expense for changes in valuation allowances or uncertain tax positions related to acquired businesses. SFAS 141(R) is effective for all business combinations with an acquisition date in the first annual period following December 15, 2008; early adoption is not permitted. We will adopt this statement as of January 1, 2009. The impact of SFAS 141(R) will have on our consolidated financial statements will depend on the nature and size of acquisitions we complete after we adopt SFAS 141(R).

FASB Statement No. 160 Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51 SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51” (SFAS 160). SFAS 160 requires that non-controlling (or minority) interests in subsidiaries be reported in the equity section of the company’s balance sheet, rather than in a mezzanine section of the balance sheet between liabilities and equity. SFAS 160 also changes the manner in which the net income of the subsidiary is reported and disclosed in the controlling company’s income statement. SFAS 160 also establishes guidelines for accounting for changes in ownership percentages and for

deconsolidation. SFAS 160 is effective for financial statements for fiscal years beginning on or after December 1, 2008 and interim periods within those years. The adoption of SFAS 160 is not expected to have a material impact on our financial position, results of operations or cash flows.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commission’s rules and forms, and accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Internal control over financial reporting is a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officer 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.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting 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 Company’s assets;

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

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

Under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on criteria established in the Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management's evaluation included such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and the Company’s overall control environment. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2007. In 2006, with internal staff and independent internal control consultants, the Company developed an assessment of then current controls, reviewed existing deficiencies and developed a plan to address all known deficiencies, including issues relating to segregation of duties. As at December 31, 2006, the Company had created a design for internal control over financial reporting. However at December 31, 2007 the Company is not able to certify the operational effectiveness of internal control over financial reporting. For the Company to certify the operating effectiveness of its internal control, more internal audit and various other procedures must be conducted. Due to the financial and staffing constraints throughout 2007, the Company was not able to complete such audits and procedures.

Based on the assessment at December 31, 2007, management believes the Company has an effective design for internal controls over financial reporting however, is not able to certify the operational effectiveness of those designs. Further, management also believes that certain material weaknesses in the Company’s internal control over financial reporting exist. The Company will work to correct during 2008. The following is a summary of known material weaknesses:

During 2007, the management of the Company believed there were deficiencies in internal control due to the lack of segregation and incompatibility of duties which could result in inaccurate financial reporting. Management continued to address some of these issues during 2007 by using other resources to try to segregate some duties and by strengthening existing controls and procedures. These remediation efforts were hindered by staff turnover during 2007. The Company has a small finance group which has made total segregation of all duties challenging. There are compensating controls which the Company relies on to reduce the likelihood that material weaknesses will occur. The Company relies on managers to review certain transactions; the Chief Financial Officer reviews all material transactions. Also, due to the relatively small size of the business, all transactions that may be material are known to the senior management as they are aware of all activities that are occurring in the business. However, these compensating controls do not fully mitigate this material weakness. The Company plans to further address these issues in 2008 by segregating some duties to different employees and the possible hiring of additional staff.

Due to the relatively small size of the Company’s finance team, the Company uses accounting software that is off the shelf and common for a business of its size. The Company found that certain security and access features of the program were not being used. The Company realizes the importance of segregation of duties and limiting access of parts of the accounting software for different employees, however due to the limited size of the finance team; the Company cannot do so without negatively affecting the efficiency of the department. Compensating controls such as frequent reviews minimize the risk of material misstatements from occurring are employed by the Company. However, these compensating controls do not fully mitigate this material weakness. The Company also uses a spreadsheet to track Company-issued stock options. As the reporting and tracking of these options are a complex process, the use of spreadsheets involves risks, including secure access rights, formula errors, incorrect entries due to complexity, incorrect reporting and other spreadsheet related issues. The Company plans to further address both of these issues in 2008 by evaluating and/or purchasing different software.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Other than the foregoing, during the year ended December 31, 2007, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Notwithstanding the foregoing, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that the Company’s disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Company and its subsidiaries to disclose material information otherwise required to be set forth in the Company’s periodic reports; however, the Company’s disclosure controls and procedures are designed to provide reasonable assurance that they will achieve their objective of ensuring that information required to be disclosed in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Directors, Executive Officers, Promoters, Control Person and Corporate Governance; Compliance With Section 16(a) of the Exchange Act.

The following table sets forth certain information concerning the Company’s executive officers and Directors as of April 3, 2008:

Oliver "Buck" Revell was appointed as the Company’s Chairman of the Board in January 2000. Mr. Revell served for over 30 years in the United States Federal Bureau of Investigation, and during his career advanced to the position of Associate Deputy Director. Mr. Revell has served on a number of Presidential and Vice Presidential task forces, including as Vice-Chairman of the Interagency Group for Counter-Intelligence and as a member of both the National Foreign Intelligence Board and the Terrorist Crisis Management Committee of the National Security Council. Mr. Revell is a life member of the International Association of Chiefs of Police, and the founding Chairman of its Committee on Terrorism. Mr. Revell was President of the Law Enforcement Television Network from 1999 to 2004 and also serves as a Trustee of the Center for American and International Law in Dallas, Texas and as President of the Institute for the Study of Terrorism and Political Violence in Washington D.C.

Roy Davidson Trivett was appointed as a Director of the Company in March 2002. Mr. Trivett was appointed President and Chief Executive Officer of the Company in July 2003. Mr. Trivett has been the President of Trivett Holdings Ltd. since August 1994 and the President and a Director of Silicon Slopes Capital Corp. since October 1998. Mr. Trivett holds Bachelor and Masters degrees in engineering from Carleton University in Canada.

Al Kassam was appointed as the Company’s Vice President, Sales in April 2004. He originally joined the Company as Vice President, Technology and Development, Chief Technology Officer and Director in November 2003, upon completion of the acquisition of Briyante Software Corp. Mr. Kassam was President and Chief Executive Officer of Briyante from October 2001 until November 2003 where he oversaw the development of the firm from a research and development organization to a developer and marketer of data-sharing products in the North American Justice market. From April 1995 to October 2001, he was a co-founder and Managing Partner of Benchmark Technologies Inc., an IT consulting firm engaged in the development of custom software for business to business data exchange. Mr. Kassam has 18 years of information technology experience. Mr. Kassam holds a Bachelor of Science from Simon Fraser University and a Masters of Business Administration from the University of British Columbia.

He is a Microsoft Certified Professional, and has spoken worldwide on the topics of disparate database integration and system development.

Keith Kretschmer was appointed as a Director of the Company in March 2004. Mr. Kretschmer retired following a 30-year career in financial services and investments in 2001. Prior to retirement, Mr. Kretschmer served as the Managing Director of Oppenheimer & Co. from 1993 to 1994 and with Oppenheimer Capital from 1994 to 2001. Oppenheimer Capital is a leading global value-equity investment firm with more than $20 billion in assets under management. Prior to his involvement at Oppenheimer, Mr. Kretschmer was a General Partner of Bear Stearns and Co. (Los Angeles) and Senior Managing Director of Bear Stearns and Co. Inc. (Boston). He also serves on the Board

of Directors of Cogent Financial (d/b/a Medicredit). Mr. Kretschmer served on the White House Advance Staff during the Ford and Nixon Administrations and he has served as an officer and director with a number of charities. He is a graduate of Wentworth Military Academy, the University of Nebraska, and attended UCLA’s Graduate School of Management.

Michael C. Volker was appointed to the Board of the Company in November 2003. He also currently serves as the Director of the Industry Liaison Office of Simon Fraser University in Burnaby, British Columbia. From June 1996 to June 2001, he was Chairman of the Vancouver Enterprise Forum and continues as an active Director managing the Vancouver Technology Angel Network. Mr. Volker has taught courses in engineering, economics, design and management (organizational behavior) at the University of Waterloo, University of Toronto, Simon Fraser University, and Kansas University. Mr. Volker obtained his Bachelor of Science and Masters of Science degrees from the University of Waterloo. Mr. Volker also served a maximum term as a Governor of the University of Waterloo (1987 - 1993).

Clyde Farnsworth became a Director of the Company in March 2004. Mr. Farnsworth served as the Director of Reserve Bank Operations and Payment Systems for the Board of Governors of the United States Federal Reserve System prior to retirement in June 1999. As the Director, Mr. Farnsworth had responsibility for operations of the twelve Federal Reserve banks on behalf of the Federal Reserve Board. During his term, he represented the Board of Governors on the following: Group of Ten Committees of the Bank for International Settlements; the Committee on Payment and Settlement Systems; the Group of Computer Experts; and the Security Experts. Mr. Farnsworth’s duties also included automation and communication planning, financial planning, financial control, and budgeting for the twelve Reserve Banks. Prior to joining the Federal Reserve Board in 1975, he served as an officer and economist at the Federal Reserve Bank of Richmond, Virginia, from August 1969 to August 1975. He was a professor of economics at Virginia Tech from 1967 to 1969, and was an Adjunct Professor at the University of Richmond and at Virginia Commonwealth University while working at the Richmond Federal Reserve Bank. Mr. Farnsworth holds a Bachelor of Arts degree in mathematics, a Master of Arts degree in finance, and a Ph.D. in economics.

Wanda Dorosz became a Director of the Company in August 2006. Ms. Dorosz is currently the Chairman and CEO of Quorum Group of Companies (“Quorum”). Ms. Dorosz is a founder and the Chairman and CEO of Quorum which operate out of Toronto, New York and Bermuda. From 1976 until 1987, Ms. Dorosz practiced law, specializing in tax and corporate finance issues primarily related to Canadian and U.S. technology companies. She is currently a director of numerous private, public and not-for-profit organizations including CCR Technologies Ltd., Wellpoint Systems Inc., LxSix Photonics Inc., Positron Technologies Inc., NGRAIN Technology and Products, York University Schulich Business School Advisory Board, and Top 40 Under 40 Board of Directors. Some of her prior directorships include Investors Group, the Residential Equities Board of Trustees, the University of Toronto Governing Council, Toronto Stock Exchange Advisory Council, Abitibi-Price Office Products, Positron Fibre Systems, PC DOCS Group International, Inc., Promis Systems Corporation, Enghouse Systems Limited, National Advisory Board on Science and Technology (NABST), an appointment of the Prime Minister, Director and Executive Committee Member of the Harbourfront Corporation, Anderson Consulting (now Accenture) Canadian Advisory Board, and the Ontario Centre for Microelectronics. She has been a national judge of the Canadian Entrepreneur Program for a number of years.

Michael E. Goffin became a Director of the Company in March 2008. Mr. Goffin joined Quorum Group of Companies, Quorum Funding Corporation (“Quorum”), in 1997 where he has since gained over ten years of investment, accounting and corporate financial experience. Prior to 1997, he held various progressive financial positions in the service industry and manufacturing sector. Mr. Goffin sits on Quorum’s Technology Advisory Committee, and is a board member of several publicly listed companies. His primary focus is on the management of portfolio investments, financial structuring, strategic modelling and due diligence. He also contributes to the Quorum mergers and acquisitions and divestiture team, including the sale of Newstar E-commerce to BCE Emergis. Mr. Goffin graduated from the University of Toronto with a Bachelor of Arts degree in Economics and Environmental Management in 1994 and holds a Certified General Accountant designation.

Sunil Amin joined Visiphor in August 2006 and has served as the Company’s Controller from August 2006 to February 2007, at which time he was appointed Chief Financial Officer. From 2003 to 2005, Mr. Amin was with Stockgroup Media Ltd., which is a leading financial media company focused on user-generated content and collaborative technologies. Prior to Stockgroup Media Ltd., Mr. Amin was involved with financial services at TD Canada Trust. Mr. Amin holds a Certified General Accountant designation.

Each Board member is elected annually and holds office until the next annual meeting of shareholders or until his or her successor has been elected or appointed, unless his or her office is earlier vacated in accordance with the Company’s Bylaws. Officers serve at the discretion of the Board and are appointed annually. None of the Directors serve as Directors of any other company with a class of securities registered pursuant to Section 12 of the Exchange Act. The Company is not aware of any involvement in legal proceedings by any of the Company’s Directors or executive officers that would be material to an evaluation of the ability or integrity of any Director or executive officer. None of the Company’s Directors or executive officers has any family relationship with any other officer or Director.

Visiphor has established a separately-standing audit committee in accordance with Section 3(a)(58)(A) of the Exchange Act which was comprised of Clyde Farnsworth, Chairman, Mike Volker and Wanda Dorosz, each of whom is ‘independent’ for audit committee purposes according to the listing standards of the NASDAQ Stock Market and the regulations of the SEC. As at December 31, 2007, the Board has determined that Mr. Farnsworth, who is an “independent” Director (as that term is used in Item 7(d) (3) (iv) of Schedule 14A under the Exchange Act) meets all of the criteria required of an audit committee financial expert. The audit committee recommends independent accountants to audit its financial statements, discusses the scope and results of the audit with the independent accountants, reviews its interim and year-end operating results with its executive officers and independent accountants, considers the adequacy of the internal accounting controls, considers the audit procedures of the Company and reviews the non-audit services to be performed by the independent accountants.

Visiphor has adopted a Code of Ethics meeting the definition of “code of ethics” under Item 406 of Regulation S-B that applies to all the Company’s Directors, officers and employees. A copy of the Code of Ethics may be viewed on the Company’s website at www.visiphor.com under “Company/Governance”.

The Company is a “foreign private issuer” as defined in Rule 3b-4 promulgated under the Exchange Act and, therefore, its officers, Directors and greater than 10% shareholders are not subject to Section 16 of the Exchange Act, pursuant to Rule 3a12-3(b) promulgated under such Act.

The following table sets forth compensation paid or earned for the year ended December 31, 2007 by the Company’s Chief Executive Officer and each of the Company’s next three most highly compensated executive officers that received compensation in excess of US$100,000 during the year (the “Named Executive Officers”).

The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the fiscal years ended December 31, 2007 and 2006 in accordance with FAS 123(R) of option awards pursuant to the Company’s stock option plan and thus may include amounts from awards granted in and prior to 2007. Assumptions used in the calculations of these amounts are included in footnote 13 to the Company’s audited financial statements for the fiscal year ended December 31, 2007 included in this Annual Report.

Visiphor has a consulting agreement with Trivett Holdings Ltd., a Company controlled by Roy Trivett, the Company’s Chief Executive Officer. The contract consists of an annual fee of $200,000. The agreement extends for 12 months from January to December each year if renewed unless terminated. Either party may terminate the agreement on notice given not less than, in the case of Visiphor, six (6) months’ or, in the case of Trivett Holdings Ltd, 1 month’s notice. The six months’ notice from Visiphor is a severance allowance under the agreement. During 2007, Trivett Holdings Ltd. agreed to take a reduction to the annual fee of $200,000 to $120,000 for the remainder of the year.

Visiphor has a consulting agreement with AG Kassam and Associates, Inc., a Company controlled by Al Kassam, the Company’s Senior Vice President. The contract consists of an annual fee of $166,000. The agreement will extend for 12-month periods and is renewed automatically each year unless terminated in the manner provided for under the agreement. Either party may terminate the agreement on notice given not less than, in the case of Visiphor, twelve months’ or, in the case of AG Kassam and Associates, Inc., one month’s notice. The twelve months’ notice from Visiphor is a severance allowance under the agreement. During 2007, AG Kassam and Associates, Inc. agreed to take a reduction to the annual fee of $166,000 to $120,000 for the remainder of the year.

The following table includes certain information with respect to the value of all previously awarded unexercised options held by the Named Executive Officers at December 31, 2007.

All options are granted for a period of three years. One-third of the options vest on the date of grant, one-third on the first anniversary of the date of grant and one-third on the second anniversary of the date of grant.

The following table provides compensation information for the fiscal year ended December 31, 2007 for each of the Company’s non-employee members of the Board.

Roy Trivett and Al Kassam are not included in this table as they are employees of the Company and thus receive no compensation for services as directors on the Board. The compensation received by Messrs. Trivett and Kassam as employees of Visiphor is shown in the Summary Compensation Table on page 69.

The amounts in this column reflect the dollar amount recognized for financial statement reporting purposes for the fiscal years ended December 31, 2007 in accordance with FAS 123(R) of option awards pursuant to the Company’s stock option plan and thus may include amounts from awards granted in and prior to 2007. Assumptions used in the calculations of these amounts are included in footnote 13 to the Company’s audited financial statements for the fiscal year ended December 31, 2007 included in this Annual Report.

During the most recently completed financial year ended December 31, 2007, there was cash compensation accrued of $73,700 for fees earned by Visiphor’s directors however as of December 31, 2007 these were not actually paid. The Company compensates Directors that do not receive compensation as consultants or employees on a fee per meeting attended basis. There were eight meetings during 2007. The payment structure, approved on August 10, 2007, $5,000 for personal attendance for the Chairman at full Board meeting and $3,000 for attendance by telephone; $2,500 for committee Chairman for personal attendance at full committee meetings and $1,500 for attendance by telephone and $900 for personal attendance at Board meetings and $450 for attendance by telephone to Board meetings. The payment structure from January, 2007 to August 10, 2007 was $2,500 for personal attendance at full Board meetings, $1,500 for attendance by telephone; and $1,000 for personal attendance at committee meetings and $750 for attendance by telephone to committee meetings.

The Company reimburses Directors for expenses incurred in connection with their services as directors. The Company may grant stock options to its directors of which the timing, number, and exercise price are established on a case-by-case basis. The Compensation Committee (the “Committee”) is appointed by the Board of the Company from members of the Board of Directors, all of which are independent non-employee directors. No director may serve on the Committee unless he or she (i) is a "Non-employee Director" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (ii) satisfies the requirements of an "outside director" for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. The Committee Chair and members are designated annually by a majority of the full Board, and may be removed, at any time, with or without cause, by a majority of the full Board. The Compensation Committee administers the incentive compensation plan and makes the recommendation to grant stock incentives to key employees of the Company on an annual basis.

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

The following table sets forth certain information concerning the number of the Company’s common shares owned beneficially as of April 3, 2008 by: (i) each Named Executive Officer of the Company; (ii) each Director of the Company; (iii) each person known to the Company to beneficially own more than five percent (5%) of the Company’s common shares either based upon statements filed with the Securities and Exchange Commission pursuant to Sections 13(d) or (g) of the Exchange Act or based upon information given directly to the Company by such persons if such statements were unavailable; and (iv) all of the Company’s Directors and officers as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

Based on an aggregate 44,781,445 common shares issued and outstanding as of April 3, 2008.

Includes 1,116,666 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Includes (a) 152,221 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008, and (b) 990,748 common shares held by Revell Group International, a corporation in which Mr. Revell is the officer and Director.

Includes 96,667 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Includes 323,334 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Includes (a) 498,769 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008, and (b) 93,333 common shares held by the Kassam Trust, a trust in which Mr. Kassam the trustee.

Includes 156,667 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Includes 100,000 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Includes 216,666 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Includes 133,333 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Quorum Secured Equity Trust holds (i) a convertible debenture in the amount of $1,600,000 convertible at any time at its option at a conversion price of $0.25 into 6,400,000 common shares; and (ii) a convertible debenture in the amount of $100,000 convertible at any time at its option at a conversion price of $0.10 into 100,000 common shares.

The Company has been informed by counsel for Quorum Secured Equity Trust and Quorum Investment Pool Limited Partnership that such funds are independent from one another and, although they are each indirectly managed by Quorum Financing Corporation, each fund independently decides how to vote and dispose of its respective share positions of the Company, such that neither fund is the beneficial owner of the shares beneficially owned by the other fund, and nor is Quorum Financing Corporation the beneficial owner of the shares beneficially owned by either fund.

Quorum Investment Pool Limited Partnership holds (i) a convertible debenture in the amount of $500,000 convertible at any time at its option at a conversion price of $0.10 into 5,000,000 common shares; and (ii) a convertible debenture in the amount of $1,750,000 convertible at any time at its option at a conversion price of $0.10 into 17,500,000 common shares, $950,000 of which is not currently outstanding or convertible as such portion of the debenture is subject to shareholder approval which has not yet been obtained.

Includes (a) 2,794,323 common shares issuable pursuant to stock options under the Company’s stock option plan exercisable within 60 days of April 3, 2008.

Item 12. Certain Relationships and Related Transactions, and Director Independence.

The Company has employment and consulting agreements with certain related parties. See “Item 10 – Executive Compensation – Employment Agreements and “Item 10 – Executive Compensation – Compensation of Directors”.

Based upon information provided to the Company, the Company understands that Ms. Dorosz and Mr. Goffin are shareholders of Quorum Funding Corporation (“Quorum”), and holds less than 10% of its issued and outstanding shares. Quorum is the general partner of QFC 1, LP (“QFC”). QFC owns all of the outstanding securities of QIP Management Inc. (“QIP Management”). QIP Management manages QIP. QIP Management is paid management fees related to QIP. As discussed in the Form 8-K filed on March 11, 2008, the Company completed a private placement with QIP of an amended and restated 8% convertible secured debenture in the principal amount of Cdn$1,750,000 maturing over a four-year period.

Except as otherwise disclosed herein, no Director, senior officer, principal shareholder, or any associate or affiliate thereof, had any material interest, direct or indirect, in any transaction since the beginning of the last fiscal year of the Company that has materially affected it, or any proposed transaction that would materially affect it, except for an interest arising from the ownership of shares of the Company where the member will receive no extra or special benefit or advantage not shared on a pro rata basis by all holders of shares in the capital of the Company.

The Board of directors has determined that the following directors are independent under NASDAQ listing standards:

The following exhibits are filed (or incorporated by reference herein) as part of this Form 10-KSB:

Previously filed as part of Visiphor’s Registration Statement on Form 10-SB filed on September 8, 1999 (File No. 000-30090).

Previously filed as part of Visiphor’s Quarterly Report on Form 10-QSB for the period ended March 31, 2003.

Previously filed as part of Visiphor’s Quarterly Report on Form 10-QSB for the period ended September 30, 2003.

Previously filed as part of Visiphor’s Current Report on Form 8-K filed on July 18, 2005.

Previously filed as part of Visiphor’s Current Report on Form 8-K filed on November 25, 2005.

Previously filed as part of Visiphor’s Quarterly Report on Form 10-QSB for the period ended September 30, 2005.

Previously filed as part of Visiphor’s Current Report on Form 8-K filed on December 7, 2005.

Previously filed as part of Visiphor’s Annual Report on Form 10-KSB for the period ended December 31, 2005.

Previously filed as part of Visiphor’s Current Report on Form 8-K filed July 20, 2006.

Previously filed as part of Visiphor’s Current Report on Form 8-K filed on September 28, 2006.

Previously filed as part of Visiphor’s Current Report on Form 8-K filed on February 6, 2007

Previously filed as part of Visiphor’s Current Report on Form 8-K/A filed April 27, 2007

Previously filed as part of Visiphor’s Current Report on Form 8-K filed May 23, 2007

Previously filed as part of Visiphor’s Current Report on Form 8-K filed July 20, 2007

Previously filed as part of Visiphor’s Current Report on Form 8-K filed October 4, 2007

Previously filed as part of Visiphor’s Current Report on Form 8-K filed December 20, 2007

Fees billed by Grant Thornton LLP, for professional services totaled $124,614 for the year ended December 31, 2007 and $122,584 for the year ended December 31, 2006, including fees associated with the annual audit and reviews of quarterly reports on Form 10-QSB.

Fees for audit-related services totaled $nil for the year ended December 31, 2007. Audit-related fees incurred for the year ended December 31, 2006 were $nil.

Fees for tax services, including fees for review of the Company’s consolidated federal income tax return, billed by Grant Thornton LLP totaled $nil for the year ended December 31, 2007 and $nil for the year ended December 31, 2006.

Fees billed by Grant Thornton LLP, for professional services rendered during the fiscal years ended December 31, 2007 totaled $nil and $nil for December 31, 2006 other than those specified above.

The Audit Committee pre-approves audit engagement terms and fees prior to the commencement of any audit work, other than that which may be necessary for the independent auditor to prepare the proposed audit approach, scope and fee estimates. The independent auditors annually submit a written proposal that details all audit and audit related services. Audit fees are fixed and contained in the proposal, and the Audit Committee reviews the nature and dollar value of services provided under such proposal. Any revisions to such proposal after the engagement has begun are reviewed and pre-approved by the Audit Committee.

There were no fees in 2007 that were not pre-approved by the Audit Committee. All services described above under the captions "Audit Fees", “Audit Related Fees", "Tax Fees" and “All Other Fees” were approved by the Audit Committee pursuant to SEC Regulation S-X, Rule 2-01(c)(7)(i).

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Vancouver, Province of British Columbia, on April 3, 2008.

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Roy Trivett and Sunil Amin, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorneys-in-fact and agents of them or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

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

We have issued our report dated April 3, 2008, accompanying the consolidated financial statements included in the Annual Report of Visiphor Corporation on Form 10-KSB for the year ended December 31, 2007. We hereby consent to the incorporation by reference of said report in the Registration Statement of Visiphor Corporation on Form S-8 (File No. 333-127738), effective August 17, 2005.

Based on my knowledge, this 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;

Based on my knowledge, the financial statements, 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 small business issuer as of, and for, the periods presented in this report;

The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 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 small business issuer and have:

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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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;

Evaluated the effectiveness of the small business issuer'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 evaluation; and

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

The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

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 small business issuer's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Visiphor Corporation (the “Company”) on Form 10-KSB for the period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sunil Amin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

CERTIFICATION PURSUANT TO
18 U.S.C. § 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Visiphor Corporation (the “Company”) on Form 10-KSB for the period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Roy Trivett, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


	2007	2006	2005	2004	2003	2002
Period End	1.0120	0.8674	0.8579	0.8310	0.7738	0.6329
Average for Period	0.9304	0.8816	0.8260	0.7719	0.7205	0.6370
High	1.0905	0.9015	0.8690	0.8493	0.7749	0.6656
Low	0.8437	0.8641	0.7872	0.7158	0.6329	0.6175


Equity Compensation Plan Information as of December 31, 2007
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights	Weighted average exercise price of outstanding options, warrants, and rights	Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plan approved by security holders	7,000,276	$0.20	2,076,675
Equity compensation plans not approved by security holders	N/A	N/A	N/A
	7,000,276	$0.20	2,076,675


		Three months ended December 31,				Year ended December 31,
			2007		2006		2007		2006

Loss for the period		$	(480,982)	$	(1,221,734)	$	(2,490,207)	$	(6,678,371)
Items not involving cash:
	Amortization		108,491		321,620		465,463		1,850,535
	Stock-based compensation		(10,132)		133,250		209,855		797,729
Accretion of convertible debentures			(20,545)		22,724		90,820		40,860
Deferred financing costs expensed (recovered)			(21,375)		6,113		-		11,206
Bad debt expense			5,411		86,301		25,602		86,301
Foreign exchange adjustment on loans payable			(1,400)		19,080		(69,640)		19,080
Changes in non-cash operating working capital:
	Accounts receivable		148,227		(513,403)		521,607		252,848
	Accrued revenue receivable		(22,642)		68,476		152,478		100,910
	Prepaid expenses and deposit		2,365		49,637		94,659		133,677
	Accounts payable and accrued liabilities		24,722		706,857		480,405		633,178
	Deferred revenue		21,552		65,747		85,310		149,798
Cash used for operations			(246,308)		(255,332)		(433,648)		(2,602,248)
Excluded from non-GAAP measure
Changes in non-cash operating working capital:
	Accounts receivable		(148,227)		513,403		(521,607)		(252,848)
	Accrued revenue receivable		22,642		(68,476)		(152,478)		(100,910)
	Prepaid expenses and deposit		(2,365)		(49,637)		(94,659)		(133,677)
	Accounts payable and accrued liabilities		(24,722)		(706,857)		(480,405)		(633,178)
	Deferred revenue		(21,552)		(65,747)		(85,310)		(149,798)
Included in non-GAAP measure
Restructuring charge			-		-		-		(102,462)
Non-GAAP operating cash flow		$	(420,532)	$	(632,646)	$	(1,768,107)	$	(3,975,121)


		Q4-2007	Q3-2007	Q2-2007	Q1-2007	Q4-2006	Q3-2006	Q2-2006	Q1-2006

Total Revenue	$	1,040,572	1,121,492	863,755	1,277,277	1,458,707	1,120,766	1,488,828	2,315,083
Net Loss		(480,982)	(412,211)	(917,742)	(679,569)	(1,221,734)	(1,904,856)	(2,024,680)	(1,527,100)
Net loss per share		(0.01)	(0.01)	(0.02)	(0.02)	(0.03)	(0.04)	(0.05)	(0.04)
Net loss as a % of revenue		(47%)	(37%)	(106%)	(53%)	(84%)	(170%)	(136%)	(66%)


VISIPHOR CORPORATION Index to Consolidated Financial Statements

Report of Independent Registered Chartered Accountants	35
Consolidated Balance Sheets	37
Consolidated Statements of Operations and Deficit	38
Consolidated Statements of Cash Flows	39
Notes to Consolidated Financial Statements	41


Canada (State or other jurisdiction of incorporation or organization)		Not Applicable (I.R.S. Employer Identification No.)


	High	Low
2006
March 31, 2006	$0.44	$0.29
June 30, 2006	$0.33	$0.16
September 30, 2006	$0.23	$0.14
December 31, 2006	$0.20	$0.09

2007
March 31, 2007	$0.13	$0.08
June 30, 2007	$0.09	$0.07
September 30, 2007	$0.08	$0.07
December 31, 2007	$0.11	$0.05


	High (U.S.)	Low (U.S.)
2006
March 31, 2006	$0.38	$0.23
June 30, 2006	$0.29	$0.12
September 30, 2006	$0.22	$0.13
December 31, 2006	$0.19	$0.06

2007
March 31, 2007	$0.06	$0.06
June 30, 2007	$0.07	$0.07
September 30, 2007	$0.06	$0.06
December 31, 2007	$0.11	$0.06

Asset	Term
Briyante technology	3 years
Patents	3 years
License	3 years
Customer relationships	3 years


Vancouver, Canada April 3, 2008	Chartered Accountants

Audit • Tax • Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd


			2007		2006

Assets

Current assets:
	Cash and cash equivalents (note 3)	$	128,423	$	42,338
	Accounts receivable		356,034		903,243
	Accrued revenue receivable		24,948		177,426
	Prepaid expenses and deposit		65,934		160,593
			575,339		1,283,600

Equipment, net (note 4)			305,539		414,706
Goodwill (note 2(n))			1,684,462		1,684,462
Other intangible assets (note 7)			198,892		465,337
Deferred financing costs (note 8)			-		71,142
		$	2,764,232		3,919,247

Liabilities and Shareholders’ Deficit

Current liabilities:
	Accounts payable (note 10)	$	1,985,429	$	1,671,154
	Accrued liabilities (note 10)		342,833		224,968
	Related party loans payable (note 9)		674,853		551,160
	Loans payable (note 9)		66,000		200,000
	Deferred revenue		539,000		453,690
	Capital lease obligations (note 11)		87,036		89,776
		$	3,695,151	$	3,190,748

Long-term liabilities:
	Capital lease obligations (note 11)	$	54,229	$	92,507
	Convertible debentures (note 12 and 13)		1,640,382		1,231,300
		$	1,694,611	$	1,323,807
Shareholders’ deficit:
	Share capital (note 13)	$	35,717,946	$	35,570,362
	Contributed surplus (note 14)		3,614,633		3,437,431
	Conversion rights (note 13e)		500,948		365,749
	Deficit		(42,459,057)		(39,968,850)
			(2,625,530)		(595,308)

		$	2,764,232	$	3,919,247

Operations and going concern (note 1)
Commitments (note 17)
Subsequent events (note 21)
See accompanying notes to consolidated financial statements.


			2007		2006

Revenue:
	Software licensing and related services	$	377,795	$	1,358,473
	Professional services		3,393,298		4,211,611
	Support		525,366		435,165
	Other		6,636		378,134
			4,303,095		6,383,383

Expenses:
	Administration		949,288		2,587,779
	Amortization		465,464		1,850,535
	Bad debt expense		25,602		86,301
	Cost of materials		22,569		345,342
	Financing expense		-		11,206
	Interest		495,336		294,055
	Sales and marketing		1,062,800		1,537,207
	Professional services		2,361,239		4,464,292
	Technology development		1,411,004		1,782,575
	Restructuring costs		-		102,462
			6,793,302		13,061,754

Loss and comprehensive loss for the year			(2,490,207)		(6,678,371)

Deficit, beginning of year			(39,968,850)		(33,290,479)

Deficit, end of year		$	(42,459,057)	$	(39,968,850)

Loss per share – basic and diluted		$	(0.06)	$	(0.15)

Weighted average number of shares outstanding			44,567,983		43,258,807


See accompanying notes to consolidated financial statements.


				2007		2006

Cash provided by (used for):

Operations:
	Loss for the year		$	(2,490,207)	$	(6,678,371)
	Adjustments to reconcile loss for the period to net cash used in operating activities:
		Amortization		465,464		1,850,536
		Stock-based compensation		209,855		797,729
		Accretion of convertible debentures		90,820		40,860
		Deferred financing costs expensed		-		11,206
		Bad debt expenses		25,602		86,301
		Foreign exchange adjustment on loans payable		(69,640)		19,080

	Changes in non-cash operating working capital:
		Accounts receivable		521,607		252,848
		Accrued revenue receivable		152,478		100,910
		Prepaid expenses and deposit		94,659		133,677
		Accounts payable and accrued liabilities		480,405		633,178
		Deferred revenue		85,309		149,798
				(433,648)		(2,602,248)

Investing Activities:
	Purchase of equipment			(33,238)		(58,286)

Financing Activities:
	Issuance of common shares for cash			66,666		202,500
	Share issue costs			-		(25,697)
	Proceeds of loans payable			467,026		1,227,080
	Repayment of loans payable			(407,693)		(895,000)
	Proceeds of convertible debentures			524,603		1,600,000
	Capital lease repayments			(97,631)		(69,944)
	Deferred financing costs			-		(126,158)
				552,971		1,912,781

Increase (decrease) in cash and cash equivalents				86,085		(747,753)

Cash and cash equivalents, beginning of the year				42,338		790,091

Cash and cash equivalents, end of the year (note 3)			$	128,423	$	42,338


			2007		2006

Supplementary information and disclosures:
	Interest paid	$	69,280	$	253,030
Non-cash investing and financing transactions not included in cash flows:
	Equipment acquired under capital lease	$	56,612	$	60,241
	Issuance of common shares on settlement of accounts payable	$	48,264	$	413,336
See accompanying notes to consolidated financial statements.

Asset	Rate
Computer hardware	30%
Furniture and fixtures	20%
Software	100%
Tradeshow equipment	20%


2008		4,129,000
2009		6,508,000
2010		3,734,000
2014		2,831,000
2015		3,583,000
2026		4,176,000
2027		1,806,000

		2007		2006
Customer A	$	1,810,030	$	1,585,633
Customer B		641,145		857,746
Customer C		-		66,437


For the periods ended December 31		2007		2006

Cash on deposit	$	98,423	$	12,338

Short term investments	$	30,000	$	30,000

Cash and cash equivalents	$	128,423	$	42,338

		2007		2006
Due 2008, including buy-out options	$	104,502	$	79,878
Due 2009, including buy-out options		45,636		21,952
Due 2010, including buy-out options		17,030		-
		167,168		217,929
Implicit interest portion (9% to 21%)		(25,903)		(35,646)
		141,265		182,283
Current portion of capital lease obligations		87,036		89,776
Long-term portion of capital lease obligations	$	54,229	$	92,507

Year
2008		176,000
2009		1,870,334
2010		40,000
2011		40,000
2012		540,000
Total	$	2,666,334


		Amount
Balance, December 31, 2005	$	-

July 2006 convertible debenture		365,749
Balance, December 31, 2006	$	365,749

Transition adjustment on adoption of new policy (note 2a)		(13,207)
Adjusted Balance, December 31, 2006	$	352,542

May 2007 convertible debenture		14,546
December 2007 convertible debenture	$	133,860
Balance, December 31, 2007	$	500,948


		Amount
Balance, December 31, 2005		2,639,702

Value of options expensed-2006		797,729
Value of options exercised-2006		-

Balance, December 31, 2006		3,437,431

Value of options expensed-2007		209,855

Value of options exercised-2007		(32,653)

Balance, December 31, 2007	$	3,614,633

		2007		2006
Canada	$	3,430,103	$	4,039,282
United States		725,521		2,316,807
United Kingdom		147,471		27,294
	$	4,303,095	$	6,383,383


Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards⁽²⁾ ($)	Non-Equity Incentive Plan Compensa-tion ($)	Nonqualified Deferred Compensa-tion Earnings ($)	All Other Compensa-tion ($)	Total ($)
Roy Trivett Chief Executive Officer	2007 2006	172,786 168,800	N/A	N/A	13,487 69,157	N/A	N/A	N/A	186,273 237,957
Sunil Amin Chief Financial Officer⁽¹⁾	2007 2006	98,642 N/A	N/A	N/A	14,454 N/A	N/A	N/A	N/A	113,096 N/A
Al Kassam Senior Vice President	2007 2006	155,811 167,690	N/A	N/A	14,596 35,633	N/A	N/A	N/A	170,407 203,323


	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date
Roy Trivett	270,000 133,334 322,963 18,519 0 100,000	0 66,667 161,481 37,037 306,667 200,000	N/A	0.45 0.21 0.13 0.085 0.10 0.07	June 24, 2008 ⁽¹⁾ August 15, 2009⁽²⁾ December 6, 2009⁽³⁾ March 5, 2010⁽⁴⁾ April 19, 2010⁽⁵⁾ September 17, 2010⁽⁶⁾
Sunil Amin	33,334 33,333 83,333	16,666 66,667 166,667	N/A	0.10 0.11 0.07	November 21, 2009⁽⁷⁾ February 6, 2010⁽⁸⁾ September 17, 2010⁽⁶⁾
Al Kassam	180,000 66,667 20,237 16,178 0 83,333	0 33,333 10,119 32,355 66,667 166,667	N/A	0.45 0.21 0.13 0.085 0.10 0.07	June 24, 2008⁽¹⁾ August 15, 2009⁽²⁾ December 6, 2009⁽³⁾ March 5, 2010⁽⁴⁾ April 19, 2010⁽⁵⁾ September 17, 2010⁽⁶⁾


Name⁽¹⁾	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)⁽²⁾	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings	All Other Compen-sation ($)	Total ($)
Oliver Revell Chairman of the Board	16,500	N/A	1,633	N/A	N/A	N/A	18,133
Clyde Farnsworth	16,750	N/A	2,048	N/A	N/A	N/A	18,798
Norman Inkster	2,250	N/A	N/A	N/A	N/A	N/A	2,250
Keith Kretschmer	13,750	N/A	8,579	N/A	N/A	N/A	22,329
Michael Volker	19,200	N/A	3,265	N/A	N/A	N/A	22,465
Wanda Dorosz	5,250	N/A	N/A	N/A	N/A	N/A	5,250


TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	AMOUNT AND NATURE OF BENEFICIAL OWNER	PERCENT OF CLASS⁽¹⁾

Common Shares	Roy Davidson Trivett⁽²⁾ 2683 Country Woods Drive Surrey, BC V3S 0E6 Canada	5,415,277	11.80

Common Shares	Oliver “Buck” Revell⁽³⁾ 36 Victoria Drive, Suite A Rowlett, TX 75088-6062 USA	1,609,584	3.58

Common Shares	Clyde Farnsworth⁽⁴⁾ 2256 Mariners Way SE Southport, NC 28461 USA	532,501	1.19

Common Shares	Keith Kretschmer⁽⁵⁾ 294 Sunshine Avenue Sequim, Washington 98382-9681 USA	1,572,501	3.49

Common Shares	Al Kassam⁽⁶⁾ 5518 – 129^th Street Surrey, BC V3X 3G4 Canada	1,004,487	2.22

Common Shares	Michael C. Volker⁽⁷⁾ 7165 Cliff Rd West Vancouver, BC V7W 2L3 Canada	241,668	*

Common Shares	Wanda Dorosz⁽⁸⁾ 13265 Fallbrook Trail, RR#5 Georgetown, Ontario L7G 4S8 Canada	66,668	*

Common Shares	Michael E. Goffin 3 Lorahill Road Toronto, Ontario M8Z 3M5	0	*

Common Shares	Sunil Amin⁽⁹⁾ 7448 Broadway Burnaby, BC V5A 1S4 Canada	166,669	*

Common Shares	Robert Long⁽¹⁰⁾ 1632 Matson Drive San Jose, CA 95124 USA	83,334	*

Common Shares	Quorum Secured Equity Trust^(11)(12) 70 York Street, Suite 1720 Toronto, Ontario M5J 1S9 Canada	7,400,000	16.52

Common Shares	Quorum Investment Pool Limited Partnership^(12)(13) 70 York Street, Suite 1720 Toronto, Ontario M5J 1S9 Canada	13,000,000	29.03

Common Shares	All Directors and officers as a group (10 persons)⁽¹⁴⁾	10,899,350	22.9


	Exhibit Number	Description
	2.1(7)	Share Purchase Agreement dated October 5, 2005, among Michael James Hilton, Thomas James Healy, Ronald E. Matthews, Jason Fyfe, Paul McHenry, Simon Chester, Adam Bowron, Sunaptic Solutions Inc. and Visiphor
	3.1(5)	Articles of Continuance
	3.2(5)	Bylaw No.1
	4.1(1)	Shareholder Agreement dated February 23, 1999 among the original shareholders and the Former Visiphor Shareholders
	10.1(2)	Revolving Line of Credit dated February 21, 2003 between Visiphor and Altaf Nazerali
	10.2(2)	Amended and Restated Loan Agreement: Revolving Line of Credit dated April 15, 2003 between Visiphor and Altaf Nazerali
	10.3(2)	General Security Agreement dated April 15, 2003 between Visiphor and Altaf Nazerali
	10.4(2)	Grid Promissory Note dated February 21, 2003 between Visiphor and Altaf Nazerali
	10.5(2)	Grid Promissory Note Amended and Restated dated April 15, 2003 between Visiphor and Altaf Nazerali
	10.6(2)	Source Code License Agreement dated April 15, 2003 between Visiphor and Altaf Nazerali
	10.7(2)	Source Code Escrow Agreement dated April 15, 2003 between Visiphor and Altaf Nazerali
	10.8(3)	Debenture Agreement between Visiphor and 414826 B.C. Ltd dated May 30, 2003
	10.9(4)	Consulting Agreement dated July 15, 2003 between Visiphor and Roy Trivet
	10.10(6)	Visiphor Corporation Stock Option Plan
	10.11(8)	Sublease Agreement between Shaw Cablesystems Limited and Visiphor
	10.12(8)	Release of Claims Agreement between OSI Systems, Inc. and Visiphor dated September 14, 2005
	10.13(9)	Placement Agent Agreement, effective as of November 7, 2005, between Visiphor and Certain Agents.
	10.14(10) *	Lease Agreement between Bremmvic Holdings Limited and Visiphor dated September 14, 2005
	10.15(10) *	Sublease agreement between International Vision Direct and Visiphor dated November 1, 2004
	10.16(10) *	Consulting Agreement with Trivett Holdings and Visiphor dated January 1, 2005
	10.17(10) *	Consulting Agreement with TelePartners and Visiphor dated January 1, 2005
	10.18(10) *	Consulting Agreement with AG Kassam and Visiphor dated January 1, 2005
	10.19(10) *	Employment Agreement with Colby James Smith and Visiphor dated January 1, 2005
	10.20(10)	Consulting Agreement with Oliver “Buck” Revell and Visiphor dated January 1, 2005
	10.21(11)	Convertible Secured Debenture of Visiphor in favor of Quorum Secured Equity Trust in the Principal Sum of Cdn$1,600,000, due December 15, 2009
	10.22(11)	Performance Warrant to purchase up to 2,350,000 common shares of Visiphor at a price of Cdn$0.30 per common share
	10.23(11)	Subscription Agreement dated July 12, 2006 addressed to Visiphor and executed by Quorum Secured Equity Trust
	10.24(11)	General Security Agreement dated July 12, 2006 in favor of Quorum Secured Equity Trust between Visiphor and Quorum Secured Equity Trust
	10.25(11)	Postponement and Subordination Agreement dated July 12, 2006 between Roy Trivett, Quorum Secured Equity Trust and Visiphor
	10.26(11)	Postponement and Subordination Agreement dated July 12, 2006 between Keith Kretschmer, Quorum Secured Equity Trust and Visiphor
	10.27(11)	Promissory Note of Visiphor dated July 12, 2006 in the amount of Cdn$85,000 payable to Roy Trivett
	10.28(11)	Promissory Note of Visiphor dated July 12, 2006 in the amount of US$400,000 payable to Keith Kretschmer
	10.29(11)	General Assignment of Accounts Receivable by Visiphor to Roy Trivett dated July 12, 2006
	10.30(11)	General Assignment of Accounts Receivable by Visiphor to Keith Kretschmer dated July 12, 2006
	10.31(12) *	Consulting Agreement between Visiphor and MIVA Holdings, Inc. dated September 16, 2006
	10.32(13)	Employment Agreement between the Company and Mr. Amin dated July 18, 2006
	10.33(14)	Form of Loan Agreement between the Company and Certain Investors
	10.34(15)	Convertible Secured Debenture of the Company in favor of Quorum Secured Equity Trust in the Principal Sum of Cdn$100,000, due December 15, 2009
	10.35(15)	Amended Convertible Secured Debenture of the Company in favor of Quorum Secured Equity Trust in the Principal Sum of Cdn$1,600,000 due December 15, 2009
	10.36(15)	Amended and Restated Performance Warrant to purchase up to 2,350,000 common shares of the Company at a price of Cdn$0.25 per common share
	10.37(15)	Amended Postponement and Subordination Agreement dated May 16, 2007 between Roy Trivett, Quorum Secured Equity Trust and the Company
	10.38(15)	Amended Postponement and Subordination Agreement dated May 16, 2007 between Keith Kretschmer, Quorum Secured Equity Trust and the Company
	10.39(16)	Consulting Agreement dated July 5, 2007 between Visiphor Corporation and the Agent named therein
	10.40(17)	Subscription Agreement of Quorum Investment Pool Limited Partnership in favor of the Company dated September 28, 2007


	Exhibit Number	Description
	10.41(17)	Secured Debenture of the Company in favor of Quorum Investment Pool Limited Partnership in the Principal Sum of Cdn$207,693, due October 28, 2007
	10.42(17)	Amended and Restated Postponement and Subordination Agreement dated September 28, 2007 between Roy Trivett, Quorum Secured Equity Trust, Quorum Investment Pool Limited Partnership and the Company
	10.43(17)	Amended and Restated Postponement and Subordination Agreement dated September 28, 2007 between Keith Kretschmer, Quorum Secured Equity Trust, Quorum Investment Pool Limited Partnership and the Company
	10.44(18)	Convertible Secured Debenture of the Company in favor of Quorum Investment Pool Limited Partnership, in the Principal Sum of Cdn$500,000, due December 13, 2012
	10.32(13)	Employment Agreement between the Company and Mr. Amin dated July 18, 2006
	10.33(14)	Form of Loan Agreement between the Company and Certain Investors
	10.34(15)	Convertible Secured Debenture of the Company in favor of Quorum Secured Equity Trust in the Principal Sum of Cdn$100,000, due December 15, 2009
	23.1	Consent of Grant Thornton, LLP
	24.1	Powers of Attorney (included on signature page)
	31.1	Section 302 Certification
	31.2	Section 302 Certification
	32.1	Section 906 Certification
	32.2	Section 906 Certification
	99.1	Risk Factors
	99.2	Form 51-901F as required by the British Columbia Securities Commission


Signature	Title	Date
/s/ Oliver Revell
____________________ Oliver Revell	Chairman and Director	April 3, 2008
/s/ Roy Trivett
____________________ Roy Trivett	Chief Executive Officer and Director (principal executive officer )	April 3, 2008
/s/ Sunil Amin
____________________ Sunil Amin	Chief Financial Officer (principal financial and accounting officer)	April 3, 2008
/s/ Clyde Farnsworth
____________________ Clyde Farnsworth	Director	April 3, 2008
/s/ Al Kassam
____________________ Al Kassam	Director	April 3, 2008
/s/ Keith Kretschmer
____________________ Keith Kretschmer	Director	April 3, 2008
/s/ Michael Volker
____________________ Michael Volker	Director	April 3, 2008
/s/ Wanda Dorosz
____________________ Wanda Dorosz	Director	April 3, 2008
/s/ Michael Goffin
____________________ Michael Goffin	Director	April 3, 2008


	(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.