- Amended Annual Report (10-K/A)

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

FORM 10-K /A (1)

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO __________

COMMISSION FILE NUMBER 333-107826

PATIENT PORTAL TECHNOLOGIES, INC.

 DELAWARE 02-0656132
 (STATE OF INCORPORATION) (I.R.S. ID)

8276 Willett Parkway, Baldwinsville, NY 13027

(315) 638-6708

Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK OTC: BB

Securities registered pursuant to Section 12(g) of the Act:
NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange 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 past 90 days. Yes |X| No |_|

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

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

Large accelerated filer Accelerated filer |_| Non-accelerated filer |_| Smaller reporting company x

(Do not check if a smaller reporting company)

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

As of June 30, 2008, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was $17,192,155 based on the closing sale price as reported on the OTC: BB. As of April 6, 2009, there were 42,951,130 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on July 16, 2009 are incorporated by reference into Part III.

Patient Portal Technologies, Inc.

FORM 10-K / A (1)

For The Fiscal Year Ended December 31, 2008

INDEX

PART I

Item 1. Business

Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders

PART II

Item 5. Market for Registrant's Common Equity, Related
 Stockholder Matters, and Issuer Purchases of Equity
 Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
 Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures about
 Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on
 Accounting and Financial Disclosure
Item 9A. Controls and Procedures
 Report of Management on Internal Control over
 Financial Reporting Report of Independent Registered
 Public Accounting Firm
Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate
 Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
 Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and
 Director Independence
Item 14. Principal Accounting Fees and Services

PART IV

Item 15. Exhibits and Financial Statement Schedules
 Signatures

ITEM 1 BUSINESS

CORPORATE INFORMATION

The Company is a Delaware corporation which was originally organized on November 22, 2002 as Suncoast Naturals, Inc. and commenced business operations in January, 2003. Pursuant to a Registration Statement filed in accordance with the Securities Act of 1933, as amended, and declared effective by the Securities and Exchange Commission on July 3, 2004, the Company in October, 2004 distributed 499,282 Shares of its Common Stock to shareholders of record of The Quigley Corporation.

On December 8, 2006, Patient Portal Connect, Inc. of Palm Beach Gardens, Florida, a Delaware corporation organized in May 2006, acquired approximately 80% of the capital stock of Patient Portal Technologies, Inc. in a tax free exchange that resulted in the shareholders of Patient Portal Connect, Inc. owning 17,500,000 shares of Common Stock of Patient Portal Technologies, Inc., as part of a "reverse" transaction. As a result of this transaction, Patient Portal Connect, Inc. (hereinafter referred to as "PPC") became a wholly-owned operating subsidiary of the Company.

Through this acquisition of PPC, we became a leading provider of innovative technology solutions for healthcare institutions. The Company's products and services are delivered over the Company's state-of-the-art proprietary technology platform. This platform is used by the Company as the delivery system for its services. The Company uses the technology to create a communication portal that allows many third parties to communicate and exchange information in a cost effective way. This solution allows the Company to offer many services that optimize patient satisfaction and outcomes, reduces administrative costs, and maximizes reimbursement for their customers.

To provide funds for acquisition purposes, on November 1, 2007, the Company entered into a $7,000,000 convertible debenture agreement with Dutchess Private Equities Fund, LTD ("Dutchess"). If Dutchess elects to convert its debentures (the "Debentures") into shares of common stock, par value $0.001 (the "Common Stock") of the Company, the conversion price for their shares of Common Stock is the lower of 85% of the lowest closing bid during the previous twenty day period prior to the conversion or $.46. Part of the financing transaction included issuing warrants to purchase up to 22,826,086 shares of the Company's common stock at a price of $.46 per share. The warrant agreement expires on November 1, 2012. Dutchess' overall ownership in the Company is limited to 4.99% of the then outstanding shares of Common Stock, in accordance with the financing documents. As a result, the number of shares issuable to Dutchess, upon conversion of the Debenture and exercising of its warrants, could potentially be materially adverse to current and potential investors. Although there is a restriction on ownership of 4.99%, Dutchess is free to sell any shares issued to them into the market, thereby enabling Dutchess to systematically convert the remaining Debentures or exercise additional Warrants into shares of Common Stock.

On March 12, 2009 the Company entered into an agreement with Dutchess Private Equities Fund, Ltd. to restructure all of its outstanding debt with the Company. This transaction will have a material positive impact on both the Company's balance sheet as well as statement of operations on a going forward basis.

The key aspects of the transaction are as follows: Dutchess will convert all of their outstanding debt, estimated at approximately $6.6 million as of the closing date, return all of their outstanding warrants (22,826,022), and terminate their security interest in the Company's assets; in return for $7.5 million in preferred convertible stock, up to $500,000 in cash, payable within 90 days of the closing and 4% of the outstanding common stock of the Company.

The preferred stock will have an 8% cumulative dividend payable in cash or additional preferred stock at the Company's option, and be convertible into 35% of the Company's common stock at the option of the holder. The Company also has the right to call up to $1 million of the preferred stock and the holder can put up to $2 million of the preferred stock at the time of a capital raising event.

On November 2, 2007, the Company acquired 100% of the capital stock of TB&A Hospital Television, Inc. (hereinafter "TB&A") for a cash purchase price of approximately $3,000,000 and credit for some of the existing accounts receivable, estimated at $300,000.. The consideration issued in the stock purchase was determined as a result of arm's-length negotiations between the parties.

Following this acquisition, the Company is carrying on the business operations of TB&A as a wholly-owned subsidiary. Prior to the stock purchase, there were no material relationships between us and TB&A or any of our respective affiliates, directors or officers, or any associates of the respective officers or directors.

The Company's offices are located at 8276 Willett Parkway, Suite 200, Baldwinsville, New York 13027. The telephone number is (888) 774-3579. The Company's website is www.patientportal.com.

OUR PLAN OF OPERATIONS

Our Company, through its operating subsidiaries, Patient Portal Connect, Inc. (PPC) and TB&A Hospital Television, Inc., provides patient centric nonmedical services which improve hospital financial performance. Having developed the industry's newest, leading-edge communication/information platform for the healthcare industry, PPC is poised to capture a significant segment of the multi-billion dollar healthcare market. Its proprietary systems were developed in close coordination with hospital industry partners to provide multi-layer functionality across a wide spectrum of critical patient-centric workflows that result in immediate improvements in cost savings, patient outcomes, and revenue growth for hospitals. Our systems and solutions are designed to integrate with existing hospital systems and processes to improve outcomes in today's healthcare environment.

The Company's technology allows it to leverage the hospitals existing television and cable infrastructure to create a communication portal for patients and third parties.

Nationwide, the demand for more customized healthcare has resulted in a greater need for improved productivity, efficiency, and customer service in hospitals and other healthcare institutions. We have has pioneered the development of integrated software applications that combine technology and industry expertise with unique customization designed to better manage the hospital/patient relationship and improve hospital operational processes. Further, our solutions enable hospitals to achieve compliance with strict government mandates that affect reimbursements by requiring measured improvements in productivity, efficiency, and patient satisfaction. Our proven technologies provide tremendous economic benefit for healthcare providers.

We intend to rapidly gain market share by leveraging strategic relationships and by acquiring companies with existing hospital contracts. Our acquisition strategy will enable us to achieve greater profitability, grow rapidly, and quickly gain first-mover advantage. Our proprietary technology platform allows us to create additional revenue streams with minimal cost by accessing enhanced service modules as market demand changes. This scalable architecture creates even greater profitability by enabling multiple services to be delivered over our service delivery platform.

We believe that our Company is positioned to quickly react to the requirements of an ever-changing healthcare industry. Unlike the costly, capital-intensive and stand-alone products offered by our industry competitors, our sophisticated technology platform offers flexible solutions and functionalities that are universal enough to have broad appeal while still allowing for a level of customization that is necessary to integrate with a hospital's existing legacy system, and at an affordable cost. Our flexible platform also enables the healthcare providers to fulfill the government's newest mandates for a full "continuum of care" from the hospital to the home. This unique ability enables us to present a tailored solution to our customers at a cost-effective price and will significantly enhances our ability to capture significant market share nationwide.

Our products and services enable hospitals to improve patient flow, enhance patient satisfaction, and create long-term relationships with patients as they move from hospital to home. In so doing, hospitals gain productivity and efficiency enhancements, reduce the burden on staff and increase cash flow by optimizing reimbursements from third-party sources including Medicare and private insurers.

The Company has adopted a multi year subscription revenue model that is based on patient interactions. We have long term contracts with third parties that pay the Company on a per patient basis based upon a variety of factors. This approach provides the Company with an ability to increase revenue as patient flow and services increase.

PATIENT PORTAL PRODUCTS AND SERVICES

The healthcare industry is in the midst of dynamic change that is redefining the way healthcare facilities do business. Competition, government scrutiny, and consumer demand for more value present new challenges. Giving good medical care is no longer enough. Healthcare facilities are searching for innovative ways to gain and retain patients as life-long customers. This necessitates implementing immediate changes that focus on improving the patient experience across a full continuum of care, and, for the first time, collecting and managing pertinent, real-time data to measure success and improve profitability.

Many healthcare facilities are plagued with decentralized workflows and vertical silos of information that create redundant, costly processes, and a disjointed patient experience. There is increasing need to improve education and communication with the patient before, during, and after their medical stay. To accomplish this, facilities need better systems, data management, and information services to assist them in meeting their goals.

Our strategy is to utilize our proprietary communications technology platform as a basis to gain and improve business relationships, then build upon that platform to integrate more and more services over time, thereby fully leveraging assets and maximizing profitability.

Our platform integrates with existing communication systems and workflows to present private branded services and information to the patient. Once the patient relationship is established, value is extended beyond the bedside with service offerings before and after a stay. This portal can be utilized by any number of third parties, including healthcare facilities, drug and health companies, patient education services, and family members, which ensures myriad revenue opportunities.

The core system was created in concert with our healthcare partners in a live laboratory to create solutions that are cost-effective, scalable, and allow for seamless and transparent integration into a facility's legacy systems and culture. Healthcare facilities gain with real-time metrics of all patient activity, which leads to improved medical outcomes, patient satisfaction scores, compliance with government regulations, and, ultimately, higher profits.

The following is a brief description of some of the principal products and services that we deliver to our customers:

HealthCast(TM) Patient Network System: In March 2007, we acquired a nine percent interest in Omnicast, Inc. in exchange for 2,950,000 shares of the Company's common stock. Omnicast, Inc. is a leading-edge technology and media provider that offers a variety of customized education and entertainment solutions for the healthcare industry.

As a part of this agreement, the Company received an exclusive technology license for the newly developed communication portal, HealthCast(TM) Patient Network System. We believe that HealthCast(TM) will fundamentally change the way patient communications are delivered at the bedside, leading to significant revenue opportunities.

HealthCast(TM) is the first suite of customized hospital television channels that invites viewers to interact with channel programming and delivers condition-specific content directly to a patient's TV, IP phone, or home computer. HealthCast(TM) features an exclusive digital-signage platform that promotes an unparalleled level of communication by simultaneously showing video, an information scroll, and additional customized messaging to a single patient, certain patient groups, or to specific areas of the hospital. HealthCast(TM) is the only patient network that puts the hospital in control of multiple information streams for an unprecedented level of communication and education for patients and families. In addition, HealthCast(TM)'s proprietary platform captures viewing metrics so hospitals can document content delivery for pay-for-performance reimbursement, and commercial sponsors can respond to patient viewing habits. In response to demand from healthcare facilities, we have developed channels for Patient Education, Hospital Foundation, Maternity and New Born Care, Patient Safety, General Information, and Nutrition, in addition to customized, condition-specific content that can be delivered on-demand to patients.

MedEx(SM): MedEx(SM) Home Delivery offers the patient free home delivery within hours of all prescription medications issued to the patient at discharge and free delivery of all refills, too. With MedEx(SM), we offer a turnkey solution for healthcare facilities that improves the hand-off of prescriptions when patients are discharged and returns all real-time data to the facility and physician for improved medication reconciliation and medication therapy management. The Company controls the private-branded process by deploying its technology to manage the information flow between all stakeholders, in addition to being the primary interface between the healthcare provider, patient, drivers, and pharmacy. This service is provided in conjunction with national pharmacy retailers. MedEx(SM) presents a unique vehicle to extend the patient relationship to the home and opens an array of revenue streams through patient education, aftercare, advertising, and product offerings.

Instant Response Line: The Instant Response Line is an interactive, live-response solution that enables patients to log a non-medical need that is electronically transferred to an appropriate facitliy department for resolution in a timely fashion. Multiple staff can be notified using various media, and all communications are time stamped and escalated as needed for immediate service recovery. A key element to the success of this system is access to real-time data, which enables administrators to see how quickly and efficiently staff respond and allows for improved strategic planning over time. Instant Response Line provides a single point of contact for all patient problems and leads to greater patient satisfaction. Putting the facitliy in proactive mode improves interdepartmental communication and adds an unparalleled level of customer service for the patient.

Quick Pulse Surveys: Quick inpatient surveys allow administrators to keep their "finger on the pulse" of what patients are thinking while in house or shortly after returning home. By conducting live surveys with patients while they are still involved in the experience leads to a higher response rate and gives the facility opportunity to proactively respond in real time. This presents a vastly different concept from the standard post-discharge written surveys healthcare facilities typically employ that include a six to eight week delay in data return. Our customized surveys focus on finite issues, allowing the facility to direct specific, timely solutions. These short, flexible surveys are cost effective enough to be repeated frequently, which enables the facility to benchmark data and measure improvements in operational efficiencies over time. Giving administrators real-time access to patient response data is a key differentiator between our service and competing survey services.

VIRTUAL NURSE(TM) MARKETING AGREEMENT

In April, 2007, we acquired a 9% minority interest in Virtual Nurse, Inc. of Palm Beach Gardens, FL, in exchange for 750,000 shares of the Company's common stock and entered into a joint Marketing Agreement to introduce Patient Portal and Virtual Nurse(TM) services to healthcare institutions throughout the United States.

Virtual Nurse's mission is to provide healthcare organizations with outsourced pre admission screening and scheduling services provided by using licensed nurse working from their home. After the service is complete the Company provides the healthcare provider with a digital record of the screening. It offers the highest quality of care through experienced, skilled, productive, and motivated nurses who benefit from the convenience of working at home on a flexible time schedule. As a result, it is able to give healthcare facilities assurance that every patient receives condition-specific education before entering their facilities and ensure that every assessment has been carefully documented and delivered on time.

Virtual Nurse's "PASS" (Pre-Admission Screening Services) program fulfills a critical need in the healthcare industry. As expenditures continue to increase and nursing shortages become greater Virtual Nurse offers the expertise of registered nurses without the challenges or costs of adding on-site staff. Virtual Nurse's RNs perform the administrative medical screening tasks usually conducted by registered nurses in a healthcare facility, with one important distinction: their RNs are dedicated to this service seven days a week, including extended hours, while hospital nurses attempt to contact patients during abbreviated calling hours.

Virtual Nurse enables healthcare providers to reallocate all available RNs to medical areas where they are needed most, free from the time-consuming administrative responsibilities of calling patients and coordinating paperwork. Further, the perception to patients is that the healthcare facility is the service provider. Therefore, the healthcare facilities gain improved patient care and satisfaction, superior customer service, and enhanced brand image.

COMPETITION

Our Company's markets are extremely competitive and are subject to rapid technological change. We believe that our Company is unique in the healthcare industry because we are positioned to provide services and products across the entire patient-service spectrum. Our competitors typically focus products on specific market niches that address a finite need within the industry. We approach the market with more innovation and versatility. Our services coordinate multiple processes toward improved productivity and communication between various stakeholders.

The competition that we face in this healthcare services marketplace can be broken down into two different company types:

Small Niche Competitors: The competition in this category is comprised of smaller companies offering few very specific products. They focus on one or two areas, such as providing patient education information or administrative services. Some of the competitors in this area include Get Well Network, Allen Technologies, Skylight Systems, Beryl, and TeleTracking. Most companies in this category have a very small hospital base (ten or fewer). Patient Portal Connect has a unique advantage vis-a-vis the small-niche competitors because we offer revenue-generating opportunities across a full continuum of care instead of a stand-alone application, 24/7 integration with our Patient Contact Center, access to an extensive customer base, and a long history serving hospitals and patients.

Large Technology-based Providers: The large technology-based providers typically offer very expensive and complex systems that deliver a variety of administrative services at high cost. Companies such as Siemens and Hill-Rom are in this category. Although the product set is enticing, to date they have sold few services due to the cost, complexity of integration, and the amount of system wide change required to sustain the services. Our technology allows us to integrate new products easily without requiring a cultural shift or debt load. Patient Portal Connect focuses on rapidly deploying less expensive, user-friendly services compared to the competition.

RESEARCH AND DEVELOPMENT

The Company employs a multiple product and services sourcing strategy that includes internal software and hardware development and licensing from third parties. In the future, Company strategy may also include acquisitions of technologies, product lines or companies.

As part of our business strategy to reduce direct costs and improve margins, elements of some of the Company's products and services are licensed from third parties. Our main outsourcing activities are related to both developing new modules for our software, and marketing and supporting our product. While our business depends somewhat on our ability to outsource, we are not dependent on any one contractor or vendor.

In the future, the Company may make select strategic acquisitions to secure certain technology, people and products which complement or augment overall product and services strategy. Both time-to-market and potential market share growth, among other factors, are considered when evaluating acquisitions of technologies, product lines or companies. Management may acquire and/or dispose of other technologies and products in the future.

As a technology and services Company, we realize that we must maintain our investment in research and development to design both new, experimental products and marketing campaigns. Management anticipates incurring additional research and development expenditures as its business grows and adequate cash flow becomes available to fund such costs.

EMPLOYEES

As of March 31, 2009, the Company and its affiliates had approximately 60 full time equivalent employees.

REGULATORY ISSUES

We are not subject to any special governmental regulation concerning our supplying of products and services to the market place and we believe we are in compliance in all material respects with all existing regulations governing other aspects of our businesses.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a high degree of risk. Prospective investors should consider carefully the following factors and other information in this report before deciding to invest in shares of our common stock. If any of the following risks actually occur, our business, financial condition, results of operations and prospects for growth would likely suffer. As a result, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related to Our Company

We Have A Limited History of Operations.

The Company's present business operations are conducted through its newly-acquired subsidiaries, Patient Portal Connect, Inc. and TB&A Hospital Television, Inc. The Company has only been operating in its current business since 2006 and therefore has a limited history of operations.

We May Need Additional Funding.

Management believes that is has sufficient cash reserves and acess to capital to satisfy the Company needs for 2009. On March 12, 2009 the Company entered into an agreement with Dutchess Private Equities Fund, Ltd. to restructure all of its outstanding debt with the Company. This transaction will have a material positive impact on both the Company's balance sheet as well as statement of operations on a going forward basis. As an outcome of this transaction, the Company is negotiating with commercial banks to secure additional working capital. However, there can be no assurance that additional funds will not be required for additional working capital purposes during such period or thereafter or that, if required, such funds will then be available on terms satisfactory to the Company, if at all.

We Have Given Dutchess A Security Interest In Certain Property

As part of the Dutchess financing transaction, we had granted Dutchess a first priority security interest in certain property of the Company to secure the prompt payment, performance and discharge in full of all of Company's obligations under the Debentures. This "first lien" on certain of our assets limited our ability to obtain additional asset-based financing or other types of secured or unsecured debt. As previously indicated we are restructuring the Dutchess transaction and their security interest will be eliminated as part of the transaction. This will allow us to pursue conventional bank financing to support our cash requirements.

Our Business Operations Could Be Significantly Disrupted If We Lose Members Of, Or Fail To Integrate, Our Management Team.

Our future performance is substantially dependent on the continued services of our management team and our ability to retain and motivate them. The loss of the services of any of our officers or senior managers could harm our business, as we may not be able to find suitable replacements. We do not have employment agreements with any of our key personnel, and we do not maintain any "key person" life insurance policies.

We May Not Be Able To Hire And Retain A Sufficient Number Of Qualified Employees And, As A Result, We May Not Be Able To Grow As We Expect Or Maintain The Quality Of Our Services.

Our future success will depend on our ability to attract, train, retain and motivate other highly skilled technical, managerial, marketing and customer support personnel. Competition for these personnel is intense, especially for software developers, Web designers and sales personnel, and we may be unable to successfully attract sufficiently qualified personnel. We will need to maintain the size of our staff to support our anticipated growth, without compromising the quality of our product offerings or customer service. Our inability to locate, hire, integrate and retain qualified personnel in sufficient numbers may reduce the quality of our services.

Risks Related to Our Products and Services

New Products and Technological Change.

The markets for our products and services are characterized by rapidly changing technology and new product introductions. Accordingly, the Company believes that its future success will depend on its ability to enhance its existing products and to develop and introduce in a timely fashion new products that achieve market acceptance. Management believes that the Company will be able to continue to compete and adapt to potential new industrial and commercial applications for its products with continuous technological enhancements. although there can be no assurance that the Company will in fact be able to identify, develop, manufacture, market or support such products successfully or that the Company will in fact be able to respond effectively to technological changes or product announcements by competitors.

We Face Significant Competition.

The Company faces significant competition from a variety of healthcare industry service providers, and may in the future face competition from a variety of potential providers, many of which have or will have considerably larger and greater financial and human resources and marketing capabilities. We believe that we will be able to compete favorably in this competitive marketplace because of our flexibility in responding to changing and emerging markets, our innovative and competitive services and products, our quick response to customer requirements, and our ability to identify, develop, produce and market original products and derivative product concepts.

We must continue to upgrade our technology infrastructure, both hardware and software, to effectively meet demand for our services.

We must continue to add hardware and enhance software to accommodate the increased services which we provide and increased use of our platform. In order to make timely decisions about hardware and software enhancements, we must be able to accurately forecast the growth in demand for our services. This growth in demand for our services is difficult to forecast and the potential audience for our services is large. If we are unable to increase the data storage and processing capacity of our systems at least as fast as the growth in demand, our systems may become unstable and our customers may encounter delays or disruptions in their service. Unscheduled downtime could harm our business and also could discourage current and potential customers and reduce future revenues.

Our network infrastructure and computer systems and software may fail.

An unexpected event like a telecommunications failure, fire, flood, earthquake, or other catastrophic loss at our service providers' facilities or at our on-site data facility could cause the loss of critical data and prevent us from offering our products and services. We do not at the present time carry business interruption insurance.

In addition, we rely on third parties to securely store our archived data, house our servers and network systems and connect us to the Internet. While our service providers have planned for certain contingencies, the failure by any of these third parties to provide these services satisfactorily and our inability to find suitable replacements would impair our ability to access archives and operate our systems and software.

We may lose users and lose revenues if our security measures fail.

If the security measures that we use to protect personal information are ineffective, we may lose users of our services, which could reduce our revenues. We rely on security and authentication technology which we have developed. With this technology, we perform real-time credit card authorization and verification. We cannot predict whether these security measures could be circumvented by new technological developments. In addition, our software, databases and servers may be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions. We may need to spend significant resources to protect against security breaches or to alleviate problems caused by any breaches. We cannot assure that we can prevent all security breaches.

Risks Related to Our Stock Being Publicly Traded

Our stock price may be volatile.

Our Common Stock has been trading in the public market since 2004. However, throughout our history trading volume has been extremely light. We cannot predict the extent to which a trading market will develop for our Common Stock or how liquid that market might become. The trading price of our Common Stock has been and is expected to continue to be highly volatile as well as subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include:

o Quarterly variations in our results of operations or those of our competitors.

o Announcements by us or our competitors of acquisitions, new products, significant contracts, commercial relationships or capital commitments.

o Disruption to our operations.

o The emergence of new sales channels in which we are unable to compete effectively.

o Our ability to develop and market new and enhanced products on a timely basis.

o Commencement of, or our involvement in, litigation.

o Any major change in our board of directors or management.

o Changes in governmental regulations or in the status of our regulatory approvals.

o Changes in earnings estimates or recommendations by securities analysts.

o General economic conditions and slow or negative growth of related markets.

In addition, the stock market in general, and the market for technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may seriously harm the market price of our Common Stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a company's securities, securities class action litigation has often been instituted against these companies. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources.

We do not intend to pay dividends on our Common Stock.

We have never declared or paid any cash dividend on our Common Stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.

Provisions in our Certificate of Incorporation and By-laws may have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:

o Our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which may prevent stockholders from being able to fill vacancies on our board of directors.

o Our stockholders may act by written consent, provided that such consent is signed by all the shareholders entitled to vote with respect to the subject matter thereof. As a result, a holder, or holders, controlling a majority of our capital stock would not be able to take certain actions without holding a stockholders' meeting.

o Our Certificate of Incorporation prohibits cumulative voting in the election of directors. This limits the ability of minority stockholders to elect director candidates. Additionally the new class of Preferred Stock to be issued to Dutchess will allow them to appoint three directors of their choosing to the board.

As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, a corporation may not engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction. Our board of directors could rely on Delaware law to prevent or delay an acquisition of us.

You may experience substantial dilution as a result of the Dutchess financing transaction, as well as if we raise funds through the issuance of additional equity and/or convertible securities.

Investors may experience substantial dilution if and when Dutchess converts its its soon to be issued new class of Preferred Stock in to common stock. They will have the right to convert the $7.5 million of Preferred Stock in to a 35% ownership interest in the Company's common stock at anytime.

Under the current agreement Dutchess could convert some or its entire debenture into Common Stock of the Company and exercises its Common Stock Purchase Warrants. Since the conversion price of the Debentures fluctuates at a substantial percentage discount (15%) to fluctuating market prices, the number of shares issuable to Dutchess, upon conversion of the Debentures, is potentially limitless. In other words, the lower the average trading price of the Company's shares at the time of conversion, the greater the number of shares that can be issued to Dutchess. This perceived risk of dilution may cause our shareholders to sell their shares, thus contributing to a downward movement in the Company's stock price. Dutchess' overall ownership at any one moment is limited to 4.9% of the outstanding shares of Common Stock in accordance with the financing documents. However, Dutchess is free to sell any shares into the market, which have been issued to them, thereby enabling Dutchess to convert the remaining Debentures or exercise additional warrants into shares of Common Stock.

Our Common Stock has a small public float and future sales of our Common Stock, may negatively affect the market price of our Common Stock.

As of April 6, 2009, the most recent trading day in our Common Stock, there were 42,951,130 shares of our Common Stock outstanding, at a closing market price (average of best bid and ask prices) of $.15 for a total market valuation of approximately $ 6,400,000. Our Common Stock has a public float of approximately 25,800,000 shares, which shares are in the hands of public investors, and which, as the term "public float" is defined by NASDAQ, excludes shares that are held directly or indirectly by any of our officers or directors or any other person who is the beneficial owner of more than 10% of our total shares outstanding. These 25,800,000 shares are held by approximately 3,000 shareholders. We cannot predict the effect, if any, that future sales of shares of our Common Stock into the market will have on the market price of our Common Stock. However, sales of substantial amounts of Common Stock, including future shares issued upon the exercise of 33,056,136 Common Stock Purchase Warrants, future shares issued upon the exercise of stock options (of which none are outstanding as of April 6, 2009 and 1,000,000 have been reserved for potential future issuance), or the perception that such transactions could occur, may materially and adversely affect prevailing market prices for our Common Stock.

We could terminate our Securities and Exchange Commission Registration, which could cause our Common Stock to be de-listed from the Over the Counter Bulletin Board ("OTCBB").

As a public company with more than 300 shareholders, we are required to file our periodic reports with the SEC and register our shares of Common Stock under the Securities Exchange Act of 1934 (the "Exchange Act"). In the event that our Company would have less than 300 shareholders of record, our reporting requirements would be on a voluntary basis. In the event that in the future we would have fewer than 300 stockholders of record, we would be eligible to de-register our Common Stock under the Exchange Act. Although the Company does not currently plan to de-register its Common Stock, there can be no assurance that we would not de-register the Common Stock at some point in the future. If the Company were to take such action, it could inhibit the ability of the Company's common stock holders to trade the shares in the open market, thereby severely limiting the liquidity of such shares. Furthermore, if we were to de-register, we would no longer be required to file annual and quarterly reports with the SEC and would no longer be subject to various substantive requirements of SEC regulations. De-registration would reduce the amount of information available to investors about our Company and may cause our Common Stock to be de-listed from the OTCBB. In addition, investors would not have the protections of certain SEC regulations to which we would no longer be subject. The Company has no intention of terminating the registration of the Common Stock, and in fact is constrained from doing so under the terms of its agreements with Dutchess.

Because the market for and liquidity of our shares is volatile and limited, and because we are subject to the "Penny Stock" rules, the level of trading activity in our Common Stock may be reduced.

Our Common Stock is quoted on the OTC Bulletin Board under the trading symbol PPRG. The OTCBB is generally considered to be a less efficient market than the established exchanges or the NASDAQ markets. While our Common Stock continues to be quoted on the OTCBB, an investor may find it more difficult to dispose of, or to obtain accurate quotations as to the price of our Common Stock, compared to if our securities were traded on NASDAQ or a national exchange. In addition, our Common Stock is subject to certain rules and regulations relating to "penny stocks" (generally defined as any equity security that is not quoted on the NASDAQ Stock Market and that has a price less than $5.00 per share, subject to certain exemptions). Broker-dealers who sell penny stocks are subject to certain "sales practice requirements" for sales in certain nonexempt transactions (i.e., sales to persons other than established customers and institutional "accredited investors"), including requiring delivery of a risk disclosure document relating to the penny stock market and monthly statements disclosing recent bid and offer quotations for the penny stock held in the account, and certain other restrictions. If the broker-dealer is the sole market maker, the broker-dealer must disclose this, as well as the broker-dealers presumed control over the market. For as long as our securities are subject to the rules on penny stocks, the liquidity of our Common Stock could be significantly limited. This lack of liquidity may also make it more difficult for us to raise capital in the future.

ITEM 1B. UNRESOLVED STAFF COMMENTS - None.

ITEM 2. PROPERTIES

As of December 31, 2008, the principal property assets of the Company consisted of hospital telecommunications services contracts, furniture, fixtures and computer and network equipment owned by our wholly-owned subsidiaries Patient Portal Connect, Inc. and TB&A Hospital Television, Inc.

During the year ended December 31, 2008, the Company had no significant equipment leases in effect. The Company maintained office space in three locations under real estate leases: Baldwinsville, NY and Amherst, NY and Jupiter, Fla. The non-cancelable lease payments for the year ended December 31, 2008 were $302,754.00. The future minimum lease payments for the three years ending December 31, 2009, 2010 and 2011 are $272,000.00, $272,000.00 and $216,000.00 respectively. The future minimum lease payments for years 2012 through 2016 are $216,000.00 through 2015 and $49,500.00 for 2016.

ITEM 3. LEGAL PROCEEDINGS

The Company is presently involved in one lawsuit which management believes does not have any merit and will not have a material effect upon the financial condition of the Company. There are no other lawsuits pending nor are any such material legal proceedings anticipated.

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

No matters were submitted to a vote of securities holders during the three months ended December 31, 2008 (the fourth quarter of the fiscal period covered by this report).

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

(a) The Company's Common Stock was initially listed on the OTC Bulletin Board Market (Current OTCBB Symbol: "PPRG") from July 27, 2005 to January, 2006, and resumed trading on the Bulletin Board from July, 2007 through December, 2008.

 HIGH LOW HIGH LOW
 BID PRICES ASK PRICES
 ----------------- -----------------
Fiscal Year 2007:
-----------------------

Quarter Ended 3/31/07 $ .14 $ .08 $ .17 $ .10
Quarter Ended 6/30/07 $ 1.45 $ .35 $ 1.60 $ .38
Quarter Ended 9/30/07 $ .80 $ .22 $ .90 $ .20
Quarter Ended 12/31/07 $ 1.50 $ .15 $ 1.75 $ .18

Fiscal Year 2008
----------------------

Quarter Ended 3/31/08 $ 1.65 $ .30 $ 1.75 $ .45
Quarter Ended 6/30/08 $ 1.65 $ .80 $ 1.75 $ .90
Quarter Ended 9/30/08 $ .81 $ .20 $ .95 $ .25
Quarter Ended 12/31/08 $ .47 $ .13 $ .50 $ .15

Sales prices do not include commissions or other adjustments to the selling price.

(b) HOLDERS - As of March 31, 2009, there were approximately 380 shareholders of record of the Company's Common Stock.

Based upon information from nominee holders, the Company believes that the number of beneficial holders of its Common Stock exceeds 3,000.

(c) DIVIDENDS - The Company has not paid or declared any dividends upon its common stock and it intends for the foreseeable future to retain any earnings to support the growth of its business. Any payment of cash dividends in the future, as determined at the discretion of the Board of Directors, will be dependent upon the Company's earnings and financial condition, capital requirements, and other factors deemed relevant.

(d) WARRANTS AND OPTIONS- As of March 31, 2009, in addition to the Company's aforesaid outstanding Common Stock, there are issued and outstanding Common Stock Purchase Warrants which are exercisable at the price-per-share indicated, and which expire on the date indicated, as follows:

 Exercise
Description Number Price Expiration
 ---------------------------------
Class "A" Warrants 250,000 $ 2.00 12/31/11
Class "B" Warrants 250,000 $ 3.00 12/31/11
Class "C" Warrants 250,000 $ 4.00 12/31/11
Class "D" Warrants 9,480,050 $ .50 12/31/09
Dutchess Warrants 22,826,086 $ .46 11/01/12

2002 INCENTIVE STOCK OPTION PLAN

On November 22, 2002, the Shareholders of the Company ratified the Company's "2002 Incentive Stock Option Plan" and reserved 1,000,000 shares for issuance pursuant to said Plan. As of March 31, 2009, no options have been awarded pursuant to this Plan.

RECENT SALES OF UNREGISTERED SECURITIES

The following sets forth the equity securities we sold during the period covered by this report, not previously reported on Forms 10-QSB or 8-K, which was not registered under the Securities Act.

During calendar year 2008 the Company sold 2,846,050 shares of unregistered common stock under a private placement for $ 570,102 and issued 33,333 shares of Series B Preferred Stock for $200,000.00. The preferred stock is convertible into common stock at a ratio of 1 share of preferred for each 10 shares of common stock at the option of the Company or holder.

The Company relied on the exemption under section 4(2) of the Securities Act of 1933 (the "Act") for the above issuances. No commission or other remuneration was paid on these issuances.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data which is derived from, and should be read in conjunction with, the Consolidated Financial Statements and the related Notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report.

Selected Financial Information

(in thousands, except per share data)

Fiscal Year Ended December 31,

 2008 2007 2006 2005 2004
 ---------------------------------------------------------

Revenues $ 17,953 $ 4,705 $ 13 $ - $ 89
Operating (Loss) $ (202) $ (1,764) $ (275) $ (105) $ (1,138)
Net (Loss) $ (2,312) $ (2,060) $ (401) $ (131) $ (1,494)
Net (Loss) Per Share $ (0.06) $ (0.08) $ (0.01) $ (0.01) $ (0.34)
Cash and Equivalents $ 411 $ 404 $ 2 $ 1 $ -
Total Assets $ 17,025 $ 14,851 $ 1,103 $ 259 $ 55
Long Term Obligations $ 3,883 $ 3,446 $ - $ - $ -
Shareholder Equity
 (Deficit) $ 5,883 $ 7,425 $ 718 $ 202 $ (2,148)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

This discussion and analysis should be read in conjunction with our financial statements and accompanying notes, which are included elsewhere in this prospectus. This discussion includes forward-looking statements that involve risks and uncertainties. Operating results are not necessarily indicative of results that may occur in future periods. When used in this discussion, the words "believes", "anticipates", "expects" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected.

Our business and results of operations are affected by a wide variety of factors, as we discuss under the caption "Risk Factors" and elsewhere in this prospectus, which could materially and adversely affect us and our actual results. As a result of these factors, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, operating results and stock price.

Any forward-looking statements herein speak only as of the date hereof. Except as required by applicable law, we undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

General Discussion on Results of Operations and Analysis of Financial Condition

We begin our General Discussion and Analysis with a discussion of the Results of Operations for the years ended December 31, 2008 and 2007, followed by a discussion of Liquidity and Capital Resources available to finance our operations.

Income Taxes

We make estimates to determine our current provision for income taxes, as well as our income taxes payable. Our estimates with respect to the current provision for income taxes take into account current tax laws and our interpretation of current tax laws, as well as possible outcomes of any future tax audits. Changes in tax laws or our interpretation of tax laws and the resolution of any future tax audits could significantly impact the amounts provided for income taxes in our financial statements.

Legal Contingencies

From time to time, we are involved in routine legal matters incidental to our business. In the opinion of management, the ultimate resolution of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.

RESULTS OF OPERATIONS

The Company was established in November, 2002. On December 7, 2006, the Company acquired Patient Portal Connect, Inc., and on November 4, 2007 acquired TB&A Hospital Television, Inc. As of December 31, 2008, these are the only operating subsidiaries of the Company. The results of operations for the year ended December 31, 2008 includes the business operations of these subsidiaries and revenues from acquired contracts for the periods subsequent to their acquisition, including hospital contracts acquired in November 2008.

Year Ended December 31, 2008 vs. December 31, 2007

The Company reported $ 17,592,615 of revenue for the Year Ended December 31, 2008 and $ 4,705,035 for the comparable period in 2007. This majority of this increase, approximately $11.8 million, is attributable to the full year impact of acquired hospital contracts (from 2007) and the full year of operations from TB&A Hospital Television, Inc. (TB&A). The remaining revenue increase of $1.0 million is from existing customer growth and as well as the addition of new customers.

Cost of sales for the Year Ended December 31, 2008 was $11,380,147 as compared to cost of sales of $ 3,056,835 during the same period in 2007. This increase followed the increase in revenue over 2007.

Selling and Administrative expenses were $ 5,231,764 for the Year Ended December 31, 2008 as compared to $2,948,026 in 2007. These expense as a percentage of revenue decreased from 62% in 2007 to 29% in 2008 primarily due to the stabilization of expenses as the Company grew its revenues as well as a reduction of start up and organization of expenses of approximately $1.2 million from 2007 to 2008. We expect these expenses to continue to decline as a percentage of revenue.

Interest costs were $ 2,093,830 for the Year Ended December 31, 2008 compared to $295,868 in 2007. This increase in interest costs was primarily due to the full year cash and non-m cash interest expense associated with the Dutchess debt.

The Company reported a net loss of ($2,311,990) for the Year Ended December 31, 2008 as compared to a net loss of ($2,059,386) during the same period in 2007. This represents a loss per share of ($.06) during the Year Ended December 31, 2008 as compared to a loss per share of $ (.08) for the same period in 2007.

Year Ended December 31, 2007 vs. December 31, 2006

The Company reported $ 4,705,035 of revenue for the Year Ended December 31, 2007 and $1,609 for the comparable period in 2006. This increase is solely attributable to the acquisition of the Company's Patient Portal Connect, Inc. operating subsidiary in December, 2006 and minimal start-up revenues attributed to this subsidiary during this period. The results for 2006 reflected minimal start up revenues from the new combined entity with Patient Portal Connect, Inc. in December 2006.

Cost of sales for the Year Ended December 31, 2007 was $ 3,056,835 as compared to cost of sales of $115,332 during the same period in 2006. This increase was attributable to the acquisition of hospital contracts and TB&A during 2007.

Selling and administrative expenses were $ 2,948,026 for the Year Ended December 31, 2007 as compared to $ 173,449 in 2006. This increase is solely attributable to the full year of operations for the Company.

Interest costs were $ 295,868 for the Year Ended December 31, 2007 compared to $126,152 in 2006.

The Company reported a net loss of ($ 2,059,386) for the Year Ended December 31, 2007 as compared to a net loss of ($ 401,408) during the same period in 2006. This represents a loss per share of $(.08) during the Year Ended December 31, 2007 as compared to a loss per share of $(.01) for the same period in 2006.

CURRENT PLAN OF OPERATIONS

Our Company, through its newly acquired subsidiaries, Patient Portal Connect, Inc. (PPC) and TB&A Hospital Television, Inc. (TB&A) is well positioned to be the premier provider of integrated workflow solutions in the healthcare industry. Having developed the industry's newest, leading-edge process improvement delivery platform for the healthcare industry, PPC is poised to capture a significant segment of the multi-billion dollar healthcare market. Its proprietary systems were developed in close coordination with hospital industry partners to provide multi-layer functionality across a wide spectrum of critical patient-centric workflows that result in immediate improvements in cost savings, patient outcomes, and revenue growth for hospitals. PPC's innovative solutions are changing the way hospitals and patients do business in today's healthcare environment.

Nationwide, an explosive demand for more customized healthcare has resulted in a greater need for improved productivity, efficiency, and customer service in hospitals. PPC has pioneered the development of integrated software applications that combine technology and industry expertise with unique customization designed to better manage the hospital/patient relationship and improve hospital operational processes. Further, our solutions enable hospitals to achieve compliance with strict government mandates that affect reimbursements by requiring measured improvements in productivity, efficiency, and patient satisfaction. PPC's proven technologies provide tremendous economic benefit for healthcare providers.

PPC intends to rapidly gain market share by leveraging strategic relationships and acquiring companies with existing hospital contracts. The Company's acquisition strategy will enable it to achieve immediate profitability, grow rapidly, and quickly gain first mover advantage. PPC's sophisticated technology platform allows the Company to create additional revenue streams with minimal cost by accessing enhanced service modules as market demand changes. This scalable architecture creates even greater profitability by enabling multiple services to be delivered over the PPC service delivery platform.

Management believes that PPC is primed to swiftly react to the ever-changing healthcare industry. Unlike the costly, capital-intensive and stand-alone products offered by our industry competitors, PPC's sophisticated platform offers flexible solutions and functionalities that are universal enough to have broad appeal while still allowing for a level of customization that is necessary to integrate with a hospital's existing legacy system, and at an affordable cost. Our flexible platform also enables the healthcare providers to fulfill the government's newest mandates for a full "continuum of care" from the hospital to the home. This unique ability enables PPC to present a tailored solution to our customers at a cost-effective price and will dramatically enhance our ability to capture significant market share nationwide.

PPC's expertise is its ability to create win-win opportunities for hospitals and patients by clearly defining customized, flexible, and integrated healthcare solutions with measurable results. PPC enables hospitals to improve patient flow, enhance patient satisfaction, and create long-term relationships with patients as they move from hospital to home. In so doing, hospitals gain productivity and efficiency enhancements, reduce the burden on staff and increase cash flow by optimizing reimbursements from third-party sources.

LIQUIDITY AND CAPITAL RESOURCES

As shown in the above financial statements, the Company incurred a net loss of ($ 2,059,386) during the year ended December 31, 2007 and ($2,311,990) during the year ended December 31, 2008. The Company has been successful in raising capital through private placements of its equity. It has plans to raise more capital through public or private financing, through the issuance of its common stock and the issuance of debt instruments, including debt convertible to equity. When attaining financing if available, it cannot be certain such financing will be on attractive terms. Should the Company obtain more capital, in turn, it may cause dilution to its existing stockholders and providing the Company can obtain more capital, it cannot be assured to ultimately attain profitability. However, management expects that the acquisitions in November, 2007 of our TB&A Hospital Television, Inc. subsidiary and additional hospital service contracts will continue to increase revenue, profitability and liquidity of the Company.

SUBSEQUENT EVENTS

As part of the transaction the Company is working to finalize an agreement for additional working capital through a commercial bank and is confident that the new bank financing will adequately funds any working capital requirements.

The Company intends to continue its efforts to complete the necessary steps in order to meet its cash flow requirements throughout fiscal 2009 and to continue its product development efforts and adjust its operating structure to reduce losses and ultimately attain profitability. Management's plans in this regard include, but are not limited to, the increase in business operations which it expects from the acquisition of additional retail hospital contracts by our Patient Portal Connect subsidiary and the continuing roll-out of its product line to its existing and future customer base. We also expect to see significant growth in the revenues of our TB&A Hospital Television, Inc. subsidiary during 2009 both through new contracts and through the sale of new flat-screen television equipment to our existing customer base.

Management believes that actions presently being taken will generate sufficient revenues to provide cash flows from operations and that sufficient capital will be available, when required, to permit the Company to realize its plans. However, there can be no assurance that this will occur. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Because our business is evolving and changing, particularly regarding our recent acquisitions and the Dutchess restructuring transaction, our future operating cash flows will be significantly increased from past results, and past operations are not a good gauge for anticipating future operations.

INFLATION

The rate of inflation has had little impact on the Company's results of operations and is not expected to have a significant impact on continuing operations.

ITEM 7A. QUANTITATIVE AND QULAITATIVE DISCLOSURES ABOUT MARKET RISK

We have no market risk associated with any of our financial based transactions or borrowings.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by this report are located beginning on page F-1 of this report and incorporated by reference.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 Page
 ----

Report of The Independent Registered Public Accountant F-1

Balance Sheets as of December 31, 2008 and December 31, 2007 F-2

Statements of Operations for the two years ended December 31,
2008 and 2007 F-3

Statements of Cash Flows for the two years ended December 31,
2008 and 2007 F-4

Statements of Stockholders' Equity December 31, 2008 and
December 31, 2007 F-5,6

Notes to Financial Statements F-7 to F-15

The Board of Directors
Patient Portal Technologies, Inc.
Baldwinsville, New York

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTANT

I have audited the balance sheet of Patient Portal Technologies, Inc. and subsidiaries (the "Company") as of December 31, 2008 and December 31, 2007, and the related statements of operations, stockholders' equity and cash flows for the years ended December 31, 2008 and December 31, 2007. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining on 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. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly in all material respects, the financial position of Patient Portal Technologies, Inc. and subsidiaries at December 31, 2008 and December 31, 2007 and the related statements of operations, stockholders' equity and cash flows for the year ended December 31, 2008 and December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

I also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) the effectiveness of internal control over financial reporting as of December 31, 2008, based on criteria established in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated April 8, 2008 expressed in unqualified opinion (attached) on management's assessment that Patient Portal Technologies, Inc. and subsidiaries maintains effective internal control and an unqualified opinion that internal control was effective.

As described in Note 2 to the financial statements, the Company restated the December 31, 2007 Consolidated Balance Sheet, Statement of Operations, Statement of Cash Flow and Statement of Shareholder Equity to correct for certain types of revenue recognition, the acquisition of TB&A, recording of the Dutchess transaction, long term investments, stock issuance transactions and modifying disclosure within the Statement of Cash Flows.

/s/ Harris F. Rattray
----------------------
Harris F. Rattray CPA
Pembroke Pines, Florida
April 10, 2009

F-1

PATIENT PORTAL TECHNOLOGIES,INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31,

 ASSETS Restated
 2008 2007
 ------------ -------------

Cash $ 411,229 $ 404,003
Accounts Receivable, net 2,046,836 1,794,553
Prepaid Expenses 54,919 20,350
Other 292,416 83,111
 ------------ -------------
TOTAL CURRENT ASSETS $ 2,805,400 $ 2,302,018
 ------------ -------------

Property, Plant & Equipment, net 4,355,532 3,267,882
Investments 1,475,000 1,475,000
Hospital Contracts, Net 7,692,452 6,651,319
Debt Issuance Costs 696,280 877,916
Note Receivable - 276,967
 ------------ -------------
TOTAL ASSETS $ 17,024,664 $ 14,851,102
 ------------ -------------

LIABILITIES AND STOCKHOLDERS EQUITY

Accounts Payable $ 3,320,317 $ 1,162,856
Current Portion - LTD 1,409,597 943,118
Current Portion - Leases 127,581 -
Accrued Expenses 1,336,675 1,245,249
Notes Payable - Current 1,065,000 629,668
 ------------ -------------
TOTAL CURRENT LIABILITIES $ 7,259,170 $ 3,980,891
 ------------ -------------

Long Term Debt, net of discount 3,584,413 3,445,501
Long Term Leases 298,259 -
 ------------ -------------
TOTAL LIABILITIES $ 11,141,842 $ 7,426,392
 ------------ -------------

Redeemable Preferred Stock , $.01 par value
authorized 1,000,000: 88,333 (Dec 31, 2008) and
55,000 (Dec 31, 2007) issued and outstanding 883 550

Common Stock, $.001 par value, authorized
100,000,000: 39,466,757 (Dec 30, 2008) and
36,620,707 (Dec 31, 2007) issued and outstanding 39,467 36,621
Additional Paid in Capital 9,702,213 8,935,290
Additional Paid In Capital - Warrants 913,043 913043
Retained Deficit (4,772,784) (2,460,794)
 ------------ -------------
TOTAL STOCKHOLDER'S EQUITY $ 5,882,822 $ 7,424,710
 ------------ -------------

TOTAL LIABILITIES AND
STOCKHOLDER's EQUITY $ 17,024,664 $ 14,851,102
 ------------ -------------