UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended		December 31, 2011
[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from		[ ] to [ ]
Commission file number		333-174252
HYGEA HOLDINGS CORP.
(Exact name of registrant as specified in its charter)

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

For the fiscal year ended

December 31, 2012

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

	For the transition period from	[ ] to [ ]

	Commission file number	333-174252

HYGEA HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Nevada		30-0532605
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9100 South Dadeland Blvd., Suite 1500, Miami, FL		~~33156~~33 1 56
(Address of principal executive offices)		(Zip Code)
Registrant's telephone number, including area code:		786-497-7718

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

Title of Each Class		Name of Each Exchange On Which Registered
N/A		N/A

Securities registered pursuant to Section 12(g) ~~1of~~1 of the Act:

None
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 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 Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 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 x No ¨
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. ¨
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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	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 ¨ No x

None
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 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 Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 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 x No ¨

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. ¨
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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

~~The~~Large ~~aggregate~~accelerated ~~market~~filer ~~value~~o ofAccelerated ~~the~~filer ~~voting~~o ~~and non~~Non-~~voting~~accelerated ~~common~~filer ~~equity~~o ~~held~~Smaller byreporting ~~non-affiliates~~company (including 16,027,437 shares which are issuable in connection with the automatic conversion of certain promissory notes upon effectiveness of the registrant’s Registration Statement on Form S-1 on February 10, 2012) 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 (June 30, 2011): $6,971,362 (based on the last price sold prior to such date of $.11 per share).x

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates (including 16,027,437 shares which are issuable in connection with the automatic conversion of certain promissory notes upon effectiveness of the registrant’s Registration Statement on Form S-1 on February 10, 2012) 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 (June 30, 2011): $ 6,971,362 (based on the last price sold prior to such date of $.11 per share).

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. There were 164,322,680 shares of common stock outstanding as of June 4, 2012 (including 16,027,437 shares which are issuable in connection with the automatic conversion of certain promissory notes upon effectiveness of the registrant’s Registration Statement on Form S-1 on February 10, 2012).

DOCUMENTS INCORPORATED BY REFERENCE

None.

Table Of Contents

TABLE OF CONTENTS

Part I.
	Item 1.	Business	1
	Item 1A.	Risk Factors	9
	Item 1A .	Risk Factors	9
	Item 1B.	Unresolved Staff Comments	19
	Item 2.	Properties	19
	Item 3.	Legal Proceedings	19
	Item 4.	Mine Safety Disclosures	19
Part II.
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
	Item 6.	Selected Financial Data	21
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	30
	Item 8.	Financial Statements and Supplementary Data	F-1
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	31
	Item 9A.	Controls and Procedures	31
	Item 9B.	Other Information	32
Part III.
	Item 10.	Directors, Executive Officers and Corporate Governance	32
	Item 11.	Executive Compensation	36
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	39
	Item 14.	Principal Accounting Fees and Services	39
Part IV.
	Item 15.	Exhibits, Financial Statement Schedules	40
SIGNATURES			41

iii

Table Of Contents

PART I

Item 1. Business

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (U.S. $) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in terms of United States dollars.

As used in this current report and unless otherwise indicated, the terms “Company”, "we", "us", "our", and "Hygea" mean Hygea Holdings Corp. and our wholly-owned subsidiaries.

General Overview

We are a Nevada corporation formed on August 26, 2008, as Piper Acquisition II, Inc. We changed our name to “Hygea Holdings Corp.” on May 16, 2011.

Our company, based on proposed business activities, was a "blank check" company. The U.S. Securities and Exchange Commission (“SEC”) defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Under SEC Rule 12b-2 under the Exchange Act, we also qualified as a “shell company,” because we had no or nominal assets (other than cash) and no or nominal operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions.

On May 16, 2011, we entered into a Share Exchange Agreement with the shareholders of Hygea Health Holdings, Inc., a Florida corporation (“Hygea Health”), each of which are accredited investors (“Hygea Health Shareholders”), pursuant to which we acquired 99.9% of the outstanding securities of Hygea Health in exchange for 135,519,339 shares of our common stock (the “Hygea Exchange”). The Hygea Exchange closed on May 16, 2011, which closing was deemed effective as of December 31, 2010. Considering that, following the Hygea Exchange, the Hygea Health Shareholders control the majority of our outstanding common stock and we effectively succeeded our otherwise minimal operations to those that are theirs, Hygea Health is considered the accounting acquirer in this reverse-merger transaction. A reverse-merger transaction is considered, and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Hygea Health securities for our net monetary assets, accompanied by a recapitalization. We are the surviving and continuing entity and the historical financials following the reverse merger transaction will be those of Hygea Health. Upon our acquisition of Hygea Health, we were no longer a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) immediately prior to our acquisition of Hygea Health pursuant to the terms of the Hygea Exchange.

~~Table~~Hygea OfHealth ~~Contents~~was founded in March of 2007 as Hygea Health Network, Inc., with the purpose of creating a network of (i) multidisciplinary integrated medical group practices with a primary care physician focus; (ii) healthcare management service organizations that manage and coordinate the medical care of patients enrolled in multiple managed care health plans (i.e., HMOs) and (iii) integrating all aspects of the network via a robust technology platform that incorporates state-of-the-art and physician friendly electronic medical records and practice management system services, including scheduling and billing capabilities. The focal point of Hygea Health’s value proposition is that the best healthcare patient results are achieved when the provider knows his patient. To achieve that end, we embrace a management philosophy where the practice is patient centric to the individual patient and use modern technology to put together a platform that collects data and organizes it into a format that helps the provider understand the full scope or complexity of the patient condition.

~~Hygea~~ We ~~Health~~have ~~was~~not ~~founded~~been ininvolved March of 2007 as Hygea Health Network, Inc., with the purpose of creating a network of (i) multidisciplinary integrated medical group practices with a primary care physician focus; (ii) healthcare management service organizations that manage and coordinate the medical care of patients enrolled in ~~multiple managed care health plans (i.e.~~any bankruptcy, ~~HMOs)~~receivership and (iii) integrating all aspects of the network via a robust technology platform that incorporates state-of-the-art and physician friendly electronic medical records and practice management system services, including scheduling and billing capabilities. The focal point of Hygea Health’s value proposition is that the best healthcare patient results are achieved when the provider knows his patient. To achieve that end, we embrace a management philosophy where the practice is patient centric to the individual patient and use modern technology to put together a platform that collects data and organizes it into a format that helps the provider understand the full scope or ~~complexity~~similar ~~of the patient condition~~proceeding.

WeOur ~~have~~Current ~~not been involved in any bankruptcy, receivership or similar proceeding.~~Business

~~Our~~We ~~Current~~have ~~Business~~two principal areas of operations. The first is a network of multidisciplinary integrated medical group practices (“Integrated Group”) with a primary care physician ("PCP") focus. The Integrated Group owns a series of subsidiaries that provide industry related services and which support the integrated group practice business model. The second focus is Palm Medical Network LLC (“Palm Medical Network”), an independent physician network. Under Palm Medical Network, we have a series of medical service organizations (“MSOs”) that have entered “at risk” contracts with Medicare Advantage Health Maintenance Organizations (“HMOs”) throughout Florida.

WeThe ~~have~~“Integrated ~~two~~Group” ~~principal~~is ~~areas~~a definition of ~~operations.~~the ~~The~~relationship ~~first~~between isdifferent aprovider ~~network~~organizations ofwe ~~multidisciplinary~~own. The ~~integrated medical group practices (“~~Integrated Group”) ~~with~~defines a ~~primary~~process and ~~care~~is ~~physician~~not ~~("PCP")~~a ~~focus~~standalone legal entity. The providers identified to be part of the Integrated Group ~~owns~~practice aare ~~series~~usually acquired ofthough ~~subsidiaries~~an ~~that~~asset ~~provide~~purchase ~~industry~~of ~~related~~the ~~services~~practice and ~~which~~a ~~support~~phase out of the ~~integrated~~provider’s ~~group~~current ~~practice~~corporate ~~business~~entity ~~model~~and provider agreements. The ~~second~~group ~~focus~~practices isare ~~Palm~~organized ~~Medical~~in ~~Network~~“pods” ~~LLC~~of ~~(“Palm~~primary ~~Medical~~care ~~Network”),~~physicians anin ~~independent~~a ~~physician~~medically ~~network~~cohesive area. ~~Under~~In ~~Palm~~addition ~~Medical~~to ~~Network~~PCP, wethe pods will have acertain ~~series~~specialties ofand ~~medical~~will ~~service~~provide ~~organizations~~ancillary services (~~“MSOs”~~i.e. pharmacy, therapy, diagnostic and lab) ~~that~~to their patient population. We have ~~entered~~acquired ~~“at~~five ~~risk”~~Doctor ~~contracts~~practices ~~with~~in ~~Medicare~~Miami-Dade ~~Advantage~~and Broward ~~Health~~Counties, ~~Maintenance~~Florida. At ~~Organizations~~present, ~~(“HMOs”)~~we ~~throughout~~do ~~Florida~~not own any active subsidiaries that provide ancillary services.

~~The~~Under ~~“Integrated~~Palm ~~Group”~~Medical isNetwork, awe ~~definition~~have a series of ~~the~~medical ~~relationship~~service ~~between different provider~~ organizations we(“MSOs”) ~~own. The~~that ~~Integrated~~have ~~Group~~entered ~~defines~~“at arisk” ~~process~~contracts ~~and~~with isMedicare ~~not~~Advantage Health aMaintenance ~~standalone~~Organizations ~~legal~~(“HMOs”) ~~entity~~throughout Florida. ~~The~~An ~~providers~~“at ~~identified~~risk” tocontract beis ~~part of~~ when the ~~Integrated~~MSO ~~Group~~agrees ~~practice~~to ~~are~~assume ~~usually~~either ~~acquired~~a ~~though~~portion anor ~~asset~~all ~~purchase~~ of the ~~practice~~financial ~~and~~risk/exposure afor ~~phase~~potential ~~out~~losses ofincurred ~~the~~by ~~provider’s~~their ~~current~~patient base ~~corporate~~participating ~~entity and provider agreements. The group practices are organized~~ in ~~“pods”~~that ofMedicare ~~primary~~Advantage ~~care physicians in a medically cohesive area~~HMO. InAn ~~addition~~MSO tois ~~PCP,~~an ~~the~~entity ~~pods~~that, ~~will~~under ~~have~~contract, ~~certain~~provides ~~specialties~~medical and ~~will~~medically related ~~provide ancillary~~ services ~~(i.e. pharmacy, therapy, diagnostic and lab)~~ to ~~their~~patients ~~patient~~on ~~population. We~~behalf ~~have acquired the practices~~ of ~~Doctors~~a ~~Sussman~~Medicare ~~and~~Advantage ~~Staller,~~HMO ~~Stephen A~~agreement. We ~~Kotzen~~currently ~~and~~have ~~Doctor~~four ~~Jose~~“at ~~David~~risk” agreements ~~Suarez which, along~~ with ~~Opa-Locka~~different ~~Pain~~Medicare ~~Management~~Advantage ~~Corp~~HMOs., We we have ~~integrated~~created ~~into~~a ~~five~~legal ~~offices~~subsidiary into ~~Miami-Dade~~manage ~~and~~each ~~Broward~~discreet Medicare Advantage ~~Counties,~~HMO ~~Florida. In~~agreement ~~2011,~~to weprotect ~~sold~~ the ~~Royal~~parent ~~Palm~~entity ~~Beach~~as ~~practice. At~~well ~~present,~~as wethe doother ~~not~~contracts ~~own~~should ~~any~~one ~~active~~of ~~subsidiaries~~the ~~that~~contracts ~~provide~~be ~~ancillary~~impaired ~~services~~or incur excessive losses.

Under Palm Medical Network, we have a series of medical service organizations (“MSOs”) that have entered “at risk” contracts with Medicare Advantage Health Maintenance Organizations (“HMOs”) throughout Florida. An “at risk” contract is when the MSO agrees to assume either a portion or all of the financial risk/exposure for potential losses incurred by their patient base participating in that Medicare Advantage HMO. An MSO is an entity that, under contract, provides medical and medically related services to patients on behalf of a Medicare Advantage HMO agreement. We currently have four “at risk” agreements with different Medicare Advantage HMOs. We have created a legal subsidiary to manage each discreet Medicare Advantage HMO agreement to protect the parent entity as well as the other contracts should one of the contracts be impaired or incur excessive losses.2

2From 2007 to 2010, Hygea Health made a series of acquisitions of group physician practices and also as acquired Palm Medical Group, in order to access their approximately 1,600 credentialed physicians.

~~Table~~Through Ofthe ~~Contents~~following healthcare management “toolkit”, we acquire, manage and integrate group practices, with a PCP focus:

~~From~~Independent Physician Association (IPA) and Managed Service Organizations (MSOs) - In 2007 towe ~~2010~~acquired Palm Medical Group, ~~Hygea~~Inc., ~~Health~~a ~~made~~Florida not-for-profit Independent Physician Association with a ~~series~~20-year ofoperating ~~acquisitions~~history. Palm ofMedical ~~group~~Group, ~~physician~~Inc. was ~~practices~~originally ~~and~~founded ~~also~~by asthe Tenet ~~acquired~~Hospital chain, now operated as Palm Medical ~~Group~~Network, inLLC ~~order~~(“Palm”). The integrated group practice and Palm are synergistic. Their interaction provides each other with significant resources and the opportunities to grow ~~access~~their respective businesses. We provide core technologies through our electronic medical records service and an alternative practice model. Palm provides a network of primary care physicians which, along with their Management Services Organizations (MSOs) contracts Medicare HMO membership with Care Plus (Humana’s Medicare HMO), Physicians United, and Amerigroup among others. Palm is an independent physician association (“IPA”) that consists of approximately 1,600 ~~credentialed~~ physicians, practicing in 76 medical specialties and delivering over 4.5 million hours of patient care annually. Palm’s MSOs have been the financial engine for our network. Palm’s network has a blanket agreement with its members that it can contract on their behalf with any payor for the provision of medical services. The provider has the right, once notified, to opt out of the agreement voluntarily.

~~Through~~Network ~~the~~of ~~following~~Medical ~~healthcare~~Group ~~management~~Practices ~~“toolkit”,~~and Healthcare weService ~~acquire,~~Providers ~~manage~~– We own and ~~integrate~~continue to acquire medical group practices, with a PCP focus: throughout Florida. We began our initial provider rollout with an initial focus on the South and Central Florida markets, with plans for expansion into surrounding states in the Southeast next, then throughout the U.S. We are also in a variety of negotiations with specialty medical and ancillary healthcare service providers (including diagnostic facilities, pharmacies, rehabilitation therapy practices, among others) to ultimately provide community-based “medical malls” for more efficient, more comprehensive and better patient care.

~~Independent~~Medical ~~Physician~~Risk ~~Association~~Assessment (~~IPA~~MRA) ~~and~~Specialists – ~~Managed~~We ~~Service~~are ~~Organizations~~focused ~~(MSOs)~~on -improving Inthe ~~2007~~quality weof ~~acquired~~care ~~Palm Medical Group, Inc., a Florida not-~~for~~-profit~~ ~~Independent~~patients ~~Physician~~and ~~Association~~achieving ~~with~~accurate aand ~~20-year~~timely ~~operating~~payment ~~history. Palm~~from ~~Medical~~our ~~Group,~~managed care ~~Inc. was~~plan ~~originally~~partners ~~founded~~for byservices ~~the Tenet Hospital chain, now operated as Palm Medical Network, LLC (“Palm”)~~rendered. ~~The~~We ~~integrated~~have ~~group~~hired ~~practice~~Foreign ~~and~~Healthcare ~~Palm~~Graduates ~~are~~to ~~synergistic. Their~~review ~~interaction~~medical ~~provides~~records ~~each~~and ~~other~~assure that ~~with~~all ~~significant resources and~~ the ~~opportunities~~medical toservices ~~grow~~provided ~~their~~by ~~respective businesses. We provide core technologies through~~ our ~~electronic~~Physicians ~~medical~~is ~~records~~memorialized ~~service~~correctly ~~and~~in anthe ~~alternative~~patients’ ~~practice model~~chart. ~~Palm~~In ~~provides~~addition, athey correct ~~network~~coding ~~of primary care physicians which~~errors, ~~along~~conduct ~~with~~health ~~their~~risk ~~Management~~assessments ~~Services~~based ~~Organizations~~on ~~(MSOs)~~the ~~contracts~~chart ~~Medicare~~review ~~HMO~~, ~~membership~~help ~~with~~to ~~Care~~correctly ~~Plus~~identify ~~(Humana’s~~all ~~Medicare~~the ~~HMO),~~issues ~~Physicians United,~~ and conditions ~~Amerigroup~~affecting ~~among~~each ~~others. Palm is an independent physician association (“IPA”) that consists of approximately 1~~patient,~~600~~ ~~physicians,~~and ~~practicing~~conducting inintensive 76 medical ~~specialties~~record ~~and delivering over 4~~audits.5 We ~~million~~believe ~~hours~~accurate tabulations of each patient ~~care annually. Palm~~’s ~~MSOs~~medical ~~have~~risk ~~been~~assessment ~~the~~score ~~financial~~within ~~engine~~each ~~for~~practice ~~our~~and ~~network. Palm’s~~within ~~network~~our ~~has~~MSO amay ~~blanket~~result ~~agreement~~in ~~with~~increased ~~its~~revenue ~~members~~and profit ~~that~~margins ~~it can contract on their behalf with any payor~~ for the ~~provision of medical services~~Company. ~~The provider has the right, once notified, to opt out of the agreement voluntarily.~~

~~Network~~Electronic of Medical ~~Group~~Records/Practice Management ~~Practices~~System ~~and Healthcare Service Providers~~ – We ~~own~~are ~~and~~strong ~~continue~~proponents toof ~~acquire~~using electronic medical ~~group~~records/practice ~~practices~~management ~~with~~systems a(“EMR/PMS”) in ~~PCP~~all ~~focus~~physician ~~throughout~~practices ~~Florida. We~~and ~~began~~ancillary ~~our~~providers ~~initial~~in ~~provider rollout with an initial focus on the South and Central~~ Florida. This ~~markets,~~system ~~with~~provides ~~plans~~integrated ~~for~~patient ~~expansion~~record ~~into~~management that ~~surrounding~~is ~~states~~fully inautomated ~~the Southeast next, then throughout the U~~end-to-end.S. We ~~are~~have ~~also~~allocated inand adeployed ~~variety~~financial ~~of negotiations with specialty medical~~ and ~~ancillary~~technical ~~healthcare~~resources ~~service providers (including diagnostic facilities, pharmacies, rehabilitation therapy practices, among others)~~ to ~~ultimately~~speed ~~provide~~the ~~community-based~~continued implementation ~~“medical~~and ~~malls”~~integration ~~for~~of ~~more~~EMR/PMS ~~efficient,~~into ~~more~~our ~~comprehensive and better patient care~~operations.

~~Medical~~In ~~Risk~~deploying ~~Assessment~~EMR ~~(MRA)~~into ~~Specialists~~our –operations, Wepatient data ~~are~~is ~~focused~~analyzed onby ~~improving~~our ~~the~~provider ~~quality~~team ofas ~~care~~well ~~for~~as ~~patients~~artificial ~~and~~intelligence ~~achieving~~is ~~accurate~~introduced to determine trends and ~~timely~~create ~~payment~~suspect ~~from~~reports on ~~our~~the ~~managed~~individual ~~care~~patients ~~plan~~allowing ~~partners~~the ~~for~~provider ~~services~~to ~~rendered~~investigate and diagnose. ~~This~~The EMR is ~~achieved~~integrated ~~through~~with the ~~utilization~~practitioner’s management ofsuite ~~specialized~~to ~~third~~assure ~~party~~data ~~healthcare~~is ~~consultants~~consistently toupdated ~~identify~~from ~~and~~the ~~correct~~most ~~coding~~recent ~~errors~~visits. Equally important, ~~conduct~~practice ~~health~~management software ~~risk~~is ~~assessments~~used ~~directly~~to ~~with~~set ~~patients~~up tonew ~~correctly~~network ~~identify~~specialist ~~all~~or ~~the~~diagnostic ~~issues~~appointments and ~~conditions~~allows ~~affecting~~monitoring/tracking ~~each~~whether the patient, has ~~and~~actually ~~conducting~~gone ~~intensive~~to ~~medical~~the ~~record~~referral ~~audits~~services. WeData ~~believe~~is ~~accurate~~obtained ~~tabulations~~from ofall ~~each~~referrals ~~patient’s~~with ~~medical~~picture ~~risk~~records ~~assessment~~input ~~score~~into ~~within~~EMR. It is ~~each~~important ~~practice~~to ~~and~~note ~~within~~that ~~our~~technology ~~MSO~~is ~~may~~truly ~~result~~robust inonly ~~increased~~if ~~revenue~~management ~~and~~is ~~profit~~committed ~~margins~~to use that technology for the ~~Company~~benefit of patient care. We are dedicated to do such that and have developed training sessions/manuals for all acquired practices.

Electronic Medical Records/Practice Management System – We are strong proponents of using electronic medical records/practice management systems (“EMR/PMS”) in all physician practices and ancillary providers in Florida. This system provides integrated patient record management that is fully automated end-to-end. We have allocated and deployed financial and technical resources to speed the continued implementation and integration of EMR/PMS into our operations.3

In deploying EMR into our operations, patient data is analyzed by our provider team as well as artificial intelligence is introduced to determine trends and create suspect reports on the individual patients allowing the provider to investigate and diagnose. The EMR is integrated with the practitioner’s management suite to assure data is consistently updated from the most recent visits. Equally important, practice management software is used to set up new network specialist or diagnostic appointments and allows monitoring/tracking whether the patient has actually gone to the referral services. Data is obtained from all referrals with picture records input into EMR. It is important to note that technology is truly robust only if management is committed to use that technology for the benefit of patient care. We are dedicated to do such that and have developed training sessions/manuals for all acquired practices. Business Model

3Our focus is the profitable operation of a medical practice by leveraging technology to assist the healthcare provider in documenting, tracking and communicating patient care to a continuum of other healthcare providers such as specialists, diagnostic centers, pharmacies and laboratories.

~~Table~~ Our Ofphysician ~~Contents~~group practice structure also offers physicians significant practice revenue enhancements that are not available to sole practitioners or improperly structured group practices. We feel we have created the optimum structure for both control and capture of physician revenue with parallel attention of best health care results to the patient. As previously stated, we are a patient centric practice with a focus of the primary care physician as the coordinator of the healthcare delivery system. Our system will be a fully integrated delivery system that will encompass most of the specialized physician referral results with the primary care physician care plan. All ancillary health services will be captured in our electronic data collection tools to allow the practice to have a total control and knowledge of a patient’s medical condition and be better able to coordinate that care. Most of the current group practice models, with the exception of such national organizations like Cleveland Clinic, Mayo Clinic and Kaiser Permanente, were structured in the 1990s where the focus was to incorporate specialist groups such as cardiologists, anesthesiologists and gynecologists. These groups were not patient centric and not properly integrated with focused continued care nor did they capture or compile all separate specialists records/research in a central database. We do not believe the group model meets today’s criteria for best medical/healthcare results of the patient. There are some other primary care oriented group practices that do not have the record keeping component and the additive designated ancillary services are not captured and, thus, we believe fail in providing the best healthcare and medical results.

~~Business~~These ~~Model~~practice enhancements include the capture of revenue created by physician referrals of both designated health services (lab, pharmacy, diagnostic and therapy) as well as specialist physician revenue that would otherwise be lost to the primary care physician. Our ability to earn and share revenue with our member groups through use of the Stark law’s “In-Office Ancillary Services Exception” (and similar provisions at the state level), draws physicians, group practices and medical specialists to our business model.

~~Our~~The ~~focus~~Stark islaw ~~the~~generally ~~profitable~~prohibits ~~operation~~physicians from ofmaking adesignated ~~medical~~health ~~practice~~service byreferrals ~~leveraging~~to ~~technology~~organizations towith ~~assist~~which ~~the~~those ~~healthcare~~physicians ~~provider~~(or inan ~~documenting~~immediate family member) have a financial relationship, ~~tracking~~unless ~~and~~an ~~communicating~~exception ~~patient~~under ~~care~~the tolaw aapplies. ~~continuum~~This ofincludes ~~other~~physician ~~healthcare~~referrals ~~providers~~to ~~such~~their asown ~~specialists,~~medical ~~diagnostic~~practice where ~~centers,~~the ~~pharmacies~~following ~~and~~circumstances ~~laboratories.~~are present:

~~Our~~· physician group practice structure also offers physicians significant practice revenue enhancements that are not available to sole practitioners or improperly structured group practices. We feel we have created the optimum structure for both control and capture of physician revenue with parallel attention of best health care results to the patient. As previously stated, we are a ~~patient centric practice with a focus of the primary care~~ physician asdelivers the coordinator of the healthcare delivery system. Our system will be a fully integrated delivery system that will encompass most of the specialized physician referral results with the primary care physician care plan. All ancillary health services ~~will~~through ~~be captured in our electronic data collection tools to allow~~ the ~~practice to have a total control and knowledge of a patient’s~~ medical ~~condition and be better able to coordinate that care. Most of the current group~~ practice models, with the exception of such national organizations like Cleveland Clinic, Mayo Clinic and Kaiser Permanente, were structured in the 1990s where the focus was to incorporate specialist groups such as cardiologists, anesthesiologists and gynecologists. These groups were not patient centric and not properly integrated with focused continued care nor did they capture or compile all separate specialists records/research in a central database. We do not believe the group model meets today’s criteria for best medical/healthcare results of the patient. There are some other primary care oriented group practices that do not have the record keeping component and the additive designated ancillary services are not captured and, thus, we believe fail in providing the best healthcare and medical results.;

~~These~~· ~~practice enhancements include~~ the ~~capture~~medical ofpractice ~~revenue~~furnishes ~~created by physician referrals of both~~ designated health services ~~(lab, pharmacy, diagnostic and therapy) as well as specialist physician revenue~~ that ~~would~~may ~~otherwise~~ be ~~lost~~payable toby ~~the~~Medicare ~~primary~~making ~~care physician. Our ability to earn and share revenue with our member groups through use of~~ the ~~Stark~~medical ~~law’s~~practice ~~“In-Office~~a ~~Ancillary~~Designated Health Services ~~Exception”~~ (~~and similar provisions at the state level~~DHS), ~~draws physicians, group practices and medical specialists to our business model.~~ entity;

~~The~~· ~~Stark~~the ~~law~~physician ~~generally~~has ~~prohibits physicians from making designated health service referrals to organizations with which those physicians (or an immediate family member) have~~ a financial relationship, ~~unless~~with ~~an exception under~~ the ~~law applies. This includes physician referrals to their own~~ medical practice; ~~where the following circumstances are present:~~and

· athe physician ~~delivers~~makes ~~services~~referrals ~~through~~to the medical practice; for the furnishing of DHS.

~~· the medical practice furnishes designated health services that may be payable by Medicare making the medical practice a Designated Health Services (DHS) entity;~~4

·Physicians and medical practices rely on the Stark law’s in-office ancillary services exception and physician ~~has~~services aexceptions ~~financial~~to ~~relationship~~allow ~~with~~"within-practice" DHS referrals. Of these, the in-office ancillary services exception is used most frequently as it allows physicians in medical ~~practice;~~practices ~~and~~to:

· ~~the~~make ~~physician makes~~ referrals tofor ~~the~~certain ~~medical~~DHS ~~practice~~within ~~for~~ the ~~furnishing~~medical ~~of DHS.~~practice;

4· furnish those DHS to practice patients;

~~Table~~· Ofbill ~~Contents~~Medicare and Medicaid for the services; and

~~Physicians~~· retain and ~~medical~~use ~~practices rely on~~ the ~~Stark~~revenues ~~law’s~~earned ~~in-office~~from ~~ancillary~~providing ~~services~~the ~~exception and physician~~ services ~~exceptions to allow "~~within~~-practice"~~ ~~DHS referrals. Of these,~~ the ~~in-office~~group ~~ancillary~~for ~~services~~payment ~~exception~~of ispractice ~~used~~expenses ~~most~~and ~~frequently~~physician ~~as it allows physicians in medical practices to:~~compensation.

·These ~~make~~exceptions ~~referrals~~are ~~for~~therefore ~~certain~~of ~~DHS~~significant importance ~~within~~to ~~the~~a medical practice;’s internal activities.

·Additional ~~furnish~~revenue ~~those~~comes ~~DHS~~from management efficiencies of scale and access to better payer benefits. Together they create a sustainable revenue stream different from that of other practice management and managed care groups. Our revenue stream is different from the focus of the traditional practice management groups in that most practice management groups pay for cost savings from other practices with better billing, which we believe increases revenue 10% to 20% and earnings of an equal amount. In our model, and in capturing ancillary revenue properly within the Stark guidelines, we anticipate increasing revenue four-fold, which we believe equates to increasing the physician take-home pay by 50% to 100%. We believe that the advantage of our model create better health care delivery systems for patients; and optimize revenue models for physicians and their partners.

·We ~~bill~~also ~~Medicare~~believe that our business model diversifies and ~~Medicaid~~maximizes ~~for~~revenue ~~the~~while ~~services;~~minimizing costs / spreading operating risk across sector and geographic areas.

·Revenue ~~retain~~Enhancement ~~and~~(Capture ~~use~~of ~~the~~Additional Revenue ~~revenues~~for ~~earned~~Practices) - We earn distinct revenue from: ~~providing~~(a) creating provider efficiencies for the delivery and administration of medical services; ~~within~~(b) ~~the~~providing ~~group~~ancillary ~~for~~medical ~~payment~~services in-house such as laboratory, diagnostic and pharmacy; (c) ownership of ~~practice~~other ~~expenses~~ancillary services restricted for physicians under the Stark law, (e.g., home health and ~~physician~~durable ~~compensation~~medical equipment) and (d) MSO revenue from Palm Medical Network.

~~These~~Cost ~~exceptions~~Minimization ~~are~~- ~~therefore~~We offer economies of ~~significant~~scale ~~importance~~by tocentralizing back office services, reducing practice management redundancy, managing of medical real estate assets and amortizing shared services and other costs across a larger base. Day-to-day services provided include compliance, management of equipment and real estate leases, staffing, billing, contract negotiation, bulk purchase of medical ~~practice’s~~supplies, ~~internal~~and accounting ~~activities~~functions. Cost minimization is further enhanced through efficiencies gained from the implementation of our licensed state-of-the-art EMR system, and associated proprietary tools.

~~Additional~~Revenue ~~revenue~~Maximization ~~comes~~- ~~from~~We ~~management~~improve physician ~~efficiencies~~incomes ofbecause ~~scale~~they ~~and~~are ~~access~~able to ~~better~~see ~~payer~~more ~~benefits. Together~~patients ~~they~~more ~~create~~efficiently, provide a ~~sustainable~~higher ~~revenue~~level ~~stream different from that~~ of ~~other~~medical ~~practice~~care ~~management~~ and ~~managed care groups. Our revenue stream is different from~~ through the ~~focus~~capture of the traditional practice management groups in that most practice management groups pay for cost savings from other practices with better billing, which we believe increases revenue 10% to 20% and earnings of an equal amount. In our model, and in capturing ancillary ~~revenue properly within the Stark guidelines, we anticipate increasing revenue four-fold, which we believe equates to increasing the physician take-home pay by 50% to 100%~~services. ~~We believe that the advantage of our model create better health care delivery systems for patients and optimize revenue models for physicians and their partners.~~

Regional Diversification - We ~~also~~plan ~~believe~~to ~~that~~form ~~our~~integrated ~~business~~group ~~model~~practices ~~diversifies~~(IGP) regionally. IGP’s are organized around the matching of patient and provider ~~maximizes~~demographics. This ~~revenue~~is ~~while~~an ~~minimizing~~approach ~~costs~~that /syncs ~~spreading~~supply ~~operating~~and demand between provider and patient and also provides risk ~~across~~abatement ~~sector~~to our investors through portfolio diversification. We believe that this interstate expansion strategy will further expand and ~~geographic~~diversify ~~areas~~our business model.

Revenue Enhancement (Capture of Additional Revenue for Practices) - We earn distinct revenue from: (a) creating provider efficiencies for the delivery and administration of medical services; (b) providing ancillary medical services in-house such as laboratory, diagnostic and pharmacy; (c) ownership of other ancillary services restricted for physicians under the Stark law, (e.g., home health and durable medical equipment) and (d) MSO revenue from Palm Medical Network.5

~~Cost~~Expanding ~~Minimization~~Industry - We ~~offer~~have ~~economies~~targeted a ofgrowth ~~scale~~industry. Key byexisting ~~centralizing~~population ~~back~~demographics ~~office~~in ~~services,~~the ~~reducing~~U.S. ~~practice~~– ~~management~~large ~~redundancy,~~aging ~~managing~~population ofand ~~medical~~increased ~~real~~longevity – ~~estate~~tend ~~assets~~to ~~and~~assure ~~amortizing~~that ~~shared~~health ~~services~~care ~~and~~will ~~other~~continue ~~costs~~to ~~across~~expand afor ~~larger~~at ~~base~~least a generation. ~~Day-to-day~~We ~~services~~believe ~~provided~~that ~~include~~this ~~compliance,~~is ~~management~~true irrespective of ~~equipment~~government ~~and~~efforts ~~real~~to ~~estate~~control ~~leases,~~cost ~~staffing,~~through ~~billing,~~managed ~~contract negotiation~~care, ~~bulk~~technology ~~purchase~~or ofrevenue ~~medical~~pressure ~~supplies,~~on ~~and accounting functions~~providers. ~~Cost~~It is ~~minimization~~many isexperts’ ~~further~~opinion ~~enhanced~~that ~~through~~healthcare ~~efficiencies~~is ~~gained~~one ~~from~~of the ~~implementation~~few ofindustries, ~~our~~along ~~licensed~~with ~~state-of-the-art~~defense, ~~EMR~~food ~~system~~and energy, ~~and~~that ~~associated~~is ~~proprietary~~essentially recession ~~tools~~resistant.

~~Revenue~~Poised ~~Maximization~~for Expansion - We plan ~~improve~~to ~~physician~~continue ~~incomes~~to ~~because~~extend ~~they~~our service offering through the adoption of the “Medical Mall” structure. Medical Malls are ~~able~~centralized tomedical ~~see~~services ~~more~~located ~~patients~~in ~~more~~a ~~efficiently~~mall format where we position multiple practices, ~~provide~~including ageneral ~~higher~~practice physicians, ~~level~~specialists, ofand ~~medical~~urgent care centers alongside ancillary service providers such as therapists, pharmacies, laboratories, and ~~through~~diagnostic ~~the~~centers. This ~~capture~~one-stop approach is expected to be attractive to physicians and patients alike since concentration of medical services, ancillary services and associated support makes health care delivery and receipt more efficient and less stressful.

Regional Diversification - We form group practice LLC’s regionally, generally by county. LLC’s are organized around the matching of patient and provider demographics. This is an approach that syncs supply and demand between provider and patient and also provides risk abatement to our investors through portfolio diversification. We believe that this interstate expansion strategy will further expand and diversify our business model.Market

Our initial targeted geographic area of operation and growth, the state of Florida, has over 36,000 doctors serving a total population of over 18.1 million people. Miami Dade County’s population of 2.5 million people is currently served by more than 8,000 medical providers, 2,000 of whom are members of the Dade County Medical Association. The Broward County Medical Association unites 1,500 allopathic (conventional medicine) and osteopathic (musculoskeletal) physicians, who join a legion of over 4,000 providers serving a population of 1.8 million. The population of Palm Beach County is 1.3 million, which is served by over 3,000 doctors.

~~Table~~According Ofto ~~Contents~~the U.S. Department of Labor, family practitioners in Florida make, on average, a net income of approximately $150,000 per year. Surgeons earn only slightly higher at approximately $165,000 per year. Specialists such as obstetricians/gynecologists earn approximately $180,000 per year. The salary ranges in the tri-county region average about 25% higher than these figures, and in the Orlando area they are closer to the averages. According to the MGMA (Medical Group Management Association), the average primary care physician grosses about $460,000 in annual billings in the South Florida market.

Expanding Industry - We have targeted a growth industry. Key existing population demographics in the U.S. – large aging population and increased longevity – tend to assure that health care will continue to expand for at least a generation. We believe that this is true irrespective of government efforts to control cost through managed care, technology or revenue pressure on providers. It is many experts’ opinion that healthcare is one of the few industries, along with defense, food and energy, that is essentially recession resistant.Competition

~~Poised~~The ~~for~~healthcare ~~Expansion~~services -industry ~~We plan~~ tends to ~~continue~~be tofragmented ~~extend~~and ~~our~~dynamic, ~~service~~consisting ~~offering through the adoption~~ of ~~the~~specialized ~~“Medical~~and ~~Mall”~~ancillary ~~structure. Medical~~services ~~Malls~~firms ~~are~~that ~~centralized~~operate ~~medical~~mainly ~~services~~on ~~located in~~ a ~~mall~~regional ~~format~~basis ~~where~~such as wegeneralist ~~position~~management ~~multiple practices~~companies, ~~including~~information ~~general~~systems ~~practice~~vending ~~physicians~~firms, ~~specialists,~~Health Maintenance Organizations and ~~urgent~~Managed ~~care~~Service ~~centers~~Organizations. Due to ~~alongside~~the ~~ancillary~~healthcare ~~service~~services ~~providers~~market ~~such~~having asa ~~therapists,~~strong ~~pharmacies,~~regional ~~laboratories~~bias, ~~and~~many ~~diagnostic~~competitors ~~centers. This~~in one~~-stop~~ ~~approach~~location ismay ~~expected~~not to be ~~attractive~~operating toin ~~physicians~~other areas. Management ~~and~~believes ~~patients~~that ~~alike~~the ~~since~~fragmented ~~concentration~~competition ofallows ~~medical~~the ~~services,~~Company ~~ancillary~~the ~~services~~opportunity ~~and~~to ~~associated~~expand ~~support~~into ~~makes~~new ~~health~~markets rapidly ~~care~~via ~~delivery~~targeted ~~and receipt more efficient and less stressful~~acquisitions.

~~Market~~The industry in which we operate has no institutional provider organizations. Our integrated practice model combines three distinct business verticals. The first business vertical is the Medicare Advantage designated clinic system that only accepts Medicare Advantage patients with significant presence maintained by Leon Medical Centers (Miami Dade County), MCCI (Florida statewide), Pasteur Medical Centers (Miami Date County) and Southeastern Integrated Medical (SiMed) Centers (Ocala and Jacksonville). The second business vertical is the commercial market and fee-for-service Medicare, which is best represented in Florida by Cleveland Clinic (Florida statewide), Mayo Clinic (Florida statewide) and Southeastern Integrated Medical (north Florida). The third business vertical is comprised of small group practices that will take a combination of both fee-for-service and Medicare Advantage patients; these practices are usually not large enough to sustain all the components of our integrated model. We combine all of the business verticals and see ourselves as payor-neutral, accepting clients irrespective of whether they are commercial, cash or Medicare Advantage/Medicare fee-for-service. We do not believe ancillary service firms are in competition with us, as they do not drive or attract patients but are more of recipient of referrals from these three business verticals. In the State of Florida, the northern part of the state is driven by a fee-for-service practice model while the southern part of the state, has a much higher incident of managed care delivery model.

~~According~~Government to the U.S. Department of Labor, family practitioners in Florida make, on average, a net income of approximately $150,000 per year. Surgeons earn only slightly higher at approximately $165,000 per year. Specialists such as obstetricians/gynecologists earn approximately $180,000 per year. The salary ranges in the tri-county region average about 25% higher than these figures, and in the Orlando area they are closer to the averages. According to the MGMA (Medical Group Management Association), the average primary care physician grosses about $460,000 in annual billings in the South Florida market. Regulation

~~Competition~~Medicare and Medicaid Participation

~~The~~Medicare ~~healthcare~~is ~~services~~a ~~industry~~federally ~~tends~~funded toand beadministered health ~~fragmented~~insurance ~~and dynamic~~program, ~~consisting~~primarily offor ~~specialized~~individuals ~~and~~entitled ~~ancillary~~to ~~services~~social ~~firms~~security ~~that~~benefits ~~operate~~who ~~mainly~~are on65 aor ~~regional~~older ~~basis~~or ~~such~~who asare ~~generalist management companies, information systems vending firms, Health Maintenance Organizations and Managed Service Organizations~~disabled. ~~Due~~Medicaid is toa ~~the~~health ~~healthcare~~insurance ~~services~~program ~~market~~jointly ~~having~~funded aby ~~strong~~state ~~regional~~and ~~bias,~~federal ~~many~~governments ~~competitors~~that inprovides ~~one~~medical ~~location~~assistance ~~may~~to ~~not~~qualifying below income ~~operating in other areas~~persons. ~~Management~~Each ~~believes~~state ~~that~~Medicaid program has the ~~fragmented~~option ~~competition~~to ~~allows~~determine ~~the~~coverage ~~Company~~for ~~the~~ambulatory ~~opportunity~~surgery tocenter ~~expand~~services and ~~into~~to ~~new~~determine ~~markets~~payment ~~rapidly~~rates ~~via~~for ~~targeted~~those ~~acquisitions~~services.

~~The~~In ~~industry~~order into ~~which~~participate wein ~~operate has no institutional provider organizations. Our integrated practice model combines three distinct business verticals. The first business vertical is~~ the Medicare program, ~~Advantage~~our ~~designated~~diagnostic ~~clinic~~centers, ~~system~~clinical ~~that~~laboratories, ~~only~~pharmacies ~~accepts~~and ~~Medicare~~short ~~Advantage~~stay ~~patients~~or ~~with~~outpatient ~~significant~~surgical ~~presence~~facilities ~~maintained~~may byhave ~~Leon~~to satisfy ~~Medical~~a ~~Centers~~set ~~(Miami~~of ~~Dade~~regulations ~~County),~~known ~~MCCI~~as ~~(Florida~~“Conditions ~~statewide),~~of ~~Pasteur Medical Centers (Miami Date County) and Southeastern Integrated Medical (SiMed) Centers (Ocala and Jacksonville)~~Participation.” ~~The~~Each ~~second~~facility ~~business~~can ~~vertical~~individually ismeet this ~~the~~requirement ~~commercial~~through ~~market~~accreditation ~~and~~with ~~fee-for-service~~the ~~Medicare~~Joint ~~which~~Commission ison ~~best~~Accreditation ~~represented~~of inHealthcare ~~Florida~~Organizations byor ~~Cleveland~~other ~~Clinic~~CMS-approved accreditation ~~(Florida statewide)~~organizations, ~~Mayo~~or ~~Clinic~~through ~~(Florida~~direct ~~statewide)~~surveys ~~and~~at ~~Southeastern~~the ~~Integrated~~direction ~~Medical~~of ~~(north Florida)~~CMS. ~~The~~As ~~third~~we ~~business~~acquire ~~vertical~~these istypes ~~comprised~~ of ~~small~~facilities, we ~~group~~will ~~practices~~have ~~that~~established ~~will~~ongoing ~~take~~quality aassurance ~~combination~~activities ofto ~~both~~monitor ~~fee-for-service~~ and ~~Medicare~~strive ~~Advantage~~to ~~patients;~~ensure ~~these~~our ~~practices~~facilities’ ~~are~~compliance with ~~usually~~these ~~not~~conditions ~~large enough to sustain all the components~~ of ~~our integrated model~~participation. WeAny ~~combine~~failure ~~all~~by ofa ~~the~~facility ~~business~~to ~~verticals~~maintain ~~and~~compliance ~~see~~with ~~ourselves~~these asConditions ~~payor-neutral, accepting clients irrespective~~ of ~~whether~~Participation as ~~they~~determined ~~are~~by ~~commercial,~~a ~~cash~~survey orcould ~~Medicare~~result ~~Advantage/Medicare~~in ~~fee-for-service. We~~the doloss ~~not~~of ~~believe~~the ~~ancillary~~facility’s ~~service~~provider ~~firms~~agreement ~~are in competition~~ with usCMS, aswhich ~~they~~would doprohibit ~~not~~reimbursement for ~~drive~~services orrendered ~~attract~~to ~~patients~~Medicare ~~but~~or ~~are~~Medicaid ~~more~~beneficiaries ofuntil ~~recipient~~such oftime ~~referrals~~as ~~from these three business verticals. In~~ the ~~State~~facility ~~of Florida, the northern part of the state~~ is ~~driven~~found byto abe ~~fee-for-service~~back ~~practice~~in ~~model~~compliance ~~while~~ with the ~~southern~~Conditions ~~part~~ of ~~the state, has a much higher incident of managed care delivery model~~Participation.

6As with most government programs, the Medicare and Medicaid programs are subject to statutory and regulatory changes, possible retroactive and prospective rate adjustments, administrative rulings, freezes and funding reductions, all of which may adversely affect the level of payments for our services.

~~Table~~Effective OfJuly ~~Contents~~1, 2011, the Accountable Care Act also prohibits the use of federal funds under the Medicaid program to reimburse providers for medical assistance provided to treat Hospital-Acquired Conditions (“HACs”). Beginning in federal fiscal year 2015, the 25% of hospitals with the worst national risk-adjusted HAC rates in the previous year will receive a 1% reduction in their total inpatient operating Medicare payments. Beginning in fiscal year 2013, hospitals with excessive readmissions for conditions designated by HHS will receive a reduction of 1% in operating payments for all inpatient discharges, not just discharges relating to the conditions subject to the excessive readmission standard. This rate will increase by 1% each year up to 3% in federal fiscal year 2015.

~~Government~~Accountable ~~Regulation~~Care Organizations

On October 31, 2011, CMS issued its final regulations for Accountable Care Organizations, or ACOs, which were created under the Acts and intended to allow providers, including hospitals, physicians and other designated professionals and suppliers to coordinate care for Medicare beneficiaries. This shared savings program is intended to produce savings as a result of improved quality and ~~Medicaid~~operational ~~Participation~~efficiency. ACOs that achieve certain savings benchmarks and quality performance standards will be eligible to share in a portion of the amounts saved by the Medicare program. The final regulations detail certain key characteristics of an ACO, including the scope and length of an ACO’s contract with CMS, the required governance of an ACO, the assignment of Medicare beneficiaries to an ACO, the payment models under which an ACO can share in cost savings, and the quality and other reporting requirements expected of an ACO. Under the regulations, patient and provider participation in ACOs will be voluntary. We will continue to monitor developments with the implementation of the ACO regulations and their effect on our business in order to react accordingly.

Medicare is a federally funded and administered health insurance program, primarily for individuals entitled to social security benefits who are 65 or older or who are disabled. Medicaid is a health insurance program jointly funded by state and federal governments that provides medical assistance to qualifying low income persons. Each state Medicaid program has the option to determine coverage for ambulatory surgery center services and to determine payment rates for those services.7

InFederal ~~order~~Anti-Kickback ~~to participate in the Medicare program, our diagnostic centers, clinical laboratories, pharmacies~~ and short stay or outpatient surgical facilities may have to satisfy a set of regulations known as “Conditions of Participation.” Each facility can individually meet this requirement through accreditation with the Joint Commission on Accreditation of Healthcare Organizations or other CMSPhysician Self-~~approved~~Referral ~~accreditation~~(Stark) organizations, or through direct surveys at the direction of CMS. As we acquire these types of facilities, we will have established ongoing quality assurance activities to monitor and strive to ensure our facilities’ compliance with these conditions of participation. Any failure by a facility to maintain compliance with these Conditions of Participation as determined by a survey could result in the loss of the facility’s provider agreement with CMS, which would prohibit reimbursement for services rendered to Medicare or Medicaid beneficiaries until such time as the facility is found to be back in compliance with the Conditions of Participation.Laws

AsSection 1877 ~~with~~of ~~most~~the ~~government~~Social ~~programs~~Security Act, commonly known as the ~~Medicare~~“Stark ~~and~~Law,” ~~Medicaid~~prohibits ~~programs~~any ~~are~~physician ~~subject~~from referring patients to ~~statutory~~any ~~and~~entity ~~regulatory~~for ~~changes,~~the ~~possible~~furnishing of ~~retroactive~~certain ~~and~~“designated ~~prospective~~health ~~rate~~services” ~~adjustments,~~otherwise ~~administrative~~payable ~~rulings~~by Medicare or Medicaid, ~~freezes~~if ~~and~~the ~~funding~~physician ~~reductions,~~or ~~all~~an ofimmediate family ~~which~~member ~~may~~has ~~adversely~~a ~~affect~~financial ~~the~~relationship ~~level~~such ofas ~~payments~~an ~~for~~ownership ~~our~~interest or compensation arrangement with the entity that furnishes services to Medicare beneficiaries, unless an exception applies.

~~Effective~~State ~~July~~and ~~1, 2011, the Accountable Care Act also prohibits the use of~~ federal ~~funds~~laws ~~under~~regulate ~~the~~relationships among ~~Medicaid program to reimburse~~ providers ~~for~~of ~~medical~~healthcare ~~assistance provided to treat Hospital-Acquired Conditions (“HACs”). Beginning in federal fiscal year 2015~~services, ~~the~~including ~~25%~~employment ofor ~~hospitals~~service ~~with~~contracts ~~the~~and ~~worst~~investment ~~national risk-adjusted HAC rates in the previous year will receive a 1% reduction in their total inpatient operating Medicare payments~~relationships. ~~Beginning~~These restrictions ininclude ~~fiscal year 2013, hospitals with excessive readmissions for conditions designated by HHS will receive~~ a ~~reduction~~federal ofcriminal ~~1% in operating payments for all inpatient discharges~~law, ~~not~~referred ~~just discharges relating~~ to ~~the~~herein ~~conditions~~as ~~subject to~~ the ~~excessive~~anti-kickback ~~readmission~~statute, ~~standard. This~~which ~~rate~~prohibits ~~will~~offering, ~~increase~~paying, soliciting byor 1%receiving ~~each~~any ~~year~~form upof toremuneration 3% in ~~federal~~return ~~fiscal year 2015.~~for:

~~Accountable~~· ~~Care~~referring ~~Organizations~~patients for services or items payable under a federal healthcare program, including Medicare or Medicaid; or

On· ~~October 31~~purchasing, ~~2011,~~leasing ~~CMS~~or ~~issued its final regulations for Accountable Care Organizations~~ordering, or ~~ACOs,~~arranging ~~which were created under the Acts and intended to allow providers, including hospitals, physicians and other designated professionals and suppliers to coordinate care~~ for ~~Medicare~~or ~~beneficiaries. This~~recommending shared savings program is intended to produce savings as a result of improved quality and operational efficiency. ACOs that achieve certain savings benchmarks and quality performance standards will be eligible to share in a portion of the amounts saved by the Medicare program. The final regulations detail certain key characteristics of an ACOpurchasing, ~~including~~leasing ~~the~~or ~~scope and length of an ACO’s contract with CMS~~ordering, ~~the~~any ~~required governance of an ACO~~good, ~~the assignment of Medicare beneficiaries to an ACO~~facility, ~~the~~service ~~payment~~or ~~models~~item ~~under~~for which anpayment ~~ACO~~may ~~can~~be ~~share~~made in ~~cost~~whole ~~savings,~~or ~~and the quality and other reporting requirements expected of an ACO. Under the regulations, patient and provider participation~~ in ~~ACOs~~part ~~will~~by bea ~~voluntary. We~~federal ~~will~~healthcare ~~continue to monitor developments with the implementation of the ACO regulations and their effect on our business in order to react accordingly~~program.

7A violation of the anti-kickback statute constitutes a felony.

~~Table~~Health OfInformation ~~Contents~~Security and Privacy Practices

~~Federal~~The ~~Anti-Kickback~~regulations promulgated under the federal Health Insurance Portability and ~~Physician~~Accountability ~~Self-Referral~~Act of 1996 (~~Stark~~“HIPAA”) ~~Laws~~contain, among other measures, provisions that require many organizations, including us, to employ systems and procedures designed to protect the privacy and security of each patient’s individual healthcare information. Among the standards that the Department of Health and Human Services has adopted pursuant to HIPAA are standards for the following:

~~Section 1877~~· ofelectronic ~~the~~transactions ~~Social~~and ~~Security~~code Act, commonly known as the “Stark Law,” prohibits any physician from referring patients to any entity for the furnishing of certain “designated health services” otherwise payable by Medicare or Medicaid, if the physician or an immediate family member has a financial relationship such as an ownership interest or compensation arrangement with the entity that furnishes services to Medicare beneficiaries, unless an exception applies.sets;

~~State~~· ~~and~~unique ~~federal~~identifiers ~~laws~~for ~~regulate relationships among~~ providers, ~~of healthcare services~~employers, ~~including~~health ~~employment~~plans ~~or service contracts~~ and investment relationships. These restrictions include a federal criminal law, referred to herein as the anti-kickback statute, which prohibits offering, paying, soliciting or receiving any form of remuneration in return for:individuals;

· ~~referring~~security ~~patients~~and ~~for~~electronic ~~services or items payable under a federal healthcare program, including Medicare or Medicaid~~signatures; or

· purchasing, leasing or ordering, or arranging for or recommending purchasing, leasing or ordering, any good, facility, service or item for which payment may be made in whole or in part by a federal healthcare program.privacy;

A· ~~violation~~breach ofnotification; ~~the anti-kickback statute constitutes a felony.~~and

~~Health~~· ~~Information Security and Privacy Practices~~enforcement

~~The~~In ~~regulations~~August ~~promulgated~~2000, ~~under~~ the ~~federal~~Department ~~Health~~of ~~Insurance Portability~~ Health and ~~Accountability~~Human ~~Act~~Services offinalized ~~1996~~the ~~(“HIPAA”)~~transaction ~~contain~~standards, ~~among~~with ~~other~~which ~~measures,~~we ~~provisions~~comply. The ~~that~~transaction standards require ~~many organizations, including~~ us, to use ~~employ~~standard ~~systems~~code ~~and~~sets ~~procedures~~established ~~designed~~by ~~to protect~~ the ~~privacy~~rule ~~and~~when ~~security~~transmitting ofhealth ~~each patient’s individual healthcare~~ information~~. Among~~ ~~the~~in ~~standards~~connection ~~that~~with ~~the~~some ~~Department~~transactions, ofincluding health ~~Health~~claims and ~~Human~~health ~~Services~~payment ~~has~~and ~~adopted~~remittance ~~pursuant to HIPAA are standards for the following:~~advices.

~~· electronic transactions and code sets;~~8

·The ~~unique~~Department ~~identifiers~~of Health and Human Services has also published a rule establishing standards for the privacy of individually identifiable health information, with which we comply. These privacy standards apply to all health plans, all healthcare clearinghouses and many healthcare providers, including ~~employers~~healthcare providers that transmit health information in an electronic form in connection with certain standard transactions. We are a covered entity under the final rule. The privacy standards protect individually identifiable health information held or disclosed by a covered entity in any form, whether communicated electronically, on paper or orally. These standards not only require our compliance with rules governing the use and disclosure of protected health ~~plans~~information, but they also require us to impose those rules, by contract, on any business associate to whom such information is disclosed. A violation of the privacy standards, as in effect prior to the 2009 Amendments discussed below, could result in civil money penalties of $100 per incident, up to a maximum of $25,000 per person per year per standard. The final rule also provided for criminal penalties of up to $50,000 and ~~individuals;~~one year in prison for knowingly and improperly obtaining or disclosing protected health information, up to $100,000 and five years in prison for obtaining protected health information under false pretenses, and up to $250,000 and ten years in prison for obtaining or disclosing protected health information with the intent to sell, transfer or use such information for commercial advantage, personal gain or malicious harm.

·Number ~~security~~of ~~and electronic signatures;~~Employees

·As ~~privacy;~~of December 31, 2012, we had 31 employees, of which 27 were full-time employees. We consider relations with our employees to be good.

·Environmental ~~breach notification; and~~Matters

·We ~~enforcement~~are unaware of any environmental matters pending or threatened related to our operations or our facilities.

InItem ~~August 2000, the Department of Health and Human Services finalized the transaction standards, with which we comply~~1A. ~~The~~ ~~transaction~~Risk standards require us to use standard code sets established by the rule when transmitting health information in connection with some transactions, including health claims and health payment and remittance advices.Factors

8Our business, operations, and financial position are subject to various risks. These risks are described below.

~~Table~~We Ofhave ~~Contents~~had minimal revenues from operations and, if we are not able to obtain further financing, we may be forced to scale back or cease operations or our business operations may fail.

~~The Department of Health and Human Services has also published a rule establishing standards for the privacy of individually identifiable health information~~To date, ~~with which~~ we ~~comply. These~~have ~~privacy~~not ~~standards~~generated ~~apply~~significant toincome ~~all~~from ~~health~~our ~~plans,~~operations ~~all healthcare clearinghouses~~ and ~~many~~we ~~healthcare~~have ~~providers,~~been ~~including~~dependent ~~healthcare~~on ~~providers~~sales ~~that~~of ~~transmit~~our ~~health~~equity ~~information~~securities and inissuances anof ~~electronic~~debt ~~form~~to inmeet ~~connection~~the ~~with~~majority ~~certain~~of ~~standard~~our ~~transactions~~cash requirements. WeDuring ~~are~~our ayear ~~covered~~ended ~~entity~~December 31, ~~under~~2012 ~~the~~we generated ~~final~~$ ~~rule. The~~11,902,581in ~~privacy~~revenue, ~~standards~~had ~~protect~~cash ~~individually~~on ~~identifiable~~hand ~~health~~of ~~information~~$ ~~held~~267,040 ~~or disclosed by~~ and a ~~covered~~working ~~entity~~capital insurplus ~~any~~of ~~form~~$ 3,543,041 ~~whether~~at ~~communicated~~December ~~electronically~~31, ~~on paper or orally~~2012. ~~These~~During the ~~standards~~year ~~not~~ended ~~only~~December ~~require~~31, ~~our~~2012, ~~compliance~~we ~~with~~used ~~rules~~$ ~~governing~~621,719 ~~the use and disclosure~~ of cash ~~protected~~in ~~health~~operating ~~information,~~activities. We ~~but~~may ~~they~~never ~~also~~generate ~~require~~positive cash usflow tofrom ~~impose~~operations. We ~~those~~estimate ~~rules,~~that bywe ~~contract,~~will onrequire ~~any~~approximately ~~business~~$2.0 ~~associate~~million to ~~whom such information is disclosed~~$3. A0 ~~violation~~million ofto ~~the~~carry ~~privacy~~out our ~~standards,~~business asplan inthrough ~~effect prior to~~ the ~~2009~~end ~~Amendments~~of ~~discussed below~~2013, ~~could~~which ~~result~~will inbe ~~civil~~dependent ~~money~~upon ~~penalties~~the number of ~~$100~~primary ~~per~~care ~~incident,~~physician uppractices toacquired during athe ~~maximum of $25~~year,~~000~~ ~~per~~if ~~person per year per standard~~any. ~~The~~Because ~~final~~we ~~rule~~cannot ~~also~~anticipate ~~provided~~when ~~for~~we ~~criminal~~will ~~penalties~~be ofable up to ~~$50,000~~generate ~~and~~significant ~~one~~revenues ~~year~~from insales, we ~~prison~~will ~~for~~need ~~knowingly~~to ~~and~~raise ~~improperly~~additional ~~obtaining~~funds orto ~~disclosing~~continue ~~protected~~to ~~health~~develop ~~information~~our business, uprespond to ~~$100,000~~competitive pressures and ~~five~~to ~~years~~respond into unanticipated ~~prison~~requirements ~~for~~or ~~obtaining~~expenses. If ~~protected~~we ~~health~~are ~~information~~not ~~under~~able ~~false~~to ~~pretenses,~~generate ~~and~~significant ~~up to $250~~revenues,~~000~~ ~~and~~we ~~ten~~will ~~years~~not inbe ~~prison~~able ~~for obtaining or disclosing protected health information with the intent~~ to maintain ~~sell,~~our ~~transfer~~operations or ~~use~~achieve ~~such~~a ~~information~~profitable ~~for~~level ~~commercial~~of ~~advantage, personal gain or malicious harm~~operations.

~~Number~~We derive a substantial portion of ~~Employees~~our revenue from CarePlus Health Plans, Inc. (“CarePlus”) and if we are unable to collect our outstanding account receivables, our operations will be negatively impacted.

AsWe derive a substantial portion of our revenue and accounts receivable from CarePlus. Revenues earned from CarePlus amounted to $9,347,941 and $7,631,831 for the years ended December 31, 2012 and 2011, werespectively. CarePlus ~~had~~account 28receivable ~~employees,~~amounted ofto ~~which~~$ 235,209,444 ~~were~~as of ~~full-time~~December ~~employees~~31, 2012. WeIf ~~consider~~we ~~relations~~are ~~with~~unable to collect our ~~employees~~outstanding toaccount receivable with CarePlus, our operations will be ~~good~~negatively impacted.

~~Environmental Matters~~9

We ~~are~~commenced ~~unaware~~our ofbusiness ~~any~~operations in ~~environmental~~August ~~matters~~2008 ~~pending~~and orwe ~~threatened~~have ~~related~~a tolimited ~~our~~operating history. If we cannot successfully manage the risks normally faced by start-up companies, we may not achieve profitable operations orand ultimately our ~~facilities~~business may fail.

~~Item~~We 1Ahave a limited operating history. ~~Risk~~ Our operating ~~Factors~~activities since our incorporation have consisted primarily of raising operating capital, closing various acquisitions and marketing our services to prospective customers. Our prospects are subject to the risks and expenses encountered by start-up companies, such as uncertainties regarding our level of future revenues and our inability to budget expenses and manage growth and our inability to access sources of financing when required and at rates favorable to us.

Our ~~business,~~limited ~~operations,~~operating history and the ~~financial~~highly ~~position~~competitive ~~are~~nature ~~subject~~of our business make it difficult or impossible to ~~various~~predict ~~risks~~future results of our operations. We may ~~These~~not ~~risks~~succeed ~~are~~in ~~described~~developing ~~below~~our business to a level where we can achieve profitable operations, which may result in the loss of some or all of your investment in our common stock.

We have ~~had~~generated ~~minimal~~limited revenues ~~from~~since our ~~operations~~inception. Because of our lack of significant operating history and our limited net income, ifin all likelihood we ~~are~~will continue to incur operating expenses without significant revenues until our services gain significant exposure in the market. Based upon current estimates, we estimate our average monthly operating expenses in the near future to be approximately $75,000 to $150,000 per month, which will be dependent upon the number of primary care physician practices acquired during the year, if any. We will not be able to ~~obtain~~expand our operations beyond current levels without generating significant revenues from our current operations or obtaining further financing. Our primary source of funds has been the sale of our common stock and issuances of debt. We can offer no assurance that we will be able to generate enough interest in our services. If we cannot attract a significant customer base, we ~~may~~will not be ~~forced~~able to ~~scale~~generate ~~back~~any significant revenues or ~~cease~~income. In ~~operations~~addition, if we are unable to establish and generate material significant revenues, or obtain adequate future financing, our business ~~operations~~will fail and you may ~~fail~~lose some or all of your investment in our common stock.

To date, we have not generated significant income from our operations and we have been dependent on sales of our equity securities and issuances of debt to meet the majority of our cash requirements. During our year ended December 31, 2011, we generated $9,427,392 in revenue, had cash on hand of $13,097 and a working capital surplus of $520,469 at December 31, 2011. During the year ended December 31, 2011, we used $1,575,958 of cash in operating activities. We may never generate positive cash flow from operations. We estimate that we will require approximately $2.0 million to $3.0 million to carry out our business plan through the end of 2012, which will be dependent upon the number of primary care physician practices acquired during the year, if any. Because we cannot anticipate when we will be able to generate significant revenues from sales, we will need ~~to raise~~ additional ~~funds~~capital to expand ~~continue~~or tomaintain ~~develop~~ our ~~business~~operations, ~~respond~~which ~~to competitive pressures and to respond to unanticipated requirements or expenses. If we are not able to generate significant revenues, we~~ will ~~not~~result bein ~~able~~dilution to ~~maintain~~existing ~~our operations or achieve a profitable level of operations~~stockholders.

WeAt ~~derive~~ a ~~substantial~~minimum, ~~portion~~we ofexpect ~~our~~that ~~revenue~~we ~~from CarePlus~~will ~~Health~~need additional ~~Plans,~~capital ~~Inc.~~during ~~(“CarePlus”)~~2013 ~~and~~ if we ~~are~~want ~~unable~~to pursue various growth initiatives. Further, we may be required to ~~collect~~make increased ~~our~~capital ~~outstanding~~expenditures ~~account~~to ~~receivables~~fund any growth of operations, infrastructure, and personnel. We may seek additional capital through the issuance of debt or equity depending upon our results of operations, ~~will~~market beconditions ~~negatively~~or ~~impacted~~unforeseen needs or opportunities. Our future liquidity and capital requirements will depend on numerous factors, including the following:

We· ~~derive~~the apace ~~substantial portion~~ of ~~our~~expansion revenue and accounts receivable from CarePlus. Revenues earned from CarePlus amounted to $7,631,831 and $8,570,744 for the years ended December 31, 2011 and 2010, respectively. CarePlus account receivable amounted to $3,403,969 as of ~~December 31, 2011. If we are unable to collect~~ our ~~outstanding account receivable with CarePlus, our~~ operations ~~will be negatively impacted.~~;

9· our need to respond to competitive pressures; and

~~Table~~· Offuture ~~Contents~~acquisitions of complementary products, technologies or businesses.

We commenced our business operations in August 2008 and we have a limited operating history. If we cannot successfully manage the risks normally faced by start-up companies, we may not achieve profitable operations and ultimately our business may fail.10

We ~~have~~expect athat ~~limited~~we ~~operating~~will ~~history. Our~~be ~~operating~~required ~~activities~~to ~~since~~sell additional ~~our~~equity ~~incorporation~~or ~~have~~debt ~~consisted~~securities. Debt ~~primarily~~financing ofmust ~~raising~~be ~~operating~~repaid ~~capital~~at maturity, ~~closing~~regardless ~~various~~of ~~acquisitions~~whether ~~and~~or ~~marketing~~not ~~our~~we ~~services~~have tosufficient cash ~~prospective~~resources ~~customers. Our~~available ~~prospects~~at ~~are~~that ~~subject~~time to repay the ~~risks~~debt and ~~expenses~~may ~~encountered~~contain bycovenants ~~start-up~~restricting ~~companies,~~the ~~such~~operations asof ~~uncertainties regarding~~ our ~~level~~business. The sale of ~~future~~additional ~~revenues~~equity ~~and~~or ~~our~~convertible ~~inability~~debt tosecurities ~~budget~~could ~~expenses~~result ~~and~~in ~~manage~~additional ~~growth~~dilution ~~and our inability~~ to ~~access~~existing ~~sources~~stockholders. Any financing ofarrangements ~~financing~~may ~~when~~not ~~required~~be ~~and~~available aton ~~rates~~terms ~~favorable~~acceptable to us, if at all.

~~Our~~We ~~limited~~will ~~operating~~need ~~history~~to ~~and~~raise ~~the~~additional funds ~~highly~~in ~~competitive~~the ~~nature~~near offuture. ~~our~~If ~~business~~we ~~make~~are itnot ~~difficult~~able ~~or impossible~~ to ~~predict~~obtain future ~~results~~financing ofwhen ~~our~~required, ~~operations. We~~we ~~may~~might ~~not~~be ~~succeed~~forced ~~in developing our business~~ to ascale ~~level~~back ~~where~~or ~~we can achieve profitable~~ cease operations, ~~which may result in the loss of some~~ or ~~all~~discontinue ~~of your investment in~~ our ~~common stock~~business.

We ~~have~~can ~~generated~~provide ~~limited~~no ~~revenues~~assurance ~~since~~to ~~our~~investors that ~~inception. Because~~we ofwill ~~our~~be ~~lack~~able ofto ~~significant~~find ~~operating~~such ~~history~~financing ~~and~~when ~~our limited~~such ~~net~~funding ~~income,~~is inrequired. Obtaining ~~all~~additional ~~likelihood~~financing we will ~~continue~~be subject to ~~incur~~a ~~operating~~number ~~expenses~~of ~~without~~factors, ~~significant~~including ~~revenues~~investor ~~until~~acceptance of our ~~services~~business ~~gain significant exposure in the market~~model. ~~Based~~Furthermore, ~~upon~~there ~~current~~is ~~estimates,~~no assurance that we ~~estimate~~will ~~our~~not ~~average~~incur ~~monthly~~further ~~operating~~debt ~~expenses~~ in the ~~near~~ future, tothat bewe ~~approximately~~will ~~$75,000~~have tosufficient ~~$150,000~~funds ~~per~~to ~~month,~~repay ~~which~~our ~~will~~future beindebtedness ~~dependent~~or ~~upon~~that ~~the~~we ~~number~~will not ofdefault ~~primary~~on ~~care~~our ~~physician~~future ~~practices~~debts, ~~acquired~~thereby ~~during~~jeopardizing ~~the~~our ~~year,~~business ~~if any~~viability. WeFinally, ~~will~~we may not be able to ~~expand~~borrow or ~~our~~raise ~~operations~~additional ~~beyond~~capital ~~current~~in ~~levels~~the ~~without~~future ~~generating~~to ~~significant~~meet ~~revenues from~~ our ~~current~~needs ~~operations~~ or ~~obtaining~~to ~~further~~otherwise ~~financing. Our~~provide ~~primary~~the ~~source~~capital ofnecessary ~~funds~~to ~~has~~maintain ~~been~~our ~~the~~operations, which ~~sale~~may ofresult ~~our~~in ~~common~~the ~~stock~~loss ~~and issuances~~ of ~~debt. We~~some ~~can~~or ~~offer~~all noof ~~assurance~~your ~~that~~investment ~~we will be able to generate enough interest~~ in our ~~services~~common stock. IfThere weis ~~cannot~~no ~~attract~~assurance athat ~~significant~~actual cash ~~customer~~requirements ~~base, we~~ will not beexceed ~~able~~our ~~to generate any significant revenues or income~~estimates. InIf ~~addition,~~additional iffunds we are ~~unable~~not ~~to establish and generate material significant revenues~~obtained, orwe ~~obtain~~would ~~adequate~~modify ~~future~~(reduce) ~~financing,~~ our primary ~~business~~care ~~will~~physician ~~fail~~practice ~~and~~acquisition ~~you may lose some or all of your investment in our common stock~~targets.

We ~~may~~have ~~need~~a ~~additional~~limited ~~capital~~operating history toand ~~expand~~if orwe ~~maintain~~are ~~our~~not ~~operations~~successful in growing the business, of which ~~will~~there ~~result~~is inno ~~dilution~~guarantee, then we may have to ~~existing~~scale ~~stockholders~~back or even cease our ongoing business operations.

AtOur asuccess ~~minimum,~~is wesignificantly ~~expect~~dependent on ~~that~~our weability ~~will~~to ~~need~~continue ~~additional~~to ~~capital~~grow ~~during~~our ~~2012~~business. ifOur weoperations ~~want~~will be subject to ~~pursue~~all ~~various~~the ~~growth~~risks ~~initiatives. Further,~~inherent wein ~~may~~the beestablishment of ~~required~~a todeveloping ~~make~~enterprise ~~increased~~and ~~capital~~the ~~expenditures~~uncertainties toarising ~~fund~~from ~~any~~the ~~growth~~absence of ~~operations,~~a ~~infrastructure,~~limited ~~and~~operating ~~personnel~~history. We may ~~seek~~be unable ~~additional~~to ~~capital~~locate ~~through~~additional ~~the~~customers ~~issuance~~or ofcontinue ~~debt~~to oroperate ~~equity~~on ~~depending~~a ~~upon~~profitable basis. If our ~~results~~business ofplan ~~operations,~~is ~~market~~not ~~conditions~~successful, and orwe ~~unforeseen~~are ~~needs~~not orable ~~opportunities. Our~~to ~~future~~operate ~~liquidity~~profitably, ~~and~~investors ~~capital~~may ~~requirements~~lose ~~will~~some ~~depend~~or onall ~~numerous~~of ~~factors,~~their ~~including the following:~~investment.

·We ~~the~~depend ~~pace~~upon ofreimbursement ~~expansion~~by ~~of our operations;~~third-party payors.

·Substantially all of our ~~need~~revenues are derived from private and governmental third-party payors. Initiatives undertaken by industry and government to ~~respond~~contain healthcare costs affect the profitability of our clinics. These payors attempt to ~~competitive~~control ~~pressures;~~healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We believe that this trend will continue and may limit reimbursements for healthcare services. If insurers or managed care companies from whom we receive substantial payments were to reduce the amounts they pay for services, our profit margins may decline, or we may lose patients if they choose not to renew the contracts with these insurers at lower rates. In addition, in certain geographical areas, the physician offices must be approved as providers by key health maintenance organizations and preferred provider plans. Failure to obtain or maintain these approvals would adversely affect our financial results.

·In ~~future~~addition, ~~acquisitions~~there ofare ~~complementary~~increasing ~~products,~~pressures from ~~technologies~~many third-party payors to control healthcare costs and to reduce or ~~businesses~~limit increases in reimbursement rates for medical services. Our relationships with managed care and non-governmental third-party payors, such as health maintenance organizations and preferred provider organizations, are generally governed by negotiated agreements. These agreements set forth the amounts we are entitled to receive for our services. We could be adversely affected in some of the markets where it operates if they are unable to negotiate and maintain favorable agreements with third-party payors.

10Additionally, third-party payors may, from time to time, request audits of the amounts paid, or to be paid, to us under our agreements with them. We could be adversely affected in some of the markets where we operate if the auditing payor alleges that substantial overpayments were made to us due to coding errors or lack of documentation to support medical necessity determinations.

~~Table Of Contents~~11

WeOur ~~expect~~historical ~~that~~revenue wehas ~~will~~been beconcentrated with ~~required~~CarePlus torepresenting ~~sell~~approximately ~~additional~~82% ~~equity~~and or82 ~~debt~~% ~~securities. Debt~~of ~~financing~~our ~~must~~2012 beand ~~repaid~~2011 atmedical ~~maturity~~revenues, ~~regardless~~respectively. The increase ofin ~~whether~~accounts orreceivable ~~not~~affects weour ~~have~~liquidity. If ~~sufficient~~we ~~cash~~are ~~resources~~unable ~~available at that time~~ to ~~repay~~collect the ~~debt~~amounts ~~and~~due ~~may~~from ~~contain~~CarePlus, our ~~covenants~~liquidity ~~restricting~~would ~~the~~be ~~operations~~affected ofresulting ~~our~~in ~~business. The~~retraction ~~sale~~ of ~~additional~~business ~~equity~~operations or ~~convertible~~seeking ~~debt securities could result in~~ additional ~~dilution~~public toor ~~existing~~private ~~stockholders. Any financing arrangements may not be available on terms acceptable~~ funding to ~~us,~~offset ifsuch ~~at all~~impact.

WeOur ~~will~~operating ~~need~~results tocould ~~raise additional funds in the near future. If we are not able to obtain future financing when required, we might~~ be ~~forced~~adversely affected toif ~~scale~~our ~~back~~actual orhealthcare ~~cease~~claims ~~operations~~exceed ~~or discontinue~~ our ~~business~~reserves.

WeHistorically, ~~can provide no assurance to investors that~~ we ~~will~~have bebeen able to ~~find~~satisfy our ~~such~~claims ~~financing~~payment ~~when~~obligations ~~such~~each ~~funding~~month isout ~~required. Obtaining additional financing will be subject to a number~~ of ~~factors,~~cash ~~including~~flows ~~investor~~from ~~acceptance~~operations ofand ~~our~~existing ~~business~~cash ~~model~~reserves. ~~Furthermore~~However, ~~there~~in the isevent ~~no assurance~~ that weour ~~will~~revenues ~~not~~are ~~incur~~substantially ~~further~~reduced ~~debt~~due into ~~the~~a ~~future,~~loss ~~that~~of wea ~~will~~significant ~~have~~HMO ~~sufficient~~contract ~~funds~~or toother ~~repay~~factors, our ~~future~~cash ~~indebtedness~~flow may ornot ~~that~~be wesufficient ~~will~~to ~~not~~pay ~~default~~off claims on ~~our~~a ~~future~~timely ~~debts~~basis, ~~thereby~~or ~~jeopardizing~~at ~~our business viability~~all. ~~Finally,~~If we ~~may~~are ~~not~~unable ~~be able~~ to ~~borrow~~pay orclaims ~~raise~~timely ~~additional~~we ~~capital~~may inbe subject ~~the future~~ to ~~meet~~HMO ~~our~~de-delegation ~~needs~~wherein ~~or to otherwise provide~~ the ~~capital~~HMO ~~necessary~~would totake ~~maintain~~away our ~~operations,~~claims ~~which~~processing ~~may~~functions ~~result~~and inperform the ~~loss~~functions ofon ~~some~~our orbehalf, charging ~~all~~us ofa ~~your~~fee ~~investment~~per inenrollee, ~~our~~a ~~common~~requirement ~~stock. There~~by isthe noHMO ~~assurance~~to ~~that~~comply ~~actual~~with ~~cash~~a ~~requirements~~corrective ~~will~~action ~~not~~plan, ~~exceed~~and/or ~~our~~termination ~~estimates. If~~of ~~additional~~the ~~funds~~HMO contract, ~~are~~which ~~not~~could ~~obtained,~~have wea ~~would~~material ~~modify~~adverse ~~(reduce)~~effect on our ~~primary~~operations ~~care~~and ~~physician~~results ~~practice~~of ~~acquisition targets~~operations.

WeOur ~~have~~operations aare ~~limited~~presently ~~operating~~focused ~~history~~in one ~~and~~geographic iflocation we- ~~are~~South ~~not~~and ~~successful~~Central inFlorida. If ~~growing~~this ~~the~~region ~~business,~~ of ~~which~~Florida ~~there~~was isto noexperience ~~guarantee,~~an ~~then~~economic wedownturn or ~~may~~continues ~~have~~ to ~~scale~~experience ~~back~~the ornegative ~~even~~effects ~~cease~~from ~~our~~the ~~ongoing~~recession, ~~business~~our operations may be negatively impacted.

Our ~~success is significantly dependent on our ability to continue to grow our~~ business., ~~Our~~financial ~~operations will be subject to all the risks inherent in the establishment of a developing enterprise~~ condition and ~~the~~results ~~uncertainties arising from the absence~~ of aoperations ~~limited operating history. We~~ may be ~~unable~~adversely toaffected ~~locate~~by ~~additional~~unfavorable ~~customers~~economic orand ~~continue~~market toconditions ~~operate~~in ~~on a profitable basis. If~~ our ~~business~~sole ~~plan~~geographical ~~is not successful, and we are not able to operate profitably, investors may lose some or all of their investment~~segment.

WeOur ~~depend~~operations ~~upon~~are ~~reimbursement~~presently byfocused ~~third~~in one geographic location -~~party~~ ~~payors~~South and Central Florida. Changes in this region could adversely affect the profitability of our business. Economic conditions have from time to time contributed to slowdowns in the healthcare industry, resulting in reduced demand and increased price competition for our services. If economic and market conditions in South and Central Florida remain unfavorable, spread or deteriorate further, we may experience an adverse impact on our business, financial condition and results of operations. Accordingly, the economic downturn in South and Central Florida may hurt our financial performance. We are unable to predict the likely duration and severity of the current disruption in financial markets and adverse economic conditions and the effects they may have on our business and financial condition and results of operations.

Substantially all of our revenues are derived from private and governmental third-party payors. Initiatives undertaken by industry and government to contain healthcare costs affect the profitability of our clinics. These payors attempt to control healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We ~~believe that this trend will continue and~~ may ~~limit~~be ~~reimbursements~~exposed ~~for healthcare services. If insurers or managed care companies from whom we receive substantial payments were~~ to ~~reduce~~liability ~~the amounts they pay for services, our profit margins may decline, or~~ if we ~~may~~cannot ~~lose~~process ~~patients~~any ifincreased ~~they~~volume ~~choose~~of ~~not~~claims toaccurately ~~renew the contracts with these insurers at lower rates. In addition, in certain geographical areas, the physician offices must be approved as providers by key health maintenance organizations~~ and ~~preferred provider plans~~timely. ~~Failure to obtain or maintain these approvals would adversely affect our financial results.~~

InWe ~~addition,~~have ~~there~~regulatory ~~are~~risk ~~increasing~~for ~~pressures~~the ~~from~~timely processing ~~many third-party payors to control healthcare costs~~ and topayment ~~reduce~~of ~~or limit increases in reimbursement rates for medical services~~claims. ~~Our~~If ~~relationships~~we ~~with~~are ~~managed~~unable ~~care~~to ~~and~~handle ~~non-governmental~~increased ~~third-party~~claims ~~payors,~~volume ~~such~~or asif ~~health~~we ~~maintenance organizations and preferred provider organizations,~~ are ~~generally~~unable ~~governed~~to bypay ~~negotiated~~claims timely ~~agreements. These~~we ~~agreements~~may ~~set~~become ~~forth~~subject ~~the~~to ~~amounts~~an weHMO ~~are~~corrective ~~entitled~~action toplan ~~receive~~or ~~for~~de-delegation ~~our~~until ~~services. We~~the ~~could~~problem beis ~~adversely~~corrected, ~~affected~~and/or ~~in some~~ termination of the ~~markets~~HMO ~~where~~agreement, itwhich ~~operates~~could ifhave ~~they~~a ~~are~~material ~~unable~~adverse toeffect ~~negotiate~~on ~~and~~our ~~maintain~~operations ~~favorable~~and ~~agreements with third-party payors.~~profitability

~~Additionally,~~Our ~~third-party~~profitability ~~payors~~ may, ~~from~~be ~~time to time, request audits of the amounts paid,~~ reduced or toeliminated beif ~~paid, to us under our agreements with them. We could be adversely affected in some of the markets where~~ we ~~operate~~are ifnot ~~the~~able ~~auditing payor alleges that substantial overpayments were made~~ to usmanage ~~due~~our tohealthcare ~~coding~~costs ~~errors or lack of documentation to support medical necessity determinations~~effectively.

11Our success depends in large part on our effective management of healthcare costs incurred by our affiliated physician organizations and controlling utilization of specialty and ancillary care, and by contracting with our independent physicians at competitive prices.

~~Table~~We Ofattempt ~~Contents~~to control the healthcare costs of our HMO enrollees through capitated and discounted fee-for-service contracts, by emphasizing preventive care, entering into risk-sharing agreements with HMOs that have favorable rate and utilization structures, and requiring prior authorization for specialist physician referrals. If we cannot maintain or improve our management of healthcare costs, our business, results of operations, financial condition, and ability to satisfy our obligations could be adversely affected.

Our historical revenue has been concentrated with CarePlus representing approximately 82.0% and 91.6% of our 2011 and 2010 medical revenues, respectively. The increase in accounts receivable affects our liquidity. If we are unable to collect the amounts due from CarePlus, our liquidity would be affected resulting in retraction of business operations or seeking additional public or private funding to offset such impact.12

~~Our~~Under ~~operating~~all ~~results~~current ~~could~~HMO becontracts, ~~adversely~~our ~~affected~~affiliated physician organizations accept the financial risk for the provision of primary care and specialty physician services, and some ancillary healthcare services. If we are unable to negotiate favorable contract rates with providers of these services, or if our ~~actual~~affiliated physician organizations are unable to effectively control the utilization of these services, our profitability would be negatively impacted. Our ability to manage healthcare ~~claims~~costs ~~exceed~~is also diminished to the extent that we are unable to sub-capitate the specialists in our ~~reserves~~service areas at competitive rates. To the extent that our HMO enrollees require more frequent or extensive care, our operating margins may be reduced and the revenues derived from its capitation contracts may be insufficient to cover the costs of the services provided.

~~Historically,~~The werevenue ~~have been able to satisfy our claims payment obligations each month out of cash flows from operations~~ and ~~existing~~profitability ~~cash~~could be ~~reserves. However,~~significantly ~~in the event that our revenues are substantially~~ reduced due to a loss of a significant HMO contract or other factors, our cash flow may not be sufficient to pay off claims on a timely basis, or at all. If we are unable to pay claims timely we may be subject to HMO de-delegation wherein the HMO would take away our claims processing functions and ~~perform~~could ~~the~~also ~~functions~~fluctuate onsignificantly ~~our~~from ~~behalf,~~period ~~charging us a fee per enrollee, a requirement by the HMO~~ to ~~comply~~period ~~with~~under aMedicare's ~~corrective~~Risk ~~action~~Adjusted ~~plan,~~payment ~~and/or termination of the HMO contract, which could have a material adverse effect on our operations and results of operations~~methodology.

~~Our~~In 2004, ~~operations~~Centers ~~are~~for ~~presently~~Medicare ~~focused~~& Medicaid inServices ~~one~~(“CMS”) ~~geographic~~began ~~location~~a four-year ~~South~~phase-in ~~and~~of ~~Central~~a ~~Florida. If~~revised ~~this~~compensation ~~region~~model offor ~~Florida~~Medicare ~~was~~beneficiaries toenrolled in ~~experience~~Medicare anAdvantage ~~economic~~plans. ~~downturn~~Previously, ormonthly ~~continues~~capitation torevenue ~~experience~~was ~~the~~based ~~negative~~primarily ~~effects~~on ~~from the recession~~age, ~~our~~sex ~~operations~~and ~~may be negatively impacted~~location.

~~Our~~The ~~business,~~CMS ~~financial~~revised ~~condition~~payment ~~and~~model ~~results~~seeks to compensate Medicare managed care organizations based on the health status of ~~operations~~each ~~may~~individual enrollee. Health plans/Medical Groups with enrollees that can be ~~adversely~~proven ~~affected~~to byrequire ~~unfavorable~~more ~~economic~~care will receive higher compensation, and ~~market~~those ~~conditions~~with inenrollees ~~our~~requiring less ~~sole~~care ~~geographical~~will ~~segment~~receive less. This is referred to by CMS as "Risk Adjustment."

~~Our~~ Increased ~~operations~~numbers ~~are~~of office ~~presently~~visits ~~focused~~by inmembers, ~~one geographic location - South~~ and ~~Central~~submission ~~Florida. Changes in this region could adversely affect the profitability~~ of ~~our~~encounter ~~business. Economic~~data ~~conditions~~is ~~have~~required ~~from~~in ~~time~~order to ~~time~~receive ~~contributed~~incremental ~~to slowdowns in the healthcare industry~~revenue, ~~resulting~~or innot ~~reduced demand and increased price competition~~ for ~~our~~any given ~~services~~member. IfThis ~~economic~~requires ~~and~~a ~~market~~great ~~conditions~~deal inof ~~South~~continuous ~~and~~effort ~~Central Florida remain unfavorable, spread or deteriorate further, we may experience an adverse impact~~ on our ~~business~~part, ~~financial condition~~ and ~~results~~cooperation ofon ~~operations. Accordingly,~~ the ~~economic~~part ~~downturn~~of inour ~~South~~contracted physicians and ~~Central~~HMO ~~Florida may hurt our financial performance~~enrollees. We ~~are~~have ~~unable~~not toalways ~~predict~~been ~~the~~able ~~likely~~to ~~duration~~gain ~~and~~this ~~severity~~cooperation offrom the ~~current~~contracted ~~disruption~~physicians ~~in financial markets~~ and enrollees, ~~adverse~~or ~~economic~~devote ~~conditions~~the ~~and~~resources ~~the~~necessary ~~effects~~to ~~they~~obtain ~~may~~incremental ~~have~~Risk onAdjustment ~~our~~revenue, ~~business~~or ~~and~~avoid ~~financial~~having ~~condition~~previously ~~and~~received revenue ~~results~~taken ofback ~~operations~~from us.

WeAdditionally, ~~may~~because beof ~~exposed~~the time required by CMS to ~~liability~~process ifall of the submitted encounter data from all participating entities, we ~~cannot~~typically ~~process~~do ~~any~~not ~~increased~~find ~~volume~~out until the latter part of ~~claims~~the ~~accurately~~calendar ~~and~~year ~~timely~~what adjustments will be made to our Medicare revenue for the prior year, at which time those adjustments to revenue, which have historically been significant, are recorded.

WeThe ~~have~~adoption ~~regulatory risk for the timely processing and payment~~ of ~~claims. If~~more werestrictive Medicare ~~are~~coverage ~~unable~~policies toat ~~handle increased claims volume or if we are unable to pay claims timely we may become subject to an HMO corrective action plan or de-delegation until~~ the ~~problem~~national ~~is corrected, and/~~or ~~termination~~local oflevels ~~the HMO agreement, which~~ could have aan ~~material~~ adverse ~~effect~~impact on our ~~operations~~ability ~~and~~to ~~profitability~~obtain Medicare reimbursement for inpatient services.

~~Our~~Medicare ~~profitability~~providers ~~may~~also can be ~~reduced~~negatively affected by the adoption of coverage policies, at the national and or ~~eliminated~~local iflevels, wedescribing ~~are~~whether ~~not~~an ~~able~~item or service is covered and under what clinical circumstances it is considered to ~~manage~~be ~~our~~reasonable, ~~healthcare~~necessary, ~~costs~~and ~~effectively~~appropriate. In the absence of a national coverage determination, Medicare contractors may specify more restrictive criteria than otherwise would apply nationally. CMS began implementing new inpatient rehabilitation hospital coverage criteria effective January 1, 2010 that will require existing local coverage policies to be updated for each Medicare contractor. We cannot predict how the adoption of modified local coverage determinations or other policies will affect our operations.

Our success depends in large part on our effective management of healthcare costs incurred by our affiliated physician organizations and controlling utilization of specialty and ancillary care, and by contracting with our independent physicians at competitive prices.13

WeIf ~~attempt~~we toare ~~control~~unable ~~the~~to ~~healthcare~~identify ~~costs~~suitable acquisition ofcandidates ~~our~~or ~~HMO~~to ~~enrollees~~negotiate ~~through~~or ~~capitated~~complete ~~and~~acquisitions ~~discounted~~on ~~fee-for-service contracts, by emphasizing preventive care, entering into risk-sharing agreements with HMOs that have~~ favorable ~~rate and utilization structures~~terms, ~~and~~our ~~requiring~~prospects ~~prior authorization~~ for ~~specialist~~growth ~~physician~~could ~~referrals~~be limited. If In addition, we ~~cannot~~may ~~maintain~~not orrealize ~~improve~~the ~~our~~anticipated ~~management~~benefits of ~~healthcare~~any ~~costs,~~acquisitions ~~our~~that ~~business,~~we ~~results~~are ofable ~~operations, financial condition, and ability~~ to ~~satisfy our obligations could be adversely affected~~complete.

12Part of our business strategy is to grow through acquisitions in order to achieve economies of scale. Although we are regularly in discussions with potential acquisition candidates, it may be difficult to identify suitable acquisition candidates and to negotiate satisfactory terms with them. If we are unable to identify suitable acquisition candidates at favorable prices, our ability to grow by acquisition could be limited.

~~Table~~In Ofaddition, ~~Contents~~to the extent we are successful in identifying suitable acquisition candidates and making acquisitions, these acquisitions involve a number of risks, including:

~~Under~~it ~~all~~may ~~current~~occur ~~HMO~~that ~~contracts, our affiliated physician organizations accept~~ the ~~financial~~acquired ~~risk~~company or ~~for~~assets ~~the~~do ~~provision~~not offurther ~~primary~~our ~~care~~business ~~and specialty physician services~~strategy, ~~and some ancillary healthcare services. If we are unable to negotiate favorable contract rates with providers of these services,~~ or if our affiliated physician organizations are unable to effectively control the utilization of these services, our profitability would be negatively impacted. Our ability to manage healthcare costs is also diminished to the extent that we ~~are~~overpaid ~~unable~~for ~~to sub-capitate~~ the ~~specialists~~company inor ~~our~~assets, ~~service~~or ~~areas at competitive rates. To the extent~~ that ~~our~~industry ~~HMO enrollees require more frequent~~ or ~~extensive~~economic ~~care~~conditions change, ~~our~~all ~~operating~~of ~~margins~~which may berequire ~~reduced~~a ~~and~~future ~~the~~impairment ~~revenues derived from its capitation contracts may be insufficient to cover the costs of the services provided.~~charge;

~~The~~we ~~revenue~~may ~~and~~have ~~profitability~~difficulty ~~could~~integrating bethe operations ~~significantly~~and ~~reduced~~personnel ~~and~~of ~~could~~the ~~also~~acquired ~~fluctuate~~business ~~significantly~~and ~~from~~may ~~period~~have todifficulty ~~period~~retaining ~~under~~the ~~Medicare's~~key ~~Risk~~personnel ~~Adjusted~~of ~~payment~~the ~~methodology.~~acquired business;

~~In 2004,~~· ~~Centers~~we ~~for~~may ~~Medicare~~have &difficulty ~~Medicaid~~incorporating ~~Services~~the ~~(“CMS”)~~acquired ~~began~~services awith ~~four-year~~our ~~phase-in~~existing ~~of a revised compensation model for Medicare beneficiaries enrolled in Medicare Advantage plans. Previously, monthly capitation revenue was based primarily on age, sex and location.~~services;

~~The~~· ~~CMS~~there ~~revised~~may ~~payment~~be ~~model~~customer ~~seeks~~confusion towhere ~~compensate~~our ~~Medicare~~services ~~managed~~overlap ~~care~~with ~~organizations~~those ~~based on the health status~~ of ~~each~~entities ~~individual enrollee. Health plans/Medical Groups with enrollees~~ that ~~can~~are ~~be proven to require more care will receive higher compensation, and those with enrollees requiring less care will receive less. This is referred to by CMS as "Risk Adjustment."~~acquired;

~~Increased~~· ~~numbers~~our ofongoing ~~office~~business ~~visits by members,~~ and ~~submission~~our ofattention ~~encounter~~may ~~data~~be isdisrupted ~~required~~or indiverted ~~order~~by totransition ~~receive incremental revenue,~~ or ~~not~~integration ~~for~~issues ~~any given member. This requires a great deal of continuous effort on our part,~~ and ~~cooperation on~~ the ~~part~~complexity of ~~our~~managing ~~contracted~~geographically ~~physicians~~ and ~~HMO~~culturally ~~enrollees. We~~diverse have not always been able to gain this cooperation from the contracted physicians and enrollees, or devote the resources necessary to obtain incremental Risk Adjustment revenue, or avoid having previously received revenue taken back from us.locations;

~~Additionally,~~· ~~because~~there ofmay ~~the time required by CMS to process all of the submitted encounter data from all participating entities, we typically do not find out until the latter part of the calendar year what adjustments will~~ be ~~made~~difficulty tomaintaining ~~our~~uniform ~~Medicare revenue for the prior year~~standards, ~~at which time those adjustments to revenue~~controls, ~~which~~procedures ~~have~~and ~~historically~~policies ~~been~~across ~~significant, are recorded.~~locations;

~~The~~· ~~adoption~~we ofmay ~~more~~acquire ~~restrictive~~companies ~~Medicare~~that ~~coverage~~have ~~policies~~material atliabilities, ~~the~~including, ~~national~~among orother ~~local~~things, ~~levels~~for ~~could~~the ~~have~~failure ~~an adverse impact on our ability~~ to ~~obtain~~comply ~~Medicare~~with ~~reimbursement~~healthcare ~~for~~laws ~~inpatient~~and ~~services.~~regulations;

~~Medicare~~· ~~providers also can be negatively affected by~~ the ~~adoption~~acquisition of coverage policies, at the national and or local levels, describing whether an item or service is covered and under what clinical circumstances it is considered to be reasonable, necessary, and appropriate. In the absence of a national coverage determination, Medicare contractors may ~~specify~~result ~~more~~in ~~restrictive~~litigation ~~criteria~~from ~~than~~terminated ~~otherwise~~employees would apply nationally. CMS began implementing new inpatient rehabilitation hospital coverage criteria effective January 1, 2010 that will require existing local coverage policies to be updated for each Medicare contractor. We cannot predict how the adoption of modified local coverage determinations or ~~other~~third ~~policies will affect our operations.~~parties;

13· we may experience significant problems or liabilities associated with service quality, technology and legal contingencies;

~~Table~~· Ofwe ~~Contents~~may spend considerable amounts of money (legal, accounting, diligence, etc.) in seeking an acquisition candidate and never complete the acquisition; and

If· ~~we are unable to identify suitable~~ acquisition ~~candidates~~candidate orletters toof ~~negotiate~~intent ormay ~~complete~~have ~~acquisitions~~large onbreak-up ~~favorable~~fees ~~terms,~~if ~~our~~the ~~prospects~~acquisition ~~for~~is ~~growth could be limited. In addition, we may~~ not ~~realize the anticipated benefits of any acquisitions that we are able to complete~~completed.

~~Part~~In ofparticular, ~~our~~the ~~business~~ strategy isfor togrowth includes ~~grow~~strategic ~~through~~ acquisitions inof ~~order~~primary tocare ~~achieve~~physician ~~economies~~(PCP) ~~of scale~~practices. ~~Although~~However, even if we are ~~regularly~~successful in ~~discussions~~completing further ~~with~~acquisitions, ~~potential~~we ~~acquisition~~may ~~candidates,~~not be possible to integrate their operations into our operations or it may be difficult and time consuming to ~~identify~~integrate ~~suitable~~the ~~acquisition~~acquired ~~candidates~~practices' management services, information systems, billing and collection systems, finance department, medical records, and other key administrative functions, while at the same time managing a larger entity with a differing history, business model and culture. We may be required to ~~negotiate~~develop ~~satisfactory~~working ~~terms~~relationships with ~~them~~providers and vendors with whom they have had no previous business experience. We also may not be able to obtain the necessary economies of scale. Integration of acquired entities is vital to be able to operate effectively and to control variable (staffing) and fixed costs. If we are ~~unable~~not tosuccessful ~~identify~~in ~~suitable~~integrating ~~acquisition~~acquired ~~candidates~~operations aton ~~favorable~~a ~~prices~~timely basis, or at all, our ~~ability~~business could be disrupted and we may not be able to ~~grow~~realize bythe anticipated benefits of its acquisitions, including cost savings. There may be substantial unanticipated costs associated with acquisition and integration activities, any of which could beresult ~~limited~~in significant one-time or on-going charges to earnings or otherwise adversely affect our operating results.

~~In addition, to the extent we are successful in identifying suitable acquisition candidates and making acquisitions, these acquisitions involve a number of risks, including:~~14

itWe may ~~occur that the acquired company or assets do~~ not ~~further~~be ~~our~~able ~~business~~to ~~strategy,~~make orfuture acquisitions ~~that~~without weobtaining ~~overpaid~~additional ~~for the company or assets, or that industry or economic conditions change, all of which may require a future impairment charge;~~financing.

To finance any acquisitions, we may, ~~have~~from time ~~difficulty~~to ~~integrating~~time, ~~the~~issue ~~operations~~additional ~~and~~equity ~~personnel~~securities or incur additional debt. A greater amount of ~~the~~debt ~~acquired~~or ~~business~~additional ~~and~~equity financing ~~may~~could ~~have~~be ~~difficulty~~required ~~retaining~~to the ~~key~~extent ~~personnel~~that ofour common stock fails to achieve or to maintain a market value sufficient to warrant its use in future acquisitions, or to the ~~acquired~~extent ~~business;~~that acquisition targets are unwilling to accept common stock in exchange for their businesses. Even if we were permitted to incur additional debt or determine to sell equity, we may not be able to obtain additional required capital on acceptable terms, if at all, which would limit our plans for growth. In addition, any capital we may be able to raise could result in increased leverage on our balance sheet, additional interest and financing expense and decreased operating income.

·Whenever we ~~may~~seek ~~have~~to ~~difficulty~~make ~~incorporating~~an acquisition of an entity that has an HMO contract, the ~~acquired~~HMO ~~services~~could potentially refuse to consent to the transfer of its contract, and this could effectively stop the acquisition or potentially deprive us of the revenues associated with ~~our~~that ~~existing~~HMO ~~services;~~contract.

·Contracts ~~there~~with HMOs typically include provisions requiring the HMO to consent to the transfer of their contract before effecting any change in control of the healthcare provider party thereto. As a result, whenever we seek to make an acquisition, such acquisition may be ~~customer~~conditioned ~~confusion~~upon ~~where~~the ~~our~~acquisition candidate's ~~services~~ability ~~overlap~~to obtain such consent from the HMOs with ~~those~~which it has contracted. Therefore, an acquisition could be delayed while an HMO seeks to determine whether it will consent to the transfer. While our experience is that the HMOs limit their review to satisfying their regulatory responsibility to ensure that, following the acquisition, the post-acquisition entity will meet certain financial and operational thresholds, the language in many of ~~entities~~the HMO agreements give the HMO the ability to decline to give their consent if they simply do not want to do business with the acquiring entity. If an HMO is unwilling for any reason to give its consent, this could deter management from completing the acquisition, or, if they complete an acquisition without obtaining an HMO's consent, they could lose the benefits associated with that ~~are~~HMO's ~~acquired;~~contract.

·Revenues ~~our ongoing business~~ and ~~our~~profits ~~attention~~could ~~may~~ be ~~disrupted~~diminished if orwe ~~diverted~~lose ~~by transition or integration issues and~~ the ~~complexity~~services of ~~managing~~key ~~geographically~~primary ~~and~~care ~~culturally diverse locations;~~physicians.

·Substantially ~~there~~all ~~may~~of beour ~~difficulty~~revenues ~~maintaining~~are ~~uniform~~derived from ~~standards~~our affiliated physician organizations. Key primary care physicians with large patient enrollment could retire, become ~~controls~~disabled, ~~procedures~~terminate their provider contracts, get lured away by a competing IPA, or otherwise become unable or unwilling to continue practicing medicine or contracting with its affiliated physician organizations. Enrollees who have been served by such physicians could choose to enroll with competitors' physician organizations, reducing our revenues and ~~policies~~profits. Moreover, we ~~across~~may ~~locations;~~not be able to attract new physicians into our affiliated physician organizations to replace the services of terminating physicians.

·We wewill ~~may~~also ~~acquire~~depend ~~companies~~upon ~~that~~its ~~have material liabilities, including, among other things, for the failure~~ ability to ~~comply~~recruit ~~with~~and ~~healthcare~~retain ~~laws~~experienced ~~and regulations;~~physicians.

·Our ~~the~~revenue ~~acquisition~~generation ~~may~~is ~~result~~dependent upon referrals from physicians in ~~litigation~~the ~~from~~communities ~~terminated~~our ~~employees~~medical oroffices ~~third~~serve, ~~parties;~~and our ability to maintain good relations with these physicians. The primary care physicians are the front line for generating these referrals and management is dependent on their talents and skills to successfully cultivate and maintain strong relationships with these physicians. If we cannot recruit and retain our base of experienced physicians, our business may decrease and our net operating revenues may decline.

~~· we may experience significant problems or liabilities associated with service quality, technology and legal contingencies;~~15

·We wecontinue ~~may~~to ~~spend~~face ~~considerable~~intense ~~amounts of money (legal, accounting, diligence, etc~~competition.~~) in seeking an acquisition candidate and never complete the acquisition; and~~

·The ~~acquisition~~industry ~~candidate~~in ~~letters~~which we operate has no institutional provider organizations. Our integrated practice model combines three distinct business verticals. The first business vertical is the Medicare Advantage designated clinic system that only accepts Medicare Advantage patients with significant presence maintained by Leon Medical Centers (Miami Dade County), MCCI (Florida statewide), Pasteur Medical Centers (Miami Date County) and Southeastern Integrated Medical (SiMed) Centers (Tampa St Petersberg). The second business vertical is the commercial market and fee-for-service Medicare, which is best represented in Florida by Cleveland Clinic (Florida statewide), Mayo Clinic (Florida statewide) and Southeastern Integrated Medical (north Florida). The third business vertical is comprised of ~~intent~~small ~~may~~group ~~have~~practices that will take a combination of both fee-for-service and Medicare Advantage patients; these practices are usually not large ~~break~~enough to sustain all the components of our integrated model. We combine all of the business verticals and see ourselves as payor-upneutral, ~~fees~~accepting ifclients irrespective of whether they are commercial, cash or Medicare Advantage/Medicare fee-for-service. We do not believe ancillary service firms are in competition with us as they do not drive or attract patients but are more of recipient of referrals from these three business verticals. In the ~~acquisition~~State of Florida, the northern part of the state is ~~not~~driven ~~completed~~by a fee-for-service practice model while the southern part of the state, has a much higher incident of managed care delivery model. We compete against many other companies in the specialized health services industry, most of which have considerably greater resources and abilities than we do. These competitors may have greater marketing and sales capacity, significant goodwill, and global name recognition.

InWe ~~particular,~~will ~~the~~depend ~~strategy~~upon for growth includes strategic acquisitions of primary care physician (PCP) practices. However, even if we are successful in completing further acquisitions, we may not be possible to integrate their operations into our operations or it may be difficult and time consuming to integrate the ~~acquired practices' management services, information systems, billing~~ cultivation and ~~collection~~maintenance ~~systems,~~of finance department, medical records, and other key administrative functions, while at the same time managing a larger entity with a differing history, business model and culture. We may be required to develop working relationships with ~~providers and vendors with whom they have had no previous business experience. We also may not be able to obtain~~ the ~~necessary~~physicians ~~economies of scale. Integration of acquired entities is vital to be able to operate effectively and to control variable (staffing) and fixed costs. If we are not successful~~ in ~~integrating acquired operations on a timely basis, or at all,~~ our ~~business could be disrupted and we may not be able to realize the anticipated benefits of its acquisitions, including cost savings~~markets. There may be substantial unanticipated costs associated with acquisition and integration activities, any of which could result in significant one-time or on-going charges to earnings or otherwise adversely affect our operating results.

14 Our success is dependent upon referrals from physicians in the communities our clinics serve and our ability to maintain good relations with these physicians and other referral sources. Physicians referring patients to the clinics are free to refer their patients to other therapy providers or to their own physician owned therapy practice. If we are unable to successfully cultivate and maintain strong relationships with physicians and other referral sources, our business may decrease and our net operating revenues may decline.

~~Table~~Our Ofoperations ~~Contents~~are subject to extensive regulation.

WeThe ~~may~~healthcare ~~not~~industry beis ~~able~~subject to ~~make~~extensive federal, ~~future~~state ~~acquisitions~~and ~~without~~local ~~obtaining~~laws ~~additional~~and ~~financing.~~regulations relating to:

To· ~~finance~~facility ~~any~~and ~~acquisitions,~~professional ~~we may~~licensure/permits, ~~from~~including ~~time~~certificates ~~to time, issue additional equity securities or incur additional debt. A greater amount~~ of debt or additional equity financing could be required to the extent that our common stock fails to achieve or to maintain a market value sufficient to warrant its use in future acquisitions, or to the extent that acquisition targets are unwilling to accept common stock in exchange for their businesses. Even if we were permitted to incur additional debt or determine to sell equity, we may not be able to obtain additional required capital on acceptable terms, if at all, which would limit our plans for growth. In addition, any capital we may be able to raise could result in increased leverage on our balance sheet, additional interest and financing expense and decreased operating income.need;

~~Whenever~~· weconduct ~~seek to make an acquisition~~ of anoperations, ~~entity~~including ~~that~~financial ~~has~~relationships anamong ~~HMO~~healthcare ~~contract~~providers, ~~the~~Medicare ~~HMO~~fraud ~~could~~and ~~potentially refuse to consent to the transfer of its contract~~abuse, and ~~this~~physician ~~could effectively stop the acquisition or potentially deprive us of the revenues associated with that HMO contract.~~self-referral;

~~Contracts~~· ~~with~~addition ~~HMOs typically include provisions requiring the HMO to consent to the transfer~~ of ~~their~~facilities contract before effecting any change in control of the healthcare provider party thereto. As a result, whenever we seek to make an acquisition, such acquisition may be conditioned upon the acquisition candidate's ability to obtain such consent from the HMOs with which it has contracted. Therefore, an acquisition could be delayed while an HMO seeks to determine whether it will consent to the transfer. While our experience is that the HMOs limit their review to satisfying their regulatory responsibility to ensure that, following the acquisition, the post-acquisition entity will meet certain financial and ~~operational~~services; thresholds, the language in many of the HMO agreements give the HMO the ability to decline to give their consent if they simply do not want to do business with the acquiring entity. If an HMO is unwilling for any reason to give its consent, this could deter management from completing the acquisition, or, if they complete an acquisition without obtaining an HMO's consent, they could lose the benefits associated with that HMO's contract.and

~~Revenues~~· ~~and~~payment ~~profits~~for ~~could be diminished if we lose the~~ services ~~of key primary care physicians~~.

~~Substantially~~In ~~all~~recent ofyears, ~~our~~there ~~revenues~~have ~~are~~been ~~derived~~heightened coordinated ~~from~~civil ~~our~~and ~~affiliated~~criminal ~~physician~~enforcement ~~organizations~~efforts by both federal and state government agencies relating to the healthcare industry. ~~Key~~We believe ~~primary~~that ~~care~~we ~~physicians~~are ~~with~~in ~~large~~substantial ~~patient~~compliance ~~enrollment~~with ~~could~~all ~~retire~~laws, ~~become~~but ~~disabled,~~differing ~~terminate~~interpretations ~~their~~or ~~provider~~enforcement ~~contracts,~~of ~~get~~these ~~lured~~laws ~~away~~and byregulations could asubject ~~competing~~our ~~IPA,~~current orpractices ~~otherwise~~to ~~become~~allegations ~~unable~~of impropriety or ~~unwilling~~illegality or could require us to ~~continue~~make ~~practicing~~changes ~~medicine~~in orour ~~contracting~~methods of ~~with~~operations, ~~its~~facilities, ~~affiliated~~equipment, ~~physician~~personnel, ~~organizations. Enrollees~~services ~~who~~and ~~have~~capital ~~been~~expenditure ~~served~~programs byand ~~such~~increase ~~physicians~~our ~~could~~operating ~~choose~~expenses. If we fail to ~~enroll~~comply with ~~competitors'~~these ~~physician~~extensive ~~organizations~~laws and government regulations, ~~reducing~~we ~~our~~could ~~revenues~~become ~~and~~ineligible ~~profits. Moreover~~to receive government program reimbursement, wesuffer ~~may~~civil ~~not~~or criminal penalties or be ~~able~~required to ~~attract~~make ~~new~~significant ~~physicians~~changes ~~into~~to our ~~affiliated~~operations. In ~~physician~~addition, we ~~organizations~~could be forced to ~~replace~~expend ~~the~~considerable ~~services~~resources ofresponding ~~terminating~~to ~~physicians~~an investigation or other enforcement action under these laws or regulations.

~~We will also depend upon its ability to recruit and retain experienced physicians.~~16

~~Our~~Healthcare ~~revenue~~reform ~~generation~~legislation is dependent upon referrals from physicians in the communities our medical offices serve, and our ability to maintain good relations with these physicians. The primary care physicians are the front line for generating these referrals and management is dependent on their talents and skills to successfully cultivate and maintain strong relationships with these physicians. If we cannot recruit and retain our base of experienced physicians, our business may affect ~~decrease and~~ our ~~net operating revenues may decline~~business.

15In recent years, many legislative proposals have been introduced or proposed in Congress and in some state legislatures that would affect major changes in the healthcare system, either nationally or at the state level. At the federal level, Congress has continued to propose or consider healthcare budgets that substantially reduce payments under the Medicare programs. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential legislation on our business is uncertain and difficult, if not impossible to predict. That impact may be material to our business, financial condition or results of operations.

~~Table~~We Ofmay ~~Contents~~incur closure costs and losses.

WeThe ~~continue~~competitive and/or economic conditions in the local markets in which we operate may require us to ~~face~~close ~~intense~~certain ~~competition~~physician offices. In the event a physician office is closed, we may incur closure costs and losses. The closure costs and losses include, but are not limited to, lease obligations, severance, and write-off of goodwill.

~~The industry in which we operate has no institutional provider organizations.~~ Our ~~integrated~~officers practice model combines three distinct business verticals. The first business vertical is the Medicare Advantage designated clinic system that only accepts Medicare Advantage patients with significant presence maintained by Leon Medical Centers (Miami Dade County), MCCI (Florida statewide), Pasteur Medical Centers (Miami Date County) and ~~Southeastern~~directors ~~Integrated~~have Medical (SiMed) Centers (Tampa St Petersberg). The second business vertical is the commercial market and fee-for-service Medicare which is best represented in Florida by Cleveland Clinic (Florida statewide)limited liability, ~~Mayo Clinic (Florida statewide)~~ and ~~Southeastern~~we Integrated Medical (north Florida). The third business vertical is comprised of small group practices that will take a combination of both fee-for-service and Medicare Advantage patients; these practices are ~~usually~~required ~~not~~in ~~large~~certain ~~enough~~instances to ~~sustain~~indemnify ~~all the components of~~ our ~~integrated~~officers ~~model. We combine all of the business verticals~~ and ~~see~~directors ~~ourselves as payor-neutral, accepting clients irrespective of whether they are commercial, cash or Medicare Advantage/Medicare fee-~~for~~-service. We~~ dobreaches ~~not believe ancillary service firms are in competition with us as they do not drive or attract patients but are more~~ of ~~recipient~~their offiduciary ~~referrals from these three business verticals~~duties. In the State of Florida, the northern part of the state is driven by a fee-for-service practice model while the southern part of the state, has a much higher incident of managed care delivery model. We compete against many other companies in the specialized health services industry, most of which have considerably greater resources and abilities than we do. These competitors may have greater marketing and sales capacity, significant goodwill, and global name recognition.

We ~~will~~have ~~depend~~adopted ~~upon~~provisions in our Articles of Incorporation and Bylaws which limit the ~~cultivation~~liability of our officers and ~~maintenance~~directors and provide for indemnification by us of ~~relationships~~our officers ~~with~~and directors to the ~~physicians~~full extent permitted by Nevada corporate law. Our articles generally provide that our officers and directors shall have no personal liability to us or our shareholders for monetary damages for breaches of their fiduciary duties as directors, except for breaches of their duties of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, acts involving unlawful payment of dividends or unlawful stock purchases or redemptions, or any transaction from which a director derives an improper personal benefit. Such provisions substantially limit our shareholders' ~~markets~~ability to hold officers and directors liable for breaches of fiduciary duty, and may require us to indemnify our officers and directors.

~~Our~~We ~~success~~are is dependent ~~upon~~on ~~referrals~~certain ~~from~~key ~~physicians in the communities our clinics serve and our ability to maintain good relations with these physicians and other referral sources~~personnel. Physicians referring patients to the clinics are free to refer their patients to other therapy providers or to their own physician owned therapy practice. If we are unable to successfully cultivate and maintain strong relationships with physicians and other referral sources, our business may decrease and our net operating revenues may decline.

Our business is dependent on the services of Daniel T. McGowan, Chairman, Board of Directors, Manuel E. Iglesias, our Chief Executive Officer and other key management and directors. We do not have key man insurance for either of these individuals. The loss of their services or our ability to expand to maintain our business will depend in part upon our ability to attract and retain qualified personnel in operations management, technology, marketing and other areas. We depend upon employees and consultants in a competitive market. If we are ~~subject~~unable to ~~extensive~~attract ~~regulation~~and retain personnel that have the technical expertise we require, it could adversely affect our ability to develop our network and market our services.

~~The~~A ~~healthcare~~small ~~industry~~number isof ~~subject~~existing toshareholders own ~~extensive~~a ~~federal,~~significant ~~state~~amount ~~and~~of ~~local~~our ~~laws~~common ~~and~~stock, ~~regulations~~which ~~relating~~could limit your ability to: influence the outcome of any shareholder vote.

·Our ~~facility~~executive officers, directors and ~~professional~~shareholders holding ~~licensure/permits~~in excess of 5% of our issued and outstanding shares, beneficially own over 61.4% of our common stock. Under our Articles of Incorporation and Nevada law, the vote of a majority of the shares outstanding is generally required to approve most shareholder action. As a result, these individuals will be able to significantly influence the outcome of shareholder votes for the foreseeable future, including ~~certificates~~votes concerning the election of ~~need;~~directors, amendments to our Articles of Incorporation or proposed mergers or other significant corporate transactions.

~~· conduct of operations, including financial relationships among healthcare providers, Medicare fraud and abuse, and physician self-referral;~~17

·We ~~addition~~may, in the future, issue additional common shares, which would reduce investors' percent of ~~facilities~~ownership and ~~services;~~may ~~and~~dilute our share value.

·Our ~~payment~~Certificate of Incorporation authorizes the issuance of 250,000,000 shares of common stock, $0.0001 par value, of which 164,322,680 shares of common stock issued and outstanding as of December 31, 2012 (including 16,027,437 shares which are issuable in connection with the automatic conversion of certain promissory notes upon effectiveness of the registrant’s Registration Statement on Form S-1 on February 10, 2012) and 10,000,000 shares of preferred stock, $0.0001 par value, of which no shares are issued and outstanding. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

InThe ~~recent~~Board ~~years~~of Directors, ~~there have been heightened coordinated civil and criminal enforcement efforts by both federal and state government agencies relating to the healthcare industry. We believe that we are~~ in ~~substantial~~its ~~compliance with all laws~~sole discretion, ~~but~~may ~~differing~~issue ~~interpretations~~preferred orshares ~~enforcement~~which ~~of these laws and regulations~~ could ~~subject~~carry ~~our~~superior ~~current~~rights ~~practices to allegations of impropriety or illegality or could require us to make changes in our methods of operations, facilities, equipment, personnel, services~~ and ~~capital~~preferences ~~expenditure programs~~ and ~~increase our operating expenses. If we fail to comply with these extensive laws and government regulations~~, wein ~~could become ineligible to receive government program reimbursement~~turn, ~~suffer~~limiting ~~civil~~the orinfluence ~~criminal~~common shareholders ~~penalties~~may orhave beon ~~required~~the todirection ~~make~~of ~~significant changes to~~ our ~~operations~~company. ~~In addition, we could be forced to expend considerable resources responding to an investigation or other enforcement action under these laws or regulations.~~

16We have authorized 10,000,000 shares of blank check preferred stock none of which is currently outstanding. Upon issuance of any preferred stock in the future, the rights attached to the preferred shares could affect our ability to operate, which could force us to seek other financing. The Board of Directors may issue preferred stock without obtaining shareholder approval. Such financing may not be available on commercially reasonable terms or at all and could cause substantial dilution to existing stockholders.

~~Table~~Currently, Ofthere ~~Contents~~is no public market for our securities, and we cannot assure you that any public market will ever develop and it is likely to be subject to significant price fluctuations.

~~Healthcare~~Currently, ~~reform~~there ~~legislation~~is ~~may~~no ~~affect~~public market for our ~~business~~stock and our stock may never be traded on any exchange, or, if traded, a public market may not materialize. Even if we are successful in developing a public market, there may not be enough liquidity in such market to enable shareholders to sell their stock.

InOur ~~recent~~common ~~years,~~stock ~~many~~is ~~legislative~~unlikely ~~proposals~~to ~~have~~be ~~been~~followed by ~~introduced~~any ormarket ~~proposed~~analysts, inand ~~Congress~~there ~~and~~may inbe ~~some~~few ~~state~~or ~~legislatures~~no ~~that~~institutions ~~would~~acting ~~affect~~as ~~major~~market ~~changes~~makers infor the ~~healthcare~~common ~~system,~~stock. Either ~~either~~of ~~nationally~~these factors orcould atadversely affect the ~~state~~liquidity ~~level~~and trading price of our common stock. At Until ~~the~~our ~~federal~~common ~~level~~stock is fully distributed and an orderly market develops in our common stock, ~~Congress~~if ~~has~~ever, ~~continued~~the price at which it trades is likely to ~~propose~~fluctuate orsignificantly. Prices ~~consider~~for ~~healthcare~~our ~~budgets~~common ~~that~~stock ~~substantially~~will ~~reduce~~be ~~payments~~determined ~~under~~in the ~~Medicare~~marketplace ~~programs. The~~and ~~ultimate~~may ~~content~~be influenced by many factors, ~~timing~~including orthe ~~effect~~depth and liquidity of ~~any~~the ~~healthcare~~market ~~reform~~for ~~legislation~~shares ~~and~~of our common stock, developments affecting our business, including the impact of ~~potential~~the ~~legislation~~factors referred onto ~~our~~elsewhere ~~business~~in isthese ~~uncertain~~Risk ~~and~~Factors, ~~difficult~~investor perception of the Company, ifand ~~not~~general ~~impossible~~economic toand ~~predict~~market conditions. ~~That~~ No assurances ~~impact~~can ~~may~~ be ~~material~~given tothat ~~our~~an ~~business,~~orderly ~~financial~~or ~~condition~~liquid ormarket ~~results~~will ever develop for the shares of ~~operations~~our common stock.

WeAs ~~may~~our ~~incur~~current ~~closure~~estimated ~~costs~~stock ~~and~~price is ~~losses~~$0.11, our Common Stock will be subject to “penny stock” rules which may be detrimental to investors.

The ~~competitive~~SEC ~~and/~~has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an ~~economic~~exercise ~~conditions~~price inof less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the ~~local~~broker-dealer ~~markets~~must inmake ~~which~~a special wesuitability ~~operate~~determination ~~may~~for ~~require~~the uspurchaser of such securities and have received the purchaser’s written consent to ~~close~~the ~~certain~~transaction ~~physician~~prior ~~offices~~to the purchase. InAdditionally, ~~the~~for ~~event~~any transaction involving a ~~physician~~penny ~~office~~stock, isunless ~~closed~~exempt, the werules ~~may~~require ~~incur~~the ~~closure~~delivery, ~~costs~~prior ~~and~~to ~~losses~~the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The ~~closure~~broker-dealer ~~costs~~also must disclose the commissions payable to both the broker-dealer and ~~losses~~the ~~include~~registered representative, current ~~but~~quotations ~~are~~for ~~not~~the ~~limited~~securities toand, ~~lease~~if ~~obligations,~~the ~~severance~~broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and ~~write~~the broker-~~off~~dealer’s ofpresumed ~~goodwill~~control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

~~Our officers and directors have limited liability, and we are required in certain instances to indemnify our officers and directors for breaches of their fiduciary duties.~~18

We have ~~adopted~~never ~~provisions~~paid ina ~~our~~dividend ~~Articles of Incorporation and Bylaws which limit the liability of~~ on our ~~officers~~common ~~and~~stock ~~directors~~ and ~~provide~~we ~~for~~do indemnification by us of our officers and directors to the full extent permitted by Nevada corporate law. Our articles generally provide that our officers and directors shall have no personal liability to us or our shareholders for monetary damages for breaches of their fiduciary duties as directors, except for breaches of their duties of loyalty, acts or omissions not inanticipate ~~good~~paying ~~faith or which involve intentional misconduct or knowing violation of law, acts involving unlawful payment of dividends or unlawful stock purchases or redemptions, or~~ any ~~transaction~~in ~~from~~the ~~which~~foreseeable ~~a director derives an improper personal benefit~~future. ~~Such provisions substantially limit our shareholders' ability to hold officers and directors liable for breaches of fiduciary duty, and may require us to indemnify our officers and directors.~~

We ~~are~~have ~~dependent~~not paid a cash dividend on ~~certain~~our common ~~key~~stock ~~personnel~~to date, and we do not intend to pay cash dividends in the foreseeable future. Our ability to pay dividends will depend on our ability to successfully develop one or more properties and generate revenue from operations. Notwithstanding, we will likely elect to retain earnings, if any, to finance our growth. Future dividends may also be limited by bank loan agreements or other financing instruments that we may enter into in the future. The declaration and payment of dividends will be at the discretion of our Board of Directors.

~~Our business is dependent on the services of Daniel T. McGowan, Chairman, Board of Directors, Manuel E. Iglesias, our Chief Executive Officer and other key management and directors.~~ We dohave not ~~have~~voluntarily ~~key~~implemented various ~~man~~corporate ~~insurance~~governance ~~for~~measures, ~~either~~in ofthe ~~these~~absence ~~individuals. The loss~~ of ~~their services or our ability to expand to maintain our business will depend in part upon our ability to attract and retain qualified personnel in operations management~~which, ~~technology,~~shareholders ~~marketing~~may ~~and other areas. We depend upon employees and consultants in a competitive market. If we are unable to attract and retain personnel that~~ have ~~the~~more ~~technical~~limited ~~expertise~~protections weagainst ~~require~~interested director transactions, itconflicts ~~could~~of ~~adversely~~interest ~~affect our ability to develop our network~~ and ~~market~~similar ~~our~~matters ~~services~~.

ARecent ~~small~~U. ~~number~~S. legislation, including the Sarbanes-Oxley Act of ~~existing~~2002 ~~shareholders~~and ~~own~~the aDodd ~~significant~~Frank ~~amount~~Wall Street Reform and Protection Act, have resulted in the adoption of ~~our~~various ~~common~~corporate governance ~~stock~~measures designed to promote the integrity of corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on which ~~could~~their ~~limit~~securities ~~your~~are ~~ability~~listed. Among the tocorporate ~~influence~~governance measures that are required under the ~~outcome~~rules of national securities exchanges and NASDAQ are those that address board of directors’ independence, audit committee oversight and the adoption of a code of ethics. We have not yet adopted any ~~shareholder~~of ~~vote~~these corporate governance measures and, since our securities are not listed on a national securities exchange or NASDAQ, we are not required to do so. There are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that may increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our personnel, systems and resources.

~~Our~~It ~~executive~~is ~~officers,~~possible ~~directors~~that ~~and~~if ~~shareholders~~we ~~holding~~were into ~~excess~~adopt some ofor 5%all of ~~our~~these ~~issued~~corporate ~~and~~governance ~~outstanding shares~~measures, ~~beneficially~~shareholders ~~own~~would ~~over~~benefit ~~61.4%~~from ofsomewhat ~~our~~greater ~~common~~assurances ~~stock. Under~~that ~~our~~internal ~~Articles~~corporate decisions ofwere ~~Incorporation~~being made by disinterested directors and ~~Nevada~~that ~~law~~policies had been implemented to define responsible conduct. For example, in the ~~vote~~absence of audit, nominating and compensation committees comprised of at least a majority of ~~the~~independent ~~shares~~directors, decisions ~~outstanding~~concerning ismatters ~~generally~~such ~~required~~as tocompensation ~~approve~~packages ~~most~~to ~~shareholder~~our ~~action. As~~senior aofficers ~~result,~~and ~~these~~recommendations ~~individuals~~for ~~will~~director nominees may be ~~able~~made toby ~~significantly~~a ~~influence~~majority of directors who have an interest in the outcome of ~~shareholder~~the ~~votes~~matters ~~for~~being ~~the~~decided. Prospective ~~foreseeable~~investors should ~~future,~~bear ~~including~~in ~~votes~~mind ~~concerning~~our ~~the~~current ~~election~~lack of ~~directors,~~corporate ~~amendments~~governance tomeasures ~~our~~in ~~Articles~~formulating oftheir ~~Incorporation~~investment ordecisions. If ~~proposed~~we ~~mergers~~do adopt orvarious corporate governance measures, our management and other ~~significant~~personnel ~~corporate~~will ~~transactions~~need to devote a substantial amount of time to these new compliance initiatives.

17Item 1B. Unresolved Staff Comments

~~Table~~As Ofa ~~Contents~~smaller reporting company”, we are not required to provide the information required by this Item.

WeItem ~~may, in the future, issue additional common shares, which would reduce investors' percent of ownership and may dilute our share value~~2. Properties

~~Our~~We ~~Certificate~~maintain ofour ~~Incorporation~~principal ~~authorizes~~executive ~~the~~office at ~~issuance~~3001 ofSW ~~250,000,000~~3rd ~~shares of common stock~~Ave, ~~$0.0001 par value~~Miami, ofFL ~~which~~331. We ~~164,322,680 shares~~occupy ofthose ~~common~~office ~~stock~~premises ~~issued~~under ~~and~~a ~~outstanding~~lease ~~as of June 5, 2012 (including 16,027,437 shares~~ which ~~are~~expires ~~issuable~~ in ~~connection~~December 2013 ~~with the automatic conversion of certain promissory notes upon effectiveness of the registrant’s Registration Statement on Form S-1 on February 10, 2012)~~ and ~~10,000,000~~includes ~~shares~~options offor ~~preferred stock~~us, ~~$0.0001~~to ~~par~~renew ~~value, of which no shares are issued and outstanding. The future issuance of common stock may result in substantial dilution in~~ the ~~percentage of our common stock held by our then existing shareholders~~lease. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

~~The~~In ~~Board~~addition ofto ~~Directors~~our principal executive office, inas ~~its~~of ~~sole~~December ~~discretion~~31, ~~may~~2011, ~~issue~~we ~~preferred~~leased ~~shares~~or ~~which~~owned ~~could~~through ~~carry~~various ~~superior~~consolidated ~~rights~~entities ~~and~~four ~~preferences~~business ~~and,~~locations into ~~turn,~~support ~~limiting~~our operations. Most ~~the~~of ~~influence~~our ~~common~~leases ~~shareholders~~contain ~~may~~one ~~have~~or onmore options to extend the ~~direction~~lease ofperiod ~~our~~for ~~company~~up to five additional years for each option. Our consolidated entities are generally responsible for property taxes, property and casualty insurance, and routine maintenance expenses.

WeOur ~~have~~principal ~~authorized~~executive ~~10,000,000~~office ~~shares~~and ofother properties ~~blank~~are ~~check~~suitable ~~preferred~~for ~~stock~~their ~~none~~respective ofuses ~~which~~and isare, ~~currently~~in ~~outstanding. Upon~~all ~~issuance~~material ofrespects, ~~any~~adequate ~~preferred~~for ~~stock~~our inpresent ~~the~~needs. Our properties ~~future,~~are ~~the~~subject ~~rights attached~~ to ~~the~~various ~~preferred~~federal, ~~shares could affect our ability to operate~~state, ~~which~~and ~~could~~local ~~force~~statutes usand toordinances ~~seek~~regulating ~~other~~their ~~financing~~operation. ~~The~~Management does ~~Board~~not ofbelieve ~~Directors~~compliance ~~may~~with ~~issue~~such ~~preferred~~statutes ~~stock~~and ~~without~~ordinances ~~obtaining~~will ~~shareholder~~materially ~~approval. Such~~affect ~~financing~~our ~~may~~business, ~~not~~financial beposition, ~~available~~results of onoperations, ~~commercially reasonable terms~~ or atcash ~~all and could cause substantial dilution to existing stockholders~~flows.

~~Currently,~~Item ~~there~~3. isLegal ~~no public market for our securities, and we cannot assure you that any public market will ever develop and it is likely to be subject to significant price fluctuations.~~Proceedings

~~Currently,~~From ~~there~~time isto notime, ~~public~~we ~~market~~may ~~for~~become ~~our~~involved in ~~stock~~various lawsuits and ~~our~~legal ~~stock~~proceedings, ~~may~~which ~~never~~arise bein ~~traded~~the onordinary ~~any~~course ~~exchange,~~of orbusiness. However, iflitigation ~~traded~~is subject to inherent uncertainties, aand ~~public~~an ~~market~~adverse ~~may~~result ~~not~~in ~~materialize. Even~~these ifor weother ~~are~~matters ~~successful~~may inarise ~~developing~~from atime ~~public~~to ~~market,~~time ~~there~~that may harm our business. We are not becurrently ~~enough~~aware ~~liquidity~~of any legal proceedings or claims that we believes will have, individually or in ~~such~~the ~~market~~aggregate, a tomaterial ~~enable~~adverse ~~shareholders~~effect toon ~~sell~~our ~~their~~business, ~~stock~~financial condition or operating results.

~~Our~~Item ~~common stock is unlikely to be followed by any market analysts, and there may be few or no institutions acting as market makers for the common stock~~4. ~~Either~~ ofMine ~~these~~Safety factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company, and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.Disclosures

~~As our current estimated stock price is $0~~None.~~11, our Common Stock will be subject to “penny stock” rules which may be detrimental to investors.~~

The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.19

18PART II

WeMarket ~~have~~for ~~never paid a dividend on our common stock and we do not anticipate paying any in the foreseeable future.~~Securities

WeThere ~~have~~is ~~not~~presently ~~paid~~no apublic ~~cash~~market ~~dividend~~for our oncommon stock and there has never been a market for our common stock. We toanticipate ~~date,~~applying ~~and~~for wequotation doof ~~not~~our common ~~intend~~stock toon ~~pay~~the ~~cash~~OTCQB ~~dividends~~maintained inby the ~~foreseeable~~OTC ~~future. Our~~Markets ~~ability~~LLC, tohowever ~~pay~~we ~~dividends~~cannot ~~will~~assure ~~depend~~you onthat our ~~ability~~shares towill ~~successfully~~be ~~develop~~quoted ~~one~~on the OTCQB or, ~~more~~if ~~properties~~quoted, ~~and~~that ~~generate~~a ~~revenue~~public ~~from~~market ~~operations~~will materialize. ~~Notwithstanding,~~ weWe ~~will~~must ~~likely~~file ~~elect~~our toannual ~~retain~~and ~~earnings,~~quarterly ifreports ~~any,~~with the Securities and Exchange Commission prior to ~~finance~~applying ~~our~~to ~~growth~~be quoted on the OTCQB. ~~Future~~The ~~dividends~~OTCQB ~~may~~securities ~~also~~are benot ~~limited~~quoted byand ~~bank~~traded ~~loan~~on ~~agreements~~the floor of an organized national or ~~other~~regional ~~financing~~stock ~~instruments~~exchange. Instead, ~~that~~OTC weBulletin ~~may~~Board ~~enter~~securities ~~into~~transactions inare ~~the~~conducted through ~~future~~a telephone and computer network connecting dealers in stocks. ~~The~~OTCQB ~~declaration~~stocks ~~and~~are ~~payment~~traditionally ofsmaller ~~dividends~~companies that ~~will~~do benot atmeet the ~~discretion~~financial ofand ~~our~~other ~~Board~~listing requirements of ~~Directors~~a regional or national stock exchange.

WeA ~~have~~market ~~not~~maker ~~voluntarily~~sponsoring ~~implemented~~a ~~various~~company's ~~corporate~~securities is ~~governance~~required ~~measures,~~to inobtain a quotation of the ~~absence~~securities on any of ~~which~~the public trading markets, ~~shareholders~~including the OTCQB. If we are unable to obtain a market maker for our securities, we will be unable to develop a trading market for our common stock. We may ~~have~~be ~~more~~unable ~~limited~~to ~~protections~~locate ~~against~~a ~~interested~~market ~~director~~maker ~~transactions~~that will agree to sponsor our securities. Even if we do locate a market maker, ~~conflicts~~there ofis no ~~interest~~assurance ~~and~~that ~~similar~~our ~~matters~~securities will be able to meet the requirements for a quotation or that the securities will be accepted for quotation on the OTCQB.

~~Recent~~As U.of S.December ~~legislation~~31, 2012 ~~including~~, ~~the~~we ~~Sarbanes-Oxley~~had ~~Act of 2002 and the Dodd Frank Wall Street Reform and Protection Act~~164,322,680 shares ~~have resulted in the adoption~~ of ~~various~~common ~~corporate~~stock ~~governance~~outstanding ~~measures~~(including designed to promote the integrity of corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges16, ~~such as the NYSE or The NASDAQ Stock Market~~027,437 onshares which ~~their securities~~ are ~~listed. Among~~issuable ~~the~~in ~~corporate~~connection ~~governance~~with ~~measures that are required under~~ the ~~rules~~automatic conversion of ~~national~~certain ~~securities~~promissory ~~exchanges~~notes ~~and~~upon ~~NASDAQ~~effectiveness ~~are those that address board~~ of ~~directors’ independence, audit committee oversight and~~ the ~~adoption~~registrant’s ofRegistration aStatement ~~code of ethics. We have not yet adopted any of these corporate governance measures and, since our securities are not listed~~ on aForm ~~national securities exchange or NASDAQ, we are not required to do so. There are significant corporate governance and executive compensation~~S-~~related~~1 ~~provisions~~on inFebruary ~~the Dodd-Frank Act that may increase our legal and financial compliance costs~~10, ~~make some activities more difficult, time-consuming or costly~~ 2012) and ~~may~~approximately ~~also~~179 ~~place~~record ~~undue strain on our personnel, systems and resources~~stockholders.

ItDividend is possible that if we were to adopt some or all of these corporate governance measures, shareholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions. If we do adopt various corporate governance measures, our management and other personnel will need to devote a substantial amount of time to these new compliance initiatives.Policy

~~Item~~The 1Bpayment by us of dividends, if any, in the future rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition, as well as other relevant factors. ~~Unresolved~~ We ~~Staff~~have ~~Comments~~not paid any dividends since our inception and we do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.

AsEquity aCompensation ~~smaller~~Plan ~~reporting company”, we are not required to provide the information required by this Item.~~Information

~~Item~~As 2of December 31, 2012, we have not adopted an equity compensation plan under which our common stock is authorized for issuance. ~~Properties~~

WeRule maintain our principal executive office at 9100 South Dadeland Blvd, Suite 1500, Miami, FL 33156. We occupy those office premises under a lease which expires in August 2012 and includes options for us, at our discretion, to renew the lease for up to ten years in total beyond that date.144

In ~~addition~~general, tounder ~~our~~Rule ~~principal executive office~~144, as ofcurrently in ~~December 31~~effect, ~~2011~~a person, weother ~~leased~~than oran ~~owned~~affiliate, ~~through~~who ~~various~~has ~~consolidated~~beneficially ~~entities~~owned ~~four~~securities ~~business~~for ~~locations~~at toleast ~~support~~six ~~our~~months, ~~operations. Most~~including ofthe ~~our~~holding period ~~leases~~of ~~contain~~prior ~~one~~owners oris ~~more~~entitled ~~options~~ to ~~extend~~sell ~~the~~his ~~lease~~or ~~period~~her ~~for~~shares upwithout toany ~~five~~volume ~~additional~~limitations; ~~years~~an ~~for~~affiliate, ~~each~~however, ~~option. Our~~can ~~consolidated~~sell ~~entities~~such number ~~are~~of ~~generally~~shares ~~responsible~~within ~~for~~any ~~property~~three-month ~~taxes,~~period ~~property~~as ~~and~~does ~~casualty~~not ~~insurance,~~exceed ~~and~~the ~~routine~~greater ~~maintenance expenses.~~of:

~~Our~~· ~~principal~~1% ~~executive~~of ~~office~~the ~~and~~number ~~other~~of ~~properties~~shares ~~are~~of ~~suitable~~common ~~for~~stock ~~their~~then ~~respective uses and are~~outstanding, in all material respects, adequate for our present needs. Our properties are subject to various federal, state, and local statutes and ordinances regulating their operation. Management does not believe compliance with such statutes and ordinances will materially affect our business, financial position, results of operations, or ~~cash flows.~~

~~Item~~· ~~3. Legal~~the ~~Proceedings~~average weekly trading volume of common stock on the OTC Bulletin Board during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

~~From~~Sales ~~time~~under Rule 144 are also subject to manner-of-sale ~~time~~provisions, wenotice ~~may~~requirements ~~become~~and ~~involved~~the inavailability ~~various~~of ~~lawsuits~~current ~~and~~public ~~legal~~information ~~proceedings,~~about ~~which~~an ~~arise~~issuer. In order into ~~the~~effect ~~ordinary~~a ~~course~~Rule 144 sale of ~~business. However~~common stock, ~~litigation~~the istransfer ~~subject~~agent torequires ~~inherent~~an ~~uncertainties~~opinion from legal counsel. Further, the ~~and~~six anmonth ~~adverse~~holding ~~result~~period inis ~~these~~applicable oronly ~~other~~to ~~matters~~issuers ~~may~~who ~~arise~~have ~~from~~been ~~time~~subject to ~~time~~the ~~that~~reporting ~~may~~requirements ~~harm~~of ~~our~~Section ~~business. We~~13 ~~are~~or 15(d) ~~not~~of ~~currently~~the ~~aware~~Securities ofExchange ~~any~~Act ~~legal~~of ~~proceedings~~1934 orfor ~~claims~~at ~~that~~least we90 ~~believes~~days. As ~~will~~of June ~~have~~5, 2012, ~~individually~~no orshares inof ~~the~~our ~~aggregate,~~common stock aare ~~material~~available ~~adverse~~for ~~effect~~sale onunder ~~our~~Rule ~~business~~144. On October 13, ~~financial~~2012, ~~condition~~approximately or164 ~~operating~~million ~~results~~shares will be available for resale under Rule 144.

~~Item~~Restrictions ~~4. Mine~~on ~~Safety~~the ~~Disclosures~~Use of Rule 144 by Former Shell Companies

~~None.~~Rule 144 is not available for the resale of securities issued by any issuer that is or has been at any time previously a shell company unless the following conditions have been met:

19· the issuer of the securities that was formerly a shell company has ceased to be a shell company;

~~Table Of Contents~~20

~~PART~~· IIthe issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act

~~Item~~· ~~5. Market~~the ~~for~~issuer ~~Registrant’s~~of ~~Common~~the ~~Equity~~securities has filed all Exchange Act reports and material required to be filed, ~~Related~~as ~~Stockholder~~applicable, ~~Matters~~during the preceding 12 months (or such shorter period that the issuer was required to file such reports and ~~Issuer~~materials), ~~Purchases~~other ofthan ~~Equity~~Form ~~Securities~~8-K reports; and

~~Market~~· ~~for~~at ~~Securities~~least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

~~There~~As iswe ~~presently~~are noa ~~public~~former ~~market~~shell ~~for~~company, our ~~common~~shareholders will ~~stock~~be ~~and~~entitled ~~there~~to ~~has~~resell ~~never~~their ~~been~~shares aof ~~market for our~~ common stock~~. We~~ ~~anticipate~~utilizing ~~applying~~Rule ~~for~~144 ~~quotation~~subject ofto ~~our~~certain ~~common~~limitations. ~~stock on the OTC Bulletin Board~~Specifically, ~~however~~shareholders will wenot ~~cannot~~be ~~assure~~entitled ~~you~~to ~~that~~utilize ~~our~~Rule ~~shares~~144 ~~will~~until beone ~~quoted~~year onafter the ~~OTC~~filing ~~Bulletin~~of ~~Board~~the ~~or,~~Form if10 ~~quoted,~~information ~~that~~on a ~~public~~Form ~~market~~8-K ~~will~~Current ~~materialize. The~~Report, which ~~OTC~~was ~~Bulletin~~October ~~Board~~13, ~~securities~~2012. ~~are~~Further, ~~not~~in ~~quoted~~order ~~and~~for ~~traded~~shareholders onto ~~the~~utilize ~~floor~~Rule ~~of an organized national or regional stock exchange. Instead~~144, ~~OTC~~the ~~Bulletin~~Company ~~Board~~must ~~securities~~remain ~~transactions~~current ~~are conducted through a telephone and computer network connecting dealers~~ in ~~stocks. OTC~~its ~~Bulletin~~filings under ~~Board stocks are traditionally smaller companies that do not meet~~ the ~~financial~~Securities ~~and~~Exchange ~~other~~Act ~~listing requirements~~ of a1934, ~~regional~~as ~~or national stock exchange~~amended.

AItem ~~market maker sponsoring a company's securities is required to obtain a quotation of the securities on any of the public trading markets, including the OTC Bulletin Board~~6. If weSelected ~~are~~Financial unable to obtain a market maker for our securities, we will be unable to develop a trading market for our common stock. We may be unable to locate a market maker that will agree to sponsor our securities. Even if we do locate a market maker, there is no assurance that our securities will be able to meet the requirements for a quotation or that the securities will be accepted for quotation on the OTC Bulletin Board.Data

As ofa ~~June~~“smaller ~~5, 2012~~reporting company”, we ~~had 164,322,680 shares of common stock outstanding (including 16,027,437 shares which~~ are ~~issuable~~not inrequired ~~connection~~to ~~with~~provide the ~~automatic~~information ~~conversion~~required ofby ~~certain~~this ~~promissory notes upon effectiveness of the registrant’s Registration Statement on Form S-1 on February 10, 2012) and approximately 179 record stockholders~~Item.

~~Dividend~~Item ~~Policy~~7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The ~~payment~~following bydiscussion usshould ofbe ~~dividends,~~read in ifconjunction ~~any,~~with inour ~~the~~audited ~~future~~financial ~~rests~~statements ~~within~~and the ~~discretion~~related ofnotes ~~our~~are ~~Board~~included ofin ~~Directors~~Item 8. Financial Statements and ~~will~~Supplementary ~~depend,~~Data ~~among~~. The ~~other~~following ~~things,~~discussion ~~upon~~contains forward-looking statements that reflect our ~~earnings~~plans, ~~capital~~estimates and ~~requirements~~beliefs. Please ~~and~~see ~~financial~~the ~~condition,~~explanatory asnote ~~well~~concerning as“Forward-Looking ~~other~~Statements” ~~relevant~~found ~~factors~~in Item 1 Business . WeFactors ~~have~~that ~~not~~could ~~paid~~cause ~~any~~or ~~dividends~~contribute ~~since~~to ~~our~~such ~~inception~~differences ~~and~~include, webut doare not ~~intend~~limited to; ~~pay~~those ~~any~~discussed ~~cash~~below and ~~dividends~~elsewhere in ~~the~~this ~~foreseeable~~annual ~~future~~report, ~~but~~particularly ~~intend~~in toItem ~~retain~~1A. ~~all~~Risk ~~earnings,~~Factors if. The ~~any,~~operating results for ~~use~~the inperiods presented ~~our~~herein ~~business~~were not significantly affected by inflation.

~~Equity Compensation Plan Information~~Overview

AsWith the acquisition of ~~June~~the 5Palm Medical Network IPA (Independent Physician Association) we have focused entirely on (i) building a multidisciplinary integrated medical group practices with a primary care physician focus; (ii) building a healthcare management service organizations that manage and coordinate the medical care of patients enrolled in multiple managed care health plans (i.e., ~~2012~~HMOs) and (iii) integrating all aspects of this network with the requisite technology platform that incorporates physician friendly electronic medical records and practice management system services, including scheduling and billing capabilities. Starting in 2009, we ~~have~~commenced the ~~not~~acquisition ~~adopted~~process anand ~~equity~~management ~~compensation~~contracting ~~plan~~with ~~under~~a ~~which~~number of group physician practices including those within the IPA’s approximately 1,600 credentialed physicians. This continues to be our ~~common~~organization-wide ~~stock~~focus isas ~~authorized~~we ~~for~~implement ~~issuance~~our business plan moving forward.

~~Rule~~As ~~144~~of December 31, 2011, we have active contracts with two HMOs, from which most of our revenue was primarily derived. HMOs offer a comprehensive healthcare benefits package in exchange for a capitation amount per enrollee that does not vary through the contract period regardless of the quantity or cost of medical services required or used. HMOs enroll members by entering into contracts with employer groups or directly with individuals to provide a broad range of healthcare services for a prepaid charge, with minimal deductibles or co-payments required of the members. The contracts between our physician members and the HMOs through the Palm IPA and the HMO provide for the provision of medical services to the HMO enrollees in consideration for the prepayment of the fixed monthly capitation amount per enrollee. The two HMO contracts and revenues ($ and % of consolidated medical revenue) realized for the years ended December 31, 2011 and 2010 is summarized as follows:

In general, under Rule 144, as currently in effect, a person, other than an affiliate, who has beneficially owned securities for at least six months, including the holding period of prior owners is entitled to sell his or her shares without any volume limitations; an affiliate, however, can sell such number of shares within any three-month period as does not exceed the greater of:

	2012 Revenue					2011 Revenue
HMO	$		% (a)			$		% (a)

CarePlus	$	9,347,14131		99.36	%	$	7,641,144		99.87	%
Preferred Care Partners		59,805		0.64	%		10,080		0.13	%

Total	$	9,406,946		100	%	$	7,651,224		100	%

·(a) 1%Percentage ofnoted ~~the~~represents ~~number~~ percentage of ~~shares~~consolidated ofmedical ~~common~~revenue ~~stock~~for ~~then~~period ~~outstanding, or~~noted.

· Capitation revenue under HMO contracts are prepaid monthly to the ~~average~~physician ~~weekly~~provides ~~trading~~based ~~volume~~on the number of ~~common~~covered ~~stock~~HMO enrollees. Capitation revenue may be subsequently adjusted to reflect changes in enrollment as a result of retroactive terminations or additions. Variability in capitation revenue exists under Medicare's capitation model referred to as "Risk Adjustment." Under the model, capitation with respect to Medicare enrollees is subject to subsequent adjustment by CMS based on the ~~OTC~~acuity ~~Bulletin~~of ~~Board~~the ~~during~~enrollees to whom services were provided and is memorialized in the ~~four~~Medical ~~calendar~~Risk ~~weeks~~Assessments ~~preceding~~(MRAs) given to member populations. Capitation for the ~~filing~~current ofyear ais ~~notice~~paid based on ~~Form~~data ~~144~~submitted for each Medicare enrollee for preceding periods. Capitation is paid at interim rates during the year and is adjusted in subsequent periods after the final data is compiled. Positive or negative capitation adjustments are made for Medicare enrollees with ~~respect~~conditions requiring more or less healthcare services than assumed in the interim payments. Since we do not have the information necessary to ~~that~~reliably ~~sale~~predict these adjustments, periodic changes in capitation amounts earned as a result of risk adjustment are recognized once those changes are communicated to us by the health plans. The absolute capitation amount for a contract period is specifically driven by the MRAs performed by company in previous contract periods.

~~Sales~~Risk ~~under~~pools ~~Rule~~are ~~144~~settled in ~~are~~the ~~also~~following ~~subject~~year tofrom ~~manner-of-sale~~earning ~~provisions,~~the ~~notice~~capitated ~~requirements~~amount ~~and~~through the ~~availability~~settlement of ~~current~~the ~~public~~medical ~~information~~services ~~about~~claims anagainst ~~issuer~~these amounts. InManagement estimates ~~order~~risk topool ~~effect~~incentives abased ~~Rule~~on ~~144~~information ~~sale~~received offrom ~~common stock,~~ the ~~transfer~~HMOs ~~agent~~or ~~requires~~hospitals anwith ~~opinion~~whom ~~from legal counsel. Further,~~ the ~~six~~risk-sharing ~~month~~arrangements were ~~holding~~in ~~period~~place, isand ~~applicable~~who ~~only~~typically tomaintain ~~issuers~~the ~~who~~information ~~have~~and ~~been~~record ~~subject~~keeping related to the ~~reporting~~risk ~~requirements~~pool ofarrangements. Differences between ~~Section~~actual 13and orestimated ~~15(d)~~settlements ofare ~~the~~recorded ~~Securities~~when ~~Exchange~~the ~~Act~~final ofaccounting ~~1934~~is ~~for~~posted. Risk atpool ~~least~~performance 90is affected ~~days. As~~by ~~of June~~many 5factors, ~~2012,~~ nosome ~~shares~~ of ~~our~~which ~~common stock~~ are ~~available~~beyond ~~for~~our ~~sale under Rule 144. On October 13~~control, ~~2012,~~and ~~approximately~~may ~~63.4~~vary ~~million~~significantly ~~shares~~from ~~will~~year beto ~~available for resale under Rule 144~~year.

~~Restrictions on the Use of Rule 144 by Former Shell Companies~~21

~~Rule 144 is not available for the resale~~ Results of ~~securities issued by any issuer that is or has been at any time previously a shell company unless the following conditions have been met:~~Operations

·Comparison ~~the issuer~~ of the ~~securities~~Years ~~that~~Ended ~~was~~December 31, 2012 ~~formerly~~and ~~a shell company has ceased to be a shell company;~~2011

	For the Year Ended December 31,
	2012			2011

Medical revenues
Fixed fee arrangements	$	9,406,946		$	7,662,008
Fee for service arrangements		2,012,671			1,665,384
Total medical revenues		11,419,617			9,327,392

License fees and non-medical revenues		482,964			100,000
Total revenues		11,902,581			9,427,392

Healthcare expenses
Physician and other provider expenses		6,868,274			5,797,462

Gross profit		5,034,307			3,629,930

Operating Expenses
Salaries and benefits		881,691			469,882
General and administrative		1,487,061			1,044,262
Medical risk adjustment reserve		1,095,677			-
Professional fees		901,294			1,173,688

Total Operating Expenses		4,365,723			2,687,832

Net operating income		668,554			942,098

Other income (expenses)
Gain on acquisition		-			7,660
Interest expense		(144,085	)		(163,340	)
Other		(65,653	)		(61,115	)
Total other income (expenses)		(209,738	)		(216,795	)

Net income before income taxes and non-controlling interest		458,816			725,303

Income tax benefit (expense)		(173,711			(165,912	)

Income attributable to non-controlling interest		(177,250	)		(167,516	)

Net income	$	107,885		$	391,875

~~Table~~Medical Ofrevenues ~~Contents~~totaled $11,419,617 for the year ended December 31, 2012, which was a $ 2,092,225, or 018%, increase over medical revenues earned during 2011. This increase was primarily related to the contribution from the OPA , Suarez the Sussman practices. License fees and non-medical revenues amounted to $482,964 for the year ended December 31, 2012. We realized $482,864 from licensing fees. Licensing fees involve transactions whereby doctor organizations in geographical areas we don’t serve pay a fee to license the Hygea name.

~~· the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act~~22

·Physician ~~the~~and ~~issuer~~other ofprovider ~~the~~expenses ~~securities~~amounted to ~~has~~$6,868,274 ~~filed~~and ~~all~~$5,797,462 ~~Exchange~~for ~~Act~~the ~~reports~~years ~~and~~ended ~~material~~December 31, ~~required~~2012 toand be2011, ~~filed~~respectively, aswhich ~~applicable~~were approximately 60.1% and 62.2% of medical revenues, ~~during~~respectively. Our ~~the~~fixed ~~preceding~~fee 12operations ~~months~~carry ~~(or~~a ~~such~~higher ~~shorter~~operating ~~period~~cost ~~that~~than ~~the~~do ~~issuer~~our ~~was~~fee for ~~required~~service activities and therefore when fixed fee revenues decrease, as occurred when comparing 2012 to ~~file~~2011, ~~such~~disproportionately to ~~reports~~fee ~~and~~for ~~materials)~~service revenues, ~~other~~our ~~than~~costs ~~Form~~as ~~8-K~~a ~~reports;~~percentage ~~and~~of such will decrease.

·Salaries atand ~~least~~benefits ~~one~~totaled ~~year~~to ~~has~~$881,691 and ~~elapsed~~$469,882 ~~from~~for the ~~time~~years ~~that~~ended ~~the~~December ~~issuer~~31, ~~filed~~2012 ~~current~~and ~~Form~~2011, 10respectively. The ~~type~~increase, ~~information~~amounting ~~with~~to ~~the~~$411,809, is ~~SEC~~primarily ~~reflecting~~comprised ~~its~~of ~~status~~salaries asrelated anto ~~entity~~acquisition ~~that~~of isthe ~~not~~Suarez aand ~~shell~~Sussman ~~company~~practices and internal staff hiring for expansion and public offering.

AsGeneral weand ~~are~~administrative aexpenses ~~former~~amounted to ~~shell~~$1,487,091 ~~company~~and $1,044,262 ~~all~~for ~~shareholders~~the ~~will~~years ~~not~~ended beDecember 31, 2012 ~~able~~and to2011, ~~resell~~respectively. The ~~their~~increase, amounting ~~securities~~to ~~utilizing~~$442,829, ~~Rule~~primarily ~~144~~represents ~~until~~general ~~one~~and ~~year~~administrative ~~after~~expenses and the ~~filing~~acquisition of the ~~Form~~Suarez 10and ~~information,~~Sussman ~~which is October 13, 2012~~practices.

~~Item~~Professional 6fees amounted to $901,294 and $1,173,688 for the years ended December 31, 2012 and 2011, respectively. ~~Selected~~ The ~~Financial~~decrease, ~~Data~~amounting to $272,394 is due primarily to the fact that the Company made no acquisitions in 2012.

AsInterest aexpense ~~“smaller~~amounted ~~reporting~~to ~~company”~~144,085as compared weto ~~are~~$163,340 ~~not~~for ~~required~~year toended ~~provide~~December 31, 2011. which correlates with the ~~information~~average ~~required~~outstanding bydebt ~~this~~between ~~Item~~the periods.

~~Item~~Income ~~7. Management’s~~attributable ~~Discussion~~to ~~and~~non-controlling interest ~~Analysis~~represents the minority interest share of ~~Financial~~Palm ~~Condition~~Medical ~~and~~Network, ~~Results~~LLC ofnet ~~Operations~~income.

~~The~~Other ~~following~~expense ~~discussion~~during ~~should be read in conjunction with our audited financial statements and~~ the ~~related~~year ~~notes~~ended ~~are included in Item 8. Financial Statements and Supplementary Data. The following discussion contains forward-looking statements that reflect our plans~~December 31, ~~estimates and beliefs. Please see the explanatory note concerning “Forward-Looking Statements” found in Item 1 Business. Factors that could cause or contribute to such differences include~~2011, ~~but~~relates ~~are not limited~~ to; ~~those~~a ~~discussed~~loss ~~below~~on ~~and~~the ~~elsewhere~~sale inof ~~this~~the ~~annual~~Company’s ~~report,~~interest ~~particularly~~ in ~~Item~~its ~~1A.~~Royal ~~Risk~~Palm ~~Factors. The~~Beach ~~operating results for the periods presented herein were not significantly affected by inflation~~practice.

~~Overview~~Liquidity and Capital Resources

~~With~~Capital the acquisition of the Palm Medical Network IPA (Independent Physician Association) we have focused entirely on (i) building a multidisciplinary integrated medical group practices with a primary care physician focus; (ii) building a healthcare management service organizations that manage and coordinate the medical care of patients enrolled in multiple managed care health plans (i.e., HMOs) and (iii) integrating all aspects of this network with the requisite technology platform that incorporates physician friendly electronic medical records and practice management system services, including scheduling and billing capabilities. Starting in 2009, we commenced the acquisition process and management contracting with a number of group physician practices including those within the IPA’s approximately 1,600 credentialed physicians. This continues to be our organization-wide focus as we implement our business plan moving forward.Resources

AsOur ofprimary ~~December 31,~~sources ~~2011,~~of weliquidity ~~have~~are ~~active~~proceeds generated ~~contracts with two HMOs,~~ from ~~which most of our revenue was primarily derived. HMOs offer a comprehensive healthcare benefits package in exchange for a capitation amount per enrollee that does not vary through~~ the ~~contract~~sale ~~period regardless~~ of ~~the~~equity ~~quantity~~and orissuances ~~cost~~ of ~~medical~~short ~~services~~and required or used. HMOs enroll members by entering into contracts with employer groups or directly with individuals to provide a broad range of healthcare services for a prepaid charge, with minimal deductibles or colong-~~payments~~term ~~required of the members~~debt. ~~The~~There ~~contracts~~is ~~between~~no ~~our~~guarantee ~~physician~~that ~~members~~this ~~and the HMOs through the Palm IPA and the HMO provide for the provision~~ source of ~~medical~~capital ~~services~~will tobe ~~the~~available ~~HMO enrollees~~ in ~~consideration for~~ the ~~prepayment of the fixed monthly capitation amount per enrollee~~future. ~~The two HMO contracts and revenues ($ and % of consolidated medical revenue) realized for the years ended December 31, 2011 and 2010 is summarized as follows:~~

	2011 Revenue				2010 Revenue
HMO	$		% (a)		$		% (a)
CarePlus	$	7,631,831	81.8	%	$	8,570,744	91.6	%
Preferred Care Partners		30,177	0.3	%		2,540	-
Total	$	7,662,008	82.1	%	$	8,573,284	91.6	%

As of December 31, 2012, we had $267,040 of cash and cash equivalents on hand as compared to $13,097 at December 31, 2011. Our working capital was $3,569,867 at December 31, 2012, as compared to $520,469 at December 31, 2011.

~~(a) Percentage noted represents percentage of consolidated medical revenue for period noted.~~23

~~Capitation~~Cash ~~revenue~~Flow under HMO contracts are prepaid monthly to the physician provides based on the number of covered HMO enrollees. Capitation revenue may be subsequently adjusted to reflect changes in enrollment as a result of retroactive terminations or additions. Variability in capitation revenue exists under Medicare's capitation model referred to as "Risk Adjustment." Under the model, capitation with respect to Medicare enrollees is subject to subsequent adjustment by CMS based on the acuity of the enrollees to whom services were provided and is memorialized in the Medical Risk Assessments (MRAs) given to member populations. Capitation for the current year is paid based on data submitted for each Medicare enrollee for preceding periods. Capitation is paid at interim rates during the year and is adjusted in subsequent periods after the final data is compiled. Positive or negative capitation adjustments are made for Medicare enrollees with conditions requiring more or less healthcare services than assumed in the interim payments. Since we do not have the information necessary to reliably predict these adjustments, periodic changes in capitation amounts earned as a result of risk adjustment are recognized once those changes are communicated to us by the health plans. The absolute capitation amount for a contract period is specifically driven by the MRAs performed by company in previous contract periods.Information

~~Risk~~We ~~pools~~used ~~are~~cash ~~settled~~flow in ~~the~~operating ~~following year from earning the capitated amount through the settlement~~ activities of ~~the~~$621,688 ~~medical~~and ~~services~~$1,492,815 ~~claims~~during ~~against these amounts. Management estimates risk pool incentives based on information received from~~ the ~~HMOs~~years orended ~~hospitals with whom the risk-sharing arrangements were in place~~December 31, 2012 and ~~who~~2011, ~~typically maintain the information and record keeping related to the risk pool arrangements~~respectively. ~~Differences~~ The ~~between~~net ~~actual~~increase ~~and~~in cash ~~estimated~~flow ~~settlements~~used ~~are~~in ~~recorded~~operating ~~when~~activities ~~the~~during 2011 ~~final~~was ~~accounting~~primarily isdue ~~posted. Risk~~to ~~pool~~our ~~performance~~realizing islower ~~affected~~net byincome ~~many~~during ~~factors~~2012, ~~some~~as ~~of which are beyond our control, and may vary significantly from year~~ compared to ~~year~~2011.

21We used $ 55,180 of cash in investing activities during 2011, in acquiring miscellaneous equipment and our acquisitions of the Suarez and Sussman practices, net of cash acquired. We used $ 160,157 of cash in investing activities during 2011.

~~Table~~We Ofhad ~~Contents~~$820,481 and $1,439,138 of cash provided by financing activities during the years ended December 31, 2012 and 2011, respectively, related to our issuances of debt and equity, net of debt repayments. For further discussion of our borrowing activity, please see Contractual Obligations below.

~~Results~~Contractual ~~of Operations~~Obligations

~~Comparison~~As a “smaller reporting company”, we are not required to provide tabular disclosure obligations. We are subject to various financial obligations and commitments in the normal course of operations. These contractual obligations represent future cash payments that we are required to make and relate primarily to accounts payable and our debt obligations. We expect to fund these contractual obligations with additional financing, either in the ~~Years~~form ~~Ended~~of ~~December 31~~equity or debt issuances, ~~2011~~for which there is no assurance that any additional financings will be available to us on satisfactory terms and ~~2010~~conditions, if at all, as well as with our revenue generated from our operations. A summary of our debt outstanding is discussed below:

	For the Year Ended December 31,
	2011			2010
Medical revenues
Fixed fee arrangements	$	7,662,008		$	8,573,284
Fee for service arrangements		1,665,384			784,930
Total medical revenues		9,327,392			9,358,214
License fees and non-medical revenues		100,000			437,583
Total revenues		9,427,392			9,795,797
Healthcare expenses
Physician and other provider expenses		5,797,462			6,855,434
Gross profit		3,629,930			2,940,363
Administrative and other operating expenses
Salaries and benefits		469,882			192,466
General and administrative		1,044,262			680,191
Professional fees		1,173,688			824,292
Total administrative and other operating expenses		2,687,832			1,696,949
Net operating income		942,098			1,243,414
Other income (expenses)
Gain on acquisition		7,660			76,219
Interest expense		(163,340	)		(36,849	)
Other		(61,115	)		(5,400	)
Total other income (expenses)		(216,795	)		33,970
Net income before income taxes
and non-controlling interest		725,303			1,277,384
Income tax benefit (expense)		(165,912	)		17,961
Income attributable to non-controlling interest		(167,516	)		(129,360	)
Net income	$	391,875		$	1,165,985

In connection with our reverse acquisition, we assumed $1,431,018 of convertible notes payable, and accrued interest on the notes of $67,261. Of this amount, $564,995 of the principal amount outstanding of these convertible notes bore interest at 10% per annum and matured on March 31, 2012, as amended. The remaining $866,023 of principal amount outstanding of these convertible notes bore interest at 5% per annum and matured on various dates between June and November 2012. The convertible notes were convertible into shares of the Company’s common stock on the basis of one share of common stock for every $0.11 of principal amount outstanding automatically upon effectiveness of the registrant’s Registration Statement on Form S-1 (which occurred on February 10, 2012). The $1,431,018 of total principal amount outstanding was therefore converted, effective February 10, 2012, into approximately 13,009,255 shares of common stock.

~~Medical~~In ~~revenues~~2011, ~~totaled~~we issued an additional $9332,~~327,392~~000 of ~~for~~principal ~~the~~of ~~year~~5% ~~ended~~convertible ~~December~~promissory ~~31,~~notes. ~~2011,~~These ~~which~~convertible ~~was~~notes abore ~~$30,822,~~interest orat ~~0.33~~5%, ~~decrease~~per ~~over~~annum ~~medical~~and ~~revenues~~matured ~~earned~~on ~~during~~various ~~2011. This~~dates between ~~decrease~~January ~~was~~and ~~primarily~~April ~~related~~2013. The toconvertible ~~the~~notes ~~impact~~were ~~of an~~also ~~average~~convertible ~~loss~~into shares of ~~150~~our ~~patients~~common ~~served~~stock byon ~~under~~the ~~our~~basis of ~~fixed~~one ~~fee~~share ~~service~~of ~~arrangements~~common ~~between~~stock ~~the~~for ~~two~~every ~~periods~~$0. ~~However,~~11 ~~contribution~~of ~~from~~principal ~~the~~amount ~~OPA~~outstanding ~~and~~automatically ~~Royal~~upon ~~practices~~effectiveness ~~acquired~~of in the ~~second~~registrant’s Registration ~~quarter~~Statement ofon ~~2010,~~Form ~~along~~S-1 ~~with~~(which ~~contributions~~occurred ~~from~~on ~~our~~February ~~Suarez management contract~~10, ~~which~~2012). The ~~began in January 2011~~$332,000 ~~and~~of ~~the~~total ~~acquisition,~~principal inamount ~~December~~outstanding was ~~2011,~~therefore ofconvertible ~~our~~into ~~Sussman~~approximately ~~practice~~3,018,182 ~~significantly~~shares ~~offset~~of ~~these~~common ~~losses~~stock.

License fees and non-medical revenues amounted to $100,000 for the year ended December 31, 2011, representing earned revenues under our CarePlus network agreement. During the year ended December 31, 2010, we realized $250,000 from licensing fees, $100,000 of deferred revenue earned under the CarePlus network agreement and $80,000 in consulting fees. Licensing fees involve transactions whereby doctor organizations in geographical areas we don’t serve pay a fee to license the Hygea name.24

22During the third quarter of 2011we entered into two note payable agreements. The first note payable agreement provides for borrowings totaling $125,000 with interest accruing at 13.9% per annum and had an original maturity of February 1, 2012, but subsequent to December 31, 2011 was extended to March 5, 2013. As of December 31, 2011 we had borrowed $125,000 under this arrangement. The second note payable agreement provides for maximum borrowings of $300,000 with interest accruing at 14.0% per annum. Borrowings are due on June 30, 2012. As of December 31, 2011, we had borrowed $204,700 under this arrangement. USE language already approved in the Qs

~~Table~~During Of2011, ~~Contents~~we entered into a loan agreement with a company controlled by the Chairman of its Board of Directors. The loan agreement provides for maximum borrowings of $1,000,000 with interest accruing at 15.0% per annum. As of December 31, 2012, we had borrowed $275,000 under this arrangement, originally due on January 1, 2012, but subsequent to December 31, 2011 was extended to December 31, 2013.

~~Physician~~At ~~and other provider expenses amounted to $5,797,462 and $6,855,434 for the years ended~~ December 31, ~~2011 and 2010~~2012, ~~respectively,~~we ~~which~~had ~~were~~borrowed ~~approximately~~a total ~~62.2% and 73.3%~~ of ~~medical~~$ ~~revenues~~369,940 ~~respectively. Our~~from ~~fixed~~the ~~fee~~Company’s ~~operations~~Chief ~~carry~~Executive aOfficer, ~~higher~~or ~~operating~~from ~~cost~~individuals ~~than~~related doto ~~our~~the ~~fee~~Company’s ~~for~~Chief ~~service~~Executive Officer ~~activities~~or ~~and~~entities ~~therefore~~under ~~when~~his ~~fixed fee revenues decrease~~control, asfor ~~occurred~~working ~~when~~capital ~~comparing~~purposes. These ~~2011~~advances toare ~~2010,~~unsecured ~~disproportionately~~and tohave ~~fee~~no ~~for~~maturity. Interest is ~~service~~accrued ~~revenues,~~on ~~our~~these ~~costs~~advances asat a4.0% ~~percentage~~per ~~of such will decrease~~annum.

~~Salaries~~Critical ~~and~~Accounting ~~benefits~~Policies ~~totaled to $469,882~~ and $192,466 for the years ended December 31, 2011 and 2010, respectively. The increase, amounting to $277,416, is primarily comprised of salaries related to Opa and Royal (two acquisitions made in second quarter 2010) for the entire 2011 period (as compared to partial in 2010), the acquisition of the Suarez and Sussman practices and internal staff hiring for expansion and public offering.Estimates

~~General~~Use and administrative expenses amounted to $1,044,262 and $680,191 for the years ended December 31, 2011 and 2010, respectively. The increase, amounting to $364,071, primarily represents general and administrative expenses for Opa and Royal operations for the entire 2011 period (as compared to only partially incurring such costs in 2010) and the acquisition of ~~the Suarez and Sussman practices.~~Estimates

~~Professional~~Future ~~fees~~events ~~amounted~~and their effects cannot be predicted with certainty; accordingly the preparation of financial statements in conformity with GAAP requires management to make ~~$1,173,688~~estimates and ~~$824,292~~assumptions ~~for~~that affect the ~~years~~reported ~~ended~~amounts ~~December~~of ~~31,~~assets ~~2011~~and liabilities and ~~2010~~disclosure of contingent assets and liabilities at the date of the financial statements, ~~respectively~~and the reported amounts of revenues and expenses during the reporting period. The ~~increase~~accounting estimates used in the preparation of these financial statements will change as new events occur, ~~amounting~~as tomore ~~$349~~experience is acquired,~~396,~~ ~~primarily~~as ~~represents~~additional ~~costs~~information ~~associated~~is ~~with~~obtained, and as the Company’s ~~efforts~~operating environment changes. Significant estimates and assumptions are used for, but not limited to ~~publicly~~accounts ~~list~~receivable, revenues, goodwill, intangible assets, income taxes, and contingent liabilities. The Company bases its ~~common~~estimates ~~stock~~on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results may differ from these estimates and assumptions used in preparation of its financial statements and changes in these estimates are recorded when known.

Gain on acquisition during the year ended December 31, 2011, related to the excess of the fair value of the net assets consolidated with respect the Company’s interest in its variable interest entity, Suarez, over the consideration given in exchange. The gain on acquisition during the year ended December 31, 2010, related to the excess of the fair value of the net assets acquired by the Company in the Opa-Locka Pain Management acquisition over the consideration given in exchange.Revenues

~~Interest~~The ~~expense~~Company ~~amounted~~provides tocoordination ~~$163,340~~and ~~for~~facilitation of ~~year~~medical ~~ended~~services; ~~December~~transaction ~~31,~~processing; ~~2011~~customer, asconsumer ~~compared~~and care professional services; and access to ~~$36~~contracted networks of physicians,~~849~~ hospitals and other health care professionals under both risk-based and fee-based (non-risk) customer arrangements. Revenues derived from risk-based health insurance arrangements in which the premium is typically at a fixed rate per individual served for a ~~2010~~one-year period, ~~which~~and ~~correlates~~where ~~with~~the Company assumes the ~~average~~economic ~~outstanding~~risk ~~debt~~of ~~between~~funding its customers’ health care and related administrative costs are presented as fixed fee arrangements in the ~~periods~~consolidated statements of operations. Revenues derived from fee-based customer arrangements are presented as fee for service arrangements in the consolidated statements of operations. The Company recognizes medical revenues on the accrual basis in the period in which eligible individuals are entitled to receive health care benefits.

~~Income attributable to non-controlling interest represents the minority interest share of Palm Medical Network, LLC net income.~~25

~~Other~~The ~~expense~~Centers ~~during~~for Medicare and Medicaid Services (CMS) deploy a risk adjustment model that apportions premiums paid to all health plans according to health severity and certain demographic factors. The CMS risk adjustment model pays more for members whose medical history indicates they have certain medical conditions. Under this risk adjustment methodology, CMS calculates the ~~year~~risk ~~ended~~adjusted ~~December~~premium 31payment using diagnosis data from hospital inpatient, ~~2011~~hospital outpatient and physician treatment settings. The Company and health care providers collect, ~~relates~~capture, and submit the necessary and available diagnosis data to aCMS ~~loss~~within onprescribed deadlines. The Company estimates risk adjustment revenues based upon the ~~sale~~diagnosis data submitted and expected to be submitted to CMS. Risk adjustment data for certain of the Company’s ~~interest~~plans inis ~~its~~subject ~~Royal~~to ~~Palm~~audit ~~Beach~~by ~~practice~~regulators.

~~Liquidity~~Payments under both the Company’s risk contracts and ~~Capital~~non-risk ~~Resources~~contracts (for both Medicare Advantage program as well as Medicaid) are subject to revision based upon premium adjustments, historical patient enrollment data and final settlements. Such revision and final payments are settled over a period ranging from 18 to 24 months after the contractual period. Preliminary data provided in fiscal year 2012, with respect to the Company’s 2011 activity does not indicate a material variance to expected, and accrued, results. However, these amounts will not be fully resolved until fiscal year 2013. Should there be variances to amounts reported, each 1% adjustment to our estimated recoverable amounts will increase or decrease our revenue by approximately $39,000.

~~Capital~~Non-medical ~~Resources~~revenues consist primarily of license fees and consulting fees. License fees consist of a license granting the use of the Hygea name and business model to the licensee. Currently, the Company has granted the use of only one license, the revenue for which was recognized in full upon the date that the use of the license was granted, in accordance with our accounting policy, as found below.

~~Our~~For ~~primary~~license ~~sources~~fees ofwhere ~~liquidity~~the ~~are~~Company ~~proceeds~~is ~~generated~~not obligated ~~from~~to provide future services, nor is there an intent or expectation that any future services will be requested by the ~~sale~~licensee, the revenue is recognized in full on the date that the use of ~~equity~~the ~~and~~license ~~issuances~~is granted, which is typically the date of ~~short~~the ~~and~~signing of ~~long-term~~the ~~debt~~agreement. ~~There~~For license fees where the Company is noobligated ~~guarantee~~to ~~that~~perform ~~this~~future ~~source~~services, ofor ~~capital~~there is the intent or expectation that future services will be ~~available~~requested inby the licensee, revenue is recognized over the period to which the earnings process closely relates with consideration of the license contract and the timing of expected future services.

AsConsulting offees ~~December~~are ~~31,~~earned ~~2011,~~over wethe ~~had~~period in ~~$13,097~~which ofthe ~~cash~~Company ~~and~~provides ~~cash~~the ~~equivalents~~related onservices. In ~~hand~~some ascases, ~~compared~~such toservices ~~$226,931~~are atbased ~~December 31, 2010. Our~~on ~~working~~an ~~capital~~hourly ~~was~~rate ~~$520,469~~and atin others ~~December~~on ~~31,~~a ~~2011~~fixed fee arrangement, whereby the Company recognizes consulting revenue as ~~compared~~it tomeets ~~$981,830~~the atterms ~~December 31,~~of ~~2010~~the underlying contract.

23Health Maintenance Organization Contracts

~~Table~~The OfCompany’s ~~Contents~~Health Maintenance Organization (“HMO”) contracts have various expiration dates ranging from one to three years with automatic renewal terms. Upon negotiation of any of the HMO contracts, the expiration dates may be extended beyond the automatic renewal terms.

~~Cash~~When ~~Flow~~it ~~Information~~is probable that expected future health care costs and maintenance costs under a contract or group of existing contracts will exceed anticipated captivated revenue on those contracts, the Company recognizes losses on its prepaid health care services with HMOs.

WeThe ~~used~~Company ~~cash~~has ~~flow~~acquired inreinsurance ~~operating~~on catastrophic ~~activities~~costs ofto ~~$1,575,958~~limit ~~and $785,758 during~~ the ~~years~~exposure ~~ended~~on ~~December 31, 2011~~patient ~~and 2010, respectively~~losses. The ~~net~~Company ~~increase~~has inthe ~~cash~~right ~~flow used in operating activities during 2011 was primarily due~~ to ~~our~~terminate ~~realizing~~unprofitable ~~lower~~physicians and ~~net~~close ~~income~~unprofitable ~~during~~centers ~~2011,~~under asits ~~compared~~managed tocare ~~2010~~contracts.

We used $77,014 of cash in investing activities during 2011, in acquiring miscellaneous equipment and our acquisitions of the Suarez and Sussman practices, net of cash acquired. We used $24,739 of cash in investing activities during 2011, primarily in our acquisition of Opa and Royal.26

WeReinsurance ~~had~~(Stop-Loss $1,439,138 and $1,037,403 of cash provided by financing activities during the years ended December 31, 2011 and 2010, respectively, related to our issuances of debt and equity, net of debt repayments. For further discussion of our borrowing activity, please see Contractual Obligations below. Insurance)

~~Contractual~~Reinsurance ~~Obligations~~premiums are reported as a health care cost and are included in physician and other provider expenses in the consolidated statements of operations. Reinsurance recoveries are reported as a reduction of physician and other provide expenses in the consolidated statement of operations.

AsReinsurance acoverage ~~“smaller~~is ~~reporting~~purchased ~~company”,~~from CarePlus weHealth ~~are~~Plans, ~~not~~Inc. ~~required~~(“CarePlus”) tounder ~~provide~~our ~~tabular~~administrative ~~disclosure~~service ~~obligations. We~~contract ~~are~~with ~~subject~~this provider to ~~various~~cover ~~financial~~catastrophic claims ~~obligations~~or ~~and~~to ~~commitments~~limit inaggregate ~~the~~annual ~~normal course of operations~~costs. ~~These~~Accordingly, ~~contractual~~we ~~obligations~~have ~~represent~~recorded ~~future~~premiums ~~cash~~and ~~payments~~benefit ~~that~~expenses werelated ~~are required~~ to ~~make~~these stop ~~and~~loss ~~relate~~insurance ~~primarily~~contracts toas ~~accounts~~expenses ~~payable~~ and ~~our~~revenues ~~debt~~received ~~obligations. We~~from ~~expect~~the toprovider ~~fund~~as ~~these~~patient ~~contractual~~fees ~~obligations with additional financing, either~~ in the ~~form~~statement of ~~equity or debt issuances, for which there~~ operations. Management is noof ~~assurance~~the opinion that ~~any~~the ~~additional~~inclusion ~~financings~~of ~~will~~stop beloss ~~available~~insurance toas usrevenues onprovided ~~satisfactory~~a ~~terms~~better ~~and~~presentation ~~conditions,~~in iflight atof ~~all,~~the asexisting reporting ~~well~~model asof ~~with~~revenues ~~our~~under ~~revenue~~the ~~generated~~At-Risk ~~from~~Administrative ~~our~~Service ~~operations. A~~Contracts ~~summary~~with ~~of our debt outstanding is discussed below:~~HMO’s.

InThe ~~July~~nature ~~2009,~~of weour ~~entered~~reinsurance ~~into~~or astop ~~$300,000 deferred revenue agreement with CarePlus Health Plans, Inc. The deferred revenue agreement~~ loss is ~~earned~~to iflimit the ~~network~~benefits ~~agreement,~~paid ~~signed~~under byone ~~both~~patient ~~parties,~~to ~~remains in effect without termination continuously through June~~ $30,000 ~~2012~~per year. AsPhysicians ~~part~~under ofcapitation ~~the~~arrangements ~~deferred~~typically have ~~revenue~~stop ~~agreement,~~loss ~~$100,000~~coverage isso ~~earned~~that ~~each~~a ~~June~~physician’s ~~30,~~financial ~~subject~~risk tofor ~~enrollment~~any ~~levels~~single ~~within~~member ~~the~~is ~~CarePlus~~limited ~~Health~~to ~~Plans. $100,000~~a ~~was~~maximum ~~earned~~amount on ~~both~~an ~~June 30, 2010~~annual basis. We ~~and~~monitor ~~June~~the ~~30,~~financial ~~2011,~~performance ~~leaving~~and asolvency ~~net $100,000 outstanding from that facility as~~ of ~~December 31,~~our ~~2011~~capitated providers. ~~The~~However, ~~deferred~~we ~~revenue~~remain ~~agreement~~financially responsible isfor ~~secured~~health bycare ~~CarePlus’~~services ~~right~~ to ~~withhold~~our ~~any~~members ~~amounts~~in ~~due and payable under~~ the ~~loan~~event ~~from~~our ~~any~~providers ~~amounts~~fail ~~due~~to usprovide ~~under~~such ~~the Network Agreement~~services.

InCash ~~connection with our reverse acquisition, we assumed $1,431,018 of convertible notes payable,~~ and ~~accrued~~Cash interest on the notes of $67,261. Of this amount, $564,995 of the principal amount outstanding of these convertible notes bore interest at 10% per annum and matured on March 31, 2012, as amended. The remaining $866,023 of principal amount outstanding of these convertible notes bore interest at 5% per annum and matured on various dates between June and November 2012. The convertible notes were convertible into shares of the Company’s common stock on the basis of one share of common stock for every $0.11 of principal amount outstanding automatically upon effectiveness of the registrant’s Registration Statement on Form S-1 (which occurred on February 10, 2012). The $1,431,018 of total principal amount outstanding was therefore converted, effective February 10, 2012, into approximately 13,009,255 shares of common stock.Equivalents

InFor purposes ~~2011, we issued an additional $332,000~~ of ~~principal~~the ofCompany's 5%consolidated ~~convertible~~Statement ~~promissory notes. These convertible notes bore interest at 5% per annum and matured on various dates between January and April 2013. The convertible notes were also convertible into shares~~ of ~~our~~Cash ~~common~~Flows, ~~stock on~~ the ~~basis~~Company ofconsiders ~~one~~as ~~share~~cash ofequivalents ~~common~~all ~~stock~~time ~~for~~deposits ~~every~~and highly ~~$0.11~~liquid ofinvestments ~~principal~~with ~~amount~~a ~~outstanding~~maturity ~~automatically upon effectiveness~~ of ~~the~~three ~~registrant’s~~months ~~Registration~~or ~~Statement on Form S-1 (which occurred on February 10~~less, ~~2012). The~~when ~~$332,000 of total principal amount outstanding was therefore convertible into approximately 3,018,182 shares of common stock~~purchased.

24Accounts Receivable

~~Table~~The OfCompany’s ~~Contents~~accounts receivable are derived primarily from its risk-based health insurance arrangements (fixed fee arrangements) in which the premium is typically at a fixed rate per individual served for a one-year period. The Company estimates risk adjustment revenues based upon the diagnosis data submitted and expected to be submitted to CMS. The reimbursement timing can span from 18 to 24 months which is attributable to the customary (and industry standard) timetable in Medicare reimbursement for pass through from HMO risk contractors. However, given the Company’s historical reimbursement activity, the Company does not believe it to have a material risk of collection of any of these amounts and therefore has not recorded a reserve for such risk. The Company’s accounts receivable also include reimbursements amount due from health insurance companies for services performed for insured patients under our fee for service program. These amounts are set by contract and the Company does not believe there to be a material risk of uncollectibility of these amounts due to its historical collection experience and financial strength of its counterparties.

InAt ~~June~~December ~~2011~~31, we2012, the ~~entered~~Company ~~into~~had a ~~$60,000~~net ~~note~~receivable ~~payable~~from ~~agreement~~CarePlus of $5,294,444 ~~interest~~. This ~~bearing~~net atreceivable ~~12%~~is ~~per~~comprised ~~annum~~of ~~and~~estimated risk adjustments due onthe ~~December~~Company 31of $3,886,784 ~~2011~~. ~~Interest~~ As ~~payments~~noted previously, the risk adjustments are ~~due~~settled on18 ato ~~monthly~~24 ~~basis~~months after the date of service. At The Company received gross reimbursements of 1,104,000$ in August 2013 and expects to receive approximately $1,750,000 in August, net of any amounts advanced by CarePlus. Therefore, based on amounts advanced through December 31, ~~2011~~2012, $500,000 we were deducted from the payment from CarePlus in ~~default~~2013, ofresulting ~~the~~in ~~repayment~~a ~~terms~~net ofpayment ~~this~~approximating ~~debt~~$1,104,000.

~~During~~The Company evaluates the ~~third~~creditworthiness ~~quarter~~ of ~~2011we~~CarePlus ~~entered~~through ~~into~~periodic ~~two~~review ~~note payable agreements. The first note payable agreement provides for borrowings totaling $125,000 with interest accruing at 13.9% per annum and had an original maturity~~ of ~~February~~the 1,financial ~~2012,~~statements ~~but subsequent to December 31, 2011 was extended to March 5, 2013. As~~ of ~~December~~its 31parent, ~~2011 we had borrowed $125~~Humana,~~000~~ ~~under this arrangement~~Inc. ~~The~~ ~~second~~Humana ~~note~~is ~~payable agreement provides for maximum borrowings~~ one of ~~$300,000~~the ~~with~~nation’s ~~interest~~largest ~~accruing~~publicly attraded ~~14.0%~~health ~~per~~and ~~annum. Borrowings~~supplemental ~~are~~benefits ~~due on June 30~~companies, ~~2012. As~~ ofbased ~~December~~on ~~31,~~its 2011, werevenues ~~had~~of ~~borrowed~~ approximately $~~204,700~~36.8 ~~under this arrangement~~billion.

During 2011, we entered into a loan agreement with a company controlled by the Chairman of its Board of Directors. The loan agreement provides for maximum borrowings of $1,000,000 with interest accruing at 15.0% per annum. As of December 31, 2011, we had borrowed $255,000 under this arrangement, originally due on January 1, 2012, but subsequent to December 31, 2011 was extended to September 30, 2012. 27

AtThe ~~December~~Company ~~31,~~evaluates the ~~2011,~~creditworthiness weof ~~had~~CarePlus ~~borrowed~~through aperiodic ~~total~~review of ~~$545,627~~the ~~from~~financial ~~the~~statements ~~Company’s~~of ~~Chief~~its ~~Executive~~parent, ~~Officer~~Humana, orInc. ~~from~~Humana ~~individuals~~is ~~related~~one of to the ~~Company~~nation’s ~~Chief~~largest ~~Executive~~publicly ~~Officer~~traded orhealth ~~entities~~and ~~under~~supplemental ~~his~~benefits ~~control~~companies, ~~for~~based ~~working~~on ~~capital~~its ~~purposes. These~~2011 ~~advances~~revenues ~~are~~of ~~unsecured and have no maturity~~approximately $36. ~~Interest~~8 ~~is accrued on these advances at 4~~billion.~~0% per annum.~~

~~Critical~~Property ~~Accounting Policies~~ and ~~Estimates~~Equipment

~~Use~~Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of ~~Estimates~~the related assets, which range from three to five years. Leasehold improvements are amortized over the underlying assets' useful lives or the term of the lease, whichever is shorter. Repairs and maintenance costs are expensed as incurred. Improvements and replacements are capitalized.

~~Future~~Intangible events and their effects cannot be predicted with certainty; accordingly the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The accounting estimates used in the preparation of these financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. Significant estimates and assumptions are used for, but not limited to accounts receivable, revenues, goodwill, intangible assets, income taxes, and contingent liabilities. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results may differ from these estimates and assumptions used in preparation of its financial statements and changes in these estimates are recorded when known.Assets

~~Revenues~~Finite lived intangible assets are acquired in a business combination and are assets that represent future expected benefits but lack physical substance. Intangible assets are amortized over their expected useful lives and are subject to impairment tests when events or circumstances indicate that a finite lived intangible assets (or asset group’s) carrying value may exceed its estimated fair value. If the carrying value exceeds its estimated fair value, an impairment would be recorded.

The Company ~~provides~~calculates ~~coordination~~the ~~and~~estimated ~~facilitation~~fair value of ~~medical~~finite ~~services;~~lived ~~transaction~~intangible ~~processing;~~assets ~~customer,~~using ~~consumer~~undiscounted ~~and~~cash ~~care~~flows ~~professional~~that ~~services;~~are ~~and~~expected ~~access~~ to ~~contracted~~result ~~networks of physicians, hospitals and other health care professionals under both risk-based and fee-based (non-risk) customer arrangements. Revenues derived~~ from ~~risk-based health insurance arrangements in which~~ the ~~premium~~use ~~is typically at a fixed rate per individual served for a one-year period, and where the Company assumes the economic risk~~ of ~~funding its customers’ health care and related administrative costs are presented as fixed fee arrangements in~~ the ~~consolidated~~intangible asset ~~statements~~or ofgroup ~~operations. Revenues derived from fee-based customer arrangements are presented as fee for service arrangements in the consolidated statements~~ of ~~operations~~assets. The Company ~~recognizes~~considers ~~medical~~many ~~revenues~~factors, onincluding ~~the~~estimated ~~accrual~~future ~~basis~~utility ~~in the period in which eligible individuals are entitled~~ to ~~receive~~estimate ~~health~~cash ~~care benefits~~flows.

25Goodwill

~~Table~~Goodwill Ofrepresents ~~Contents~~the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. To determine whether goodwill is impaired, the Company performs a two-step impairment test. In the first step of the test, the fair values of the reporting units are compared to their aggregate carrying values, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, the Company would proceed to step two of the test. In step two of the test, the implied fair value of the goodwill of the reporting unit is determined by a hypothetical allocation of the fair value calculated in step one to all of the assets and liabilities of that reporting unit (including any recognized and unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was reflective of the price paid to acquire the reporting unit. The implied fair value of goodwill is the excess, if any, of the calculated fair value after hypothetical allocation to the reporting unit’s assets and liabilities. If the implied fair value of the goodwill is greater than the carrying amount of the goodwill at the analysis date, goodwill is not impaired and the analysis is complete. If the implied fair value of the goodwill is less than the carrying value of goodwill at the analysis date, goodwill is deemed impaired by the amount of that variance.

The ~~Centers~~Company ~~for~~calculates ~~Medicare~~the ~~and~~estimated ~~Medicaid~~fair value ~~Services~~of ~~(CMS)~~our ~~deploy~~reporting aunits ~~risk~~using ~~adjustment~~discounted ~~model~~cash ~~that~~flows. To ~~apportions~~determine ~~premiums~~fair ~~paid~~values tothe ~~all~~Company ~~health~~must ~~plans~~make ~~according~~assumptions about toa ~~health~~wide ~~severity~~variety ~~and~~of ~~certain~~internal ~~demographic~~and external factors. ~~The~~Significant ~~CMS~~assumptions ~~risk~~used ~~adjustment~~in ~~model~~the ~~pays~~impairment ~~more~~analysis ~~for~~include financial ~~members~~projections ~~whose~~of ~~medical~~free ~~history~~cash ~~indicates~~flow ~~they~~(includes ~~have~~significant ~~certain~~assumptions ~~medical~~about ~~conditions. Under this risk adjustment methodology~~operations, ~~CMS~~capital ~~calculates~~requirements ~~the~~and ~~risk~~income ~~adjusted~~taxes), long-term ~~premium~~growth ~~payment~~rates ~~using~~for ~~diagnosis~~determining ~~data~~terminal ~~from hospital inpatient~~value, ~~hospital outpatient~~ and ~~physician~~discount ~~treatment settings~~rates. ~~The~~Where ~~Company~~available and ~~health care providers collect~~appropriate, ~~capture,~~comparative market ~~and~~multiples ~~submit~~are ~~the~~used ~~necessary and available diagnosis data~~ to ~~CMS~~corroborate ~~within prescribed deadlines. The Company estimates risk adjustment revenues based upon~~ the ~~diagnosis~~results ~~data submitted and expected to be submitted to CMS. Risk adjustment data for certain~~ of ~~the~~our ~~Company’s~~discounted ~~plans~~cash isflow ~~subject to audit by regulators~~test.

~~Payments~~The ~~under both the~~ Company’s ~~risk~~completed ~~contracts~~its ~~and~~annual ~~non-risk~~assessment of ~~contracts~~goodwill ~~(for both Medicare Advantage program~~ as ~~well~~of asDecember ~~Medicaid)~~31, ~~are subject to revision based upon premium adjustments~~2011, ~~historical patient enrollment data~~ and ~~final~~determined ~~settlements. Such~~that ~~revision~~no ~~and~~impairment ~~final~~existed ~~payments~~as ~~are~~of ~~settled~~that ~~over a period ranging from 18 to 24 months after the contractual period~~date. ~~Preliminary~~Although ~~data~~the ~~provided~~Company believes inthat ~~fiscal~~the ~~year~~financial ~~2011,~~projections ~~with~~used ~~respect~~are toreasonable ~~the~~and ~~Company’s~~appropriate ~~2010~~for ~~activity~~all ~~does~~of ~~not~~its ~~indicate~~reporting aunits, ~~material~~there ~~variance~~is touncertainty inherent ~~expected,~~in ~~and~~those ~~accrued, results~~projections. ~~However,~~That ~~these~~uncertainty ~~amounts~~is ~~will~~increased ~~not~~by bepotential ~~fully~~health ~~resolved~~care ~~until~~reforms, ~~fiscal~~as ~~year~~any ~~2012. Should~~passed ~~there~~legislation may besignificantly ~~variances~~change tothe ~~amounts~~forecasts ~~reported,~~and ~~each~~long-term 1%growth ~~adjustment~~rate toassumptions ~~our~~for ~~estimated~~some ~~recoverable amounts will increase~~ or ~~decrease~~all ~~our~~of ~~revenue~~its byreporting ~~$39,000~~units.

Non-medical revenues consist primarily of license fees and consulting fees. License fees consist of a license granting the use of the Hygea name and business model to the licensee. Currently, the Company has granted the use of only one license, the revenue for which was recognized in full upon the date that the use of the license was granted, in accordance with our accounting policy, as found below.28

~~For~~Income license fees where the Company is not obligated to provide future services, nor is there an intent or expectation that any future services will be requested by the licensee, the revenue is recognized in full on the date that the use of the license is granted, which is typically the date of the signing of the agreement. For license fees where the Company is obligated to perform future services, or there is the intent or expectation that future services will be requested by the licensee, revenue is recognized over the period to which the earnings process closely relates with consideration of the license contract and the timing of expected future services.Taxes

~~Consulting~~The ~~fees~~Company ~~are~~accounts ~~earned~~for ~~over~~income ~~the~~taxes ~~period~~using an inasset and liability approach which allows for the ~~Company~~recognition ~~provides~~and measurement of deferred tax assets based upon the ~~related~~likelihood of ~~services~~realization of tax benefits in future years. InUnder ~~some~~this ~~cases~~method, ~~such~~deferred ~~services~~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 anenacted ~~hourly~~tax ~~rate~~laws and instatutory ~~others~~tax onrates aapplicable ~~fixed~~to ~~fee~~the ~~arrangement,~~periods ~~whereby~~in which the ~~Company~~differences ~~recognizes~~are ~~consulting~~expected to ~~revenue~~affect astaxable income. A valuation allowance is provided for deferred tax assets if it ~~meets~~is ~~the~~more ~~terms~~likely ofthan not these items will either expire before the ~~underlying~~Company ~~contract~~is able to realize their benefits, or that future deductibility is uncertain.

~~Health~~Recently ~~Maintenance~~Adopted ~~Organization~~Accounting ~~Contracts~~Standards

~~The~~None ~~Company’s~~of ~~Health~~the ~~Maintenance~~Accounting ~~Organization~~Standards Updates (~~“HMO”~~ASU) ~~contracts~~that ~~have~~the ~~various~~Company ~~expiration~~adopted ~~dates~~and ~~ranging~~that ~~from~~became ~~one~~effective toJanuary ~~three~~1, ~~years with automatic renewal terms. Upon negotiation of any of the HMO contracts~~2011, ~~the~~had ~~expiration~~a ~~dates~~material ~~may~~impact beon ~~extended~~its ~~beyond~~consolidated ~~the~~financial ~~automatic renewal terms~~statements.

~~When~~ASU it is probable that expected future health care costs and maintenance costs under a contract or group of existing contracts will exceed anticipated captivated revenue on those contracts, the Company recognizes losses on its prepaid health care services with HMOsNo. 2011-04

~~The~~On ~~Company~~May ~~has~~12, ~~acquired~~2011, ~~reinsurance~~the onFASB ~~catastrophic~~issued ~~costs~~ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to ~~limit~~Achieve ~~the~~Common ~~exposure~~Fair onValue ~~patient~~Measurement ~~losses~~and Disclosure Requirements in U.S. GAAP and IFRSs.” This ASU amends U.S. generally accepted accounting principles (U.S. GAAP) and results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and international financial reporting standards (IFRS). The ~~Company~~amendments ~~has~~in this ASU change the ~~right~~wording used to ~~terminate~~describe many ~~unprofitable~~of ~~physicians~~the requirements in U.S. GAAP for measuring fair value and ~~close~~for ~~unprofitable~~disclosing ~~centers~~information ~~under~~about ~~its~~fair ~~managed~~value ~~care~~measurements; ~~contracts~~however, the amendment’s requirements do not extend the use of fair value accounting, and for many of the requirements, the FASB did not intend for the amendments to result in a change in the application of the requirements in the “Fair Value Measurement” Topic of the Codification. Additionally, ASU No. 2011-04 includes some enhanced disclosure requirements, including an expansion of the information required for Level 3 fair value measurements. For the Company, ASU No. 2011-04 was effective January 1, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

26ASU Nos. 2011-05 and 2011-12

~~Table~~On OfJune ~~Contents~~16, 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” This ASU eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. An entity can elect to present items of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements.

~~Reinsurance~~ASU ~~(Stop~~No. 2011-~~Loss~~05 ~~Insurance~~also requires reclassifications of items out of accumulated other comprehensive income to net income to be measured and presented by income statement line item in both the statement where net income is presented and the statement where other comprehensive income is presented. However, on December 23, 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” to defer this new requirement. For us, both ASU No. 2011-05 and ASU No. 2011-12 were effective January 1, 2012. Since these ASUs pertain to presentation and disclosure requirements only, the adoption of these ASUs is not expected to have a material impact on the Company’s consolidated financial statements.

Reinsurance premiums are reported as a health care cost and are included in physician and other provider expenses in the consolidated statements of operations. Reinsurance recoveries are reported as a reduction of physician and other provide expenses in the consolidated statement of operations.29

~~Reinsurance~~ASU ~~coverage is purchased from CarePlus Health Plans, Inc~~No. (“CarePlus”) under our administrative service contract with this provider to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums and benefit expenses related to these stop loss insurance contracts as expenses and revenues received from the provider as patient fees in the statement of operations. Management is of the opinion that the inclusion of stop loss insurance as revenues provided a better presentation in light of the existing reporting model of revenues under the At2011-~~Risk Administrative Service Contracts with HMO’s.~~07

~~The~~In ~~nature~~July of2011, ~~our~~the ~~reinsurance~~FASB orratified ~~stop~~the ~~loss~~final consensus isreached by the Emerging Issues Task Force related to ~~limit~~the presentation and disclosure of net revenue, the ~~benefits~~provision ~~paid~~for bad ~~under~~debts, ~~one~~and ~~patient~~the toallowance ~~$30~~for doubtful accounts of healthcare entities and issued ASU No. 2011-07,~~000~~ ~~per~~“Health ~~year~~Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities. ~~Physicians~~” This ~~under~~ASU ~~capitation~~retains ~~arrangements~~the ~~typically~~existing ~~have~~revenue ~~stop~~recognition ~~loss~~model ~~coverage~~for sohealthcare ~~that~~entities, pending afurther ~~physician’~~developments in the FASB's ~~financial~~revenue ~~risk~~recognition project. However, this ASU requires the provision for ~~any~~doubtful accounts ~~single~~associated ~~member~~with ispatient ~~limited~~service revenue to abe ~~maximum~~separately ~~amount~~displayed on anthe ~~annual~~face ~~basis~~of the statement of operations as a component of net revenue. We This ~~monitor~~ASU also requires enhanced disclosures of significant changes in estimates related to patient bad debts. While this ASU will have no net impact on the Company’s financial ~~performance~~position, ~~and~~results ~~solvency~~ of ~~our~~operations, ~~capitated~~or ~~providers. However~~cash flows, weit will ~~remain~~require ~~financially~~the ~~responsible~~Company to reclassify its provision for ~~health~~doubtful ~~care~~accounts ~~services~~from operating expenses to ~~our~~a ~~members~~component inof net operating revenues beginning with the ~~event~~first ~~our~~quarter ~~providers~~of ~~fail~~2012, towith ~~provide~~retrospective ~~such~~application ~~services~~required. The Company’s historical provision for doubtful accounts has not been material.

~~Recoveries~~ASU ~~that are recognized in the statements of operations approximate $583,607 and $404,254 for the years ended December 31, 2011 and 2010, respectively~~No. ~~There~~ ~~is no recoverable amount recognized in the Company’s consolidated Balance Sheets from an accrual of recoveries under stop loss policies at either December 31,~~ 2011 ~~or December 31, 2010.~~-08

~~Accounts~~On ~~Receivable~~September 15, 2011, the FASB issued ASU No. 2011-8, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” This ASU allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test prescribed by current accounting principles. However, the quantitative impairment test is required if an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. An entity can choose to perform the qualitative assessment on none, some or all of its reporting units. Moreover, an entity can bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative goodwill impairment test, and then resume performing the qualitative assessment in any subsequent period. For the Company, ASU No. 2011-8 was effective January 1, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

~~The~~ASU Company’s accounts receivable are derived primarily from its risk-based health insurance arrangements (fixed fee arrangements) in which the premium is typically at a fixed rate per individual served for a one-year periodNo. ~~The~~ Company estimates risk adjustment revenues based upon the diagnosis data submitted and expected to be submitted to CMS. The reimbursement timing can span from 18 to 24 months which is attributable to the customary (and industry standard) timetable in Medicare reimbursement for pass through from HMO risk contractors. However, given the Company’s historical reimbursement activity, the Company does not believe it to have a material risk of collection of any of these amounts and therefore has not recorded a reserve for such risk. The Company’s accounts receivable also include reimbursements amount due from health insurance companies for services performed for insured patients under our fee for service program. These amounts are set by contract and the Company does not believe there to be a material risk of uncollectibility of these amounts due to its historical collection experience and financial strength of its counterparties.2011-11

AtOn December 3116, 2011, the ~~Company~~FASB ~~had~~issued aASU No. ~~net~~2011-11, ~~receivable~~“Balance ~~from~~Sheet ~~CarePlus~~(Topic of210): ~~$3,403,969~~Disclosures about Offsetting Assets and Liabilities.” This ~~net~~ASU requires ~~receivable~~disclosures isto ~~comprised~~provide information to help reconcile differences in the offsetting requirements under U.S. GAAP and IFRS. The disclosure requirements of ~~estimated~~this ~~risk~~ASU ~~adjustments~~mandate ~~due~~that entities disclose both gross and net information about financial instruments and transactions eligible for offset in the ~~Company~~statement of ~~$3,886,784~~financial ~~reduced~~position byas ~~advance~~well ~~payments~~as ~~made~~instruments byand ~~CarePlus~~transactions subject to ~~providers~~an ofenforceable master ~~$482,815~~netting arrangement or similar agreement. AsASU ~~noted~~No. ~~previously,~~2011-11 ~~the~~also ~~risk~~requires ~~adjustments~~disclosure ~~are~~of ~~settled~~collateral 18received toand posted 24in ~~months~~connection ~~after~~with ~~the~~master ~~date~~netting ofarrangements ~~service~~or similar arrangements. The ~~Company~~scope ~~expects~~of tothis ~~receive~~ASU ~~gross~~includes ~~reimbursements~~derivative contracts, ofrepurchase $2agreements,~~118,073~~ inand ~~August~~securities ~~2012~~borrowing and ~~$1,768,711~~lending inarrangements. Entities ~~August~~are ~~2013~~required ~~respectively,~~to ~~net~~apply the amendments of ~~any~~ASU ~~amounts~~No. ~~advanced~~2011-11 byfor ~~CarePlus. Therefore,~~annual ~~based~~reporting onperiods ~~amounts~~beginning ~~advanced~~on ~~through~~or ~~December~~after ~~31,~~January ~~2011~~1, ~~$482~~2013,~~815~~ ~~would~~and beinterim ~~deducted~~periods ~~from~~within those ~~the~~annual ~~payment~~periods. All ~~from~~disclosures ~~CarePlus~~provided inby ~~2012,~~those ~~resulting~~amendments inare arequired ~~net~~to ~~payment~~be provided retrospectively for all comparative periods presented. The Company is currently reviewing the effect of ~~$1,635,258~~ASU No. 2011-11.

27Off-Balance Sheet Arrangements

~~Table~~At OfDecember ~~Contents~~31, 2012, we did not have any off-balance sheet arrangements.

~~The~~Item ~~Company evaluates the creditworthiness of CarePlus through periodic review of the financial statements of its parent, Humana, Inc~~7A. ~~Humana~~Quantitative ~~is one of the nation’s largest publicly traded health~~ and ~~supplemental~~Qualitative ~~benefits~~Disclosures ~~companies,~~About ~~based~~Market ~~on its 2011 revenues of approximately $36.8 billion.~~Risk

~~Intangible~~As ~~Assets~~a “smaller reporting company”, we are not required to provide the information required by this Item.

Finite lived intangible assets are acquired in a business combination and are assets that represent future expected benefits but lack physical substance. Intangible assets are amortized over their expected useful lives and are subject to impairment tests when events or circumstances indicate that a finite lived intangible assets (or asset group’s) carrying value may exceed its estimated fair value. If the carrying value exceeds its estimated fair value, an impairment would be recorded.30

~~The~~Item ~~Company calculates the estimated fair value of finite lived intangible assets using undiscounted cash flows that are expected to result from the use of the intangible asset or group of assets~~8. ~~The~~ ~~Company~~Financial ~~considers~~Statements ~~many~~and ~~factors,~~Supplementary ~~including estimated future utility to estimate cash flows.~~Data

~~Goodwill~~Report of Independent Registered Public Accounting Firm

Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. To ~~determine whether goodwill is impaired,~~ the ~~Company~~Board ~~performs a two-step impairment test. In the first step~~ of the test, the fair values of the reporting units are compared to their aggregate carrying values, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, the Company would proceed to step two of the test. In step two of the test, the implied fair value of the goodwill of the reporting unit is determined by a hypothetical allocation of the fair value calculated in step one to all of the assets and liabilities of that reporting unit (including any recognized and unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was reflective of the price paid to acquire the reporting unit. The implied fair value of goodwill is the excess, if any, of the calculated fair value after hypothetical allocation to the reporting unit’s assets and liabilities. If the implied fair value of the goodwill is greater than the carrying amount of the goodwill at the analysis date, goodwill is not impaired and the analysis is complete. If the implied fair value of the goodwill is less than the carrying value of goodwill at the analysis date, goodwill is deemed impaired by the amount of that variance.Directors

~~The~~Hygea ~~Company~~Holdings ~~calculates the estimated fair value of our reporting units using discounted cash flows~~Corporation. To determine fair values the Company must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (includes significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value, and discount rates. Where available and appropriate, comparative market multiples are used to corroborate the results of our discounted cash flow test.

~~The Company completed its annual assessment of goodwill as of December 31~~Miami, 2011, and determined that no impairment existed as of that date. Although the Company believes that the financial projections used are reasonable and appropriate for all of its reporting units, there is uncertainty inherent in those projections. That uncertainty is increased by potential health care reforms, as any passed legislation may significantly change the forecasts and long-term growth rate assumptions for some or all of its reporting units.Florida

28We have audited the accompanying consolidated balance sheets of Hygea Holdings Corporation as of December 31, 2012 and 2011 and the related consolidated statements of operations, stockholders' deficit, and cash flows for the years then ended. 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.

~~Table~~We Ofconducted ~~Contents~~our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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.

~~Income~~In ~~Taxes~~our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hygea Holdings Corporation as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years then ended, in conformity with U.S. generally accepted accounting principles.

~~The~~/s/ ~~Company~~Kabani ~~accounts~~& for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. 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. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company ~~is able to realize their benefits~~, ~~or that future deductibility is uncertain~~Inc.

~~Recently~~Certified ~~Adopted~~Public ~~Accounting Standards~~Accountants

~~None~~Los ~~of the Accounting Standards Updates (ASU) that the Company adopted and that became effective January 1~~Angeles, ~~2011, had a material impact on its consolidated financial statements.~~California

~~ASU~~December ~~No.~~3, ~~2011-04~~2013

~~On May 12, 2011, the FASB issued ASU No. 2011~~F-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This ASU amends U.S. generally accepted accounting principles (U.S. GAAP) and results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and international financial reporting standards (IFRS). The amendments in this ASU change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements; however, the amendment’s requirements do not extend the use of fair value accounting, and for many of the requirements, the FASB did not intend for the amendments to result in a change in the application of the requirements in the “Fair Value Measurement” Topic of the Codification. Additionally, ASU No. 2011-04 includes some enhanced disclosure requirements, including an expansion of the information required for Level 3 fair value measurements. For the Company, ASU No. 2011-04 was effective January 1~~, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.~~

~~ASU~~HYGEA ~~Nos~~HOLDINGS CORP. ~~2011-05~~AND ~~and 2011-12~~SUBSIDIARIES

OnCONSOLIDATED ~~June~~BALANCE 16, 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” This ASU eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. An entity can elect to present items of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements.SHEETS

ASU No. 2011-05 also requires reclassifications of items out of accumulated other comprehensive income to net income to be measured and presented by income statement line item in both the statement where net income is presented and the statement where other comprehensive income is presented. However, on December 23, 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” to defer this new requirement. For us, both ASU No. 2011-05 and ASU No. 2011-12 were effective January 1, 2012. Since these ASUs pertain to presentation and disclosure requirements only, the adoption of these ASUs is not expected to have a material impact on the Company’s consolidated financial statements.

	December 31,
	2012		2011

Assets
Current assets
Cash and cash equivalents	$	267,040	$	13,097
Accounts receivable		5,925,957		4,666,742
Prepaid and other current assets		-		107,249
Note receivable - related party - current		60,000		60,000
Total current assets		6,252,997		4,847,088

Property and equipment, net		230,451		292,444

Goodwill		1,159,900		1,159,900
Intangible assets, net		1,938,781		2,200,364
Note receivable - related party		212,223		282,368
Other assets		4,200		166,891
Total assets	$	9,798,552	$	8,949,055

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable and accrued liabilities	$	450,241	$	790,826
Convertible notes payable - current		95,769		1,431,018
Notes payable		664,700		264,700
Notes payable - related parties		636,840		805,627
Deferred revenue - current		-		100,000
Common stock to be issued		566,667		850,000
Taxes payable		268,913		84,448
Total current liabilities		2,683,130		4,326,619

Convertible notes payable		-		332,000
Notes Payable		607,500		125,000
Total liabilities		3,290,630		4,783,619

Commitments and contingencies		-		-

Stockholders’ Equity
Preferred stock - 10,000,000 shares of $.0001 par value, no shares issued and outstanding		-		-
Common stock - 250,000,000 shares of $.0001 par value, 164,322,680 and 148,295,243 shares issued and outstanding, respectively		16,433		14,830
Additional paid-in capital		3,767,327		1,711,579
Non-controlling interest		2,427,426		2,250,176
Retained earnings		296,736		188,851
Total Stockholders’ equity		6,507,922		4,165,436
Total liabilities and Stockholders’ equity	$	9,798,552	$	8,949,055

29The accompanying notes are an integral part of these audited consolidated financial statements.

~~Table Of Contents~~F-2

~~ASU~~HYGEA NoHOLDINGS CORP. ~~2011-07~~AND SUBSIDIARIES

InCONSOLIDATED ~~July~~STATEMENTS ~~2011,~~OF the FASB ratified the final consensus reached by the Emerging Issues Task Force related to the presentation and disclosure of net revenue, the provision for bad debts, and the allowance for doubtful accounts of healthcare entities and issued ASU No. 2011-07, “Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.” This ASU retains the existing revenue recognition model for healthcare entities, pending further developments in the FASB's revenue recognition project. However, this ASU requires the provision for doubtful accounts associated with patient service revenue to be separately displayed on the face of the statement of operations as a component of net revenue. This ASU also requires enhanced disclosures of significant changes in estimates related to patient bad debts. While this ASU will have no net impact on the Company’s financial position, results of operations, or cash flows, it will require the Company to reclassify its provision for doubtful accounts from operating expenses to a component of net operating revenues beginning with the first quarter of 2012, with retrospective application required. The Company’s historical provision for doubtful accounts has not been material.OPERATIONS

ASU No. 2011-08

	For the Years Ended December 31,
	2012			2011

Medical revenues
Fixed fee arrangements	$	9,406,946		$	7,662,008
Fee for service arrangements		2,012,671			1,665,384
Total medical revenues		11,419,617			9,327,392

License fees and non-medical revenues		482,964			100,000
Total revenues		11,902,581			9,427,392

Healthcare expenses
Physician and other provider expenses		6,868,274			5,797,462

Gross profit		5,034,307			3,629,930

Administrative and other operating expenses
Salaries and benefits		881,691			469,882
General and administrative		1,487,061			1,044,262
Medical risk adjustment reserve		1,095,677			-
Professional fees		901,294			1,173,688

Total administrative and other operating expenses		4,365,723			2,687,832

Net operating income		668,584			942,098

Other income (expenses)
Gain on acquisition		-			7,660
Interest expense		(144,085	)		(163,340	)
Other		(65,653	)		(61,115	)
Total other income (expenses)		(209,738	)		(216,795	)

Net income before income taxes and non-controlling interest		458,846			725,303

Income tax benefit (expense)		(173,711	)		(165,912	)

Income attributable to non-controlling interest		(177,250	)		(167,516	)

Net income	$	107,885		$	391,875

Earnings per common share:
Basic	$	0.00		$	0.00
Diluted	$	0.00		$	0.00

Weighted average number of common shares outstanding:
Basic		164,322,680			148,295,243
Diluted		164,322,680			162,452,779

OnThe ~~September~~accompanying ~~15,~~notes ~~2011,~~are ~~the FASB issued ASU No. 2011-8, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” This ASU allows~~ an ~~entity~~integral part to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test prescribed by current accounting principles. However, the quantitative impairment test is required if an entity believes, as a result of ~~its~~these ~~qualitative~~audited assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. An entity can choose to perform the qualitative assessment on none, some or all of its reporting units. Moreover, an entity can bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative goodwill impairment test, and then resume performing the qualitative assessment in any subsequent period. For the Company, ASU No. 2011-8 was effective January 1, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

~~ASU No. 2011~~F-113

OnHYGEA ~~December~~HOLDINGS ~~16, 2011, the FASB issued ASU No~~CORP. ~~2011-11,~~AND ~~“Balance~~SUBSIDIARIES Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires disclosures to provide information to help reconcile differences in the offsetting requirements under U.S. GAAP and IFRS. The disclosure requirements of this ASU mandate that entities disclose both gross and net information about financial instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an enforceable master netting arrangement or similar agreement. ASU No. 2011-11 also requires disclosure of collateral received and posted in connection with master netting arrangements or similar arrangements. The scope of this ASU includes derivative contracts, repurchase agreements, and securities borrowing and lending arrangements. Entities are required to apply the amendments of ASU No. 2011-11 for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. All disclosures provided by those amendments are required to be provided retrospectively for all comparative periods presented. The Company is currently reviewing the effect of ASU No. 2011-11.

~~Off-Balance~~CONSOLIDATED ~~Sheet~~STATEMENTS ~~Arrangements~~OF STOCKHOLDERS’ EQUITY

At ~~December~~FOR ~~31,~~THE ~~2011,~~YEARS weENDED ~~did~~DECEMBER ~~not~~31, ~~have~~2012 ~~any~~AND ~~off-balance sheet arrangements.~~2011

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

	Preferred stock				Common stock				Paid-in		Subscription			Non-controlling		Retained earnings			Total
	Shares		Amount		Shares		Amount		capital		receivable			interest		(deficit)			equity

Balance, December 31, 2010		-	$	-		148,295,243	$	14,830	$	1,711,579	$	(305,000	)	$	2,082,660	$	(203,024	)	$	3,301,045

Receipt of subscription receivable		-		-		-		-		-		305,000			-		-			305,000

Net income		-		-		-		-		-		-			167,516		391,875			559,391

Balance, December 31, 2011		-		-		148,295,243		14,830		1,711,579		-			2,250,176		188,851			4,165,436

Issuance of common shares upon conversion of convertible debt		-		-		16,027,437		1,603		2,055,748		-			-		-			2,057,351

Net income		-		-		-		-		-		-			177,250		107,885			285,135

Balance, December 31, 2012		-	$	-		164,322,680	$	16,433	$	3,767,327	$	-		$	2,427,426	$	296,736		$	6,507,922

AsThe aaccompanying ~~“smaller~~notes ~~reporting company”, we~~ are ~~not~~an ~~required~~integral topart ~~provide~~of ~~the~~these ~~information~~audited ~~required~~consolidated byfinancial ~~this Item~~statements.

30F-4

~~Table~~HYGEA OfHOLDINGS ~~Contents~~CORP. AND SUBSIDIARIES

~~Item~~CONSOLIDATED ~~8. Financial~~STATEMENTS ~~Statements~~OF ~~and~~CASH ~~Supplementary Data~~FLOWS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

	For the Years Ended December 31,
	2012			2011
Cash flows from operating activities:
Net income	$	107,885		$	391,875
Non-controlling interest		177,250			167,516
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		76,988			53,172
Amortization		261,584			142,874
Medical risk adjustment reserve		933,488			-
Changes in operating assets and liabilities:
Accounts receivable		(2,192,703	)		(2,420,855	)
Deferred taxes		-			78,271
Prepaid expenses and other assets		269,941			(269,940	)
Accounts payable and accrued liabilities		(340,585	)		379,824
Deferred revenue		(100,000	)		(100,000	)
Taxes payable		184,464			84,448
Net cash used in operating activities		(621,688	)		(1,492,815	)

Cash flows from investing activities:
Capital expenditures		(14,995	)		(105,389	)
Proceeds from related party loans receivable		70,145			-
Acquisitions, net of cash acquired		-			(54,768	)
Net cash used in investing activities		55,150			(160,157	)

Cash flows from financing activities:
Borrowings from stockholders and related parties		151,681			512,438
Proceeds from issuance of loans payable		610,300			721,700
Repayment of loans payable		-			(100,000	)
Proceeds from issuance of stock		58,500			305,000
Net cash provided by financing activities		820,481			1,439,138

Net increase (decrease) in cash and cash equivalents		253,943			(213,834	)
Cash and cash equivalents, beginning of period		13,097			226,931
Cash and cash equivalents, end of period	$	267,040		$	13,097

Supplemental cash flow information:
Cash paid for interest	$	-		$	-

Cash paid for taxes	$	-		$	-

ToThe ~~the~~accompanying ~~Board~~notes are an integral part of ~~Directors~~these ~~and~~audited ~~Shareholders~~consolidated of financial statements.

~~Hygea Holdings Corp.~~F-5

WeHYGEA ~~have audited the accompanying consolidated balance sheets of Hygea Holdings Corp~~HOLDINGS CORP. ~~and~~AND its subsidiaries, formerly Piper Acquisition II, Inc. (collectively, the "Company") as of December 31, 2011 and 2010, and the related consolidated statements of operations, equity and cash flows for the years then ended. 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.SUBSIDIARIES

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

InNOTES TO ~~our~~CONSOLIDATED ~~opinion,~~FINANCIAL the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Hygea Holdings Corp. at December 31, 2011 and 2010, and the consolidated results of operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.STATEMENTS

~~/s/~~1. ~~Kabani~~Description &of ~~Company, Inc.~~Business

~~CERTIFIED~~Hygea ~~PUBLIC~~Holdings Corp., ~~ACCOUNTANTS~~formerly Piper Acquisition II, Inc. ("the Company" or "Holdings") is a Nevada corporation formed on August 26, 2008, as Piper Acquisition II, Inc. The Company changed its name to "Hygea Holdings Corp." on May 16, 2011.

~~Los~~Effective ~~Angeles~~December 31, CA2010, the Company acquired 99.9% of the outstanding common shares of Hygea Health Holdings, Inc., a Florida corporation ("Hygea Health"), in exchange for the issuance of 135,519,339 shares of the Company's Common Stock. The exchange of shares between the Company and Hygea Health was accounted for as a reverse acquisition under the purchase method of accounting. A reverse acquisition is considered, and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Hygea Health's securities for our net monetary assets, accompanied by a recapitalization. Hygea Health is the surviving and continuing entity and the historical financials following the reverse acquisition transaction are those of Hygea Health. Hygea Health's historical equity has been retroactively restated to reflect the reverse acquisition as if it had occurred on January 1, 2010. As of the date of the merger, the Company's authorized capital consisted of 10,000,000 shares of Preferred Stock, $0.0001 par value, and 250,000,000 shares of Common Stock, S0.0001 par value. The financial statements of the Company, as of December 31, 2010, were not significant; therefore, no pro forma financial information thereof is included in these notes to the Company's consolidated financial statements.

~~June~~As 5a result of the acquisition, ~~2012~~the Company is the sole shareholder of Hygea Health. Hygea Health has two principal areas of operations. The first is a network of multidisciplinary integrated medical group practices ("Integrated Group") with a primary care physician ("PCP") focus. The Integrated Group owns a series of subsidiaries that provide industry related services and which support the integrated group practice business model. Hygea Health owns Palm Medical Network LLC ("Palm Medical Network"), an independent physician network. Under Palm Medical Network, the Company has a series of medical service organizations ("MSOs") that have entered "at risk" contracts with Medicare Advantage Health Maintenance Organizations ("HMOs") throughout Florida.

~~F-1~~2. Significant Accounting Policies

~~Table~~Principles of OfConsolidation ~~Contents~~and Basis of Presentation

HYGEA HOLDINGS CORP. AND SUBSIDIARIES
(FORMERLY PIPER ACQUISITION II, INC.)
CONSOLIDATED BALANCE SHEETS
	As of December 31,
	2011		2010
Assets
Current assets
Cash and cash equivalents	$	13,097	$	226,931
Accounts receivable		4,666,742		2,245,887
Prepaid and other current assets		107,249		-
Note receivable - related party - current		60,000		-
Deferred taxes		-		78,271
Total current assets		4,847,088		2,551,089
Property and equipment, net		292,444		240,227
Goodwill		1,159,900		1,139,900
Intangible assets, net		2,200,364		1,458,470
Investment		-		342,368
Note receivable - related party		282,368		-
Other assets		166,891		4,200
Total assets	$	8,949,055	$	5,736,254
Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities	$	790,826	$	411,002
Line of credit		-		100,000
Convertible notes payable - current		1,431,018		665,068
Notes payable		264,700		-
Notes payable - related parties		805,627		293,189
Deferred revenue - current		100,000		100,000
Common stock to be issued		850,000		-
Taxes payable		84,448		-
Total current liabilities		4,326,619		1,569,259
Convertible notes payable		332,000		765,950
Notes Payable		125,000		-
Deferred revenue		-		100,000
Total liabilities		4,783,619		2,435,209
Commitments and contingencies
Equity
Preferred stock - 10,000,000 shares of $.0001 par
value, no shares issued and outstanding		-		-
Common stock - 250,000,000 shares of $.0001 par value,
148,295,243 shares issued and outstanding, respectively		14,830		14,830
Additional paid-in capital		1,711,579		1,711,579
Subscription receivable		-		(305,000	)
Non-controlling interest		2,250,176		2,082,660
Retained earnings (deficit)		188,851		(203,024	)
Total equity		4,165,436		3,301,045
Total liabilities and equity	$	8,949,055	$	5,736,254
The accompanying notes are an integral part of these consolidated financial statements.

The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States (GAAP). All intercompany amounts have been eliminated in consolidation. Our financial statements consolidate all of our affiliates - entities in which we have a controlling financial interest, most often because we hold a majority voting interest. To determine if we hold a controlling financial interest in an entity we first evaluate if we are required to apply the variable interest entity ("VIE") model to the entity, otherwise the entity is evaluated under the voting interest model.

~~F-2~~Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE's economic performance combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. When changes occur to the design of an entity we reconsider whether it is subject to the VIE model. We continuously evaluate whether we have a controlling financial interest in a VIE.

~~Table~~Non-controlling interests Ofrelate ~~Contents~~to the third party ownership in a consolidated entity in which the Company has a controlling interest. For financial reporting purposes, the entity's assets, liabilities, and operations are consolidated with those of the Company, and the non-controlling interest in the entity is included in the Company's consolidated financial statements within the equity section of the consolidated Balance Sheets.

HYGEA HOLDINGS CORP. AND SUBSIDIARIES
(FORMERLY PIPER ACQUISITION II, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
	For the Year Ended December 31,
	2011			2010
Medical revenues
Fixed fee arrangements	$	7,662,008		$	8,573,284
Fee for service arrangements		1,665,384			784,930
Total medical revenues		9,327,392			9,358,214
License fees and non-medical revenues		100,000			437,583
Total revenues		9,427,392			9,795,797
Healthcare expenses
Physician and other provider expenses		5,797,462			6,855,434
Gross profit		3,629,930			2,940,363
Administrative and other operating expenses
Salaries and benefits		469,882			192,466
General and administrative		1,044,262			680,191
Professional fees		1,173,688			824,292
Total administrative and other operating expenses		2,687,832			1,696,949
Net operating income		942,098			1,243,414
Other income (expenses)
Gain on acquisition		7,660			76,219
Interest expense		(163,340	)		(36,849	)
Other		(61,115	)		(5,400	)
Total other income (expenses)		(216,795	)		33,970
Net income before income taxes
and non-controlling interest		725,303			1,277,384
Income tax benefit (expense)		(165,912	)		17,961
Income attributable to non-controlling interest		(167,516	)		(129,360	)
Net income	$	391,875		$	1,165,985
Earnings per common share:
Basic	$	0.00		$	0.01
Diluted	$	0.00		$	0.01
Weighted average number of common shares outstanding:
Basic		148,295,243			125,122,579
Diluted		163,834,809			125,122,579
The accompanying notes are an integral part of these consolidated financial statements.

F-6

~~F-3~~HYGEA HOLDINGS CORP. AND SUBSIDIARIES

~~Table~~(FORMERLY PIPER OfACQUISITION ~~Contents~~II, INC.)

HYGEA HOLDINGS CORP. AND SUBSIDIARIES
(FORMERLY PIPER ACQUISITION II, INC.)
CONSOLIDATED STATEMENTS OF EQUITY
	Preferred stock				Common stock				Paid-in		Subscription			Non-controlling		Retained earnings			Total
	Shares		Amount		Shares		Amount		capital		receivable			interest		(deficit)			equity
Balance, January 1, 2010		-	$	-		101,949,916	$	10,195	$	977,305	$	-		$	1,953,300	$	(1,369,009	)	$	1,571,791
Issuance of Common Stock for cash		-		-		4,706,506		471		99,529		-			-		-			100,000
Issuance of Common Stock in acquisition of subsidiary		-		-		1,354,577		135		123,646		-			-		-			123,781
Issuance of Common Stock for cash		-		-		27,508,340		2,751		511,099		(305,000	)		-		-			208,850
Recapitalization due to reverse merger		-		-		12,775,904		1,278		-		-			-		-			1,278
Net income		-		-		-		-		-		-			129,360		1,165,985			1,295,345
Balance, December 31, 2010		-		-		148,295,243		14,830		1,711,579		(305,000	)		2,082,660		(203,024	)		3,301,045
Receipt of subscription receivable		-		-		-		-		-		305,000			-		-			305,000
Net income		-		-		-		-		-		-			167,516		391,875			559,391
Balance, December 31, 2011		-	$	-		148,295,243	$	14,830	$	1,711,579	$	-		$	2,250,176	$	188,851		$	4,165,436
The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~F-4~~2. Significant Accounting Policies (Continued)

~~Table~~Use Ofof ~~Contents~~Estimates

HYGEA HOLDINGS CORP. AND SUBSIDIARIES
(FORMERLY PIPER ACQUISITION II, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Year Ended December 31,
	2011			2010
Cash flows from operating activities:
Net income	$	391,875		$	1,165,985
Non-controlling interest		167,516			129,360
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		35,170			55,367
Amortization		162,766			101,625
Gain on acquisition		(7,660	)		(76,219	)
Loss on disposition		61,115			-
Changes in operating assets and liabilities:
Accounts receivable		(2,366,975	)		(1,994,808	)
Deferred taxes		81,463			(78,271	)
Prepaid expenses and other assets		(269,940	)		67,500
Accounts payable and accrued liabilities		184,264			(56,297	)
Deferred revenue		(100,000	)		(100,000	)
Taxes payable		84,448			-
Net cash used in operating activities		(1,575,958	)		(785,758	)
Cash flows from investing activities:
Capital expenditures		(16,186	)		(71,918	)
Acquisitions, net of cash acquired		(60,828	)		47,179
Net cash used in investing activities		(77,014	)		(24,739	)
Cash flows from financing activities:
Borrowings from stockholders and related parties		512,438			225,592
Repayment of borrowings from stockholders and
related parties		-			(67,420	)
Proceeds from issuance of loans payable		721,700			570,381
Repayment of loans payable		(100,000	)		-
Subscription receivable		305,000			308,850
Net cash provided by financing activities		1,439,138			1,037,403
Net increase (decrease) in cash and cash equivalents		(213,834	)		226,906
Cash and cash equivalents, beginning of year		226,931			25
Cash and cash equivalents, end of year	$	13,097		$	226,931
Supplemental cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Non-cash investing and financing activities:
Sale of cost method investment for related party
note receivable	$	342,368		$	-
Acquisition of medical practice for shares of common
stock to be issued and debt	$	1,090,000		$	-
The accompanying notes are an integral part of these consolidated financial statements.

Future events and their effects cannot be predicted with certainty; accordingly the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The accounting estimates used in the preparation of these financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company's operating environment changes. Significant estimates and assumptions are used for, but not limited to accounts receivable, revenues, goodwill, intangible assets, income taxes, and contingent liabilities. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results may differ from these estimates and assumptions used in preparation of its financial statements and changes in these estimates are recorded when known.

~~F-5~~Revenues

~~Table~~The OfCompany ~~Contents~~provides coordination and facilitation of medical services; transaction processing; customer, consumer and care professional services; and access to contracted networks of physicians, hospitals and other health care professionals under both risk-based and fee-based (non-risk) customer arrangements. Revenues derived from risk-based health insurance arrangements in which the premium is typically at a fixed rate per individual served for a one-year period, and where the Company assumes the economic risk of funding its customers' health care and related administrative costs are presented as fixed fee arrangements in the consolidated statements of operations. Revenues derived from fee-based customer arrangements are presented as fee for service arrangements in the consolidated statements of operations. The Company recognizes medical revenues on the accrual basis in the period in which eligible individuals are entitled to receive health care benefits.

~~HYGEA~~The ~~HOLDINGS~~Centers ~~CORP~~for Medicare and Medicaid Services (CMS) deploy a risk adjustment model that apportions premiums paid to all health plans according to health severity and certain demographic factors. ~~AND~~The ~~SUBSIDIARIES~~CMS risk adjustment model pays more for members whose medical history indicates they have certain medical conditions. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from hospital inpatient, hospital outpatient and physician treatment settings. The Company and health care providers collect, capture, and submit the necessary and available diagnosis data to CMS within prescribed deadlines. The Company estimates risk adjustment revenues based upon the diagnosis data submitted and expected to be submitted to CMS. Risk adjustment data for certain of the Company's plans is subject to audit by regulators.

Payments under both the Company's risk contracts and non-risk contracts (~~FORMERLY~~for ~~PIPER~~both ~~ACQUISITION~~Medicare IIAdvantage program as well as Medicaid) are subject to revision based upon premium adjustments, ~~INC~~historical patient enrollment data and final settlements.) Such revision and final payments are settled over a period ranging from 18 to 24 months after the contractual period. Preliminary data provided in fiscal year 2012, with respect to the Company's 2011 activity does not indicate a material variance to expected, and accrued, results. However, these amounts will not be fully resolved until fiscal years 2013 and 2014. Should there be variances to amounts reported, each 1% adjustment to our estimated recoverable amounts will increase or decrease our revenue by $41,000. Data provided in fiscal year 2013, with respect to the Company's 2010 activity was adjusted to reflect the decrease in amounts deemed doubtful. Bad debts provided for during 2012 approximated $1,095,677 and additional revenue adjustment of $500,000 related to the resolution of 2010 revisions in 2013.

~~NOTES~~Non-medical TOrevenues consist ~~CONSOLIDATED~~primarily ~~FINANCIAL~~of ~~STATEMENTS~~license fees and consulting fees. License fees consist of a license granting the use of the Hygea name and business model to the licensee. Currently, the Company has granted the use of only one license, the revenue for which was recognized in full upon the date that the use of the license was granted, in accordance with our accounting policy, as found below.

~~1. Description of Business~~F-7

~~Hygea~~HYGEA HOLDINGS ~~Holdings Corp~~CORP., ~~formerly~~AND Piper Acquisition II, Inc. (“the Company” or “Holdings”) is a Nevada corporation formed on August 26, 2008, as Piper Acquisition II, Inc. The Company changed its name to “Hygea Holdings Corp.” on May 16, 2011.SUBSIDIARIES

~~Effective December 31, 2010, the Company acquired 99.9% of the outstanding common shares of Hygea Health Holdings, Inc., a Florida corporation~~ (~~“Hygea~~FORMERLY PIPER ~~Health”),~~ACQUISITION ~~in exchange for the issuance of 135~~II,~~519,339~~ ~~shares of the Company’s Common Stock~~LNC. The exchange of shares between the Company and Hygea Health was accounted for as a reverse acquisition under the purchase method of accounting. A reverse acquisition is considered, and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Hygea Health’s securities for our net monetary assets, accompanied by a recapitalization. Hygea Health is the surviving and continuing entity and the historical financials following the reverse acquisition transaction are those of Hygea Health. Hygea Health’s historical equity has been retroactively restated to reflect the reverse acquisition as if it had occurred on January 1, 2010. As of the date of the merger, the Company’s authorized capital consisted of 10,000,000 shares of Preferred Stock, $0.0001 par value, and 250,000,000 shares of Common Stock, $0.0001 par value. The financial statements of the Company, as of December 31, 2010, were not significant; therefore, no pro forma financial information thereof is included in these notes to the Company’s consolidated financial statements.)

AsNOTES TO aCONSOLIDATED ~~result~~FINANCIAL of the acquisition, the Company is the sole shareholder of Hygea Health. Hygea Health has two principal areas of operations. The first is a network of multidisciplinary integrated medical group practices (“Integrated Group”) with a primary care physician (“PCP”) focus. The Integrated Group owns a series of subsidiaries that provide industry related services and which support the integrated group practice business model. Hygea Health owns Palm Medical Network LLC (“Palm Medical Network”), an independent physician network. Under Palm Medical Network, the Company has a series of medical service organizations (“MSOs”) that have entered “at risk” contracts with Medicare Advantage Health Maintenance Organizations (“HMOs”) throughout Florida.STATEMENTS

2. Significant Accounting Policies (Continued)

~~Principles~~For license fees where the Company is not obligated to provide future services, nor is there an intent or expectation that any future services will be requested by the licensee, the revenue is recognized in full on the date that the use of ~~Consolidation~~the license is granted, which is typically the date of the signing of the agreement. For license fees where the Company is obligated to perform future services, or there is the intent or expectation that future services will be requested by the licensee, revenue is recognized over the period to which the earnings process closely relates with consideration of the license contract and ~~Basis~~the timing of ~~Presentation~~expected future services.

~~The~~Consulting ~~accompanying~~fees are ~~financial~~earned ~~statements~~over ~~were~~the ~~prepared~~period in ~~accordance~~which ~~with~~the ~~accounting~~Company ~~principles~~provides ~~generally accepted in~~ the ~~United~~related ~~States (GAAP)~~services. ~~All~~ ~~intercompany~~In ~~amounts~~some ~~have~~cases, ~~been~~such ~~eliminated~~services inare ~~consolidation. Our~~based ~~financial~~on ~~statements~~an ~~consolidate~~hourly rate ~~all~~and ~~of our affiliates – entities~~ in ~~which~~others weon ~~have~~ a ~~controlling~~fixed ~~financial~~fee ~~interest~~arrangement, ~~most~~whereby ~~often because we hold a majority voting interest. To determine if we hold a controlling financial interest in an entity we first evaluate if we are required to apply~~ the ~~variable~~Company ~~interest~~recognizes ~~entity~~consulting ~~(“VIE”)~~revenue ~~model~~as toit ~~the~~meets ~~entity, otherwise~~ the ~~entity~~terms isof ~~evaluated under~~ the ~~voting interest model~~underlying contract.

~~Where~~Health weMaintenance Organization hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. When changes occur to the design of an entity we reconsider whether it is subject to the VIE model. We continuously evaluate whether we have a controlling financial interest in a VIE.Contracts

~~Non-controlling~~The ~~interests~~Company's Health ~~relate~~Maintenance toOrganization ~~the~~("HMO") ~~third~~contracts ~~party~~have ~~ownership~~various inexpiration adates ~~consolidated~~ranging ~~entity~~from inone ~~which~~to ~~the~~three ~~Company~~years ~~has~~with automatic arenewal ~~controlling interest~~terms. ~~For~~ ~~financial~~Upon ~~reporting~~negotiation ~~purposes,~~of ~~the~~any ~~entity’s assets, liabilities, and operations are consolidated with those~~ of the ~~Company~~HMO contracts, ~~and~~ the ~~non-controlling~~expiration ~~interest~~dates inmay ~~the~~be ~~entity~~extended isbeyond ~~included in~~ the ~~Company’s~~automatic renewal ~~consolidated financial statements within the equity section of the consolidated Balance Sheets~~terms.

~~F-6~~When it is probable that expected future health care costs and maintenance costs under a contract or group of existing contracts will exceed anticipated captivated revenue on those contracts, the Company recognizes losses on its prepaid health care services with HMOs.

~~Table~~The OfCompany ~~Contents~~has acquired reinsurance on catastrophic costs to limit the exposure on patient losses. The Company has the right to terminate unprofitable physicians and close unprofitable centers under its managed care contracts.

~~HYGEA~~Medical ~~HOLDINGS CORP. AND SUBSIDIARIES~~Service Expense

~~(FORMERLY~~The ~~PIPER~~Company ~~ACQUISITION~~contracts with IIor employs various health care providers to provide medical services to its patients. Primary care physicians are compensated on either a salary or capitation basis. For patients enrolled under full risk managed care contracts, ~~INC~~the cost of specialty services are paid on either a fee for service, per diem, or capitation basis.)

~~NOTES~~The TOcost ~~CONSOLIDATED~~of ~~FINANCIAL~~health care ~~STATEMENTS~~services provided or contracted for under full risk managed care contracts are accrued in the period in which services are provided.

~~Use~~Reinsurance (Stop-Loss ~~of Estimates~~Insurance)

~~Future~~Reinsurance ~~events~~premiums are ~~and their effects cannot be predicted with certainty; accordingly the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the~~ reported ~~amounts~~as ofa ~~assets~~health ~~and~~care ~~liabilities~~cost and ~~disclosure~~are ofincluded ~~contingent~~in ~~assets~~physician and ~~liabilities~~other atprovider ~~the date of the financial statements, and the reported amounts of revenues and~~ expenses ~~during the reporting period. The accounting estimates used~~ in the ~~preparation~~consolidated ~~of these financial~~ statements ~~will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes~~of operations. ~~Significant~~ ~~estimates~~Reinsurance ~~and~~recoveries ~~assumptions~~ are ~~used~~reported ~~for,~~as ~~but~~a ~~not~~reduction limited to accounts receivable, revenues, goodwill, intangible assets, income taxes, and contingent liabilities. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of ~~which~~physician ~~form the basis for making judgments about carrying values of assets~~ and ~~liabilities that are not readily apparent from~~ other ~~sources. The~~provider ~~Company~~expenses ~~evaluates its estimates and assumptions on a regular basis and may employ outside experts to assist~~ in ~~our~~the ~~evaluation,~~consolidated ~~as considered necessary. Actual results may differ from these estimates and assumptions used in preparation~~ statement of ~~its financial statements and changes in these estimates are recorded when known~~operations.

~~Revenues~~Reinsurance coverage is purchased from CarePlus Health Plans, Inc. ("CarePlus") under our administrative service contract with this provider to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums and benefit expenses related to these stop loss insurance contracts as expenses and revenues received from the provider as patient fees in the statement of operations. Management is of the opinion that the inclusion of stop loss insurance as revenues provided a better presentation in light of the existing reporting model of revenues under the At-Risk Administrative Service Contracts with HMO's.

The ~~Company~~nature ~~provides coordination and facilitation~~ of our ~~medical~~reinsurance ~~services;~~or ~~transaction~~stop ~~processing;~~loss ~~customer,~~is ~~consumer and care professional services; and access~~ to ~~contracted~~limit ~~networks~~the ofbenefits ~~physicians,~~paid ~~hospitals and other health care professionals~~ under ~~both~~one ~~risk-based~~patient ~~and~~to ~~fee-based~~$30,000 ~~(non-risk)~~per ~~customer arrangements~~year. ~~Revenues~~ ~~derived~~Physicians ~~from~~under ~~risk-based~~capitation ~~health insurance~~ arrangements typically inhave ~~which~~stop ~~the~~loss ~~premium~~coverage isso ~~typically~~that at a ~~fixed~~physician's ~~rate~~financial ~~per~~risk ~~individual served~~ for aany ~~one-year~~single ~~period,~~member ~~and~~is ~~where~~limited ~~the~~to ~~Company~~a ~~assumes~~maximum ~~the~~amount ~~economic~~on an ~~risk~~annual ofbasis. ~~funding~~We ~~its~~monitor ~~customers’~~the ~~health~~financial ~~care~~performance and ~~related~~solvency ~~administrative~~of ~~costs~~our ~~are~~capitates ~~presented as fixed fee arrangements in the consolidated statements of operations~~providers. ~~Revenues~~ ~~derived~~However, ~~from~~we ~~fee-based~~remain ~~customer~~financially ~~arrangements~~responsible for ~~are~~health ~~presented~~care asservices ~~fee~~to ~~for~~our ~~service~~members ~~arrangements~~ in the ~~consolidated~~event ~~statements~~our ofproviders ~~operations. The~~fail ~~Company~~to ~~recognizes~~provide ~~medical~~such ~~revenues~~services. onStop ~~the~~loss ~~accrual~~limits ~~basis~~were inincreased to ~~the~~$35,000 ~~period~~ in ~~which eligible individuals are entitled to receive health care benefits~~2013.

The Centers for Medicare and Medicaid Services (CMS) deploy a risk adjustment model that apportions premiums paid to all health plans according to health severity and certain demographic factors. The CMS risk adjustment model pays more for members whose medical history indicates they have certain medical conditions. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from hospital inpatient, hospital outpatient and physician treatment settings. The Company and health care providers collect, capture, and submit the necessary and available diagnosis data to CMS within prescribed deadlines. The Company estimates risk adjustment revenues based upon the diagnosis data submitted and expected to be submitted to CMS. Risk adjustment data for certain of the Company’s plans is subject to audit by regulators.F-8

~~Payments~~HYGEA under both the Company’s risk contracts and non-risk contracts (for both Medicare Advantage program as well as Medicaid) are subject to revision based upon premium adjustments, historical patient enrollment data and final settlementsHOLDINGS CORP. ~~Such~~ ~~revision~~AND and final payments are settled over a period ranging from 18 to 24 months after the contractual period. Preliminary data provided in fiscal year 2011, with respect to the Company’s 2010 activity does not indicate a material variance to expected, and accrued, results. However, these amounts will not be fully resolved until fiscal year 2012. Should there be variances to amounts reported, each 1% adjustment to our estimated recoverable amounts will increase or decrease our revenue by $39,000.SUBSIDIARIES

~~Non-medical~~(FORMERLY ~~revenues~~PIPER ACQUISITION ~~consist primarily of license fees and consulting fees. License fees consist of a license granting the use of the Hygea name and business model to the licensee. Currently~~II, the Company has granted the use of only one license, the revenue for which was recognized in full upon the date that the use of the license was granted, in accordance with our accounting policy, as found belowINC.)

~~F-7~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~2. OfSignificant ~~Contents~~Accounting Policies (Continued)

~~HYGEA~~Recoveries that ~~HOLDINGS~~are ~~CORP~~recognized in the statements of operations approximate $837,946 and $585,813 for the years ended December 31, 2012 and 2011, respectively. ~~AND~~There ~~SUBSIDIARIES~~is no recoverable amount recognized in the Company's consolidated Balance Sheets from an accrual of recoveries under stop loss policies at either December 31, 2012 or December 31, 2011.

~~(FORMERLY~~Cash ~~PIPER~~and ~~ACQUISITION~~Cash ~~II, INC.)~~Equivalents

~~NOTES~~For purposes TOof ~~CONSOLIDATED~~the ~~FINANCIAL~~Company's ~~STATEMENTS~~consolidated Statement of Cash Flows, the Company considers as cash equivalents all time deposits and highly liquid investments with a maturity of three months or less, when purchased.

~~For~~Accounts license fees where the Company is not obligated to provide future services, nor is there an intent or expectation that any future services will be requested by the licensee, the revenue is recognized in full on the date that the use of the license is granted, which is typically the date of the signing of the agreement. For license fees where the Company is obligated to perform future services, or there is the intent or expectation that future services will be requested by the licensee, revenue is recognized over the period to which the earnings process closely relates with consideration of the license contract and the timing of expected future services.Receivable

~~Consulting~~The Company's ~~fees~~accounts receivable are ~~earned~~derived ~~over~~primarily ~~the~~from ~~period~~its risk-based health insurance arrangements (fixed fee arrangements) in which the premium is typically at a fixed rate per individual served for a one-year period. The Company ~~provides~~estimates risk adjustment revenues based upon the ~~related~~diagnosis ~~services~~data submitted and expected to be submitted to CMS. In ~~some~~The ~~cases,~~reimbursement ~~such~~timing ~~services~~can ~~are~~span ~~based~~from on18 to an24 ~~hourly~~months ~~rate~~which is attributable to the customary (and industry standard) timetable in ~~others~~Medicare onreimbursement afor ~~fixed~~pass ~~fee~~through from ~~arrangement~~HMO risk contractors. However, ~~whereby~~given the Company's ~~recognizes~~historical ~~consulting~~reimbursement ~~revenue~~activity asand itthe ~~meets~~changes in the ~~terms~~mix of patients during 2012, the ~~underlying~~Company believes it to have a material risk of collection of some of these amounts and therefore has recorded a reserve for such risk approximating $441,696. The Company's accounts receivable also include reimbursements amount due from health insurance companies for services performed for insured patients under our fee for service program. These amounts are set by contract and the Company does not believe there to be a material risk of uncollectibility of these amounts due to its historical collection experience and financial strength of its counterparties.

~~Health~~At December ~~Maintenance~~31, ~~Organization~~2012, ~~Contracts~~the Company had a net receivable from CarePlus of $5,294,444. This net receivable is comprised of estimated risk adjustments due the Company of $3,886,784. As noted previously, the risk adjustments are settled 18 to 24 months after the date of service. The Company received gross reimbursements of approximately $1,104,000 in August 2013 and expects to receive approximately $1,750,000 in August 2014, net of any amounts advanced by CarePlus. Therefore, based on amounts advanced through December 31, 2012, $500,000 were deducted from the payment from CarePlus in 2013, resulting in a net payment approximating $1,104,000.

The Company’s ~~Health~~evaluates ~~Maintenance~~the ~~Organization~~creditworthiness ~~(“HMO”)~~of ~~contracts~~CarePlus ~~have~~through ~~various~~periodic ~~expiration~~review ~~dates~~of ~~ranging~~the ~~from~~financial ~~one~~statements toof ~~three~~its ~~years~~parent, ~~with~~Humana, ~~automatic renewal terms~~Inc. ~~Upon~~ Humana ~~negotiation~~is ofone ~~any~~ of the ~~HMO~~nation's ~~contracts,~~largest ~~the~~publicly ~~expiration~~traded ~~dates~~health ~~may~~and besupplemental ~~extended~~benefits ~~beyond~~companies, ~~the~~based ~~automatic~~on ~~renewal~~its ~~terms~~2011 revenues of approximately $36.8 billion.

~~When~~Property ~~it is probable that expected future health care costs~~ and maintenance costs under a contract or group of existing contracts will exceed anticipated captivated revenue on those contracts, the Company recognizes losses on its prepaid health care services with HMOs.Equipment

~~The~~Property and ~~Company~~equipment ~~has~~are ~~acquired~~stated ~~reinsurance~~at oncost. ~~catastrophic~~Depreciation ~~costs~~is tocomputed ~~limit~~using the ~~exposure~~straight-line onmethod ~~patient~~over ~~losses. The~~the ~~Company~~estimated ~~has~~useful lives of the related ~~right~~assets, which range from three to ~~terminate~~five ~~unprofitable~~years. ~~physicians~~Leasehold improvements are amortized over the underlying assets' useful lives or the term of the lease, whichever is shorter. Repairs and ~~close~~maintenance ~~unprofitable~~costs ~~centers~~are ~~under~~expensed ~~its~~as ~~managed~~incurred. ~~care~~Improvements ~~contracts~~and replacements are capitalized.

~~Medical~~Intangible ~~Service Expense~~Assets

~~The~~Finite ~~Company~~lived intangible ~~contracts~~assets ~~with~~are oracquired ~~employs~~in ~~various~~a ~~health~~business ~~care~~combination ~~providers~~and toare ~~provide~~assets ~~medical~~that ~~services~~represent tofuture ~~its~~expected ~~patients~~benefits but lack physical substance. ~~Primary~~ ~~care~~Intangible ~~physicians~~assets are ~~compensated~~amortized onover ~~either~~their aexpected ~~salary~~useful lives and are subject to impairment tests when events or circumstances ~~capitation~~indicate ~~basis. For~~that ~~patients~~a ~~enrolled~~finite ~~under~~lived ~~full~~intangible ~~risk~~assets ~~managed~~(or ~~care~~asset ~~contracts,~~group's) ~~the~~carrying ~~cost~~value ofmay ~~specialty~~exceed ~~services~~its ~~are~~estimated ~~paid~~fair onvalue. If ~~either~~the acarrying ~~fee~~value ~~for~~exceeds ~~service,~~its ~~per~~estimated ~~diem~~fair value, oran ~~capitation~~adjustment ~~basis~~for impairment would be recorded.

~~The cost of health care services provided or contracted for under full risk managed care contracts are accrued in the period in which services are provided.~~F-9

~~Reinsurance~~HYGEA ~~(Stop-Loss~~HOLDINGS CORP. ~~Insurance)~~AND SUBSIDIARIES

~~Reinsurance~~(FORMERLY ~~premiums~~PIPER ACQUISITION ~~are~~II, ~~reported as a health care cost and are included in physician and other provider expenses in the consolidated statements of operations~~INC. ~~Reinsurance recoveries are reported as a reduction of physician and other provide expenses in the consolidated statement of operations.~~)

~~Reinsurance~~NOTES ~~coverage~~TO isCONSOLIDATED FINANCIAL purchased from CarePlus Health Plans, Inc. (“CarePlus”) under our administrative service contract with this provider to cover catastrophic claims or to limit aggregate annual costs. Accordingly, we have recorded premiums and benefit expenses related to these stop loss insurance contracts as expenses and revenues received from the provider as patient fees in the statement of operations. Management is of the opinion that the inclusion of stop loss insurance as revenues provided a better presentation in light of the existing reporting model of revenues under the At-Risk Administrative Service Contracts with HMO’s.STATEMENTS

~~The nature of our reinsurance or stop loss is to limit the benefits paid under one patient to $30,000 per year~~2. ~~Physicians~~ ~~under~~Significant ~~capitation~~Accounting ~~arrangements~~Policies typically have stop loss coverage so that a physician’s financial risk for any single member is limited to a maximum amount on an annual basis. We monitor the financial performance and solvency of our capitated providers. However, we remain financially responsible for health care services to our members in the event our providers fail to provide such services.(Continued)

~~F-8~~The Company calculates the estimated fair value of finite lived intangible assets using undiscounted cash flows that are expected to result from the use of the intangible asset or group of assets. The Company considers many factors, including estimated future utility to estimate cash flows.

~~Table Of Contents~~Goodwill

~~HYGEA~~Goodwill represents ~~HOLDINGS~~the ~~CORP~~amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. ~~AND~~Goodwill ~~SUBSIDIARIES~~is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. To determine whether goodwill is impaired, the Company performs a two-step impairment test. In the first step of the test, the fair values of the reporting units are compared to their aggregate carrying values, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, the Company would proceed to step two of the test. In step two of the test, the implied fair value of the goodwill of the reporting unit is determined by a hypothetical allocation of the fair value calculated in step one to all of the assets and liabilities of that reporting unit (including any recognized and unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was reflective of the price paid to acquire the reporting unit. The implied fair value of goodwill is the excess, if any, of the calculated fair value after hypothetical allocation to the reporting unit's assets and liabilities. If the implied fair value of the goodwill is greater than the carrying amount of the goodwill at the analysis date, goodwill is not impaired and the analysis is complete. If the implied fair value of the goodwill is less than the carrying value of goodwill at the analysis date, goodwill is deemed impaired by the amount of that variance.

The Company calculates the estimated fair value of our reporting units using discounted cash flows. To determine fair values the Company must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (~~FORMERLY~~includes ~~PIPER~~significant ~~ACQUISITION~~assumptions IIabout operations, ~~INC.~~capital requirements and income taxes), long-term growth rates for determining terminal value, and discount rates. Where available and appropriate, comparative market multiples are used to corroborate the results of our discounted cash flow test.

~~NOTES~~The Company TOcompleted ~~CONSOLIDATED~~its ~~FINANCIAL~~annual ~~STATEMENTS~~assessment of goodwill as of December 31, 2012, and determined that no impairment existed as of that date. Although the Company believes that the financial projections used are reasonable and appropriate for all of its reporting units, there is uncertainty inherent in those projections. That uncertainty is increased by potential health care reforms, as any passed legislation may significantly change the forecasts and long-term growth rate assumptions for some or all of its reporting units.

~~Recoveries~~Fair ~~that~~Value ~~are recognized in the statements~~ of operations approximate $583,607 and $404,254 for the years ended December 31, 2011 and 2010, respectively. There is no recoverable amount recognized in the Company’s consolidated Balance Sheets from an accrual of recoveries under stop loss policies at either December 31, 2011 or December 31, 2010.Financial Instruments

~~Cash~~The Company's financial instruments consist mainly of cash and ~~Cash~~cash ~~Equivalents~~equivalents, certificates of deposit, amount due from HMOs and accounts payable and accrued expenses. The carrying amount of these items approximate fair value due to their short-term nature.

~~For~~Income purposes of the Company’s consolidated Statement of Cash Flows, the Company considers as cash equivalents all time deposits and highly liquid investments with a maturity of three months or less, when purchased.Taxes

~~Accounts~~The Company ~~Receivable~~accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. 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. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

~~The~~Earnings ~~Company’s accounts receivable are derived primarily from its risk-based health insurance arrangements (fixed fee arrangements) in which the premium is typically at a fixed rate~~ per ~~individual~~Common served for a one-year period. The Company estimates risk adjustment revenues based upon the diagnosis data submitted and expected to be submitted to CMS. The reimbursement timing can span from 18 to 24 months which is attributable to the customary (and industry standard) timetable in Medicare reimbursement for pass through from HMO risk contractors. However, given the Company’s historical reimbursement activity, the Company does not believe it to have a material risk of collection of any of these amounts and therefore has not recorded a reserve for such risk. The Company’s accounts receivable also include reimbursements amount due from health insurance companies for services performed for insured patients under our fee for service program. These amounts are set by contract and the Company does not believe there to be a material risk of uncollectibility of these amounts due to its historical collection experience and financial strength of its counterparties.Share

AtThe calculation ~~December 31, 2011, the Company had a net receivable from CarePlus~~ of ~~$3,403,969. This~~earnings ~~net~~per ~~receivable~~common share is ~~comprised~~based ofon ~~estimated risk adjustments due~~ the ~~Company~~weighted-average ofnumber ~~$3,886,784 reduced by advance payments made by CarePlus to providers~~ of ~~$482,815. As~~common ~~noted~~shares ~~previously,~~outstanding ~~the~~during ~~risk adjustments are settled 18 to 24 months after~~ the ~~date of service~~applicable period. The ~~Company~~calculation ~~expects~~for todiluted ~~receive~~earnings ~~gross~~per ~~reimbursements~~common ofshare ~~$2,118,073~~recognizes inthe ~~August~~effect ~~2012 and $1,768,711 in August 2013 respectively, net~~ of ~~any~~all ~~amounts~~potential ~~advanced~~dilutive bysecurities ~~CarePlus. Therefore,~~that ~~based~~were outstanding onduring ~~amounts~~the ~~advanced~~respective ~~through December 31~~periods, ~~2011,~~unless ~~$482,815~~their impact would be ~~deducted from the payment from CarePlus in 2012, resulting in a net payment of $1,635,258~~anti-dilutive.

The Company evaluates the creditworthiness of CarePlus through periodic review of the financial statements of its parent, Humana, Inc. Humana is one of the nation’s largest publicly traded health and supplemental benefits companies, based on its 2011 revenues of approximately $36.8 billion.F-10

~~Property~~HYGEA HOLDINGS ~~and~~CORP. ~~Equipment~~AND SUBSIDIARIES

~~Property~~(FORMERLY PIPER ~~and~~ACQUISITION ~~equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets~~II, ~~which range from three to five years~~INC. Leasehold improvements are amortized over the underlying assets’ useful lives or the term of the lease, whichever is shorter. Repairs and maintenance costs are expensed as incurred. Improvements and replacements are capitalized.)

~~Intangible~~NOTES ~~Assets~~TO CONSOLIDATED FINANCIAL STATEMENTS

~~Finite lived intangible assets are acquired in a business combination and are assets that represent future expected benefits but lack physical substance~~2. ~~Intangible~~ ~~assets~~Significant ~~are~~Accounting ~~amortized~~Policies ~~over their expected useful lives and are subject to impairment tests when events or circumstances indicate that a finite lived intangible assets~~ (~~or asset group’s~~Continued) ~~carrying value may exceed its estimated fair value. If the carrying value exceeds its estimated fair value, an impairment would be recorded.~~

~~F-9~~Recently Adopted Accounting Standards

~~Table~~None of Ofthe ~~Contents~~Accounting Standards Updates (ASU) that the Company adopted and that became effective January 1, 2012, had a material impact on its consolidated financial statements.

~~HYGEA~~ASU ~~HOLDINGS CORP~~No. ~~AND SUBSIDIARIES~~2011-04

~~(FORMERLY~~On May ~~PIPER~~12, ~~ACQUISITION~~2011, IIthe FASB issued ASU No. 2011-04, ~~INC~~"Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This ASU amends U.S. generally accepted accounting principles (U.S. GAAP) and results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and international financial reporting standards (IFRS). The amendments in this ASU change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements; however, the amendment's requirements do not extend the use of fair value accounting, and for many of the requirements, the FASB did not intend for the amendments to result in a change in the application of the requirements in the "Fair Value Measurement" Topic of the Codification. Additionally, ASU No. 2011-04 includes some enhanced disclosure requirements, including an expansion of the information required for Level 3 fair value measurements. For the Company, ASU No. 2011-04 was effective January 1,2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

~~NOTES~~ASU TONos. ~~CONSOLIDATED~~2011-05 ~~FINANCIAL STATEMENTS~~and 2011-12

~~The~~On June ~~Company~~16,2011, ~~calculates~~ the ~~estimated~~FASB ~~fair~~issued ~~value~~ASU ofNo. ~~finite~~2011-05, ~~lived~~"Comprehensive ~~intangible~~Income ~~assets~~(Topic ~~using~~220): ~~undiscounted~~Presentation ~~cash~~of ~~flows~~Comprehensive ~~that~~Income." This ~~are~~ASU ~~expected~~eliminates the current option to ~~result~~report ~~from~~other comprehensive income and its components in the ~~use~~statement of ~~the~~changes ~~intangible~~in ~~asset~~equity. An orentity ~~group~~can elect to present items of ~~assets. The~~net ~~Company~~income ~~considers~~and ~~many~~other ~~factors,~~comprehensive ~~including~~income ~~estimated~~in ~~future~~one ~~utility~~continuous tostatement ~~estimate~~or ~~cash~~in ~~flows~~two separate, but consecutive, statements.

~~Goodwill~~ASU No. 2011-05 also requires reclassifications of items out of accumulated other comprehensive income to net income to be measured and presented by income statement line item in both the statement where net income is presented and the statement where other comprehensive income is presented. However, on December 23, 2011, the FASB issued ASU No. 2011-12, "Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05" to defer this new requirement. For us, both ASU No. 2011-05 and ASU No. 2011-12 were effective January 1, 2012. Since these ASUs pertain to presentation and disclosure requirements only, the adoption of these ASUs is not expected to have a material impact on the Company's consolidated financial statements.

~~Goodwill~~ASU ~~represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses~~No. ~~Goodwill~~ is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. To determine whether goodwill is impaired, the Company performs a two2011-step impairment test. In the first step of the test, the fair values of the reporting units are compared to their aggregate carrying values, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than its carrying amount, the Company would proceed to step two of the test. In step two of the test, the implied fair value of the goodwill of the reporting unit is determined by a hypothetical allocation of the fair value calculated in step one to all of the assets and liabilities of that reporting unit (including any recognized and unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value was reflective of the price paid to acquire the reporting unit. The implied fair value of goodwill is the excess, if any, of the calculated fair value after hypothetical allocation to the reporting unit’s assets and liabilities. If the implied fair value of the goodwill is greater than the carrying amount of the goodwill at the analysis date, goodwill is not impaired and the analysis is complete. If the implied fair value of the goodwill is less than the carrying value of goodwill at the analysis date, goodwill is deemed impaired by the amount of that variance.07

~~The~~In July ~~Company~~2011, ~~calculates~~the FASB ratified the ~~estimated~~final ~~fair~~consensus ~~value~~reached ofby ~~our~~the ~~reporting~~Emerging ~~units~~Issues ~~using~~Task ~~discounted~~Force ~~cash~~related ~~flows. To~~to ~~determine~~the ~~fair~~presentation ~~values~~and disclosure of net revenue, the ~~Company~~provision ~~must~~for ~~make~~bad ~~assumptions~~debts, ~~about~~and athe ~~wide~~allowance ~~variety~~for doubtful accounts of ~~internal~~healthcare entities and ~~external~~issued ~~factors~~ASU No. ~~Significant~~ 2011-07, ~~assumptions~~"Health ~~used~~Care inEntities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the ~~impairment~~Allowance ~~analysis~~for ~~include~~Doubtful ~~financial~~Accounts ~~projections~~for ofCertain ~~free~~Health ~~cash~~Care ~~flow~~Entities." ~~(includes~~This ~~significant~~ASU ~~assumptions~~retains ~~about~~the ~~operations~~existing revenue recognition model for healthcare entities, ~~capital~~pending ~~requirements~~further ~~and~~developments ~~income~~in ~~taxes)~~the FASB's revenue recognition project. However, ~~long-term~~this ~~growth~~ASU ~~rates~~requires the provision for ~~determining~~doubtful ~~terminal~~accounts ~~value,~~associated ~~and~~with ~~discount~~patient ~~rates~~service revenue to be separately displayed on the face of the statement of operations as a component of net revenue. ~~Where~~ ~~available~~This ~~and~~ASU ~~appropriate,~~also ~~comparative~~requires ~~market~~enhanced ~~multiples~~disclosures ~~are~~of ~~used~~significant changes in estimates related to ~~corroborate~~patient bad debts. While this ASU will have no net impact on the Company's financial position, results of ~~our~~operations, ~~discounted~~or cash flows, ~~flow~~it ~~test~~will require the Company to reclassify its provision for doubtful accounts from operating expenses to a component of net operating revenues beginning with the first quarter of 2012, with retrospective application required. The Company's historical provision for doubtful accounts has not been material.

The Company completed its annual assessment of goodwill as of December 31, 2011, and determined that no impairment existed as of that date. Although the Company believes that the financial projections used are reasonable and appropriate for all of its reporting units, there is uncertainty inherent in those projections. That uncertainty is increased by potential health care reforms, as any passed legislation may significantly change the forecasts and longF-~~term growth rate assumptions for some or all of its reporting units.~~11

~~Fair~~HYGEA HOLDINGS ~~Value~~CORP. ofAND ~~Financial Instruments~~SUBSIDIARIES

~~The~~(FORMERLY PIPER ~~Company’s~~ACQUISITION ~~financial instruments consist mainly of cash and cash equivalents~~II, ~~certificates of deposit, amount due from HMOs and accounts payable and accrued expenses~~INC. ~~The carrying amount of these items approximate fair value due to their short-term nature.~~)

~~F-10~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~2. OfSignificant ~~Contents~~Accounting Policies (Continued)

~~HYGEA~~Recently ~~HOLDINGS~~Adopted ~~CORP. AND SUBSIDIARIES~~Accounting Standards

~~(FORMERLY~~ASU ~~PIPER ACQUISITION II, INC~~No.) 2011-08

~~NOTES~~On TOSeptember ~~CONSOLIDATED~~15, 2011, ~~FINANCIAL~~the ~~STATEMENTS~~FASB issued ASU No. 2011-8, "Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment." This ASU allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test prescribed by current accounting principles. However, the quantitative impairment test is required if an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. An entity can choose to perform the qualitative assessment on none, some or all of its reporting units. Moreover, an entity can bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative goodwill impairment test, and then resume performing the qualitative assessment in any subsequent period. For the Company, ASU No. 2011-8 was effective January 1, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.

~~Income~~ASU ~~Taxes~~No. 2011-11

~~The~~On ~~Company~~December ~~accounts~~16, 2011, ~~for~~the ~~income~~FASB ~~taxes~~issued ~~using~~ASU anNo. ~~asset~~2011-11, ~~and~~"Balance ~~liability~~Sheet ~~approach~~(Topic ~~which~~210): ~~allows~~Disclosures ~~for~~about ~~the~~Offsetting ~~recognition~~Assets and ~~measurement~~Liabilities." This ofASU ~~deferred~~requires ~~tax~~disclosures ~~assets~~to ~~based~~provide ~~upon~~information ~~the~~to ~~likelihood~~help ofreconcile ~~realization~~differences ofin ~~tax~~the ~~benefits~~offsetting inrequirements ~~future~~under ~~years~~U. ~~Under~~S. GAAP and IFRS. The disclosure requirements of this ~~method,~~ASU ~~deferred~~mandate ~~income~~that ~~taxes~~entities ~~are~~disclose ~~recognized~~both ~~for~~gross ~~the~~and ~~tax~~net ~~consequences~~information inabout ~~future~~financial instruments ~~years~~and oftransactions ~~differences~~eligible ~~between~~for ~~the~~offset ~~tax~~in ~~bases~~the statement of ~~assets~~financial ~~and~~position ~~liabilities~~as well as instruments and ~~their~~transactions subject ~~financial~~to ~~reporting~~an ~~amounts~~enforceable atmaster ~~each~~netting ~~period~~arrangement ~~end~~or ~~based~~similar onagreement. ~~enacted~~ASU ~~tax~~No. ~~laws~~2011-11 also requires disclosure of collateral received and ~~statutory~~posted ~~tax~~in ~~rates~~connection ~~applicable~~with tomaster ~~the~~netting ~~periods~~arrangements inor ~~which~~similar ~~the~~arrangements. ~~differences~~The scope of this ASU includes derivative contracts, repurchase agreements, and securities borrowing and lending arrangements. Entities are ~~expected~~required to ~~affect~~apply ~~taxable~~the ~~income. A~~amendments of ~~valuation~~ASU ~~allowance~~No. is201 ~~provided~~l-l 1 for ~~deferred~~annual ~~tax~~reporting ~~assets~~periods ifbeginning iton isor ~~more~~after ~~likely~~January ~~than~~1,2013, ~~not~~and ~~these~~interim ~~items~~periods ~~will~~within ~~either~~those ~~expire~~annual periods. ~~before~~All ~~the~~disclosures ~~Company~~provided isby ~~able~~those amendments are required to ~~realize~~be ~~their~~provided ~~benefits,~~retrospectively orfor ~~that~~all ~~future~~comparative ~~deductibility~~periods presented. The Company is ~~uncertain~~currently reviewing the effect of ASU No. 2011-11.

~~Earnings per Common Share~~F-12

~~The~~HYGEA ~~calculation of earnings per common share is based on the weighted-average number of common shares outstanding during the applicable period~~HOLDINGS CORP. ~~The~~ ~~calculation~~AND ~~for diluted earnings per common share recognizes the effect of all potential dilutive securities that were outstanding during the respective periods, unless their impact would be antidilutive.~~SUBSIDIARIES

~~Recently~~(FORMERLY ~~Adopted~~PIPER ACQUISITION ~~Accounting~~II, ~~Standards~~INC.)

~~None~~NOTES ofTO ~~the~~CONSOLIDATED FINANCIAL ~~Accounting Standards Updates (ASU) that the Company adopted and that became effective January 1, 2011, had a material impact on its consolidated financial statements.~~STATEMENTS

~~ASU No~~3. ~~2011-04~~Property and Equipment

OnProperty ~~May 12, 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement~~ and ~~Disclosure~~equipment ~~Requirements~~consisted ~~in U.S. GAAP and IFRSs.” This ASU amends U.S. generally accepted accounting principles (U.S. GAAP) and results in a consistent definition~~ of ~~fair value and common requirements for measurement of and disclosure about fair value between U.S. GAAP and international financial reporting standards (IFRS). The amendments in this ASU change~~ the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements; however, the amendment’s requirements do not extend the use of fair value accounting, and for many of the requirements, the FASB did not intend for the amendments to result in a change in the application of the requirements in the “Fair Value Measurement” Topic of the Codification. Additionally, ASU No. 2011-04 includes some enhanced disclosure requirements, including an expansion of the information required for Level 3 fair value measurements. For the Company, ASU No. 2011-04 was effective January 1, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.following:

ASU Nos. 2011-05 and 2011-12

	As of December 31,
	2012			2011
Medical equipment	$	233,686		$	290,227
Furniture and office equipment		159,059			87,522
Computers and software		46,397			46,397
Less accumulated depreciation		(208,691	)		(131,702	)
	$	230,451		$	292,444

~~On June 16, 2011, the FASB issued ASU No~~4. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” This ASU eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. An entity can elect to present items of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements.Acquisitions

~~ASU No. 2011~~Opa-05Locka ~~also~~Pain ~~requires~~Management reclassifications of items out of accumulated other comprehensive income to net income to be measured and presented by income statement line item in both the statement where net income is presented and the statement where other comprehensive income is presented. However, on December 23, 2011, the FASB issued ASU No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” to defer this new requirement. For us, both ASU No. 2011-05 and ASU No. 2011-12 were effective January 1, 2012. Since these ASUs pertain to presentation and disclosure requirements only, the adoption of these ASUs is not expected to have a material impact on the Company’s consolidated financial statements.Corporation

FOn May 1, 2010, Hygea of Miami Dade, LLC, a wholly owned subsidiary of the Company, entered into a contribution agreement with Opa-11Locka Pain Management Corporation ("OPA"), a Florida corporation and an independent duly licensed medical doctor. In the transaction, the Company acquired a 100% interest in OPA's common stock for $1.00 per share or $100, and simultaneously issued 1,354,577 shares of the Company's Common Stock as purchase consideration, and further entered into a four year non-competition agreement with OPA and the independent medical doctor with applicable restrictive covenants.

~~Table~~At Ofthe ~~Contents~~time of acquisition the assets and liabilities contributed by OPA amounted to:

HYGEA HOLDINGS CORP. AND SUBSIDIARIES

Cash and cash equivalents	$	7,177
Accounts receivable		32,640
Property and equipment		14,517
Covenant not to compete		165,466
Deposits		4,200
Due to related party		(24,000	)
Net assets acquired	$	200,000

~~(FORMERLY~~The ~~PIPER~~total ~~ACQUISITION~~purchase consideration IIwas determined to be $123,781 ~~INC~~based on the fair value of the common stock issued.) The Company recorded a gain on acquisition of $76,219 related to this transaction for the year-ended December 31, 2010, as net assets acquired were $200,000. The acquisition of Opa-Locka was in alignment with the Company's strategic plans and contributes to the continued expansion into healthcare markets through membership and practice acquisitions.

~~NOTES~~Royal TOPalm ~~CONSOLIDATED~~Beach ~~FINANCIAL~~Medical ~~STATEMENTS~~Group

~~ASU~~On NoMarch 1, 2010, the Company entered into an agreement, with two shareholders within the Company, to purchase 100% of the membership interest of Royal Palm Beach Medical Group, LLC ("Royal Palm"), a Florida limited liability company. ~~2011-07~~The acquisition price paid by the Company amounted to $142,000, which equals the amount of cash paid and approximated the fair value of net assets acquired, which included primarily accounts receivable.

InThe ~~July 2011, the FASB ratified the final consensus reached by the Emerging Issues Task Force related to the presentation and disclosure~~ acquisition of ~~net~~Royal ~~revenue,~~Palm ~~the~~was provision for bad debts, and the allowance for doubtful accounts of healthcare entities and issued ASU No. 2011-07, “Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.” This ASU retains the existing revenue recognition model for healthcare entities, pending further developments in ~~the~~alignment ~~FASB's revenue recognition project. However, this ASU requires the provision for doubtful accounts associated~~ with ~~patient service revenue to be separately displayed on~~ the face of the statement of operations as a component of net revenue. This ASU also requires enhanced disclosures of significant changes in estimates related to patient bad debts. While this ASU will have no net impact on the Company’'s ~~financial~~strategic ~~position,~~plans ~~results~~and ofcontributes ~~operations, or cash flows, it will require the Company~~ to ~~reclassify its provision for doubtful accounts from operating expenses to a component of net operating revenues beginning with~~ the ~~first~~continued ~~quarter~~expansion ofinto ~~2012,~~healthcare ~~with~~markets through ~~retrospective~~membership ~~application~~and ~~required. The~~practice ~~Company’s historical provision for doubtful accounts has not been material~~acquisitions.

~~ASU No. 2011~~F-0813

OnHYGEA ~~September 15, 2011, the FASB issued ASU No~~HOLDINGS CORP. ~~2011-8,~~AND “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” This ASU allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test prescribed by current accounting principles. However, the quantitative impairment test is required if an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. An entity can choose to perform the qualitative assessment on none, some or all of its reporting units. Moreover, an entity can bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative goodwill impairment test, and then resume performing the qualitative assessment in any subsequent period. For the Company, ASU No. 2011-8 was effective January 1, 2012, and the adoption of this ASU is not expected to have a material impact on its consolidated financial statements.SUBSIDIARIES

~~ASU~~(FORMERLY ~~No.~~PIPER ACQUISITION ~~2011-11~~n, INC.)

OnNOTES ~~December~~TO ~~16,~~CONSOLIDATED FINANCIAL 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires disclosures to provide information to help reconcile differences in the offsetting requirements under U.S. GAAP and IFRS. The disclosure requirements of this ASU mandate that entities disclose both gross and net information about financial instruments and transactions eligible for offset in the statement of financial position as well as instruments and transactions subject to an enforceable master netting arrangement or similar agreement. ASU No. 2011-11 also requires disclosure of collateral received and posted in connection with master netting arrangements or similar arrangements. The scope of this ASU includes derivative contracts, repurchase agreements, and securities borrowing and lending arrangements. Entities are required to apply the amendments of ASU No. 2011-11 for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. All disclosures provided by those amendments are required to be provided retrospectively for all comparative periods presented. The Company is currently reviewing the effect of ASU No. 2011-11.STATEMENTS

~~F-12~~4. Acquisitions (Continued)

~~Table~~Hvgea OfHealth ~~Contents~~Reverse Acquisition

~~HYGEA~~Effective ~~HOLDINGS~~December 31, ~~CORP~~2010, the Company acquired 99.9% ~~AND~~of ~~SUBSIDIARIES~~the outstanding common shares of Hygea Health, in exchange for the issuance of 135,519,339 shares of common stock. The exchange of shares between the Company and Hygea Health was accounted for as a reverse acquisition under the purchase method of accounting. A reverse acquisition is considered, and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Hygea Health securities for the Company's net monetary assets, accompanied by a recapitalization. Accordingly, the transaction has been reflected as Hygea Health having issued a total of 12,775,904 shares of common stock to the Company's shareholders.

~~(FORMERLY~~At ~~PIPER~~the ~~ACQUISITION~~time IIof acquisition, ~~INC.)~~the assets and liabilities contributed by the Company amounted to:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash and cash equivalents	$	182,002
Accounts receivable		10,000
Note receivable from Hygea Health		570,381
Accrued interest on Hygea Health note		27,274
Goodwill		709,900
Convertible notes		(1,431,018	)
Recapitalization due to reverse merger		(67,261	)
Net asssets acquired	$	1,278

3.Sussman ~~Property~~ and ~~Equipment~~Staller MP. PA. Inc.

~~Property~~On December 1, 2011, the Company entered into an asset and ~~equipment~~stock ~~consisted~~purchase agreement with Sussman and Staller MD, PA, Inc. ("Sussman"), a Florida professional services corporation, and Howard Sussman, MD and Sheldon Staller, MD, together who owned all of the ~~following:~~voting shares of Sussman. In the transaction, the Company acquired 100% of the assets of Sussman and a three-year option to acquire 100% of the voting shares of Sussman, in exchange for the assumption of certain liabilities, a $50,000 cash payment at closing, $ 50,000 to be paid 2 months after closing and shares of the Company's Common Stock having a value of $850,000. As of December 31, 2012, the Company had not issued the shares of its Common Stock. In addition the sellers entered into a non-competition agreement with the Company, for a period of two years beginning upon their termination from the Company.

	As of December 31,
Cash and cash equivalents	$	11,466
	2011			2010
Accounts receivable		129,591
Medical equipment	$	290,227		$	203,640
Property and equipment		71,201
Furniture and office equipment		87,522			86,722
Payor contracts		456,000
Computers and software		46,397			46,397
Covenant not to compete		380,000
		424,146			336,759
Patient records		61,000
Less accumulated depreciation		(131,702	)		(96,532	)
Goodwill		20,000
	$	292,444		$	240,227
Accounts payable		(39,258	)
Net assets acquired	$	1,090,000

4The total purchase consideration was determined to be $ 1,090,000 based on the cash and the fair value of the common stock issued. ~~Acquisitions~~The acquisition of Sussman is in alignment with the Company's strategic plans and contributes to the continued expansion into healthcare markets through membership and practice acquisitions. During the year ended December 31,2011, the Company recognized total revenue, from December 1, 2011, the date of acquisition, to December 31, 2011, of $ 153,972 and income before income taxes of $62,210.

~~Opa~~F-~~Locka Pain Management Corporation~~14

OnHYGEA May 1, 2010, Hygea of Miami Dade, LLC, a wholly owned subsidiary of the Company, entered into a contribution agreement with Opa-Locka Pain Management Corporation (“OPA”), a Florida corporation and an independent duly licensed medical doctorHOLDINGS CORP. In ~~the~~AND transaction, the Company acquired a 100% interest in OPA’s common stock for $1 per share or $100, and simultaneously issued 1,354,577 shares of the Company’s Common Stock as purchase consideration, and further entered into a four year non-competition agreement with OPA and the independent medical doctor with applicable restrictive covenants.SUBSIDIARIES

At(FORMERLY ~~the~~PIPER ACQUISITION ~~time~~II, ~~of acquisition the assets and liabilities contributed by OPA amounted to:~~INC.)

Cash and cash equivalents	$	7,177
Accounts receivable		32,640
Property and equipment		14,517
Covenant not to compete		165,466
Deposits		4,200
Due to related party		(24,000	)
Net assets acquired	$	200,000

NOTES TO CONSOLDDATED FINANCIAL STATEMENTS

~~The total purchase consideration was determined to be $123,781 based on the fair value of the common stock issued~~5. ~~The~~ Company recorded a gain on acquisition of $76,219 related to this transaction for the year-ended December 31, 2010, as net assets acquired were $200,000. The acquisition of Opa-Locka was in alignment with the Company’s strategic plans and contributes to the continued expansion into healthcare markets through membership and practice acquisitions.Disposals

~~Royal~~Hvgea of Palm Beach. ~~Medical Group~~LLC

On ~~March~~February 1, 2010, ~~the~~Hygea ~~Company~~Health ~~entered~~Network, ~~into~~Inc. ~~an agreement~~("HHN"), ~~with~~as ~~two~~controlling ~~shareholders~~shareholder ~~within~~of ~~the~~Hygea ~~Company~~of Palm Beach, toLLC. ~~purchase~~("HPB"), sold 100% of the membership interest ofin ~~Royal~~HPB ~~Palm~~to ~~Beach~~two ~~Medical~~shareholders ~~Group,~~of ~~LLC~~the ~~(“Royal Palm”), a Florida limited liability company~~Company. ~~The~~ ~~acquisition~~Consideration ~~price~~received ~~paid~~for by the ~~Company~~sale amounted to recovery ~~$142~~of 100,000, ~~which~~shares ~~equals~~of ~~the~~HHN ~~amount~~and ofplaintiff ~~cash~~participation ~~paid~~in ~~and~~outstanding ~~approximated~~legal ~~the~~matters. ~~fair~~There ~~value~~was ofno ~~net~~gain ~~assets~~or ~~acquired,~~loss ~~which~~recognized with ~~included~~this ~~primarily~~sale ~~accounts~~as ~~receivable~~the Company's investment was immaterial.

~~The~~Hvgea ~~acquisition~~Health ofNetwork. ~~Royal Palm was in alignment with the Company’s strategic plans and contributes to the continued expansion into healthcare markets through membership and practice acquisitions~~Inc.

FOn April 30, 2010, the Company sold 100% of the outstanding common stock of Hygea Health Network, Inc. (HHN) to an unrelated party for total consideration of $10. The amount of assets and liabilities sold was negligible as this transaction constitutes the sale of a non-13operating entity.

~~Table~~Roval OfPalm ~~Contents~~Beach Medical Group

~~HYGEA~~On ~~HOLDINGS~~April ~~CORP~~30, 2011, the Company entered into an agreement to sell 100% of the membership interest of Royal Palm. ~~AND~~The ~~SUBSIDIARIES~~Company received no proceeds on the sale and recognized a loss of $61,115 approximated the fair value of net assets disposed, consisting of primarily accounts receivable.

~~(FORMERLY PIPER ACQUISITION II, INC.)~~Cyfluent

~~NOTES~~In TO2008 ~~CONSOLIDATED~~the ~~FINANCIAL~~Company acquired ~~STATEMENTS~~30% interest in an electronic medical records and practice software company for total consideration of $342,368. This investment was recognized using the cost method as the Company was unable to assert significant influence due to the fact that the remaining 70% ownership rests with one non-related entity. On November 15, 2011, the Company sold its investment in Cyfluent for its carrying cost of $342,368 to an entity controlled by the Company's Chairman, its Chief Executive Officer and President, its Chief Operating Officer, and two additional Directors of the Company. The purchase price is payable in five annual installments of $60,000 each, beginning November 15, 2012, with a final installment of $42,368 on November 15, 2017.

~~Hygea~~6. ~~Health Reverse Acquisition~~Goodwill

~~Effective~~In ~~December~~September 312007, ~~2010,~~ the Company ~~acquired~~organized ~~99.9%~~Palm ofMedical ~~the~~Network, ~~outstanding~~LLC ~~common~~to ~~shares~~acquire substantially all of ~~Hygea~~the ~~Health,~~assets inand ~~exchange~~business ~~for~~of ~~the~~Palm ~~issuance~~Medical ofGroup, Inc. ~~135~~("PMG"),~~519,339~~ ~~shares~~a ofFlorida ~~common~~not-for-profit ~~stock~~corporation. The ~~exchange~~purchase ofwas ~~shares~~accounted ~~between~~for by the ~~Company~~purchase ~~and~~method, ~~Hygea~~whereby ~~Health~~the acquired ~~was~~net ~~accounted~~assets ~~for~~were asrecorded aby ~~reverse~~the ~~acquisition~~Company ~~under~~at ~~the~~their ~~purchase~~fair ~~method~~market ~~of accounting~~value. A ~~reverse~~The ~~acquisition~~excess isof ~~considered,~~the ~~and~~purchase ~~accounted~~price ~~for~~over ~~as,~~the afair ~~capital~~value of ~~transaction~~the innet ~~substance;~~assets itacquired isin ~~equivalent to~~ the ~~issuance~~transaction ofhas ~~Hygea~~been ~~Health~~recorded ~~securities~~as ~~for~~goodwill. ~~the~~The Company’s ~~net~~owns ~~monetary~~80% ~~assets,~~of ~~accompanied~~PMG byand atherefore ~~recapitalization. Accordingly,~~consolidates it's results within the ~~transaction~~Company's ~~has~~consolidated ~~been~~financial ~~reflected~~statements. asThe ~~Hygea~~income ~~Health~~attributable ~~having~~to ~~issued~~the a20% ~~total~~not-owned ofby ~~12,775,904~~the ~~shares~~Company is ofreported ~~common~~as ~~stock~~income attributable to non-controlling interest in the Company’'s ~~shareholders~~consolidated Statement of Operations.

AtEffective December 31, 2010, the ~~time~~Company acquired all of ~~acquisition~~the outstanding common shares of Hygea Health, in exchange for the ~~assets~~issuance ~~and~~of ~~liabilities~~135,519,339 shares ~~contributed~~of bythe Company's Common Stock. The exchange of shares between the Company ~~amounted~~and Hygea Health was accounted for as a reverse acquisition under the purchase method of accounting. A reverse acquisition is considered, and accounted for as, a capital transaction in substance; it is equivalent to: the issuance of Hygea Health securities for the Company's net monetary assets, accompanied by a recapitalization. The excess of the purchase price over the fair value of assets acquired in the transaction has been recorded as goodwill.

Cash and cash equivalents	$	182,002
Accounts receivable		10,000
Note receivable from Hygea Health		570,381
Accrued interest on Hygea Health note		27,274
Goodwill		709,900
Convertible notes		(1,431,018	)
Recapitalization due to reverse merger		(67,261	)
Net asssets acquired	$	1,278

The Company's evaluation of goodwill for the years 2012 and 2011 indicated no impairment.

~~Sussman and Staller MD, PA, Inc.~~F-15

OnHYGEA ~~December 1, 2011, the Company entered into an asset and stock purchase agreement with Sussman and Staller MD, PA, Inc~~HOLDINGS CORP. ~~(“Sussman”),~~AND a Florida professional services corporation, and Howard Sussman, MD and Sheldon Staller, MD, together who owned all of the voting shares of Sussman. In the transaction, the Company acquired 100% of the assets of Sussman and a three-year option to acquire 100% of the voting shares of Sussman, in exchange for the assumption of certain liabilities, a $50,000 cash payment at closing, $150,000 to be paid X months after closing and shares of the Company’s Common Stock having a value of $850,000. As of December 31, 2011, the Company had not issued the shares of its Common Stock. In addition the sellers entered into a non-competition agreement with the Company, for a period of two years beginning upon their termination from the Company.SUBSIDIARIES

Cash and cash equivalents	$	11,466
Accounts receivable		129,591
Property and equipment		71,201
Payor contracts		456,000
Covenant not to compete		380,000
Patient records		61,000
Goodwill		20,000
Accounts payable		(39,258	)
Net assets acquired	$	1,090,000

(FORMERLY PIPER ACQUISITION II, INC.)

~~The~~NOTES ~~total~~TO ~~purchase~~CONSOLIDATED FINANCIAL consideration was determined to be $1,090,000 based on the cash and the fair value of the common stock issued. The acquisition of Sussman is in alignment with the Company’s strategic plans and contributes to the continued expansion into healthcare markets through membership and practice acquisitions. During the year ended December 31, 2011, the Company recognized total revenue, from December 1, 2011, the date of acquisition, to December 31, 2011, of $153,972 and income before income taxes of $62,210.STATEMENTS

~~F-14~~7. Intangible Assets

Table Of Contents

	As of December 31,
	2012			2011
Credentialed provider network	$	1,502,000		$	1,502,000
Covenants not to compete		466,986			545,466
Payor contracts		463,660			463,660
Trade name		124,000			124,000
Patient records		61,000			61,000
Total Intangible Assets		2,617,646			2,696,126
Less accumulated depreciation		(678,865	)		(495,762	)
Intangible Assets - Net	$	1,938,781		$	2,200,364

~~HYGEA~~Credentialed ~~HOLDINGS~~Provider ~~CORP. AND SUBSIDIARIES~~Network

~~(FORMERLY~~The ~~PIPER~~Company ~~ACQUISITION~~recorded an IIintangible asset related to a credentialed provider network when it acquired PMG. The asset is being amortized over its estimated useful life, ~~INC~~approximately 16 years, as the Company does not expect to have material levels of turnover in its acquired provider base over this period.) Amortization expense recorded during the years ended December 31, 2012, and 2011, was $93,875.

~~NOTES~~Covenants TONot ~~CONSOLIDATED~~to ~~FINANCIAL STATEMENTS~~Compete

5The Company paid for a covenant not-to-compete as part of its acquisition of OPA totaling $165,466. ~~Disposals~~The value of this asset is being amortized over four years, the effective life of the restrictive covenant. Amortization expense recorded during the year ended December 31, 2012 was $45,387. Amortization expense recorded during the year ended December 31, 2011, was nominal.

~~Hygea~~The Company paid for a covenant not-to-compete as part of ~~Palm~~its ~~Beach~~acquisition of Sussman totaling $368,100. ~~LLC~~The value of this asset is being amortized over seven years, the Company's estimate of the life of the restrictive covenant. Amortization expense recorded during the year ended December 31, 2012 approximated $40,103. Amortization expense recorded during the year ended December 31, 2011, was nominal.

OnPayor February 1, 2010, Hygea Health Network, Inc. (“HHN”), as controlling shareholder of Hygea of Palm Beach, LLC. (“HPB”), sold 100% of the membership interest in HPB to two shareholders of the Company. Consideration received for the sale amounted to recovery of 100,000 shares of HHN and plaintiff participation in outstanding legal matters. There was no gain or loss recognized with this sale as the Company’s investment was immaterial.Contracts

~~Hygea~~The ~~Health~~Company ~~Network~~recorded an intangible asset related to payor contracts, ~~Inc~~fixed fee agreements with five insurance carriers and fee-for service agreements with numerous additional payors, when it acquired Sussman. The asset is being amortized over its estimated useful life, approximately 16 years, as the Company does not expect to have material levels of turnover in its acquired carrier base over this period. Amortization expense recorded during the year ended December 31, 2012 approximated $8,670. Amortization expense recorded during the year ended December 31, 2011, was nominal.

OnThe ~~April 30, 2010, the~~ Company ~~sold~~also ~~100%~~has ofan ~~the~~intangible asset ~~outstanding common stock~~ of ~~Hygea Health Network~~$7,660 ~~Inc.~~associated ~~(HHN)~~with toits anconsolidated ~~unrelated party for total consideration of $10~~VIE. ~~The~~ ~~amount~~See ofNote ~~assets and liabilities sold was negligible as this transaction constitutes the sale of a non-operating entity~~8.

~~Royal Palm Beach Medical Group~~F-16

OnHYGEA ~~April 30, 2011, the Company entered into an agreement to sell 100% of the membership interest of Royal Palm~~HOLDINGS CORP. ~~The~~ ~~Company~~AND ~~received no proceeds on the sale and recognized a loss of $61,115 approximated the fair value of net assets disposed, consisting of primarily accounts receivable.~~SUBSIDIARIES

~~Cyfluent~~(FORMERLY PIPER ACQUISITION II, INC.)

InNOTES ~~2008~~TO ~~the~~CONSOLIDATED FINANCIAL Company acquired 30% interest in an electronic medical records and practice software company for total consideration of $342,368. This investment was recognized using the cost method as the Company was unable to assert significant influence due to the fact that the remaining 70% ownership rests with one non-related entity. On November 15, 2011, the Company sold its investment in Cyfluent for its carrying cost of $342,368 to an entity controlled by the Company’s Chairman, its Chief Executive Officer and President, its Chief Operating Officer, and two additional Directors of the Company. The purchase price is payable in five annual installments of $60,000 each, beginning November 15, 2012, with a final installment of $42,368 on November 15, 2017.STATEMENTS

67. ~~Goodwill~~Intangible Assets (Continued)

InTrade September 2007, the Company organized Palm Medical Network, LLC to acquire substantially all of the assets and business of Palm Medical Group, Inc. (“PMG”), a Florida not-for-profit corporation. The purchase was accounted for by the purchase method, whereby the acquired net assets were recorded by the Company at their fair market value. The excess of the purchase price over the fair value of the net assets acquired in the transaction has been recorded as goodwill. The Company owns 80% of PMG and therefore consolidates its results within the Company’s consolidated financial statements. The income attributable to the 20% not-owned by the Company is reported as income attributable to non-controlling interest in the Company’s consolidated Statement of Operations.Name

~~Effective December 31, 2010, the Company acquired all of the outstanding common shares of Hygea Health, in exchange for the issuance of 135,519,339 shares of the Company’s Common Stock.~~ The ~~exchange of shares between the~~ Company ~~and~~recorded ~~Hygea~~an ~~Health~~asset ~~was~~related ~~accounted~~to ~~for as~~ a ~~reverse~~trade ~~acquisition~~name ~~under~~when ~~the~~it ~~purchase~~acquired ~~method of accounting~~PMG. A ~~reverse~~This ~~acquisition~~asset is ~~considered,~~being ~~and~~amortized ~~accounted~~over ~~for~~its ~~as,~~estimated ~~a capital transaction in substance; it is equivalent to the issuance of Hygea Health securities for the Company’s net monetary assets~~useful life, ~~accompanied~~approximately by16 ~~a recapitalization~~years. ~~The~~ ~~excess~~Amortization ofexpense ~~the~~recorded ~~purchase~~during ~~price over~~ the ~~fair~~years ~~value~~ended ofDecember ~~assets~~31, ~~acquired~~2012, inand ~~the~~2011, ~~transaction~~was ~~has been recorded as goodwill~~$7,750.

~~The~~Patient ~~Company's evaluation of goodwill for the years 2011 and 2010 indicated no impairment.~~Records

~~F-15~~The Company recorded an intangible asset related to patient records when it acquired Sussman. The asset is being amortized over its estimated useful life, approximately 16 years, as the Company does not expect to have material levels of turnover in its patient base over this period. Amortization expense recorded during the year ended December 31, 2012 approximated $3,812. Amortization expense recorded during the year ended December 31, 2011, was nominal.

~~Table~~Impairment ~~Of Contents~~Analysis

~~HYGEA~~Each ~~HOLDINGS~~of ~~CORP~~the above "identifiable" definite-lived intangible assets are reviewed for impairment, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360," Property, Plant, and Equipment ," whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. ~~AND~~If the ~~SUBSIDIARIES~~sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. During the year ended December 31, 2012, the Company did not experience any event of change in circumstance that would indicate that the carrying amount may not be recoverable.

~~(FORMERLY~~8. ~~PIPER~~Variable ~~ACQUISITION~~Interest ~~II, INC.)~~Entity

~~NOTES~~In TOJanuary ~~CONSOLIDATED~~2011, the ~~FINANCIAL~~Company ~~STATEMENTS~~entered into a Management Agreement ("Management Agreement") with Jose David Suarez, PA a Florida Professional Association (the "PA" or the "Practice") and Dr. Jose David Suarez, ("Suarez", "Shareholder" or "Owner" of the Practice) whereby the Company was engaged to implement, operate and manage the Practice, or delegate implementation, operation and management of the Practice to one or more third parties (except where expressly provided otherwise, hereinafter in compliance with all applicable federal and State laws and regulations. The Company has assumed the risk of all profitability or losses of the Practice. In consideration for entering into the Management Agreement, the Company issued 430,782 shares of its Common Stock to Suarez.

7The Company has determined that the Management Agreement is a Variable Interest Entity ("VIE") in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, "Consolidation". In ~~Intangible~~evaluating ~~Assets~~whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and the Company's decision-making role, if any, in those activities that significantly determine the entity's economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity's future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

	As of December 31,
	2011			2010
Credentialed provider network	$	1,502,000		$	1,502,000
Covenants not to compete		545,466			165,466
Payor contracts		463,660			-
Trade name		124,000			124,000
Patient records		61,000			-
Total intangible assets		2,696,126			1,791,466
Less: accumulated amortization		(495,762	)		(332,996	)
Intangible assets, net	$	2,200,364		$	1,458,470

In determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all of its economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity's design, including: the entity's capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of the Company's economic interests is a matter that requires the exercise of professional judgment.

~~Credentialed Provider Network~~F-17

~~The~~HYGEA ~~Company recorded an intangible asset related to a credentialed provider network when it acquired PMG~~HOLDINGS CORP. ~~The~~ ~~asset~~AND is being amortized over its estimated useful life, approximately 16 years, as the Company does not expect to have material levels of turnover in its acquired provider base over this period. Amortization expense recorded during the years ended December 31, 2011, and 2010, was $93,875.SUBSIDIARIES

~~Covenants~~(FORMERLY ~~Not~~PIPER ACQUISITION toII, ~~Compete~~INC.)

~~The~~NOTES ~~Company~~TO ~~paid~~CONSOLIDATED FINANCIAL for a covenant not-to-compete as part of its acquisition of OPA totaling $165,466. The value of this asset is being amortized over four years, the effective life of the restrictive covenant. Amortization expense recorded during the year ended December 31, 2011 was $41,400. Amortization expense recorded during the year ended December 31, 2011, was nominal.STATEMENTS

~~The Company paid for a covenant not-to-compete as part of its acquisition of Sussman totaling $368,100~~8. ~~The~~ ~~value~~Variable ofInterest ~~this~~Entity ~~asset is being amortized over seven years, the Company’s estimate of the life of the restrictive covenant. Amortization expense recorded during the year ended December 31, 2011, was nominal.~~(Continued)

~~Payor~~The ~~Contracts~~table below summarizes the assets associated with the Practice described above. The practice had no liabilities at December 31, 2011.

The Company recorded an intangible asset related to payor contracts, fixed fee agreements with five insurance carriers and fee-for service agreements with numerous additional payors, when it acquired Sussman. The asset is being amortized over its estimated useful life, approximately 16 years, as the Company does not expect to have material levels of turnover in its acquired carrier base over this period. Amortization expense recorded during the year ended December 31, 2011, was nominal.

Cash			7,171
Accounts receivable			73,451
Property and equipment, net			10,944
Payor contract			7,660

~~The~~Total ~~Company~~revenues from ~~also~~the ~~has~~Practice anwere ~~intangible~~$495,337 ~~asset~~in 2012. Related expenses consisted primarily of salaries and benefits of $7302,~~660~~243, ~~associated~~general ~~with~~and administrative ~~its~~expenses ~~consolidated~~of ~~VIE~~$174,964 and professional fees of $81,345. ~~See~~ ~~Note~~Total 8revenues from the Practice were $659,502 in 2011. Related expenses consisted primarily of salaries and benefits of $231,693, general and administrative expenses of $265,989 and professional fees of $70,255.

~~F-16~~9. Line of Credit

~~Table~~During Of2009, HHN ~~Contents~~entered into a line of credit agreement for borrowings of up to $100,000 bearing interest at a rate of 3.09%. Interest on the outstanding principal balance is due monthly with principal due at maturity on September 9, 2011. The loan was secured by a $100,000 certificate of deposit owned by one of the shareholders of the Company. The outstanding balance of this line of credit amounted to$100,000 as of December 31, 2010, which was repaid during 2011.

~~HYGEA HOLDINGS CORP~~10. ~~AND~~Convertible ~~SUBSIDIARIES~~Notes Payable

~~(FORMERLY~~In ~~PIPER~~connection with ~~ACQUISITION~~the IIreverse acquisition by the Company, ~~INC~~Hygea Health assumed $1,431,018 of convertible notes payable, and accrued interest on the notes of $67,261.) Total principal outstanding of $564,995 of these convertible notes bear interest at 10% per annum and matured on March 31, 2012, as amended. The remaining $866,023 of principal amount outstanding bear interest at 5% per annum and mature on various dates between June and November 2012. The convertible notes were converted into shares of the Company's Common Stock on the basis of one share of Common Stock for every $0.11 of principal amount outstanding. The $1,431,018 of total principal amount outstanding was therefore converted into approximately 13,009,255 shares of Common Stock. The conversion price of these notes was arbitrarily determined. There is no relationship between the conversion price and the Company's assets, book value, net worth, or any other economic or recognized criteria of value and this price does not necessarily accurately reflect the actual value of the Common Stock or the price that may be realized upon disposition of the shares of Common Stock.

~~NOTES~~In 2011, TOthe ~~CONSOLIDATED~~Company ~~FINANCIAL~~issued ~~STATEMENTS~~an additional $332,000 of principal of 5% convertible promissory notes. These convertible notes bear interest at 5% per annum and mature on various dates between July and December 2013. The convertible notes are convertible into shares of the Company's Common Stock on the basis of one share of common stock for every $0.11 of principal amount outstanding. The $108,356 of total principal amount outstanding is therefore convertible into approximately 985,055 shares of the Company's Common Stock.

~~Trade Name~~F-18

~~The~~HYGEA ~~Company recorded an asset related to a trade name when it acquired PMG~~HOLDINGS CORP. ~~This~~ ~~asset~~AND ~~is being amortized over its estimated useful life, approximately 16 years. Amortization expense recorded during the years ended December 31, 2011, and 2010, was $7,750.~~SUBSIDIARIES

~~Patient~~(FORMERLY ~~Records~~PIPER ACQUISITION II, INC.)

~~The~~NOTES TO ~~Company~~CONSOLIDATED ~~recorded~~FINANCIAL an intangible asset related to patient records when it acquired Sussman. The asset is being amortized over its estimated useful life, approximately 16 years, as the Company does not expect to have material levels of turnover in its patient base over this period. Amortization expense recorded during the year ended December 31, 2011, was nominal.STATEMENTS

~~Impairment~~11. ~~Analysis~~Notes Payable

~~Each~~During of2012 the above “identifiable” definite-lived intangible assets are reviewed for impairment, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, “ Property, Plant, and Equipment ,” whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. During the year ended December 31, 2011, the Company ~~did~~entered into ~~not experience any event of change in circumstance that would indicate that~~ the ~~carrying~~following ~~amount~~unsecured ~~may~~notes ~~not be recoverable.~~payable:

8The first note payable was for a borrowing of $60,000, interest bearing at 12% per annum and due on December 31, 2011. ~~Variable~~This ~~Interest~~note ~~Entity~~was paid in full during 2014.

InThe third ~~January~~note ~~2011,~~payable ~~the~~agreement ~~Company~~provides ~~entered~~for ~~into~~maximum aborrowings ~~Management~~of ~~Agreement~~$300,000 ~~(“Management Agreement”)~~ with ~~Jose~~interest ~~David~~accruing ~~Suarez,~~at PA8.0% aper ~~Florida~~annum. ~~Professional~~Borrowings ~~Association~~are due ~~(the~~on ~~"PA"~~June or30, ~~the "Practice") and Dr~~2014. ~~Jose~~As ~~David Suarez, (“Suarez”, "Shareholder" or "Owner"~~ of ~~the~~December ~~Practice) whereby the Company was engaged to implement~~31, ~~operate~~2012 and ~~manage the Practice~~2011, ~~or delegate implementation, operation and management of~~ the ~~Practice to one or more third parties (except where expressly provided otherwise, hereinafter in compliance with all applicable federal and State laws and regulations. The~~ Company ~~has~~had ~~assumed~~borrowed ~~the risk of all profitability or losses of the Practice. In consideration for entering into the Management Agreement~~$204,700 ~~the~~under ~~Company~~this ~~issued 430,782 shares of its Common Stock to Suarez~~arrangement.

The Company has determined that the Management Agreement is a Variable Interest Entity (“VIE”) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation”. In ~~evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance~~ 2012, the Company ~~considers~~issued ~~the~~an ~~purpose~~additional ~~for which the VIE was created~~$200,000 ~~the importance~~ of ~~each~~principal of ~~the~~8% ~~activities~~promissory innotes. ~~which~~These itnotes isbear ~~engaged and the Company’s decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic~~ interest ~~holders. This~~at ~~evaluation~~8% ~~requires~~per ~~consideration of all facts~~ annum and ~~circumstances~~mature ~~relevant~~on tovarious ~~decision-making~~dates ~~that~~through ~~affects~~July ~~the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important~~2014.

In ~~determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE~~ 2012, the Company ~~evaluates~~issued ~~all~~an ofadditional ~~its economic interests in the entity~~$200,000 ~~regardless~~ of ~~form~~principal ~~(debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors~~ of ~~the~~25% ~~entity’s~~promissory design, including: the entity’s capital structure, contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have potential to be economically significantnotes. ~~The~~ ~~evaluation~~These ofnotes ~~each~~bear ofinterest ~~these~~at ~~factors~~25% inper ~~reaching~~annum and amature ~~conclusion~~on ~~about~~various ~~the~~dates ~~potential~~through ~~significance~~December ~~of the Company’s economic interests is a matter that requires the exercise of professional judgment~~2013.

~~F-17~~The second payable agreement provided for borrowings totaling $607,500 with interest accruing at 13.9% per annum and had an original maturity of February 1, 2012, but subsequent to December 31, 2011 was extended to March 5, 2014. As of December 31, 2012 and 2011, the Company had borrowed $607,500 and $125,000 under this arrangement.

~~Table~~12. OfNotes ~~Contents~~Payable - Related Parties

~~HYGEA~~During 2011, ~~HOLDINGS~~the ~~CORP~~Company entered into a loan agreement with a company controlled by the Chairman of its Board of Directors. ~~AND~~The ~~SUBSIDIARIES~~loan agreement provides for maximum borrowings of $1,000,000 with interest accruing at 15.0% per annum. As of December 31, 2012 and 2011, the Company had borrowed $275,000 and $255,000 under this arrangement, due on September 30, 2013.

~~(FORMERLY~~At December ~~PIPER~~31, ~~ACQUISITION~~2012 IIand 2011, ~~INC~~the Company had borrowed a total of $369,940 and $545,627, respectively, from the Company's Chief Executive Officer, or from individuals related to the Company's Chief Executive Officer or entities under his control for working capital purposes.) These advances are unsecured and have no maturity. Interest is accrued on these advances at 4.0% per annum.

~~NOTES~~13. TODeferred ~~CONSOLIDATED FINANCIAL STATEMENTS~~Revenue

~~The~~In July ~~table~~2009 ~~below~~PMN ~~summarizes~~entered ~~the~~into ~~assets~~a ~~associated~~$300,000 deferred revenue agreement with CarePlus. The deferred revenue agreement is earned by the Company ~~Practice~~if ~~described~~the ~~above~~network agreement, signed by both parties, remained in effect without termination continuously through June 30, 2012. ~~The~~ ~~practice~~As ~~had~~part noof ~~liabilities~~the atdeferred ~~December~~revenue 31agreement, ~~2011~~$100,000 is earned each June 30, subject to enrollment levels within the CarePlus.

Cash			7,171
Accounts receivable			73,451
Property and equipment, net			10,944
Payor contract			7,660

14.

Income Taxes

~~Total~~The ~~revenues~~Company's net ~~from~~income ~~the~~before ~~Practice~~income ~~were~~taxes ~~$659,502~~and innon-controlling ~~2011. Related~~interest ~~expenses~~totaled ~~consisted~~$1,000,646 ~~primarily~~and of$725,303 ~~salaries~~for ~~and~~the ~~benefits~~years ofended ~~$231~~December 31,~~693,~~ ~~general~~ 2012 and ~~administrative~~2011, ~~expenses~~respectively. ofThe ~~$265,989~~total ~~and~~provision ~~professional~~for ~~fees~~income taxes consisted of ~~$70,255.~~the following:

9. Line of Credit

	For the Year Ended December 31,
	2012		2011
Current taxes
Federal		150,761	$	217,855
State		22,950		26,328
Deferred taxes
Federal		-		-
State		-		-
Change in valuation allowance		-		(78,271	)
Total	$	173,711	$	165,912

~~During~~Deferred income ~~2009,~~taxes ~~HHN~~reflect ~~entered~~the ~~into~~net aeffect ~~line~~ of ~~credit~~temporary ~~agreement~~differences ~~for~~between ~~borrowings~~the ofcarrying upamount toof ~~$100,000~~assets ~~bearing~~and ~~interest~~liabilities atfor afinancial reporting ~~rate~~purposes ofand ~~3.09%. Interest on~~ the ~~outstanding~~amounts ~~principal~~used ~~balance~~for isincome ~~due~~tax ~~monthly with principal due at maturity on September 9, 2011~~purposes. ~~The~~ ~~loan~~There ~~was~~were ~~secured~~no bydeferred aincome ~~$100,000~~taxes ~~certificate~~for ~~of deposit owned by one of~~ the ~~shareholders~~year ofended ~~the Company. The outstanding balance of this line of credit amounted to $100,000 as of~~ December 31, ~~2010,~~2012 ~~which~~and ~~was repaid during~~ 2011.

~~10. Convertible Notes Payable~~F-19

InHYGEA ~~connection with the reverse acquisition by the Company, Hygea Health assumed $1,431,018 of convertible notes payable, and accrued interest on the notes of $67,261~~HOLDINGS CORP. ~~Total~~ ~~principal~~AND outstanding of $564,995 of these convertible notes bear interest at 10% per annum and matured on March 31, 2012, as amended. The remaining $866,023 of principal amount outstanding bear interest at 5% per annum and mature on various dates between June and November 2012. The convertible notes are convertible into shares of the Company’s Common Stock on the basis of one share of Common Stock for every $0.11 of principal amount outstanding. The $1,431,018 of total principal amount outstanding is therefore convertible into approximately 13,009,255 shares of Common Stock. The conversion price of these notes was arbitrarily determined. There is no relationship between the conversion price and the Company’s assets, book value, net worth, or any other economic or recognized criteria of value and this price does not necessarily accurately reflect the actual value of the Common Stock or the price that may be realized upon disposition of the shares of Common Stock.SUBSIDIARIES

In(FORMERLY ~~2011,~~PIPER ACQUISITION ~~the Company issued an additional $332~~II,~~000~~ ~~of principal of 5% convertible promissory notes~~INC. These convertible notes bear interest at 5% per annum and mature on various dates between January and April 2013. The convertible notes are convertible into shares of the Company’s Common Stock on the basis of one share of common stock for every $0.11 of principal amount outstanding. The $332,000 of total principal amount outstanding is therefore convertible into approximately 3,018,182 shares of the Company’s Common Stock.)

~~11.~~NOTES ~~Notes~~TO ~~Payable~~CONSOLIDATED FINANCIAL STATEMENTS

~~During~~14. ~~2011,~~Income ~~the~~Taxes ~~Company entered into the following unsecured notes payable:~~(Continued)

~~The~~At December ~~first~~31, ~~note~~2012 ~~payable~~and ~~was~~2011, ~~for~~the aCompany ~~borrowing~~had ofno ~~$60,000,~~unutilized ~~interest~~net ~~bearing~~operating atloss ~~12%~~carryforward. ~~per~~A ~~annum~~reconciliation ~~and~~of ~~due~~the onstatutory ~~December~~federal income ~~31,~~tax ~~2011. The~~rate ~~Company~~with ~~was~~our ineffective ~~default~~income oftax ~~the~~rate ~~terms~~for ofthe ~~this~~years ~~note~~ended at December 31, 2011. , and 2010 is as follows:

The second payable agreement provided for borrowings totaling $125,000 with interest accruing at 13.9% per annum and had an original maturity of February 1, 2012, but subsequent to December 31, 2011 was extended to March 5, 2013. As of December 31, 2011, the Company had borrowed $125,000 under this arrangement.

	For the Year Ended December 31,
	2012		2011
Net income before income taxes and non-controlling interest	$	458,846	$	725,303
Income Tax Expense at U.S. statutory rate (34%)		173,711		246,603
State income taxes, net of deferred benefit		22,895		26,328
Amortization of tax goodwill and accelerated depreciation				(28,748	)
Change in valuation allowance		-		(78,271	)
	$	200,537	$	165,912

~~F-18~~15. Stockholders’ Equity

~~Table~~The OfCompany ~~Contents~~has 250,000,000 shares of common stock, 0.0001 par value, and 10,000,000 shares of preferred stock, $0.0001 par value authorized. As of December 31, 2011, the Company had 148,295,243 shares of common stock outstanding and no shares of preferred stock outstanding. Hygea Health had 400,000 shares of preferred stock outstanding at the date of acquisition by the Company, which were converted into shares of the Company's Common Stock concurrently with the acquisition by the Company.

~~HYGEA~~All ~~HOLDINGS~~share ~~CORP~~prices of issuances were arbitrarily determined as the Company was private and closely held by related parties. ~~AND~~There ~~SUBSIDIARIES~~is no relationship between the issuance prices and the Company's assets, book value, net worth, or any other economic or recognized criteria of value and these prices do not necessarily accurately reflect the actual value of the Company's Common Stock or the price that may be realized upon disposition of shares of the Company's Common Stock.

~~(FORMERLY~~During ~~PIPER~~2010, Hygea ~~ACQUISITION~~Health IIissued 100,000 ~~INC~~shares of preferred stock for total consideration of $100,000.) As a result of the reverse acquisition entered into with the Company, these shares have been retroactively restated and reflected as the issuance of 4,706,506 shares of the Company's Common Stock as of the date first issued.

~~NOTES~~During 2010, TOthe ~~CONSOLIDATED~~Company ~~FINANCIAL~~issued ~~STATEMENTS~~1,354,577 shares of Common Stock as purchase price consideration for the acquisition of OPA. The fair value of the shares was determined to be $123,781 as of the date of purchase, based on an independent third-party purchase price valuation.

The third note payable agreement provides for maximum borrowings of $300,000 with interest accruing at 14.0% per annum. Borrowings are due on June 30, 2012. As of December 31, 2011, the Company had borrowed $204,700 under this arrangement. F-20

12HYGEA HOLDINGS CORP. ~~Notes~~AND ~~Payable – Related Parties~~SUBSIDIARIES

~~During~~(FORMERLY ~~2011,~~PIPER ACQUISITION ~~the Company entered into a loan agreement with a company controlled by the Chairman of its Board of Directors. The loan agreement provides for maximum borrowings of $1~~II,~~000,000~~ ~~with interest accruing at 15~~INC.~~0% per annum. As of December 31, 2011, the Company had borrowed $255,000 under this arrangement, due on September 30, 2012.~~)

AtNOTES ~~December~~TO ~~31,~~CONSOLIDATED FLNANCIAL 2011, the Company had borrowed a total of $545,627 from the Company’s Chief Executive Officer, or from individuals related to the Company’s Chief Executive Officer or entities under his control for working capital purposes. These advances are unsecured and have no maturity. Interest is accrued on these advances at 4.0% per annum.STATEMENTS

1315. ~~Deferred~~Stockholders’ ~~Revenue~~Equity - continued

InDuring ~~July 2009 PMN entered into a $300~~2010,~~000~~ ~~deferred revenue agreement with CarePlus. The deferred revenue agreement is earned by~~ the Company ifissued ~~the network agreement~~27, ~~signed by both parties~~508,340 ~~remains~~shares inof ~~effect~~Common ~~without~~Stock ~~termination~~for ~~continuously~~total ~~through~~consideration ~~June~~of 30$513, ~~2012~~850. As ~~part~~ of ~~the~~December ~~deferred revenue agreement~~31, ~~$100~~2010,~~000~~ isthe ~~earned~~Company ~~each~~had recorded ~~June~~a ~~30,~~balance ~~subject~~due tofrom ~~enrollment~~shareholders ~~levels~~of ~~within the CarePlus.~~ $~~100~~305,000 ~~was~~related ~~earned~~to onthis ~~both June 30~~issuance, ~~2010~~ ~~and~~which ~~June~~had ~~30,~~been ~~2011,~~recorded ~~leaving~~as a ~~net~~contra-equity ~~$100,000~~balance within ~~outstanding~~the ~~from~~consolidated ~~that~~Statements ~~facility as~~ of ~~December 31, 2011~~Equity. ~~The~~ ~~deferred~~This ~~revenue~~amount ~~agreement~~was isreceived ~~secured~~during ~~by CarePlus’ right to withhold any amounts due and payable under~~ the ~~loan~~year ~~from~~ended ~~any~~December ~~amounts due to PMN under the Network Agreement~~31,2011.

14Effective December 31, 2010, the Company acquired 99.9% ~~Income~~of ~~Taxes~~the outstanding common shares of Hygea Health, in exchange for the issuance of 135,519,339 shares of common stock. The exchange of shares between the Company and Hygea Health was accounted for as a reverse acquisition under the purchase method of accounting. A reverse acquisition is considered, and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Hygea Health securities for the Company's net monetary assets, accompanied by a recapitalization. Accordingly, the transaction has been reflected as Hygea Health having issued a total of 12,775,904 shares of common stock to the Company's shareholders.

~~The~~16. ~~Company’s~~Commitments ~~net income before income taxes~~ and ~~non-controlling interest totaled $725,303 and $1,277,384 for the years ended December 31, 2011 and 2010, respectively. The total provision for income taxes consisted of the following:~~Contingencies

	For the Year Ended December 31,
	2011			2010
Current Taxes
Federal	$	217,855		$	402,504
State		26,328			45,730
Deferred Taxes
Federal		-			-
State		-			-
Change in Valuation
Allowance		(78,271	)		(466,195	)
Total	$	165,912		$	(17,961	)

Legal Claims

~~F-19~~The Company, in the normal course of operations, is involved in alleged claims where both, the Company and its patients or vendors, are negotiating the settlement or resolution of disputes. In these cases, management does not believe the disposition of these matters will materially affect the financial position of the Company.

~~Table Of Contents~~Commitments

~~HYGEA~~The Company ~~HOLDINGS~~has ~~CORP~~entered into three operating leases for office space. ~~AND~~Future ~~SUBSIDIARIES~~payments on these operating leases amount to:

(FORMERLY PIPER ACQUISITION II, INC.)

2013		71,052
2014		218,121

2015		75,512
		37,756
	$	402,441

~~NOTES~~Concentrations TOof ~~CONSOLIDATED~~Credit ~~FINANCIAL STATEMENTS~~Risk

~~Deferred~~The ~~income~~Company ~~taxes~~derives substantially ~~reflect~~all ~~the net effect~~ of ~~temporary~~its ~~differences~~revenue ~~between~~and ~~the~~accounts ~~carrying~~receivable ~~amount~~from ofCarePlus. ~~assets~~Revenues ~~and~~earned ~~liabilities~~from ~~for~~CarePlus ~~financial~~amounted ~~reporting~~to ~~purposes~~$7,074,723 and $7,631,831 ~~the amounts used~~ for ~~income~~the ~~tax~~years ~~purposes.~~ended ~~The~~December ~~tax~~31, ~~effects~~2012 ofand ~~temporary~~2011, ~~differences~~respectively. ~~that~~CarePlus ~~give~~accounts ~~rise~~receivables amounted to ~~deferred~~$5,500,898 ~~income tax assets~~ and $3,886,784 ~~deferred~~as ~~income~~of ~~tax~~December ~~liabilities~~31, ~~are~~2012 asand ~~follows:~~2011, respectively.

	For the Year Ended December 31,
	2011		2010
Net operating loss carryforward	$	-	$	78,271
Other		-		-
Deferred tax asset	$	-	$	78,271

17.

Related Party Transactions

AtDuring 2011, the Company entered into a loan agreement with a company controlled by the Chairman of its Board of Directors. The loan agreement provides for maximum borrowings of $1,000,000 with interest accruing at 15.0% per annum. As of December 31, 2012 and 2011, the Company nohad ~~unutilized~~borrowed ~~net~~$275,000 ~~operating~~and ~~loss~~$255,000 ~~carryforward~~under this arrangement, due on September 30, 2013. See Note 12.

AAt December ~~reconciliation~~31, 2012 and 2011, the Company had borrowed a total of $369,940 and $545,627, respectively from the ~~statutory~~Company's ~~federal~~Chief ~~income~~Executive Officer, ~~tax~~or ~~rate~~from ~~with~~individuals ~~our~~related ~~effective~~to ~~income~~the ~~tax~~Company's ~~rate~~Chief Executive Officer or entities under his control for ~~the~~working ~~years~~capital purposes. ~~ended~~These ~~December 31,~~advances ~~2011,~~are unsecured and ~~2010~~have no maturity. Interest is asaccrued ~~follows:~~on these advances at 4.0% per annum. See Note 12.

	For the Year Ended December 31,
	2011			2010
Net income before income taxes
and non-controlling interest	$	725,303		$	1,277,384
Income Tax Expense at U.S.
statutory rate (34%)		246,603			434,311
State income taxes, net of deferred benefit		26,328			45,730
Amortization of tax goodwill		(28,748	)		(29,000	)
Change in valuation allowance		(78,271	)		(466,195	)
Other		-			(2,807	)
	$	165,912		$	(17,961	)

F-21

15HYGEA HOLDINGS CORP. ~~Equity~~AND SUBSIDIARIES

~~The~~(FORMERLY ~~Company~~PIPER ACQUISITION ~~has 250~~II,~~000,000~~ ~~shares of common stock, $0~~INC.0001 par value, and 10,000,000 shares of preferred stock, $0.0001 par value authorized. As of December 31, 2011, the Company had 148,295,243 shares of common stock outstanding and no shares of preferred stock outstanding. Hygea Health had 400,000 shares of preferred stock outstanding at the date of acquisition by the Company, which were converted into shares of the Company’s Common Stock concurrently with the acquisition by the Company.)

~~All~~NOTES ~~share~~TO ~~prices~~CONSOLIDATED FINANCIAL of issuances were arbitrarily determined as the Company was private and closely held by related parties. There is no relationship between the issuance prices and the Company’s assets, book value, net worth, or any other economic or recognized criteria of value and these prices do not necessarily accurately reflect the actual value of the Company’s Common Stock or the price that may be realized upon disposition of shares of the Company’s Common Stock.STATEMENTS

~~During 2010, Hygea Health issued 100,000 shares of preferred stock for total consideration of $100,000~~17. As aRelated ~~result~~Party ofTransactions ~~the~~– reverse acquisition entered into with the Company, these shares have been retroactively restated and reflected as the issuance of 4,706,506 shares of the Company’s Common Stock as of the date first issued.continued

~~During~~On ~~2010~~November 15, 2011, the Company ~~issued~~sold 1its investment in Cyfluent for its carrying cost of $342,~~354~~368 to an entity controlled by the Company's Chairman,~~577~~ its ~~shares~~Chief ofExecutive ~~Common~~Officer ~~Stock~~and asPresident, ~~purchase~~its ~~price~~Chief ~~consideration~~Operating ~~for~~Officer, ~~the~~and ~~acquisition~~two additional Directors of ~~Opa~~the Company. The ~~fair~~purchase price ~~value~~is ofpayable ~~the~~in ~~shares~~five ~~was~~annual ~~determined~~installments toof be $~~123~~60,~~781~~000 aseach, ofbeginning ~~the~~November ~~date~~15, ~~of purchase~~2012, ~~based~~with a final installment of $42,368 on anNovember ~~independent~~15, ~~third-party~~2017. ~~purchase~~See ~~price~~Note ~~valuation~~5.

~~F-20~~During the year ended December 31, 2012 and 2011, the Company made payments totaling $47,300 and $74,000, respectively, to a firm controlled by its Chief Executive Officer, President and Director for legal services to be rendered.

~~Table~~18. OfSubsequent ~~Contents~~Events

~~HYGEA~~On ~~HOLDINGS~~March ~~CORP~~5,2013, the Company engaged Dawson James, a broker dealer who is a member of Financial Industry Regulatory Authority ("FINRA"), to assist in raising capital. ~~AND~~The ~~SUBSIDIARIES~~Contract called for Dawson James to receive a ten percent commission to paid in cash (10%) on all offering sales. Dawson James shall also receive a common stock purchase warrant to purchase an amount of shares equal to ten percent (10%) of the shares of common stock issued at an exercise price of SO. 1875 per share. In addition, the Company will pay Dawson James a $20,000 due diligence fee plus additional pass through expenses plus 3% of the total capital raised for general expenses. On March 16,2013, the Company entered a Stock Purchase Agreement with Dawson James pursuant to which Dawson James acquired 35,998,000s shares of common (the "Dawson Shares") stock for a purchase price of $0.0001 per share. As of December 31st 2013 Dawson James subscribed $3,060,000 of the offering. Dawson James earned and was paid $306,000 in commissions and approximately $173,000 of offering expenses. Also as of December 31s' 2013, after two offering extensions, the offering was closed to further investment.

~~(FORMERLY~~On ~~PIPER~~December ~~ACQUISITION~~24th, 2013, IIOK Compounding from Tulsa, ~~INC~~Oklahoma, contracted to invest $3,000,000 into Hygea with an option to invest an additional $7,000,000 for $10,000,000 investment to purchase up to a 20% total stake in the Company.) The transaction has a per share price of approximately $.225 per share on a fully diluted basis. As of May 10th, 2013 OK has invested a total of $2,250,000 of its $3,000,000 contracted investment. As part of the OK investment Hygea has entered into a revenue sharing agreement for sales of compounding products OK makes to physicians via the Palm Medical IPA members.

~~NOTES~~In TOMarch ~~CONSOLIDATED~~of ~~FINANCIAL~~2014 the ~~STATEMENTS~~Company entered into an agreement with Millennium HealthCare, Inc. to provide Millenniums' ancillary services to Hygea's owned physicians and its IPA physician members in the Palm Medical Network.

During ~~2010,~~2013 and the ~~Company~~first ~~issued~~4 ~~27,508,340~~months ~~shares~~ of ~~Common~~2014 ~~Stock~~Hygea ~~for~~made ~~total consideration of $513,850. As of December 31, 2010,~~ the ~~Company~~five ~~had~~practice ~~recorded~~acquisitions alisted ~~balance~~below ~~due~~for ~~from shareholders of $305,000 related to this issuance, which had been recorded as~~ a ~~contra-equity~~total ~~balance~~combined ~~within the consolidated Statements~~ of ~~Equity. This~~15 ~~amount~~Primary ~~was~~Care ~~received during the year ended December 31, 2011.~~Physicians (PCPs)

~~Effective~~1. ~~December~~On ~~31,~~January ~~2010~~la, ~~the~~2013 ~~Company~~Hygea acquired 99Dr.9% ofMiguel ~~the~~Burgos ~~outstanding~~MD ~~common~~PA ~~shares of Hygea Health,~~ in ~~exchange for the issuance of 135~~Orlando,~~519,339~~ ~~shares~~FL ~~of common stock. The exchange of shares between the Company and Hygea Health was accounted~~ for as a ~~reverse~~total acquisition ~~under~~price ~~the purchase method~~ of ~~accounting. A reverse acquisition is considered~~$440, ~~and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Hygea Health securities for the Company’s net monetary assets, accompanied by a recapitalization~~000. ~~Accordingly, the transaction has been reflected as Hygea Health having issued a total of 12,775,904 shares of common stock to the Company’s shareholders.~~

162. ~~Commitments~~On ~~and~~January ~~Contingencies~~29th, 2013 Hygea acquired MD-to-Home LLC in Boca Raton, FL for a total acquisition price of $ 1,018,000.

~~Legal~~3. ~~Claims~~On March 1st, 2013 Hygea acquired Mid Florida Adult Medicine LLC (Dr. Raul Tamayo) in Orlando, FL for a total acquisition price of $1,500,000.

~~The~~4. ~~Company,~~On inMay ~~the normal course of operations~~29, is2013 ~~involved~~Hygea inacquired ~~alleged~~Excel ~~claims~~Hospitalists ~~where~~Partners ~~both,~~LLC ~~the Company and its patients or vendors, are negotiating the settlement or resolution~~ of ~~disputes. In these cases~~Orlando, ~~management~~FL ~~does~~for ~~not~~a ~~believe~~total ~~the~~acquisition ~~disposition~~price of ~~these matters will materially affect the financial position of the Company~~$1,500,000.

~~Commitments~~NOTE: This transaction was rescinded in November.

~~The Company has entered into three operating leases for office space. Future payments on these operating leases amount to:~~F-22

2012	$	372,488
2013		271,052
2014		218,121
2015		75,512
2016		37,756
	$	974,929

HYGEA HOLDINGS CORP. AND SUBSIDIARIES

~~Concentrations~~(FORMERLY ofPIPER ACQUISITION ~~Credit~~II, ~~Risk~~INC.)

~~The~~NOTES ~~Company~~TO ~~derives~~CONSOLIDATED FINANCIAL substantially all of its revenue and accounts receivable from CarePlus. Revenues earned from CarePlus amounted to $7,631,831 and $8,570,744 for the years ended December 31, 2011 and 2010, respectively. CarePlus accounts receivables amounted to $3,886,784 and $1,617,936 as of December 31, 2011 and 2010, respectively. STATEMENTS

1718. ~~Related~~Subsequent ~~Party~~Events ~~Transactions~~(Continued)

~~During~~5. ON ~~2011~~February 25*, ~~the~~2014 ~~Company~~Hygea ~~entered~~acquired Atlanta ~~into~~Clinical aResearch ~~loan~~Centers ~~agreement~~LLC ~~with~~and aAtlanta ~~company~~Cardiology ~~controlled~~and byPrimary ~~the~~Care ~~Chairman~~PC of(Dr. ~~its~~Bobby ~~Board~~Kahn) of ~~Directors. The~~Atlanta, ~~loan~~FL ~~agreement provides~~ for ~~maximum~~a ~~borrowings~~total acquisition price of $1,000,000 ~~with interest accruing at 15~~.~~0% per annum. As of December 31, 2011, the Company had borrowed $255,000 under this arrangement, due on September 30, 2012. See Note 12.~~

AtIn ~~December~~July ~~31,~~of ~~2011,~~2013 Hygea ~~the~~signed ~~Company had borrowed~~ a ~~total~~binding Letter of ~~$545,627~~Intent ~~from~~(LOI) ~~the~~to ~~Company’~~acquire Physician's ~~Chief~~Group ~~Executive~~Alliance ~~Officer~~(PGA), ora ~~from~~holding ~~individuals~~company ~~related~~of toa ~~the~~number ~~Company’s~~of ~~Chief~~Florida and ~~Executive~~Georgia ~~Officer~~practices, ormajority ~~entities~~owned ~~under~~and ~~his~~controlled ~~control~~by ~~for~~William ~~working~~Steele ~~capital~~a ~~purposes~~former Humana senior executive. ~~These~~ ~~advances~~After ~~are~~months ~~unsecured~~of extensive negotiations, it was concluded that because of PGA's existing corporate and ~~have~~financial nostructure ~~maturity. Interest~~it iswould ~~accrued~~not onbe ~~these~~able ~~advances~~to atbe 4audited.0% Accordingly ~~per~~the ~~annum. See~~LOI ~~Note~~was 12terminated in March 2014.

~~During~~Hygea ~~the~~is ~~year~~currently in ~~ended~~active ~~December~~negotiations ~~31,~~to ~~2011,~~acquire ~~the~~a ~~Company~~number ~~made~~of ~~payments~~practices ~~totaling~~and ~~$74,000~~physician togroups ain ~~firm~~Florida, ~~controlled~~New ~~by its Chief Executive Officer~~York, ~~President~~New Jersey and ~~Director for legal services to be rendered~~Georgia. These include:

On1. ~~November~~2 ~~15,~~IPAs ~~2011, the Company sold its investment~~ in ~~Cyfluent~~New ~~for~~York ~~its~~comprising ~~carrying cost~~ of ~~$342,368~~over to200 anphysicians ~~entity~~as ~~controlled~~well bythat ~~the~~will ~~Company’s~~include ~~Chairman, its Chief Executive Officer and President, its Chief Operating Officer, and two additional Directors of~~ the ~~Company. The~~outright ~~purchase~~acquisition ~~price is payable in five annual installments~~ of ~~$60,000~~up ~~each,~~to ~~beginning~~3O ~~November 15, 2012, with a final installment~~ of ~~$42,368~~those ~~on November 15, 2017~~doctors. ~~See Note 5.~~

~~F-21~~2. 12 separate practice in South and Central Florida that comprise over SO doctors.

~~Table~~3. OfA ~~Contents~~45 PCP member group being formed as an IPA in Atlanta, GA

~~Item 9~~4. ~~Changes~~ inCore ~~and~~group ~~Disagreements~~of ~~With~~3 ~~Accountants~~PCPs onthat ~~Accounting~~represent ~~and~~over ~~Financial~~30 ~~Disclosure~~PCPs in New Jersey.

~~None~~F-23

Item 9A9. ~~Controls~~ Changes in and ~~Procedures~~Disagreements With Accountants on Accounting and Financial Disclosure

~~Disclosure Controls and Procedures~~None

WeItem ~~maintain~~9A. ~~disclosure~~Controls ~~controls~~ and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and President (our principal executive officer, our principal financial officer and our principal accounting officer) to allow for timely decisions regarding required disclosure.Procedures

AsDisclosure ofControls ~~December 31, 2011, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision~~ and with the participation of our Chief Executive Officer and President (our principal executive officer, our principal financial officer and our principal accounting officer) of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and President (our principal executive officer, our principal financial officer and our principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.Procedures

~~Management’~~We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's ~~Report~~rules onand ~~Internal~~forms, ~~Control~~and ~~over~~that ~~Financial~~such ~~Reporting~~information is accumulated and communicated to our management, including our Chief Executive Officer and President (our principal executive officer, our principal financial officer and our principal accounting officer) to allow for timely decisions regarding required disclosure.

~~Our~~As ~~management~~of isDecember ~~responsible~~31, ~~for~~2012, ~~establishing~~the ~~and~~end ~~maintaining~~of ~~adequate~~our fiscal ~~internal~~year ~~control~~covered ~~over~~by ~~financial~~this ~~reporting. Responsibility~~report, ~~estimates~~we ~~and~~carried ~~judgments~~out byan ~~management~~evaluation, ~~are~~under ~~required to assess~~ the ~~expected~~supervision ~~benefits~~ and ~~related~~with ~~costs~~the ofparticipation ~~control procedures. The objectives~~ of ~~internal~~our ~~control~~Chief Executive ~~include~~Officer ~~providing~~and ~~management~~President ~~with~~(our ~~reasonable,~~principal ~~but~~executive ~~not~~officer) ~~absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,~~ and ~~that~~our ~~transactions~~Chief ~~are~~Financial ~~executed~~Officer in(our ~~accordance~~principal ~~with~~financial ~~management’s authorization~~ officer and ~~recorded~~our ~~properly~~principal toaccounting ~~permit~~officer) of the ~~preparation~~effectiveness of ~~consolidated~~the ~~financial~~design ~~statements~~and inoperation ~~conformity~~of ~~with~~our ~~accounting~~disclosure ~~principles~~controls ~~generally~~and ~~accepted in the United States~~procedures. ~~Our~~Based on ~~management assessed~~ the ~~effectiveness~~foregoing, ofour our ~~internal~~Chief ~~control~~Executive ~~over~~Officer ~~financial~~and ~~reporting~~President as(our ofprincipal ~~December~~executive ~~31,~~officer) ~~2011. In~~and ~~making~~our ~~this~~Chief ~~assessment,~~Financial Officer (our ~~management~~principal ~~used~~financial ~~the~~officer ~~criteria~~and ~~set~~our ~~forth~~principal byaccounting ~~the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”~~officer) inconcluded ~~Internal~~that ~~Control-Integrated~~our ~~Framework. Our~~disclosure ~~management~~controls ~~has~~and ~~concluded~~procedures ~~that,~~were effective as of ~~December~~the ~~31,~~end ~~2011,~~of ~~our~~the ~~internal~~period ~~control~~covered ~~over~~by ~~financial~~this ~~reporting~~annual ~~was effective~~report.

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

~~Inherent~~Our ~~limitations~~management onis responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of ~~controls~~our internal control over financial reporting as of December 31, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of December 31, 2012, our internal control over financial reporting was effective.

~~Internal~~This ~~control~~annual ~~over~~report ~~financial~~does ~~reporting~~not ~~has inherent limitations which~~ include ~~but~~an attestation isreport ~~not limited to the use~~ of ~~independent~~our ~~professionals~~company’s ~~for~~registered ~~advice~~public ~~and~~accounting ~~guidance,~~firm ~~interpretation~~regarding ofinternal ~~existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal~~ control over financial reporting. Management’s report iswas anot ~~process which involves human diligence and compliance and is~~ subject to ~~lapses~~attestation ~~in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented~~ by ~~collusion~~our orCompany’s ~~improper~~registered ~~management~~public ~~override. Because~~accounting offirm ~~its~~pursuant ~~inherent~~to ~~limitations,~~rules ~~internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features~~ of the ~~financial reporting process~~ Securities and itExchange isCommission ~~possible~~that topermit ~~design~~our ~~into~~company ~~the process safeguards~~ to ~~reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can~~ provide only ~~reasonable~~management’s ~~assurance~~report with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in ~~conditions,~~this orannual ~~that the degree of compliance with the policies or procedures may deteriorate~~report.

31Inherent limitations on effectiveness of controls

~~Table~~Internal Ofcontrol ~~Contents~~over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process, which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Changes in Internal Control over Financial Reporting~~31

~~There~~Changes ~~have been no changes~~ in ~~our~~Internal ~~internal~~Control ~~controls~~ over Financial ~~financial reporting that occurred during the year ended December 31, 2011, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.~~Reporting

~~Item~~There ~~9B. Other~~have ~~Information~~been no changes in our internal controls over financial reporting that occurred during the year ended December 31, 2011, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

~~None~~Item 9B. Other Information

~~PART III~~None.

~~Item~~PART ~~10. Directors, Executive Officers and Corporate Governance~~III

Item 10. Directors, Executive Officers and ~~Directors~~Corporate Governance

~~Below~~Executive ~~are~~Officers ~~the names~~ and ~~certain information regarding the Company’s executive officers and directors.~~Directors

Name	Age	Position
Daniel T. McGowan	63	Chairman of the Board of Directors
Manuel E. Iglesias	57	Chief Executive Officer, President and Director
Edward (Ted) Moffly	57	Director
Martha Castillo	37	Chief Operating Officer and Director
Frank Kelly Jr.	64	Director
Dr. Carl Rosencrantz	59	Director
Francisco H. Reccio	66	Director
Glenn Marrichi	60	Director
Lacy Loar	58	Compliance Officer and Director
Frank B. Olsen	64	Senior Vice-President of Operations

Below are the names and certain information regarding the Company’s executive officers and directors.

Officers are elected annually by the Board of Directors (subject to the terms of any employment agreement), at its annual meeting, to hold such office until an officer’s successor has been duly appointed and qualified, unless an officer sooner dies, resigns or is removed by the Board.

Name	Age	Position
Daniel T. McGowan	63	Chairman of the Board of Directors
Manuel E. Iglesias	57	Chief Executive Officer, President and Director
Edward (Ted) Moffly	57	Director and Chief Financial Officer
Martha Castillo	37	Chief Operating Officer and Director
Frank Kelly Jr.	64	Director
Dr. Carl Rosencrantz	59	Director
Francisco H. Reccio	66	Director
Glenn Marrichi	60	Director
Lacy Loar	58	Compliance Officer and Director
Frank B. Olsen	64	Senior Vice-President of Operations

~~Background~~Officers are elected annually by the Board of ~~Executive~~Directors ~~Officers~~(subject to the terms of any employment agreement), at its annual meeting, to hold such office until an officer’s successor has been duly appointed and ~~Directors~~qualified, unless an officer sooner dies, resigns or is removed by the Board.

~~Daniel~~Background ~~T. McGowan – Chairman, Board~~ of ~~Director.~~Executive ~~Since~~Officers ~~2010, Daniel McGowan has served as chairman~~ and a director of the Company. Entering his 41st year of leadership in health and human services delivery, Mr. McGowan has been responsible for the transformation of a variety of key organizations, including the dramatic transformation of HIP Health Plans of New York from a troubled company to one of the nation’s leading health care companies. Under his stewardship as President, HIP grew from less than $1.0 billion in annual revenue to over $5.0 billion and acquired Connecticare, Vytra and Perfect Health plans in a ten-year period, while paying off $400,000 in debt and moving from the 49th to the 440th percentile of the organization’s reserve requirement. When HIP and GHI merged in 2006, he was named the first President of Emblem Health Services Corp., LLC with annual revenues of $8.0 billion serving 1,600,000 members in New York. Today, he does private consulting and chairs a number of critically-important boards in healthcare, development and education, including the National Medical Fellowships, the New York Primary Care Development Corporation and the New York Chapter of the Arthritis Foundation. Prior to his work for HIP and Emblem Health, he led the development of Catholic Charities for the Long Island Diocese into the largest health and human services agency on Long Island by expanding its programs and quadrupling its resources. He served as vice president for Planning and Program Development at Long Island Jewish Medical Center and as executive director of both the Long Island and New York City Health Systems agencies. He was elected president of the New York State Association of Health Planning Agencies and chair of the American Health Plan Association. Mr. McGowan was a key leader for several Midwest health planning agencies, including the Bureau of Planning Coordination for the State of Wisconsin when it was ranked as the top such agency in the country by the Department of Health and Human Services. He has lectured and written extensively on health-system and hospital planning, development and regulation, holding faculty positions at several major universities. Mr. McGowan graduated from Marquette University with a Bachelor of Arts in Psychology and received a Master of Science from Northern Illinois University in Administration of Health and Mental Health Services. Mr. McGowan served as President of Emblem Health, Inc. from 2007 to 2008 and served as President and Chief Operating Officer of Health Insurance Plan (HIP) of New York from 1997 to 2008. He has been consulting and acting on many private and public boards since 2008. Directors

32Daniel T. McGowan – Chairman, Board of Director . Since 2010, Daniel McGowan has served as chairman and a director of the Company. Entering his 41st year of leadership in health and human services delivery, Mr. McGowan has been responsible for the transformation of a variety of key organizations, including the dramatic transformation of HIP Health Plans of New York from a troubled company to one of the nation’s leading health care companies. Under his stewardship as President, HIP grew from less than $1.0 billion in annual revenue to over $5.0 billion and acquired Connecticare, Vytra and Perfect Health plans in a ten-year period, while paying off over $400 million in debt and moving from the 49th to the 440th percentile of the organization’s reserve requirement. When HIP and GHI merged in 2006, he was named the first President of Emblem Health Services Corp., LLC with annual revenues of $8.0 billion serving 1,600,000 over 5.5 million members in New York and Connecticut. Today, he does private consulting and chairs a number of critically-important boards in healthcare, development and education, including the National Medical Fellowships, the New York Primary Care Development Corporation and the New York Chapter of the Arthritis Foundation. Prior to his work for HIP and Emblem Health, he led the development of Catholic Charities for the Long Island Diocese into the largest health and human services agency on Long Island by expanding its programs and quadrupling its resources. He served as vice president for Planning and Program Development at Long Island Jewish Medical Center and as executive director of both the Long Island and New York City Health Systems agencies. He was elected president of the New York State Association of Health Planning Agencies and chair of the American Health Plan Association. Mr. McGowan was a key leader for several Midwest health planning agencies, including the Bureau of Planning Coordination for the State of Wisconsin when it was ranked as the top such agency in the country by the Department of Health and Human Services. He has lectured and written extensively on health-system and hospital planning, development and regulation, holding faculty positions at several major universities. Mr. McGowan graduated from Marquette University with a Bachelor of Arts in Psychology and received a Master of Science from Northern Illinois University in Administration of Health and Mental Health Services. Mr. McGowan served as President of Emblem Health Services Corporation, LLC, from 2007 to 2008 and served as President and Chief Operating Officer of Health Insurance Plan (HIP) of New York from 1997 to 2008. He has been consulting and acting on many private and public boards since 2008.

~~Table Of Contents~~32

Manuel E. Iglesias – President/Chief Executive Officer, Director. Since 2007, Manuel Iglesias has served as an officer and director of the Company. He brings extensive legal business and political experience including regulatory matters having represented clients before federal and state agencies primarily in the securities and financial regulatory areas. Mr. Iglesias focuses his work on healthcare related business transactions, contracts and asset protection. He has been a member of Health Law and Corporate Practices with law firms in the State of Florida. Mr. Iglesias has devoted a major part of his life in the business development and venture capital arena, structuring and raising capital for small and midsized businesses. He is a member of The Florida Bar and The Illinois Bar. Mr. Iglesias is a graduate of the University of Chicago School of Law, and he earned a Master’s in Business Administration from the University of Chicago School of Business and a Bachelor’s in Foreign Service from Georgetown University. Mr. Iglesias has also studied in Switzerland, Germany and Austria. Prior to 2007, Mr. Iglesias was of counsel to the law firms of Becker Polikoff (2004 through 2006) and Ruden McClosky (2006 through 2009).

Edward (Ted) Moffly CFO – Director. Since 2007, Edward Moffly has served as an officer and director of the Company. Ted was the former CFO of IP Gear (Pink Sheets QMXI), an enterprise VoIP company. As CFO, Mr. Moffly engineered the acquisition of Quasar/BOS, an Israeli VoIP gateway company, brought the company public via a downstream merger and structured contracts with companies such as Siemens and Excel. Before IP Gear, Mr. Moffly was founding partner and CEO of Spin Networks, a security software company based out of Toronto, Canada and Belo Horizonte, Brazil. Mr. Moffly was ~~also~~ the CEO of Synergyx, an IP integration company. The company designed, built and managed IP networks in over 50 countries. Mr. Moffly has extensive experience managing sophisticated construction projects including hydroelectric, medical technology and automated production facilities. Mr. ~~Moffly sits on the board of directors for Socratic Solutions, a supplemental education company and has served as the company’s interim CFO.~~ He is on the board of directors for ~~Denarii~~Moveo ~~Systems~~LLC, an international ~~mobile~~transportation ~~payment~~services ~~solutions~~ provider company. Mr. Moffly did his undergraduate work at Columbia University and has an MBA in Finance from the University of Chicago. ~~Mr. Moffly is currently Chief Financial Officer of Denari, a position he has held since 2006. Mr. Moffly has been Chief Financial Officer of the Company at various times from 2007 through 2010.~~

Martha Castillo – Chief Operating Officer, Director. Ms. Castillo oversees health care provider relations, doctor credentialing, marketing and daily operational activities for the Company. Prior to joining the Company, in 2007, Ms. Castillo worked for approximately eight years both as an independent agent representing clients such as AFLAC, AIG, ING, and Nationwide Life, and as a marketing coordinator at Mercy Health in Miami, Florida. Ms. Castillo brings a background in accounting to her position, having served for four years as an accountant at DuFry America. Ms. Castillo has a degree in accounting from University of Central Texas and a degree in business administration from Saint Peters College, New Jersey.

Frank Kelly, Jr. – Director . Frank Kelly became Director and Chairman of the Board in 2007. Mr. Kelly is the President and CEO of MFK Global, Inc. since 1999, a diversified management and strategic marketing consulting company, where he manages and implements global projects ranging from management reorganization to innovative product introductions. Prior to MFK Global, Mr. Kelly worked 24 years with The Coca-Cola Company, holding various executive positions with both US and global responsibilities including Japan. Mr. Kelly attended Harvard University Business School MBA program and holds a B.S. in Accounting and Finance from Bentley University.

Dr. Carl Rosencrantz – Director of Hygea, Chairman of the Board of Directors of Palm Medical Network . Dr. Carl Rosencrantz is a practicing radiologist in, and chairman of, the West Boca Medical Center Department of Imaging. In that capacity he is also the Medical Director of Imaging for Delray Community Hospital. Prior to forming West Boca, Dr. Rosencrantz was a staff radiologist at the Pompano Beach Medical Center. He is a member of the Tenet Radiology Advisory board. Through his relationship with Tenet, Dr. Rosencrantz was a founding member of the Palm Medical Group, and has served on its executive committee in various capacities since 1989. He began his career as an OBGYN resident at Mount Sinai and after completing his OB residency, he continued at Mount Sinai as a resident in radiology. He later became a staff radiologist at West Boca Medical Center where he rose to Chief of Staff. Dr. Rosencrantz has a BA from Amherst College and an MD from the University of Miami. Dr. Rosencrantz’ principal occupation over the last five years has been serving in the capacity as Chairman and Medical Director of West Boca Medical Center Department of Imaging.

~~Table~~Francisco OfH. ~~Contents~~Recio – Director . Mr. Recio has over thirty years of international experience in finance, accounting, management and technology. He began his career at Deloitte, Haskins & Sells in the Management Consulting Practice and rose to Senior Manager. Mr. Recio left Deloitte for KPMG, joining as a Senior Manager in the Management Consulting Department and became a partner one year later. He was Partner in Charge of Florida Consulting and Latin America Consulting and was the Chairman of the Worldwide Operations Management Practice Committee. Mr. Recio then joined Oracle Corporation as Group Vice President of Latin America Services with responsibility for over 1,000 professionals as direct reports. During his stewardship, Oracle revenues in Latin America Services increased tenfold. Mr. Recio left Oracle to found and become chairman of Avisena, Inc., a healthcare practice management technology company. Mr. Recio is a member of the Board of Directors of Palmetto General Hospital, the largest Tenet hospital in Florida; sits on various advisory boards including the Lally School of Management and Technology and at his alma mater Rensselaer Polytechnic Institute (“RPI”); served as a member of the Board of Directors of the Cedars Medical Center Foundation (largest HCA hospital in Florida); and is a former member of the Board of Directors of the Health Foundation of South Florida. Mr. Recio has a bachelor’s degree in Engineering and an MS in Management from RPI.

~~Francisco~~Glenn H.Marrichi ~~Recio~~ – ~~Director. Mr.~~Chief Strategic ~~Recio has over thirty years of international experience in finance~~Officer, ~~accounting, management and technology~~Director. He ~~began~~Since ~~his career at Deloitte~~2010, ~~Haskins~~Glenn &Marrichi ~~Sells~~has inserved ~~the~~as ~~Management~~an ~~Consulting~~officer ~~Practice~~ and ~~rose~~director toof ~~Senior~~the ~~Manager~~Company. ~~Mr.~~He brings ~~Recio~~extensive ~~left~~strategic ~~Deloitte~~and ~~for~~brand-marketing ~~KPMG,~~experience ~~joining as a Senior Manager~~ in the ~~Management~~healthcare ~~Consulting Department and became a partner one year later~~category. HeAs ~~was~~an ~~Partner~~executive inat ~~Charge~~major ofinternational advertising ~~Florida~~agencies ~~Consulting~~in ~~and~~Chicago, ~~Latin~~New ~~America~~York, ~~Consulting~~Los Angeles and ~~was~~Detroit, ~~the Chairman of the Worldwide Operations Management Practice Committee.~~ Mr. ~~Recio~~Marrichi ~~then~~has ~~joined~~engaged ~~Oracle~~in ~~Corporation~~brand-building asand ~~Group~~strategic ~~Vice~~marketing on ~~President~~behalf of ~~Latin~~these ~~America~~well-known ~~Services~~brands ~~with~~— ~~responsibility~~Johnson ~~for~~& ~~over~~Johnson, 1Celebrex,~~000~~ ~~professionals~~Baxter asInternational, ~~direct~~Ciba ~~reports. During his stewardship~~Vision, ~~Oracle~~The ~~revenues~~Arthritis Foundation inand ~~Latin~~McNeil ~~America~~Consumer ~~Services increased tenfold~~Products. ~~Mr.~~A ~~Recio~~national ~~left~~speaker ~~Oracle~~on tothe ~~found~~subject ~~and~~of ~~become~~brand ~~chairman~~value ~~of Avisena~~innovation, ~~Inc.,~~he’s a ~~healthcare~~winner of ~~practice~~the ~~management~~industry’s ~~technology~~prestigious ~~company. Mr.~~awards ~~Recio~~including isthe aAmerican ~~member~~Marketing ofAssociation’s ~~the~~Gold ~~Board~~EFFIE offor ~~Directors~~advertising of& marketing ~~Palmetto~~effectiveness. In ~~General Hospital~~addition, ~~the~~he ~~largest~~has ~~Tenet~~served ~~hospital in Florida; sits~~ on ~~various advisory boards including~~ the ~~Lally~~national ~~School~~board of ~~Management~~both ~~and~~the ~~Technology~~Arthritis Foundation and atCommunity Health ~~his~~Charities, ~~alma~~the ~~mater~~leading ~~Rensselaer~~workplace-based ~~Polytechnic~~charity ~~Institute~~devoted ~~(“RPI”);~~to ~~served~~health ascauses athat ~~member~~include of the ~~Board~~American ofCancer ~~Directors~~Society, ofAmerican Diabetes ~~the~~Association ~~Cedars Medical Center Foundation (largest HCA hospital in Florida);~~ and isthe aAmerican ~~former~~Heart ~~member~~Association. Mr. ofMarrichi’s ~~the~~principal ~~Board~~occupation offor ~~Directors of~~ the ~~Health~~last ~~Foundation~~five years ~~of South Florida. Mr. Recio~~ has abeen ~~bachelor’s~~President ~~degree~~and inChief ~~Engineering~~Executive ~~and~~Officer anof MSThe inMarketing ~~Management~~Identity ~~from~~Partnership, ~~RPI~~Inc.

~~Glenn~~Lacy ~~Marrichi~~Loar – ~~Chief Strategic~~ Compliance Officer, Director. Since ~~2010~~2007, ~~Glenn~~Lacy ~~Marrichi~~Loar has served as an officer and director of the Company. HeAs ~~brings~~a corporate ~~extensive~~generalist, ~~strategic~~she ~~and~~brings ~~brand-marketing~~a ~~experience~~background in ~~the~~contract ~~healthcare~~negotiations, ~~category~~mergers and acquisitions, litigation, and public company issues. AsFrom 1998 anuntil ~~executive~~2007, atshe ~~major~~has ~~international~~served ~~advertising~~as ~~agencies~~a inkey ~~Chicago,~~advisor ~~New~~to ~~York,~~senior ~~Los~~executives ~~Angeles~~at American Access, Inc. and Ibid ~~Detroit~~America, MrInc., ~~Marrichi~~in ~~has~~which ~~engaged~~she assisted in ~~brand-building~~taking ~~and~~public ~~strategic~~through ~~marketing~~a onreverse ~~behalf~~merger. A offormer ~~these~~newspaper ~~well-known~~reporter ~~brands~~and editor ~~---~~from ~~Johnson~~1990 &until ~~Johnson~~1998, ~~Celebrex,~~Ms. ~~Baxter~~Loar ~~International,~~has ~~Ciba~~used ~~Vision,~~her ~~The~~writing ~~Arthritis~~skills ~~Foundation~~to ~~and~~draft ~~McNeil~~private ~~Consumer~~placement ~~Products. A~~memoranda, ~~national~~merger ~~speaker~~agreements, onas ~~the~~well as ~~subject~~registration ofstatements ~~brand~~as ~~value~~prescribed ~~innovation,~~by ~~he’s~~the aSecurities ~~winner~~and ofExchange ~~the~~Commission. She ~~industry’s~~has ~~prestigious~~drafted ~~awards~~corporate ~~including~~governance codes to comply with the ~~American~~Sarbanes-Oxley ~~Marketing~~Act ~~Association’s~~of ~~Gold~~2002 ~~EFFIE~~and ~~for~~press ~~advertising~~releases &to ~~marketing~~comply ~~effectiveness~~with Fair Disclosure laws. InMs. ~~addition,~~Loar was healso ~~has~~an ~~served~~affiliate onof the ~~national~~former ~~board~~Law Offices of ~~both~~Manuel ~~the~~Iglesias, ~~Arthritis~~P.A., ~~Foundation~~Miami, ~~and~~Florida, ~~Community~~a ~~Health~~boutique ~~Charities,~~law ~~the~~firm ~~leading~~specializing ~~workplace-based~~in ~~charity~~corporate and ~~devoted~~securities law. She has collaborated to ~~health~~provide ~~causes~~pro ~~that~~bono ~~include~~legal ~~the~~services ~~American~~to ~~Cancer~~select ~~Society~~indigent clients, ~~American~~concerning ~~Diabetes~~matters as ~~Association~~diverse as Family Law (child custody and ~~the~~domestic ~~American~~violence), ~~Heart~~Property, ~~Association~~and Civil Litigation. MrMs. ~~Marrichi~~Loar earned a Bachelor’s Degree ~~principal~~from ~~occupation~~Eckerd ~~for~~College ~~the~~and ~~last~~Southern ~~five~~California ~~years~~University ~~has~~for ~~been~~Professional ~~President~~Studies, and ~~Chief~~a ~~Executive~~law ~~Officer~~degree as a top-tier graduate of ~~The~~Southern ~~Marketing~~California ~~Identity~~University ~~Partnership,~~College ~~Inc~~of Law.

~~Lacy~~Dr. ~~Loar~~Francis –B. ~~Compliance~~Olsen ~~Officer,~~- ~~Director. Since~~Senior Vice- ~~2007,~~President ~~Lacy~~for ~~Loar~~Operations . Dr. Olsen has ~~served~~spent asover anthirty ~~officer~~years ~~and~~in ~~director~~various ofpositions in the ~~Company. As~~healthcare aarena: clinical ~~corporate generalist~~practice, ~~she~~residency ~~brings~~education, ahospital ~~background~~outpatient indepartment ~~contract~~administration ~~negotiations,~~and ~~mergers~~finally ~~and~~senior ~~acquisitions,~~executive ~~litigation,~~of ~~and~~an ~~public~~$8 ~~company~~billion health ~~issues~~insurer. ~~From 1998~~Dr. ~~until~~Olsen ~~2007, she has~~ served as a Senior ~~key~~Vice ~~advisor~~President tofor ~~senior~~Emblem ~~executives~~Health atNY ~~American~~from ~~Access,~~July ~~Inc.~~1997 ~~and~~to ~~Ibid~~November ~~America, Inc~~2008., From November in2008 ~~which~~to ~~she~~present, ~~assisted~~Dr. inOlsen ~~taking~~has ~~public~~served ~~through~~as aThe ~~reverse~~Managing ~~merger. A~~Partner ~~former~~for ~~newspaper~~Ask ~~reporter~~4 ~~and~~Risk ~~editor~~Services, ~~from~~LLC. As ~~1990~~a ~~until~~result ~~1998,~~of ~~Ms.~~this career ~~Loar~~path he has ~~used~~developed ~~her~~interest ~~writing~~and ~~skills~~expertise toin ~~draft~~process ~~private~~analysis ~~placement~~and ~~memoranda~~re-engineering, ~~merger~~healthcare ~~agreements,~~finance asand ~~well~~coordination of aspayments ~~registration~~in ~~statements~~a asvery ~~prescribed~~complex byreimbursement ~~the~~environment. He ~~Securities~~spent ~~and~~over ~~Exchange~~11 ~~Commission. She~~years ~~has~~in ~~drafted~~managed ~~corporate~~care ~~governance~~as ~~codes~~senior toexecutive responsible ~~comply~~for ~~with~~regulatory ~~the~~compliance, ~~Sarbanes-Oxley~~as ~~Act~~well ofas ~~2002~~operational and ~~press~~financial ~~releases~~performance toof ~~comply~~all ~~with~~government ~~Fair~~sponsored ~~Disclosure~~products ~~laws~~(Medicare, Medicaid. ~~Ms.~~ ~~Loar~~Child ~~was~~and ~~also~~Family anHealth ~~affiliate~~Plus ofand ~~the~~Workers ~~former~~Compensation). Dr. ~~Law~~Olsen ~~Offices~~has ofoccupied ~~Manuel~~VP ~~Iglesias,~~and ~~P.A.,~~SVP ~~Miami,~~slots ~~Florida,~~for aProduct Management ~~boutique~~at ~~law~~HIP ~~firm~~Health ~~specializing~~Plan inof ~~corporate~~New ~~and~~York ~~securities~~which ~~law. She~~merged ~~has~~with ~~collaborated~~GHI to ~~provide~~become ~~pro~~Emblem ~~bono~~Health. At ~~legal~~various ~~services~~times toduring ~~select~~this period ~~indigent~~he ~~clients,~~was ~~concerning~~given ~~matters~~responsibility asfor ~~diverse~~enrollment, ascustomer ~~Family~~service, ~~Law~~direct ~~(child~~marketing ~~custody~~ and ~~domestic~~the ~~violence),~~government ~~Property,~~products ~~and~~sales ~~Civil Litigation~~force. MsDr. Olsen ~~Loar~~serves ~~earned~~as a ~~Bachelor’s~~director ~~Degree~~on ~~from~~the ~~Eckerd~~boards ~~College~~of Care for the Homeless and ~~Southern~~the ~~California~~State University ~~for~~of ~~Professional~~New ~~Studies,~~York ~~and~~at aStony ~~law~~Brook ~~degree~~School asof Dental aMedicine ~~top-tier~~Alumni ~~graduate~~Association. Previously, he held directorships of ~~Southern~~Vytra ~~California~~Health ~~University~~Plan, ~~College~~the ofPerfect ~~Law~~Health Insurance Company and Health Watch Systems.

Dr. Francis B. Olsen - Senior Vice- President for Operations. Dr. Olsen has spent over thirty years in various positions in the healthcare arena: clinical practice, residency education, hospital outpatient department administration and finally senior executive of an $8 billion health insurer. Dr. Olsen served as a Senior Vice President for Emblem Health NY from July 1997 to November 2008. From November 2008 to present, Dr. Olsen has served as The Managing Partner for Ask 4 Risk Services, LLC. As a result of this career path he has developed interest and expertise in process analysis and re-engineering, healthcare finance and coordination of payments in a very complex reimbursement environment. He spent over 11 years in managed care as senior executive responsible for regulatory compliance, as well as operational and financial performance of all government sponsored products (Medicare, Medicaid. Child and Family Health Plus and Workers Compensation). Dr. Olsen has occupied VP and SVP slots for Product Management at HIP Health Plan of New York which merged with GHI to become Emblem Health. At various times during this period he was given responsibility for enrollment, customer service, direct marketing and the government products sales force. Dr. Olsen serves as a director on the boards of Care for the Homeless and the State University of New York at Stony Brook School of Dental Medicine Alumni Association. Previously, he held directorships of Vytra Health Plan, the Perfect Health Insurance Company and Health Watch Systems.34

34Our directors are elected for a term of one year and until their successors are elected and qualified.

~~Table~~Family ~~Of Contents~~Relationships

~~Our~~There ~~directors~~ are ~~elected~~no ~~for~~family arelationships ~~term~~between any of ~~one~~our ~~year~~directors, ~~and~~executive ~~until~~officers ~~their~~and ~~successors~~proposed ~~are~~directors ~~elected~~or ~~and~~executive ~~qualified~~officers.

~~Family~~Involvement ~~Relationships~~in Certain Legal Proceedings

~~There~~None ~~are no family relationships between any~~ of our directors, executive officers, promoters ~~and~~or ~~proposed~~control ~~directors~~persons orhas ~~executive~~been ~~officers.~~involved in any of the following events during the past five years:

~~Involvement~~· inany ~~Certain~~bankruptcy ~~Legal~~petition ~~Proceedings~~filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

~~None~~· ofany ~~our~~conviction ~~directors,~~in ~~executive~~a ~~officers,~~criminal ~~promoters~~proceeding or ~~control~~being ~~persons~~subject ~~has~~to ~~been~~a ~~involved~~pending incriminal ~~any~~proceeding, ofexcluding ~~the~~traffic ~~following~~violations ~~events~~and ~~during~~other ~~the~~minor ~~past five years:~~offences;

· ~~any~~being ~~bankruptcy~~subject ~~petition~~to ~~filed~~any byorder, judgment or ~~against~~decree, ~~any~~not ~~business~~subsequently ofreversed, ~~which~~suspended ~~such~~or ~~person~~vacated, ~~was~~of aany ~~general~~court ~~partner~~of competent jurisdiction, permanently or ~~executive~~temporarily ~~officer~~enjoining, ~~either~~barring, atsuspending ~~the~~or ~~time~~otherwise oflimiting ~~the~~his ~~bankruptcy~~involvement orin ~~within~~any ~~two~~type ~~years~~of ~~prior~~business, tosecurities ~~that~~or ~~time~~banking activities; or

· ~~any~~being ~~conviction~~found by a court of competent jurisdiction in a ~~criminal~~civil ~~proceeding~~action, the Securities and Exchange Commission or ~~being~~the ~~subject~~Commodity Futures Trading Commission to ahave ~~pending~~violated ~~criminal~~federal ~~proceeding,~~or ~~excluding~~state ~~traffic~~securities ~~violations~~or commodities law, and ~~other~~the ~~minor~~judgment ~~offences;~~has not been reversed, suspended, or vacated.

·Compliance ~~being~~with ~~subject~~Section to16(a) ~~any order, judgment or decree, not subsequently reversed, suspended or vacated,~~ of ~~any~~the Securities ~~court~~Exchange ofAct ~~competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type~~ of ~~business, securities or banking activities; or~~1934

·Section ~~being~~16(a) ~~found~~of bythe aSecurities ~~court~~Exchange Act of ~~competent~~1934 ~~jurisdiction~~requires inour aexecutive ~~civil~~officers ~~action,~~and ~~the~~directors and persons who own more than 10% of our Common Stock to file with the Securities and Exchange Commission orinitial

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