Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

In addition to historical information, this Report contains forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, management of growth, competition, pricing pressures on the Company's products, industry growth and general economic conditions. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date hereof. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements.

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.

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

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.

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.

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 May 18, 2009 the Company closed on a transaction 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 converted all of their outstanding debt and accrued interest, which was approximately $6.6 million as of the closing date, retired all of their outstanding warrants (22,826,022),and terminated their security interest in the Company's assets; in return for $7.9 million in preferred convertible stock, a cash payment of $100,000 and 4% of the then outstanding common stock of the Company, approximately 1,718,000 shares.

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 36.8% 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 at the time of a capital raising event.

On June 21, 2009 the Company closed on a $3.0 million working capital facility with a regional bank located in New York State. The funds will be used to support Company operations as well as consolidate some previous more costly debt.

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 facility 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 facility 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.

RESULTS OF OPERATIONS

Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) 157, " Fair Value Measurements ". SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The adoption of this standard has not had a significant impact on the Company's consolidated financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities ", including an amendment of FASB No. 115 ("FAS 159"). The Statement permits companies to choose to measure many financial instruments and certain other items at fair value in order to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. FAS 159 is effective for the Company beginning January 1, 2008. The adoption of this standard has not had a significant impact on the Company's consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued Statement of Financial Accounting Standard No. 160, "Non-controlling Interests in Consolidated Financial Statements -- an amendment of ARB No. 51" ("FAS 160"). FAS 160 establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the retained interest and gain or loss when a subsidiary is deconsolidated. This statement is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 with earlier adoption prohibited. The Company is currently evaluating the impact, if any, of FAS 160 on its operating results and financial position.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations," ("SFAS 141R") which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquirer. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R applies prospectively to business combinations for which . . .