Medical Technology & Innovation, Inc. Form 10-KSB June 30, 2006

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB

(Mark One)

__ _X____

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended June 30, 2006

_ __ ____

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 33-27610-A

Medical Technology & Innovations Inc.

(Name of small business issuer in its charter)

Florida	65-2954561
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1800 Fruitville Pike Suite 200, Lancaster PA	17601
(Address of principal executive offices)	(Zip Code)

(Issuer’s telephone number, including area code): (717) 390-3777

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

None

(Title of each class)

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

None

(Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

YES [ ] NO [X]

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 or Regulation S-B is not contained in this form, and no disclosure will 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-KSB or any amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [ ] NO [X]

The issuer’s revenues for its most recent fiscal year were $0.

The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold or the average bid and asked prices of such stock as of January 2, 2007 was $0. There is no quoted marked for the voting stock

As of January 2, 2007, 6,837,904 shares of Common Stock, no par value, of the registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

None

Transitional Small Business Disclosure Format (Check One): YES [ ] NO [X]

Table of Contents

Form 10-KSB

Medical Technology & Innovations, Inc.

Part I

Item No.		Page

1.	Description of Business	3

2.	Description of Properties	4

3.	Legal Proceedings	5

4.	Submission of Matters to a Vote of Security Holders	5


Part II

5.	Market for Common Equity and Related Stockholder Matters and Small Business Issuer’s Purchase of Equity Securities	6

6.	Management’s Discussion and Analysis or Plan of Operation	6

7.	Financial Statements	9

8.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	18

8A.	Controls and Procedures	18

8B.	Other Information	19


Part III

9.	Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act	19

10.	Executive Compensation	20

11.	Security Ownership of Certain Beneficial Owners and Management	21

12.	Certain Relationships and Related Transactions	21

13.	Exhibits	22

14.	Principal Accountant Fees And Services	22

Item 1. Description of Business

Prior Business

Medical Technology & Innovations, Inc., f/k/a Southstar Productions, Inc. (the “Company”) was incorporated in the state of Florida in January 1989. Prior to September 6, 2002, the company operated through two wholly-owned subsidiaries, Medical Technology, Inc. (“MTI”) and Steridyne Corporation (“Steridyne”).

Prior to September 6, 2002, the Company manufactured and distributed the PhotoScreener, which is a specialized Polaroid-type instant film camera designed to detect conditions that lead to amblyopia (“lazy eye”) and other eye disorders. Steridyne was a manufacturer and distributor of thermometer sheaths, probe covers, and anti-decubitus gel cushions. Steridyne also distributed both glass and digital thermometers.

On September 6, 2002, the Company signed an Agreement in Lieu of Foreclosure with a company affiliated with the Chief Executive Officer and Chairman of the Board. The Agreement in Lieu of Foreclosure transferred the assets of the Company and its subsidiaries to Polycrest Holdings, Inc., except for (a) certain technology that was retained by the Company, and (b) the Company’s contingent asset related to the anticipated settlement, award, or judgment in the Company’s litigation against LensCrafters, Inc. and Luxottica Group S.p.A. The Agreement also transferred the liabilities of the Company and its subsidiaries to Polycrest Holdings, Inc. except for (a) the contingent liabilities of the LensCrafters’ litigation, (b) the employment agreement of the Chairman and Chief Executive Officer, and (c) the lease of its headquarters building.

Between September 6, 2002, and June 22, 2005, the Company ceased operations except for liabilities associated with the LensCrafters’ litigation and the liabilities associated with other litigation which the Company is a party. On July 25, 2005, the Company received a judgment of $15.6 million in the LensCrafters’ litigation. The Company has paid all legal expenses and judgments and believes it is free of all litigation.

Current Business

On June 22, 2005, the Company formed a subsidiary called World Nurse Space, Inc. (“WNSI”). The subsidiary was formed to launch a Social Website aimed at nurses. The Company has re-purposed itself and is focusing on Social Website Developing not only in the nurse profession but in other areas as well. Therefore on September 25, 2006 the Company formed a second subsidiary called “itLinkz Corporation.” The business purpose of itLinkz is to adapt the technology and concepts used in the WNSI website to a broad array of social networks.

Over the next few years, itLinkz‘s strategy is to create and launch thousands of sophisticated yet easy to use social and business networking community websites. On each website, both personal and professional level members will be able to connect anytime around shared interests, to collaborate, share knowledge and team up with other members. This concept offers applications not only to online social groups but to business communities as well.

With the anticipated January 2007 launch of its first Web 2.0 social networking website, itLinkz has successfully addressed critical market segmentation issues which Myspace.com, YouTube.com, Facebook.com, Digg.com, LinkedIn.com, Multiply.com, Gather.com and others have not adequately delivered. For the online community, itLinkz has focused its efforts on developing and launching websites focused on defined areas of interests rather than offering to advertisers and marketers a generalist community with broad interests. itLinkz has developed a strategic plan that will allow the Company to gain a competitive advantage with a first to market approach with the LinkUp model. itLinkz will identify niche audiences based on their total size, spending habits and their supply/demand for online content consumption.

The focal point of itLinkz’ development has been the construction of the core website ‘engine’. The internals of the engine is comprised of software that itLinkz has licensed from a software vendor. Customization and extension of the engine is being developed initially by the software vendor. Beginning with the second release in 2007, the responsibility for engine customization and extension will be migrated in-house. Contractually, itLinkz owns exclusive intellectual property rights to all code developed under our work-to-hire agreement with the software vendor. In addition, itLinkz has access to all source code that has been licensed from the software vendor. To date, the Company has spent approximately $300,000 on the research and development of this engine.

This engine is used as the backbone for each website, which is then “skinned” with a customized, unique look and feel of each particular profession, community or interest group. In addition to planning for the development and launch of thousands of social networking websites, itLinkz is currently examining the most expeditious and profitable manner in which to present this technology to the thousands of business communities that could make use of itLinkz’ expertise and knowledge. Since itLinkz’s websites are being designed to be hosted separately from each other, itLinkz will be hosting the websites on a geographically diverse set of hosting providers. This will provide basic defense against a site wide disaster. In addition, a contract will be signed with an availability services vendor to provide a disaster recovery site to quickly restore sites that may experience a disaster scenario. Initial websites will be hosted at a Class-A hosting provider located near itLinkz’ headquarters. itLinkz has entered into a three year contract with this hosting provider to provide Internet connectivity, system/network administration and server leasing. All hosting provider contracts will provide the ability to quickly scale to meet the demands of the websites it hosts.

Initially, and to quickly generate revenues, itLinkz has developed a first-to-market commercial opportunity for advertisers, marketers and business operators. Through its websites, itLinkz offers access to consumers and patrons within tightly-defined demographic profiles and with shared interests. itLinkz is developing and launching 500 separate and specific social networking online communities. Each website is focused on one common interest (profession, hobby, leisure, current events, industry or geographic area). In doing so, itLinkz is positioning itself as a premier provider to advertisers and marketers who, by advertising their products on itLinkz, have targeted demographic websites where they can reach consumers predisposed to favorably receive their message and to tap the collective knowledge of that community. This will allow advertisers and marketers to refine their sales and marketing process to a degree that will likely provide the advertiser an effective revenue stream, while monitoring the progress of different advertising campaigns. itLinkz’ technology offers possibilities for other user generated applications such as providing a sophisticated web based communication tool for businesses and organizations.

itLinkz management believes it is poised for significant growth with the launch of the new online social and business networking sites it is developing. Plans have been put into operation for a launch in the near-term of the first seven itLinkz websites.

The Company recognizes that marketing will play a critical role in the success of this enterprise and is committed to developing an aggressive yet professional multi-dimensional promotional effort to launch each web community. The primary goals of itLinkz marketing efforts will be to:

Build awareness

Establish significant member community

Promote participation and interaction

Attract large scale advertisers and markets who will advertise on itLinkz websites

The key metric will be attracting significant numbers of people to join the site and encouraging them to spend time participating and contributing within each itLinkz web community. To insure that there is sufficient awareness to stimulate and drive traffic to the websites and encourage registration, itLinkz will assertively employ traditional and innovative promotional tactics. To reach these objectives, itLinkz has contracted with professional marketing and public relations firms that have demonstrated the ability to provide marketing insights and expertise that drives results in the new Web 2.0 environment. For example, itLinkz has engaged a California-based marketing communications firm with extensive brand development experience and strong creative credentials. The Company has also partnered with a highly respected group specializing in Internet strategies and interactive solutions.

Employees

As of January 2, 2007, the Company employed 10 full-time employees. None of the Company’s employees are represented by a labor union. The Company considers its employee relations to be good.

Item 2. Description of Properties

The Company’s principal executive and administrative offices are located at 1800 Fruitville Pike in Lancaster, Pennsylvania. This facility is leased from FHP Partnership for a term that will expire on September 1, 2011. The monthly rental paid by the Company is $6,246. The Company believes that its properties are adequate for the Company’s business for the foreseeable future.

Item 3. Legal Proceedings

On February 15, 2000, the Company filed a lawsuit in the Common Pleas Court of Dauphin County, Pennsylvania, against LensCrafters, Inc. (LensCrafters) and its parent, Luxottica Group S.P.A. (Luxottica). The Company had entered into a business relationship with LensCrafters to provide more than 600 of its PhotoScreener devices for use in the retail facilities of LensCrafters. In a written agreement dated August 25, 1998, LensCrafters committed that it would conduct a national marketing campaign in excess of $5 million to promote vision screening through the PhotoScreener. The Company’s complaint provided that the Company delivered the PhotoScreeners to LensCrafters, but LensCrafters failed to meet its promotional and marketing commitments. The Complaint asserted legal claims for breach of contract by LensCrafters, for misrepresentation and fraud by LensCrafters, and for intentional interference with contract by Luxottica. LensCrafters moved to refer the case to arbitration. The case was moved to the American Aribitration Association in Cincinnati, OH where it was heard on March 8, 2005. The American Arbitration Association ruled in favor of the Company and an award was made for $15.6 million during the fiscal year ended June 30, 2005. After payment of legal fees and expenses, including the payment to its Chairman described in the next paragraph, the Company received net proceeds of $4.8 million from the award.

As of January 1, 2000, the Company entered into an Agreement with Growth Capital Resources, a company affiliated with Jeremy Feakins, Medical Technology’s Chairman and Chief Executive Officer. Growth Capital Resources agreed to provide litigation management services with regard to the proceedings against LensCrafters et al; and to pay or advance all attorney’s fees and other litigation costs incurred by the Company to pursue this litigation. No costs or expenses were to be reimbursed in the event the litigation is unsuccessful. On January 6, 2003, the Agreement was amended to incorporate the litigation management of all of the ongoing litigation. In return for assuming the additional litigation, the Company agreed to reimburse 35% of the gross judgment, award or settlement from the LensCrafters litigation and all costs associated with managing it to the affiliated company. Accordingly, from the proceeds of the LensCrafters judgment, $5,460,000 was paid to Growth Capital Resources.

In 2000, the Company and Steridyne Corporation were named defendants in a breach of contract litigation relating to the asset purchase agreement with Florida Medical Industries (“FMI”). On September 11, 2002, the Circuit Court for Lake County, FL, ruled against the Company and Steridyne which resulted in an award to FMI in the amount of $866,457. The judgment was appealed and resolved on January 8, 2003 in favor of FMI. As a result, the award began accruing interest of 9% per annum on $658,294 of the award and 6% per annum on $208,163 of the award. The amounts including accrued interest were paid from the proceeds of the LensCrafters settlement on July 27, 2005, and totaled $1,061,737.

Item 4. Submission of Matters to a Vote of Security Holders

None.

PART II.

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer’s Purchase of Equity Securities

At the close of business on December 4, 2001, the Company affected a one-for-twenty-five reverse stock split as approved by the Company’s Board of Directors. Prior to the split, the Company was authorized to issue 700,000,000 shares of common stock. The authorized shares were reduced in proportion to the stock split so that after the reverse stock split, the authorized capital stock of the Company was 28,000,000 shares of common stock. All common stock and per share data included in these consolidated financial statements and accompanying footnotes has been restated to give effect to the reverse stock split.

The following table sets forth the range of the high and low bid prices for the common stock during the periods indicated, and represents interdealer prices, which do not include retail mark-ups and mark-downs, or any commission to the broker-dealer, and may not necessarily represent actual transactions.

Quarter Ending	High	Low	Quarter Ending	High	Low

September 30, 2005	$ .00	$ .00	September 30, 2004	$ .05	$ .00
December 31, 2005	.00	.00	December 31, 2004	.00	.00
March 31, 2006	.00	.00	March 31, 2005	.00	.00
June 30, 2006	.00	.00	June 30, 2005	.00	.00

As of January 5, 2007, there were approximately 720 record holders of common stock. Such amounts do not include common stock held in “nominee” or “street” name.

The Company has not paid cash dividends on its common stock since its inception. At the present time, the Company’s anticipated working capital requirements are such that it intends to follow a policy of retaining any earnings in order to finance the development of its business.

Item 6. Management’s Discussion and Analysis or Plan of Operation

This analysis should be read in conjunction with the consolidated financial statements and notes thereto.

This Form 10-KSB includes “forward looking statements” concerning the future of operations of the Company. It is management’s intent to take advantage of the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. This statement is for the express purpose of availing the Company of the protections of such safe harbor with respect to all “forward looking statements” contained in this Form 10-KSB. We have used “forward looking statements” to discuss future plans and strategies of the Company. Management’s ability to predict results or the effect of future plans is inherently uncertain. Factors that could affect results include, without limitation, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions, acceptance, technological change, changes in industry practices and one-time events. These factors should be considered when evaluating the “forward looking statements” and undue reliance should not be placed on such statements. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein.

Agreement in Lieu of Foreclosure

On August 30, 2002, the Company’s Board of Directors unanimously approved an Agreement in Lieu of Foreclosure (“Agreement”) between (a) the Company and its subsidiaries as Debtors and (b) Polycrest Holdings, Inc. as Creditor. Polycrest Holdings, Inc. is owned by Jeremy Feakins, our Chief Executive Officer, and James Howson, a shareholder of Medical Technology. The Board of Directors of each of the Company’s subsidiaries likewise approved the Agreement.

The Agreement provided that the transaction would not close unless certain conditions were satisfied, including the receipt by the Company of a fairness opinion from an independent accounting firm that concluded that the Agreement was fair to the Company and to its shareholders. The Company has received the fairness opinion which is filed on Form 8-K on October 15, 2002 and has closed the transaction.

The fairness opinion concluded that the Company and its subsidiaries had a negative net asset value and that, therefore, the transaction transferring a substantial part of the assets in return for the release of security interests and the assumption of a substantial part of the liabilities while leaving substantial assets in the Company would be fair from a financial point of view to the Company and to its shareholders.

The Agreement transferred the assets of the Company and its subsidiaries to Polycrest Holdings, Inc., except for (a) certain technology that was retained by the Company, part of which it licensed to Polycrest Holdings, Inc. in return for royalties from the sale of IVD products, and (b) the Company’s contingent asset related to the anticipated settlement, award or judgment in the Company’s litigation against LensCrafters, Inc. and Luxottica Group S.p.A. This contingent asset was subject to payment of attorney’s fees and a fee for managing the case and advancing the costs and expenses incurred in the litigation.

The Agreement transferred the liabilities of the Company and its subsidiaries to Polycrest Holdings, Inc. The Company retained certain contingent liabilities, the Company’s lease of its headquarters building, its employment agreement with the Chairman and Chief Executive Officer and contingent liabilities associated with the various litigation matters.

The Agreement released the Company and its subsidiaries from all liabilities related to funds and services that had been advanced by the Chairman and Chief Executive Officer and parties related to him as well as the security agreements that covered those liabilities. The Chairman and Chief Executive Officer and parties related to him had loaned money to the Company and had advanced funds and services for the benefit of the Company and its subsidiaries, beginning with the loan of $1,000,000 on January 21, 2000. The Board of Directors had authorized the Company to obtain the loan and the advances and to enter into security agreements, dated August 7, 2002, to secure the advances. The security agreements related back to all advances of funds and services that were provided to the Company and its subsidiaries before that date but did not include the loan of January 21, 2000, which had been paid off in part.

Because the Company’s inability to repay the advances, Polycrest Holdings, Inc. was entitled to foreclose on the assets of the Company and its subsidiaries but instead settled the potential foreclosure actions by entering into the Agreement. The date of the Agreement is September 6, 2002, to reflect the onset of the closing process, which was completed over the following thirty days.

Results of Operations

Fiscal Year Ended June 30, 2006 as Compared to June 30, 2005

On July 25, 2005, the Company received the cash from the LensCrafters litigation of $15,626,623 less legal expenses and prior judgments. The net cash received was $8,727,865. From that $8,727,865, $4,375,328 was paid to Growth Capital Resources per the Litigation Management Agreement, $3,000,000 was put into an escrow account for pending litigation, approximately $360,742 was paid for old litigation matters and $991,795 went to funding the operating expenses.

Operating expenses during the year ended June 30, 2006 were $991,795, compared to $121,031 for fiscal year 2005, or an increase of $870,764 or 719%. Interest expense was $74,169 and $71,736 for years ended June 30, 2006 and 2005, respectively. Operating expenses in the fiscal year 2006 consist primarily of expenses related to the LensCrafters and other litigation and the development costs of the new social networking websites.

Liquidity and Capital Resources

At June 30, 2006, the Company had cash of $64,171 and working capital of $76,135 as compared to $0 and $2,466,010, respectively, at June 30, 2005. This decrease in the working capital is due to the LensCrafters award being issued on June 30, 2005, the payment of expenses related to that litigation and the restriction placed on cash.

From June 30, 2002 until we received the LensCrafters judgment in 2005, our operations were funded by Growth Capital Resources, an affiliate of our Chairman. As of January 1, 2000, the Company had entered into an Agreement with Growth Capital Resources to provide litigation management services with regard to the proceedings against LensCrafters et al; and to pay or advance all attorney’s fees and other litigation costs incurred by the Company to pursue this litigation. No costs or expenses were to be reimbursed in the event the litigation is unsuccessful. On January 6, 2003, the Agreement was amended to incorporate the litigation management of all of the current litigation. In return for assuming the additional litigation, the Company agreed to reimburse 35% of the gross judgment, award or settlement from the LensCrafters litigation and all costs associated with managing it to the affiliated company.

On June 30, 2005 we received a $15.6 million judgment from LensCrafters. From that sum we paid:

$5,357,022 - to our attorneys;

$5,460,000 - to Growth Capital Resources;

$3,268,388 - to settle outstanding liabilities.

The remaining $1,541,213 is being applied to the expenses of initiating the operations of the itLinkz business. At December 31, 2006 we had $651,089 in cash and cash equivalents and $1,498,900 in debts.

Item 7. Financial Statements

Index to Consolidated Financial Statements

	Page

Report of independent registered public accounting firm	10

Consolidated balance sheets as of June 30, 2006 and 2005	11

Consolidated statements of operations for the years ended
June 30, 2006 and 2005	12

Consolidated statements of changes in stockholders’ equity for the years ended
June 30, 2006 and 2005	13

Consolidated statements of cash flows for the years ended
June 30, 2006 and 2005	14

Notes to consolidated financial statements	15

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Medical Technology & Innovations, Inc. and Subsidiaries

Lancaster, Pennsylvania

We have audited the accompanying consolidated balance sheets of Medical Technology & Innovations, Inc. and Subsidiaries (the “Company”) as of June 30, 2006 and 2005 and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Medical Technology & Innovations, Inc. and Subsidiaries as of June 30, 2006 and 2005 and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net working capital deficit that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to those matters are also described in Note 8. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Stegman & Company

Baltimore, Maryland

January 3, 2007

Medical Technology and Innovations, Inc.

Consolidated Balance Sheets

As of June 30, 2006 and 2005

	2006			2005
Assets

Current Assets:
Cash	$	64,171		$	-
Restricted cash		3,000,000			-
Award receivable		-			15,626,623
Total Assets	$	3,064,171		$	15,626,623


Liabilities and Stockholders' Equity

Current Liabilities:
Accounts Payable	$	165,959		$	-
Accrued liabilities		256,875			226,625
Accrued legal expenses		-			5,526,041
Other liabilities		1,408,178			1,562,947
Accrued consulting services		84,672			4,460,000
Current Maturities of Long-Term Debt		1,072,352			1,385,000
Total current liabilities		2,988,036			13,160,613

Long-Term Debt, Net of Current Maturities		-			-
Other Long-Term Liabilities		-			619,766
Total Liabilities		2,988,036			13,780,379


Stockholders' Equity
Common stock, no par value, authorized 28,000,000 shares, outstanding 6,837,904 shares		15,883,711			15,883,711
Preferred Stock, Authorized 100,000,000 Shares $1,000 par value, 12%, noncumulative, outstanding 22.5 shares.		22,500			22,500
Treasury Stock, at cost (78,941 shares)		(436,799	)		(436,799	)
Accumulated Deficit		(15,393,277	)		(13,623,168	)
Total Stockholders' Equity		76,135			1,846,244
Total Liabilities and Stockholders' Equity	$	3,064,171		$	15,626,623

The accompanying notes are an integral part of the financial statements.

Medical Technology and Innovations, Inc.

Consolidated Statements of Operations

For the Years Ended June 30, 2006 and 2005

	2006			2005


Operating Expenses
General, and Administrative	$	991,795		$	121,031

Total Operating Expenses		991,795			121,031

Loss from Operations		(991,795	)		(121,031	)

Litigation settlement expense		704,145			-
Interest Expense, Net		74,169			71,736
Gain on Award from Lenscrafters - Net of legal expenses		-			4,299,179

Net (Loss) Income	$	(1,770,109	)	$	4,106,412


Net (Loss) Income per common share (basic and diluted)	$	(0.259	)	$	0.601

Weighted Average Outstanding Shares		6,837,904			6,837,904

The accompanying notes are an integral part of the financial statements.

Medical Technology and Innovations, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended June 30, 2006 and 2005

													Total
	Common		Common		Preferred		Treasury			Accumulated			Stockholders'
	Shares		Stock		Stock		Stock			Deficit			Equity

Balance at July 1, 2004		6,837,904	$	15,883,711	$	22,500	$	(436,799	)	$	(17,729,580	)	$	(2,260,168	)
Net Loss		-		-		-		-			4,106,412			4,106,412
Balance at June 30, 2005		6,837,904		15,883,711		22,500		(436,799	)		(13,623,168	)		1,846,244
Net Loss		-		-		-		-			(1,770,109	)		(1,770,109	)
Balance at June 30, 2006		6,837,904	$	15,883,711	$	22,500	$	(436,799	)	$	(15,393,277	)	$	76,135

The accompanying notes are an integral part of the financial statements.

Medical Technology and Innovations, Inc.

Consolidated Statements of Cash Flows

For the Years Ended June 30, 2006 and 2005

	2006			2005

Cash flows from operating activities
Net (loss) income	$	(1,770,109	)	$	4,106,412

Adjustments to reconcile net loss to net cash used in operating activites:

Changes in assets and liabilities

Award receivable		15,626,623			(15,626,623	)
Restricted cash		(3,000,000	)		-
Accounts payable		165,959			-
Accrued legal expenses		(5,526,041	)		5,526,041
Accrued consulting services		(4,375,328	)		5,460,000
Other long-term liabilities		(619,766	)		-
Accrued interest payable		72,352			-
Other liabilities		(154,769	)		462,670
Accrued liabilities		30,250			71,500
Net cash provided by (used in) operating activities		449,171			-


Cash flows from financing activities:
Principal payments on long-term debt		(385,000	)		-
Net cash used in financing activities		(385,000	)		-
Net increase in cash		64,171			-
Cash at beginning of year		-			-
Cash at end of year	$	64,171		$	-


Noncash investing and financing transactions:

Cash paid for interest	$	195,680		$	-

The accompanying notes are an integral part of the financial statements.

Medical Technology and Innovations, Inc.

Notes to Consolidated Financial Statements

For the Years Ended June 30, 2006 and 2005

1.	Summary of Significant Accounting Policies

Organization. Medical Technology & Innovations, Inc., f/k/a Southstar Productions, Inc. (the “Company”) was incorporated in the state of Florida in January 1989. Prior to September 6, 2002, the Company operated two wholly-owned subsidiaries, Medical Technology, Inc. (“MTI”) and Steridyne Corporation (“Steridyne”). MTI was incorporated in the state of Iowa in April 1993 and Steridyne was incorporated in the state of Florida in 1996.

The Company acquired control of MTI in October of 1995 under the terms of a Share Exchange Plan (“the Plan”) with Southstar Productions, Inc. (“Southstar”). On August 1, 1996 the Company acquired the net assets and the right to the name of Steridyne. Effective April 1, 1999 the Company acquired certain key operating assets of the thermometer business of Florida Medical Corporation (“Florida Medical”), a former manufacturer of glass thermometers and distributor of digital thermometers which then became a part of Steridyne.

Between September 6, 2002, and July 25, 2005, the Company ceased operations except for liabilities associated with the LensCrafters’ litigation and the liabilities associated with other litigation which the Company is a party to.

On June 30, 2005, the Company was awarded $15.6 million in the LensCrafters’ litigation. The amount was received on July 25, 2005. The Company has paid all legal expenses and judgments and believes it is free of all litigation. The Company has re-purposed itself and is in the Social Website Developing.

Principles of Consolidation. The consolidated financial statements include the Company and its wholly-owned subsidiaries. All significant intercompany items have been eliminated.

Income Taxes. Deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary difference. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Advertising. Advertising costs are expensed as incurred.

Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Net Loss Per Common Share. Basic and diluted net loss per common share was computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. The impact of common stock equivalents has been excluded from the computation of weighted average common shares outstanding, as the effect would be antidilutive.

Restricted Cash. Restricted cash is excluded from cash in the Consolidated Statements of Cash Flows until the cash is transferred from the restricted account to the Company’s operating account. The cash has been restricted by court order in anticipation of settling litigation and has been placed in escrow.

On July 1, 2006, the court ordered the Company settle this litigation for approximately $704,000. The Company’s escrow agent paid the settlement from the escrowed funds and returned the balance of the account to the Company. At that time, the restriction was terminated. The settlement amount of $704,000 is included in the liability section of the balance sheet at June 30, 2006.

Long-Term Debt. Long-Term Debt consisted of the following at June 30, 2006 and 2005:

	2006			2005
15% note due July 2002, principal and interest payable monthly secured by substantially all of the assets of a subsidiary of the Company and guaranteed by the Company's Chief Executive Officer and major stockholder	$	-		$	32,752
15% note due July 2002, principal and interest payable monthly secured by substantially all of the assets of a subsidiary of the Company and guaranteed by the Company's Chief Executive Officer and major stockholder		-			67,248
10% note, principal and interest payable quarterly, unsecured		-			100,000
3% note, due February 2005, principal and interest payable quarterly, unsecured		-			25,000
Unsecured notes payable, due various dates, interest payable at various rates from 0% to 10%		-			160,000
7.5% unsecured note to the Company's Chief Executive Officer, principal and compounding interest due on demand but no later than July 31, 2010		1,072,352			1,000,000
Total Long-Term Debt	$	1,072,352		$	1,385,000
Less: amounts due in one year		(1,072,352	)		(260,000	)
Long-Term Debt, Net of Current Maturities	$	-		$	1,125,000

The amount of long-term debt maturing in each of the next five fiscal years is $1,072,352 in 2007.

Lease Expense. The Company leases various office space under operating lease agreements. Rent expense for the fiscal years ended June 30, 2006 and 2005 amounted to $9,000 and $9,000 respectively. Future minimum annual rentals for subsequent fiscal years are as follows at June 30, 2006:

Fiscal		Lease
Year		Payments
2007		4,500

Income Taxes. The Company did not incur any income tax expense for its fiscal years ending June 30, 2006 and 2004, respectively. As of June 30, 2006 the Company has sustained significant net operating losses (NOLs) for tax purposes. These NOLs began to expire in various amounts beginning in 2004 and will continue to expire through 2026 NOLs are subject to limitations should the ownership of the Company significantly change. The deferred tax asset resulting from the above NOL carryforwards has not been recorded in the accompanying financial statements. Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. The Company has not filed various required income tax returns and is in the process of preparing these returns to comply with all applicable regulations.

Preferred Stock. The $1,000 par value convertible preferred stock is convertible into 599 shares of the Company’s common stock.

Related Party Transactions. The Company and its wholly-owned subsidiaries have had transactions with various entities, certain of whose principals are also officers or directors of the Company or MTI.

As of January 1, 2000, the Company entered into an Agreement with a company affiliated with the Chairman and Chief Executive Officer to provide litigation management services with regard to the proceedings against LensCrafters et al; and to pay or advance all attorneys’ fees and other litigation costs incurred by the Company to pursue this litigation. No costs or expenses will be reimbursed in the event the litigation is unsuccessful. On January 6, 2003, the Agreement was amended to incorporate the litigation management of all of the current litigation. In return for assuming the additional litigation, the Company agreed to reimburse 35% of the gross judgment, award or settlement from the LensCrafters litigation and all costs associated with managing it to the affiliated company. The total amount due to the affiliated company at June 30, 2006, is $1,404,503.

As of June 30, 2006 the total amount payable to the Company’s Chairman and Chief Executive Officer was $715,224 consisting of accrued wages, rent and reimbursable expenses.

Contingent Liabilities. On September 6, 2002, the Company entered into an Agreement in Lieu of Foreclosure with a company that is affiliated with the Chairman and Chief Executive Officer. The agreement transferred the liabilities of the Company and its subsidiaries to Polycrest Holdings, Inc., including contingent liabilities related to litigation matters. The Company retained certain contingent liabilities, The Company’s lease of its headquarters building, its employment agreement with the Chairman and Chief Executive Officer and contingent liabilities associated with the various litigation matters. As of June 30, 2006 and 2005, the Company has accrued $704,033 and $2,182,713, respectively, related to these contingent liabilities, which consist of amounts due the Chairman and CEO.

Going Concern. The accompanying consolidated financial statements have been prepared assuming that the Company will continue with a going concern. The Company has suffered recurring losses from operations and has a net working capital deficit that raises substantial doubt about its ability to that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In view of these matters, realization of a major portion of the assets in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements and the success of its future operations. The Company entered into an Agreement in Lieu of Foreclosure on August 30, 2002 with a company associated with the Chief Executive Officer and Chairman of the Board. In that Agreement, the associated company has been given all of the assets and substantially all of the liabilities of the Company. In June of 2006, an award was issued against LensCrafters and its affiliates for $15.6 million and awarded to the Company. Management believes that actions presently being taken to revise the Company’s operating and financial requirements will provide the opportunity for the Company to continue as a going concern.

Litigation Matters. On February 15, 2000, the Company filed a lawsuit in the Common Pleas court of Dauphin County, Pennsylvania, against LensCrafters, Inc. (LensCrafters) and its parent, Luxottica Group S.P.A. (Luxottica). The Company entered into a business relationship with LensCrafters to provide more than 600 of its PhotoScreener devices for use in the retail facilities of LensCrafters. In a written agreement dated August 25, 1998, LensCrafters committed that it would conduct a national marketing campaign in excess of $5 million to promote vision screening through the PhotoScreener. The Company’s complaint provided that the Company delivered the PhotoScreeners to LensCrafters, but LensCrafters has failed to meet its promotional and marketing commitments. The complaint sought substantial monetary damages from both Luxottica and LensCrafters. It asserted legal claims for breach of contract by LensCrafters, for misrepresentation and fraud by LensCrafters, and for intentional interference with contract by Luxottica. LensCrafters moved to refer the case to arbitration. The case was moved to the American Aribitration Association in Cincinnati, OH, where it was heard on March 8, 2005. The American Aribitration Association ruled in favor of the Company and an award was made for $15.6 million in the fiscal year ended June 30, 2005.

As of January 1, 2000, the Company entered into an Agreement with a company affiliated with the Chairman and Chief Executive Officer to provide litigation management services with regard to the proceedings against LensCrafters et al; and to pay or advance all attorneys’ fees and other litigation costs incurred by the Company to pursue this litigation. On January 6, 2003, the Agreement was amended to incorporate the litigation management of all of the current litigation. In return for assuming the additional litigation, the Company agreed to reimburse 35% of the gross judgment, award or settlement from the LensCrafters litigation and all costs associated with managing it to the affiliated company.

In 2000, the Company and Steridyne Corporation were named defendants in a breach of contract litigation relating to the asset purchase agreement of Florida Medical Industries (“FMI”). On September 11, 2002, the Circuit Court for Lake County, FL, ruled against the Company and Steridyne which resulted in an award to FMI in the amount of $866,457. The $866,457 liability related to this litigation has been accrued at June 30, 2002. The judgment was appealed and resolved on January 8, 2003 in favor of FMI. As a result, the award began accruing interest of 9% per annum on $658,294 of the award and 6% per annum on $208,163 of the award. The amounts including accrued interest were paid from the proceeds of the LensCrafters settlement on July 25, 2005, and totaled $1,061,737.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

See: Item 8 in the Annual Report on Form 10-KSB for the year ended June 30, 2002.

Item 8A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Jeremy Feakins, our Chief Executive Officer, and Jennifer Herman, our Chief Financial Officer, carried out an evaluation of the effectiveness of Medical Technology’s disclosure controls and procedures as of June 30, 2006. Pursuant to Rule13a-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, “disclosure controls and procedures” means controls and other procedures that are designed to insure that information required to be disclosed by Medical Technology in the reports that it files with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time limits specified in the Commission’s rules. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to insure that information Medical Technology is required to disclose in the reports it files with the Commission is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, Mr. Feakins and Ms. Herman concluded that Medical Technology’s systems of disclosure controls and procedures were not effective as of June 30, 2006 because of the weaknesses in our internal control over financial reporting discussed below.

In the first quarter of the fiscal year ended June 30, 2003 the Company effectively ceased operations. The Company has not made any of the required SEC filings since filing it’s Form 10-QSB for the three and nine month periods ended March 31, 2002. During this period the Company lacked both the staff and financial resources to make the required filings. As a result there is a material weakness in the internal control over financial reporting during this period consisting primarily of the lack of required SEC filings since the March 31, 2002 Form 10-QSB. Additionally there were certain audit adjustments related to the valuation of assets that were disposed of between March 31, 2002 and September 30, 2002 and to the timing of recording contingent liabilities directly related to the successful outcome of the Company’s litigation against LensCrafters, Inc.

In August 2006 the Company hired a CFO to begin creating the supporting accounting records needed to bring current the required SEC filings. The Company is in the process of establishing the appropriate internal controls over financial reporting for periods going forward. This includes a new accounting system and additional employees in the accounting area.

Changes in Internal Controls. There was no change in internal controls over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during Medical Technology’s fourth fiscal quarter of 2006 that has materially affected or is reasonably likely to materially affect Medical Technology’s internal control over financial reporting.

Item 8B. Other Information

None.

PART III.

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act

The executive officers and directors of the Company are identified in the table below.

	POSITION WITH	DATE ELECTED
NAME	COMPANY	DIRECTOR	AGE

Jeremy Feakins	Director, Chief	April 1996	53
	Executive Officer

Michael Ragan	Executive Vice President,	--	47
	Technology & Operations

Jennifer Herman	Vice President - Finance	--	30
	Chief Financial Officer

BUSINESS EXPERIENCE

Mr. Feakins was originally elected to the Company’s board in April of 1996. Since 1989, he has served as President of Medical Technology, Inc. (MTI) and in October 1995, became the President and Chief Executive Officer of Medical Technology & Innovations, Inc. In October 2004 Mr. Feakins founded Care Recruitment Solutions International, Inc., which was engaged in the business of international placement of nurses. Mr. Feakins served as Chief Executive Officer of Care Recruitment Solutions, Inc. and its successor, CRSI Group, Inc. until August 2006, when it terminated its nurse placement operations. He continues to serve as a member of the Board of Directors of Caspian International Oil Corporation (Pink Sheets: CIOC), which is the successor to CRSI Group, Inc. From 2002 until 2004 Mr. Feakins was also employed as a Managing Member of Steridyne Industries, LLC., an importer of medical devices. Steridyne filed for a Chapter 7 liquidation in bankruptcy in December 2004 after Hurricanes Francis and Charley damaged Steridyne’s warehouse in Florida and destroyed its inventory. Since 1995, Mr. Feakins has also served as Chairman of Growth Capital Resources, LLC a venture capital and management consulting firm. From 1980 to 1986, he was the managing Director of Craft Master, Limited, a South African corporation, which was a manufacturer and exporter of point of purchase display systems. Mr. Feakins received his degree in accounting from the Royal Naval Secretarial and Accounting College, Chatham, Great Britain.

Mr, Ragan has served as the Executive Vice President of Operations and Technology of Medical Technology & Innovations, Inc. since October 2006. Prior to that, he was the Executive Vice President to the World Nurse Space, Inc. division. Mr. Ragan has over 20 years experience leading enterprise level technology initiatives for companies such as Tyco International and RR Donnelley and Sons (NYSE: RRD). Most recently he led a professional services organization which provided technology solutions for the Financial Services and Healthcare markets. Mr. Ragan also served as the Chief Technology Officer at Everybook, Inc., a high-tech startup company. Mr. Ragan has experience in global business process re-engineering and is a certified professional project manager. Mr. Ragan is a graduate of the Indiana University of Pennsylvania.

Ms. Herman has served as the Chief Financial Officer of Medical Technology & Innovations, Inc. since August 2006. Her most recent position was in New York City where she was instrumental in directing the reorganization of a Sub-Prime Auto Lending business into a highly successful Corporate Communications and Medical Education business (NYSE: IDAI). Ms. Herman brings an extensive financial management background and a great deal of SEC reporting and Sarbanes-Oxley experience. Ms. Herman graduated from Kutztown University with her Master’s in Business Administration and Alvernia College with a double Bachelor’s Degree in Accounting and Business Management.

Audit Committee; Compensation Committee

The Board of Directors has not appointed an Audit Committee or a Compensation Committee, since the Board has only one member. There is no audit committee financial expert on the Board, due to the fact that the Company’s business is still in its development stage.

Code of Ethics

The Company does not have a written code of ethics applicable to its executive officers. The Board of Directors has not adopted a written code of ethics because there are so few members of management.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than ten percent of its Common Stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission (SEC). Officers, directors, and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all ownership forms they file.

Item 10. Executive Compensation

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning the compensation of the Company’s Executive Officers whose compensation exceeded $100,000 for the fiscal years ending June 30, 2006, 2005 and 2004.

Name and Principal Position (1)	Fiscal Year	Annual Compensation Salary	All Other Compensation

J. Feakins,	2006	$ 62,500	-
Chief Executive Officer	2005	$ 62,500	-
	2004	$ 62,500	-

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information concerning all persons known to the Company to be the beneficial owners of more than 5% of the Company’s Common Stock, (ii) the ownership interest of each director and nominee, and (iii) by all directors and officers as a group calculated as of January 2, 2007.

NAME	AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP	PERCENT OF OWNERSHIP

Jeremy Feakins	2,064,611⁽¹⁾	30.2%

All Executive Directors and Officers as a Group (3 persons)	1,464,334	25.0%

Growth Capital Resources	600,277	8.8%

James Howson	1,729,586	25.3%

(1)	Includes 600,277 shares owned of record by Growth Capital Resources, LLC, of which Mr. Feakins is a control person.

Item 12. Certain Relationships and Related Transactions

During fiscal 2006, the Company accrued wages payable to the Company’s Chairman and Chief Executive Officer amounting to $146,273 which was included on the Balance Sheet as of June 30, 2006.

As of January 1, 2000 the Company entered into an Agreement with a company affiliated with the Chairman and Chief Executive Officer to provide litigation management services with regards to the proceedings against LensCrafters et al. This company is paying or advancing all attorney’s fees and other litigation costs and expenses incurred by the Company to pursue this litigation against LensCrafters et al. Assuming that the Company is successful in receiving a judgment or award or settlement from this litigation, all litigation cost and expenses paid will be reimbursed and 35% of the gross judgment, award, or settlement will be paid to the company affiliated with the Chairman and Chief Executive Officer. No costs or expenses will be due in the event the litigation is unsuccessful.

Item 13. Exhibits

(a)

Exhibits:

3.1.Restated Articles of Incorporation for Medical Technology & Innovations, Inc. [Incorporated by reference to the Company’s Annual Report on Form 10-KSB (File No. 33-27610-A), filed September 30, 1996]

3.2 By-laws [Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-18 (File No. 33-27610-A), filed March 17, 1989]

21.1 Subsidiaries.

Medical Technology, Inc.

Steridyne Corporation.

itLinkz Corporation

31-a

Rule 13a-14(a) Certification - Jeremy Feakins

31-b

Rule 13a-14(a) Certification - Jennifer Herman

Rule 13a-14(b) Certifications

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Stegman & Company expects to bill approximately $17,500 to the Company for professional services rendered for the audit of our fiscal 2006 financial statements and review of fiscal 2006 quarterly financial statements on form 10-QSB.

Audit-Related Fees

Stegman & Company billed $0 to the Company during fiscal 2006 for assurance and related services that are reasonably related to the performance of the 2006 audit.

Tax Fees

Stegman & Company billed $0 to the Company during fiscal 2006 for professional services rendered for tax compliance, tax advice and tax planning.

All Other Fees

Stegman & Company billed $0 to the Company in fiscal 2006 for services not described above.

It is the policy of the Company’s Board of Directors that all services, other than audit, review or attest services, must be pre-approved by the Board of Directors, acting in lieu of an audit committee. All of the services described above were approved by the Board of Directors.

Signatures

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MEDICAL TECHNOLOGY & INNOVATIONS, INC.

BY:		BY:
	/s/ JEREMY P. FEAKINS		/s/ JENNIFER A. HERMAN
	Jeremy P. Feakins, Chief Executive Officer		Jennifer A. Herman, Chief Financial Officer

Date: January 8, 2007

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ JEREMY P. FEAKINS

Jeremy P. Feakins, Chief Executive Officer,

and Director

Date: January 8, 2007

/s/ JENNIFER A. HERMAN

Jennifer A. Herman, Chief Financial Officer

Date: January 8, 2007

* * * * *