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20-F 1 form20f.htm .

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

FORM 20-F

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended February 28, 2007

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

For the transition period from ___________________________ to ______________________________

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


	AMS HOMECARE INC.
	(Exact name of registrant as specified in charter)

BRITISH COLUMBIA, CANADA

000-50109

(State or other jurisdiction

of incorporation)

(Commission File Number)


	1360 CLIVEDEN AVENUE, DELTA, BRITISH COLUMBIA, CANADA, V3M-6K2
	(Address of principal executive offices)

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

NONE

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Title of each class:

Name of each exchange on which registered:

COMMON SHARES, WITHOUT PAR VALUE

NASD Over-the-Counter Bulletin Board

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

NONE

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 235,572,391 Common Shares

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 126.2 of the Exchange Act.

Large Accelerated Filer o

Accelerated Filer o

Non-Accelerated Filer x

Indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17 x Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 126.2 of the Exchange Act.

Yes o No x

TABLE OF CONTENTS

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3.

KEY INFORMATION

ITEM 4.

INFORMATION ON THE COMPANY

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

ITEM 8.

FINANCIAL INFORMATION

ITEM 8B.

SIGNIFICANT CHANGES

ITEM 9.

THE OFFER AND LISTING

ITEM 10.

ADDITIONAL INFORMATION

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

ITEM 13.

DEFAULTS, DIVIDENDS ARREARS AND DELINQUENCIES

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 45

ITEM 15.

CONTROLS AND PROCEDURES

ITEM 16.

AUDIT COMMITTEE FINANCIAL EXPERT, CODE OF ETHICS AND PRINCIPAL ACCOUNTANT FEES AND SERVICES 46

ITEM 17.

FINANCIAL STATEMENTS AND EXHIBITS

INTRODUCTION AND USE OF CERTAIN TERMS

AMS Homecare Inc. is a corporation incorporated under the Company Act (British Columbia, Canada) on March 5, 1981. As used herein, except as the context otherwise requires, the term “we”, “our” or the “Company” refers to AMS Homecare Inc. and its subsidiaries, now called AMS Homecare Canada Inc., and AMS Homecare USA Inc. Our consolidated financial statements are prepared in accordance with Canadian Generally Accepted Accounting Principles with a reconciliation to United States Generally Accepted Accounting Principles and are presented in Canadian dollars. All monetary amounts contained in this Annual Report are in Canadian dollars unless otherwise indicated.

Our registered office and our North American office and principal place of business is located at 1360 Cliveden Avenue, Delta, British Columbia, V3M 6K2.

FORWARD-LOOKING STATEMENTS

The information set forth in this Form 20-F is as of February 28, 2007 unless otherwise indicated.

The following discussion contains forward-looking statements regarding events and financial trends, which may affect our future operating results and financial position. Such statements are subject to risks and uncertainties that could cause our actual results and financial position to differ materially from those anticipated in forward-looking statements. These factors include, but are not limited to, the fact that we will need additional financing to fully execute our business plan and will be subject to certain risks, all of which factors are set forth in more detail in the section entitled “Risk Factors” at Item 3 and “Operating and Financial Review and Prospects” at Item 5

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Disclosure under this item is not required as this Form 20-F is filed as an annual report.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Disclosure under this item is not required as this Form 20-F is filed as an annual report.

ITEM 3.

KEY INFORMATION

Selected Financial Data

The following table sets forth our selected consolidated financial information, which has been derived from our consolidated financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles. The financial data should be read in conjunction with our consolidated financial statements and notes thereto and "Results of Operations" under "Item 5 – Operating and Financial Review and Prospectus".


	Year Ended February 28, 2007	Year Ended February 28, 2006	Year Ended February 28, 2005	Year Ended February 29, 2004	Year Ended February 28, 2003
Sales	$6,714,106	$6,946,317	$5,470,434	$4,394,857	$2,691,777
Earnings (loss) before other income and income taxes	$8,052	$120,102	$38,558	$253,942	(225,433)
Net earnings (loss)	($557,825)	($3,486,833)	$19,758	$255,725	(237,433)
Earnings (loss) per common share	($0.002)	($0.04)	$0.01	$0.01	(0.01)
Diluted Earnings (loss) Per common share	($0.002)	($0.04)	$0.01	$0.01	(0.01)
Dividends Per Share	$0.00	$0.00	$0.00	$0.00	0.00
Weighted average common shares outstanding	235,572,391	74,075,541	46,632,453	46,398,891	45,645,101
Total assets	$2,746,393	$2,987,459	$2,569,901	$1,853,166	$1,416,698
Capital assets	$78,970	$83,627	$55,035	$49,580	$39,098
Total liabilities	$3,641,126	$3,324,367	$2,249,839	$1,587,862	$1,407,119
Advances from Shareholders	$876,607	$501,607	$501,607	$442,257	$352,395
Shareholder’s equity (deficiency)	($894,733)	($336,908)	$320,062	$265,304	$9,579

Under U.S. GAAP, all amounts in the foregoing table remain the same except the following:


Earnings (Loss) before other income and taxes	($557,772)	($3,506,886)	$38,558	$253,942	($400,433)
Net earnings (loss)	($557,825)	($3,486,833)	$19,758	$255,725	($412,433)
Total assets	$2,719,457	$2,980,150	$2,560,155	$1,840,064	$1,403,596
Shareholders' equity (deficiency)	($921,669)	($344,217)	$310,316	$252,202	($3,523)
Capital Stock	$2,940,263	$2,940,263	$75,400	$75,400	$75,400

On October 15, 2007, the Interbank rate of exchange for converting Canadian dollars into United States dollars equaled 0.9914 Canadian dollars for 1 United States dollar. The following table presents a history of the high and low exchange rates of Canadian dollars into United States dollars for the previous six months:


Month	High	Low
September 2006	1.1287	1.1045
October 2006	1.1404	1.1152
November 200	1.1473	1.1290
December 2006	1.1654	1.1403
January 2007	1.1827	1.1636
February 2007	1.1855	1.1591

The following table presents a history of the average exchange rates of Canadian dollars into United States dollars as of the last day of each fiscal year.


Year	Average Exchange Rate
2007	1.1698
2006	1.1360
2005	1.2332
2004	1.3371
2003	1.4852

Risk Factors

The following is an overview of the risk factors to be considered in relation to our business. Specific risk factors to be considered are as follows:

WE ARE DEPENDENT ON PIHSIANG FOR OUR SUCCESS AND IF THIS RELATIONSHIP DETERIORATES OR IS TERMINATED OUR BUSINESS WILL SIGNIFICANTLY SUFFER

Since 1989, we have been dependent largely upon our Taiwanese scooter supplier, Pihsiang Machinery Manufacturing Co. ("Pihsiang"), for our success. Approximately 90% of our gross revenue during the fiscal year ending February 28, 2007 was attributable to sales of products supplied to SCMP by Pihsiang. In addition, Pihsiang distributes its products to our competitors in the U.S. Our success is dependent upon our reputation for providing quality sales, marketing and distribution services for our dealers. However, our reputation is, in turn, dependent upon an ongoing supply from Pihsiang of quality products that meet the requirements of the marketplace. We may continue to rely on Pihsiang to provide the AMS line of scooters and power chairs which will increase our dependence on Pihsiang in reference to scooter sales. We have also entered into new manufacturing and distribution agreements with other suppliers for products other than scooters, which are intended to diversify the risk inherent to the Pihsiang relationship. In addition to product diversification, we also provide monitoring services using our proprietary software called IER Systems. We set-up a retail outlet in the United States called “65 Plus” in November 2005.

COMPETITION WITHIN OUR INDUSTRY COULD REDUCE OUR MARKET SHARE AND HARM OUR FINANCIAL PERFORMANCE

The industry within which we operate is highly competitive and price sensitive. Many of our competitors have substantially greater financial, marketing and human resources than we do. Our ability to compete favorably is, in large part, dependent upon our ability to maintain low operating costs and to continue our favorable relations with dealers and suppliers in the industry. Furthermore, as barriers to entry into certain sectors of our business are low, competition may intensify, and there can be no assurance that we will maintain our current level of profitability.

DIRECT DISTRIBUTION BY MANUFACTURERS COULD REDUCE OUR REVENUES AND HARM OUR BUSINESS

Any decision by manufacturers of durable medical equipment to distribute their products directly to end-users through their own sales forces, instead of through distribution intermediaries like us, could have an adverse effect on our business. Similarly, if large retailers begin operations in Canada and the United States and obtain products directly from manufacturers, it could have an adverse effect on our business. Within North America, there are manufacturers that manufacture and distribute their products directly to retailers and this may reduce our revenues.

OUR RELIANCE UPON DEALERS COULD BE DETRIMENTAL TO OUR FINANCIAL CONDITIONS IF THOSE DEALERS DO NOT SELL OUR PRODUCTS

Substantially all sales of our products are made through dealers. If the efforts of our dealers prove unsuccessful, if such dealers abandon or limit their sales of our products or if such dealers encounter serious financial difficulties, our results of operations and financial condition could be materially adversely affected. The addition of new distribution chains for our products may reduce this risk further.

VOLATILITY IN EXCHANGE RATES MAY BE DETRIMENTAL TO OUR FINANCIAL CONDITIONS

The Company purchases goods for resale that are denominated in U.S. dollars and it earns its revenues in Canadian dollars. As such, it is subject to risk due to fluctuations in the U.S./Canadian exchange rate. Any increased costs due to exchange rates will ultimately reduce our earnings and may also reduce our sales if we are forced to raise the price of our products due to increased costs to us.

DOING BUSINESS OUTSIDE OF CANADA MAY SUBJECT US TO ADDITIONAL RISKS

Historically our operations have been confined to Canada. However in November 2005 we announced the opening of our first retail store called 65Plus. Our new business model turns our focus towards expanding business into the United States, although there is no assurance that we will be successful with either expansion. There can be no assurance that we will be successful in our efforts to expand. Establishing operations outside Canada will expose us to additional risks associated with fluctuations in foreign currency exchange rates. We have no intention at this time of expanding into Europe, Latin America, Asia or India. However we continue to explore opportunities. In addition, international operations are subject to other risks, such as the imposition of government controls, export license requirements, tariffs or taxes and other trade barriers and difficulties in staffing and managing international operations, among others. There can be no assurance that these and other factors will not have an adverse effect on our financial condition and results of operations. Currently, we operate primarily in Canada. Our expansion into the United States results in us competing with other manufacturers and their distributors of their products.

SUBSTANTIALLY ALL OF OUR ASSETS AND OUR DIRECTORS AND OFFICERS ARE OUTSIDE OF THE UNITED STATES WITH THE RESULT THAT IT MAY BE DIFFICULT FOR INVESTORS TO ENFORCE ANY JUDGMENTS OBTAINED AGAINST US OR ANY OF OUR DIRECTORS OR OFFICERS WITHIN THE UNITED STATES

Substantially all of our assets are located outside of the United States except for an immaterial amount of inventory and store fixtures at our first retail outlet. In addition, our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for investors to effect service of process or enforce within the United States any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts of Canada and other jurisdictions would recognize or enforce judgments of United States courts obtained against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in Canada or other jurisdictions against us or our directors and officers predicated upon the securities laws of the United States or any state thereof.

CONFLICTS WITH PIHSIANG COULD AFFECT THE LAUNCH OF OUR BRANDED SCOOTERS

Although our agreement with Pihsiang allows us to sell the AMS line of scooters manufactured by Pihsiang, there is ongoing risk that the manufacturer may terminate this agreement, which would result in the loss of our ability to market these scooters. We would then have to obtain a new manufacturer to produce our AMS line of scooters and this may be costly and time-consuming.

FAILURE TO EXECUTE OUR PROPOSED BUSINESS PLAN COULD HAVE A MATERIALLY ADVERSE EFFECT ON OUR RESULTS OF OPERATION

Our operations to date have consisted principally of distributing a relatively narrow line of assistive medical products in Canada. The implementation of the broader geographic and product diversification plan now commencing will place substantial demands on management, and it is expected that these demands will intensify as we grow. The effective implementation of the aggressive business plan centered on expansion in the United States will require the hiring of additional management personnel to be situated at a U.S. head office skilled in sales, operations and cost control. Since the competition for such personnel can be intense, our inability to attract, integrate and retain additional management personnel, to address additional management needs or to manage growth effectively, could have a material adverse effect on our business, results of operations and prospects.

GOVERNMENT REGULATIONS AND THE STATUS OF HEALTHCARE REIMBURSEMENT ARE FREQUENTLY CHANGING AND IF THE CHANGES ARE ADVERSE, IT WILL AFFECT OUR REVENUE AND PROFITABILITY

Our ability to operate profitably depends in part on the extent to which reimbursement for the cost of the products we sell will be available from government health administration authorities, private health coverage insurers and other organizations. Third-party payers are increasingly challenging the price of medical products, with the result that profit margins are generally being reduced. Significant uncertainty exists as to the reimbursement status of new medical equipment, and there can be no assurance that adequate third party coverage will be available to establish price levels sufficient for us to operate profitably. A major issue facing our business in the United States is Competitive Bidding, a resolution that was part of the Provider Giveback Bill, which is legislation to increase reimbursement for hospitals and doctors. The current United States administration believes that in order to control rising medical costs without sacrificing service, market economics should be introduced. Competitive Bidding involves a process whereby equipment providers provide bids to Medicare and the lowest-cost provider wins the Medicare reimbursement. The introduction of Competitive Bidding will result in a shakeout of the smaller equipment providers who cannot match the lowest price. If we cannot provide competitive products to the equipment providers, then this will reduce sales. There are similar issues regarding competition and reimbursement in other markets, however we have not fully evaluated specifics in markets other than the United States.

THE DEVELOPMENT OF NEW PRODUCTS MAY MAKE OUR PRODUCTS OBSOLETE, WHICH MAY REDUCE OUR SALES AND COMPETITIVE POSITION

There is a risk that our competitors could develop competing scooter and power-chair products that could make our solutions uncompetitive. For example, if we cannot respond to the competitive products and develop new products that are competitive, then the demand for our existing products will decline thereby reducing our sales.

OUR FUTURE PERFORMANCE IS DEPENDENT ON OUR ABILITY TO RETAIN KEY PERSONNEL

We rely on the experience and expertise of senior staff. There is no assurance that we will successfully be able to attract and retain skilled and experienced personnel and our failure to do so will affect our prospects, business and operations. We do not have any key man life insurance.

OUR SHARE PRICE MAY BE VOLATILE AND OUR STOCK MARKET LISTING MAY BE AT RISK

Market prices for shares of junior venture companies are often volatile. Factors such as announcements of technological innovations, new commercial products, patents, the development of proprietary rights by us or others, regulatory actions, publications or financial results could have a significant effect on the market price for our common shares. The Company announced in releases dated July 10, 2006 and July 10, 2006 that the Company was unable to obtain an audit opinion letter from our auditors Cinnamon Jang Willoughby & Company (CJW). We obtained new auditors, STS Partners LLP and have now completed the audit. As a result of the delays in filings the Company was cease traded by the British Columbia Securities Commission and is at risk of being de-listed from the OTCBB. The Company needs to file a complete Form 20F in order to maintain a listing.

OUR DEPENDENCE ON DISTRIBUTION AND RESELLER AGREEMENTS COULD BE DETRIMENTAL TO OUR OPERATIONS

Our success is dependent on the maintenance and acquisition of rights to use and distribute a variety of products sourced mainly offshore. The majority of our current distribution and reseller agreements with manufacturers are subject to cancellation in the event of our non-performance. The loss of distribution rights to certain products may significantly decrease our revenues and hamper our ability to compete in the medical equipment and products industry. Currently we generate 86% of our sales from the sale of products that are manufactured by Pihsiang. The loss of the Pihsiang agreement would have a material adverse impact on our results.

OUR BUSINESS MAY FAIL

Our financial statements have been prepared on a going-concern basis. If our business fails, there are no assurances that we will be able to realize our assets and liquidate our liabilities on favorable terms.

IF THE COMPANY FAILS TO SUCCESSFULLY DEVELOP AND INTRODUCE NEW PRODUCTS AND SERVICES, ITS COMPETITIVE POSITION AND ABILITY TO GENERATE REVENUES WILL BE HARMED

We have introduced and intend to continue to introduce additional and enhanced products and services in order to expand our business. The planned timing or introduction of new products and services is subject to risks and uncertainties, such as market acceptance and distribution issues, which could delay or prevent the introduction of

one or more of our new products or services. As a result, actual timing may differ materially from original plans. Moreover, we cannot be sure that any of our new products and services will achieve widespread market acceptance or generate incremental revenue.

A FAILURE TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH OTHER COMPANIES COULD DECREASE OUR REVENUE, WHICH MAY HARM OUR BUSINESS

We depend on establishing and maintaining distribution relationships with manufacturers of medical products. There is intense competition for relationships with these firms, and we may have to pay significant fees and royalties to establish additional distribution relationships or maintain existing relationships in the future. We may be unable to enter into or successfully renew relationships with these firms on commercially reasonable terms.

Many companies that we may approach for a strategic relationship or who already have strategic relationships with us also provide products to other sources. As a result, these companies may be reluctant to enter into or maintain strategic relationships with us. Our business, results of operations and financial condition could be materially adversely affected if we do not establish additional, and maintain existing, strategic relationships on commercially reasonable terms or if any of our strategic relationships do not result in an increase in revenue or profitability.

WE COULD BE SUBJECT TO PRODUCT LIABILITY CLAIMS, WHICH IF SUCCESSFUL, COULD SIGNIFICANTLY IMPACT OUR OPERATIONS

Participants in the medical equipment industry are subject to lawsuits alleging product liability, many of which involve significant damage claims and defense costs. We currently have in force product liability insurance coverage for $5 million. Successful claims against us in excess of our insurance coverage could have a material adverse effect on our business, results of operations and financial condition. Claims made against us, regardless of their merit, also could have a material adverse effect on our reputation. There can be no assurance that the coverage limits of our insurance policies will be adequate. While we have been able to obtain product liability insurance in the past and do not anticipate problems in obtaining such insurance in the future, such insurance varies in cost, may be difficult to obtain and may not be available in the future on acceptable terms or at all.

YOU SHOULD NOT RELY ON OUR QUARTERLY OPERATING RESULTS AS AN INDICATION OF OUR FUTURE PERFORMANCE BECAUSE OUR RESULTS OF OPERATIONS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND SEASONALITY

We may experience significant fluctuations in our quarterly operating results due to a variety of factors, many of which are outside our control. Factors that may cause the Company's quarterly operating results to fluctuate include: our ability to retain existing distributors, attract new distributors and maintain distributor satisfaction; the announcement or introduction of new or enhanced products by us or our competitors; governmental regulation; a shortfall in our revenues relative to our forecasts and a decline in our operating results due to our inability to adjust our spending quickly; and general economic conditions and economic conditions specific to our market. As a result of these and other factors, you should not rely on quarter-to-quarter comparisons of our operating results as indicators of likely future performance.

Our sales, which have been predominately been confined to date to Canada , have been highest in the spring and summer. Moreover, we have experienced, and expect to continue to experience, losses or significantly lower earnings from November to January of each year insofar as Canadian scooter sales are concerned. Our results of operations have depended significantly upon the weather in the second and third calendar quarters, but could be offset by gains from the introduction of other products such as disposables, rollators, cushions and wheelchairs. Less than satisfactory net sales during the winter months could have a material adverse effect on our financial condition or results of operations for the year. In the future, changes in the product mix offered by us, our expansion into United States or other factors, may result in different seasonality trends that may adversely affect our revenues.

OUR RECENT REVENUE GROWTH MAY NOT CONTINUE IN THE FUTURE

There can be no assurance that the revenue growth we experienced in 2007 will continue or increase. Our industry makes the prediction of future results difficult or impossible, and therefore, our recent revenue growth should not be taken as an indication of any growth that can be expected in the future. Although we believe that the losses during the years ending February 28, 2002 and February 28, 2003 were due largely to the costs associated with the reverse tender offer, we may operate at a loss at any point in the future. The company suffered a loss in 2006 due primarily to the reporting and payment of some of the damages incurred by the CEO and the President as a result of RTO delays Any increase in our revenues will be dependant on our ability to implement all of the products and services we propose to offer under our business plan which will require us to expend capital on an on-going basis.

OUR LONG-TERM LIQUIDITY AND CAPITAL RESOURCES ARE UNCERTAIN

We believe revenues from current operations combined with our cash resources and lines of credit may not be adequate to fund our current marketing program in Canada. We believe we will need to secure additional financing to continue our expansion into the U.S. Other than as described below, we have not entered into any agreements with respect to this additional financing but expect to raise such funds through debt or the offering of stock. In the event that additional funds are needed, there is no assurance that we will successfully raise or internally generate sufficient capital. Additionally, any issuances of equity may result in dilution to our existing shareholders or may result in a change of control. We may require additional financings depending on acquisition costs and working capital needs in the future. Any additional financings requiring security over assets of AMS may be limited because we have already pledged those assets to secure a loan from Royal Bank of Canada. We entered into a five year term subordinated-debt financing for $250,000 with Vancity Capital Corporation beginning in November 2002, with an annual interest rate of prime plus 10.50%, payable monthly, consisting of principal and interest. This debt is secured by corporate guarantees and personal guarantees from Ms. Rani Gill and Mr. Harj Gill, our President and CEO, respectively. We have also entered into a five year term subordinated debt financing for $250,000 with the Business Development Bank of Canada beginning in September 2004 with an annual interest rate of floating base rate plus variance of 7.50%, payable monthly, consisting of principal and interest. In addition, on July 11, 2006, the Company renogiated its credit facility with the Royal Bank of Canada. The credit facility was increased from $1,750,000 ro 2,000,000 at an interest rate of Royal Bank prime plus 2.75% per annum. Additional funding was also provided by the Business Development Bank of Canada in November 2005 for $500,000 at an interest rate of 17% per annum, repayable over 60 months with no principal payment until November 15, 2010. All of these facilities contains certain covenants with respect to tangible net worth, ratio of debt to tangible net worth, working capital and ratio of current assets to current liabilities. As of February 28, 2007, the Company was in violation of these covenants. Subsequent to year-end, one of the subsidiaries of the Company, AMS Homecare Canada Inc., filed for bankruptcy. There may be further risks to liquidity and capital resources as the Company has previously reported that damages have been suffered by the Company, the CEO, and the President. As per the lawsuit filed against the TSX Venture Exchange and certain individuals, management believes these damages have been caused by the TSX Venture Exchange and its predecessor companies. Additional costs may be incurred; however the Company has not recorded an accrual for this contingency as actual cannot be ascertained at this time. Management has attempted to minimize damages to the Company in various ways, including personal guarantees. Provided by the CEO and the President. The Company would be at a severe risk if the personal guarantees were withdrawn by the CEO and President.

LITIGATION

In April 2003, a former employee filed a wrongful dismissal suit in the Supreme Court of British Columbia for the amount $250,000 based upon his expected earnings over the 5-year term of his contract with us, stating that he was terminated in breach of his contract. We disputed this claim based on the belief that he was terminated as per the terms of his contract and we believed that there was no merit to this claim. On May 10, 2006 the Company abandoned the appeal with respect to a wrongful termination judgment issued and settled the matter for $65,493.24.

On March 11, 2005, the Company announced that it had filed a Statement of Claim in British Columbia Supreme Court alleging the TSX Venture Exchange and certain of its employees acted deliberately to delay the Company’s reverse takeover (RTO) of Shoprider Canada Mobility Products between August 2000 and February 2002. The Company believes that both the Company, and vendors of the RTO Target and Company President and CEO suffered damages as a result of the delay and has reported this in news releases. The Company has estimated the amount of the alleged damages but has not at this time finalized the final amount of these damages. The lawsuit and associated damages to date has been financed by the Directors who are also the CEO and the President. These two directors have claimed no specified amounts and no accruals have been made; however, the CEO and the President were issued 174,850,000 common shared valued at $2,617,997 plus $799,847 in cash for some of the damage to date. The shareholders including minority shareholders voted and approved the issuance of shares and cash to be

paid to the CEO and the President and authorized the Board to make payments for further damages that may be paid by the Company. Payments will further dilute the shareholders and also decrease cash in the Company and thereby further increasing the risk to the Company.

PENNY STOCK TRADING RULES MAY ADVERSELY AFFECT A SHAREHOLDER'S ABILITY TO RESELL OUR STOCK

The "penny stock" trading rules impose duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in our stock, including determination of the purchaser's investment suitability, delivery of certain information and disclosures to the purchaser and receipt of a specific purchase agreement from the purchaser prior to effecting the purchase transaction. Compliance with the "penny stock" trading rules affect or will affect a holder’s ability to resell our stock because of the additional duties and responsibilities imposed upon the broker-dealers and salespersons recommending and effecting sale and purchase transactions in such securities. In addition, many broker-dealers will not effect transactions in penny stocks, except on an unsolicited basis, in order to avoid compliance with the "penny stock" trading rules. Consequently, the "penny stock" trading rules may materially limit or restrict the number of potential purchasers of our stock and the ability of a holder to resell our stock.

DIVIDENDS MAY NOT BE PAID IN THE FUTURE WHICH MAY AFFECT A SHAREHOLDER'S RETURN ON INVESTMENT

We have not paid dividends on our common shares to shareholders for the last several years and we do not intend to pay a dividend in the foreseeable future as any excess funds will be reinvested in implementing our business plan.

RECENT TERRORIST ACTIVITIES AND RESULTING MILITARY AND OTHER ACTIONS COULD ADVERSELY AFFECT OUR BUSINESS

The terrorist acts in New York, Washington, D.C. and Pennsylvania on September 11, 2001 have created an uncertain economic environment and we are unable to predict the impact these events, or the responses thereto, will have on our business. The continued threat of terrorism within the United States and abroad and military action and heightened security measures in response to such a threat may cause significant economic disruptions throughout the world. Our business, results of operations and financial condition could be materially and adversely affected to the extent such disruptions result in its inability to effectively market and sell our products.

ITEM 4.

INFORMATION ON THE COMPANY

History and Development of AMS

We were originally incorporated under the Company Act (British Columbia, Canada) on March 5, 1981 as Jacob Gold Corporation. Our name was subsequently changed to Sargon Resources Ltd. and then to International Sargon Resources Ltd., and later to Canoil Exploration Corporation ("Canoil"). On February 28, 2002 Canoil, which had no operations, material assets or liabilities at the time, acquired 393231 and Ambassador, the corporate partners that own SCMP, a general partnership founded in 1989 and registered by the Registrar of Companies (British Columbia) on June 25, 1992. Canoil's name was changed to our current legal and commercial name, AMS Homecare Inc, on March 14, 2002. Our North American office and principal place of business is located at 1360 Cliveden Avenue, Delta, British Columbia, V3M 6K2 (phone: (604) 273-5173). Further, AMS Homecare Inc., operates through two subsidiaries, AMS Homecare USA Inc. and AMS Homecare Canada Inc.

As at February 28, 2007, the Company’s registered office is located at 1360 Cliveden Avenue, Delta, British Columbia, Canada, V3M 6K2.

We have delivered, since 1989, high quality, reliable and comfortable self-care equipment addressing the requirements of customers seeking to maintain their freedom and independence. We are dedicated to providing innovative, reasonably priced healthcare solutions specially developed or acquired with consumers in mind.

The Shoprider® brand manufactured by Pihsiang, which we represent exclusively in Canada, is recognized for superior design and technical sophistication, as well as for functionality in mobility products.

Through warehouse-service centers conveniently located across Canada, we distribute Shoprider® scooters and accessories and install, manufacture and assemble a proprietary patient monitoring system, called IER Systems. IER is an acronym for Integrated Emergency Response Systems.

We offer an expanding product line of AMS-brand assistive devices such as walkers/rollators, bed assists, bathroom safety and daily living items to serve the broader homecare/healthcare market requirements.

Capital Expenditures and Divestitures

On February 28, 2002, we (known as Canoil at the time) acquired 393231 and Ambassador, the corporate partners that own SCMP in exchange for 30,000,000 common shares issued to Rani Gill (50%) and RKGCM Holdings Ltd. (50%), a company controlled by Ms. Gill. All of these shares were subject to an escrow agreement, pursuant to which 15% of the shares have been released from escrow and 5% of which will be released on September 7, 2004. Thereafter, 10% of the remaining shares will be released from escrow every six months thereafter until all the shares have been released from escrow. The final tranche of shares to be released from escrow will be released on September 7, 2008. Throughout the escrow period, the holder may vote the shares, except in support of an arrangement that would result in the repayment of capital prior to a wind up, and retains the same shareholder rights as the non-escrow shares, including the right to dividends. The release from escrow of these shares is not subject to the verification of any representations and warranties. The only condition upon the release of these shares from escrow is the passage of time. During the year, the Company obtained the approval from the TSX Venture Exchange and from the shareholders for the release of all the escrowed shares. Therefore, there is no escrow agreement in place.

Ms. Gill and RKGCM Holdings Ltd. granted an option entitling us to repurchase from them up to an aggregate of 10,000,000 shares at a price of $0.10 cents per share. This option was exercisable if, at any time prior to February 2006, Ms. Gill voluntarily terminates her employment with us. This time period has now expired.

In our accounting presentation, management determined that Canoil was not a business and that financial statements and pro forma financial statements were not required to be included in this Form 20-F. Canoil had no long-lived tangible or intangible assets, intellectual property or employees. Canoil had no processes in place to sustain operations other than minimal processes that enabled it to maintain its listing on the TSX Venture Exchange. Canoil was not in the business of marketing any products or services or outputs which were utilized to generate revenues. Prior to the acquisition, Canoil had assets of $153,546 including $133,445 due from SCMP and liabilities of $165,565 which were incurred mostly to maintain its listing. Canoil had a shareholders deficiency of $12,019.

Business Overview

Description of the Company

AMS Homecare Inc. is a Healthcare company focused on the elderly and disabled marketplace, with three main divisions. The wholesale and contract manufacturing division started in 1989 now supplies mobility equipment and medical products throughout Canada, and currently has a base of over 300 plus dealer customers in Canada. AMS also has a technology division, called IER Systems, which markets and installs proprietary software and hardware into Care Facilities and it is used to monitor the facility and the residents. AMS also has a retail division in the United States, named 65 PLUS, which has been initiated in 2005. The foundation and concept behind the retail stores is to offer products to the “graying population” as a “one stop shop”. Our first store opened in November 2005 this year in Bellevue, Washington State.

Mission

AMS Homecare Inc. is a dominant player in the durable medical industry in Canada. Our mission is to actively seek out the most innovative and affordable healthcare products on the market today to keep up with your changing lifestyle. At AMS, we also recognize that understanding and empathy toward each of our customers is essential to meeting individual needs. Our strategy of distributing quality products directly and through our US retail chain as well as providing monitoring technology to eldercare and hospital facilities allows us to fully meet the needs of the “graying population”.

Executive Summary

This business plan outlines the growth potential of AMS in the health care industry. The market for AMS products is growing at between 5 - 15 percent per annum, depending on the product. The Company has established and is executing a strategy to take advantage of the opportunities that are present in the industry.

The strategies include:

Expansion of Canadian operations through increasing the dealer base and improving dealer relations and the sale of new products directly into care facilities. www.amshomecare.com

Entering the United States Market through the establishment and or purchase of retail stores and potential franchising of these retail stores called 65 Plus

Developing and marketing IER systems, a monitoring system for health care facilities and incorporating Ultra Wide Band Technology.

DISTRIBUTION AND CONTRACT MANUFACTURING

Since 1989 AMS has been marketing the Shoprider Brand Scooters and powerchairs, through an exclusivity agreement with Pihsiang Machinery in Taiwan. The Company has expanded its distribution business to market exclusively the Supracor medical cushions developed by a Supracor, a US company . The Company also sells bathlifts and other products under distribution agreements. In addition, AMS markets products such as walkers, wheelchairs, and scooter accessories which are outsource manufactured locally in Canada and in Asia.

IER SYSTEMS / ULTRA WIDEBAND TECHNOLOGY

Software for monitoring buildings and residents was acquired in January 2004 by AMS. The software has been further enhanced over the last two years. Currently there are 30 Care Facilities in BC and North America that have installed IER Systems.

IER Systems contacts care personnel directly; wherever they may be in the facility. Its provision of quick access to both reports and the patient database is an immediate benefit to the staff and management. The system also provides personal alarm protection for patients or residents, as well as staff working alone during the night or in unprotected areas. A wide selection of devices for personal use are available in pendant, wristband or belt clip attachments.

Waterproof devices may be worn in the shower or bath while still providing emergency call protection. The same integrated system providing supervised nurse call systems may also control the building security with programmable day and night modes for all devices. The supervised security alarm operation also monitors maintenance equipment. Establishing two-way communication is very beneficial, especially for after hours staff assisted calls. The IER System interfaces with existing telephone systems to provide two-way communication via long range telephones or pocket pagers. IER software is intended to be integrated with leading and new products such as with UWB (Ultra Wideband) products when available to make it the most advanced system available.

Wireless 2000 RF & UWB Technologies has given AMS exclusive rights to market and distribute any or all of the HRRM and PLT Systems for use in the health care, residential elder care, medical offices and hospital markets throughout in United States and Mexico and in Canada the exclusive right to market to Residential Elder Care Facilities and non-exclusive rights in Canada for all markets that are not Residential Elder Care Facilities. To date Wireless 2000 has not produced and delivered commercial products to AMS. Such delays will delay any expected sales from these products and also delay the integration of IER Systems with the UWB products. There is no assurance that Wireless 2000 will produce and deliver these products.

A large opportunity also exists for the HRRM in the health and fitness markets where the comfort of a non-contact monitor and immunity to interference from other nearby heart monitors will be key selling points. Large opportunities also exist for tracking products (assets) and people using the PLT system in warehouses, distribution centers, shipping and storage facilities, large companies, and amusement parks. A very intriguing use of UWB, which provides a much needed product, is created by combining the features of the HRRM with the PLT system into an integrated system that provides vital signs monitoring and tracking of firefighters and search and rescue personnel within burning buildings. Wireless 2000 is currently developing the core wireless technology upon which its UWB products will be based. A team of experienced professionals with backgrounds in RF, DSP, and UWB has been assembled. The team was committed, through the signing of a contract with AMS, to deliver a commercially viable prototype of the HRRM by the end of 2005, and a functional commercial quality HRRM and PLT system by May 2006. As noted, these products have not been delivered by Wireless 2000 to the Company. The Company continues to discuss the development progress with Wireless2000 AMS intends to incorporate the UWB products into its IER System, creating a leading edge monitoring system for AMS to market in the years ahead. As at February 28, 2006, the Company paid $200,000 for the exclusive distribution rights. The Company will pay $350,000 in total.

RETAIL NETWORK / 65PLUS

The Company in November 2005 opened up a retail outlet called 65PLUS in the USA offering : Pharmacy, Durable Medical/Mobility, and many other products useful to the ageing baby boomer generation. The retail store expects to address the needs of the aging population. There are opportunities to consolidate the industry as it is fragmented and there are opportunities to grow by setting up new 65 PLUS stores as the sector grows naturally due to the aging population. Our first store is in Washington State. The Company expects to franchise the 65plus store concept starting at some stage in the future..

DISTRIBUTION AND CONTRACT MANUFACTURING

The Company has range of products, which are distributed, and others that are manufactured under contracts or agreements for AMS. The Company will continue to add products and look for opportunities to work with manufacturers to bring to market the best and most needed products. Negotiations and agreements are pending for more products.

Product Lines

Product: Shoprider and Accessories

This line includes scooters, power-chairs, rollators, wheelchairs and accessories. It is intended to meet the needs of mobility challenged individuals in daily living requirements. This line is targeted at the Canadian dealers target market and the end consumers target market in the USA.

Scooters

There are many models to choose from depending on the specific needs of the consumer. They come in both three and four wheeled models and range from smaller, lightweight travel versions to more rugged deluxe models.

The scooters are manufactured with state-of-the-art technology in Taiwan under ISO 9001 standards. They have quality features such as suspension arms for a smoother ride, sealed brakes to prevent repair costs from dirty brakes, and fuses in the wiring harnesses to avoid electrical damage.

The scooters are stylish and attractive looking more like a fun toy than a medical device. This decreases the apprehension of elderly admitting to their disabilities. The company will introduce a similar line of products under the 65PLUS banner in the USA. to be sold directly to end users and through its 65PLUS stores.

Power-chairs

These have many features tending to the needs of the disabled such as swing-away controllers and mid-wheel drive maneuverability.

Rollators

Aluminum frame, loop handbrakes, wire basket, and an accessory/food tray make this product a very helpful product in attending mobility needs without a major investment.

Wheelchairs

Loop hand brakes, removable padded armrests, manual dual rear tire locks, swing-away foot rests, fold down back and safety belt.

Accessories

The accessories allow customers to personalize their scooter to their own specific needs. Products like an attachable tote, a weather guard, or even an oxygen tank holder allows for more freedom.

Bathlift

The Company markets the Aquajoy bath lift in North America. In Canada, the bathlift is sold through the existing distribution network and the in the US through its 65 Plus retail store and the 65Plus Website. . The product assists individuals in lowering themselves into the bathtub.

Supracor Honeycomb Cushioning

AMS has acquired a exclusive license to market the Supracor product in Canada. Supracor honeycomb cushioning uses memory technology to keep the product in a consistent shape and provide airflow thus preventing sores and further medical attention due to the sores. It is primarily used for the power chairs and wheelchairs aimed at the rehabilitation market. However, the product has many applications leaving opportunities open for AMS to explore.

The product is targeted to the Canadian dealer base with a primary focus on pharmacies and similar retail outlets. The main competition is ROHO. There are also other products such as less expensive foam and other cushioning materials.

Although the margins are slightly smaller at 25% to 30% within this product line, it is still profitable and is assistive in helping AMS reach its growth objectives. This product is being marketed to the established dealer network in Canada through the sales force. They use brochures and show the product at trade shows to build demand. This product is experiencing growth of about 20% to 30% per year. Supracor is priced competitively being slightly lower than its main competitor and but high above the lower quality materials such as foam. This product is pushed through the distribution channels using brochures and the sales team. Demonstrations at trade shows allow potential clients to see the product, how it works and the benefits that it could provide to their customers. Supracor’s cushioning is distributed through the established dealer network already in place in Canada.

General comments

Currently, AMS uses cooperative advertising to promote these products. It offers a standard reimbursement to the dealers. AMS also works with the head office of its dealers on national advertising in flyers and a radio ad. AMS is regularly represented at trade shows and is also starting to advertise in magazines such as Senior Solutions.

With the securing of more financing, AMS will increase promotional budgets to include event sponsoring, celebrity endorsements, and other common marketing tools.

AMS maintains a large dealer base in Canada with approximately 300 dealers plus. These dealers are made up of pharmacies, retail outlets and medical equipment specialists.

In the US, AMS has its own 65PLUS stores to sell directly to the end consumer as well as through a website and a 1-800 number to sell directly through that channel as well.

RETAIL STORES / 65PLUS

The United States represents a much larger market for AMS products. AMS is in a unique position in that it already has experience in this market under the predecessor company.

The Company has another advantage in that it will sell direct to the consumers to take advantage of retail margins. In this market, AMS will have a strong cost advantage making it competitive in this highly saturated market. AMS has entered this market with its own private label brand of Scooters under the name “65 PLUS”. This product will be marketed through branding strategies securing a strong position in customer awareness and preference.

The US expansion will begin along the Northern border close to the Canadian operation hubs. This is done so that both US and Canadian operations can support each other during the start up phase of the growth strategy. In the Eastern US, AMS will set up a warehouse space from which to supply the American retail and direct sales and provide auxiliary inventory space for the expanding Canadian operations in Ontario and Quebec.

In Washington on the West Coast of the United States, AMS has set up the first 65 PLUS store (www.65plusstore.com) to sell to consumers. A site was chosen due to its favorable demographics and its close proximity to the Vancouver headquarters and warehouse in BC Canada.

Sales will be built not only by a bricks-and-mortar establishment but also with ecommerce and telephone sales. A website is under development that will provide customers with the information they require and ecommerce capabilities to facilitate sales online. Also, a 1-800 number will allow those without Internet access to order AMS products over the telephone.

AMS expects to expand its own dealership network into attractive market regions through acquisitions and retail start-ups.

To support US expansion, more aggressive marketing strategies will be implemented to build awareness of AMS, generate consumer demand and remain competitive. These strategies will be directed to the end consumer in such mediums as television, radio, magazine ads, celebrity endorsements and event and philanthropic causes sponsorship.

The United States market will pose a stronger need for a sophisticated customer service strategy to remain on top of customer needs. This will build customer loyalty, generate input for new product developments and facilitate more efficient operating systems.

MONITORING TECHNOLOGY / IER SYSTEMS / UWB TECHNOLOGY

A new business unit was added to AMS in 2004. IER is a completely comprehensive monitoring system that is targeted at institutions in the health care industry. Long-term care facilities, nursing homes, acute care facilities, resorts and hospitals will all benefit from this integrated approach to operations management.

This monitoring technology integrates alarms, intercoms, video surveillance, portable communications devices, telephones, PA systems, and other components of the facilities operating technologies into a singular control center. This allows administrators to manage a facility with the greatest efficiency reducing wasted human resources and improving the management’s efficiency.

With this technology, facility administrators will have a comprehensive knowledge of the environment. They can monitor the facility for temperature and ventilation, security breaches, fires. With the inclusion of other AMS technologies in the future such as UWB, institutions may be able to monitor patients including their vital signs, their locations, communications and other vital inputs.

All this capability will be coordinated with Internet based operating software to effectively manage a facility from a convenient location. These institutions may be able to reduce administration staff or even outsource their facility management through web-based monitoring to AMS which may be offered in the future.

IER is a software system that integrates all communicative systems within a facility. It coordinates the telephone system, intercoms, video cameras, and staff paging. It also logs all data so that companies can track records and look for trends that affect their business. This system connects hardware devices such as wireless smoke detectors, wireless long-range telephones, pocket pagers, staff and resident pendants and bathroom and bedside stations.

This system allows a client company to provide more safety to their clients and better service through:

Faster reaction times

Less wasted efforts

Financial savings

By monitoring the facility and the touch points within that facility, a client company can detect problems and determine what and where the problem is with dramatically improved accuracy. This means that they can attend the problems faster, with the proper resources to more effectively handle the situation. Through these more efficient operations, a company can save on the operations budget and increase their margins.

Marketing tools used include mass mail outs to target markets, cold calls to prospects in database, and ads in care industry trade magazines. The facilities being marketed to have an executive board prefer to issue requests for proposals. Sometimes the billing is done through a general contractor. Tailoring the marketing efforts to this environment will be most effective.

The markets currently being sought after include all of North America.

The Industry

Ultra WideBand Industry

The commercial Ultra WideBand (UWB) market is in its infancy. Only recently has the FCC allowed UWB-based products to be manufactured and sold in the United States (February 14, 2002). The rest of the world is awaiting the recommendation of the study being conducted by the International Telecommunications Union before approving UWB for use in their countries. In the Unites States, UWB-based products may only be sold for indoor operation, hand-held outdoor operation, vehicular radar (collision avoidance) use, and to law enforcement, fire, and rescue organizations for selected material penetrating imaging applications (Ground Penetrating Radar and Wall Penetrating Imaging Systems).

Allied Business Intelligence (ABI) and Wireless Oracle, now called Unstrung Insider, have investigated the market for UWB. ABI has projected a UWB market size of $1.39 billion by 2007 with 45.1 million units sold while Unstrung Insider has projected the market size of $630 million by 2007. According to Unstrung Insider, the market is broken down into 4 main areas (the percentages associated with each segment are shown in brackets):

1. Indoor Short-Range Data Communications (78%)

2. Portable Device Data Communications (15%)

3. Radio-Location Services/Ground Penetrating Radar (GPR)/Imaging (5%)

4. Vehicular Radar Systems (2%)

The market segments in which AMS has chosen to compete, namely location/tracking and heart/respiration rate monitoring (motion detection), fall into the Radio-Location Services/Ground Penetrating Radar (GPR)/Imaging category. Using the projections of Unstrung Insider, we see the market in which UWB will be competing will have a size of approximately $31.5 million by 2007. However, this market also includes GPR, imaging, and security/intrusion detection.

The competition in the area of location and tracking will come from other companies providing UWB location and tracking systems (Aetherwire, MSSI, Ubisense) as well as from companies providing WLAN location and tracking systems (Ekahau), active and battery assisted RFID systems (eXI, Identec, RF Code, System Concepts, RFID Inc, Visonic), and Dedicated RF Location Systems (Seimens). Two key differentiators of UWB systems for location and tracking are their ability to resolve location down to 5-10 centimeter accuracy and their anticipated low cost resulting from their ability to be designed without requiring the use of analog components that are necessary in WLAN, RFID, and Dedicated RF systems.

Although there are currently no other methods of monitoring both heart and respiration rate within only one device other than by using UWB or Doppler radar, there will be competition from incumbent heart rate monitor manufacturers. It has been shown however, that monitoring both the heart rate and respiration rate provides a more accurate measure of an individual’s exertion level.

The UWB Products

The Real-Time Precision Location and Tracking system will be designed to service markets where there is a need to determine the location of people or valuable assets in real-time. The initial users of these types of systems will be hospitals and care centers where they will use the system to track their patients, personnel, and mobile life saving equipment. Other market segments that may also wish to use this system include large corporations wishing to track their mobile assets or personnel; moving and storage companies, warehouses, and distribution centers tracking customer or product crates (inventory) within their facilities.

In order for these companies to justify using an UWB location and tracking system, the UWB system must be comparable or better than existing systems in terms of features, cost, and/or functionality. A typical UWB location and tracking system will consist of hundreds or thousands of low-cost mobile transmitters that send beacon signals with their unique ID and other short information (one-way) to stationary or hand-held receivers. The receivers use the difference in the time of arrival of the beacon signal to calculate the exact location of the tag. Because the UWB signals. Wireless 2000 will be using are pulse based, whereas other technologies use narrow-band (sinusoidal) signals, the Wireless 2000 system will be able to resolve the location of a tag to within 5-10 centimeters, whereas other technologies can only resolve a location down to 3 meters. UWB systems also have advantages in terms of immunity to frequency selective fading, which affects narrow-band technologies and can cause tags to become undetected in indoor environments.

An example of where such a system is needed is the film industry. Wireless 2000 spoke with a large movie studio in the United States. This movie studio has a large number of expensive items that require tracking as they often go missing. A single department within this movie studio has a requirement to track 18,000 items. A Location and Tracking system would allow the movie studio to keep track of these items saving the movie studio the cost of replacing these missing items. As mentioned above, RFID can only indicate that a tagged item has come into close proximity (within a meter) of a reader but does not provide an indication of where the item is located on the premises. Other establishments with expensive equipment, which requires tracking, include hospitals, universities, and research establishments. Location and Tracking systems can also be used in hospitals to identify where idle

equipment is located. A typical hospital with 950 beds requires 600 pumps to serve its patient population. This number can be reduced to 330 pumps if the availability of the pumps and their location is tracked. This provides a capital cost savings to the hospital in the order of $2 million. Additionally, poor record keeping results in only half of the users of the pumps being charged. Integrating the use of a pump and its location with a billing system can help recover approximately $8 million of annual lost revenue. Hospitals and care centers can also use the system to track and locate patients within their facilities.

The Heart Rate and Respiration Monitor will be designed for use as a non-contact heart and respiration rate monitor. The non-contact nature of the device will allow it to be placed on the outside of clothing or beneath the bed of a patient in a hospital or care facility. Since this device is non-contact and does not require leads connected to the body, it will allow the patient greater freedom of movement. This device could also be used in instances where the patient's skin is very sensitive such as with burn victims or prematurely born infants. Another potential market for the HRRM is the health and fitness market.

Key selling points will be the fact that the UWB system can measure both heart rate and respiration rate, can be worn on the outside of clothing, and is not prone to interference from other nearby monitors. Existing heart rate monitors used by fitness enthusiasts can only record heart rate, must be strapped to the chest (i.e. have contact with skin), and use the same transmit and receive channels increasing the probability of interference between users. Is has been shown that heart rate together with respiration rate provide a better indication of exertion level than just heart rate alone.

The HRRM will consist of an extremely low power radar transmitter (1/1000th the power of a cell phone), which sends short pulses of energy toward the lung and heart, a receiver which collects the signal reflections off the lung and heart, signal processing to eliminate the noise and extract the heart rate and the respiration rate from the received reflected signals, and either a display, in the case of a consumer application, or a data communication module, in the case of a hospital or care center application, to send the data to a central monitoring station.

Market Analysis

We expect the demand for age-related products such as scooters and other mobility devices will increase significantly over the next decade. By 2000 the average life expectancy in the United States was almost 80 years, up from 47 years in 1900. This longevity has resulted in a growing elderly population. According to the U.S. Bureau of the Census, not only is the total population growing, but also the senior age groups are growing in relation to the total population. In the 1990s alone the 65 – and – older crowd increased seven percent to reach 34 million, or 13 percent of the U.S. population (National Center for Health Statistics). Statistics Canada also has reported that between 1991 and 2001 the number of Canadians aged 80 years and over increased 41.2%.

Demographers project that in the United States after the first baby boomers (individuals born 1945-1964) reach retirement age in 2011, the numbers will increase even more, with people age 65 and older numbering 1 in 5 by the middle of the 21st Century.

In America before the year 2000, the fastest-growing segment of the country’s population was the seniors group between the ages of 65 and 85 totalling 3.8 million. The U.S. Census Bureau projects that by 2030 this group will number 9 million, and then swell to 19 million by 2050.

We believe that the growth in senior age groups will yield excellent opportunities in the medical homecare industry in the future.

Principal Markets

Since our inception, we principally have sold products in Canada. Most of our products are for healthcare patients and their homecare needs with the exception of our proprietary software monitoring system called IER Systems. As at February 28, 2006, approximately 86% ( February 28, 2005 : 86% February 29, 2004: 86%; February 28, 2003: 95%) of sales are from products provided by the company’s largest supplier, Pihsiang Machinery.

Seasonality

Our sales, which have been predominately confined to date to Canada , have been highest in the spring and summer. Moreover, we have experienced, and expect to continue to experience, losses or significantly lower earnings from November to January of each year insofar as Canadian scooter sales are concerned. Our results of operations have depended significantly upon the weather in the second and third calendar quarters, but could be offset by gains from the introduction of other products such as disposables, rollators, cushions and wheelchairs. Less than satisfactory net sales during the winter months could have a material adverse effect on our financial condition or results of operations for the year. In the future, changes in the product mix and services offered by us, our expansion into United States or other factors, may result in different seasonality trends that may adversely affect our revenues.

Source and Availability of Raw Materials

The Company operates as a distributor and installer in Canada and as a retailer in the United States; therefore, it does not use any raw materials.

Sales and Marketing

Each dealer in our Canadian network of independent dealers has its own sales force that is supported by our sales representatives. Our dealer network was started as a strategic way of growing our product and service sales throughout Canada. We conduct dealer programs and training that expand the service and operations capabilities of the dealers while promoting our products. We have experienced minimal turnover in our dealership network and are not dependent on any one of our dealers.

Our marketing programs consist of:

Marketing Materials: We have a number of color brochures, flyers, banners and posters outlining our line of scooters. In addition, we have a purchasing solutions booklet, which helps end-users choose the right scooter by outlining the unique features of each scooter.

A Co-op Advertising Fund: We have established a program under which our authorized dealers can claim expenses for the promotion of our products. This fund is based on each dealer’s quarterly scooter sales. We refund up to 50% of funds spent by the dealers on advertising up to a maximum of 3% of the dealer’s quarterly scooter sales.

A Floor Plan Program: We have established a program with certain qualifying dealers under which we supply the dealer with a variety of scooter models for display in the dealer showroom, but the dealer does not have to pay for the scooter until it is sold. We believe that sales activity is improved where customers can view the available scooter models rather than relying upon brochure pictures and descriptions.

Website: We have developed a Website (www.amshomecare.com) containing information about our line of products. A separate website (www.65plusstore.com) has been launched to facilitate online purchasing from our 65 Plus retail outlets in the United States.

General Advertising: We have a toll-free telephone line for our customers and dealers. As well, we intend to advertise in trade publications.

Competition

The homecare medical equipment and supplies markets are highly competitive, price sensitive and fragmented, with a number of competitors offering similar products. Companies compete primarily with respect to price, delivery and service, product design and features, quality and relationships developed between dealers and customers. Our most significant competitors in our primary markets are Invacare, Pride Mobility Products Corporation, Sunrise Medical Inc., and Optiway Technology Inc.

Our most significant competitors in the integrated emergency response systems (IER) include, senior tech, Visionlink Wireless, Comtechwireless, Iportcommunications

We do not anticipate that obsolescence will be a factor influencing our business, as we are committed to researching and distributing the latest advances in healthcare equipment and supplies. With respect to pricing issues, our pricing policy is to keep current at all times with pricing trends in the marketplace to ensure that our products are competitive.

Dependence on Pihsiang

Since 1989, we have been dependent largely upon our Taiwanese scooter supplier, Pihsiang, for our success. Approximately 86% of our gross revenue during the fiscal year ending February, 28 2006 was attributable to sales of products supplied to AMS by Pihsiang. In addition, Pihsiang distributes its products to our competitors in the U.S. Our success is dependent upon our reputation for providing quality sales, marketing and distribution services for our dealers. However, our reputation is, in turn, dependent upon an ongoing supply from Pihsiang of quality products that meet the requirements of the marketplace. We may continue to rely on Pihsiang to provide the AMS line of scooters which will increase our dependence on Pihsiang in reference to scooter sales. We have entered into new manufacturing and distribution agreements with other suppliers for other products, which are intended to diversify the risk inherent to the Pihsiang relationship. Specifically, we expect increased revenues from other products so that over the next few years a greater percentage of our total revenue will be from these new products thereby reducing our reliance on Pihsiang products to generate revenue, but there can be no assurance that we will be successful with these efforts. There is an ongoing risk of inadequate inventory problems as we expand into other products and other jurisdictions which could harm our financial position.

Proprietary Protection

In the past, our ability to compete has not been dependent on our ability to protect proprietary technology, though this may change with the introduction of new products. Proprietary protection for products may be sought in the future, depending on the nature of the products acquired or developed by us. To our knowledge, Pihsiang owns the trademark Shoprider®, which it has licensed to us for use in Canada.

We have registered the domain names "amshomecare.com", and "shoprider.ca", and “65plusstore”. We have registered “AMS”, “AMS Homecare”, “IER Systems”, “65 Plus” and “65 Plus Store” as trademarks and service marks in Canada and/or the United States. We have also registered trade names Cobra, Landcruiser, Trailblazer, Firefly and Voyager, Minigo, Chameleon for use in the medical industry in Canada.

Competitive Strengths

Our goal is to increase our market share by capitalizing on areas that we consider our competitive strengths. However, being a small to medium business, we will require substantial financing and appropriate execution of our business plan to benefit from these competitive strengths:

A Strong Brand Franchise: Our expansion plan is premised on marketing our line of products, which are enhanced by the strength and reputation that we have earned in developing the Shoprider® brand name in Canada. Shoprider® is a widely recognized brand across the North American industry. This brand recognition is an important marketing tool for expanding our customer base in Canada. Our background in the homecare medical industry linked to a brand leader may help us to market our new and distinct line of products effectively throughout the United States. Over the last three years, we have also established a strong reputation in the healthcare field for the company trademarks, “AMS Homecare”. In addition, the company is continuing to establish itself in the monitoring field with the “IER Systems” trademark.

Long Term Customer Relationships: Together with our dealer network we have developed strong, long-term relationships with a large number of customers. As a result of our sales leadership and long-term relationships, we believe we can generate significant sales with a larger base of product offerings in the homecare medical products industry. By purchasing additional products, customers ensure compatibility and conformity with existing products, and retain our local dealer as a single contact for the supply of product lines and ongoing services.

Dealer Networks: Our relationships with our Canadian network of independent dealers in more than 300 locations was built over several years, and provides us with a focus on the core functions of design, contract manufacturing and distribution while benefiting from the dealers' local market expertise and ongoing customer support. Our relationships with our dealers typically are long-term in nature, providing continuity in customer relationships and a strong foundation of product knowledge.

Regulatory Approvals

Our business is affected by government regulation and reimbursement policies. Government regulations differ from country to country and, within the U.S. and Canada, from state to state and province to province. Changes in regulations take place frequently and can impact the size, growth potential and profitability of products sold in each market. All scooters and power wheel chairs as well as the rollator sold under our name require ADP (Assisted Devices Program) approval from the government of Ontario in order for Canadian purchasers of these products to qualify for government assistance. The ADP approval process takes anywhere from three months to a year from the filing of an application to have the products listed. This process includes the testing of the products for safety and durability. Approval is also required in the United States in order for the consumers to receive government assistance. Some of the products will require regulatory approvals in the US in order to be sold in hospitals and for other specialized medical uses, and therefore new product offerings will be initially limited to certain outlets. The time taken for such approvals can vary from 90 days to one year.

The powerchairs and scooters from Pihsiang are already FDA approved. We have not yet applied for FDA approval for any other products.

Organizational Structure

The Company wholly-owns the following subsidiaries:

AMS Homecare Canada Inc.,, was incorporated under the laws of the Province of British Columbia on October 12, 2000;

AMS Homecare USA Inc. was incorporated under the laws of the State of Delaware on January 17, 2003

Facilities

We have a leased, furnished warehouse at Cliveden Avenue, Delta, B.C., which also serves as our head office, and have leased premises in Mississauga, Ontario, and Montreal, Quebec. All of the properties are used for office space or storage. The terms of each of the leases are as follows:

Montreal, Quebec: We have entered into an agreement dated March 1, 2002 with U-Haul to lease 560 square feet of storage space located at 65 Brunswick Boulevard, Montreal, Quebec. Effective March 1, 2002 the rent payable is $800.00 per month. The term of the lease is one month and renews automatically month to month. Ten days notice is required to terminate the lease.

Delta, British Columbia: We have entered into a lease with Sun Life Assurance Company of Canada until March 2008 for office and warehouse premises at 1360 Cliveden Avenue, Delta, British Columbia. The annual basic rent for the first two years is $71,513 and $74,788 for the remaining three years. This new location is over 10,000 square feet.

Bellevue, WA: We have entered into a lease with F-Mac Ross Plaza LLC for three years commencing July 1, 2005 for retail premises in Bellevue, WA. The annual basic rent payable for the 2,100 square foot retail space is US$3,762.50. We have two five-year options to renew the lease by providing six months advance written notice.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This discussion and analysis is of the operating results and our financial position for the year ended February 28, 2006 and the two prior fiscal years and should be read in conjunction with the Consolidated Financial Statements and the related Notes thereto provided at Item 17.

Results of Operations

Year Ended February 28, 2007

Selected Financial Information (in $’000)


Quarter	Feb. 28,	Nov. 30,	Aug. 31,	May 31,	Feb. 28,	Nov. 30,	Aug. 31,	May 31,
Ended	2007	2006	2006	2006	2006	2005	2005	2005

Sales	$579.8	$1,316.8	$2,529.4	$2,288.1	$934.6	$1,774.2	$2,220.4	$2,017.1

Gross profit	$322.5	$567.5	$1,013.5	$1,018.9	$243.6	$753.8	$950.9	$870.7

Operating
income (loss)	$(340.4)	$(197.2)	$223.3	$322.2	$(487.8)	$15.8	$292.5	$299.6

Interest and
amortization	$88.7	$82.6	$78.4	$75.0	$96.0	$53.8	$55.5	$54.4

Other income
and expense	$565.8	$-	$ -	$ -	$3,627.0	$ -	$ -	$ -

Total assets	$2,746.4	$3,399.8	$3,794.9	$3,154.8	$2,987.5	$3,515.2	$3,254.8	$3,191.9

Shareholders'
equity (Deficit)	$(894.7)	$11.5	$208.7	$(14.7)	$(336.9)	$868.0	$872.2	$599.7

Net sales for the year ended February 28, 2007 decreased by 3% to $6,714,106 as compared to $6,946,317 during the same period in 2006. This decrease of $232,211 from 2006 to 2007 is primarily due to lower sales for the Company’s IER division. The Company’s first retail store in Bellevue, WA did not open until November 2005 and therefore sales from the store as a percentage of total sales are immaterial for both the 2007 and 2006 fiscal years. The decrease in total assets of $183,266 from 2006 to 2007 is primarily due to a decrease in accounts receivable. Retained deficit of the Company increased by $500,025 due to compensation payouts for damages. The recorded loss in the last quarter is due to the seasonality factor in the sale of durable medical equipment, compensation to the current CEO of the Company in respect of some of the damages suffered by him during the RTO process. The peak season for the sale of scooters and scooter accessories runs from May to September. The Company continues to diversify its product and service offerings in order to mitigate the seasonality effect on sales. As at February 28, 2007, 90% of the total sales were from scooters and power chairs with the remaining 10% from sale of cushions, disposables, daily living aids, IER monitoring services, and retail sales.

Gross profit as a percentage of net sales increased to 43.5% in 2007 compared to 40.6% during the same period in 2006. This increase in gross profit by $103,367 or 4% is a result of lower cost of goods sold for the new and existing products.

Selling expenses as a percentage of net sales were 17.8% for the year ended February 28, 2007 compared to 15.9% for the same period in 2006. The overall dollar amount increased by $87,747 to $1,194,901 in 2007 compared to $1,107,154 for the same period a year ago. This increase is comprised of higher advertising, freight, and salaries costs. Advertising costs comprised of co-operative advertising with dealers, tradeshows, and brochures increased by $9,532 to $216,582 for the year ended February 28, 2007 compared to the same period a year ago. Freight and delivery costs increased by $13,895 to $166,938 for the year because of higher fuel costs. Salaries costs increased by $94,333 for year ended February 28, 2007. There is a full year of salaries included in fiscal 2007 to the three employees at the retail location in Bellevue, WA as compared to only four months of salaries in fiscal 2006 with the retail location opening in November 2005.

General and administrative costs as a percentage of net sales for the twelve months ended February 28, 2007 were 25.6% compared to 22.9% in the previous year. The overall dollar amount increased by $127,670 to $1,719,403 compared to $1,591,733 for the same period a year ago. Amortization expense was higher in the previous fiscal year due to the full amortization of certain intangibles. Bad debts increased by $12,482 to $13,949 compared to $1,467 for the same period a year ago. There were four customer accounts written-off during the year compared to only two in the previous year. Interest and bank charges increased by 46% or $100,757 during the twelve months ended February 28, 2007. This increase is due to a full year of interest paid on the additional long-term loan funds received in December 2005 and higher interest paid to the operating bank. Professional fees decreased by $114,856 to $268,368 from $383,224 due to lower legal fees paid during the current fiscal year. During the previous fiscal year, legal costs were higher due to legal fees paid for the lawsuit launched by the Company against the TSX Venture and fees paid with respect to an action filed by a former employee. Salaries and consulting costs increased by $112,161 for the year. This increase is primarily comprised of higher consulting payments to the President and CEO. Total consulting payments were $312,000 for the current fiscal year compared to $206,500 for the previous fiscal year.

Net loss before income taxes was $557,772 for the twelve months ended February 28, 2007 compared to $3,506,886 in the previous year. The higher loss in the previous year was primarily attributable to the compensation to current directors and employees, and compensation to the current President and CEO of the Company in respect of some of the damages suffered by them during the RTO process. The Company issued 14,150,000 common shares valued at $211,866 to the current directors and certain employees in the previous fiscal year. The Company issued 174,850,000 common shares at a value of $2,617,997 and paid cash of $799,847 to the President and CEO of the company as approved by the Board to reflect the extent of some of the damages in the previous fiscal year compared to $511,393 paid out in the current fiscal year.

Transaction with Related Parties

The Company advanced $66,743 to WISE, a private business controlled by the CEO, as part of the agreement to share in the revenue from the operations of WISE. The advanced amount is included in receivables.

The Company paid/accrued $37,991 (2006 – $41,257, 2005 - $43,343) in interest during the year to the President of the Company on shareholders advances totalling $501,607. (Note 7)

The Company paid $511,393 to the CEO of the Company in respect of some of the damages suffered by him during the RTO process. In the previous fiscal year, the Company issued 174,850,000 common shares at a value of $2,617,997 and paid a total of $799,847 in cash to the President and to the CEO of the Company in respect of some of the damages suffered by them during the RTO process. The value of the shares was based on exchange amounts, representing the amounts established and agreed upon by the related parties. (Notes 8, 17, and 18)

The Company issued 13,000,000 common shares at a value of $194,647 during the previous fiscal year (2005 - $Nil) to the current directors of the Company for their services rendered to the Company from the time of its listing on the TSX Venture Exchange in 2002 to date. The value of the shares was based on exchange amounts, representing the amounts established and agreed upon by the related parties. (Note 8)

The Company paid a total of $312,000 (2006 - $206,500, 2005 - $286,000) in management fees to the President and to the CEO in the normal course of operations.

Share Capital

Authorized:

300,000,000 common voting shares without par value

200,000,000 preferred shares without par value

Issued and Fully Paid:

235,572,391 Common Shares (2006: 235,572,891 and 2005: 46,648,891)

On March 16, 2004, 250,000 warrants were converted into the Company’s common shares at a price of fourteen cents per share.

On December 8, 2005, 76,500 common shares were cancelled and returned to treasury.

On January 6, 2006, the Company issued 189,000,000 common shares at a value of $2,829,863. Of the total, 13,000,000 common shares were issued to directors, excluding the President and the CEO, for services provided since 2002, 1,150,000 common shares were issued to employees for compensation, and 174,850,000 shares were issued to the President and to the CEO for some of the damages suffered in the reverse take-over.

Stock Options and Warrants:

The Company has a stock option plan for officers, directors and employees. The maximum number of options available for issuance is 8,777,811. As at February 28, 2007, no options were granted or issued.

Warrants

There were no warrants outstanding as at February 28, 2007.

Year Ended February 28, 2006

Selected Financial Information


	Feb. 28,	Feb. 28,	Feb. 29,
Fiscal Year Ended	2006	2005	2004

Sales	$6,946,317	$ 5,470,434	$ 4,394,857
Earnings
(loss) before
Income taxes	($3,506,886)	$ 38,558	$ 256,925
Per common share -
Basic & diluted	($.04)	$ 0.001	$ 0.001
Total assets	$2,987,459	$ 2,569,901	$ 1,853,166
Long-term liabilities	$692,572	$ 304,429	$ 161,694
Due to Shareholders	$501,607	$ 501,607	$ 442,257

Net sales for the year ended February 28, 2006 increased by 27% to $6,946,317 as compared to $5,470,434 during the same period in 2005. This increase of $1,475,883 from 2005 to 2006 as well as the increase of $1,075,577 from 2004 to 2005 is primarily due to higher volume of existing products and the addition of new products and services introduced during the year. The Company’s first retail store in Bellevue, WA did not open until November 2005 and therefore sales from the store as a percentage of total sales are immaterial. The increase in total assets of $417,558 from 2005 to 2006 is primarily due to an increase in accounts receivable. The increase in long-term liabilities in 2006 of $388,143 is comprised of an additional long-term loan of $500,000 in December 2005 less repayment of existing long-term loans.

Gross profit as a percentage of net sales increased to 40.6% in 2006 compared to 39.5% during the same period in 2005. This increase in gross profit by $657,416 or 30% is a result of higher sales, and higher margins for the new and existing products.

Selling expenses as a percentage of net sales were 15.9% for the year ended February 28, 2006 compared to 15.1% for the same period in 2005. The overall dollar amount increased by $279,185 to $1,107,154 in 2006 compared to $827,969 for the same period a year ago. This increase is comprised of higher advertising, communication, freight, salaries, and travel costs. Advertising costs comprised of co-operative advertising with dealers, tradeshows, and brochures increased by $73,431 to $207,050 for the year ended February 28, 2006 compared to the same period a year ago. Freight and delivery costs increased by $37,566 to $153,043 for the year due to higher sales and higher fuel costs. Salaries, communication and travel costs increased by $168,505 for year ended February 28, 2006 with the addition of two more employees for the Bellevue, WA retail location.

General and administrative costs as a percentage of net sales for the twelve months ended February 28, 2006 were 22.9% compared to 23.7% in the previous year. The overall dollar amount increased by $296,687 to $1,591,733 compared to $1,295,046 for the same period a year ago. Amortization expense increased by $28,452 for the year with the opening of the new retail location and additional head office staff. Bad debts decreased by $49,834 to $1,467 compared to $51,301 for the same period a year ago. Interest and bank charges were 35% or $56,557 higher with the addition of the new long-term loan in December 2005. Occupancy and office costs increased by $122,156 the opening of the Company’s first retail outlet in Bellevue, WA. Public relations costs decreased by $53,191 compared to the previous year as the Company only engaged the services of outside investor relations firms for part of the year. Additional public Company costs of translating financial statements, USA filings, lawsuit launched by the Company, and costs relating to an action by a former employee account for the $211,771 increase in professional fees compared to the previous year. Salaries and consulting costs decreased by $35,108 for the year. Consulting payments to the President and CEO were lower by $79,500. This decrease was offset by an increase in salaries and benefits for administrative staff totally $44,392 due to additional staff.

Net loss before income taxes was $3,506,886 for the twelve months ended February 28, 2006 compared to earnings of $38,558 in the previous year representing a decrease of $3,545,444. This decrease in earnings before income taxes is primarily attributable to the compensation to current directors and employees, and compensation to the current President and CEO of the Company in respect of some of the damages suffered by them during the RTO process. The Company issued 14,150,000 common shares valued at $211,866 to the current directors and certain employees. The Company issued 174,850,000 common shares at a value of $2,617,997 and paid cash of $799,847 to the President and CEO of the company as approved by the Board to reflect the extent of some of the damages.

Summary of Quarterly Results (in $’000)


Quarter	Feb. 28,	Nov. 30,	Aug. 31,	May 31,	Feb. 28,	Nov. 30,	Aug. 31,	May 31,
Ended	2006	2005	2005	2005	2005	2004	2004	2004

Sales	$ 934.6	$ 1,774.2	$ 2,220.4	$ 2,017.1	$ 890.5	$ 1,046.0	$ 1,573.5	$ 1,960.5
Earnings
(loss) before taxes	$ (4,114.9)	$ 15.8	$ 292.5	$ 299.6	$ (241.2)	$ (136.8)	$ 41.5	$ 375.0
Fully diluted
EPS	$ (0.0555)	$ 0.0003	$0.0063	$ 0.0064	$ (0.0052)	$ (0.0029)	$0 .0009	$ 0 .0080

The recorded loss in the last quarter is due to the seasonality factor in the sale of durable medical equipment, compensation to current directors and employees, and compensation to the current President and CEO of the Company in respect of some of the damages suffered by them during the RTO process. The peak season for the sale of scooters and scooter accessories runs from May to September. The Company continues to diversify its product and service offerings in order to mitigate the seasonality effect on sales. As at February 28, 2006, 86% of the total sales were from scooters and power chairs with the remaining 14% from sale of cushions, disposables, daily living aids, IER monitoring services, and retail sales.

Transaction with Related Parties

The Company advanced $3,332 to WISE, a private business controlled by the CEO, as part of the agreement to share in the revenue from operations of WISE.

The Company paid/accrued $41,257 (2005 – $43,343, 2004 - $33,903) in interest during the year to the President of the Company on shareholders advances totalling $501,607.

The Company issued 174,850,000 common shares at a value of $2,617,997 and paid a total of $799,847 in cash (2005 - $Nil, 2004 - $Nil) to the President and to the CEO of the Company in respect of some of the damages suffered by them during the RTO process. The value of the shares was based on exchange amounts, representing the amounts established and agreed upon by the related parties.

The Company issued 13,000,000 common shares at a value of $194,647 (2005 - $Nil, 2004 - $Nil) to the current directors of the Company, excluding the President and the CEO, for their services rendered to the Company form the time of its listing on the TSX Venture Exchange in 2002 to date. The value of the shares was based on exchange amounts, representing the amounts established and agreed upon by the related parties.

The Company paid a total of $206,500 (2005 - $286,000, 2004 - $118,800) in management fees to the President and to the CEO in the normal course of operations.

Share Capital

Authorized:

300,000,000 common voting shares without par value

200,000,000 preferred shares without par value

Issued and Fully Paid:

235,572,391 Common Shares (2005: 46,648,891; and 2004: 46,398,891)

On March 16, 2004, 250,000 warrants were converted into the Company’s common shares at a price of fourteen cents per share.

On December 8, 2005, 76,500 common shares were cancelled and returned to treasury.

On January 6, 2006, the Company issued 189,000,000 common shares at a value of $2,829,863. Of the total, 13,000,000 common shares were issued to directors, excluding the President and the CEO, for services provided since 2002, 1,150,000 common shares were issued to employees for compensation, and 174,850,000 common shares were issued to the President and to the CEO for some of the damages suffered in the reverse take-over.

Stock Options and Warrants:

The Company has a stock option plan for officers, directors and employees. The maximum number of options available for issuance is 8,777,811. As at February 28, 2006, no options were granted or issued.

Warrants

There were no warrants outstanding as at February 28, 2006.

Year Ended February 28, 2005

Net sales for the year ended February 28, 2005 increased by 24% to $5,470,434 as compared to $4,394,857 during the same period in 2004. This increase of $1,075,577 from 2004 to 2005 as well as the increase of $1,703,080 from 2003 to 2004 is primarily due to higher volume of existing products and the addition of new products and services introduced during the year. In July 2004, the company’s bank credit facility with the Royal Bank of Canada was increased from $1,000,000 to $1,750,000. With this increased credit facility, the company was able to increase inventory purchases and consequently generate higher sales from its existing products as well as diversify its product offerings and services. Although the company was able to generate higher sales volume, it’s sales growth and business plan that included expansion into the United States continues to be delayed as a result of the delays from the Reverse Takeover. The increase in assets of $716,735 from 2004 to 2005 as well as the increase of $436,468 from 2003 to 2004 is primarily due to an increase in accounts receivable and inventory. The company secured another long-term loan in the amount of $250,000 in September 2005 resulting in an increase in long-term liabilities in 2005 from crease in long-term debt from 2004 to 2005 is from

Gross profit as a percentage of net sales increased to 39.5% in 2005 compared to 37.6% during the same period in 2004. This increase in gross profit by $507,962 or 30% is a result of higher sales, and higher margins for the new products and services as well as the increase in value of the Canadian dollar.

Selling expenses as a percentage of net sales were 15% for the year ended February 28, 2005 compared to 13% for the same period in 2004. The overall dollar amount increased by $274,455 to $827,969 in 2005 compared to $553,514 for the same period a year ago. This increase is comprised of higher advertising, freight and delivery, and salaries costs. Advertising costs comprised of co-operative advertising with dealers, tradeshows, and brochures increased by $78,913 to $133,619 for the year ended February 28, 2005 compared to the same period a year ago. Freight and delivery costs increased by $36,716 to $115,477 as a direct result of higher sales and the increased cost of fuel. Salaries and benefits and travel costs increased by $159,089 due to the additional employees for nurse monitoring division.

General and administrative costs as a percentage of net sales for the twelve months ended February 28, 2005 were 24% compared to 19% in the previous year. The overall dollar amount increased by $448,891 to $1,295,046 compared to $846,155 for the same period a year ago. Amortization expense increased by $7,237 for the year ended February 28, 2005 compared to the previous year with the addition of new computer hardware and software. Bad debts increased by $32,250 due to the write-off of accounts receivable from one customer. Office and supplies increased by $37,200 for the year as a result of the new computer software program, internal server set-up and support, and donations. Salaries and consulting costs increased by $188,221 for the year due to the approval of management contracts for the President and CEO in May 2004 and the addition of an administrative employee. Public relations costs increased by $97,651 for the year ended February 28, 2005. The company hired the services of investor relations firms in an effort to promote public awareness in the securities markets. Additional public company costs of translating financial statements and USA filings account for the $46,817 increase in professional fees for the year ended February 28, 2005.

Earnings before income taxes were $38,558 for the twelve months ended February 28, 2005 compared to $256,925 in the previous year representing a decrease of $218, 367. This decrease in earnings before income taxes is attributable to the start-up salaries costs of the new nurse monitoring division, higher public company related costs, and management contract costs.

The recorded losses in the last two quarters are due to the seasonality factor in the sale of durable medical equipment, the additional costs of the IER monitoring services division, and public company related costs. The peak season for the sale of scooters and scooter accessories runs from May to September. The company continues to diversify its product and service offerings in order to mitigate the seasonality effect on sales. As at February 28, 2005, 86% of the total sales were from scooters and power chairs with the remaining 14% from sale of cushions, disposables, daily living aids and IER monitoring services.

Critical Accounting Policies

Our consolidated financial statements are based on the selection and application of significant accounting policies, some of which require management to make estimates and assumptions. Our estimates are based on historical experience and on our future expectations that are believed to be reasonable; the combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material. We believe that the following are some of the more critical judgment areas in the application of our accounting policies that currently affect our financial condition and results of operations.

Reserve for Inventory Obsolescence. We write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of the inventory and the estimated market value based upon assumptions about market conditions, future demand and expected usage rates. If actual market conditions are less favorable than those projected by management causing usage rates to vary from those estimated, additional inventory write-downs may be required, however these are not expected to have a material adverse impact on our financial statements.

Warranty Liability. Prior to 2002, our warranty coverage was over three years for all parts except for the frame, which was lifetime coverage. We received a 12-month warranty coverage on all parts from our manufacturer up to 2000, after which the coverage was increased to 15 months. We changed our warranty coverage in 2002. The warranty coverage now offered is lifetime for the frame, 12 months for battery charges, 12 months for electronics (controller and power seat assembly) and 18 months for the motor, transaxle and brake. This coverage is only applicable to the customers as an original purchaser of the product from an authorized AMS dealer and does not apply to any subsequent purchase, assignee or other recipient of the product. This warranty does not cover certain defined wear items. Since 2002, our warranty obligations to our customers have been substantially reduced by warranties extended by the supplying manufacturer. We believe that the amounts estimated for future warranty liabilities are immaterial, and thus no provision is made in our financial statements.

Impairment on Long-Lived Assets. The determination of impairment on long-lived assets, is conducted as indicators of impairment are present. If such indicators were present, the determination of the amount of impairment would be based on our judgments as to the future operating cash flows to be generated from these assets throughout their estimated useful lives. Our estimates of the period over which future cash flows will be generated, as well as the predictability of these cash, can have a significant impact on the estimated value of these assets and, in periods of prolonged down cycles may result in impairment.

Accounts Receivable and Revenue Recognition. Revenues are recognized when goods are shipped, which is when legal title passes to the customer and the Company has fully performed under the contact. The Company extends four different payment terms to its customers. The Company provides allowances for expected cash discounts, returns, claims and doubtful accounts based upon historical bad debt and claims experience and periodic evaluation of the aging of accounts receivable. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Deferred Tax Assets and Liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in earnings in the period that includes the enactment date. Additionally, taxing jurisdictions could retroactively disagree with the Company's tax treatment of certain items, and some historical transactions have income tax effects going forward. Accounting rules require these future effects to be evaluated using current laws, rules and regulations, each of which can change at any time and in an unpredictable manner. Management, based on projections of future taxable income, continually monitors the deferred tax assets. When projections of future taxable income are not adequate to support the value of recorded deferred tax assets, a valuation allowance is recorded to reduce the assets to its estimated realizable value.

Liquidity and Capital Resources

We continued to finance our operations principally through cash generated by the business, shareholder advances, credit facility from the Royal Bank of Canada and funds obtained from our term debt. Our borrowing arrangements for the bank contain certain covenants with respect to tangible net worth, ratio of tangible net worth, working capital and ratio of current assets to current liabilities. During the current fiscal year and subsequent to February 28, 2006, the Company obtained increases in the credit facility with the Royal Bank. The long term debt is comprised of two separate five-year term subordinated debt financing from Vancity Capital Corporation and the Business Development Bank of Canada (BDC). The Vancity debt financing was obtained beginning in November 2002 with an interest rate of prime plus 10.5%, payable monthly, consisting of principal and interest. The BDC financing was obtained in September 2004 with a floating base rate plus variance of 7.5% per annum, consisting of principal and interest. Additional BDC funding was obtained in November 2005 with interest at 17% per annum, repayable over 60 months with no principal payment until maturity on November 15, 2010. All of the financings are secured by corporate guarantees and personal guarantees from Ms. Rani Gill and Mr. Harjit Gill. The financings are also subject to certain covenants with respect to tangible net worth, ratio of tangible net worth, working capital and ratio of current assets to current liabilities. As at February 28, 2007, the Company was in violation of these covenants.

The amounts outstanding are disclosed in the financial statements. As at February 28, 2007 our bank demand loan was $1,811,101 and as at February 28, 2006 was $1,513,412. The total amount outstanding under the Vancity Capital Corporation loan was $46,622 as at February 28, 2007 and $108,438 as at February 28, 2006. The total amount outstanding under the Business Development Bank of Canada loans was $645,950 as at February 28, 2007. $695,990 as at February 28, 2006.

The Company continued to finance its operations principally through cash generated by the business, shareholder advances, and increase in the credit facility from a Canadian chartered bank and the funds obtained from the long-term debt.

Net working capital decreased from $715,511 in fiscal 2006 to $488,748 as at February 28, 2007. This decrease is primarily due to the increase in the bank demand loan.

Operating activities resulted in cash outflows of $500,722 during the fiscal year ended February 28, 2007 compared to $685,568 for the same period in fiscal 2006. This decrease in cash outflows is primarily due to changes in working capital accounts and the operations of the company as at February 28, 2007.

Cash flows from financing activities were $560,833 during the 2007 fiscal year compared to $756,591 in the previous year. These advances were comprised of advances from both the bank demand loan and shareholder advances.

Cash flows utilized by investing activities were $60,111 for the twelve months ended February 28, 2007 compared to $71,023 in the previous year. Acquisitions of capital assets decreased by $32,614 whereas the investment in intangible assets increased by $21,702 during the current fiscal year as compared to the same period in the previous year.

Trend Summary

The following trends are affecting the market for assistive medical equipment, as well as the various other medical products and devices manufactured under contract and/or distributed by us. All trends and analysis listed below is compiled from a valuation report prepared for us by Evans & Evans Inc. business valuators of Vancouver, British Columbia.

Growth In Population Over 65

Life expectancy increases with every passing year. A significant percentage of people using home and community-based healthcare services are 65 years of age and older, and currently represent the vast majority of home healthcare patients. It is estimated that this segment of the population will increase significantly during the next ten years.

Lifestyle Changes

An increasing number of individuals who suffer from mobility-related impairments are not disabled in the traditional sense. These individuals purchase scooters and power wheelchairs to improve their mobility and independence and, ultimately, their quality of life. These also are the consumers for whom disposable medical products and supplies are a growing lifestyle component.

Focus On Aesthetics & Comfort

The trend towards purchasing mobility products to improve quality of life has grown as consumers have focused increasingly on the aesthetics and comfort of their mobility devices. We believe that these concerns will continue to drive the demand for our new products and product applications as we integrate technology and processes to improve the appearance and comfort of our key products.

Treatment Options

Many medical professionals and patients prefer home healthcare over institutional care. They believe that it results in greater patient independence and improved responsiveness to treatment, as familiar surroundings are believed to be conducive to improved patient outcomes. Healthcare professionals, public payers and private payers agree that homecare is a cost-effective and clinically appropriate alternative to facility-based care.

Rising Costs Of Healthcare

Home healthcare has gained acceptance among health care providers and public policy makers as a cost-effective, clinically appropriate and patient preferred alternative to facility-based care for a variety of acute and long-term illnesses and disabilities. Home healthcare and the medical devices and products required to permit such care will play an increasing growing role in reducing healthcare costs.

Summary of Contractual Obligations


Long-term debt		2007		2006
Loan of $250,000, interest at prime plus 10.5% per annum, repayable over 60 months in blended monthly payments of $6,146, due November 2007	$	46,622	$	108,438
Loan of $250,000, interest at floating base rate plus variance of 7.5% per annum, with the first principal payment of $3,970 on February 4, 2005, followed by 59 consecutive monthly instalments of $4,170 commencing on March 3, 2005, with the final payment on January 3, 2010.		145,950		195,990
Loan of $500,000, interest at 17% per annum, repayable over 60 months with no principal payment until maturity on November 15, 2010.		500,000		500,000
		692,572		804,428
Less current portion		96,662		111,856
	$	595,910	$	692,572

These loans are secured by a general security agreement from the Company in all present and after-acquired property subject to prior charges by the bank in addition to personal guarantees from the President and CEO and contain certain covenants with respect to tangible net worth, ratio of debt to tangible net worth, working capital ratio and ratio of current assets to current liabilities. As at February 28, 2007 the Company was in violation of these loan covenants.

Principal repayments of the Long-term debt are as follows:


2008		96,662
2009		50,040
2010		45,870
2011		500,000
	$	692,572

Operating leases

The Company is committed to operating leases for premises and vehicles. Future minimum payments are as follows:


2007	$	365,299
2008		66,273
2009		14,355
2010		9,570
	$	455,497

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

The following table sets forth all of our current directors and executive officers, with each position and office held by them. Each director’s terms of office expires at the next annual general meeting of shareholders.

All of our Directors and Senior Management and our subsidiary own, as a group, own 213,572,701 shares or 90.66% of all of our outstanding shares as at February 28, 2007.


Name, Position, Province or State, and Country of Residence⁽¹⁾	Principal Occupation and, If Not at Present an Elected Director, Occupation During the Past 5 Years⁽¹⁾	Previous Service as a Director	Number of Shares⁽²⁾

RANI GILL President, Chief Financial Officer and Chairperson British Columbia, Canada	President and CFO of the Company. Prior to that owner of Shoprider Canada Mobility Products.	January 19, 2002	184,966,277
HARJ GILL Chief Executive Officer, Corporate Secretary and Director British Columbia, Canada	Chief Executive Officer and Corporate Secretary of the Company. Prior to that an independent business person and Investment Advisor.	August 28, 2002	14,877,624
AMARJIT MANN⁽³⁾Director British Columbia, Canada	Owner of a Pharmacy and Pharmacist.	August 28, 2002	5,110,300
JAN KARNIK^{(3) (4)}Director British Columbia, Canada	Owner of a Mechanical Engineering Firm. Prior to that a Project Development Manager	November 26, 2001	4,005,000
RANJODH SAHOTA⁽³⁾Director British Columbia, Canada	Business person and Administrator for Ministry of Human Resources	September 19, 2003	4,613,500

(1)

The information as to country of residence and principal occupation, not being within the knowledge of the Company, has been furnished by the respective directors individually.

(2)

The information as to shares beneficially owned or over which a director exercises control or direction, not being within the knowledge of the Company, has been furnished by the respective directors individually as of July 31, 2006.

(3)

Denotes member of Audit Committee as at August 28, 2006

(4)

Denotes member as Lead Director. Amarjit Mann, Jan Karnik and Ranjodh Sahota are independent directors from the company.

The Company does not have an executive committee.

Rani Gill

From 1989 until 2000 she was our Controller and in 2000-2001 became the owner of the SCMP partnership. Included among her professional accomplishments is previous responsibility for the accounting and administration functions inside a $70 million sales and service organization. She was appointed our President in March 2002. Ms. Gill obtained a Bachelor in Administration from Simon Fraser University, Burnaby, British Columbia in 1986. She was granted a Certified Management Accountant designation from the British Columbia Society of Management Accountants in 1992. She has been the controller of Prostar Interactive Mediaworks and Serviceworks Distribution Inc. since July 1994. Ms. Gill was responsible for the initial set-up and the ongoing administration of all our operations in the United States. She is currently our President, CFO and is the Chairperson for the Company. She is responsible for administration and finance.

Ranjodh Sahota

Mr. Sahota has been involved in residential real estate development as both general contractor and owner for last 10 years. He has also operated his family pressure washing business during the last 10 years. From 1993 to 2003 Mr. Sahota has worked in the Ministry of Children and Family of the Government of British Columbia as a Peace Officer, and recently as an Employment Assistance Officer, Ministry of Human Resources.

Jan Karnik

Mr. Karnik is currently a senior account manager for a software technology company, and has worked as a senior official of a major B.C.-based engineering firm, where he was responsible for a division with 140 employees. He has a Bachelor of Science degree (physics) from Simon Fraser University and has obtained his M.B.A.

Amarjit Mann

Mr. Mann holds a Pharmacy degree and an MBA from the University of British Columbia, and is owner of a pharmacy in Surrey, B.C. Subsequent to February 28, 2007, Mr. Mann resigned as director due to an apparent conflict of interest.

Harj Gill

Mr. Gill holds a Bachelor of Science Degree from the University of Waterloo, carries the Certified Investment Manager Designation and is a Fellow of the Canadian Securities Institute. He has worked as a Financial Advisor with major Brokerage firms in Canada, and was our General Manager. Currently, as our Chief Executive Officer, he is responsible for the execution of the overall business strategy and administration.

Board Practices

The current directors were elected to their position at the annual meeting of shareholders held on July 26, 2004. The directors continue to serve until the next meeting of shareholders to be held in 2005. Our officers are elected by the board and serve at the board’s pleasure. Directors are appointed annually at the annual general meeting of shareholders.

We have not entered into service contracts with any of our directors. The Audit Committee meets once per quarter and is comprised of three independent directors. The Audit Committee reviews and monitors the financial reporting process on behalf of the Board of Directors. The Audit Committee is responsible for reviewing the Company's financial statements with management and with the external auditors. It is also responsible to review accounting policies and procedures, as well as internal controls over the Company's assets and to meet with the external auditors to review the results of their audit. The Audit Committee reviews the annual financial statements and recommends their approval to the Board of Directors.

The Board of Directors is of the view that the decision to not set up various committees such as Nominating, Human Resources, Governance or Compensation Committee is appropriate having regard to the cost and time issues and the operating size of the Registrant.

STATEMENT OF EXECUTIVE COMPENSATION

"Named Executive Officer" means: (a) the Chief Executive Officer ("CEO"); (b) the Chief Financial Officer (“CFO”), regardless of the amount of compensation of those individuals; (c) the Company’s three most highly compensated executive officers, other than the CEO and CFO, who were serving as executive officers at the end of the most recently completed fiscal period and whose salary and bonus exceeds $150,000; and (d) any additional individuals for whom disclosure would have been provided under (c) except that the individual was not serving as an officer of the Company at the end of the most recently completed fiscal year.

The Company currently has two Named Executive Officers, Ms. Rani Gill and Mr. Harj Gill. The following table sets forth the compensation awarded, paid to or earned by the Company’s Named Executive Officers during the financial years ended February 28, 2006, 2005 and 2004.

Summary Compensation Table


		Annual Compensation			Long Term Compensation
					Awards		Pay-outs
Name and Principal Position	Year⁽¹⁾	Salary ($)	Bonus ($)	Other Annual Compensation ($)	Securities Under Options/ SARs granted (#)	Restricted Shares or Restricted Share Units ($)	LTIP Pay-outs ($)	AllOther Compensation ($)
Rani Gill President and Chief Financial Officer	2007 2006 2005	$156,000 $78,000 $143,000	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	N/A N/A N/A	N/A N/A N/A	⁽²⁾Nil Nil
Harj Gill Chief Executive Officer	2007 2006 200	$156,000 $128,500 $143,000	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	N/A N/A N/A	N/A N/A N/A	⁽³⁾Nil Nil

(1)

Fiscal years ended February 28, 2007, 2006, and 2005.

(2)

The Company issued 161,000,000 common share to Ms. Gill as compensation for some of the damages incurred in respect of a reverse takeover transaction.

(3)

The Company issued 13,850,000 common shares Mr. Gill as compensation for damages incurred in respect of a reverse take over transaction.

Other Benefits

No remuneration was paid (other than the payments set out above and those made pursuant to the Canada Pension Plan or any other government plan similar to it and payments to be made for, or benefits to be received from, group life or accident insurance, group hospitalization or similar group benefits or payments) during the financial year ended February 28, 2006 to the directors and senior officers of the Company, as a group, directly or indirectly, by the Company or any of its subsidiaries pursuant to any existing plan or arrangement. There are Director’s service contracts which provide benefits upon the termination of employment.

Termination of Employment, Change in Responsibilities and Employment Contracts

The Company has no plan, contract or arrangement whereby any Named Executive Officer is entitled to receive payment of more than $100,000 in the event of that officer's resignation, retirement or other termination of employment, or in the event of a change of control of the Company or a subsidiary or a change in the Named Executive Officer's responsibilities following such a change of control.

Employment Agreements/Management Contracts - Named Executive Officers

The Company entered into employment agreements dated May 01, 2004 (collectively, the "Employment Agreements") with its Named Executive Officers - Ms. Rani Gill, President, CFO and Chairperson, and Mr. Harj Gill, CEO and Corporate Secretary. Under the terms of the respective Employment Agreements, the Company agreed to pay Ms. Gill an annual salary of CDN$156,000, and Mr. Gill an annual salary of US$156,000 (collectively, the "Annual Base Salaries") payable monthly. The terms of each Employment Agreement provide that the Company’s independent directors can increase the Annual Base Salaries upon review approximately every six months, and the agreements can be renegotiated from time to time. The Annual Base Salaries are exclusive of bonuses, benefits and other compensation, which can be negotiated and approved by the Company Directors. The Employment Agreements have a term of five years commencing May 01, 2004 and terminating May 01, 2009, and, thereafter, will automatically renew for subsequent terms, unless terminated in accordance with the terms of the respective Employment Agreement.

See also, "Composition of the Board of Directors", below.

Composition of the Compensation Committee/Board of Directors

The Company does not have a formal Compensation Committee. However, compensation is determined by the Board of Directors whereby the Independent directors approve compensation for the Executive Officers. The independent directors are Jan Karnik, Amarjit Mann, and Ranjodh Sahota.

Report on Executive Compensation

It is the responsibility of the Board of Directors with approval from the Independent Directors to determine and administer the compensation policies and levels for the Company's executive officers. The Board of Directors meets as required and its recommendations are submitted to the Independent Board members for approval. The Independent Directors:

Reviews and approves corporate goals and objectives relevant to CEO compensation, evaluates the CEO's performance in light of those goals and objectives and recommends and approves the CEO's compensation level based on this evaluation. In determining current and future bonuses and any other long-term incentive component of the CEO's and CFO’s compensation, the Independent Directors may consider the Company's performance and relative shareholder return, the value of similar incentive awards to CEO’s and CFO’s at comparable companies, the awards given to the CEO and CFO in past years, contributions made by the CEO and CFO and personal opportunities lost, personal guarantees offered, and funds expended personally which has not been reimbursed by the company, in efforts to assist company and move company forward and other factors that the Independent Directors deem appropriate in connection with its review.

Interprets, implements, administers, reviews and approves remuneration of the Company's Executive Officers and other key officers, including their participation in incentive compensation plans and equity based compensation plans.

Makes recommendations and approves the compensation of non-employee directors, including their participating in incentive compensation plans and equity-based compensation plans.

Develops and recommends to the Board which recommends to the Company's shareholders (to the extent shareholder approval is required by any applicable law or regulation) for their approval of all stock ownership, stock option and other equity based compensation plans of the Company, and all related policies and programs. In addition, the Independent Directors recommend to the Board, which recommends to the Company's shareholders (to the extent shareholder approval is required by any applicable law or regulation) for their approval all equity-based compensation plans with respect to non-employee directors, and all related policies and programs.

The Independent Directors monitor compliance by the Company and any recipients of stock, stock options or other equity awards under the Company's equity-based compensation plans (such as any policy that requires officers or directors to own Common Shares).

The total compensation plan for executive officers is comprised of the following components: base salary and other benefits, a bonus incentive program and stock options. In determining an executive officer's compensation the Independent Directors try to ensure that incentive compensation, such as bonuses and stock options, is structured to ensure that each officer's personal interests are aligned with those of the shareholders. The Independent Directors have undertaken a review of executive compensation within the home healthcare industry generally, within the Company's peer group within the home healthcare industry as well as within companies of a similar size (as measured by market capitalization) within both Canada and the United States. As a result, the Independent Directors have recommended to the Board certain compensation benchmarks.

The Independent Directors concluded that base salaries should be at levels substantially similar to the comparison group. In establishing base salaries, the Independent Directors review general market salary levels for individuals in positions with similar responsibilities and experience, with the objective of setting base salaries for the Company's executive officers consistent with those found in the marketplace. On an individual basis, base salaries are established by taking into account individual performance and experience as compared to those individuals in the comparison group. In order to ensure the attraction, motivation and retention of key executives, base salaries are reviewed during the year and negotiation are implemented with the executive officers in a manner the Independent Directors deem appropriate. The Independent Directors during the year have concluded that the current compensation paid to the officers and directors of the company are below industry standards but the Independent Directors have determined not to implement any increase for the moment. The Independent Directors will conduct periodic reviews to ensure that if the Committee deems it necessary or helpful to the Company, the Independent Directors will attempt to negotiate increases in compensation for directors and officers to ensure that compensation meets industry comparisons.

All Named Executive Officers have the right to receive salary enhancement in the form of bonuses. The eligibility of the Named Executive Officers to receive such incentive bonuses are subject to the Company's attainment of strategic, operational and financial goals for the calendar year. The Company has achieved many of its strategic and operational and financial goals but believes it suffered damages from the TSX Venture Exchange and continues to attempt to recover from these damages. The Company has been assisted greatly by the personal efforts of the CEO and CFO and the directors of the Company. Compensation in the future and any awards, if any, are based on a comparison of executive and Company target objectives for the year, with actual individual performance and Company financial performance during the same period, as well as the any unrecognized efforts made by the Officers to assist the company in its goals.

The Company has a Stock Option Plan which is intended to advance the interests of the Company and its subsidiaries by: aligning the interests of Named Executive Officers and employees with those of the Company's shareholders, providing eligible participants with a propriety interest in the growth and performance of the Company; and attracting, motivating and retaining selected key officers, employees, directors and third party consultants. The Independent Directors review and recommend to the board all option grants, taking into account the amount and terms of outstanding options, SARs, shares and units. No options have been issued to date and is below industry standards.

Chief Executive Officer Compensation

The compensation package of the Chief Executive Officer and President is recommended and approved by the Independent Directors. The Chief Executive Officer's, and President’s compensation package consists of Base Salary, Annual Incentives and Long-Term Incentives as described above. As described above, the Company targets a mid-level of compensation for each component as well as for total compensation with reference to the same comparison group of companies in closely related industries in the U.S. and Canada.

In establishing the Chief Executive Officer's and President’s base salary for a given year, the Compensation Committee takes into account Mr. Gill’s and Ms. Gill’s contribution in terms of leadership in the management of the Company as well as the scope and size of the Company's operations, and personal sacrifices including personal guarantees, loans offered to the company. The Company also considers the level of corporate performance achieved in the prior year as well as the expected level of performance for the current year in establishing the Chief Executive Officer's and President’s base salary for a given year.

Based on the continued efforts to improve the Company's ability to increase revenues, expansion of distribution of products, US growth targets, and new business ventures, as well as the continued execution of the Company's marketing and acquisition strategies, the Board of Directors believes that Mr. Gill as Chief Executive Officer and Ms. Gill, as President continue to achieve their goals for the Company and, as a result, they have earned their compensation. It is the Company’s belief that the compensation paid to date does not fully reflect the contributions made by Mr. Gill and Ms. Gill to assist the Company, however, no increase in compensation has been approved or negotiated by the Independent Directors at this time.

Compensation of Directors

Directors' Fees: During the most recently completed financial year, the Company has not paid any Director’s fees.

Stock Options

During the fiscal year, no incentive stock options were granted to the Company's directors, employees or consultants.

Pension Plans

We do not provide retirement benefits for directors, senior management or employees.

Employees

As of February 28, 2007, we had a total of nineteen employees/contract employees (eighteen full-time employees/contract employees and two part-time employees). There are thirteen employees/contract employees located in the Vancouver office the remaining are located in the Ontario, the Montreal or in the US office. None of the employees are unionized.

Share Ownership of Directors and Senior Management


Name and Title	Share Ownership	% Share Ownership
Rani Gill President and Director	184,966,277	78.5
Harj Gill Director	14,877,624	6.3
Amarjit Mann Director	5,110,300	2.2
Jan Karnik Director	4,005,000	1.7
Ranjodh Sahota CEO and Director	4,613,500	2.0
All Directors and Senior Management as a group	213,572,701	90.66%

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major shareholders

The following table sets forth, as of February 28 2007, certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial owner of more than 5% of our outstanding common shares. Unless otherwise indicated by footnote, we believe that the beneficial owners of the common shares listed below, based on information furnished by such owners, have sole investment and voting power with respect to such common shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the United States Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

The company is aware of only one shareholder owning more than 10% of the company’s outstanding common shares. The name of this shareholder is listed below. This shareholder has identical voting rights to the other shareholders.


Title of Class	Identity of Holder	Number of Common Shares	Percentage of Beneficially Owned
Common shares	Rani Gill	184,966,277	78.5%

United States Shareholders

As of February 28, 2007, we had 85 registered shareholders with addresses in the United States representing 1.0% of the issued and outstanding shares. In addition, residents of the United States may beneficially own common shares registered in the names of non-residents of the United States.

Related party transactions

None of our directors or senior officers, and no associates or affiliates of any of them is or has been indebted to us or our subsidiaries at any time. None of our experts or counsel was employed on a contingent basis or owns any shares which is material to such person. Immaterial advances as noted in the financials, were made to the CEO in efforts to move forward arrangements with the Company that were being made with WISE, a company owned by the CEO. Hence, on June 12, 2006, the Company announced that it had agreed to provide administrative services to the World Internet Stock Exchange (“WISE”), a private business involved in providing stock information and quotation services through WIS-X. The Company has entered into an interim agreement and will be finalizing a revenue sharing model under which the Company would be compensated for the services provided to WISE.

ITEM 8.

FINANCIAL INFORMATION

Financial Information

Our consolidated financial statements for the last three fiscal years ended February 28, 2007, including our consolidated balance sheets, the consolidated statements of operations and deficit and the notes to those statements are included in this Form 20-F.

Revenue Recognition

Revenue is recognized upon shipment of good to the end dealer subsequent to the confirmation of price and payment terms. There are no return or price adjustment rights granted as an order is only shipped upon receipt of a written or verbal purchase order confirming the price of the gods being shipped. The Company offers consignment inventory to certain dealers upon receipt of signed agreement from the dealer. The Company retains title to the inventory until such time as the customer provides a written or verbal purchase order confirming the sale. At this time, the Company issues an invoice and recognizes the revenue. Sales representatives are responsible for confirming on a monthly basis all consignment stock at their customers. An independent confirmation is obtained by head office at each year-end. The value of consignment inventory as at February 28, 2005, February 29, 2004, and February 28, 2003 was $306,814, $240,668, and $185, 313, respectively.

ITEM 8B.

SIGNIFICANT CHANGES

Other than as set out, there have been no significant changes in our business in the period from February 28, 2006 until the date of this document.

On May 29, 2006, the Company provided an update on the lawsuit filed against the TSX Venture Exchange and certain of its employees on March 11, 2005 seeking damages and penalties for their deliberate delay of the Company’s reverse takeover (RTO). Based on the review of disclosure documents obtained from the TSX Venture in April 2005, the Company will proceed forward with this lawsuit.

As of May 31, 2006, the Company was in compliance with the terms of all banking and long-term debt covenants entered into.

On June 12, 2006, the Company announced that it had agreed to provide administrative services to the World Internet Stock Exchange (“WISE”), a private business involved in providing stock information and quotation services through WIS-X. The Company has entered into an interim agreement and will be finalizing a revenue sharing model under which the Company would be compensated for the services provided to WISE. WISE is owned by the CEO of the Company.

On July 11, 2006, the Company renegotiated its credit facility with the Royal Bank of Canada. The credit facility was increased from $1,750,000 to $2,000,000 at an interest rate of Royal Bank prime plus 2.75% per annum. In addition to the general security agreement from the Company, personal guarantees of $1,000,000 each have been provided by both the President and CEO.

At the Annual General Meeting on August 31, 2006, the Company obtained shareholders approval for the following resolutions:

Removal of pre-existing Company provisions

ii.

Adoption of new articles under the Business Corporations Act

iii.

Increase authorized share capital to an unlimited number of common shares without par value and an unlimited number of preferred shares without par value

iv.

Amendment of the Company Option Plan to increase maximum options that can be issued to 47,000,000 shares

Conduct business with WISE, a Company controlled by the CEO

vi.

Authorization to issue 174,850,000 shares to the President and CEO and to issue and compensate the President and CEO with further shares and payments as deemed appropriate by the independent Board of Directors for damages and related events

On August 24, 2007, the subsidiary, AMS Homecare Canada Inc., filed for bankruptcy.

On September 27, 2007, the assets of AMS Homecare Canada Inc. were sold to 6833110 Canada Inc., a company owned by Mr. Sukhi Grewal and others including Kelly Langlois, an former employee. Both the company and the associated individuals including a former director of AMS Homecare Inc., Mr. Amarjit Mann, have been advised by legal counsel that there is a conflict of interest by them purchasing and attempting to compete with AMS Homecare Inc.

Subsequent to February 28, 2007, AMS Homecare Inc. entered into a marketing agreement with HG Soliman Enterprises Ltd. to jointly cooperate to market AMS products.

ITEM 9.

THE OFFER AND LISTING

Price History

Our common shares were listed and posted for trading on the TSX Venture Exchange (symbol AHC) from March 15, 2002 until the company was delisted on August 20, 2004. Our common shares have been quoted on the NASD Over-The-Counter Bulletin Board (symbol AHCKF.OB) since March 8, 2004.

The annual high and low market prices for the five most recent full financial years are set forth in the table below.

NASD Over-The-Counter Bulletin Board:


YEAR	HIGH	LOW
03/01/05 – 02/28/06	$0.130	0.045
03/01/04 – 02/28/05	0.240	0.070

For the two most recent full financial years the high and low market prices for each full financial quarter are set forth in the table below.

NASD Over-The-Counter Bulletin Board:


QUARTER	HIGH	LOW
12/01/05 – 02/28/06	$0.90	0.045
09/01/05 – 11/30/05	0.094	0.070
06/01/05 – 08/31/05	0.130	0.055
03/01/05 – 05/31/05	0.100	0.050
12/01/04 – 02/28/05	0.100	0.070
09/01/04 – 11/30/04	0.150	0.070
06/30/04 – 08/31/04	0.240	0.090
03/01/04 – 05/31/04	0.150	0.110

For each of the most recent six months the high and low market prices are set forth in the tables below.

NASD Over-The-Counter Bulletin Board:


MONTH	HIGH	LOW
02/06	$0.060	0.048
01/06	0.065	0.045
12/05	0.090	0.050
11/05	0.094	0.080
10/05	0.090	0.070
09/05	0.094	0.080

NASD Over-The-Counter Bulletin Board:


MONTH	HIGH	LOW
08/04	$0.25	0.08
07/04	0.12	0.09

At September 29, 2006, we had 235,572,391 common shares issued and outstanding and held by estimated 1000 registered owners of record.

ITEM 10.

ADDITIONAL INFORMATION

Memorandum and Articles of Association

Our Certificate of Incorporation was filed with the Ministry of Finance and Corporate Relations, Registrar of Companies in the Province of British Columbia, Canada on March 5, 1981 under the name Jacob Gold Corporation with the Certificate of Incorporation No. 228476. We were incorporated to conduct all lawful business pursuant to the laws of British Columbia and our Certificate of Incorporation and Articles do not describe a business object or purpose. As at the Company’s annual general meeting on July 29, 2005 and again reconfirmed at the Company’s annual general meeting on August 31, 2006, the Company obtained shareholders’ approval to amend the Articles of the Incorporation, as the Board deems necessary and to reflect the new Business Corporations Act in British Columbia. The new Articles of the Company were presented to the shareholders and approved.

Pursuant to our Articles, a director must disclose his interest in and not vote in respect of any proposed contract or transaction with us in which he is in any way directly or indirectly interested, but such director will be counted in the quorum at the meeting of the directors at which the proposed contract or transaction is approved.

Questions to be determined at a directors meeting shall be determined by a majority vote. The Chairman has no additional power for voting, and directors are not required to hold our shares.

Pursuant to the Articles, the directors may authorize the Company to borrow money in such amounts and upon such security and on such terms and conditions as they deem fit.

The Articles may be amended by a special resolution of the shareholders and by filing thereafter with Registrar of Companies in the Province of British Columbia.

As at February 28, 2007 our authorized and issued capital is as follows:

Authorized:

300,000,000 common shares without par value

200,000,000 Preference shares without par value

Issued:

235,572,391 common shares

Common shares

All issued and outstanding common shares are fully paid and non-assessable. Each holder of record of common shares is entitled to one vote for each common share so held on all matters requiring a vote of shareholders, including the election of directors. There are no provisions regarding cumulative voting. The holders of common shares will be entitled to dividends on a pro-rata basis, if, as and when declared by the board of directors. There are no preferences, conversion rights, pre-emptive rights, subscription rights, or restrictions or transfers attached to the common shares. In the event of our liquidation, dissolution, or winding, the holders of common shares are entitled to participate in our assets available for distribution after satisfaction of the claims of creditors.

Preference Shares

The Preference shares are issuable in one or more series. Our directors may fix the number of shares in the series and fix the preferences, special rights and restrictions, privileges, conditions and limitations attaching to the shares of that series, before the issuance of shares of any particular series. The Preference shares are entitled to priority over the common shares with respect to the payment of dividends and distributions in the event of our dissolution, liquidation or winding-up. The Preference shares rank equally within their class as to dividends, voting rights, participation and assets in all other respects.

Powers and Duties of Directors

The directors shall manage or supervise the management of our affairs and business and shall have authority to exercise all such powers that are not required to be exercised by our shareholders in a general meeting.

A director's term of office expires immediately prior to the next annual general meeting. In general, a director who is, in any way, directly interested in an existing or proposed contract or transaction with us, whereby a duty or interest might be created to conflict with his duty or interest as a director, shall declare the nature and extent of his interest in such contract or transaction or the conflict or potential conflict with his duty and interest as a director. Such director shall not vote in respect of any such contract or transaction and if he shall do so, his vote shall not be counted, but he shall be counted in the quorum presented at the meeting at which such vote is taken. However, notwithstanding the foregoing, directors shall have the right to vote on determining the remuneration of the directors.

The directors may from time to time on our behalf (a) borrow money in such manner and amount from such sources and upon such terms and conditions as they think fit; (b) issue bonds, debentures and other debt obligation; or (c) mortgage, charge or give other security on the whole or any part of our property and assets.

Shareholders

An annual general meeting shall be held once in every calendar year and within 13 months of the last annual general meeting at such time and place as may be determined by the directors. A quorum at an annual general meeting and special meeting shall be one member present in person or by proxy or (being a corporation) represented in accordance with the Company Act, holding not less than one voting share. We believe there is no limitation imposed by the laws of British Columbia or by the memorandum or our other constituent documents on the right of a non-resident to hold or vote the common shares.

Material Contracts

We have entered into material contracts during the year as reported in news releases during the year:

We have also entered into various other agreements during the year as part of normal business and the agreements are confidential for competitive reasons.

Inspection of Documents

Paper copies of documents and exhibits referenced in this Form 20-F may be viewed at the Company’s principal office at 1360 Cliveden Avenue, Delta, British Columbia, Canada, V3M 6K2.

Exchange Controls

The Company does not believe there are any decrees or regulations under the laws of British Columbia or Canada applicable to it restricting the import or export of capital or affecting the remittance of dividends or other payments to non-resident holders of our common shares, other than for the withholding of taxes. There are no restrictions under our Memorandum or Articles that limits the right of non-resident owners to hold or vote our common shares or to receive dividends thereon. We are organized under the laws of British Columbia. There is uncertainty as to whether the Courts of British Columbia would (i) enforce judgments of United States Courts obtained against us or our directors and officers predicated upon the civil liability provisions of the federal securities laws of the United States or (ii) entertain original actions brought in British Columbia Courts against us or such persons predicated upon the federal securities laws of the United States.

There is no limitation imposed by the laws of Canada or our Memorandum or Articles on the right of a non-resident to hold or vote the common shares, other than as provided in the Investment Act (Canada) (the "Investment Act"). The following discussion summarizes the principal features of the Investment Act for a non-resident who proposes to acquire the common shares.

The Investment Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an “entity”) that is not a “Canadian” as defined in the Investment Act (a “non-Canadian”), unless after review, the Director of Investments appointed by the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada. An investment in the common shares by a non-Canadian other than a “WTO Investor” (as that term is defined by the Investment Act, and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when we were not controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire our control and the value of our assets, as determined in accordance with the regulations promulgated under the Investment Act, was $5,000,000 or more, or if 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 our assets. An investment in the common shares by a WTO Investor, or by a non-Canadian when we were controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire our control and the value of our assets, as determined in accordance with the regulations promulgated under the Investment Act was not less than a specified amount, which for 2000 was any amount in excess of $192 million. A non-Canadian would acquire our control for the purposes of the Investment Act if the non-Canadian acquired a majority of the common shares. The acquisition of one third or more, but less than a majority of the common shares would be presumed to be an acquisition of our control unless it could be established that, on the acquisition, we were not controlled in fact by the acquirer through the ownership of the common shares.

Certain transactions relating to the common shares would be exempt from the Investment Act, including: (a) an acquisition of the common shares by a person in the ordinary course of that person’s business as a trader or dealer in securities; (b) an acquisition of our control 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 Investment Act; and (c) an acquisition of our control by reason of an amalgamation, merger consolidation or corporate reorganization following which our ultimate direct or indirect control in fact, through the ownership of the common shares, remained unchanged.

Currently 99% of our operations are in Canadian dollars.

Taxation

The following is a summary of the material Canadian federal income tax considerations, as of the date hereof, generally applicable to security holders who deal at arm's length with us, who, for purposes of the Income Tax Act (Canada) (the "Canadian Tax Act") and any applicable tax treaty or convention, have not been and will not be resident or deemed to be resident in Canada at any time while they have held our shares, to whom such shares are capital property, and to whom such shares are not "taxable Canadian property" (as defined in the Canadian Tax Act). This summary does not apply to a non-resident insurer.

Generally, our shares will be considered to be capital property to a holder thereof provided that the holder does not use such shares in the course of carrying on a business and has not acquired them in one or more transactions considered to be an adventure in the nature of trade. All security holders should consult their own tax advisors as to whether, as a matter of fact, they hold our shares as capital property for the purposes of the Canadian Tax Act.

This discussion is based on the current provisions of the Canadian Tax Act and the regulations thereunder, the current provisions of the Canada-United States Income Tax Convention (1980) (the "Tax Treaty") and current published administrative practices of the Canada Customs and Revenue Agency. This discussion takes into account specific proposals to amend the Canadian Tax Act and the regulations thereunder publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the "Proposed Amendments") and assumes that all such Proposed Amendments will be enacted in their present form. No assurances can be given that the Proposed Amendments will be enacted in the form proposed, if at all.

Except for the foregoing, this discussion does not take into account or anticipate any changes in law, whether by legislative, administrative or judicial decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian federal income tax considerations described herein.

WHILE INTENDED TO ADDRESS ALL MATERIAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS, THIS SUMMARY IS OF A GENERAL NATURE ONLY. THEREFORE, SECURITY HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES.

Generally, our shares will not be "taxable Canadian property" at a particular time provided that such shares are listed on a prescribed stock exchange (which proposed legislation includes the TSX Venture Exchange), the holder does not use or hold, and is not deemed to use or hold, our shares in connection with carrying on a business in Canada and the holder, persons with whom such holder does not deal at arm's length, or the holder and such persons, has not owned (or had under option) 25% or more of the issued shares of any class or series of our capital stock at any time within sixty months preceding the particular time. As of August 20, 2004, the company voluntarily de-listed from the TSX Venture Exchange and as such there may tax implications to United States shareholders and these security holders should consult their own tax advisors.

Generally, a holder of our shares that are not taxable Canadian property will not be subject to tax under the Canadian Tax Act on the sale or other disposition of shares.

Dividends paid or deemed to be paid on our shares are subject to non-resident withholding tax under the Canadian Tax Act at the rate of 25%, although such rate may be reduced under the provisions of an applicable income tax treaty or convention. For example, under the Tax Treaty, the rate is reduced to 5% in respect of dividends paid to a company that is the beneficial owner thereof, that is resident in the United States for purposes of the Tax Treaty and that owns at least 10% of our voting stock. In all other cases, the rate is reduced to 15% in respect of dividends paid to the beneficial owner thereof that is resident in the United States for purposes of the Tax Treaty.

Dividend Policy

The declaration of dividends on our common shares is within the discretion of our board of directors and will depend on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. At the present time, our anticipated capital requirements are such that we intend to follow a policy of retained earnings in order to finance the further development of our business.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Foreign Exchange Risk

The Company purchases goods for resale that are denominated in U.S. dollars and it earns its revenues in Canadian dollars. As such, it is subject to risk due to fluctuations in the U.S./Canadian exchange rate. The Company does not enter into derivative financial instruments to mitigate its exposure to foreign currency risk.

Interest Rate Risk

Interest on the Company's bank indebtedness and long-term debt is variable based on the lenders' prime rates. This exposes the Company to the risk of changing interest rates that may have an effect on its earnings in future periods. The Company does not use derivative instruments to reduce its exposure to interest rate risk.

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Disclosure under this item is not required as this Form 20-F is filed as annual report.

PART II

ITEM 13.

DEFAULTS, DIVIDENDS ARREARS AND DELINQUENCIES

As of February 28, 2006, there was no material default in the payment principal, interest, a sinking or purchase fund installment. Furthermore, there was no material default that was not cured relating to indebtedness of the Company or any of its subsidiaries.

The Company has not declared or issued any dividends for the fiscal year ended February 28, 2006.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

As at February 28, 2006, there have been no material modifications to the rights of security holders and the use of proceeds other than those indicated in news releases and referred to in the Form 20F annual report.

ITEM 15.

CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company's management, including its Chief Financial Officer and Chief Executive Officer, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-14(c) under the Exchange Act as of the end of the fiscal year, (the "Evaluation Date"). Based upon that evaluation, the Chief Financial Officer and Chief Executive Officer concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective as the controls and other procedures of the Company are designed to ensure that information required to be disclosed by the Company in the report that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Furthermore, disclosure controls and procedures include without limitation controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management including its principal executive and principal financial officers or persons performing similar functions, are appropriate to allow timely decisions regarding required disclosure and therefore are effective in timely alerting them to the material information relating to the Company (or its consolidated subsidiaries) required to be included in the Company's periodic SEC filings.

There were no significant changes made in the Company's internal controls during the period covered by this annual report on Form 20-F or, to the Company's knowledge, in other factors that could significantly affect these controls subsequent to the date of their execution, nor were there any significant deficiencies or material weaknesses in the Company’s internal controls requiring corrective actions.

The Company's management, including the Chief Financial Officer and Chief Executive Officer, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

ITEM 16.

AUDIT COMMITTEE FINANCIAL EXPERT, CODE OF ETHICS AND PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Committee Financial Expert

The Registrant currently has three independent directors on its audit committee two of whom are financial experts, Jan Karnik, who is the Chairman, and Amarjit Mann. Also, the Registrant retained the audit services of chartered accountants to perform the audit on its year-end consolidated financial statements.

Code of Ethics

The Registrant has adopted a formal written code of ethics and can be requested by the shareholders and is subject to the laws of the Province of British Columbia, Canada, whereby they are required to act honestly, in good faith and in the best interests of the Registrant.

Principal Accountant Fees and Services

The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by our independent auditors on a case-by-case basis. In making such determinations, the Audit Committee considers whether the provision of non-audit services is compatible with maintaining the auditor’s independence. All of the non-audit services provided by our independent auditors in the year ended February 28, 2006 were pre-approved in accordance with this policy.

The following table discloses accounting fees and services of the Registrant:


Type of Services Rendered	2007 Fiscal Year (CAD$)	2006 Fiscal Year (CAD$)
(a) Audit Fees	$39,751	$23,500
(b) Audit-Related Fees	-	$30,865
(c) Tax Fees	$10,000	$13,050
(d) All Other Fees	-	-

PART III

ITEM 17.

FINANCIAL STATEMENTS AND EXHIBITS

The following financial statements are incorporated by reference to this Item.

All financial statements herein are stated in accordance with Canadian Generally Accepted Accounting Principles and there have been no significant charges since the date of the annual financial statements.

(a)

The following Financial Statements pertaining to our consolidated financial statements are filed as part of this Registration Statement:


Exhibit Reference #
N/A	Report of Independent Registered Chartered Accountants
	Consolidated Balance Sheets	48
	Consolidated Statements of Operations	49
	Consolidated Statement of Shareholders' Equity (Deficiency)	50
	Consolidated Statements of Cash Flows	51
	Notes to the Consolidated Financial Statements	52

AMS Homecare Inc.

Consolidated Balance Sheets

(expressed in Canadian dollars)


As at February 28		2007		2006
Assets
Current
Receivables (Note 12(a)(d))	$	892,562	$	1,176,052
Inventories		1,608,584		1,566,845
Prepaids		98,410		87,802
Income tax recovery		-		15,000
		2,599,556		2,845,699
Plant and equipment (Note 3)		78,970		83,627
Intangible assets (Note 4)		67,867		58,133
	$	2,746,393	$	2,987,459
Liabilities
Current
Bank demand loan (Note 5)	$	1,811,101	$	1,513,412
Payables and accruals		260,846		504,920
Current portion of long-term debt (Note 6)		96,662		111,856
		2,168,609		2,130,188
Long-term debt (Note 6)		595,910		692,572
Due to shareholders (Note 7)		876,607		501,607
		3,641,126		3,324,367
Capital Stock and Shareholders’ Deficiency
Capital stock (Note 8)		2,940,263		2,940,263
Deficit		(3,834,996)		(3,277,171)
		(894,733)		(336,908)
	$	2,746,393	$	2,987,459

Commitments (Notes 11 and 12)

Subsequent Events (Note 16)

Contingencies (Note 18)

Approved on behalf of the Board


“Jan Karnik” Director	“Rani Gill” Director

See accompanying notes to the consolidated financial statements.

AMS Homecare Inc.

Consolidated Statements of Operations

(expressed in Canadian dollars)


		2007		2006		2005
Sales	$	6,714,106	$	6,946,317	$	5,470,434

Cost of sales		3,791,750		4,127,328		3,308,861
Gross profit		2,922,356		2,818,989		2,161,573
Expenses
Selling
Advertising and promotion		216,582		207,050		133,619
Communication		68,265		71,595		39,300
Freight and delivery		166,938		153,043		115,477
Salaries and benefits		654,308		559,975		442,863
Stationery and supplies		13,042		11,999		12,316
Travel		75,766		103,492		84,394
		1,194,901		1,107,154		827,969
General
Bad debts		13,949		1,467		51,301
Amortization		55,034		77,125		48,673
Insurance		74,200		64,977		49,595
Interest and bank charges		194,100		153,183		118,838
Interest on long-term debt		123,727		63,887		41,675
Occupancy		258,993		240,589		163,350
Office and supplies		99,875		115,522		70,605
Professional fees		268,368		383,224		171,453
Public relations		45,759		52,510		105,701
Salaries and benefits		496,993		384,832		419,940
Transfer agent and regulatory		31,315		19,512		26,448
Travel		57,090		34,905		27,467
		1,719,403		1,591,733		1,295,046
Total expenses		2,914,304		2,698,887		2,123,015
Operating income		8,052		120,102		38,558
Other income (expense) (Note 17)
Other income		3,369		2,722		-
Other expense		(57,800)		-		-
Directors’ fees and employee compensation		-		(211,866)		-
Compensation for damages		(511,393)		(3,417,844)		-
		(565,824)		(3,626,988)		-
Net earnings (loss) before income taxes		(557,772)		(3,506,886)		38,558
Income taxes (Note 9)		53		(20,053)		18,800
Net earnings (loss)	$	(557,825)	$	(3,486,833)	$	19,758
Weighted average common shares outstanding		235,572,391		74,075,541		46,632,453
Earnings (loss) per share, basic and fully diluted	$	(0.002)	$	(0.047)	$	0.01

See accompanying notes to the consolidated financial statements.

AMS Homecare Inc.

Consolidated Statement of Capital Stock and

Shareholders’ Equity (Deficiency)

(expressed in Canadian dollars)

Years Ended February 28, 2007, 2006 and 2005



	Common Shares Issued
	Number of Shares			Amount		Retained Earnings (Deficit)		Total

Balance, February 29, 2004	46,398,891	$	75,400		$	189,904	$	265,304
Conversion of warrants into common shares (Note 8(a))	250,000			35,000		-		35,000
Net earnings, year ended February 28, 2005	-			-		19,758		19,758
Balance, February 28, 2005	46,648,891			110,400		209,662		320,062
Cancellation of shares (Note 8(b))	(76,500)			-		-		-
Shares issued for compensation and damages
(Note 8(c))	189,000,000			2,829,863		-		2,829,863
Net loss, year ended February 28, 2006	-			-		(3,486,833)		(3,486,83)
Balance, February 28, 2006	235,572,391			2,940,263		(3,277,171)		(336,908)
Net loss, year ended February 28, 2007	-			-		(557,825)		(557,825)
Balance, February 28, 2007	235,572,391	$		2,940,263	$	(3,834,996)	$	(894,733)

See accompanying notes to the consolidated financial statements.

AMS Homecare Inc.

Consolidated Statements of Cash Flows

(expressed in Canadian dollars)


For the Years Ended February 28,		2007		2006		2005
Cash derived from (applied to):
Operating Activities
Net earnings (loss)	$	(557,825)	$	(3,486,833)	$	19,758
Amortization		55,034		77,125		48,673
Loss (gain) on sale of property and equipment		-		-		2,031
Shares issued for compensation and damages (Note 17)		-		2,829,863		-
Changes in non-cash operating working capital (Note 10)		2,039		(105,723)		(664,096)
		(500,722)		(685,568)		(593,634)
Financing Activities
Proceeds from bank demand loan		297,689		359,886		374,035
Proceeds from long-term debt		-		500,000		250,000
Repayment of long-term debt		(111,856)		(103,295)		(49,765)
Advances from shareholders		375,000		-		59,350
Common stock issued		-		-		35,000
		560,833		756,591		668,620
Investing Activities
Purchase of equipment		(18,871)		(51,485)		(27,893)
Acquisition of intangible assets		(41,240)		(19,538)		(47,093)
		(60,111)		(71,023)		(74,986)
Net change in cash		-		-		-
Cash, beginning of year		-		-		-
Cash, end of year	$	-	$	-	$	-
Non-cash transactions
Common shares issued for compensation and damages (Note 17)	$	-	$	2,829,863	$	-
Supplemental cash flow information
Interest	$	269,649	$	182,567	$	127,258
Income taxes	$	-	$	14,947	$	-

See accompanying notes to the consolidated financial statements.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

Operations

AMS Homecare Inc. is a corporation incorporated under the Company Act (British Columbia, Canada) on March 5, 1981. The Company is currently listed on the OTCBB with the symbol AHCKF. The Company has two subsidiaries, AMS Homecare Canada Inc. and AMS Homecare USA Inc. AMS Homecare Canada Inc. is a purveyor of mobility equipment, durable and disposable medical products, and patient monitoring technology with a head office in Delta, B.C. and branch locations in Ontario and Quebec. AMS Homecare USA Inc. operates as a retail outlet in Bellevue, WA under the trade name 65Plus.

These financial statements were prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of business. With the subsidiary, AMS Homecare Canada Inc., having filed for bankruptcy subsequent to year-end, the Company’s ability to continue as a going concern is dependent on the ability of the Company to raise equity financing, and the attainment of profitable operations, external financings and further share issuances to meet the Company’s liabilities as they become payable.

Summary of significant accounting policies

Basis of presentation

These consolidated financial statements are presented in accordance with Canadian generally accepted accounting principles and include the accounts of the Company and its wholly owned subsidiaries AMS Homecare Canada Inc. and AMS Homecare USA Inc. The accounting principles used conform in all material respects to those generally accepted in the United States of America except as disclosed in Note 19. All significant intercompany balances and transactions are eliminated on consolidation.

Use of estimates

Preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the year. Actual results could differ from those reported.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectibility is reasonably assured.

Research and product development

Research costs are expensed as incurred. Product development costs are expensed as incurred except when the costs associated with the process are clearly identifiable, the Company has indicated its intention to use the process, and funding for continued development is available. In these circumstances, the costs are deferred and amortized on a systematic basis once the Company has commenced selling the developed product. Should the conditions for deferral cease to exist, such deferred costs are charged as a period expense.

Inventories

Inventories, which are predominately finished goods, are valued at the lower of cost and net realizable value. Cost is determined using a weighted moving average calculation method.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

Summary of significant accounting policies, (Continued)

Plant and equipment

Plant and equipment assets are recorded at cost less accumulated amortization, and amortization is calculated on the declining balance method at the following rates:


Automobile	30%
Office furniture and equipment	20%
Warehouse equipment	30%
Leasehold improvements	20%
Store fixtures	20%
Computer hardware	30%
Computer software	50%

The Company reviews the carrying value of its plant and equipment assets on a regular basis and where these carrying values are estimated to exceed the net recoverable amounts, provision is made for these decreases in value.

Distribution rights

The distribution rights are amortized over the term of the distribution agreement which is five years. Management assesses these distribution rights for impairment at each balance sheet date and will record an impairment adjustment in the period in which such a write-down is warranted.

Trademarks and patents

Trademarks consist of legal fees incurred to register certain corporate trademarks. These trademarks are amortized over 60 months on a straight-line basis. Patented technologies are amortized over 180 months on a straight-line basis.

Financing costs

The financing costs are amortized over the term of the loan on a straight-line basis.

Intellectual property

Intellectual property is to be amortized over ten years on a straight-line basis. The Company will review the property for impairment in its value and will record an impairment adjustment in the year in which such a write-down is identified.

Foreign currency

The Company’s and its subsidiaries’ functional currency is the Canadian dollar. Monetary assets and liabilities denominated in United States dollars for the current fiscal year were translated to Canadian dollars at the year-end exchange rate of $1.1698. All income and expenses for the fiscal years were translated at average exchange rates prevailing during the period. Non-monetary assets and liabilities are translated at the rates prevailing at the dates the assets were acquired or liabilities incurred. Exchange gains and losses arising on translation are included in earnings.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

Summary of significant accounting policies, (Continued)

Income taxes

The Company follows the liability method of accounting for income taxes based on the accounting recommendations issued by the Canadian Institute of Chartered Accountants. Under the liability method, future income tax assets and liabilities are computed based on differences between the carrying amount of assets and liabilities on the balance sheet and their corresponding tax values, using the enacted income tax rates at each balance sheet date. Future income tax assets can also result from unused loss carry-forwards and other deductions. The valuation of any future income tax assets is reviewed annually and adjusted, if necessary, by use of a valuation allowance to reflect the uncertainty that the assets will be realized.

Earnings (loss) per share

Earnings (loss) per share are calculated using the weighted average number of shares outstanding. There were no unexercised warrants as at February 28, 2007.

Statement of cash flows

For the purpose of the statement of cash flows, the Company considers cash on hand balances with banks and highly liquid temporary money market instruments with original maturities of three months or less as cash or cash equivalents. Bank borrowings are considered to be financing activities.

Stock-based compensation

The Company has a stock-based compensation plan as described in Note 8. In accordance with the new recommendations of the CICA for accounting for stock-based compensation, the Company has adopted the fair value method of accounting for stock-based compensation.


3. Plant and equipment						2007		2006
		Cost		Accumulated Amortization		Net Book Value		Net Book Value
Automobile	$	21,548	$	11,745	$	9,803	$	6,609
Office furniture and equipment		41,190		30,464		10,726		11,950
Warehouse equipment		26,663		20,956		5,707		1,837
Leasehold improvements		3,766		1,020		2,746		3,389
Store fixtures		36,735		9,746		26,989		32,012
Computer hardware and software		97,095		74,096		22,999		27,830
	$	226,997	$	148,027	$	78,970	$	83,627

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005


4. Intangible assets						2007		2006
		Cost		Accumulated Amortization		Net Book Value		Net Book Value
Distribution rights	$	50,000	$	50,000	$	-	$	15,000
Trademarks and patents		70,326		54,191		16,135		14,515
Financing costs		52,500		39,125		13,375		18,875
Intellectual property		13,042		1,621		11,421		2,434
Product development costs		36,063		9,127		26,936		7,309
	$	221,931	$	154,064	$	67,867	$	58,133

Bank demand loan

The Company has pledged certain of its assets as security for an operating line of credit consisting of direct demand loan borrowings and documentary letters of credit to a maximum of $2,000,000. The demand loan bears interest at the Royal Bank prime rate plus 2.75% per annum. The security includes a first floating charge over all assets and an assignment of inventories. This facility contains certain covenants with respect to total liabilities to tangible net worth. As at year end, the Company was in violation of these covenants.


6. Long-term debt		2007		2006
Loan of $250,000, interest at prime plus 10.5% per annum, repayable over 60 months in blended monthly payments of $6,146, due November 2007	$	46,622	$	108,438

Loan of $250,000, interest at floating base rate plus variance of 7.5% per annum, with the first principal payment of $3,970 on February 4, 2005, followed by 59 consecutive monthly installments of $4,170 commencing on March 3, 2005, with the final payment on January 3, 2010.		145,950		195,990

Loan of $500,000, interest at 17% per annum, repayable over 60 months with no principal payment until maturity on November 15, 2010		500,000		500,000
		692,572		804,428
Less current portion		96,662		111,856
	$	595,910	$	692,572

These loans are secured by a general security agreement from the Company in all present and after-acquired property subject to prior charges by the bank in addition to personal guarantees from the President and CEO and contain certain covenants with respect to tangible net worth, ratio of debt to tangible net worth, working capital ratio and ratio of current assets to current liabilities. As at February 28, 2007, the Company was in violation of these loan covenants.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

6. Long-term debt, (Continued)

Principal repayments of the Long-term debt are as follows:


2008		96,662
2009		50,040
2010		45,870
2011		500,000
	$	692,572

Due to shareholders

Advances received from shareholders are unsecured. Shareholders have agreed not to demand repayment in advance of March 1, 2008. The Company agrees to pay/accrue interest of $3,200 (USD $2,800) per month to the shareholders, an effective interest rate of 8% per annum.

Capital stock

Authorized:

300,000,000 common voting shares without par value

200,000,000 preferred shares without par value

Issued and Fully Paid:

235,572,391 Common Shares (2006: 235,572,891; and 2005: 46,648,891)

On March 16, 2004, 250,000 warrants were converted into the Company’s common shares at a price of fourteen cents per share.

On December 8, 2005, 76,500 common shares were cancelled and returned to treasury.

On January 6, 2006, the Company issued 189,000,000 common shares at a value of $2,829,863. Of the total, 13,000,000 common shares were issued to directors, excluding the President and CEO, for services provided since 2002, 1,150,000 shares were issued to employees for compensation, and 174,850,000 shares were issued to the President and to the CEO for some of the damages suffered in the reverse take-over. (Notes 13, 17, and 18)

Stock Options and Warrants:

Warrants

There were no warrants outstanding as at February 28, 2007.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

9. Income taxes

The components of the future income tax assets and liabilities at February 28, 2007 and 2006 are as follows:


		2007		2006
Plant and equipment	$	6,600	$	7,800
Intangible assets		8,600		2,700
Non-capital losses		1,477,000		1,288,300
		1,492,200		1,298,800
Valuation allowance		(1,492,200)		(1,298,800)
	$	Nil	$	Nil

The Company’s non-capital losses available to be carried forward are comprised as follows:


		2007		2006
Canada	$	3,193,000	$	3,119,000
United States		775,000		304,000
	$	3,968,000	$	3,423,000

The Company’s non-capital losses that, if not used, will expire as follows:


			Date of Expiry
Canada
Year ended February 29, 2004	$	3,000	2014
Year ended February 28, 2006		3,116,000	2016
Year ended February 28, 2007		74,000	2017
	$	3,193,000
United States
Year ended February 28, 2006	$	304,000	2025
		471,000	2026
	$	775,000

The potential future tax benefit that may be derived from these losses and expenditures has been offset by a valuation allowance because it is uncertain that sufficient future income will be earned to realize those benefits. Also, the availability of the above deductions for income tax purposes may be restricted if there is a change in control of the Company. These losses are subject to acceptance by local tax authorities.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

Income taxes, (Continued)

The following schedule reconciles the expected statutory tax provision (recovery) with the tax provision (recovery) recorded in these consolidated financial statements:


		2007	2006		2005
Net earnings (loss), before income taxes
Canada	$	(88,509)	$	(3,204,886)	$	38,558
United States		(469,263)		(302,000)		-
	$	(557,772)	$	(3,506,886)	$	38,558
Expected provision (recovery)
Canada at 38%	$	(33,600)	$	(1,217,900)	$	14,652
United States at 34%		(159,500)		(102,700)		-
		(193,100)		(1,320,600)		14,652
Utilization of non-capital losses				-		(4,755)
Prior year tax provision adjustment		-		(5,053)		-
Timing differences		(247)		6,800		8,903
Valuation allowance		193,400		1,298,800		-
Income tax provision (recovery)	$	53	$	(20,053)	$	18,800

10. Changes in non-cash operating working capital


		2007	2006		2005
Receivables	$	(283,490)	$	(479,493)	$	(72,858)
Inventories		41,739		30,205		(597,747)
Prepaids		10,608		40,627		(21,848)
Payables and accruals		244,074		337,938		9,557
Income taxes		(15,000)		(35,000)		18,800
	$	2,069	$	(105,723)	$	(664,096)

11.

Operating Leases

The Company is committed to operating leases for premises and vehicles. Future minimum payments are as follows:


2007	$	365,299
2008		66,273
2009		14,355
2010		9,570
	$	455,497

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

12.

Commitments

On March 28, 2005, the Company announced the signing of a binding agreement with Wireless 2000 of Burnaby, British Columbia to acquire the exclusive distribution rights for a term of 25 years to distribute its products into the healthcare, residential elder care, medical offices and hospital markets in North America. The terms of the agreement call for Wireless 2000 to deliver a commercial product to the Company within one year. The Company will pay $350,000 in total over this period for the exclusive distribution rights. The Company will also pay a 20% royalty to Wireless 2000 on the revenues of all Wireless 2000 products sold. As at February 28, 2007, the Company has paid a total of $200,000 for the exclusive distribution rights. These payments are included in receivables as they are refundable and will be repaid if Wireless 2000 fails to deliver a functional commercial quality product.

On July 5, 2005, the Company announced an agreement to acquire a fifteen percent interest in Vytron Communications (“Vytron”) of Toronto for $1.5 million dollars. The acquisition is subject to an independent appraisal of the assets of Vytron in addition to certain other conditions. This acquisition will allow the Company to further its vision of providing improved security and monitoring in Healthcare facilities. Currently, Vytron has not met certain terms and conditions and the Company is awaiting response from Vytron.

On July 11, 2005, the Company announced the acquisition of exclusive distribution rights to sell TOTALtrak, Inc.’s (“TOTALtrak”) product line to the healthcare industry in Canada subject to certain terms and conditions. The distribution rights allow the Company to continue to assemble a range of monitoring assets to further enhance and expand its IER Systems Division. TOTALtrak is a high-tech Asset Management Company that develops products utilizing state-of-the-art radio frequency identification (RFID) and patent pending multiple range identification (MRID) technologies, global positioning technologies and advanced programming to create TOTAL Asset Management Systems. Currently, TOTALtrak has not met certain terms and conditions and the Company is attempting to re-negotiate the agreement.

As at February 28, 2007, the Company had no outstanding letters of credit for inventory ($278,934 - February 28, 2006).

13.

Related Party Transactions

The Company paid/accrued $37,991 (2006 – $41,257, 2005 - $43,343) in interest during the year to the President of the Company on shareholders advances totalling $501,607. (Note 7)

The Company paid a total of $312,000 (2006 - $206,500, 2005 - $286,000) in management fees to the President and to the CEO in the normal course of operations.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

13.

Related Party Transactions, (Continued)

The Company paid a total of $312,000 (2006 - $206,500, 2005 - $286,000) in management fees to the President and to the CEO in the normal course of operations.

14.

Financial instruments and risk management

Fair value

The Company has various financial instruments including receivables, income tax recoveries, bank demand loan, payables and accruals, and long-term debt. It is not practicable to estimate the fair value of the amounts due from related parties or due to shareholders. The fair value of all other financial instruments approximates their recorded amounts.

Credit risk

The Company is subject to credit risk. To mitigate this, the Company actively manages and monitors its receivables and obtains security where warranted.

Foreign exchange risk

The Company purchases goods for resale that are denominated in U.S. dollars and it earns its revenues in Canadian dollars. As such, it is subject to risk due to fluctuations in the U.S./Canadian exchange rate. The Company does not enter into derivative financial instruments to mitigate its exposure to foreign currency risk.

Interest rate risk

Interest on the Company’s bank indebtedness and long-term debt is variable based on the lenders’ prime rates. This exposes the Company to the risk of changing interest rates that may have an effect on its earnings in future periods. The Company does not use derivative instruments to reduce its exposure to interest rate risk.

15.

Economic dependence

Approximately 90% (February 28, 2006: 86%; February 28, 2005: 85%) of sales are from products provided by the Company’s largest supplier with the balance being comprised of other products, patient monitoring services, and retail sales in Bellevue, WA.

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

16.

Subsequent events:

On August 24, 2007, the subsidiary, AMS Homecare Canada Inc., filed for bankruptcy.

Subsequent to February 28, 2007, AMS Homecare Inc. entered into a marketing agreement with HG Soliman Enterprises Ltd. to jointly cooperate to market AMS products.

17. Other Income (Expense)

The other income (expense) amounting to $3,626,988 (2005: $Nil, 2004: $2,983) are comprised of the following:


		2007		2006		2005
Other income (a)	$	3,369	$	2,722	$	-
Other expense (a)		(57,800)		-		-
Directors’ fees and employee compensation (b)		-		(211,866)		-
Damages paid to the Company’s President and CEO (c)		(511,393)		(3,417,844)		-
	$	(565,824)	$	(3,626,988)	$	-

Other income and expense

Foreign exchange translation gain during the current fiscal year was $3,369 and $2,722 for the previous year. During the current fiscal year, the Company wrote-off a deposit paid to V, L.L.C. of Richmond, VA in the amount $57,800 (USD $50,000). This deposit was for the exclusive licensing agreement with

V, L.L.C. to apply Nemesysco’s Layered Voice Analysis (LVA) software technology. The Company is currently negotiating directly with Nemesysco for the same technology.

Directors’ fees & employee compensation

During the previous fiscal year, the Company issued 13,000,000 common shares at a value of $194,643 to compensate the current directors for their services rendered to the Company from the time of its listing on the TSX Venture Exchange in 2002 to date. The Company also issued 1,150,000 common shares at a value of $17,219 to compensate certain employees for their services from 2002 to date. (Note 8 and 13)

Damages paid to the Company’s President and to the CEO

During the current year, the Company paid in cash $511,393 (2006: - $799,847) to the CEO in respect of some of the damages suffered by him during and after the RTO process. In the previous year, the Company also issued 174,850,000 common shares valued at $2,617,997 to the President and to the CEO of the Company in respect of some of the damages suffered by them during the RTO process. (Notes 8, 13, and 18))

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

18.

Contingencies

On March 11, 2005, the Company announced that it had filed a Statement of Claim in British Columbia Supreme Court alleging the TSX Venture Exchange and certain of its employees acted deliberately to delay the Company’s reverse takeover (RTO) of Shoprider Canada Mobility Products between August 2000 and February 2002. Based on the review of disclosure documents obtained from the TSX Venture Exchange in April 2005 by management, the Company will proceed forward with this lawsuit. During the current fiscal year, the Company paid a total of $511,393 in cash to the CEO as compensation for some of the damages. In the previous fiscal year, the Company paid $3,417,844 in cash and common shares to the President and to the CEO as compensation for some of the damages. Additional costs may be incurred; however no accrual has been recorded at this point until actual costs can be ascertained. (Notes 8, 13, and 17)

19.

Differences between Canadian and U.S. generally accepted accounting principles and practices,

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”) which differ in certain respects from those principles and practices that the Company would have followed had its financial statements been prepared in accordance with accounting principles and practices accepted in the United States of America (“U.S. GAAP”). The differences between the Canadian and U.S. bases that affect these consolidated financial statements are as follows:

(1)

Under Canadian GAAP, product development costs can be deferred and amortized on a systematic basis when the costs associated with the process are clearly identifiable, the Company has indicated its intention to use the process and funding for continued development is available. Under U.S. GAAP, such development costs are expensed as incurred.

(2)

Under U.S. GAAP, transaction costs related to a reverse-takeover are charged to equity only to the extent of the cash held by the accounting subsidiary. All transaction costs incurred in excess of the cash acquired are charged to period expenses. Under Canadian GAAP, such costs are charged to equity regardless of the accounting subsidiary’s cash balance.

Had the Company followed U.S. GAAP, the effect on the consolidated financial statements of the Company of the foregoing differences is set out below:


Balance sheets				2007		2006
Assets under Canadian GAAP			$	2,746,393	$	2,987,459
Product development costs expensed under U.S. GAAP				(26,936)		(7,309)
Assets under U.S. GAAP			$	2,719,457	$	2,980,150
Shareholders’ equity (deficiency) under Canadian GAAP			$	(894,733)	$	(336,908)
Product development costs expensed under U.S. GAAP				(26,936)		(7,309)
Shareholders’ equity (deficiency) under U.S. GAAP			$	(921,669)	$	(344,217)

Statements of operations		2007		2006		2005
Net earnings (loss) under Canadian GAAP	$	(557,825)	$	(3,486,833)	$	19,758
Product development costs expensed under U.S. GAAP		3,335		2,437		3,356
Net earnings (loss) under U.S. GAAP	$	(554,490)	$	(3,484,396)	$	23,114
Weighted average common shares outstanding		235,572,391		74,075,541		46,632,453
Earnings (loss) per share, basic and fully diluted	$	(0.002)	$	(0.04)	$	0.01

AMS Homecare Inc.

Notes to the Consolidated Financial Statements

(expressed in Canadian dollars)

For the Years Ended February 28, 2007, 2006 and 2005

19.

Differences between Canadian and U.S. generally accepted accounting principles and practices, (Continued)


Statements of cash flows		2007		2006		2005
Cash (applied to):
Operating Activities under Canadian and U.S. GAAP	$	(500,722)	$	(685,568)	$	(593,634)
Financing Activities under Canadian and U.S. GAAP	$	560,833	$	756,591	$	668,620
Investing Activities under Canadian and U.S. GAAP	$	(60,111)	$	(71,023)	$	(74,986)
No differences under Canadian and U.S. GAAP for non-cash transactions not included in cash flows

Recent United States accounting pronouncements

In November 2004, the FASB Issued SFAS No. 151, Inventory Costs, an amendment of APB No. 43, Chapter 4.

SFAS No. 151 amends APB No. 43, Chapter 4, to clarify that abnormal amount of idle facility expense, freight, handling costs and wasted material (spoilage) should be recognized as current period charges. In addition, SFAS No. 151 requires that allocation of fixed production overhead to the cost of conversion be based on normal capacity of the production facilities. The provision of SFAS No. 151 shall be effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company does not expect the adoption of SFAS No. 151 to have a material impact on its consolidated financial statements.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary Assets – An Amendment of APB Opinion No. 29 (“APB No. 29”), Accounting for Non-monetary Transactions. SFAS No. 153 eliminates the exception from fair value measurement for non-monetary exchanges of similar productive assets in paragraph 21(b) of APB No. 29 and replaces it with an exception for exchanges that do not have commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for fiscal periods beginning after June 15, 2005. The Company does not expect the adoption of SFAS No. 153 to have a material impact on its consolidated financial statements.

In December 2004, the FASB issued Statement No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 123R”), which requires the measurement and recognition of compensation expense for all stock-based compensation payments. SFAS 123R is effective for all annual periods beginning after June 15, 2005. In March 2005, The Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 relating to the adoption of SFAS123R. The Company will adopt SFAS 123R in the first quarter of fiscal 2007 and will continue to evaluate its impact on its operating results and financial condition. Since the Company currently has no stock options outstanding, the adoption of this statement has no current impact on these consolidated financial statements.

In June 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes, and FASB No. 3, Reporting Accounting Changes in Interim Financial Statements. The statement applies to all voluntary changes in accounting principle and changes the requirements for accounting for and reporting a change in accounting principle. SFAS No. 154 requires retrospective application to prior periods’ consolidated financial statements of a voluntary change in accounting principle unless to do so is impracticable. It is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Earlier application is permitted for accounting changes and corrections of errors made occurring in fiscal years beginning after June 1, 2005. The Company does not expect the effect of SFAS No. 154 to have a material impact on its consolidated financial statements.

The following exhibits are incorporated by reference to this Item. The following Exhibits are filed with this annual report:


Exhibit Reference	Name
9.1	Consent of STS Partners LLP, Chartered Accountants
9.2	Consent of HLB Cinnamon Jang Willoughby
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Registration Statement on its behalf.


		AMS Homecare Inc.,
		a British Columbia Corporation

Dated: October 17, 2007	By:	/s/ Harj Gill
		Harj Gill
		President and Chief Executive Officer