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þ
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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Nevada
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88-0390360
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State
or other jurisdiction of
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(IRS
Employer
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Incorporation
or organization
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Identification
Number)
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5625
South Arville Street, Suite E, Las Vegas Nevada
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89118
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(Address
of principal executive offices)
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(Zip
Code)
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Page
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Part
I — Financial Information
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3
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Item
1 — Financial Statements
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3
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Consolidated
Balance Sheets as of March 31, 2008 (Unaudited) and December 31,
2007
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3
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Unaudited
Consolidated Statements of Operations for the Three Months Ended
March 31,
2008 and March 31, 2007, as restated
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4
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Unaudited
Consolidated Statements of Cash Flows for the Three Months Ended
March 31,
2008 and March 31, 2007, as restated
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5
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Notes
to Consolidated Financial Statements
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6
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Item
2 — Management’s Discussion and Analysis or Plan of
Operation
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12
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Item
3 — Quantitative and Qualitative Disclosures About Market
Risk
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13
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Item
4 — Controls and Procedures
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13
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Part
II — Other Information
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14
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Item
1 — Legal Proceedings
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14
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Item
2 — Unregistered Sales of Equity Securities and Use of
Proceeds
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14
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Item
3 — Defaults Upon Senior Securities
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14
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Item
4 — Submission of Matters to a Vote of Security Holders
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14
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Item
5 — Other Information
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14
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Item
6 — Exhibits
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14
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Certification
of CEO Pursuant to Section 302
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Certification
of CFO Pursuant to Section 302
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Certification
of Officers Pursuant to Section 906
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March 31, 2008
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December 31, 2007
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|||||
(Unaudited)
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(Restated)
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||||||
ASSETS:
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|||||||
CURRENT
ASSETS
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|||||||
Cash
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$
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1,835
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$
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1,835
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|||
Current
Assets of Discontinued Operations (Note 6)
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3,541,004
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2,850,238
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|||||
Prepaid
Expenses
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26,540
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-
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|||||
Total
Current Assets
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3,569,379
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2,852,073
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|||||
TOTAL
ASSETS
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$
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3,569,379
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$
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2,852,073
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LIABILITIES
& STOCKHOLDERS’ DEFICIT:
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|||||||
CURRENT
LIABILITIES
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|||||||
Accounts
Payable and Accrued Expenses
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$
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109,362
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$
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124,411
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Current
Liabilities of Discontinued Operations (Note 6)
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6,085,546
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4,996,036
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|||||
Current
Portion of Notes Payable
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3,747
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9,747
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Current
Portion of Related Party Notes Payable (Note 5)
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360,000
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-
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|||||
Fair
Market Value of Derivative Liabilities (Note 4)
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8,532
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8,124
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Total
Current Liabilities
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6,567,187
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5,138,318
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|||||
NONCURRENT
LIABILITIES
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|||||||
Notes
Payable
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377,727
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377,727
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|||||
Related
Party Notes Payable (Note 5)
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8,422,570
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8,422,570
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|||||
Total
Noncurrent Liabilities
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8,800,297
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8,800,297
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|||||
TOTAL
LIABILITIES
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15,367,484
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13,938,615
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COMMITMENTS
& CONTINGENCIES (Note 7)
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|||||||
STOCKHOLDERS’
DEFICIT:
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|||||||
Common
Stock, $.001 par value; 100,000,000 shares authorized 42,163,691
shares
issued and outstanding at March 31, 2008 and December 31, 2007,
respectively
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42,163
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42,163
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|||||
Additional
Paid-in Capital
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29,623,891
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29,605,537
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Shares
to be Issued
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163
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163
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Accumulated
Deficit
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(41,464,322
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)
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(40,734,405
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)
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Total
Stockholders’ Deficit
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(11,798,105
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)
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(11,086,542
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)
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TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$
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3,569,379
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$
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2,852,073
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Three Months Ended
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||||||
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March 31,
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||||||
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2008
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2007
As Restated
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|||||
REVENUE
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|||||||
Sales
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$
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-
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$
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-
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Cost
of Goods Sold
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-
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-
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|||||
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|||||||
GROSS
PROFIT
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-
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-
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|||||
OPERATING
EXPENSES
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Investor
Relations
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19,935
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71,692
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Stock
Option Expense
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18,354
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81,137
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|||||
Other
Operating Expenses
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107,153
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21,393
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|||||
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Total
Operating Expenses
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145,442
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174,222
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|||||
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|||||||
LOSS
FROM CONTINUING OPERATIONS
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(145,442
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)
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(174,222
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)
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OTHER
INCOME AND EXPENSE
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|||||||
Interest
Expense
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(67,068
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)
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(119,756
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)
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Change
in Fair Value of Derivatives
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(408
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)
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1,865,372
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|||||||
Total
Other Income and Expenses
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(67,476
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)
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1,745,616
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LOSS
FROM DISCONTINUED OPERATIONS
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(516,999
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)
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(1,136,240
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)
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Net
Income
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$
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(729,917
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)
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$
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435,154
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|||||||
Basic
Earnings Per Common Share
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$
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(0.02
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)
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$
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0.01
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|||||||
Diluted
Earnings Per Common Share
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$
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(0.02
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)
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$
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0.01
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|||||||
Weighted
Average Shares Used to Compute Basic Earnings Per Common
Share
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42,163,691
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39,071,211
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|||||
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|||||||
Weighted
Average Shares Used to Compute Diluted Earnings Per Common
Share
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42,163,691
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46,455,168
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Three Months Ended
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||||||
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March 31,
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||||||
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2008
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2007 As
Restated
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|||||
CASH
USED IN OPERATING ACTIVITIES:
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Net
loss (income)
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$
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(729,917
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)
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$
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435,154
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Adjustments
to reconcile net income to net cash used in operating
activities
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|||||||
Stock
issued for services
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-
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30,000
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|||||
Amortization
of debt discount
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60,000
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—
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|||||
Change
in fair value of derivative liabilities
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408
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(1,865,372
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)
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||||
Stock
option expense
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18,354
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81,137
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|||||
Accretion
of notes payable balances
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-
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21,973
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Changes
in operating assets and liabilities
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|||||||
Decrease
(increase) in assets of discontinued operations
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(690,766
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)
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712,026
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(Increase)
decrease in prepaid expenses
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(26,540
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)
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-
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||||
(Decrease)
increase in accounts payable
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(15,049
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)
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(636,872
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)
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Increase
(decrease) in liabilities of discontinued operations, net
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1,089,510
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(1,061,048
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)
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||||
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|||||||
NET
CASH USED IN OPERATING ACTIVITIES
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(294,000
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)
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(2,283,002
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)
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|||||||
CASH
PROVIDED BY FINANCING ACTIVITIES:
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|||||||
Proceeds
from related party debt
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300,000
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—
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|||||
Payments
on related party debt
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-
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(30,000
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)
|
||||
Net
proceeds from issuance of stock
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-
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1,132,000
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|||||
Proceeds
from note payable
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-
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6,576
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|||||
Payments
of notes payable
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(6,000
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)
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(6,000
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)
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|||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
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294,000
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1,102,576
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|||||
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|||||||
NET
DECREASE IN CASH & CASH EQUIVALENTS
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-
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(1,180,426
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)
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||||
BEGINNING
CASH & CASH EQUIVALENTS
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1,835
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1,211,789
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|||||
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|||||||
ENDING
CASH & CASH EQUIVALENTS
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$
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1,835
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$
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31,363
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|||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
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|||||||
Cash
paid for interest
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$
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12,188
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$
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15,099
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|||
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|||||||
Cash
paid for income taxes
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$
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—
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$
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—
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|||||||
SUPPLEMENTAL
DISCLOSURES OF NON-CASH TRANSACTIONS
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|||||||
Accrued
commissions in connection with private placement
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$
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-
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$
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10,000
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|||
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|||||||
Issuance
of warrants in connection with private placement
|
$
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-
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$
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1,045,182
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Cash
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$
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177,495
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Accounts
receivable
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1,234,668
|
|||
Inventory
|
965,927
|
|||
Costs
in excess of billings
|
488,370
|
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Other
assets
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5,599
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|||
Fixed
assets
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713,220
|
|||
Accumulated
depreciation
|
(407,534
|
)
|
||
Goodwill
|
11,144,216
|
|||
Accounts
payable
|
(879,995
|
)
|
||
Notes
payable
|
(2,297,227
|
)
|
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Billings
in excess of earnings
|
(912,638
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)
|
||
Total
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$
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10,232,101
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|
Stock
|
|
Stock
|
Stock
|
Cliff
|
|||||||||||
Date(s) of
|
Options
|
Exercise
|
Options
|
Options
|
Vesting
|
|||||||||||
Grant
|
Granted
|
Price
|
Forfeited
|
Remaining
|
Period
|
|||||||||||
10/20/2005
|
972,500
|
0.79
|
535,000
|
437,500
|
23
months
|
|||||||||||
3/30/2006
|
1,347,500
|
0.42
|
1,192,500
|
155,000
|
33
months
|
|||||||||||
6/2/2006
|
600,000
|
0.41
|
0
|
600,000
|
33
months
|
|||||||||||
8/8/2006
|
192,500
|
0.21
|
80,000
|
112,500
|
33
months
|
|||||||||||
9/1/2006
|
350,000
|
0.42
|
0
|
350,000
|
33
months
|
|||||||||||
9/21/2006
|
750,000
|
0.39
|
750,000
|
0
|
27
months
|
|||||||||||
9/25/06
to 2/1/2007
|
200,000
|
0.27 to 0.42
|
125,000
|
75,000
|
33
months
|
|||||||||||
Balance
at March 31, 2008
|
4,412,500
|
2,682,500
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1,730,000
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|
March 31,
2008
|
December 31,
2007
|
|||||
Derivative
liability, warrants exchanged for common stock on March 10, 2007,
initial value
|
$
|
1,497,416
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$
|
1,497,416
|
|||
Cumulative
adjustments to record fair market value of derivative
liability
|
(1,497,416
|
)
|
(1,497,657
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)
|
|||
Subtotal
|
-
|
5,759
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|||||
Derivative
liability, warrants related to private placement on November
13, 2006, initial value
|
729,820
|
729,820
|
|||||
Cumulative
adjustments to record fair market value of derivative
liability
|
(728,933
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)
|
(729,098
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)
|
|||
Subtotal
|
887
|
722
|
|||||
Derivative
liability, warrants related to private placement on January 23, 2007,
initial value
|
1,045,182
|
1,045,182
|
|||||
Cumulative
adjustment to record fair market value of derivative
liability
|
(1,043,189
|
)
|
(1,043,539
|
)
|
|||
Subtotal
|
1,993
|
1,643
|
|||||
Derivative
liability, warrants related to Dutchess debt financing on July
17, 2007,
initial value
|
30,000
|
30,000
|
|||||
Adjustment
to record fair market value of derivative liability
|
(24,348
|
)
|
(30,000
|
)
|
|||
Subtotal
|
5,652
|
-
|
|||||
Total
|
$
|
8,532
|
$
|
8,124
|
2008
|
$
|
840,000
|
||
2009
|
1,800,000
|
|||
2010
|
2,400,000
|
|||
2011
|
3,000,000
|
|||
January 1,
2012
|
2,195,738
|
|||
Total
|
$
|
10,235,738
|
March 31,
2008
|
December 31,
2007
|
||||||
Assets of
discontinued operations
|
|||||||
Cash
|
$
|
306,788
|
$
|
375,959
|
|||
Accounts
receivable, net
|
1,459,205
|
1,207,544
|
|||||
Inventory
|
1,522,710
|
903,196
|
|||||
Fixed
assets, net
|
148,741
|
167,660
|
|||||
Other
Assets
|
103,561
|
195,879
|
|||||
Total
assets
|
$
|
3,541,005
|
$
|
2,850,238
|
|||
Liabilities
of discontinued operations
|
|||||||
Accounts
payable and accrued expenses
|
$
|
1,840,062
|
$
|
1,787,965
|
|||
Notes
Payable
|
1,978,419
|
1,795,171
|
|||||
Billings
in excess of costs
|
2,267,065
|
1,412,900
|
|||||
Total
liabilities
|
6,085,546
|
4,996,036
|
|||||
Net
liabilities of discontinued operations
|
$
|
2,544,541
|
$
|
2,145,798
|
|
Year Ended ended
|
||||||
|
December 31
|
||||||
|
2008
|
2007
As Restated
|
|||||
Sales
|
$
|
1,853,011
|
$
|
1,261,416
|
|||
Cost
of Goods sold
|
1,710,817,
|
961,042
|
|||||
Gross
Profit
|
142,194
|
300,374
|
|||||
Salaries
|
389,657
|
961,736
|
|||||
Rent
|
54,953
|
48,248
|
|||||
Contingency
accrual
|
100,000
|
150,000
|
|||||
Interest
expense
|
26,062
|
42,754
|
|||||
Other
|
88,521
|
233,876
|
|||||
Loss
from Discontinued Operations
|
$
|
(516,999
|
)
|
$
|
(1,136,240
|
)
|
2009
|
$
|
67,500
|
Exhibits.
|
|
|
No.
|
|
Description
|
31.1
|
|
Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
31.2
|
|
Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
|
32.1
|
|
Certification
of Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
|
SIENA
TECHNOLOGIES, INC.
(Registrant)
|
||
|
|
|
|
Date:
May 15, 2008
|
By:
|
|
/s/
Anthony Delise
|
|
|
|
Anthony
Delise
Interim
Chief Executive Officer
|