MIT Holding 10Q 2008 Q1 Quarterly report

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No: 333-13679

MIT HOLDING, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	20-5068091
(State or other jurisdiction of	I.R.S. Employer ID No)
incorporation or organization)

37 West Fairmont Ave., Suite 202, Savannah, GA 31406

(Address of principal executive office) (Zip Code)

Registrant's telephone number: (912) 925-1905

N/A

Former name, former address and former fiscal year,

(if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

(Do not check if a smaller reporting company)

Smaller reporting company ý

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

The number of shares of common stock, no par value per share, outstanding as of May 19, 2008 was 48,744,634.

MIT HOLDING, INC.

FORM 10-Q

QUARTERLY PERIOD ENDED March 31, 2008

INDEX

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1:	Financial Statements	F-1 - F-18
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4T:	Controls and Procedures	6
PART II - OTHER INFORMATION
Item 1:	Legal Proceedings	7
Item 1A:	Risk Factors	7
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3:	Defaults Upon Senior Securities	7
Item 4:	Submission of Matters to a Vote of Security Holders	7
Item 5:	Other Information	7
Item 6:	Exhibits	7

Item 1. Financial Statements.

INDEX TO FINANCIAL STATEMENTS

	Page

Financial Statements



Consolidated Balance Sheets as of March 31, 2008 (Unaudited) and December 31, 20072007	F-2



Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (Unaudited)	F-3



Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007 (Unaudited)	F-4



Notes to Financial Statements	F-5 - F-18

F-1

MIT HOLDING, INC.

CONSOLIDATED BALANCE SHEETS

	March 31, 2008	December 31, 2007
ASSETS	Unaudited

CURRENT ASSETS
Cash and cash equivalents	$	15,146	$	51,404
Accounts receivable		3,693,077		3,082,915
Inventory		237,884		260,752
Notes receivable		82,151		59,255

Total current assets		4,028,258		3,454,326

PROPERTY AND EQUIPMENT, net		34,049		32,983

OTHER ASSETS
Minority investment in foreign corporation		1,933,200		1,933,200
Healthcare reserve		1,571,228		1,571,228
Non-compete agreement, net		160,001		163,334

Total other assets		3,664,429		3,667,762

TOTAL ASSETS	$	7,726,736	$	7,155,071

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	2,486,795	$	2,148,500
Income taxes payable		46,690		41,156
Litigation settlement payable		0		101,209
Notes payable-NHC		1,307,356		999,161
Notes payable-bank-installment loans		34,987		34,987
Notes payable-bank-lime of credit		277,750		277,750
Notes payable-legal fees		175,000		175,000

Total current liabilities		4,328,578		3,777,763

LONG-TERM LIABILITIES
Notes payable-banks		65,087		75,615

Total long-term liabilities		65,087		75,615

STOCKHOLDERS’ EQUITY
Preferred stock, $0.000001 par value; 5,000,000 shares
authorized, 3,505.39 and 3,530.39 shares issued and
outstanding at March 31, 2008 and December 31, 2007		0		0
Common stock, $0.000001 par value; 250,000,000 shares
authorized, 46,195,134 and 46,145,134 shares issued and
outstanding at March 31, 2008 and December 31, 2007		46		46
Additional paid-in-capital		1,798,390		1,798,390
Retained Earnings		1,534,635		1,503,257

Total stockholders’ equity		3,333,071		3,301,693

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,726,736	$	7,155,071

The accompanying notes are an integral part of these statements.

F-2

MIT HOLDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2008 and 2007

UNAUDITED

	March 31, 2008		March 31, 2007
Revenue:
Sales and services rendered	$	2,773,360	$	2,803,094

Cost of medical supplies		1,819,353		1,479,023

Gross profit		954,007		1,324,071

Operating Expenses
Salaries and payroll cost		454,719		545,631
Selling, general and administrative		445,690		420,186
Depreciation and amortization		7,417		5,333

Total operating expenses		907,826		971,150

Net income from operations		46,181		352,921

Other expenses-interest		9,269		12,299

Net income (loss) before provision for income taxes		36,912		340,622

Provision for income taxes		5,534		115,811

Net income	$	31,378	$	224,811

Net income per share from continuing operations:
Basic and diluted	$	.00	$	.01
Weighted average number of shares outstanding:
Basic and diluted		46,170,134		26,401,779

The accompanying notes are an integral part of these statements

F-3

MIT HOLDING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007

UNAUDITED

	March 31, 2008			March 31, 2007
OPERATING ACTIVITIES
Net income	$	31,378		$	224,811
Adjustments for noncash and nonoperating items:
Depreciation and amortization		7,417			5,333
Issuance of common stock for consulting fees and conv. notes		0			1,285
Changes in operating assets and liabilities:
Receivables		(610,162	)		(1,219,207	)
Inventory		22,868			0
Healthcare reserve		0			163,848
Notes receivable		(22,896	)		0
Accounts payable and accrued expenses		338,295			770,379
Litigation payable		(101,209	)		(45,000	)
Notes payable		308,195			0
Income taxes payable		5,534			63,077

Cash (used) by operating activities		(20,580	)		(35,474	)

INVESTING ACTIVITIES
Capital expenditures		(5,150	)		0

Cash (used) by investing activities		(5,150	)		0

FINANCING ACTIVITIES
Payments on notes payable		(10,528	)		(1,908	)

Cash (used) by financing activities		(10,528	)		(1,908	)

NET (DECREASE) IN CASH		(36,258	)		(37,382	)

CASH BALANCE BEGINNING OF PERIOD		51,404			40,227

CASH BALANCE END OF PERIOD	$	15,146		$	2,845

Supplemental Disclosures:
Interest		9,269			12,299
Taxes		5,534			115,811

The accompanying notes are an integral part of these statements

F-4

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.	Nature of Operations/ Basis of Presentation

Nature of Operations

MIT Holding, Inc., a Delaware corporation, is a holding company. Through three wholly-owned subsidiaries MIT distributes wholesale pharmaceuticals, administers intravenous infusions, operates an ambulatory center where therapies are administered and sells and rents home medical equipment.

Medical Infusion Technologies, Inc. was incorporated in November 1991 in the state of Georgia. On July 6, 2006, an agreement and plan of merger was made between MIT Holding, Inc., a Delaware corporation, Medical Infusion Technologies, Inc., and MIT Acquisition A, Inc. By this agreement, MIT Holding, Inc. became the parent company and Medical Infusion Technologies, Inc.and Ambulatory Care, Inc., the wholly-owned subsidiaries.

MIT Holding, Inc. Mergers with Convention All Holdings, Inc.

Our Company was formerly known as Convention All Holdings, Inc. and, until May 2, 2007, we acquired a 100% ownership interest in MIT Holding, Inc. through a merger of MIT Holding, Inc. with and into MIT CVAH Acquisition Corp, a newly formed Delaware corporation and wholly-owned subsidiary, in exchange for 32,886,779 shares of our common stock. In addition, 9,738,860 shares of common stock of MIT are issuable to the holders of 6% Series A Convertible Preferred Stock (“Series A Preferred Stock”) upon conversion of the Series A Preferred and 9,738,860 shares of common stock are issuable to the holders of certain warrants issued in conjunction with the Series A Preferred Stock at an exercise price of $0.75 per share (the “Warrants”) issued in a private placement by MIT as of May 31, 2007. Simultaneously with the Merger, the company formerly known as MIT Holding, Inc. changed its name to Medical Infusion Group, Inc., and we changed our name to MIT Holding, Inc. As a result of the Merger, we now own 100% of Medical Infusion Group, Inc., which, in turn, continues to own 100% of the issued and outstanding shares of capital stock of MIT Ambulatory Care Center, Inc., a Georgia corporation ("Ambulatory"), Medical Infusion Technologies, Inc., a Georgia corporation (“Infusion”) and MIT International Distribution, Inc. (“MIT International”).

F-5

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of Presentation

The accompanying interim unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements and in the opinion of management contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2008, and the results of operations for the three months ended March 31, 2008 and 2007, and cash flows for the three months ended March 31, 2008 and 2007. These results have been determined on the basis of accounting principles generally accepted in the United States and applied consistently as those used in the preparation of the Company's 2007 Annual Report on Form 10-KSB.

2.	Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market (net realizable value). They consist mainly of pharmaceutical supplies and medical equipment.

3.	Cash Equivalents

Investments having an original maturity of 90 days or less that are readily convertible into cash are considered cash equivalents. The Company has no cash equivalents as of March 31, 2008 and December 31, 2007.

4. Property and Equipment

Property and equipment are stated at cost and are depreciated principally on methods and at rates designed to amortize their costs over their estimated useful lives.

F-6

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4.	Property and Equipment (continued)

The estimated service lives of property and equipment are principally as follows:

Furniture and fixtures	5- 7 years
Computer equipment	3- 7 years
Vehicles	5- 7 years

Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized.

Asset Impairments:

The company regularly reviews its investments and other assets that include the extent to which carrying value exceeds its related market value, the financial condition of the investee, and the intent and ability to retain the investment for a sufficient period of time to allow for recovery of the market value of the investments.

5.	Factored Accounts Receivable and Factoring Agreement.

On May 14, 2005, the Company entered into a factoring agreement with Northern Health Care, Inc., (“NHC”) located at 333 Seventh Avenue, New York, New York. The purchase price of the accounts were determined separately for each group of accounts purchased and were equal to the expected net realizable value of such accounts. The purchase price was determined as follows:

(a) Upon the purchase of accounts, NHC shall pay to the Company an amount equal to the lesser of (a) 85% of the purchase price of all the accounts purchased on May 14, 2005, or (b) the amount requested by the Company, less any amounts specified in Section 2.1 (b) below.

F-7

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

5.	Factored Accounts Receivable and Factoring Agreement. (continued)

(b) all remaining amounts of the purchase price subsequent to the initial installment with respect to all purchased accounts shall be aggregated and paid with respect to all purchased accounts as a group, regardless of the date such accounts were or are purchased, in accordance with the provisions of this paragraph (b) and such payment of all remaining amounts of the purchase price shall be subject to the terms of the agreement and applicable legal requirements. The funds from which the subsequent installments of the purchase price are to be paid shall be limited to the funds in the reserve account from time to time pursuant to the terms of the agreement. NHC shall have no responsibility for payment of any installment of the purchase price subsequent to the initial installment except from funds available in the reserve account pursuant to the terms of the agreement.

Age of receivable on Date of purchase Calculated in days From date of service:	Discount Percent: Receivables purchased On initial closing date	Discount Percent: Receivables relating To purchased after Initial closing date	Discount Percent: Receivables relating To purchased after Initial closing date
	All receivables	Wholesale	All other receivables
1 to 15 days	5.00%	1.50%	4.00%
16 to 30 days	5.00%	1.85%	4.00%
31 to 45 days	5.00%	2.50%	4.00%
46 to 60 days	5.00%	3.25%	4.00%
Each additional 15 days	An additional 1.00%	An additional .75%	An additional .75%

F-8

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

5.	Factored Accounts Receivable and Factoring Agreement. (continued)

In April 2007, the Company and NHC entered into a revolving line of credit to replace the receivable purchase agreement. The initial facility amount is $2,000,000, with the facility increasing in increments of $400,000 at such time as MIT’s outstanding balance exceeds 85% of the then existing amount outstanding under the facility. This credit agreement with NHC is personally guaranteed by Mr. Parker. This agreement replaced the purchase agreement with NHC executed in May 2005. Over 95% of our revenues are subject to the agreement with NHC.

Reserve Account:

NHC established a reserve account that will be owned, maintained, managed and controlled by NHC and the Company shall have no legal or equitable interest therein. NHC furnishes the Company a regular accounting of the reserve account on or about the 15^th day of each month, for the preceding month, beginning no later than 90 days following the initial closing date of May 14, 2005.

Health Care Reserve:

Health care reserves are all of the factored receivables returned to the Company that will be owned, maintained, managed and controlled by MIT. Due to insurance adjustments and final settlement of these receivables, the Company views these accounts as collectible over an extended period of time.

6.	Revenue Recognition

Sales and services are recorded when products are delivered to the customers. Provision for discounts, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures.

F-9

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

7.	Advertising Cost

Advertising cost is expensed as incurred. Advertising expense totaled $ 8,603 for the three months ended March 31, 2008 and $36,281 for the three months ended March 31, 2007.

8.	Recent Accounting Pronouncements

New accounting statements issued, and adopted by the Company, include the following:

In February 2007, the Financial Accounting Standards Board issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 amends SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of SFAS No. 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. SFAS No. 159 applies to all entities, including not-for-profit organizations. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 applies to all entities with available-for-sale and trading securities. Some requirements apply differently to entities that do not report net income. This statement is effective as of the beginning of each reporting entity’s first fiscal year that begins after November 15, 2007. The Company has not yet determined the effect of SFAS No. 159 on its financial position, operations or cash flows.

F-10

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (continued)

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations.” It will require an acquirer to recognize, at the acquisition date, the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their full fair values as of that date. In a business combination achieved in stages (step acquisitions), the acquirer will be required to remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss in earnings. The acquisition-related transaction and restructuring costs will no longer be included as part of the capitalized cost of the acquired entity but will be required to be accounted for separately in accordance with applicable generally accepted accounting principles in the U.S. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements.” The statement clarifies the definition of a non-controlling (or minority) interest and requires that non-controlling interests in subsidiaries be reported as a component of equity in the consolidated statement of financial position and requires that earnings attributed to the non-controlling interests be reported as part of consolidated earnings and not as a separate component of income or expense. However, it will also require expanded disclosures of the attribution of consolidated earnings to the controlling and non-controlling interests on the face of the consolidated income statement. SFAS No. 160 will require that changes in a parent’s controlling ownership interest, that do not result in a loss of control of the subsidiary, are accounted for as equity transactions among shareholders in the consolidated entity therefore resulting in no gain or loss recognition in the income statement. Only when a subsidiary is deconsolidated will a parent recognize a gain or loss in net income. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008, and will be applied prospectively except for the presentation and disclosure requirements that will be applied retrospectively for all periods presented. The Company is currently evaluating the impact of SFAS No. 160 to its financial position and results of operations.

F-11

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (continued)

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS No. 161”). SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. The provisions of SFAS No. 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not expect the provisions of SFAS No. 161 to have a material impact on the financial statements.

Estimates

Preparing the Company’s financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.

F-12

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE B—GOING CONCERN

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. Although we had revenues of $ 12,680,741 for the year 2007 and had receivables of $3,082,915 as of December 31, 2007, and revenues of $ 2,773,360 for the three months ended March 31, 2008, our inability to achieve sufficient collections on our revenues has created a liquidity challenge that raises doubt about our ability to continue as a going concern. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders. (See Note-G)

The accompanying financial statements do not include any adjustments related to the recoverability of classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

NOTE C - SHORT-TERM AND LONG-TERM DEBT OBLIGATIONS

The Company’s short-term and long-term debt at December 31, 2007 are as follows:

	Current		Long-term		Total
The Coastal Bank-credit line	$	277,750		0	$	277,750
The Coastal Bank-installments		34,987		75,615		110,602
NHC Note		999,161		0		999,161
Legal fees note		175,000		0		175,000

Total	$	1,486,898		75,615	$	1,562,513

The Coastal Bank notes consist of five notes with principal balances of $54,806, $39,051, $15,642, $1,103, and $277,500 at December 31, 2007. All notes are secured by all business assets of the Company with interest rates from 5% to 7%.

F-13

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE C - SHORT-TERM AND LONG-TERM DEBT OBLIGATIONS (continued)

The Company’s short-term and long-term debt at March 31, 2008 are as follows:

	Current		Long-term		Total
The Coastal Bank-credit line	$	277,750		0	$	277,750
The Coastal Bank-installments		34,987		65,087		100,074
NHC Note		1,307,356		0		1,307,356
Legal fees note		175,000		0		175,000

Total	$	1,795,093		65,087	$	1,860,180

The Coastal Bank notes consist of four notes with principal balances of $50,273, $33,341, $13,460, and $277,500 at March 31, 2008. All notes are secured by all business assets of the Company with interest rates from 5% to 7%.

NOTE D - RELATED PARTY TRANSACTIONS

The Company and Mr. Parker have entered into an employment agreement for a term of five years commencing June 2006. The employment agreement provides for a base salary of $250,000 (exclusive of housing and expense allowances), with bonuses to be determined annually by the Board of Directors.

Mr. Parker has also executed a personal guarantee of the Company’s obligations to Northern.

F-14

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE E - OPERATING SEGMENTS

The Company has four principal operating segments, which are as follows:

Medical Infusion Technologies-“MIT”

MIT Wholesale-“Wholesale”

Medical Infusion Tech,DME-“DME”

MIT Ambulatory Care Center-“Ambulatory Care”

“MIT” is a provider of intravenous therapies to patients at their home, at a designated facility, or at the Company’s office facilities. MIT’s primary product lines are centered upon infusion therapy.

“Wholesale” primarily aims at a network of hard to find pharmaceuticals. It concentrates in sales on rare products in the pharmaceutical industry.

“DME” carries the gamut of durable medical equipment and supplies.

“Ambulatory Care” administers the intravenous therapies to patients.

The following tables show the operations of the Company’s reportable segments:

For the three months ended March 31,

Medical

Infusion

Wholesale/

Ambulatory

DME

Combined

and MIT

International

Care

2008
Revenue	$	694,509	$	622,594	$	1,213,946	$	242,311	$	2,773,360

Interest expense		9,269		0		0		0		9,269
Depreciation & amortization		7,417		0		0		0		7,417

2007
Revenue	$	646,485	$	1,232,786	$	708,384	$	215,439	$	2,803,094

Interest expense		12,299		0		0		0		12,299
Depreciation & amortization		5,333		0		0		0		5,333

F-15

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE F - NON-COMPETE PROVISION (RESTRICTIVE COVENANT)

On May 10, 2005, the Company entered into two non-compete agreements with Arlene Wihelm and Dexter Truax. These agreements were amended as of December 20, 2006 as follows:

Pursuant to the initial agreement, Arlene Wilhelm and Dexter Truax were granted an equity ownership in MIT Holdings, Inc., a Nevada Corporation with offices at 37 West Fairmont Avenue, Suite 202, Savannah, Georgia, equivalent to five per cent of the outstanding common stock of MIT. In addition, when the Company completed its plan to become publicly traded, Arlene Wilhelm was to receive additional compensation of five hundred thousand dollars and Dexter Truax will receive two hundred thousand dollars payable on a structured installment through the year 2008 of MIT receiving its net proceeds of the public offering.

The above amendments on December 20, 2006, to the employment agreements dated May 10, 2005, constitute the repurchase of common stock from Dexter Truax and Arlene Wilhelm of 20,000 common shares of the Company and the re-issuance of 1,050,000 shares of common stock of the Company, respectively.

On June 7, 2007, the Company and Ms. Wilhelm executed another amendment to her employment agreement which provides that, the Company will issue her 312,500 shares of common stock of the Company, and on May 10, 2010, cash or common stock, at the option of the Company, equal to the amount, if any, by which $625,000 exceeds the sum of (i) the market value of these 312,500 shares issued to Ms. Wilhelm on June 7, 2007 which she holds on May 10, 2010, and (ii) the amount of proceeds, if any, she received upon the sale of any of the 312,500 shares. Market value of the shares is to be determined at the discretion of the Compensation Committee of the Board of Directors, if any, and should a Compensation Committee not exist, by the Board of Directors.

NOTE G - COMMITMENTS AND CONTINGENCIES

The following is a description of the Company’s contingent commitments at March 31, 2008:

On April 4, 2008, we received a letter from Northern indicating that Northern considered MIT in default of its obligations under the credit agreement, and declaring all amounts under the credit agreement due and payable in full immediately. Subsequent to this letter, we received oral assurances from Northern that they would continue to fund MIT for an additional 60 days from April 4. We can make no assurances that Northern will continue to fund MIT for that period, no assurances we will be able to pay Northern at the end of that period, and no assurances that we will be able to find alternate funding on terms favorable to the Company or at all.

F-16

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE G- COMMITMENTS AND CONTINGENCIES (continued)

The following are the key terms of MIT’s lease agreements:

The lease on the facility located at 115B Echols St., Savannah, GA was entered into January 1, 2007 and expires January 1, 2009. The rent is $3800 per month. This lease is personally guaranteed by William C. Parker, Chairman of the Board.

MIT leases two suites in the facility located at 37 W. Fairmont Avenue, Savannah, GA. The leases for Suites 202 and 204 each commenced November 1, 2004, for a term of 36 months. The monthly rent on Suite 202 is $1360, and the monthly rent on Suite 204 is $1123.. This lease is personally guaranteed by William C. Parker.

The lease on the facility located at 393 EH Court, Brunswick, GA was entered into in April 2006, for a term of 24 months. Monthly rent for the initial 12 months was $1500, and for the next 12 months is $1545. This lease is guaranteed by William C. Parker. This lease was terminated in January 2008 with the closing of the Brunswick location.

Stock-Based Compensation Plan:

On June 7, 2007 the Board of Directors approved the 2007 Stock Incentive Plan (the "Plan") covering 5,000,000 shares. The shareholders subsequently approved the Plan. The shares underlying the Plan are restricted. The Plan is identical to MIT’s 2006 Stock Incentive (which was adopted by which was adopted by Medical Infusion Group (the former MIT Holding Inc.) prior to the Merger) in all material respects, other than that the 2006 Stock Incentive Plan covers 7,000,000 shares. All awards under the 2006 Stock Incentive Plan were exchanged for awards under the Plan effective upon the Company’s May 2, 2007 merger with Medical Infusion Group, Inc.

F-17

MIT HOLDING, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

March 31, 2008

NOTE G- COMMITMENTS AND CONTINGENCIES (continued)

The Plan is intended to benefit the stockholders of the Company by providing a means to attract, retain and reward individuals who can and do contribute to the longer-term financial success of the Company. Further, the recipients of stock-based awards under the Plan should identify their success with that of the company's shareholders and therefore will be encouraged to increase their proprietary interest in the Company. The Compensation Committee administers the Plan.

NOTE H- MINORITY INTEREST IN FOREIGN CORPORATION

On December 20, 2007 we entered into a business development and consulting agreement with Miura Enterprises, S.A. (“Miura”) of the Dominican Republic whereby we exchanged the account receivable from our Dominican customer for an 18% equity ownership in Miura. One of Miura’s tasks is to assist the Company in the collection of this account receivable. We will receive up to 80% of the amount collected. As of December 31, 2007, we have valued the account receivable and our equity interest in Miura at $1,933,200. The original accounts receivable was in the amount of $2,416,500. There has been no impairment of the minority interest for the three months ended March 31, 2008.

NOTE I - SUBSEQUENT EVENTS

Subsequent to the date of our financial statements, several lawsuits were commenced against the Company aggregating $304,000. The Company believes these will be settled with no material impact.

F-18

Item 2. Management's Discussion and Analysis

The statements contained in this 10Q, are not purely historical statements, but rather include what we believe are forward-looking statements. The forward-looking statements are based on factors set forth in the following discussion. Our actual results could differ materially from results anticipated in these forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.

Overview

Through its subsidiaries, MIT distributes wholesale drugs, prepares intravenous medication for home infusion by the patient, operates ambulatory centers where intravenous infusions are administered and sells and rents home medical equipment. MIT is based in Savannah, Georgia and operates an ambulatory care center in Savannah. Our distribution of wholesale drugs has historically accounted for the majority of our revenues, although this was not the case in the quarter ended March 31, 2008, but and is anticipated to be our most significant area of growth.

Critical Accounting Policies

Management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, impairment of long-lived assets, including finite lived intangible assets, accrued liabilities and certain expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are summarized in Note 1 to our audited financial statements for the year ended December 31, 2007. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market (net realizable value). They consist mainly of pharmaceutical supplies and medical equipment.

Factored Accounts Receivable and Factoring Agreement.

Mr. Parker amended the purchase agreement with NHC that was executed in May 2005 whereby NHC purchased from MIT the rights to all our accounts receivable. Over 95% of our revenues are subject to the agreement with NHC. As of December 31, 2007, $3,082,915 in receivables were subject to this agreement.

In April 2007, MIT and NHC entered into a revolving line of credit to replace the receivable purchase agreement. The initial facility amount is $2,000,000, with the facility increasing in increments of $400,000 at such time as MIT’s outstanding balance exceeds 85% of the then existing amount outstanding under the facility. This credit agreement with NHC is personally guaranteed by Mr. Parker. This agreement replaced the purchase agreement with NHC executed in May 2005.

Reserve Account:

In connection, with the May 2005 factoring agreement, NHC established a reserve account that will be owned, maintained, managed and controlled by NHC and the Company shall have no legal or equitable interest therein. NHC furnishes the Company a regular accounting of the reserve account on or about the 15^th day of each month, for the preceding month, beginning no later than 90 days following the initial closing date of May 14, 2005.

Health Care Reserve:

Health care reserves are all of the factored receivables returned to the Company that are owned, maintained, managed and controlled by MIT.

Revenue Recognition

Advertising Cost

Advertising cost is expensed as incurred.

Estimates

New Accounting Pronouncements

New accounting statements issued, and adopted by the Company, include the following:

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. We are currently evaluating the impact on our consolidated financial statements of SFAS 157, which will become effective for us on January 1, 2008 for financial assets and January 1, 2009 for non-financial assets.

Results of Operations

Comparison of three months ended March 31, 2008 to three months ended March 31, 2007.

Revenues

Consolidated revenues for the quarter ended March 31, 2008 were $2,773,360, as compared to $2,803,094 for the quarter ended March 31, 2007, representing a decrease of $29,734 or 1.06%. Consolidated cost of sales for the year ended quarter ended March 31, 2008 were $1,819,353 or 65.6% of sales as compared cost of sales for the quarter ended March 31, 2007 of $1,479,023 or 52.8% of sales. This resulted in a gross profit for this quarter of $954,007 or 34.4% as compared to gross profit for the same quarter in 2007 of $1,324,071 or 47.2%. The decrease in our consolidated revenues for this quarter were the result of decreasing reimbursement from our domestic customers. The increase in the costs of good sold for the quarter were due to less favorable pricing from domestic vendors resulting in lower margins as compared to the same period in 2007. This decrease in margins overall was due to the lack of sufficient operating funds during the first this quarter to purchase supplies on the open market at more competitive prices.

The Company has four principal operating segments, which are as follows:

Medical Infusion Technologies-“MIT”

MIT Wholesale-“Wholesale”

Medical Infusion Tech,DME-“DME”

MIT Ambulatory Care Center-“Ambulatory Care”

“Wholesale” primarily aims at a network of hard to find pharmaceuticals. It concentrates in sales on rare products in the pharmaceutical industry.

“DME” carries the gamut of durable medical equipment and supplies.

“Ambulatory Care” administers the intravenous therapies to patients.

The following tables show the operations of the Company’s reportable segments:

For the three months ended March 31,

	Medical
	Infusion		Wholesale/		Ambulatory		DME		Eliminations	Combined
	and MIT		International		Care
2008
Revenue	$	694,509	$	622,594	$	1,213,946	$	242,311		$	2,773,360

Interest expense		9,269		0		0		0			9,269
Depreciation & amortization		7,417		0		0		0			7,417
2007
Revenue	$	646,485	$	1,232,786	$	708,384	$	215,439		$	2,803,094

Interest expense		12,299		0		0		0			12,299
Depreciation & amortization		5,333		0		0		0			5,333

Operating Expenses

Total operating expenses decreased $63,324 or 6.5% to $907,826 for the quarter ended March 31, 2008, from $971,150 for the same period in 2007. The decrease in operating expense is attributable to the decrease in personnel costs which were offset somewhat by higher legal fees. The major components of operating expense include:

•

Salaries and payroll related costs decreased from $545,631 to $454,719 for the first quarter of 2008 or a reduction of 16.6% over the quarter ended March 31, 2007. The decrease was due primarily to the reduction of personnel in the sales and marketing areas reducing travel and personnel support expenses and a reduction in staffing costs relating to the loss of a major customer for products and services supplied by Ambulatory and our DME divisions.

•

Sales, general and administrative expenses increased $25,504 or 6.07% to $445,690 for the quarter ended March 31, 2008 as compared to $420,186 for the same period in 2007. The increase was due primarily to a sustained level in our advertising and marketing efforts and increased legal expenses. We anticipate these expenditures to remain flat over the next quarter and increases to occur upon the increase in sales from new opportunities in subsequent quarters. Legal and professional expenses for the quarter were $79,428; Travel and entertainment was $19,926; consulting fees of $29,224; outside and contract labor $48,271; license fees of $9,395; Additional expenses included office expense of $17,245; Advertising of $8,603; rent expense of $27,361; insurance expense of $38,574 and telephone of $14,970; factoring fees of $33,777; interest expense of $12,299 and contract services of $48,271; We anticipate seeing the results of these expenditures represented in subsequent quarters. Another variable influencing the decrease in general and administrative costs is the reduction in leased space of our facilities in the fourth quarter of 2006.

•

Depreciation and amortization increased $2,084 or 39.1% to $7,417 for the quarter ended March 31, 2008 as compared to $5,333 for the same period in 2007. The increase was mainly attributable to the amortization and depreciation of assets acquired.

Operating Income

Operating income before taxes (including interest) decreased $303,710 or 89.2% for the quarter ended March 31, 2008 as compared to the quarter ended March 31, 2007, from $340,622 for the quarter ended March 31, 2007 to $36,912 for the quarter ended March 31, 2008. Operating income as a percentage of gross revenue was 1.3% for the quarter as compared to 12.1% for the quarter ended March 31, 2007. This is primarily attributable to the decreased margins in the most recent quarter.

Net income

As a result of the above factors, net income decreased by $193,433 for the three months ended March 31, 2008 as compared to the quarter ended March 31, 2008. Net Income was $31,378 for the three months ended March 31, 2008 as compared to a net income of $224,811 for the three months ended March 31, 2007.

Liquidity and Capital Resources

As of March 31, 2008, we had cash of $15,146, as compared to $2,845 at March 31, 2007. For the three months ended March 31, 2008, net cash used by operating activities aggregated $(20,580) as compared to cash used by operations for the three months ended March 31, 2007 $(35,474). As of December 31, 2007, we had cash of $51,404 as compared to a cash balance of $40,227 as of December 31, 2006.

As of March 31, 2008, we were funded primarily through operations and our financing agreement with NHC. On April 4, 2008, we received a letter from Northern indicating that Northern considered MIT in default of its obligations under the credit agreement, and declaring all amounts under the credit agreement due and payable in full immediately. Subsequent to this letter, we received oral assurances from Northern that they would continue to fund MIT for an additional 60 days from April 4. However, there is no assurance that Northern will continue to fund MIT and while MIT is negotiating with a new factor, there is no assurance that an agreement will be reached or that it will be reached on acceptable terms. If an acceptable agreement with a new factor is not achieved, MIT does not currently have sufficient financing to pay the balance due Northern and there is no assurance such funding can be obtained.

We are subject from time to time to litigation relating to the activities of our business and in the marketplace which it serves. As of December 31, 2005, we were engaged in litigation relating to a financial consulting agreement. Effective April 17, 2006, the parties entered into a settlement agreement pursuant to which we agreed to pay $750,000. We paid an aggregate of $225,000 though May 2006 and in July 2006, we commenced monthly payment of $15,000, which continued through October 1, 2007. The remaining balance of $375,000 was due October 17, 2007. The total consideration of $750,000 was expensed in the year 2005. In October and November 2007, the Company paid $275,000, leaving a balance of $100,000 which has been subsequently paid as of March 31, 2008.

Based on our current plan, we believe that our current cash balances and results of operations will be sufficient to fund our operations through for the next twelve months provided we obtain a source of financing to replace Northern, of which there can be no assurance.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements

Item 3. Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our Chief Executive Officer, William C. Parker, and Principal Financial Officer, John Sabia, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control Over Financial Reporting. During the most recent quarter ended March 31, 2008, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are party to litigation that we consider to be a part of the ordinary course of our business. At present, we are not involved in any pending claims that we believe could reasonably be expected to have a material adverse effect on our business, financial condition, or results of operations.

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information

None

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


	MIT HOLDING, INC.

DATE: May 19, 2008	By:	/s/ William C. Parker
		William C. Parker, Chief Executive Officer

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	7th grade Avg

MIT Holding Inactive 10-Q2008 Q1 Quarterly report

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