UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Amendment No.1)

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended:     December 31, 2008

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 000-52117

IMPACT MEDICAL SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-515331
(State or other jurisdiction of	(I.R.S. employer
incorporation or formation)	identification number)

 17011 Beach Blvd., Suite 900

Huntington Beach, CA  92647

  (Address of principal executive offices) 

Issuer’s telephone number:	(514) 843-5959 ext. 110
Issuer’s facsimile number:	(905) 248-5353

N/A

(Former name, former address and former

fiscal year, if changed since last report)

Copies to:

The Sourlis Law Firm

Virginia K. Sourlis, Esq.

The Galleria

2 Bridge Avenue

Red Bank, New Jersey 07701

 (732) 530-9007 

www.SourlisLaw.com

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.0001 per share

 (Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨ No x

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

Yes ¨ No x  

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

Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    

x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨Nox

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as a specified date within the past 60 days:  $2,503,587 based on a sales price of $0.35 per share on May 6, 2009.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

As of the date of this Amendment No. 1, there were 20,718,477 shares of our common stock and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

None

EXPLANTORY NOTE

The Registrant is filing this Amendment No. 1 to its Form 10-K for the fiscal year ended December 31, 2008 pursuant to a comment letter, dated April 27, 2009, received from the Securities and Exchange Commission on April 27, 2009.

The Auditors’ report included in the Company’s original Form 10-K for the fiscal year ended December 31, 2008 did not refer to the balance sheet for the year ended December 31, 2007 in so far as it relates to their conclusion that the financial statements present fairly the financial position of the Company.

The amended Auditors’ report included in this Amendment No. 1 has been amended to comply with the SEC’s comment and is included in this Amendment No. 1.

This Amendment No.1 on Form 10-K for the Registrant’s year ended December 31, 2008 incorporates by reference all of the other items of the originally filed Form 10-K.

The financial statements included in this Amendment No. 1 have not been changed from the original filing.

Item 8.  Financial Statements and Supplementary Data.

Impact Medical Solutions, Inc.

Financial Statements

For the fiscal year ended December 31, 2008

Contents

Index to Financial Statements	F-1
Report of Farber Hass Hurley LLP, a PCAOB Registered Accounting Firm	F-2
Audited Financial Statements
Balance Sheets	F-3
Statements of Operations	F-4
Statements of Cash Flows	F-5
Statements of Changes in Stockholders’ Equity	F-6
Notes to Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Impact Medical Solutions, Inc.

We have audited the accompanying balance sheet of Impact Medical Solutions, Inc. (the “Company”), as of December 31, 2008, and December 31, 2007, and the related statements of operations, shareholders’ equity (deficit), and cash flows for each of the years ended December 31, 2008, 2007 and 2006 and October 20, 1997 (date of inception) to December 31, 2008.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2008 and December 31, 2007, and the results of its operations and its cash flows for each of the years ended December 31, 2008, 2007 and 2006 and October 20, 1997 (date of inception) to December 31, 2008, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/  Farber Hass Hurley LLP

April 14, 2009

Camarillo, California

F-2

Impact Medical Solutions, Inc.

(A Development Stage Company)

Balance Sheets

	December 31,
	2008			2007
ASSETS
Current assets
Cash	$	34,015		$	15,144
Prepaid expenses		5,218			26,686
Total current assets		39,233			41,830
Furniture and equipment, net of accumulated depreciation of $58,119 and $43,704 at December 31, 2008 and 2007, respectively		17,270			27,171
Patent, net of accumulated amortization of $156,864 and $127,452 at December 31, 2008 and 2007, respectively		343,136			372,548
	$	399,639		$	441,549
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Loans from related parties, net of unamortized discount of $3,258 and $65,447 at December 31, 2008 and 2007, respectively	$	311,896		$	257,366
Convertible debt, net of unamortized discount of $4,267 and $16,910 at December 31, 2008 and 2007, respectively		448,724			316,081
Other loan payable, net of unamortized discount of $116 at December 31, 2008		9,884			-
Note payable		34,613			34,613
Accounts payable		279,282			269,875
Accrued interest		153,229			83,391
Accrued vacation		64,133			64,133
Accrued salaries, bonuses and other payroll related items		589,600			330,350
Other accrued liabilities		30,000			-
Total current liabilities		1,921,361			1,355,809
Commitments and contingencies		-			-
Shareholders' deficit
Preferred stock, 10,000,000 shares authorized, $.0001 par value, no shares issued and outstanding		-			-
Common stock, 100,000,000 shares authorized, $.0001 par value, 18,768,466 and 16,478,465 shares issued and outstanding at December 31, 2008 and 2007, respectively		1,877			1,648
Additional paid-in capital		6,432,631			5,226,178
Deferred option and warrant costs		(612,081	)		(387,437	)
Deficit accumulated during the development stage		(7,344,149	)		(5,754,649	)
Total shareholders' deficit		(1,521,722	)		(914,260	)
	$	399,639		$	441,549

The accompanying notes are an integral part of these financial statements.

F-3

Impact Medical Solutions, Inc.

(A Development Stage Company)

Statements of Operations

	Year ended December 31,									Cumulative from inception (October 20, 1997) to December 31,
	2008			2007			2006			2008
Costs and expenses:
Research and development	$	134,327		$	151,217		$	212,060		$	872,052
Medical and clinical		123,852			105,767			249,165			1,229,565
General and administrative		960,683			666,632			1,368,915			4,231,987
Operating loss		(1,218,862	)		(923,616	)		(1,830,140	)		(6,333,604	)
Other income (expense):
Interest expense		(369,775	)		(338,294	)		(246,450	)		(1,004,601	)
Interest income		-			15			20			290
		(369,775	)		(338,279	)		(246,430	)		(1,004,311	)
Loss before provision for taxes		(1,588,637	)		(1,261,895	)		(2,076,570	)		(7,337,915	)
Provision for taxes		863			1,594			577			6,234
Net loss	$	(1,589,500	)	$	(1,263,489	)	$	(2,077,147	)	$	(7,344,149	)
Basic and diluted net loss per share	$	(0.09	)	$	(0.08	)	$	(0.13	)
Basic and diluted weighted average number of common shares outstanding		16,833,629			15,996,205			15,426,710

The accompanying notes are an integral part of these financial statements.

F-4

Impact Medical Solutions, Inc.

(A Development Stage Company)

Statements of Cash Flow

	Year ended December 31,									Cumulative from inception (October 20, 1997) to December 31,
	2008			2007			2006			2008
Cash flows from operating activities:
Net loss	$	(1,589,500	)	$	(1,263,489	)	$	(2,077,147	)	$	(7,344,149	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		43,827			43,970			43,584			215,279
Amortization of loan discount		287,262			290,227			233,708			822,899
Issuance of common stock for services		440,259			81,464			50,000			631,883
Issuance of stock options and warrants for services		59,233			64,119			927,257			1,179,837
Decrease (increase) in prepaid expenses		21,468			(21,677	)		(2,410	)		(5,218	)
Increase (decrease) in accounts payable		9,407			103,402			61,486			279,282
Increase (decrease) in accrued expenses		359,088			171,474			51,778			836,962
Net cash used by operating activities		(368,956	)		(530,510	)		(711,744	)		(3,383,225	)
Cash flows from investing activities:
Capital expenditures		(4,514	)		(564	)		(3,358	)		(75,685	)
Net cash used by investing activities		(4,514	)		(564	)		(3,358	)		(75,685	)
Cash flows from financing activities:
Proceeds from loans from related parties		21,500			175,000			-			341,500
Proceeds from convertible debt		120,000			332,991			-			452,991
Proceeds from loans from others		10,000			-			-			10,000
Payments on note payable		-			-			(4,000	)		(65,387	)
Issuance of common stock, net of costs		270,000			-			517,305			2,780,168
Net cash provided by financing activities		421,500			507,991			513,305			3,519,272
Effect of exchange rate changes		(29,159	)		27,320			-			(26,347	)
Net increase (decrease) in cash		18,871			4,237			(201,797	)		34,015
Cash, beginning of period		15,144			10,907			212,704			-
Cash, end of period	$	34,015		$	15,144		$	10,907		$	34,015
Non-cash investing and financing activities:
Issuance of common stock & note payable for patent	$	-		$	-		$	-		$	500,000
Issuance of warrants with debt	$	212,546		$	353,036		$	244,282		$	830,539

The accompanying notes are an integral part of these financial statements.

F-5

Impact Medical Solutions, Inc.

(A Development Stage Company)

Statements of Changes in Shareholders’ Equity (Deficit)

From Inception (October 20, 1997) to December 31, 2008

										Deficit
	Common Stock									Accumulated
					Additional		Deferred Share,			During the			Total
	Number				Paid-in		Option &			Development			Shareholders'
	of Shares		Total		Capital		Warrant Cost			Stage			Equity (Deficit)
Initial capitalization		3,000,000	$	1,500	$	1,250	$	-		$	-		$	2,750
Net loss for 1997		-		-		-		-			(2,750	)		(2,750	)
Balance, December 31, 1997		3,000,000		1,500		1,250		-			(2,750	)		-
Net loss for 1998		-		-		-		-			-			-
Balance, December 31, 1998		3,000,000		1,500		1,250		-			(2,750	)		-
Net loss for 1999		-		-		-		-			-			-
Balance, December 31, 1999		3,000,000		1,500		1,250		-			(2,750	)		-
Net loss for 2000		-		-		-		-			-			-
Balance, December 31, 2000		3,000,000		1,500		1,250		-			(2,750	)		-
Net loss for 2001		-		-		-		-			-			-
Balance, December 31, 2001		3,000,000		1,500		1,250		-			(2,750	)		-
Net loss for 2002		-		-		-		-			-			-
Balance, December 31, 2002		3,000,000		1,500		1,250		-			(2,750	)		-
Net loss for 2003		-		-		-		-			(181,023	)		(181,023	)
Shares issued for patent		8,000,000		4,000		396,000		-			-			400,000
Shares issued for cash net of share issue costs of $86,096		2,086,000		1,043		434,361		-			-			435,404
Balance, December 31, 2003		13,086,000		6,543		831,611		-			(183,773	)		654,381
Net loss for 2004		-		-		-		-			(733,248	)		(733,248	)
Stock option costs		-		-		5,009		-			-			5,009
Warrants issued with loans payable		-		-		4,225		-			-			4,225
Shares issued for cash net of share issue costs of $17,602		895,000		448		561,950		-			-			562,398
Balance, December 31, 2004		13,981,000		6,991		1,402,795		-			(917,021	)		492,765
Net loss for 2005		-		-		-		-			(1,496,992	)		(1,496,992	)
Stock warrant costs		-		-		238,892		(199,946	)		-			38,946
Amortization of stock warrant costs		-		-		-		85,273			-			85,273
Warrants issued with loans payable		-		-		16,450		-			-			16,450
Shares issued for services		60,160		30		60,130		-			-			60,160
Shares issued for cash net of share issue costs of $52,689		1,045,000		522		991,789		-			-			992,311
Balance, December 31, 2005		15,086,160	$	7,543	$	2,710,056	$	(114,673	)	$	(2,414,013	)	$	188,913

(continued)

The accompanying notes are an integral part of these financial statements.

F-6

Impact Medical Solutions, Inc.

(A Development Stage Company)

Statements of Changes in Shareholders’ Equity (Deficit)

From Inception (October 20, 1997) to December 31, 2008

	Common Stock											Accumulated
						Additional			Deferred Share,			During the			Total
	Number					Paid-in			Option &			Development			Shareholders'
	of Shares		Total			Capital			Warrant Cost			Stage			Equity (Deficit)
Balance, December 31, 2005		15,086,160	$	7,543		$	2,710,056		$	(114,673	)	$	(2,414,013	)	$	188,913
Shares issued for cash		517,305		259			517,046			-			-			517,305
Shares issued for services		50,000		25			49,975			-			-			50,000
Impact shares converted to Freedom 1 at 1 to 1		-		(6,262	)		6,262			-			-			-
Shares issued upon merger		200,000		20			(20	)		-			-			-
Value of warrants issued		-		-			1,101,523			(430,046	)		-			671,477
Amortization of stock warrant costs		-		-			-			500,062			-			500,062
Net loss for 2006		-		-			-			-			(2,077,147	)		(2,077,147	)
Balance, December 31, 2006		15,853,465		1,585			4,384,842			(44,657	)		(4,491,160	)		(149,390	)
Shares issued for services		625,000		63			454,937			(455,000	)		-			-
Value of warrants issued		-		-			386,399			(33,363	)		-			353,036
Amortization of share, option and warrant cost		-		-			-			145,583			-			145,583
Net loss for 2007		-		-			-			-			(1,263,489	)		(1,263,489	)
Balance, December 31, 2007		16,478,465		1,648			5,226,178			(387,437	)		(5,754,649	)		(914,260	)
Shares issued for cash, net of issuance costs of $30,000		400,001		40			269,960			-			-			270,000
Settlement of liability		100,000		10			69,990									70,000
Shares issued for services		1,790,000		179			468,321			(356,000	)		-			112,500
Value of warrants issued		-		-			398,182			(185,636	)		-			212,546
Amortization of share, option and warrant cost		-		-			-			316,992			-			316,992
Net loss for 2008		-		-			-			-			(1,589,500	)		(1,589,500	)
		18,768,466	$	1,877		$	6,432,631		$	(612,081	)	$	(7,344,149	)	$	(1,521,722	)

The accompanying notes are an integral part of these financial statements.

F-7

Impact Medical Solutions, Inc.

(A Development Stage Company)

Notes to Financial Statements

December 31, 2008

1.           Organization and summary of significant accounting policies

Organization and Line of Business

Impact Medical Solutions, Inc. (a development stage company) (the "Company" or “IMS”), a Nevada corporation, was incorporated on October 20, 1997.  On September 9, 2003, IMS acquired a patent from MPR Health Systems, Inc., a California corporation; a patented medical information system called Muscle Pattern Recognition (“MPR”) with a value of $500,000.  Since inception, Impact Medical has been involved in the development and pre-market clinical testing of the MPR system.

Merger of Impact Medical Solutions, Inc. into Freedom 1, Inc.

On December 27, 2006, Freedom 1, Inc., a Delaware corporation (“Freedom 1”), entered into a Plan and Agreement of Merger (the “Merger Agreement”) with Impact Medical Solutions, a privately held Nevada corporation (“Impact Medical”), pursuant to which Impact Medical purchased 1 share of Freedom 1 for $1.00, and Freedom 1 became a wholly owned subsidiary of Impact Medical (the “Sale”).  Following the Sale, Freedom 1 effected a short-form parent-subsidiary merger pursuant to the Merger Agreement of Impact Medical with and into Freedom 1, pursuant to which the separate existence of Impact Medical terminated and Freedom 1 changed its name to “Impact Medical Solutions, Inc.”

Concurrently with the merger, stockholders of Impact Medical received 1 share of Freedom 1’s common stock for each issued and outstanding share of Impact Medical’s common stock.  As a result, at closing Freedom 1 issued 15,653,465 shares of its common stock to the stockholders of Impact Medical, representing 100% of Freedom 1’s outstanding common stock immediately following the Merger.  In addition, 200,000 shares of the Company’s stock were issued to the former shareholder of Freedom 1.

Common stock options and warrants exercisable into 11,010,241 shares of Impact Medical before the merger will be exercisable into the same number of shares of IMS after the merger.

Development Stage Company

The Company is a development stage company as defined in Statement of Financial Accounting Standards ("SFAS") 7, Accounting and Reporting by Development Stage Enterprises. The Company is devoting substantially all of its present efforts to establish a new business, and its planned principal operations have not yet commenced.  The Company has not generated any material revenues throughout its history. The Company's ability to continue in business is dependent upon obtaining sufficient financing or attaining future profitable operations.

Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States that contemplate continuation of the Company as a going concern.  However, during the years ended December 31, 2008, 2007 and 2006, the Company incurred a net loss of $1,588,487, $1,263,489 and $2,077,147, respectively, and is in the development stage at December 31, 2008. The Company has not earned any revenue since inception.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Recovery of the Company's assets is dependent upon future events, the outcome of which is indeterminable. In addition, successful completion of the Company's clinical development program and its transition to the attainment of profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company's cost structure. In view of these matters, realization of a major portion of the assets in the accompanying balance sheets is dependent upon the Company's ability to meet its financing requirements and the success of its plans to sell its products.  The Company is attempting to raise approximately $2,000,000 in additional funds over the next year through private placements.  However, there can be no assurance that the Company will be successful in raising such additional funds.  The Company may also seek to compensate providers of services by issuance of stock in lieu of cash.

F-8

1.           Organization and summary of significant accounting policies (continued)

Cash and cash equivalents, other cash flow statement supplemental information and concentration of risk

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.  Balances in bank accounts may, from time to time, exceed insured limits.  The Company believes that its loss exposure is limited due to quality of the financial institutions that hold its deposits.

Income taxes of $863, $1,594 and $800 were paid in 2008, 2007 and 2006, respectively.  No interest payments were made in 2008, 2007 and 2006.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.

Furniture and Equipment

Furniture and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets, which is 5 years.

Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized. When furniture and equipment are retired or disposed of, the related costs and accumulated depreciation are eliminated from the accounts, and any gain or loss on such disposition is reflected in operations.

Patent

Patent consists of U.S. Patent No. 6,280,395 and legal fees incurred in maintaining the patent for the Company's product. These costs are amortized over a period of seventeen years using the straight-line method.

Long-lived assets

Long-lived assets (primarily furniture and equipment and patents) are reviewed annually for impairment whenever events or changes in circumstances indicate that carrying amount of an asset may not be recoverable.  Impairment is necessary when the undiscounted cash flows estimated to be generated by the asset are less than the carrying amount of the asset.

Research and Development Costs

Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with SFAS 2, Accounting for Research and Development Costs.

Income Taxes

The Company accounts for income taxes under the liability method required by SFAS 109 which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.

F-9

1.           Organization and summary of significant accounting policies (continued)

Share-based payments

The Company adopted the provisions of SFAS 123(R), Share-Based Payments, on January 1, 2006.  Accordingly, compensation costs for all share-based awards to employees are measured based on the grant date fair value of those awards and recognized over the period during which the employee is required to perform service in exchange for the award (generally over the vesting period of the award). The Company has no awards with market or performance conditions. Excess tax benefits, as defined by SFAS 123(R), are recognized as an addition to additional paid-in-capital.

Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on the Company’s historical experience, the Company expects no forfeitures.

The Company had no share-based compensation expenses for the years ended December 31, 2008, 2007 and 2006.

Since the Company has a net operating loss carryforward as of December 31, 2008, no excess tax benefits for the tax deductions related to share-based awards were recognized in the statement of operations.  Additionally, no incremental tax benefits were recognized from stock options exercised in the years ended December 31, 2008, 2007 and 2006 which would have resulted in a reclassification to reduce net cash provided by operating activities with an offsetting increase in net cash provided by financing activities.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with accounting principles generally accepted in the United States. For certain of the Company's financial instruments, including cash, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. The amounts shown for convertible debt, note payable, loans from related parties and other loans also approximate fair value because current interest rates offered to the Company for notes payable of similar maturities are substantially the same.

Net Loss Per Share

Basic loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period.  Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include dilutive options, warrants and other potential common stock outstanding during the period.  None of the outstanding options or warrants were included in the computation of loss per share because they were anti-dilutive.

Reclassifications

Certain items in the 2007 and 2006 financial statements have been reclassified to conform to the 2008 presentation.

Recent accounting pronouncements

In February 2007, the FASB issued SFAS 159 – The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115 (SFAS 159).  SFAS 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS 159 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company has implemented this statement in the current fiscal year and there is no material effect.

In September 2006, the FASB issued Statement of Financial Accounting Standards 157 (“SFAS 157”), Fair Value Measurements, which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements.  SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements.  SFAS 157 is effective for fiscal years beginning after November 15, 2007 with earlier adoption permitted.  The Company has implemented this statement in the current fiscal year and there is no material effect.

F-10

1.           Organization and summary of significant accounting policies (continued)

Recent Account Pronouncements (continued)

In October 2008, the FASB issued Financial Staff Position 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, ("FSP 157-3"). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active, and addresses application issues such as the use of internal assumptions when relevant observable data does not exist, the use of observable market information when the market is not active, and the use of market quotes when assessing the relevance of observable and unobservable data. FSP 157-3 is effective for all periods presented in accordance with SFAS 157. The adoption of FSP 157-3 did not have a significant impact on our consolidated financial statements or the fair values of our financial assets and liabilities.

In December 2008, the FASB issued Financial Staff Position ("FSP") Financial Accounting Standard No. 140-4 and FASB Interpretation 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities ("FSP FAS 140-4" and "FIN 46(R)-8"). The document increases disclosure requirements for public companies and is effective for reporting periods (interim and annual) that end after December 15, 2008. FSP FAS 140-4 and FIN 46(R)-8 became effective for us on December 31, 2008. The adoption of FSP FAS 140-4 and FIN 46(R)-8 did not have a significant impact on our consolidated financial statements.

2.           Furniture and equipment

	2008			2007			2006
Furniture and equipment	$	75,389		$	70,875		$	70,311
Less accumulated depreciation		(58,119	)		(43,704	)		(29,146	)
	$	17,270		$	27,171		$	41,165
Depreciation expense	$	14,415		$	14,558		$	14,172

3.           Patents

	2008		2007		2006
Patents
Gross carrying amount	$	500,000	$	500,000	$	500,000
Accumulated amortization	$	156,864	$	127,452	$	98,040
Amortization expense	$	29,412	$	29,412	$	29,412

Amortization of patents is expected to be $29,412 in each of the next five years.

4.           Loans from related parties

During 2008, the Company borrowed a total of $1,500 from Wayne Cockburn, its CEO.  This loan, evidenced by a short-term promissory note issued on June 17, 2008, bears interest at 10% per annum and matured on September 17, 2008.  Mr. Cockburn was also granted 1,500 Series B common stock purchase warrants to purchase 1,500 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $470 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On September 17, 2008, the maturity date of the $1,500 promissory note to Mr. Cockburn was extended to December 17, 2008.  Mr. Cockburn was granted an additional 1,500 Series B common stock purchase warrants to purchase 1,500 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $144 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On December 17, 2008, the maturity date of the $1,500 promissory note to Mr. Cockburn was extended to April 30, 2009.  Mr. Cockburn was granted an additional 1,500 Series B common stock purchase warrants to purchase 1,500 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $77 at the time of issuance, and is reflected as a discount on the loan in the accompanying financial statements and is being amortized over the life of the loan as interest expense.

F-11

4.           Loans from related parties (continued)

During 2008, the Company borrowed a total of $10,000 from Wayne Cockburn, its CEO.  This loan, evidenced by a short-term promissory note issued on June 2, 2008, bears interest at 10% per annum and matured on September 2, 2008.  Mr. Cockburn was also granted 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $3,695 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On September 2, 2008, the maturity date of the $10,000 promissory note to Mr. Cockburn was extended to December 2, 2008.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $2,582 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On December 2, 2008, the maturity date of the $10,000 promissory note to Mr. Cockburn was extended to April 30, 2009.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $389 at the time of issuance, and is reflected as a discount on the loan in the accompanying financial statements and is being amortized over the life of the loan as interest expense.

During 2008, the Company borrowed a total of $10,000 from Wayne Cockburn, its CEO.  This loan, evidenced by a short-term promissory note issued on April 1, 2008, bears interest at 10% per annum and matured on July 1, 2008.  Mr. Cockburn was also granted 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $2,879 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On July 1, 2008, the maturity date of the $10,000 promissory note to Mr. Cockburn was extended to October 31, 2008.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $1,901 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense. On October 31, 2008, the maturity date of the $10,000 promissory note to Mr. Cockburn was extended to January 31, 2009.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $462 at the time of issuance, and is reflected as a discount on the loan in the accompanying financial statements and is being amortized over the life of the loan as interest expense.  On January 31, 2009, this loan was extended to April 30, 2009 and Mr. Cockburn was granted 10,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loan and will be amortized over the extended life of the loan as interest expense.

F-12

4.           Loans from related parties (continued)

During 2007, the Company borrowed a total of $40,000 from Alan Goldman, one of its officers.  This loan, evidenced by a short-term promissory note issued on December 3, 2007, bears interest at 10% per annum and matured on March 3, 2008.  Mr. Goldman was also granted 40,000 Series B common stock purchase warrants to purchase 40,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $14,126 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On March 3, 2008, the maturity date of the $40,000 promissory note to Mr. Alan Goldman was extended to June 3, 2008.  Mr. Goldman was granted an additional 40,000 Series B common stock purchase warrants to purchase 40,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $11,920 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On June 3, 2008, the maturity date of the $40,000 promissory note to Mr. Alan Goldman was extended to October 31, 2008.  Mr. Goldman was granted an additional 40,000 Series B common stock purchase warrants to purchase 40,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $14,780 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On October 31, 2008, the maturity date of the $40,000 promissory note to Mr. Alan Goldman was extended to January 31, 2009.  Mr. Goldman was granted an additional 40,000 Series B common stock purchase warrants to purchase 40,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $1,846 at the time of issuance, and is reflected as a discount on the loan in the accompanying financial statements and is being amortized over the life of the loan as interest expense.  On January 31, 2009, this loan was extended to April 30, 2009 and Mr. Goldman was granted 40,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loan and will be amortized over the extended life of the loan as interest expense.

During 2007, the Company borrowed a total of $10,000 from Wayne Cockburn, its CEO.  This loan, evidenced by a short-term promissory note issued on October 26, 2007, bears interest at 10% per annum and matured on January 26, 2008.  Mr. Cockburn was also granted 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $3,148 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On January 26, 2008 the maturity date of the promissory note was extended to April 30, 2008.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $1,901 at the time of issuance, and was reflected as a discount on the loan and was amortized over the extended life of the loan as interest expense.  On April 30, 2008 the maturity date of the promissory note was extended to July 1, 2008.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $1,167 at the time of issuance, and was reflected as a discount on the loan and was amortized over the extended life of the loan as interest expense.  On July 1, 2008, the maturity date of the $10,000 promissory note to Mr. Cockburn was extended to October 31, 2008.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $1,901 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On October 31, 2008, the maturity date of the $10,000 promissory note to Mr. Cockburn was extended to January 31, 2009.  Mr. Cockburn was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black- Scholes valuation method totaled $462 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On January 31, 2009, this loan was extended to April 30, 2009 and Mr. Cockburn was granted 10,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loan and will be amortized over the extended life of the loan as interest expense.

F-13

4.           Loans from related parties (continued)

During 2007, the Company borrowed a total of $100,000 from Frans Berndsen, one of its shareholders.  During the second quarter, $65,000 of these loans were issued and treated as 12% convertible notes payable as described in note 5.  As such, the shareholder was granted one Series B warrant for every $2.00 loaned for a total of 32,500 Series B common stock purchase warrants to purchase 32,500 shares of common stock at $1.00 per share until December 31, 2009, and a total debt discount of $23,599 was recorded to be amortized over the life of the loan.  On September 27, 2007 the Company and the lender agreed there had been a misunderstanding and a debt restructuring occurred.  The original $65,000 in loans were restructured to modify the original terms, as well as for the remaining $35,000 which was received in the third quarter and for which 17,500 Series B warrants had been issued.  These loans, evidenced by short-term promissory notes issued on May 31, 2007, June 8, 2007 and July 17, 2007, bear interest at 10% per annum and matured on September 27, 2007.  The 50,000 Series B warrants previously issued were cancelled and in connection with the short-term promissory notes, the shareholder was granted 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $44,154 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the original life of the loan as interest expense.  The future cash payments of the new loan exceed the carrying value of the loan as of the restructuring date, so no gain was recorded.  On September 27, 2007 the maturity date of the promissory note was extended to December 27, 2007.  The shareholder was granted an additional 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $18,023 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the extended life of the loan as interest expense.  On December 27, 2007, the maturity date of the promissory note was extended to March 31, 2008.  Mr. Berndsen was granted an additional 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $34,624 at the time of issuance, and was reflected as a discount on the loan and was amortized over the extended life of the loan as interest expense.  On March 31, 2008, the maturity date of the promissory note was extended to July 1, 2008.  Mr. Berndsen was granted an additional 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $28,793 at the time of issuance, and was reflected as a discount on the loan and was amortized over the extended life of the loan as interest expense.  On July 1, 2008, the maturity date of the $100,000 promissory note to Mr. Berndsen was extended to October 31, 2008.  Mr. Berndsen was granted an additional 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $19,008 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On October 31, 2008, the maturity date of the $100,000 promissory note to Mr. Berndsen was extended to January 31, 2009.  Mr. Berndsen was granted an additional 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $4,616 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On January 31, 2009, this loan was extended to April 30, 2009 and Mr. Berndsen was granted 100,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loan and will be amortized over the extended life of the loan as interest expense.

F-14

4.           Loans from related parties (continued)

During 2007, the Company borrowed $25,000 from George Angelidis, one of its directors.  This loan, evidenced by a short-term promissory note issued on March 21, 2007, bears interest at 10% per annum and matured on June 1, 2007.  Mr. Angelidis was also granted 25,000 Series B common stock purchase warrants to purchase 25,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $11,291 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the original life of the loan as interest expense.  On June 1, 2007 the maturity date of the promissory note was extended to August 1, 2007.  Mr. Angelidis was granted an additional 25,000 Series B common stock purchase warrants to purchase 25,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $11,121 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the extended life of the loan as interest expense.  On August 1, 2007 the maturity date of the promissory note was extended to December 31, 2007.  Mr. Angelidis was granted an additional 50,000 Series B common stock purchase warrants to purchase 50,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $22,320 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the extended life of the loan as interest expense.  Effective January 1, 2008, the maturity date of the promissory note was extended to March 31, 2008.  Mr. Angelidis was granted an additional 25,000 Series B common stock purchase warrants to purchase 25,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $8,656 at the time of issuance, and was reflected as a discount on the loan and amortized over the extended life of the loan as interest expense.  On March 31, 2008, the maturity date of the promissory note was extended to July 1, 2008.  Mr. Angelidis was granted an additional 25,000 Series B common stock purchase warrants to purchase 25,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $7,198 at the time of issuance, and was reflected as a discount on the loan and amortized over the extended life of the loan as interest expense. On July 1, 2008, the maturity date of the $25,000 promissory note to Mr. Angelidis was extended to October 31, 2008.  Mr. Angelidis was granted an additional 25,000 Series B common stock purchase warrants to purchase 25,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $4,752 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On October 31, 2008, the maturity date of the $25,000 promissory note to Mr. Angelidis was extended to January 31, 2009.  Mr. Angelidis was granted an additional 25,000 Series B common stock purchase warrants to purchase 25,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair  value  of  the warrants using the Black-Scholes valuation method totaled $1,154 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense. On January 31, 2009, this loan was extended to April 30, 2009 and Mr. Angelidis was granted 25,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loans and will be amortized over the extended life of the loans as interest expense.

In 2004, the Company borrowed a total of CD$145,000 from Cavandale Corporation, a Company owned by one of the directors.  The loans bear interest at 10% and matured November 1, 2004.  Cavandale was also granted 211,270 Series A warrants at $.50 per share.  The fair value of the warrants using the Black-Scholes valuation method totaled $4,225 at the time of issuance, and was reflected as a discount on the loans, and amortized over the life of the loan as interest expense.  In February 2005, the due date of the loans was extended to July 1, 2005 in exchange for 100,000 Series B warrants.  The fair value of the warrants using the Black-Scholes valuation method totaled $19,246 at the time of issuance, and was reflected as a discount on the loans and amortized over the extended life of the loan as interest expense.  In August 2005, the due date of the loans was extended to July 1, 2006 in exchange for 100,000 Series B warrants.  The fair value of the warrants using the Black-Scholes valuation method totaled $16,450 at the time of issuance, and was reflected as a discount on the loans in the accompanying financial statements and amortized over the extended life of the loan as interest expense.  In July 2006, the due date of the loans was extended to July 1, 2007 in exchange for 100,000 Series B warrants.  The fair value of the warrants using the Black-Scholes valuation method totaled $39,095 at the time of issuance, and was reflected as a discount on the loans in the accompanying financial statements and amortized over the extended life of the loan as interest expense.  In July 2007, the due date of the loans was extended to July 1, 2008.  Cavandale was granted an additional 100,000 Series B common stock purchase warrants to purchase 100,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $44,484 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the extended life of the loan as interest expense.  On July 1, 2008, the due date of the loans was extended to October 1, 2008.  Cavandale was granted an additional 145,000 Series B common stock purchase warrants to purchase 145,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $27,562 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the extended life of the loan as interest expense.  On October 1, 2008, the due date of the loans was extended to January 1, 2009.  Cavandale was granted an additional 145,000 Series B common stock purchase warrants to purchase 145,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $12,642 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the extended life of the loan as interest expense.  On January 1, 2009, this loan was extended to July 1, 2009 and Cavendale was granted 290,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loans and will be amortized over the extended life of the loans as interest expense.

F-15

4.           Loans from related parties (continued)

The Company intends to extend all loans to related parties that came due on April 30, 2009 to July 30, 2009.

5.           Convertible debt

On December 22, 2008, the Company issued a convertible promissory note totaling $50,000 to an individual who qualifies as an accredited investor under Regulation D of the Securities Act of 1933, as amended.  The note bears interest at 12%, matures on April 30, 2009 and is convertible into common shares at a rate of $1.00 per share.  The note holder was also granted one Series B warrant for every $2.00 loaned, for a total of 25,000 Series B warrants.  In accordance with emerging Issues Task Force Issue 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments (“EITF 00-27”), the Company recognized the value attributable to the warrants in the amount of $1,283 to additional paid-in capital and a discount against the convertible promissory notes.  The debt discount is being amortized to interest expense over the life of the loan.  The Company valued the warrants in accordance with EITF 00-27 using the Black-Scholes valuation method and the following weighted average assumptions:  term of 1 year, risk-free interest rate of 1.125%, volatility of 85% and a weighted fair value of $.0513.

On January 4, 2008, the Company issued a convertible promissory note totaling $70,000 to an individual who qualifies as an accredited investor under Regulation D of the Securities Act of 1933, as amended.  The note bears interest at 12%, matured on January 25, 2008 and is convertible into common shares at a rate of $1.00 per share.  The note holder was also granted one Series B warrant for every $2.00 loaned, for a total of 35,000 Series B warrants.  In accordance with EITF 00-27, the Company recognized the value attributable to the warrants in the amount of $7,424 to additional paid-in capital and a discount against the convertible promissory notes.  The debt discount was amortized to interest expense over the life of the loan.  The Company valued the warrants in accordance with EITF 00-27 using the Black-Scholes valuation method and the following weighted average assumptions: term of 1.92 years, risk-free interest rate of 3.25%; volatility of 84% and a weighted fair value of $.2121.

During 2007, the Company issued convertible promissory notes totaling $332,991 to eleven individuals (after restructuring), each of whom qualifies as an accredited investor under Regulation D of the Securities Act of 1933, as amended.  The notes bear interest at 12%, matured on January 25, 2008 and are convertible into common shares at a rate of $1.00 per share.  The note holders were also granted one Series B common stock purchase warrant for every $2.00 loaned, for a total of 166,496 Series B warrants.  In accordance with guidance issued by the Financial Accounting Standards Board and the Emerging Issues Task Force regarding Accounting for Convertible Securities with a Beneficial Conversion Feature or Contingently Adjustable Conversion Ratios, the company recognized an embedded beneficial conversion feature present in the convertible promissory notes.  The Company recognized and measured an aggregate of $72,511 of the proceeds, which is equal to the intrinsic value of embedded beneficial conversion feature, to additional paid-in capital and a discount against the convertible promissory notes. In accordance with EITF 00-27, the Company recognized the value attributable to the warrants in the amount of $78,248 to additional paid-in capital and a discount against the convertible promissory notes.  The Company valued the warrants in accordance with EITF 00-27 using the Black-Scholes valuation method and the following assumptions: term of 2-2.92 years, risk-free interest rate of 3.25% - 4.875%; volatility of 63-83% and a weighted fair value of $.3190- $.4533.  The total debt discount of $149,745 was amortized to interest expense over the life of the loan.

During the quarter ended September 30, 2007, $65,000 of this debt was restructured.  See note 4.

On January 25, 2008, the due date of the convertible loans issued to that time was extended to April 30, 2008 in exchange for 100,748 Series B warrants.  The fair value of the warrants using the Black-

Scholes valuation method totaled $19,150 at the time of issuance, and was reflected as a discount on the loan and was amortized over the extended life of the loan as interest expense.

F-16

5.           Convertible debt (continued)

On April 30, 2008, the due date of the convertible loans issued to that time was extended to October 31, 2008 in exchange for 100,748 Series B warrants.  The fair value of the warrants using the Black-Scholes valuation method totaled $11,758 at the time of issuance, and was reflected as a discount on the loan and was amortized over the extended life of the loan as interest expense.

On October 31, 2008, the due date of the convertible loans issued to that time was extended to April 30, 2009 in exchange for 100,748 Series B warrants.  The fair value of the warrants using the Black-Scholes valuation method totaled $4,650 at the time of issuance, and is reflected as a discount on the loan and is being amortized over the extended life of the loan as interest expense.

The Company intends to extend all convertible loans that came due on April 30, 2009 to July 30, 2009.

6.           Other loan payable

On April 22, 2008, the Company borrowed a total of $10,000 from Gregory Harrison, an individual who has also loaned the Company $100,000 in the convertible note program.  This loan, evidenced by a short-term promissory note issued on April 22, 2008, bears interest at 10% per annum and matures on July 22, 2008.  Mr. Harrison was also granted 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method totaled $3,346 at the time of issuance, and was reflected as a discount on the loan and was amortized over the life of the loan as interest expense.  On July 22, 2008, the maturity date of the $10,000 promissory note to Mr. Harrison was extended to October 1, 2008.  Mr. Harrison was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value of the warrants using the Black-Scholes valuation method totaled $2,503 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense.  On October 1, 2008, the maturity date of the $10,000 promissory note to Mr. Harrison was extended to January 31, 2009.  Mr. Harrison was granted an additional 10,000 Series B common stock purchase warrants to purchase 10,000 shares of common stock at $1.00 per share until December 31, 2009 for the extension.  The fair value  of  the  warrants  using the Black-Scholes valuation method totaled $462 at the time of issuance, and was reflected as a discount on the loan in the accompanying financial statements and was amortized over the life of the loan as interest expense. On January 31, 2009, this loan was extended to April 30, 2009 and Mr. Harrison was granted 10,000 Series B warrants for extending the due date.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loans and will be amortized over the extended life of the loans as interest expense.

The Company intends to extend all loans to Mr. Harrison that came due on April 30, 2009 to July 30, 2009.

7.           Note payable

In 2003, the Company purchased a patent from MPR Health Systems, Inc. for 8,000,000 shares of the Company’s common stock and a 5-year $100,000 Demand Promissory Note (the “Note”). The Note bears interest at 2% and was due and payable on August 23, 2008.  On August 23, 2008, the due date of the note was extended to January 31, 2009 with the same terms.  On January 31, 2009 the due date of the note was extended to April 30, 2009 with the same terms.

The Company intends to extend the loan to MPR Health Systems that came due on April 30, 2009 to July 30, 2009.

F-17

8.           Shareholders’ equity

Stock splits

In April 2000, the Board of Directors approved a 7 for 1 stock split.  In March 2003, the Board approved a 3 for 7 reverse stock split.  Per-share amounts in the accompanying financial statements have been adjusted for these splits.

Preferred stock

Preferred stock may be issued in any one or more series, and any series shall be comprised of such number of shares and may have such voting powers and such designations, preferences and rights as shall be stated and expressed in resolutions of the Board of Directors of the Company.  To date, the Board has not designated any series of preferred stock.

In 1997, the Company issued 3,000,000 shares of common stock for $2,750.

In 2003, the Company sold 2,086,000 shares of common stock for $.25 per share or a total of $521,500 in connection with a private placement.  Costs relating to these shares totaled $86,096.  A Series A Warrant was issued with each share sold.  Holders of the Series A Warrants are entitled to purchase additional shares of common stock at $0.50 per common share prior to June 30, 2009.

During 2003, the Company also issued 8,000,000 shares of common stock and a $100,000 Promissory Note for a patent of MPR Health Systems, Inc.

Between January and June of 2004, the Company sold 420,000 shares of common stock for $.25 per share, for a total of $105,000 in a private placement.  A Series A Warrant was issued with each share sold.  Holders of the Series A Warrants are entitled to purchase additional shares of common stock at $0.50 per common share prior to June 30, 2009.  Between September and November of 2004, the Company sold 475,000 shares for $1.00 per share or a total of $475,000 in a private placement.  A Series B Warrant was issued with each share sold.  Holders of the Series B Warrants are entitled to purchase additional shares of common stock at $1.00 per common share prior to December 31, 2009.  Costs relating to shares sold in 2004 totaled $17,602.

During 2005, the Company sold 1,045,000 shares for $1.00 per share or a total of $1,045,000 in a private placement.  A Series B Warrant was issued with each share sold.  Holders of the Series B Warrants are entitled to purchase additional shares of common stock at $1.00 per common share prior to December 31, 2009.  Costs relating to shares sold in 2005 totaled $52,689.

During April and May 2005, the Company issued a total of 60,160 shares to two vendors for services.  The services were valued at $1.00 per share.

During 2006, the Company sold 517,305 shares for $1.00 per share or a total of $517,305 in a private placement.  A Series B Warrant was issued with each share sold.  Holders of the Series B Warrants are entitled to purchase additional shares of common stock at $1.00 per common share prior to December 31, 2009.

In September 2006, the Company issued a total of 50,000 shares to an individual to settle a dispute.  The shares were valued at $1.00 per share.

In December 2006, the Company issued a total of 200,000 shares to the former shareholder of Freedom 1 as part of the merger agreement described in Note 1.

During 2007, the Company issued a total of 625,000 shares to three vendors for consulting services.  The services were valued at $.71 - $1.00 per share for a total of $455,000, and the value of the services is being amortized over the period of the consulting agreements.

On June 12, 2008, the Board authorized a private placement of 1,000,000 units of common stock and Series C and D purchase warrants.  The unit price is $0.75 and each unit is comprised of one share of common stock, one Series C warrant and one half Series D warrant.  In addition, for each Series D warrant exercised, the holder will receive an additional Series C warrant.  In June and July 2008, the Company sold 400,001 units of its private placement for gross proceeds of $300,000 less issuance costs of $30,000.

F-18

8.           Shareholders’ equity (continued)

Common stock issuances

In July 2008, the Company negotiated a settlement with one of its creditors.  The creditor agreed to take $75,000 cash and 100,000 of the Company’s common shares valued at $70,000 (the trading price on the date of settlement was $.70) to settle a $117,400 account payable, resulting in a $27,600 loss on settlement of debt.  The loss on settlement of debt is included in general and administrative expenses in the accompanying statement of operations.

In August 2008, the Company entered into a consulting contract for the period August 5, 2008 to December 31, 2008.  Payment for the consulting services will be 30,000 shares of the Company’s common stock.  At September

30, 2008, the consultant had not begun work, so the commencement of the contract was re-negotiated from August 5, 2008 to December 1, 2008.  This contract was ultimately cancelled and no shares were issued.

On August 1, 2008, the Company entered into a one year consulting contract.  Payment for consulting services will be 240,000 shares of the Company’s common stock and 300,000 Series C common stock purchase warrants.  At September 30, 2008, the consultant had not begun work, so the commencement of the contract was re-negotiated from August 1, 2008 to December 1, 2008.  The services were valued at $.40 per share for the common stock and $31,472 for the entire amount of the warrants (using the Black-Scholes method) for a total of $127,472, and the value of the services is being amortized over the period of the consulting agreement.

On December 9, 2008, the Company issued a total of 1,300,000 shares of the Company’s common stock to two vendors and a related party for consulting services.  The services were valued at $.20 per share for a total of $260,000, and the value of the services is being amortized over the period of the consulting agreements.  These vendors have the ability to earn an additional 1,000,000 shares upon reaching a certain milestone defined in the agreements.

On December 13, 2008, the Board granted 250,000 shares of the Company’s common stock to a related party, for services rendered.  The services were valued at $.45 per share for a total of $112,500 and was expensed to general and administrative expenses in the accompanying statement of operations.

Warrants

During 2003, the Company issued 2,086,000 Series A common stock purchase warrants in connection with a private placement.

During 2004, the Company issued 420,000 Series A common stock purchase warrants and 475,000 Series B common stock purchase warrants in connection with private placements.

In addition, the Company issued 211,270 Series A common stock purchase warrants along with loans payable from July to October 2004.  See note 4.

The Company also issued 250,000 Series A common stock purchase warrants to an individual for corporate finance consulting services in July 2004.

During 2005, the Company issued 1,045,000 Series B common stock purchase warrants in connection with private placements.

In addition, the Company issued 100,000 Series B common stock purchase warrants in February 2005 and 100,000 in August 2005 to extend the due date of loans payable to July 2005.  See note 4.

Other 2005 issuances include 1,100,000 Series B common stock purchase warrants in connection with three, two year consulting agreements and 41,250 Series B common stock purchase warrants as share issuance costs.  The warrants issued for consulting fees were valued at $238,892 using the Black-Scholes method and are being amortized over the life of the consulting agreement.  The warrants issued as share issuance costs were valued at $7,939.

F-19

8.           Shareholders’ equity (continued)

Warrants (continued)

The following weighted average assumptions were used to calculate the warrants issued in 2005: term of 2.5 years, risk-free interest rate of 3.255%; volatility of 25% and a weighted fair value of $.0011.

Between January and July 2006, the Company issued 517,305 Series B common stock purchase warrants in connection with private placements.

In September 2006, the Company extended the expiration dates of both the Series A and Series B common stock purchase warrants.  The Series A expiration date was extended from September 9, 2008 to June 30, 2009 and the

Series B expiration date was extended from July 31, 2007 to December 31, 2009.

As a result of the due date extensions, the 250,000 Series A and 1,100,000 Series B warrants issued for consulting fees were re-valued at $580,324 and the resulting expense is included in general and administrative expenses in the accompanying statement of operations.  In addition, the 211,270 Series A and 200,000 Series B warrants issued to extend the loan due date were re-valued at $205,187 and the resulting expense is included in interest expense in the accompanying statement of operations.

The following weighted average assumptions were used to calculate the warrants re-valued in 2006: term of 2.75 - 3.25 years, risk-free interest rate of 4.625%; volatility of 49% and a weighted fair value of $.39 - $.60.

Other 2006 Series B common stock purchase warrant issuances include 100,000 warrants issued in July to extend the due date of loans payable (see note 4), 50,000 issued to settle a dispute and 658,316 issued for consulting fees.  The 100,000 shares were valued at $39,095, as described in note 4.  The remaining warrants were valued at a total of $276,917 and expensed as general and administrative expenses in the accompanying statements of operations.

The following weighted average assumptions were used to calculate the warrants issued in 2006: term of 3.25 years, risk-free interest rate of 4.625%; volatility of 49% and a weighted fair value of $.39.

During 2007, the Company issued 550,000 Series B warrants in connection with loans to related parties or the extension of due dates for those loans.  See note 4.  In addition, the Company issued 166,496 Series B warrants in connection with convertible debt.  See note 5.

Other 2007 Series B common stock purchase warrant issuances include 75,000 issued for consulting fees.  These warrants were valued at a total of $33,363 and are being expensed as general and administrative expenses in the accompanying statements of operations.

The following weighted average assumptions were used to calculated the warrants issued in 2007:  term of 2 – 2.92 years, risk-free interest rate of 3.25% - 4.875%, volatility ranging from 66% - 83% and a weighted fair value ranging from $.1802 - $.4533.

During 2008, the Company issued 944,500 Series B warrants in connection with loans or the extension of due dates for loans.  See note 4.  In addition, the Company issued 362,244 Series B warrants in connection with convertible debt or the extension of due dates for convertible debt.  See note 5.

The following weighted average assumptions were used to calculate the warrants issued in 2008:  term of 1-2 years, risk-free interest rate of 1.125% - 3.25%, volatility ranging from 70% - 94% and a weighted fair value ranging from $.0389 - $.3695.

During 2008, the Board passed resolutions to authorize 1,500,000 Series C warrants and 500,000 Series D warrants.  The Series C warrants may be used to purchase an equivalent number of common shares at $1.25 per share and expire September 1, 2011, while the Series D warrants may be used to purchase an equivalent number of common shares at $0.95 per share and expire on September 1, 2009.

F-20

8.           Shareholders’ equity (continued)

Warrants (continued)

During 2008, the Company issued 1,000,000 Series C common stock purchase warrants for three consulting contracts to be provided over the next two years.  These warrants were valued at a total of $185,636 and were classified as deferred warrants on the accompanying balance sheet and are being amortized to general and administrative expenses over the lives of the contracts.  The following weighted average assumptions were used to calculate the Series C warrants issued: term of 2.75 - 3.25 years, risk-free interest rate of 1.25% - 2.625%; volatility of 72% – 85% and a weighted fair value of $.1049 - $.2202.

During 2008, the Company issued 400,001 Series C common stock purchase warrants and 200,001 Series D warrants in connection with the private placement described above.

Stock options

2003 stock option plan

In October 2003, the Company adopted the Stock Option Plan (the "2003 Plan"), which was also approved by its stockholders in October 2003. The purpose of the 2003 Plan is to attract, retain, and motivate certain key employees of the Company by giving them incentives which are linked directly to increases in the value of the common stock of the Company.  Each director, officer, employee, or consultant of the Company is eligible to be considered for the grant of awards under the 2003 Plan. The maximum number of shares of common stock that may be issued pursuant to awards granted under the 2003 Plan was increased on March 19, 2004 from 2,250,000 to 4,850,000, subject to certain adjustments to prevent dilution. Any shares of common stock subject to an award, which for any reason expires or terminates unexercised, are again available for issuance under the 2003 Plan.  Grants under the 2003 Plan are exercisable at the market value of the Company's stock on the date of such grant.  All options under the 2003 Plan are exercisable at times as determined by the board of directors, not to exceed 10 years from the date of grant.  On March 10, 2004 a total of 4,173,600 options were granted.  The grant price was $.25, with 2,120,000 options vesting immediately and the remaining 2,053,600 options vesting on March 10, 2005.  305,000 options were cancelled in 2006 and the remaining 3,868,600 options expire on March 10, 2014.

In February 2008, the company adopted the 2008 Equity Incentive Plan (the “2008 Plan”).  The purpose of the 2008 Plan is to attract, retain, and motivate certain key employees of the Company by giving them incentives which are linked directly to increases in the value of the common stock of the Company.  Each director, officer, employee, or consultant of the Company is eligible to be considered for the grant of awards under the 2008 Plan.  The maximum number of shares of common stock that may be issued pursuant to awards granted under the 2008 Plan is 1,000,000, subject to certain adjustment to prevent dilution.  Any shares of common stock subject to an award, which for any reason expires or terminates unexercised, are again available for issuance under the 2008 Plan.  Grants under the 2008 Plan are exercisable at the market value of the Company’s stock on the date of such grant.  All options under the 2008 Plan are exercisable at times as determined by the board of directors, not to exceed 10 years from the date of grant.  To date, no options have been granted under the 2008 Plan.

9.           Income taxes

The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting and tax bases of its assets and liabilities.  Deferred tax assets are reduced by a valuation allowance when deemed appropriate. For 2008, 2007 and 2006 there are no material differences between income tax expense and the amount computed by applying the federal statutory income tax rate.

At December 31, 2008, the Company has a net operating loss carryforward for federal tax purposes of approximately $6,580,000, which, if unused to offset future taxable income, will begin to expire in 2023.  The Company also has a California net operating loss carryforward of approximately $6,584,000 which, if unused to offset future taxable income, will begin to expire in 2013.

F-21

9.           Income taxes (continued)

The Company had deferred tax assets of $2,869,000 at December 31, 2008, relating to its net operating loss.  A valuation allowance has been recognized to offset the entire related deferred tax asset due to the uncertainty of realizing the benefit.  The valuation allowance increased $372,000 in 2008 and $1,059,000 in 2007, primarily related to the net taxable loss and to change in estimate for certain deductions.

10.        Commitments and contingencies

Lease

The Company leases its office space in Huntington Beach, California and Toronto, Canada on a month-to-month basis.  Effective August 1, 2008, the Company also leases three rooms in a medical clinic in Salt Lake City, Utah on a month-to-month basis.  Additionally, effective October 2008, the Company leased office space in Toronto, Canada on a month-to-month basis. Effective December 9, 2008, the Company entered into a General Services Agreement with Roy Bonnell and Associates  to lease 2 office spaces in Montreal, Canada.  Under the terms of the agreement, the lease payments for 2009 for 2 offices are deemed to be paid in full against a payment of 342,858 shares of common stock to Roy Bonnell and Associates; however, if additional office space is required, an escalation agreement goes into effect. During all of 2006 and a portion of 2007, the Company leased space in Quebec, Canada as well.  Total rent expense charged to operations totaled $42,811 in 2008, $58,803 in 2007 and $45,295 in 2006.

11.        Subsequent events (unaudited)

Apartment lease

Effective January 1, 2009, the Company entered into a short term lease for apartment space in Montreal, Canada.  Monthly rent will be CD$1,300 through April 30, 2009.

Private placement

In March 2009, the Board of Directors authorized a private placement to sell up to 500,000 units of the Company’s common stock and Series A warrants at $.30 per unit.  Each unit shall be comprised of one share of the Company’s common stock and one Series A warrant.  To date, 200,000 units have been sold for total proceeds of $60,000.

Stock issuance

On February 3, 2009 the Company issued 500,000 shares of its common stock in exchange for a two year promissory note with 3974715 Canada Ltd.  The note bears interest at 5%.

In December 2008, the Company issued a total of 1,300,000 shares of the Company’s common stock to two consultants and a related party for consulting services.  Under the terms of the consulting agreements, the vendors had the ability to earn an additional 1,000,000 shares upon reaching a certain milestone defined in the agreements.  All shares issued pursuant to the consulting agreements were subject to resale restrictions under Rules 504 and 505, Regulation D of the Securities Act of 1933.

In February 2009, the agreements were amended whereby the 1,000,000 additional shares were issued immediately to the vendors however the resale restrictions were amended to reflect Regulation S of the Securities Act of 1933 (Rules Governing Offers and Sales Made Outside the United States Without Registration).  The 1,300,000 shares, issued in December 2008 under Regulation D, were returned to the Company to be held until April 30, 2009.  If a certain milestone is not met by April 30, 2009, the vendors have agreed to have the 1,300,000 shares cancelled and returned to the Company.  If the milestone is met, the shares will be returned to the vendors.

In June 2008, the Company entered into a two year consulting agreement with a related party.  Payment on this contract was 500,000 Series C warrant to purchase 500,000 shares of the Company’s common stock.  In March 2009, this contract was extended for an additional year in exchange for 250,000 shares of common stock.

F-22

11.        Subsequent events (unaudited) (continued)

Loans from related parties

On February 20, 2009, the Company borrowed a total of $25,000 from MPR Health Systems, Inc.  This loan, evidenced by a short-term promissory note issued on February 20, 2009, bears interest at 10% per annum and matures on May 20, 2009.  MPR Health Systems, Inc. was also granted 25,000 Series C common stock purchase warrants to purchase 25,000 shares of common stock at $1.25 per share until September 1, 2011.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loans and will be amortized over the extended life of the loans as interest expense.

On April 2, 2009, the Company borrowed a total of $20,000 from MPR Health Systems, Inc.  This loan, evidenced by a short-term promissory note issued on April 2, 2009, bears interest at 10% per annum and matures on July 2, 2009.  MPR Health Systems, Inc. was also granted 20,000 Series B common stock purchase warrants to purchase 20,000 shares of common stock at $1.00 per share until December 31, 2009.  The fair value of the warrants using the Black-Scholes valuation method will be reflected as a discount on the loans and will be amortized over the extended life of the loans as interest expense.

Other

In February 2009, the Company’s common shares were accepted for trading on the Frankfurt Stock Exchange under the ticker symbol "0IM". The International Security Identification Number (ISIN) number is US45257K1007.

F-23

Item 15. Exhibits and Financial Statement Schedules.

Exhibit No.	Description
3.2 (1)	Bylaws of Impact Medical Solutions, Inc.
10.3(1)	Code of Ethics
31.1(2)	Certification of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002, with respect to the registrant’s Amendment No. 1 to its Annual Report on Form 10-K for the year ended December 31, 2008.
32.1(2)	Certification of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

(1) Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the Commission on December 29, 2006 and incorporated by reference herein.

(2) Not deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section.

SIGNATURES

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

Date:  May 7, 2009	IMPACT MEDICAL SOLUTIONS, INC.
		By:	/s/ Wayne Cockburn
			Wayne Cockburn
			President Chief Executive Officer,
			Secretary, Treasurer and Interim Chief
			Financial Officer and a Member of the
			Board of Directors (Principal Executive
			Officer and Principal Financial and
			Accounting Officer)

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

Signature  Title  Date

/s/ Wayne D. Cockburn	President, Chief Executive Officer,	May 7, 2009
Wayne D. Cockburn	Secretary, Treasurer
	and Interim Chief Financial Officer and
	a Member of the Board of Directors
	(Principal Executive Officer and
	Principal Financial Officer)
/s/ Donald Paterson	Chairman of the Board of Directors	May 7, 2009
Donald Paterson
/s/ George Angelidis	Director	May 7, 2009
George Angelidis
/s/ Craig Lunsman	Director	May 7, 2009
Craig Lunsman
s/ Stephen Schectman	Director	May 7, 2009
Stephen Schectman