This discussion and analysis of our financial condition and results of operations contains forward looking statements that involve risks and uncertainties. We have based these forward looking statements on our current expectations and projections of future events. Such statements

reflect our current views with respect to future events and are subject to unknown risks, uncertainty and other factors that may cause results to differ materially from those contemplated in such forward looking statements. In addition, the following discussion should be read in conjunction with the audited consolidated financial statements and the related notes thereto included elsewhere in this annual report.

The following discussion provides information with respect to our results of operations, liquidity, and capital resources on a comparative basis for the years ended June 30, 2008 and 2007 and should be read in conjunction with the Consolidated Financial Statements included in Item 8 of this annual report and related notes appearing elsewhere in this annual report.

We operate a chain of pharmacies and provide pharmacy management services to various not for profit entities ("pharmacy"). During the fiscal years ended June 30, 2008 and June 30, 2007, our results also included discontinued operations that consisted of wholesale and retail sales of medical equipment and supplies ("medical") and wholesale and retail distribution of equipment, supplies, and novelty items to emergency medical service, fire departments, and police departments ("fire and police").

Year Ended June 30, 2008 Compared to June 30, 2007.

Net Revenues. Total revenues for the year ended June 30, 2008 increased
$6,609,478 to $71,239,989 or 10.2% from $64,630,511 for year ended June 30,
2007.

                      2008             2007         % Increase
Pharmacy          $ 68,039,194     $ 62,294,837             9.2
Dispensing Fees      3,200,795        2,335,674            37.0
TOTAL             $ 71,239,989     $ 64,630,511            10.2

Total revenues increased $6,609,478 to $71,239,989 or 10.2% for the year ended June 30, 2008 as compared to $64,630,511 for the year ended June 30, 2007. The main reason was due to a 4.75% increase in the number of prescriptions dispensed at stores open more than one year, the acquisition of a pharmacy in July 2007, the addition of three new pharmacies in April and December 2007, and February 2008, respectively. Stores open more than one year experienced a 2.4% growth in revenue. The growth in the number of prescriptions dispensed did not correlate to a commensurate growth in revenue due to an increased number of generic medications as a percentage of total number of prescriptions dispensed. Generic medications typically have a lower selling price than brand name medications. D.A.W. recognizes revenue both from the sale of prescription medications and other products as well as through dispensing fee revenue derived through the dispensing of prescriptions with inventory owned by FQHCs pursuant to pharmacy management services contracts entered into between D.A.W. and various FQHCs.

The pharmacy sales (revenues other than dispensing fees) increased $5,744,357 to $68,039,194 or 9.2% for the year ended June 30, 2008 as compared to $62,294,837 for the year ended June 30, 2007. The increase was attributable to the acquired store, the opening of three new pharmacies, and a 2.0% increase in sales at locations opened more than one year.

The increase in prescription dispensing at stores open more than one year can be attributed to greater drug utilization on the part of an aging population, an overall increase in market share within certain communities and an increased utilization of pharmacy services by patients of FQHCs with whom the pharmacies have contracts to provide services. The pharmacies manage two pharmacies owned by FQHCs and additionally have contracts to provide pharmacy services to patients of five other FQHCs. The pharmacies maintain a segregated inventory owned by the FQHCs for the purpose of dispensing prescriptions to health center patients.

Dispensing fee revenue increased $865,121 to $3,200,795 or 37% for the year ended June 30, 2008 as compared to $2,335,674 for the year ended June 30, 2007. Two locations which opened in February and April 2007, accounted for $513,013 of the increase. The remainder of the increase can be attributed to an expanded number of and increased demand for covered medications effectuated during the fiscal year by the Massachusetts Health Safety Net Office, an increased number of prescription benefit management contracts entered into by the FQHCs contracted with D.A.W. and marketing initiatives targeting the patients of the FQHCs.

Gross Profit Margins. Pharmacy overall gross profit margins increased by .7% to 22% for the year ended June 30, 2008 as compared to 21.3% for the year ended June 30, 2007. Dispensing fee revenue is excluded from the calculation as there is no correlating inventory cost associated with the services provided.

The following is a table of gross profit margin percentages for the two years ended June 30:

2008 2007 % Increase
22.0 21.3 .7

The increase in gross profit margins was due to increased purchase volume discounts as well as increased dispensing of generic medications which carry higher gross profit margins. Each helped to offset lower insurance reimbursements.

Selling, general and administrative expenses. Selling, general and administrative expenses ("S,G&A") for the year ended June 30, 2008 increased $3,343,541 to $17,771,045 or 23.2% from $14,427,504 for year ended June 30, 2007.

The following table shows the breakdown for the two years ended June 30:

2008 2007 % Increase $ 17,771,045 $ 14,427,504 23.2

Corporate overhead increased $205,842 to $1,167,302 or 21.4% for the year ended June 30, 2008 as compared to $961,460 for the year ended June 30, 2007 due to a combination of the following: increased officer salaries of $149,085, principally due to a $118,415 charge attributable to the non-renewal of the former chief executive officer's employment contract and $18,230 for the addition of the new Chief Executive Officer's salary; increased legal expenses of $196,533, principally due to the purchase of the minority interest in D.A.W.; increased investment banker fees of $4,700 due to fees incurred for finding a source to buy the remaining 20% of D.A.W.; increased stock option expense of $25,359 due to the election of two directors, an officer and the issuance of stock options to the management team of D.A.W. in connection with their three year renewal of employment agreements; increased annual meeting expenses of $21,399 due to additional matters voted upon; increased accounting expense of $9,969 due to additional fees for the review of SEC filings; and increased extension fees of $8,330 paid to the Minority Shareholders prior to the February 2008 transaction described below.

Interest Expense. Interest expense increased for the year ended June 30, 2008 by $72,419 to $98,188 or 281% from $25,769 for year ended June 30, 2007.

The following table shows the breakdown for the two years ended June 30:

2008 2007 % Increase
$ 98,188 $ 25,769 281

The pharmacy's interest expense decreased $10,779 to $11,845 or 47.6% for the year ended June 30, 2008 as compared to $22,624 for the year ended June 30, 2007 due to pay down on interest bearing notes.

Corporate interest expense increased $83,198 to $86,343 or 2645.4% for the year ended June 30, 2008 as compared to $3,145 for the year ended June 30, 2007 due to $68,218 of interest on notes issued in connection with the purchase of the remaining 20% of D.A.W. and $14,980 on our line of credit.

Deemed Dividend on Redemption of Preferred Stock. In February 2008, we redeemed the then outstanding Series A and B preferred stock ("Series A and B Preferred Stock") for $400,000. The excess over the carrying value of $3 was recorded as a deemed dividend and increased the net loss applicable to common shareholders.

Earnings Per Share. Basic (loss) earnings per share is computed by dividing
(loss) earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share considers the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the (loss) earnings of the entity.

The dilutive effect of the Series 2 Stock shall be reflected in diluted earnings per share by application of the "if-converted" method in accordance with SFAS No. 128. For the twelve months ended June 30, 2008, due to their anti-dilutive effect, 1,691,320 common shares of stock options, 815,217 common shares underlying convertible notes and 218,000 common shares underlying convertible preferred stock were excluded from the computation of dilutive (loss) earnings per share.

FASB Emerging Issue Task Force Topic D-42, "The Effect on the Calculation of Earnings Per Share for the Redemption or Induced Conversion of Preferred Stock", provides among other things, that any excess of (1) the fair value of the consideration transferred to the holders of preferred stock redeemed over
(2) the carrying amount of preferred stock, should be subtracted from net earnings to determine net (loss) income available to common shareholders in the calculation of earnings per share. For the year ended June 30, 2008, this resulted in $399,997 being subtracted from net earnings.

Expenses associated with the Acquisition of the 20% minority interest in D.A.W. and Change in Control

Expenses associated with the Acquisition, as well as our change in control, totaled $1,379,797 or $.34 per share for the fiscal year ended June 30, 2008. This was a combination of the following expenses: deemed dividend of Class A and B (Series 1) Preferred Stock of $399,997; legal expense of $586,000; forbearance extension fees paid to the Minority Shareholders of $199,980; a charge attributable to the non-renewal of the former chief executive officer's employment contract of $118,415; investment banker fees of $40,850; miscellaneous expenses of $21,005; special board meeting expenses of $10,000 and accounting expenses of $3,550.

Discontinued operations

During our fiscal year ended June 30, 2008, we operated a medical and surgical equipment and supplies segment, known as ADCO and ADCO South. ADCO engages in both the wholesale and retail selling of medical equipment and surgical supplies throughout New England and Florida. It sells the same products worldwide through its Internet site. In June 2008, we sold ADCO South. In September 2008, we sold certain assets and liabilities of ADCO. As such, ADCO and ADCO South have been classified as discontinued operations in our financial statements.

At December 31, 2007, we reevaluated the outstanding liabilities of our fire and police discontinued operation and concluded the discontinued segment would not be able to satisfy the amounts owed. Therefore, we reversed the liabilities from our discontinued operations. The discontinued operations consisted of wholesale and retail sale of equipment and supplies to emergency medical services, fire departments and police departments (fire and police segment). We recognized a gain on operations, net of income taxes, of $196,628.

The following table shows net sales, cost of goods sold, gross profit margin, S,G&A expenses, depreciation expense, interest income and interest expense for the year ended June 30, 2008 as compared to the year ended June 30, 2007:

                             2008            2007          % (decrease) increase
Sales                     $ 3,991,597     $ 5,343,675                       (25.3 )
Cost of goods sold        $ 2,752,719     $ 3,802,800                       (27.6 )
Gross profit margin (%)          31.0            28.8                         7.6
S,G&A expenses            $ 1,066,869     $ 1,661,724                       (35.8 )
Depreciation expense      $    35,388     $    55,377                       (36.1 )
Interest income           $     3,472     $     5,259                       (34.0 )
Interest expense          $     1,143     $       274                       317.2

Income Taxes. The following table shows income taxes for the two years ended June 30:

                             2008           2007        % (decrease) increase
Pharmacy                  $  318,500     $  622,000                      (48.8 )
Corporate                   (426,700 )     (327,670 )                    (30.2 )
                            (108,200 )      294,330
Discontinued operations       48,000        (54,800 )                    187.6
                          $  (60,200 )   $  239,530                     (125.1 )

The pharmacy's income tax expense decreased by $303,500 to $318,500 or 48.8% for the year ended June 30, 2008 as compared to $622,000 for the year ended June 30, 2007 due to lower net income.

Corporate's tax benefit increased by $99,030 to $426,700 or 30.2% for the year ended June 30, 2008 as compared to $327,670 for the year ended June 30, 2007 due to increased expenses related to the buyout of the 20% interest in D.A.W. Additionally we will be able to utilize a portion of the tax benefits from intangible assets previously written-off for book purposes.

The discontinued operations tax expense increased by $102,800 to $48,000 or 187.6% for the year ended June 30, 2008 as compared to a tax benefit of $54,800 for the year ended June 30, 2007, mainly due to the reevaluation of the outstanding liabilities of our fire and police discontinued operation. We concluded the discontinued segment would not be able to satisfy the amounts owed, therefore, we reversed the liabilities of $298,628.

Liquidity and Capital Resources

Net cash provided by operating activities was $1,847,986 for the year ended June 30, 2008 as compared to $364,499 for the year ended June 30, 2007. The primary source of cash for the year ended June 30, 2008 was from extended accounts payable terms pursuant to an agreement with D.A.W.'s major supplier to fund a portion of our purchase of the 20% interest in D.A.W. and for pharmacy operations. For the year ended June 30, 2007, cash was used primarily to fund two start-up pharmacies and for operations. Additionally, cash was used in both years to fund corporate overhead.

The net cash used in investing activities was $2,790,345 for the year ended June 30, 2008 as compared to $288,284 for the year ended June 30, 2007. The cash used was to fund a portion of our purchase of the 20% interest in D.A.W., an acquisition of a pharmacy, and to purchase property, plant and equipment.

Net cash used in financing activities of $226,749 for the year ended June 30, 2008 was for the repayment of long-term debt as compared to $184,750 for the year ended June 30, 2007.

Our primary source of liquidity is cash provided from operations. Our principal uses of cash are: operations, acquisitions, capital expenditures and repayment of debt.

Cash. At June 30, 2008, we had $140,688 in cash as compared to $1,135,677 in cash at June 30, 2007. The reduction in cash was due to the funding of the Acquisition and costs associated with the same and the acquisition of a pharmacy in July 2007.

Asset security interest. The pharmacy has an agreement with its major supplier to purchase pharmaceuticals. This agreement terminates January 31, 2012. Payment for the merchandise delivered is secured by a first primary interest in all assets of D.A.W.

Accounts receivable. At June 30, 2008, we had net accounts receivable of approximately $4.96 million as compared to approximately $4.83 million at June 30, 2007. The increase was due to D.A.W.'s increased revenues.

Goodwill. At June 30, 2008, net goodwill was $2,153,100 as compared to $18,000 at June 30, 2007. We purchased the remaining 20% of D.A.W. in February 2008 (see below, Purchase of Minority Interest in D.A.W.). The increase of $2,135,100 was the difference between the purchase price of $4,000,000 for the remaining 20% of D.A.W. and minority interest as of February 3, 2008 of $1,864,900.

Line of credit. In October 2004, our discontinued operation, ADCO, obtained a $300,000 line of credit which is collateralized by property owned by ADCO and guaranteed by us. The interest rate for the line of credit is the Wall Street Journal Prime Rate. Repayment of the line of credit is in monthly payments of interest only, with the principal being due at maturity, unless renewed. The line of credit expires November 30, 2008. We intend to renew the line of credit. As of the date of this report, we have drawn $300,000 on the line of credit.

Debt. At June 30, 2008, debt was $2,313,958 as compared to $290,707 at June 30, 2007. Debt increased to purchase the remaining 20% interest of D.A.W. See Note 3, Change in Control and Purchase of 20% of Subsidiary, in Item 8 of this annual report.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, inventory shrinkage, impairment, and income taxes. We base our estimates on historical experience, current and anticipated business conditions, the condition of the financial markets and various other assumptions that are believed to be reasonable under existing conditions. Actual results may differ from these estimates.

We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Revenue recognition. For all pharmacy sales other than third party pharmacy sales and those described below, we recognize revenue from the sale of merchandise at the time of the sale. For third party pharmacy sales, revenue is recognized at the time the prescription is dispensed. We record third-party revenues and related receivables, net of provisions for contractual and other adjustments.

We also recognize revenues sales from non-cash transactions wherein the pharmacy dispenses pharmaceuticals from its inventory provided to non-profit organizations through certain governmental programs treating needy patients. We receive a dispensing fee, a percentage of the costs of the medication and the replacement of the pharmaceuticals. The dispensing fee and the percentage of the prescription cost are recorded as sales. Replacement of the pharmaceuticals received are recorded at cost. We recognize dispensing fee revenue when it dispenses prescriptions for non-profit agencies on a per prescription basis and receives a dispensing fee for each prescription dispensed. In one contract, we also receive a stipulated monthly amount per patient.

Our estimate of uncollectible amounts are based on our historical collection experience and current economic and credit conditions.

Inventories. Included in our valuation of inventory are estimates of the losses related to shrinkage, which occurs during periods between physical inventory counts. When estimating these losses, we considered historical loss results at specific locations as well as overall loss trends. Should actual shrink losses differ from the estimates upon which our reserves were based, our operating results will be impacted.

Impairment. We evaluate long-lived assets, excluding goodwill, for impairment in the fourth quarter and annually, or whenever events or changes in circumstances indicate that the assets may not be recoverable. The impairment is measured by estimating the expected future cash flows expected to be generated by the assets, and comparing this amount to the carrying value.

Goodwill impairment. In connection with the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", our Chief Executive Officer and our Chief Financial Officer perform an annual impairment test of goodwill. Our tests during the fourth quarter of fiscal years 2008 and 2007 resulted in no impairment being identified. However, the process of evaluating goodwill for impairment involves the determination of the fair value of our companies. Inherent in such fair value determinations are certain judgments and estimates, including the interpretation of economic indicators and market valuations and assumptions about our strategic plans. To the extent that our strategic plans change, or that economic and market conditions worsen, it is possible that our conclusion regarding goodwill impairment could change and result in a material effect on our financial position or results of operations.

Income taxes. We have significant deferred tax assets. We regularly review deferred tax assets for recoverability considering our historical profitability, projected taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. We will establish a valuation allowance against deferred tax assets when we determine that it is more likely than not that some portion of our deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. Significant judgment is required in making these assessments.

Purchase of Minority Interest in D.A.W.

On February 4, 2008, in connection with the closing of the Acquisition, we (i) entered into an amendment with Karen Wright to amend Ms. Wright's employment agreement to reflect her resignation as our President and Vice President of Operations and her resignation from our Board of Directors, (ii) entered into employment agreements with D.A.W. and each of Messrs. Mark Dumouchel, David Dumouchel, Wayne Gunter, Donato Mazzola and Michael Curry (collectively, the "New Employment Agreements"), (iii) entered into a registration rights agreement
(the "Registration Rights Agreement") with the Minority Shareholders, (iv)
issued a $350,000 promissory note (the "Purchase Note"), (v) issued $1,500,000 of convertible notes (the "Convertible Notes"), (vi) issued a $400,000 promissory note (the "Nyer Promissory Note") and (vii) issued a promissory note in connection with a certain loan from D.A.W. (the "D.A.W. Note").

The Minority Shareholders were Mark Dumouchel, the President and a director of D.A.W., David Dumouchel, a Vice President and a director of D.A.W. and the brother of Mark Dumouchel, Lucille Curry, the sister of each of Mark and David Dumouchel, Wayne Gunter, a Vice President of D.A.W., and Donato Mazzola, a Vice President of D.A.W. The stockholders of F.M.T. Franchise Co., Inc. ("F.M.T.") (another majority-owned subsidiary of ours which was purchased, in part, by D.A.W.) other than us were Mark Dumouchel, David Dumouchel, Michael Curry, a Vice President of D.A.W. and husband of Lucille Curry, Wayne Gunter and Donato Mazzola.

In connection with the Acquisition, the pledge agreement dated as of August 14, 2006 made by us in favor of D.A.W. was terminated and is of no further force and effect. Pursuant to the pledge agreement, we had pledged to D.A.W. certain shares of D.A.W. owned by us to secure our debt to D.A.W. under an agreement, dated as of August 9, 2006, by and among us, D.A.W., F.M.T., the Minority Shareholders and Michael Curry (the "2006 Agreement").

Still unable to satisfy our purchase obligations under the 2006 Agreement, in December 2007 we entered into the First Amended and Restated Agreement which we entered into on December 20, 2007 with D.A.W., the Minority Shareholders and Michael Curry (the "Amended Agreement") in order to allow for a series of transactions, which, when completed and realized upon over time, would together with other related transactions (by and between Samuel Nyer and us) satisfy our obligations under the 2006 Agreement and the 1996 Agreement.

Upon the effectiveness of the Amended Agreement, on February 4, 2008, the rights and obligations of the parties to the 1996 Agreement and the 2006 Agreement (as such terms are defined below) were satisfied.

In consideration for the remaining 20% of D.A.W.'s outstanding common stock, we paid and issued to the Minority Shareholders the following: (i) an aggregate cash payment of $1,750,000 (which was funded by the D.A.W. Note); (ii) 2,000 shares of Series 2 Stock, a newly-created series of convertible Class B Stock, which shares are initially convertible into 218,000 shares of our common stock, based upon an initial conversion price of $1.84 (which is subject to adjustment), and which have 2,000 votes per share of Series 2 Stock (for an aggregate of 4,000,000 votes); (iii) the Purchase Note; and (iv) the Convertible Notes, which are convertible into an aggregate of approximately 815,217 shares of common stock, based upon an initial conversion price of $1.84.

On February 4, 2008, we also purchased from Mr. Nyer 2,000 shares of our Class A Stock and 1,000 shares of Class B Stock held by Mr. Nyer (which represented all of the issued and outstanding shares of such preferred stock) in exchange for the Nyer Promissory Note. In accordance with the terms of the Amended Agreement, we cancelled the Class A Stock and the Class B Stock. Samuel Nyer's son, Dr. Kenneth Nyer, was our director, but he resigned his position on February 4, 2008.

. . .