Aclor International, Inc. - FORM 10-Q

Attached files

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EX-32.1 - EXHIBIT 32.1 - Aclor International, Inc.	ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - Aclor International, Inc.	ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - Aclor International, Inc.	ex31-1.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X]	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2011

[ ]	Transition Report under Section 13 or 15(d) of the Exchange Act for the Transition Period from _______ to _______

Commission File Number: 333-123611

METISCAN, INC.

(Exact name of small business issuer as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

26-3613222

(I.R.S. Employer Identification No.)

12225 Greenville Ave, Suite 700

Dallas, Texas 75243

Telephone: 972-479-8866

(Address and phone number of principal executive offices)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 [_] No [X]

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 (ss.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 [_]

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 definitions of "large accelerated filer," "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]

Check whether the issuer is a “shell company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Yes [_] No [X]

The Registrant has 2,564,650,554 shares of Common stock, par value $.0001 per share issued and outstanding as of May 2, 2011.

We have filed a Registration Statement on Form S-1 (“S-1”) with the Securities and Exchange Commission (“SEC”). However, the S-1 has not yet been declared effective by the SEC. Until the S-1 is declared effective by the SEC, we are not a SEC reporting company. There can be no assurance that our S-1 will ever be declared effective by the SEC.

We have voluntarily chosen to file this Form 10-Q Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 (“10-Q”). This 10-Q has not been reviewed by the SEC and our voluntary quarterly and annual filings will likely not be reviewed by the SEC until after the S-1 is declared effective. Further, although we intend to comply with the SEC’s filing requirements, in view of the fact that we are not a SEC reporting company, we are not required to adhere to the SEC’s filing requirements.

INDEX TO QUARTERLY REPORT

ON FORM 10-Q

PART I	FINANCIAL INFORMATION		Page

Item 1.	Financial Statements (Unaudited)
	Condensed Balance Sheets
		December 31, 2010 and March 31, 2011	3
	Condensed Statements of Operations
		For the Three Months Ended March 31, 2011 and 2010	4
	Condensed Statements of Shareholders’ Equity (Deficit)
		For the Three Months Ended March 31, 2011	5 - 6
	Condensed Statements of Cash Flows
		For the Three Months Ended March 31, 2011 and 2010	7 - 8
	Notes to Condensed Financial Statements		9

Item 2.	Management's Discussion and Analysis or Plan of Operation		16

	Risk Factors		19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		31

Item 4T.	Controls and Procedures		31


PART II	OTHER INFORMATION

Item 1.	Legal Proceedings		32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		32

Item 3.	Defaults upon Senior Securities		32

Item 4.	Submission of Matters to a Vote of Security Holders		32

Item 5.	Other Information		32

Item 6.	Exhibits		32

Signatures			33

Page 2 of 33

METISCAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31, 2011			December 31, 2010

ASSETS

CURRENT ASSETS

Cash	$	82,244		$	92,724
Accounts receivable		593,291			682,512
Notes receivable		1,514			1,514

TOTAL CURRENT ASSETS		677,049			776,750

PROPERTY AND EQUIPMENT, net of accumulated depreciation		2,636,064			2,600,933

PREPAID EXPENSES		18,907			18,907
OTHER ASSETS		675,522			675,522
OTHER NON-CURRENT ASSETS, including restricted cash of $7,954,061		7,954,061			7,954,061

TOTAL ASSETS	$	11,961,603		$	12,026,173

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable and accrued liabilities	$	2,226,941			2,405,326
Notes payable, current portion		2,179,231			2,148,351
Customer deposit					15,800
Security deposit		8,016			8,016

TOTAL CURRENT LIABILITIES		4,414,188			4,577,493

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock, par value $0.0001 per share
Authorized – 10,000,000 shares
Issued and outstanding – 750,000 shares series “C”		75			75
Issued and outstanding – 500,000 shares series “D”		50			50
Issued and outstanding – 60 shares series “E”		-			-
Issued and outstanding – 72 shares series “F”		-			-
Common stock, par value $0.0001 per share
Authorized – 10,000,000,000 shares
Issued and outstanding – 2,551,400,555 and 2,441,400,555, respectively		353,865			243,865
Additional paid-in capital		9,203,948			9,204,868
Accumulated deficit		(2,010,523	)		(2,000,178	)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		7,547,415			7,448,680

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	11,961,603		$	12,026,173

The accompanying notes are an integral part of the financial statements

Page 3 of 33

METISCAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

(UNAUDITED)

	2011			2010

REVENUES	$	485,561		$	898,628

COST OF REVENUES		117,304			152,586

GROSS PROFIT		368,257			746,042

EXPENSES
Selling, general and administrative		341,345			465,128

TOTAL EXPENSES		341,345			465,128

INCOME (LOSS) FROM OPERATIONS		26,912			(280,914	)

OTHER INCOME (EXPENSE)
Interest income		5			41
Gain (loss) on settlement of debt, net		(17,439	)		(346,793	)
Interest expense		(19,824	)		(8,634	)

TOTAL OTHER INCOME (EXPENSE)		(37,258	)		(355,386	)

INCOME (LOSS) BEFORE INCOME TAXES		(10,346	)		(74,472	)

Income tax expense		-			-


NET INCOME (LOSS) FROM CONTINUING
OPERATIONS		(10,346	)		(74,472	)

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS		-			-

NET INCOME (LOSS)		(10,346	)		(74,472	)


NET (LOSS) PER COMMON SHARE

Basic and diluted	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING

Basic and diluted		2,479,289,444			2,269,339,170

The accompanying notes are an integral part of the financial statements

Page 4 of 33

METISCAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2011

(UNAUDITED)

	Preferred Series “A”				Preferred Series “B”				Preferred Series “C”				Preferred Series “D”				Preferred Series “E”
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount

Balance December 31, 2010		-	$	-		-	$	-		750,000	$	75		500,000	$	50	$	50	$	-

Common stock issued for cash		-		-		-		-		-		-		-		-		-		-

Conversion of shares due to settlement		-		-		-		-		-		-		-		-		-		-

Common stock issued for services		-		-		-		-		-		-		-		-		-		-

Net loss		-		-		-		-		-		-		-		-		-		-

Balance, March 31, 2011		-	$	-		0	$	-		750,000	$	75		500,000	$	50	$	47	$	-

The accompanying notes are an integral part of the financial statements

Page 5 of 33

METISCAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2011

(UNAUDITED)

	Preferred Series “F”				Common Stock				Additional Paid-in			Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital			Deficit			(Deficit)

Balance December 31, 2010		61	$	-		2,441,400,555	$	243,868	$	9,204,867		$	(2,000,178	)	$	7,448,680

Common stock issued for cash		-		-				-		-			-			-

Conversion of shares due to settlement		-		-		110,000,000		110,000		(920	)		-			109,080

Common stock issued for services								-		-			-			-

Net loss		-		-		-		-		-			(10,346	)		(10,346	)

Balance, March 31, 2010		59	$	-		2,551,400,555	$	353,866	$	9,203,947		$	(2,010,524	)	$	7,547,414

The accompanying notes are an integral part of the financial statements

Page 6 of 33

METISCAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

(UNAUDITED)

	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(10,345	)	$	(74,472	)
Adjustments to reconcile net (loss) to net cash (used) by operating activities:
Common stock issued for services		109,080			-
Gain (loss) on settlement of debt		17,439			346,792
Loss on settlement of debt with stock issuance		-			-
Depreciation expense		20,869			44,052
Changes in operating assets and liabilities:
Accounts receivable		73,421			(347,756	)
Prepaid expenses		-			(4,369	)
Accounts payable and accrued liabilities		(209,219	)		65,488
Advances from customers					-
Other assets		-			900
NET CASH PROVIDED BY OPERATING ACTIVITIES		1,245			30,435

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in limited liability company					(100	)
Purchase of property and equipment		(42,604	)		(14,613	)
NET CASH USED BY INVESTING ACTIVITIES		(42,604	)		(14,713	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from cash held in escrow		-			3,125
Proceeds from (repayments of) notes payable		30,879			(55,989	)
Proceeds from (repayments of) notes payable, shareholder		-			-
Proceeds from common stock		-			-
Cancellation of common stock subscription		-			-
NET CASH USED BY FINANCING ACTIVITIES		30,879			(52,864	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(10,480	)		(37,142	)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		92,724			105,917

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	$	82,244		$	68,775

The accompanying notes are an integral part of the financial statements

Page 7 of 33

METISCAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

(UNAUDITED)

	2011		2010

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION

Interest paid	$	19,824	$	8,634
Taxes paid	$	9,528	$	11,400

The accompanying notes are an integral part of the financial statements

Page 8 of 33

METISCAN, INC. AND SUBSIDIARIES

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION

Description of Business

Metiscan, Inc. (“we”, “us” or “our”) was originally incorporated on February 27, 1997 pursuant to the laws of the State of Florida, using the name OSCM-One Stop.com, Inc. On September 25, 2008, pursuant to the consent of the Stockholders and the Board of Directors, we merged into a newly formed wholly-owned subsidiary which had been incorporated pursuant to the laws of the State of Delaware on September 9, 2008, called “Metiscan, Inc.” We were the surviving entity in such transaction.

During 1999, we provided Internet and communication technologies.

On August 8, 2008, we acquired Metiscan Technologies, Inc. (Technologies) in a stock-for-stock transaction. As a result, Technologies became our wholly owned subsidiary. Pursuant to the acquisition agreement, (the “Agreement”), we issued a total of 157,000,000 shares of our common stock in exchange for 100% of the issued and outstanding shares of Technologies. The Agreement provided for 32,000,000 shares to be issued upon closing and 125,000,000 to be issued as soon as possible after we filed an amendment to increase our authorized shares, which we did on August 15, 2008. On August 8, 2008, the 32,000,000 shares were issued. On August 21, 2008, the 125,000,000 shares were issued.

For accounting purposes, the transaction described in the preceding paragraph has been accounted for as a reverse merger, since the stockholders of Technologies own a majority of our issued and outstanding shares of common stock, and the directors and executive officers of Technologies became our directors and executive officers. This acquisition was accounted for at historical cost in a manner similar to that in pooling of interests method because after the acquisition, the former stockholders of Technologies acquired a majority of the issued and outstanding shares of the Company. The financial statements of the Company are not significant; therefore, no pro forma financial information is submitted. Thus, the historical financial statements are those of Technologies.

On November 13, 2008, we formed Taptopia, Inc., a wholly owned subsidiary that provides technology utilizing Smartphones to event organizers, convention centers, and their related vendors

On November 13, 2008, we formed Shoreline Employment Services, Inc., an employment services company which provides part-time, full time, and contract employees.

Page 9 of 33

On December 31, 2008, we completed the acquisition of two diagnostic imaging facilities, Schuylkill Open MRI, Inc. (SOMRI) located in Pottsville, Pennsylvania and Metiscan-CC, Inc. (Corpus), located in Corpus Christi, Texas in stock-for-stock transactions. As a result, Corpus became our wholly owned subsidiary and SOMRI became our majority-owned subsidiary. Pursuant to the same Agreement the Company agreed to issue a total of 9,000,000,000 shares (the “Imaging Shares”) of its common stock in exchange for 100% of the issued and outstanding shares of Corpus and a majority ownership of SOMRI. Pursuant to an ancillary letter agreement dated December 31, 2008, Metiscan agreed to issue the Imaging Shares on or before March 31, 2009. The Imaging Shares were issued as 900,000 shares of Series “C” Preferred Stock on May 7, 2009, which is convertible into 9,000,000,000 shares of the Company’s common stock.

For accounting purposes, the transaction described in the preceding paragraph has also been accounted for as a reverse merger, since the stockholders of SOMRI and Corpus were issued Series “C” Preferred Stock which, upon conversion into common stock, would represent a majority of our issued and outstanding shares of common stock, and the directors and executive officers of SOMRI and Corpus became our directors and executive officers. This acquisition was accounted for at historical cost in a manner similar to that in pooling of interests method because after the acquisition, the former stockholders of SOMRI and Corpus acquired a majority of our outstanding shares.

On February 26, 2009 Technologies merged into Corpus pursuant to the consent of the Stockholders and the Board of Directors of each of the respective companies. Corpus was the surviving entity in such transaction.

On June 24, 2009, we announced that we had determined to become a holding company focused upon growing our organization by making key acquisitions of companies, which focus on developing new technologies.

On October 16, 2009, Corpus filed a petition for relief under Chapter 7 of the Bankruptcy Code. We have written off the assets and liabilities of Corpus and described the operating results from Corpus in this registration statement as discontinued operations.

On February 11, 2010, Taptopia entered into a joint venture with ConvExx, LLC to form Appcon, LLC (Appcon), which was formed under the laws of the State of Nevada. Pursuant to the Operating Agreement, each of Taptopia and ConvExx own a 50% interest in Appcon, which was created to function as a trade show organizer for mobile application trade shows to be held in the future. On December 1, 2010, Taptopia and ConvExx mutually agreed to an orderly shut down of Appcon and dissolved the company with the State of Nevada.

On November 15, 2010 FirstView ceased its operations and is currently evaluating other business pursuits.

The historical financial information presented in this report is that of the Company, FirstView, SOMRI, Shoreline and Taptopia. The historical financial information has been restated to reflect the discontinued operations of Corpus.

Page 10 of 33

As of March 31, 2011, we operated the following subsidiaries:

• FirstView EHR, Inc. (FirstView) – FirstView is a majority owned subsidiary which provides healthcare information technology (“Healthcare IT”) services for diagnostic imaging facilities, including, but not limited to, web-based electronic healthcare records (EHR), long-term archiving and professional “Healthcare IT” services.

• Schuylkill Open MRI, Inc. (“SOMRI”) – We own seventy-two (72%) percent of SOMRI. A minority of the issued and outstanding shares of SOMRI are owned by a Pennsylvania physician and 2 other minority shareholders. SOMRI is an independent diagnostic testing facility (IDTF) located in Pottsville, Pennsylvania providing Magnetic Resonance Imaging (MRI) services and is unaffiliated with any hospital or medical group. SOMRI officially opened for business and began its operations in March, 2003 as an outpatient open MRI facility. SOMRI currently performs exams on the Siemens Concerto OPEN MRI System utilizing Siemens’ Syngo software. In 2008, Schuylkill also added the Siemens Magnetom Vision 1.5T high field closed magnet to its facility. Having both the Siemens Concerto OPEN MRI System and the Siemens Magnetom Vision 1.5T high field closed magnet gives SOMRI flexibility in the studies it can conduct. SOMRI uses FirstView’s Healthcare IT support to host and manage its RIS and PACS systems. SOMRI offers same day, evening and Saturday appointments to accommodate emergency and non-emergency patient’s schedule needs.

SOMRI participates in most major insurance plans. SOMRI also accepts Medicare, Medicaid, Worker’s Compensation claims, Personal Injury Protection (PIP) and Letters of Protection (LOPs) for participating personal injury attorneys in the area. SOMRI is accredited by the American College of Radiology (ACR).

• Shoreline Employment Services, Inc. (“Shoreline”) – Shoreline, which is our wholly owned subsidiary, is an employment services company that provides part-time, full time, and contract employees, and provides other human resource related services such as employee benefits and retirement plans such as 401ks to us, our subsidiaries and one third party on an as-needed basis.

• Taptopia, Inc. (Taptopia) – Taptopia is our wholly owned subsidiary which provides technology utilizing Smartphones to event organizers, convention centers, and their related vendors. Taptopia’s cornerstone product the Digital Show Guide™ (DSG) which was launched in December of 2009, enables attendees and exhibitors to easily navigate event schedules and exhibitor information from their Apple iPhones™, iPod touches™, iPads™ and BlackBerrys. Users have the ability to take notes about events or exhibitors directly within the software application, send their contact information and notes immediately to their contacts, utilize pre-event planning tools and stay current with real-time announcements. The DSG replaces traditional paper show guides and provides event organizers the ability to make last minute changes and additions to the DSG electronically.

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Taptopia has filled a design patent application and a trademark application with the United States Patent and Trademark Office (USPTO) to legally protect Taptopia's Digital Show Guide(TM) product. The design patent application protects the graphical user interface (GUI) and its interactive design elements related to Taptopia's interactive digital maps. The trademark application protects the mobile software product's trade name -- Digital Show Guide(TM). Taptopia is also working on other Smartphone software technologies that may be utilized by event organizers, convention centers, and their related vendors.

On February 11, 2010, Taptopia entered into a joint venture with ConvExx, LLC to form Appcon, LLC (Appcon), which was formed under the laws of the State of Nevada. Pursuant to Appcon’s Operating Agreement, each of Taptopia and ConvExx owned a 50% interest in Appcon, which was created to function as a trade show organizer for mobile application trade shows to be held in the future. The trade show which Appcon was to organize initially was postponed due to insufficient registrations by trade show participants. On December 1, 2010, Taptopia and ConvExx mutually agreed to an orderly shut down of Appcon and dissolved the Company with the State of Nevada.

Basis of Presentation

In connection with preparation of the consolidated condensed financial statements and in accordance with the recently issued Statement of Financial Accounting Standards No. 165 “Subsequent Events” (SFAS 165), the Company evaluated subsequent events after the balance sheet date through the issuance date of these financial statements.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has incurred net loss during the three months ended March 31, 2011 and has a working capital deficit of $3,785,486. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty.

During fiscal 2011, Management plans to take the following steps in order to grow Metiscan;

·	Continue to reduce operating expenses by eliminating inefficiencies in our operations;

·	Procure capital equipment necessary to maintain a market advantage for our services we offered;

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·	Evaluate further upgrades of infrastructure and licensed software, as well as improve service at our freestanding diagnostic imaging center;

·	Develop mobile software solutions for the convention, meeting and trade show industries; and

·	Develop and acquire new technologies and operating ventures that add value to the overall entity.

Revenue Recognition

The Company uses the accrual method of accounting. Sales are recognized when service is provided.

Depreciation and Amortization

The Company depreciates its property and equipment using the straight-line method with estimated useful lives from five to thirty-nine years. For federal income tax purposes, depreciation is computed using an accelerated method.

Income Taxes

The Company accounts for income taxes under SFAS 109, “Accounting for Income Taxes.” Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements 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 those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and the disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company’s historical results as well as management’s future expectations. The Company’s actual results could vary materially from management’s estimates and assumptions.

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Disclosure About Fair Value of Financial Instruments

The Company estimates that the fair value of all financial instruments at March 31, 2011 as defined in FASB 107 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

Basic and Diluted Income (Loss) per Share

In accordance with SFAS No. 128, “Earnings Per Share,” basic income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed similar to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2011 and 2010, the Company had no potentially dilutive shares.

Recent Accounting Pronouncements

There are no current accounting pronouncements that affect the Company.

Convertible Debt

Convertible Note #1

Effective April 15, 2010, as consideration for a $100,000 loan, the Company executed a convertible promissory note (the “Convertible Note #1”) to SBCH Charitable Foundation in the amount of one hundred thousand ($100,000) dollars. Interest on the outstanding portion of the principal of Convertible Note #1 accrues at a rate of twelve (12%) percent per annum, payable monthly. Pursuant to Convertible Note #1, beginning on October 15, 2010, and continuing each month thereafter until September 15, 2011 (the “Maturity Date for Note #1”), one-twelfth of the outstanding principal is automatically converted into common stock of the Company at a conversion price of sixty (60%) percent of the average closing bid price of the five (5) trading days prior to the date of conversion; provided, however, that the conversion price shall not exceed $0.001 per share.

Effective September 15, 2010, Convertible Note #1 was amended such that conversion of principal and interest would begin on April 15, 2011, and continuing each month thereafter until March 15, 2012 (the “Amended Maturity Date for Note #1”). Effective April 1, 2011, Convertible Note #1 was further amended such that conversion of principal and interest would begin on July 15, 2011, and continuing each month thereafter until June 15, 2012 (the “Second Amended Maturity Date for Note #1”) and no interest payments shall be due until the Second Amended Maturity Date for Note #1.

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Convertible Note #2

Effective September 1, 2010, as consideration for a $100,000 loan, the Company executed a convertible promissory note (the “Convertible Note #2”) to SBCH Charitable Foundation in the amount of one hundred thousand ($100,000) dollars. Interest on the outstanding portion of the principal of Convertible Note #2 accrues at a rate of twelve (12%) percent per annum, payable monthly. Pursuant to Convertible Note #2, beginning on March 1, 2011, and continuing each month thereafter until February 1, 2012 (the “Maturity Date for Note #2”), one-twelfth of the outstanding principal is automatically converted into common stock of the Company at a conversion price of sixty (60%) percent of the average closing bid price of the five (5) trading days prior to the date of conversion; provided, however, that the conversion price shall not exceed $0.001 per share.

Effective April 1, 2011 Convertible Note #2 was amended such that conversion of principal and interest would begin on January 1, 2013, and continuing each month thereafter until December, 2014 (the “Amended Maturity Date for Note #2” and that no interest payments shall be due until the Amended Maturity Date for Note #2.

Subsequent Events

On May 10, 2011, SBCH Charitable Foundation (“SBCH”) was issued fifty million restricted shares (50,000,000) of the Company’s common stock for deferring interest payments and amending the Maturity Date related to Convertible Note #1.

On May 10, 2011, SBCH was issued fifty million restricted shares (50,000,000) of the Company’s common stock for deferring interest payments and amending the Maturity Date related to Convertible Note #2.

On May 10, 2011, SBCH was issued fifty million restricted shares (50,000,000) of the Company’s stock as payment for terminating an Employee Benefits and Payroll Services letter agreement.

On May 10, 2011, Michael Foster & Associates was issued fifteen million restricted shares (15,000,000) of the Company’s common stock as payment for Digital Show Guide™ commissions earned from Taptopia.

On April 28, 2011, Metiscan amended its Certificate of Incorporation with the State of Delaware such that the Company shall have the authority to issue ten billion ten million (10,010,000,000) shares, of which ten billion (10,000,000,000) shares shall be common stock, par value $0.0001 per share, and ten million (10,000,000) shares shall be preferred stock, par value $0.0001 per share.

NOTE 2 ACCOUNTS PAYABLE AND ACCRUED LIABILITY

Approximately $1,500,000 of the $2,226,941 accounts payable and accrued liabilities are attributed to discounted operations and the corresponding chapter 7 bankruptcy proceedings for Metiscan-CC, Inc.

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NOTE 3 CANCELLATION OF SERIES A & SERIES B PREFERRED STOCK

On February 5, 2010, the Company cancelled its Series A and Series B Preferred class of stock (“A and B Preferred Shares”) and created a Series E and Series F Preferred class of stock (“E and F Preferred Shares”). The cancellation of the A and B Preferred Shares and creation of the E and F Preferred Shares was pursuant to the settlement agreement reached with Garth James whereas Mr. James was issued sixty (60) shares of Series E Preferred stock and seventy-two (72) shares of Series F Preferred stock. Each month, beginning February 2010, the Company purchases one (1) share of Series E Preferred stock and one (1) share of Series F Preferred stock at the total cost of approximately $10,000. Through March 31, 2011, the Company has purchased thirteen (13) of each series for a total of approximately $130,000.

NOTE 4 INVESTMENT IN LIMITED LIABILITY COMPANY

On February 11, 2010, the Company’s wholly owned subsidiary, Taptopia invested $100 in AppCon, LLC a limited liability company formed under the laws of the state of Nevada. Taptopia owned 50% of the interest and ConvExx, an unrelated entity, owned the remaining 50%. The purpose of the limited liability company was to function as a trade show organizer for mobile application trade shows to be held in the future. On December 1, 2010, Taptopia and ConvExx mutually agreed to an orderly shut down of Appcon and dissolved Appcon with the State of Nevada.

NOTE 5 LOSS ON SETTLEMENT OF DEBT

During the three months ended March 31, 2011, we experienced a net loss on the settlement of debt in the amount of $17,439.

NOTE 6 LEGAL PROCEEDINGS

There are no legal proceedings.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

You should read this section together with our financial statements and related notes thereto included elsewhere in this report. In addition to the historical information contained herein, this report contains forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are not based on historical information but relate to future operations, strategies, financial results or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. Certain statements contained in this 10-Q, including, without limitation, statements containing the words "believe," "anticipate," "estimate," "expect," "are of the opinion that" and words of similar import, constitute "forward-looking statements." You should not place any undue reliance on these forward-looking statements.

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You should be aware that our results from operations could materially be effected by a number of factors, which include, our ability to control costs and expenses, access to capital, and our ability to meet contractual obligations. There may be other factors not mentioned above or included elsewhere in this report that may cause actual results to differ materially from any forward-looking information.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified two accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management's most difficult, subjective judgment.

Going Concern. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's current financial resources are not considered adequate to fund its planned operations. This condition raises substantial doubt about its ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Non-Cash Equity Issuances. We periodically issue shares of our common stock in exchange for, or in settlement of, services. Our management values the shares issued in such transactions at either the then market value of our common stock, as determined by the Board of Directors and after taking into consideration factors such as the volume of shares issued or trading restrictions, or the value of the services received, whichever is more readily determinable.

SELECT FINANCIAL INFORMATION

	For the Three Months Ended
	March 31, 2011			March 31, 2010
Statement of Operations Data

Total Revenue	$	485,561		$	898,628
Operating Loss	$	26,912		$	(280,914	)
Net income (loss) after taxes	$	(10,346	)	$	(74,472	)
Net income ( loss) per share	$	(0.00	)	$	0.00

Balance Sheet Data

Total assets	$	11,961,603		$	11,891,262
Total liabilities	$	(4,414,188	)	$	(4,478,595	)
Stockholders’ equity (deficit)	$	7,547,415		$	(7,412,667	)

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During the three months ended March 31, 2011 our revenues were $485,561 as compared to $898,628 during the three months ended March 31, 2010. This decrease of $413,067, or 45%, is primarily the result of our operation of Schuylkill Open MRI, Inc. (SOMRI) and the revenues that majority owned subsidiary FirstView EHR, Inc. (FirstView) produces.

Our cost of revenues during the three months ended March 31, 2011 were $117,304 as compared to $152,586 during the three months ended March 31, 2010. Cost of revenues as a percentage of revenues were 24% during the three months ended March 31, 2011 as compared to 16% during the three months ended March 31, 2010. This is a decrease of $35,282 or 23%.

Although there can be no assurance, we anticipate cost of revenues to remain within the range of 10% to 25% of revenues in the foreseeable future.

Our selling, general and administrative expenses during the three months ended March 31, 2011 were $341,345 as compared to $465,128 during the three months ended March 31, 2010. This is a decrease of $123,780, or 27%. While there can be no assurance of a specific trend, we are continually working to minimize our selling, general and administrative expenses that will allow our revenues to sufficiently cover these expenses.

We experienced a net loss from operations of $10,346 during the three months ended March 31, 2011 as compared to a net loss from operations of $74,472 during the three months ended March 31, 2010.

Our interest expense during the three months ended March 31, 2011 was $19,824 as compared to $8,634 during the three months ended March 31, 2010. The increase in interest expense is a direct result of the discontinued operations and Chapter 7 bankruptcy filing with Metiscan- CC, Inc. As of March 31, 2011, the interest rates on our notes payable ranged from 6.1% to 12%.

During the three months ended March 31, 2011 we experienced a net loss on the settlement of debt in the amount of $17,439 as compared to $346,793 during the three months ended March 31, 2010.

Liquidity and Capital Resources

We have incurred an operating loss for the three months ended March 31, 2011 of $10,346 and an operating loss for the three months ended March 31, 2010 of $74,472. As of March 31, 2011, we had an accumulated deficit of $2,000,178 and available cash of $82,244. The Company had a working capital deficit of $3,737,139 as of March 31, 2010.

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We expect our revenues to increase during the foreseeable future as a result of increasing the number of customers we service. Revenues from our services are expected to increase in proportion to the number of customers serviced by us. Currently cash flows from operations are not sufficient to meet our cash requirements. Consequently, we are depending upon the proceeds from future debt or equity investments to sustain our operations and implement our business plan until revenue is sufficient to cover our operating expenses. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.

During the three months ended March 31, 2011 cash provided by operations was $1,245 as compared to $30,435 cash provided by operations during the three months ended March 31, 2010. This is a direct result of our increase in net loss in the amount of $1,172,298 and the decrease in accounts payable and accrued expenses in the amount of $209,219 during the three months ended March 31, 2011 as compared to an increase of $65,488 during the three months ended March 31, 2010.

During the three months ended March 31, 2011 we used $42,604 to purchase property and equipment as compared to $14,613 during the three months ended March 31, 2010.

During the three months ended March 31, 2011 we provided $30,879 of cash in financing activities as compared to using $52,864 in financing activities during the three months ended March 31, 2010.

Off-Balance Sheet Arrangements

Since our inception through March 31, 2011, we have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation S-B.

Risk Factors

An investment in our common stock involves a high degree of risk. If any of the following risks actually occur, our business, financial condition and operations will be materially affected.

Accordingly, prospective investors should carefully consider the following risk factors, in addition to the other information with respect to our business, contained before purchasing shares.

OUR S-1 HAS NOT YET BEEN DECLARED EFFECTIVE.

We have filed a Registration Statement on Form S-1 (“S-1”) with the Securities and Exchange Commission (“SEC”). However, the S-1 has not yet been declared effective by the SEC. Until the S-1 is declared effective by the SEC, we are not an SEC reporting company. There can be no assurance that our S-1 will ever be declared effective by the SEC.

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We have voluntarily chosen to file this Form 10-K Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 (“10-K”). This 10-K has not been reviewed by the SEC and our voluntary quarterly and annual filings will likely not be reviewed by the SEC until after the S-1 is declared effective. Further, although we intend to comply with the SEC’s filing requirements, in view of the fact that we are not an SEC reporting company, we are not required to adhere to the SEC’s filing requirements.

THERE IS UNCERTAINTY AS TO OUR ABILITY TO REMAIN A GOING CONCERN.

As of March 31, 2011 we had an accumulated deficit of $2,010,523, had available cash of $82,244 and had current liabilities of $4,414,188. For the near future, it is likely that we will incur operating expenses without sufficient revenues to cover these expenses. We are likely to have a continually increasing net operating loss until we successfully increase our customer base and level our selling, general and administrative expenses. We cannot guarantee that we will be able to increase our customer base and revenues to the extent necessary to generate sufficient revenue to cover our operating expenses. We expect negative cash flow from operations to continue, at least for the foreseeable future, as we continue to develop our businesses. If cash generated by operations is insufficient to satisfy our liquidity requirements, we may be required to sell debt or additional equity securities. The sale of additional equity or convertible debt securities would result in additional dilution to our stockholders. Further, there can be no assurance that we will be able to successfully sell our securities in order to obtain additional capital.

SOMRI IS SUBJECT TO CHANGES IN HEALTHCARE LAWS THAT MAY REDUCE OUR REVENUES AND LOWER OUR PROFIT MARGINS.

Each time the United States government amends existing, or introduces new, healthcare laws, SOMRI may be faced with lower profit margins and/or the need to change the services offered by SOMRI. The U.S. government has undertaken efforts to control growing healthcare costs through legislation, regulation and voluntary agreements with medical care providers and drug companies. In the recent past, the U.S. Congress has considered several comprehensive healthcare reform proposals. The proposals were generally intended to expand healthcare coverage for the uninsured and reduce the growth of total healthcare expenditures. By way of example, the Deficit Reduction Act of 2006, (the “DRA”) drastically reduced the amount of revenue SOMRI was able to generate from each patient study through Medicare, which caused SOMRI’s to reduce fees to its clients thereby lowering its profit margins. If the United States government makes further changes in healthcare laws which lower government reimbursement of patient studies, we will again be forced to reduce our fees and lower our profit margins.

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IF WE FAIL TO COMPLY WITH THE EXTENSIVE HEALTHCARE LAWS AND GOVERNMENT REGULATIONS APPLICABLE TO US, WE COULD SUFFER PENALTIES OR BE REQUIRED TO MAKE SUBSTANTIAL CHANGES TO OUR OPERATIONS.

The healthcare industry is highly regulated. SOMRI is required to comply with extensive and complex laws and regulations at the federal, state, and local government levels. These laws and regulations relate to, among other things:

• Licensure and certification of healthcare facilities;

• Professional regulation of Physicians;

• Patient health and safety;

• Reimbursement for healthcare services;

• Availability of patient medical records;

• Patient referrals; and

• False claims.

Existing and new laws and regulations affecting the healthcare industry could create unexpected liabilities for us, could cause us to incur additional costs and could restrict our operations. Many healthcare laws are complex, and their application to specific products and services may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate the healthcare information services that we provide. However, these laws and regulations may nonetheless be applied to our products and services. Our failure to accurately anticipate the application of these laws and regulations, or other failure to comply, could create liability for us, result in adverse publicity and negatively affect our businesses. Some of the risks we face from healthcare regulation are as follows:

• Anti-kickback Laws. There are federal and state laws that govern patient referrals, physician financial relationships and inducements to healthcare providers and patients. The federal healthcare programs’ anti-kickback law prohibits any person or entity from offering, paying, soliciting or receiving anything of value, directly or indirectly, for the referral of patients covered by Medicare, Medicaid and other federal healthcare programs or the leasing, purchasing, ordering or arranging for or recommending the lease, purchase or order of any item, good, facility or service covered by these programs. Many states also have similar anti-kickback laws which are not necessarily limited to items or services for which payment is made by a federal healthcare program. These laws are applicable to manufacturers and distributors and, therefore, may restrict how we and some of our customers market products to healthcare providers, including e-details. Any determination by a state or federal regulatory agency that any of our practices violate any of these laws could subject us to civil or criminal penalties and require us to change or terminate some portions of our business and could have an adverse effect on our business. Even an unsuccessful challenge by regulatory authorities of our practices could result in adverse publicity and be costly for us to respond to.

• Medical Professional Regulation. The practice of most healthcare professions requires licensing under applicable state law. In addition, the laws in some states prohibit business entities from practicing medicine. If a state determines that some portion of our business violates these laws, it may seek to have us discontinue those portions or subject us to penalties or licensure requirements. Any determination that we are a healthcare provider and have acted improperly as a healthcare provider may result in liability to us.

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If SOMRI violates these laws, SOMRI and/or our officers and directors could be subject to: (1) criminal penalties such as imprisonment and fines: (2) civil penalties, including monetary penalties and the loss of our license to operate our diagnostic imaging facilities: and (3) exclusion or suspension from participating in governmental healthcare programs such as Medicare and Medicaid.

REDUCTION OR CHANGES IN REIMBURSEMENT FROM GOVERNMENT OR THIRD-PARTY PAYORS COULD ADVERSELY AFFECT OUR OPPERATING RESULTS.

We are dependent on government and third-party sources for services provided to patients. A number of factors affect the amounts we receive for our services, including, but not limited to, whether or not we are a participating provider, negotiated discounts, fee schedules or capitation payment arrangements, cost containment and utilization decisions of third-party payors, Medicare and Medicaid regulations and reimbursement policies, and other market and cost factors. We have little or no control over any of the foregoing.

SOMRI IS SUBJECT TO COMPETITION WITH A SINGLE HOPSITAL IN OUR MARKET AREA WHICH MAY ADVERSELY AFFECT OUR PATIENT FLOW.

SOMRI competes with a single hospital that also provides MRI services in our market area. This hospital may have competitive advantages which may affect our patient flow. There can be no assurance that this competition, or other competition which we may encounter in the future, will not adversely affect the business, financial condition, results of operation or cash flows of SOMRI.

OUR ABILITY TO GENERATE REVENUE DEPENDS IN LARGE PART ON REFERRALS FROM PHYSICIANS AND A SIGNIFICANT REDUCTION WOULD ADVERSELY AFFECT OUR BUSINESS.

A significant reduction in physician referrals would have a negative impact on our business. We derive substantially all of our net revenue, directly or indirectly, from fees charged for the diagnostic imaging services performed at SOMRI. We depend on referrals of patients from unaffiliated physicians and other third parties who have no contractual obligations to refer patients to us for a substantial portion of the services we perform. If a sufficiently large number of these physicians and other third parties were to discontinue referring patients to us, our scan volume could decrease, which would reduce our net revenue and operating margins. Further, commercial third-party payors have implemented programs that could limit the ability of physicians to refer patients to us. For example, prepaid healthcare plans, such as health maintenance organizations, sometimes contract directly with providers and require their enrollees to obtain these services exclusively from those providers. Some insurance companies and self-insured employers also limit these services to contracted providers. These “closed panel” systems are now common in the managed care environment. Other systems create an economic disincentive for referrals to providers outside the system’s designated panel of providers. If we are unable to compete successfully for these managed care contracts, our results and prospects for growth could be adversely affected.

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WE MAY NOT BE ABLE TO GENERATE SUFFICIENT CASH FLOW TO MEET OUR DEBT SERVICE OBLIGATIONS.

Our ability to generate sufficient cash flow from operations to make payments on our debt and other contractual obligations will depend on our future financial performance. A range of economic, competitive, regulatory, legislative and business factors, many of which are outside of our control, will affect our financial performance. Our inability to generate sufficient cash flow to satisfy our debt and other contractual obligations would adversely impact our business, financial condition and results of operations.

WE DO NOT HAVE EMPLOYMENT CONTRACTS WITH OUR KEY EMPLOYEES WHICH COULD ADVERSELY AFFECT OUR ABILITY TO GROW AND MAINTAIN OUR BUSINESSES.

We do not currently have any employment contracts with any employees. However, we do have key employees who are instrumental to our business and would be difficult to replace. These employees include Bryan A. Scott, our President and Chief Executive Officer, Janine Frieh, our Chief Financial Officer, Michael Foster our Vice President of Sales and Marketing for Taptopia and Shelley Tomey our Center Manager for SOMRI. Mr. Foster has over 25 years experience in the convention and trade show industry and is instrumental in building relationships which affect the growth of Taptopia’s business. Mrs. Tomey has managed SOMRI since its inception in 2003 and is key in maintaining relationships with referring physicians. Currently, there are no plans to enter into employment agreements with these employees; however, we may change this policy in the future. There can be no assurance that these employees will accept agreements if we were to offer agreements to them.

OUR CHIEF FINANCIAL OFFICER AND OUR CHIEF OPERATING OFFICER ARE EMPLOYED ON A PART-TIME BASIS WHICH MAY CAUSE THEM TO GIVE PRIORITY TO OTHER MATTERS OVER OUR NEEDS WHICH MAY MATERIALLY AFFECT OUR BUSINESS.

Our Chief Financial Officer operates her own CPA firm. Our Chief Operating Officer is employed by Barclaycard US. Our Chief Financial Officer and Chief Operating Officer work for us only on a part-time as needed basis. There can be no assurance that these individuals will be able to devote the time required by us.

A CONFLICT OF INTEREST MAY ARISE BETWEEN MINTZ & FRAADE, P.C.’S CAPACITY AS OUR LEGAL COUNSEL AND AS A STOCKHOLDER.

The law firm of Mintz & Fraade, P.C. is our legal counsel. We have issued a total of 87,500,000 shares of the Company’s common stock to Mintz & Fraade, P.C. as consideration for legal services rendered to us, of which 85,000,000 shares are currently owned by Mintz & Fraade, P.C. and 2,500,000 shares have been transferred to Mintz & Fraade Enterprises, LLC. A conflict of interest may arise between Mintz & Fraade, P.C.’s capacity as our legal counsel and as a stockholder because Mintz & Fraade, P.C.’s interests as our stockholder may not be the same as its interests as our legal counsel.

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WE ARE CONTROLLED BY OUR PRESIDENT, CHIEF EXECUTIVE OFFICER AND ONE OF OUR DIRECTORS, BRYAN A. SCOTT.

We are currently authorized to issue 10,000,000,000 shares of common stock, and as of May 2, 2011 there were 2,564,650,554 shares of common stock issued and outstanding. We are currently authorized to issue 10,000,000 shares of preferred stock. As of December 31, 2010 we have issued 900,000 shares of “Series C Preferred Stock” to Metiscan Holdings, Inc. (“Holdings”). Holdings has converted 150,000 shares of the Series C Preferred Stock into 1,500,000,000 shares of our common stock (which is included in the 2,564,650,554 shares of common stock issued and outstanding). The remaining 750,000 shares of Series C Preferred Stock owned by Holdings have voting rights equal to 7,500,000,000 shares of our common stock. The Series C Preferred Stock can be converted at any time into the then-available authorized but unissued shares of our common stock. At the present time, we have available 2,435,349,446 authorized but unissued shares of our common stock. At any time after our Certificate of Incorporation is amended to increase our authorized shares of common stock, the remaining shares of Series C Preferred Stock owned by Holdings can be converted into a total of 7,500,000,000 additional shares of common stock. Holdings currently has the same voting rights as if all of the Series C Preferred Stock had been converted into common stock. Accordingly, Holdings has the same voting rights whether or not the Series C Preferred Stock is converted into common stock.

Our President, Chief Executive Officer and one of our directors, Bryan A. Scott, is also the President, Chief Executive Officer and a director of Holdings. Additionally, Brian Hart, our Chief Operating Officer and one of our directors is also the Chief Operating Officer and director of Holdings. Janine Frieh, our Chief Financial Officer and one of our directors, is also the Chief Financial Officer and a director of Holdings. A trust for the benefit of Mr. Scott (the “Trust”) owns 88% of Holdings. The Trust has two trustees: Bryan A. Scott as the “Family Trustee” and Mandy Adams, who is an unrelated third party as the “Independent Trustee”. Bryan A. Scott is also designated as the “primary beneficiary” of the Trust. As of March 31, 2011, through Holdings, the trustees of the Trust have the right to vote approximately 89% of our voting securities based upon the number of shares of common stock issued and outstanding as of March 31, 2011. Thus, the trustees of the Trust in effect control our Board of Directors because Holdings has the power to vote its shares to remove any director from our Board of Directors and replace him or her with someone chosen by the Trustees of the Trust.

The only way in which Holdings would cease to control a majority of our voting securities is if our Certificate of Incorporation is amended to increase our authorized shares of common stock, and a sufficient number of shares are issued to third-party stockholders to reduce the shares owned by Holdings to less than a majority. Because the trustees of the Trust have the right currently to vote approximately 89% of our voting securities, the trustees of the Trust must approve an increase of our authorized shares and sales of new securities in order to reduce the percentage of issued and outstanding shares owned by Holdings to less than a majority.

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WE NEED ADDITIONAL FINANCING TO DEVELOP OUR BUSINESS AND TO MEET OUR CAPITAL REQUIREMENTS.

We will need additional financing to develop our business and meet our capital requirements. We currently have no arrangements to obtain additional financing and we will be dependent upon sources such as:

• future earnings,

• funds from private sources such as, loans and additional private placements, and

• funds from public offerings.

We entered into an agreement dated June 26, 2009 (the “Account Management Agreement”) with five independent private equity investors and an unrelated intermediary as the manager of the transaction, which may provide us with up to $7,954,061, which is set forth on our balance sheet as of December 31, 2010 as “Other Non-Current Assets”. The terms and conditions of the Account Management Agreement are set forth in the Notes to our Financial Statements in Note 6 of this Annual Report on Form 10-K.

In view of our current working capital deficit, our ability to obtain additional funds is limited. Additional financing may only be available, if at all, upon terms which may not be commercially advantageous. If adequate funds are not available from operations or additional sources of financing, our business will be materially adversely affected.

OUR ANTICIPATED FUTURE GROWTH IS DEPENDENT UPON OUR ABILITY TO SUCCESSFULLY MANAGE THE GROWTH OF OUR OPERATIONS.

We expect to experience growth in the number of employees and the scope of our operations. There can be no assurance that we will be able to grow our business as expected. Taptopia has recently added an employee to its sales staff, and our Directors are contemplating our acquisition of a business although we have yet to identify any such business. Our future success will be highly dependent upon our ability to successfully manage the expansion of our operations. Our ability to manage and support our growth effectively will be substantially dependent upon our ability to implement adequate improvements to financial and management controls, reporting and other procedures and hire sufficient numbers of financial, accounting, administrative and management personnel. Our expansion, and the resulting growth in the number of our employees, will result in increased responsibility for both existing and new management personnel. There can be no assurance that we will be able to identify, attract and retain experienced accounting and financial personnel. Our future operating results will depend upon the ability of our management and other key employees to implement and improve our systems for operations, financial control and information management, and to recruit, train, and manage our employee base. There can be no assurance that we will be able to achieve or manage any such growth successfully or to implement and maintain adequate financial and management controls and procedures. Our inability to do so would have a material adverse effect upon our business, results of operations and financial condition.

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Our future success depends upon our ability to address potential market opportunities while managing our expenses to match our ability to finance our operations. This need to manage our expenses will place a significant strain upon our management and operational resources. If we are unable to manage our expenses effectively, our business, results of operations and financial condition will be adversely affected.

RISKS WITH RESPECT TO SHARES OF OUR COMMON STOCK

WE MAY BE SUBJECT TO THE SECURITIES AND EXCHANGE COMMISSION'S "PENNY STOCK" RULES IF OUR COMMON STOCK SELLS BELOW $5.00 PER SHARE.

As trading in our common stock is limited and quotations are sporadic, on May 16, 2011, which was the last date upon which our common stock traded prior to the filing date of this Report, the closing price of our stock was $0.0009. Because the current trading price of our common stock is below $5.00 per share, trading in our securities is subject to the requirements of the Securities and Exchange Commission's rules with respect to securities trading below $5.00, which are referred to as "penny stocks". These rules require the delivery prior to any transaction of a disclosure schedule explaining the penny stock market and all associated risks and impose various sales practice requirements upon broker-dealers who sell "penny stocks" to persons other than established customers and accredited investors, which are generally defined as institutions or an investor individually or with their spouse, who has a net worth exceeding $1,000,000, excluding their residence, or annual income, individually exceeding $200,000 or, with their spouse, exceeding $300,000. For these types of transactions the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to the sale. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit its market price and liquidity.

In addition, we are subject to an SEC rule (Rule 15c2-11) (the so-called penny stock rules) which imposes various requirements upon broker-dealers who sell securities governed by the rule to persons other than established customers and accredited investors. The requirement that broker-dealers comply with this rule could deter broker-dealers from recommending or selling our common stock, thus further adversely affecting the liquidity and share price of our common stock, as well as our ability to raise additional capital.

WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK.

We have never paid dividends on our common stock, and there can be no assurance that we will have sufficient earnings to pay any dividends with respect to the common stock. Moreover, even if we have sufficient earnings, we are not obligated to declare dividends with respect to the common stock. The future declaration of any cash or stock dividends will be in the sole and absolute discretion of the Board of Directors and will depend upon our earnings, capital requirements, financial position, general economic conditions and other pertinent factors. It is also possible that the terms of any future debt financing may restrict the payment of dividends. We presently intend to retain earnings, if any, for the development and expansion of our business.

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OUR DIRECTORS HAVE THE RIGHT, WITHOUT THE AGREEMENT OF STOCKHOLDERS, TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK WITH ANY RIGHTS ALLOWABLE PURSUANT TO LAW, WHICH COULD ADVERSELY AFFECT THE RIGHTS AND VALUE OF OUR COMMON STOCK, INCLUDING VOTING RIGHTS AND LIQUIDATION PREFERENCES.

Our directors, without further action by our stockholders, have the authority to issue shares of Preferred Stock from time to time in one or more series, and to fix the number of shares, the relative rights, conversion rights, voting rights, terms of redemption, liquidation preferences and any other preferences, special rights and qualifications of any such series. Any issuance of Preferred Stock could adversely affect the rights of holders of common stock and the value of such common stock. Although our Board of Directors is required to make any determination to issue such stock based upon its judgment as to the best interests of our stockholders, our Board of Directors could, for example, act in a manner which would discourage an acquisition attempt or other transaction which some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of such stock. Our Board of Directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by applicable law or stock exchange rules.

THERE CAN BE NO ASSURANCE THAT OUR COMMON STOCK WILL EVER BE LISTED ON ANY NATIONAL SECURITIES EXCHANGES OR MARKETS.

Until such time as our common stock is listed upon any of the national securities exchanges or markets, of which there can be no assurance, accurate quotations as to the market value of our securities may not be possible. Sellers of our securities are likely to have more difficulty disposing of their securities than sellers of securities which are listed upon any of the several NASDAQ markets, the New York Stock Exchange, the American Stock Exchange, or one of the other national securities exchanges or markets.

Although we intend for our common stock to trade on public markets other than the Pink OTC Markets (where it is currently quoted), such as the OTC Bulletin Board, there can be no assurance that we would be successful in having our common stock listed or quoted on other public markets, or that if so listed or quoted, that our common stock would thereafter increase in value.

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Even if additional public markets do develop, the volume of trading in our common stock will presumably be limited and likely dominated by a few individuals. The limited volume, if any, will make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that one can purchase or sell in a short period of time. An investor may find it difficult to dispose of shares of our common stock or obtain a fair price for our common stock in the market.

Plan of Operation

On August 8, 2008, Metiscan, Inc. (Metiscan, the Company, our or we) completed the acquisition of Metiscan Technologies, Inc. (Technologies) and at the same time, elected a new slate of directors and appointed new corporate officers.

On November 13, 2008, we formed Taptopia, Inc., a wholly owned subsidiary that provides technology utilizing Smartphones to event organizers, convention centers, and their related vendors

On November 13, 2008, we formed Shoreline Employment Services, Inc., an employment services company which provides part-time, full time, and contract employees.

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On June 24, 2009, we announced that we had determined to become a holding company focused upon growing our organization by making key acquisitions of companies which focus on developing new technologies.

On February 11, 2010, Taptopia entered into a joint venture with ConvExx, LLC to form Appcon, LLC (Appcon), which was formed under the laws of the State of Nevada. Pursuant to the Operating Agreement, each of Taptopia and ConvExx owned a 50% interest in Appcon, which was created to function as a trade show organizer for mobile application trade shows to be held in the future. On December 1, 2010, Taptopia and ConvExx mutually agreed to an orderly shut down of Appcon and dissolved the company with the State of Nevada.

As of November 15, 2010 FirstView has ceased its operations and is currently evaluating other business pursuits.

As of March 31, 2011, we operated the following subsidiaries:

• FirstView EHR, Inc. (FirstView) – FirstView is our wholly owned subsidiary which provides healthcare information technology (“Healthcare IT”) services for diagnostic imaging facilities, including, but not limited to, web-based electronic healthcare records (EHR), long-term archiving and professional “Healthcare IT” services.

As of November 15, 2010 FirstView has ceased its operations and is currently evaluating other business pursuits.

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Taptopia has filed a design patent application and a trademark application with the United States Patent and Trademark Office (USPTO) to legally protect Taptopia's Digital Show Guide(TM) product. The design patent application protects the graphical user interface (GUI) and its interactive design elements related to Taptopia's interactive digital maps. The trademark application protects the mobile software product's trade name -- Digital Show Guide(TM). Taptopia is also working on other Smartphone software technologies that may be utilized by event organizers, convention centers, and their related vendors.

Number of total employees and number of full-time employees

As of March 31, 2011, we had 17 total employees, of which 13 were full-time employees. Our subsidiaries had the following number of employees:

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	Total Employees:	Full-Time Employees:

FirstView:	0	0

SOMRI:	0	0

Shoreline:	17	13

Taptopia:	0	0

Shoreline is an employee services company which leases the services of its employees to the subsidiaries of Metiscan and other unrelated third parties.

As of March 31, 2011, we had 8 consultants. Our subsidiaries had the following number of consultants:

	Consultants:

FirstView:	0

SOMRI:	5

Shoreline:	1

Taptopia:	2

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Based on the nature of our current operations, we have not identified any issues of market risk at this time.

ITEM 4T. CONTROLS AND PROCEDURES

The principal executive officer and principal financial officer of the Company, who are the same person (“the Certifying Officer”) with the assistance of advisors, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in section 240.13a-14(c) and 240.15d-14(c) under the Exchange Act) within 90 days prior to the filing of this report. Based upon the evaluation, the Certifying Officer concludes that the Company’s disclosure controls and procedures are effective in timely alerting management to material information relative to the Company which is required to be disclosed in its periodic filings with the SEC.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the quarter ended March 31, 2011, no matters were submitted to the Company's security holders.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

31.1

Certification of CEO and CFO Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	METISCAN, INC. (Registrant)


Dated: May 17, 2011	By:	/s/ Bryan A. Scott
		Bryan A. Scott, President and Chief Executive Officer


	By:	/s/ Janine Frieh
		Janine Frieh, Chief Financial Officer


	By:	/s/ Brian Hart
		Brian Hart, Chief Operating Officer


	By:	/s/ Rossanna Perales,
		Rossanna Perales, Controller

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Aclor International, Inc. - FORM 10-Q - May 17, 2011

Attached files

Aclor International, Inc. Reports