Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management discussion and analysis should be read in conjunction with the Condensed Financial Statements and Notes thereto presented elsewhere in this Form 10-Q. The discussion is based upon such condensed financial statements that have been prepared in accordance with U.S. Generally Accepted Accounting Principles.

The statements contained in this Report that are not historical are forward-looking statements, including statements regarding the Company's expectations, intentions, beliefs or strategies regarding the future. Forward-looking statements include the Company's statements regarding liquidity, anticipated cash needs and availability and anticipated expense levels. All forward-looking statements included in this Report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. Additionally, the following discussion and analysis should be read in conjunction with the Condensed Financial Statements and notes thereto appearing elsewhere in this Report. The discussion is based upon such condensed financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles.

Overview

The Company had ceased active operations as of June 1, 2007 upon the sale of Drug Depot. When the Company was operating, it derived its revenues, primarily from the sale of prescription drugs to veterinarians and their clients and laboratories. Revenues were billed and recognized, as products were shipped, net of discounts, allowances, returns and credits.

Selling, general and administrative costs include office expense, license fees and professional fees.

Results of Operations

Three Months Ended September 30, 2009 Compared To Three Months Ended September 30, 2008

Operating expenses. The Company incurred operating expenses of $8,614 for the three months ended September 30, 2009, a decrease of $17,524 or 67%, compared to $26,138 for the three months ended September 30, 2008. The decrease was primarily attributable to the decrease in accounting and legal fees in 2009.

The Company had no income tax provision for the three months ended September 30, 2009 and 2008. No tax benefit has been provided due to the uncertainty in the utilization of the loss carryforwards. These net operating losses may be carried forward for up to 20 years.

Preferred dividends. The Company did not have any preferred stock dividends for the three months ended September 30, 2009 and 2008 related to the Company's Series A Preferred Stock of Vertical Health Solutions, Inc.

Net income (loss) per share. Net income (loss) per share for the three months ended September 30, 2009 and 2008 were ($0.00) and ($0.00), respectively.

Inflation; Seasonality. Management believes that there was no material effect on operations or the financial condition of the Company as a result of inflation for the three months ended September 30, 2009 and 2008.

Nine Months Ended September 30, 2009 Compared To Nine Months Ended September 30, 2008

Operating expenses. The Company incurred operating expenses of $25,913 for the nine months ended September 30, 2009, a decrease of $75,812 or 75%, compared to $101,725 for the nine months ended September 30, 2008. The decrease was primarily attributable to the decrease in accounting and legal fees in 2009.

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The Company had no income tax provision for the nine months ended September 30, 2009 and 2008. No tax benefit has been provided due to the uncertainty in the utilization of the loss carryforwards. These net operating losses may be carried forward for up to 20 years.

Preferred dividends. The Company did not have any preferred stock dividends for the nine months ended September 30, 2009 and 2008 related to the Company's Series A Preferred Stock of Vertical Health Solutions, Inc.

Net income (loss) per share. Net income (loss) per share for the nine months ended September 30, 2009 and 2008 were ($0.00) and ($0.00), respectively.

Inflation; Seasonality. Management believes that there was no material effect on operations or the financial condition of the Company as a result of inflation for the nine months ended September 30, 2009 and 2008.

Financial Condition, Liquidity and Capital Resources

The Company has $20,641 of cash and a working capital deficit of approximately $85,700 at September 30, 2009, compared to no cash and a working capital deficit of approximately $193,600 at September 30, 2008.

Net cash used by operating activities was $73,267 and $91,893 for the nine months ended September 30, 2009 and 2008, respectively. The increase in cash used was primarily attributable to the payment of accounts payable and the lack of any revenue generating activity during the nine months ended September 30, 2009.

Net cash used by investing activities was $0 for the nine months ended September 30, 2009 and 2008.

The Company received $100,000 cash in exchange for a note payable for financing activities and repaid $6,092 to a related party, during the nine months ended September 30, 2009 as compared to $91,893 cash received by related parties during the same period ended September 30, 2008. The overall increase in cash provided by financing activities is primarily the result of the issuance of the note payable.

The Company's future liquidity and cash requirements will primarily depend on the Company's ability to develop a new business or secure future acquisitions. In particular, as the Company will not have any cash flows from operations, it will be necessary for the Company to raise capital or seek additional financing. While there can be no assurance that such raising of capital or seeking of additional financing would be available in amounts and on terms acceptable to the Company, management believes that such financing would likely be available on acceptable terms.