Management's Discussion and Analysis

6 Months Ended

Jun. 30, 2011

Management's Discussion and Analysis

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

Forward Looking Statements

Unless the context requires otherwise, "we," "us", "our" or "the Company" refers to Biomedical Technology Solutions Holdings, Inc. and its subsidiaries on a consolidated and condensed basis. The Company's subsidiaries include Biomedical Technology Solutions, Inc., BMTS Properties, Inc., BMTS Leasing, LLC and Healthcare Sales Professionals, Inc.

Certain statements contained herein are not statements of historical fact and constitute forward-looking statements. These statements include specifically identified forward-looking statements herein. Examples of forward-looking statements, include: (i) projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure, and other financial items; (ii) statements of plans and objectives of Holdings, or any of its management or Boards of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying those statements. Words such as "believes," "anticipates," "expects," "intends," "targeted," "may," "will" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include: (i) the strength of foreign and U.S. economies in general and the strength of the local economies in which operations are conducted; (ii) the ability of Holdings to finance its planned operations; (iii) the ability of Holdings to hire and retain key personnel, (iv) the ability of Holdings to maintain as well as protect any underlying patents; (v) the ability of Holdings to compete with financially stronger competitors; (vii) the effects of and changes in trade, monetary and fiscal policies and laws; (vii) inflation, interest rates, market and monetary fluctuations and volatility; (viii) the timely development of and acceptance of new products and services and perceived overall value of these products and services by existing and potential customers; (ix) the dependence of Holdings on its key management personnel; (x) the ability to control expenses; (xiii) the effect of changes in laws and regulations with which Holdings must comply; (xi) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board; (xii) changes in the organization and compensation plans of Holdings; (xiii) the costs and effects of litigation and of unexpected or adverse outcomes in litigation; and (ix) the success of Holdings at managing the above risks.

In light of the significant uncertainties inherent in the forward-looking statements made in this prospectus, particularly in view of our early stage of operations, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

RESULTS OF OPERATIONS

Three months ended June 30, 2011 compared to 2010:

Revenue. Revenues were $158,982 in 2011, up from $138,986 in 2010. The increase (14%) was due to changes in management, refocused efforts in product marketing and supporting distributors.

Cost of Revenue. Cost of revenue for 2011 was $92,654 up from $88,673 from the prior year. The increase (4%) is attributed to increased revenue. Our cost of revenue as a percentage of revenue decreased to 58% of revenue for the quarter ended June 30, 2011 up from 64% for 2010 due to product revenue mix. We expect that this percentage to decrease in the near future due to decreases related to volume purchases of the materials that comprise our product.

Operating Expenses. Selling, General and Administrative costs were $256,601 in the second quarter of 2011, as compared to $360,522 in 2010. The following table is a summary of certain of these expenses:

	June 30	June 30
	2011	2010
Selling expense	$ 118,138	$ 78,190
General office expense	22,594	143,771
Professional fees	34,543	39,985
Depreciation and amortization	2,109	15,540
Travel expense	15,304	1,490
Stock Based Compensation expense	63,913	81,636
	$ 256,601	$ 360,522

Selling and travel expenses increased in 2011 as the Company continued to refocus its activities towards end customers and distributors. The decrease in 2011 in general office expenses was due to cost cutting measures implemented in the first quarter of 2011 as a result of management changes. Professional fees consist primarily of audit and legal expenses. The Company anticipates its overall operating expenses to remain at the levels significantly lower than those of 2010. As cash flow improves, the Company anticipates adding additional sales personnel and management.

Net Loss. For the quarter ended June 30, 2011, we incurred a net loss of $252,584, compared to a net loss of $348,211 for 2010, a decrease in net loss of $119,540 or 34%. The decrease in net loss was due to a change in management and implementation of major cost cutting measures.

The beneficial conversion feature was recorded as a charge to loss applicable to holders of Common Stock. The Company also accrued dividends on the shares of Series A Convertible Preferred Stock totaling $998.

Six months ended June 30, 2011 compared to 2010:

Revenue. Revenues were $342,322 in 2011 up from $301,690 in 2010. The increase of (13%) was due to changes in management, refocused efforts in product marketing and supporting distributors.

Cost of Revenue. Cost of revenue in 2011 was $194,569, up from $164,486 in 2011. The increase (18%) was due to increased revenue. Our cost of revenue as a percentage of revenue increased to 57% compared to 55% in 2010. The increase was due to product mix and additional freight for inventory costs due to the Company’s continued lack of working capital.

Operating Expenses. Selling, general and administrative expenses were $391,039 in 2011 compared to $815,700 in 2010. The following table is a summary of certain of these expenses:

	Six Months Ended	Six Months Ended
	June 30	June 30
	2011	2010
Selling expense	$ 149,289	$142,638
General office expense	60,757	320,735
Professional fees	60,205	64,482
Depreciation and amortization	4,501	46,865
Travel expense	32,374	2,388
Stock Based Compensation expense	83,913	238,592

	$ 391,039	$ 815,700

The decrease in 2011 in general office expenses was due to cost cutting measures implemented in the first quarter of 2011 as a result of management changes. Professional fees consist primarily of audit and legal expenses. The Company anticipates its overall operating expenses to remain at the levels significantly lower than those of 2010. As cash flow improves, the Company anticipates adding additional sales personnel and management.

Net Loss. For the six months ended June 30, 2011, we incurred a net loss of $333,779, compared to a net loss of $761,645 for 2010, a decrease in net loss of $427,866 or 56%. The decrease in net loss was due to a change in management and implementation of major cost cutting measures.

The beneficial conversion feature was recorded as a charge to loss applicable to holders of Common Stock. The Company also accrued dividends on the shares of Series A Convertible Preferred Stock totaling $1,984.

Liquidity and Capital Resources

The Company's sources of liquidity and capital resources historically have been proceeds from offerings of equity securities. In the past, this source has been sufficient to meet its needs and finance the Company's business. The Company can give no assurance that the historical sources of liquidity and capital resources will be available for future development and acquisitions, and it may be required to seek alternative financing sources not necessarily favorable to the Company.

At June 30, 2011, we had a working capital deficit of $(1,394,822), as compared to working capital deficit of $(828,850) at June 30, 2010. The decrease in working capital was due to decreased revenue and resulting gross margins and increased increase operating costs from 2010. The Company continues to lower its overall operating expenses into 2011 and continues to focus on sales activities in order to improve its working capital.

In 2010, we completed the sale of an aggregate of 1,757,333 shares of common stock for gross proceeds of $306,000 and secured an additional $164,000 of note proceeds plus premium financing for the directors and officers insurance of $35,439 for a total of $199,439. A note holder converted his note of $30,000 dollars into 200,000 shares. We also used cash for general working capital. Net cash used in the first two quarters of 2011 was $232,954 compared to $329,781 for 2010.

Capital Commitments

The Company headquarters and administrative and production facilities are located at 9800 Mt. Pyramid Ct., Englewood, Colorado, in approximately 5,000 square feet of leased office space at a monthly rental of approximately $4,000. The lease expired August 31, 2011 and the Company is operating with a month to month lease agreement. We consider our relations with our landlord to be good.

Going Concern

Our independent auditors have questioned our ability to continue as a going concern for the next twelve months. The financial statements do not include any adjustments that might result from this uncertainty.

Off-Balance Sheet Transactions

The Company has no off-balance sheet transactions.

Common Stock Dividend Policy

We have not paid any cash dividends on our common stock, and we currently intend to retain any future earnings to fund the development and growth of our business. Any future determination to pay dividends on our common stock will depend upon our results of operations, financial condition and capital requirements, applicable restrictions under any credit facilities or other contractual arrangements and such other factors deemed relevant by our Board of Directors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were ineffective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

BIOMEDICAL TECHNOLOGY SOLUTIONS HOLDINGS INC 10-Q/A