Indicate by check mark whether the registrant (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.

Yesþ      Noo

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Yeso      Noþ

The number of shares outstanding of the issuer’s common stock, par value $0.001 per share, as of DecemberOctober 31, 20082009 was 24,766,117.57,002,412.

     This Reportreport on Form 10-Q contains certain “forward-looking statements” (as such term is defined in section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These statements, which involve risks and uncertainties, reflect our current expectations, intentions or strategies regarding our possible future results of operations, performance, and achievements. Forward-looking statements in this report include, without limitation: statements regarding future products or product development; statements regarding future selling, including our expectations regarding the success of our network marketing sales channel, general and administrative costs and research and development spending; statements regarding our product development strategy; statements regarding the legal complaint filed against the company; and statements regarding future financial performance, results of operation, capital expenditures and financingsufficiency of capital resources to fund our operating requirements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and applicable common law and SEC rules.

     These forward-looking statements aremay be identified in this report by using words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “plan”, “predict”, “project”, “should” and similar terms and expressions, including references to assumptions and strategies. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, these statements are subject to certain risks, uncertainties, and contingencies, which could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, such statements.

     The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

When considering these forward-looking statements, you should keep in mind the cautionary statements in this report and the documents incorporated by reference. We have no obligation and do not undertake to update or revise any such forward-looking statements to reflect events or circumstances after the date of this report.

     These unaudited Condensed Consolidated Financial Statements and Notes should be read in conjunction with the audited financial statements and notes of LifeVantageLifevantage Corporation as of and for the year ended June 30, 20082009 included in our Annual Reportannual report on Form 10-KSB.10-K.

     The condensed consolidated financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of the management of Lifevantage Corporation (“LifeVantage”Lifevantage” or the “Company”), these interim Financial Statements include all adjustments, consisting of normal recurring adjustments, that are considered necessary for a fair presentation of the Company’s financial position as of December 31, 2008,September 30, 2009, and the results of operations for the three and six month periods ended December 31,September 30, 2009 and 2008 and 2007 and the cash flows for the sixthree month periods ended December 31, 2008September 30, 2009 and 2007.2008. Interim results are not necessarily indicative of results for a full year or for any future period. Certain prior period amounts have been reclassified to conform to our current period presentation.

     The condensed consolidated financial statements and notes included herein are presented as required by Form 10-Q, and do not contain certain information included in the Company’s audited financial statements and notes for the fiscal year ended June 30, 20082009 pursuant to the rules and regulations of the SEC. For further information, refer to the financial statements and notes thereto as of and for the year ended June 30, 2008,2009, and included in the Annual Reportreport on Form 10-KSB10-K on file with the SEC.

     On September 26, 2007 and October 31, 2007August 5, 2009, the Company issued debentures convertible into the Company’s common stock in a private placement offering. The netgross proceeds received by the Company from the offering of approximately $1,328,000$904,000 are being used to develop and expand its network marketing efforts, scientific studies and intellectual property protection. While the 2007 funding improved the Company’s liquidity position, the Company is seeking to raise up to an additional $2,000,000 for its entry into the Network Marketing Sales Channelsales channel and to increase the Company’s working capital. The Company anticipates raising additional capital to continue to expand the network marketing sales channel. However, there can be no assurance that any additional funds can be raised or that revenue generated from this new sales channel will result in positive cash flow.

     The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiary Lifeline Nutraceuticals Corporation (“LNC”). All inter-company accounts and transactions between the entities have been eliminated in consolidation.

     Management of the Company has made a number of estimates and assumptions relating to the reporting of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements. Actual results could differ from those estimates.

     The Company ships the majority of its productproducts sold through the network marketing or multi-level marketing sales channel directly to the consumer via United Parcel Service (“UPS”) and receives substantially all payment for these sales in the form of credit card charges. Revenue from direct product sales to customers and distributors is recognized upon passage of title and risk of loss to customers when product is shipped from the fulfillment facility. Sales revenue and estimated returns are recorded when product is shipped. The Company’s direct to customerstandard return policy is to provide a 30-day money back guarantee on orders placed by customers. After 30 days, the Company does not issue refunds to direct sales customers for returned product. In the network marketing sales channel, the Company allows terminating distributors to return unopened unexpired product that they have previously purchased up to twelve months prior to termination, subject to certain consumption limitations. To date, returns from terminating distributors have been negligible and the Company recognizes all such revenue. The Company has experienced overall monthly returns of approximately 1 percent2% of sales. Our direct to consumer return rate, other than network marketing or multi-level marketing sales, and our retail sales return rate is approximately 1% of sales based on historical experience and our network marketing sales channel return rate is approximately 4% of sales based upon network marketing industry experience. As of December 31, 2008September 30, 2009 and June 30, 2008,2009, the Company’s reserve balance for returns and allowances was approximately $92,000$62,300 and $97,700,$68,500, respectively.

     For its sales to retail customers,distributors, the Company analyzes itsanalyzed individual contracts to determine the appropriate accounting treatment for its recognition of revenue on a customer by customer basis.

     The Company’s accounts receivable primarily consistconsists of receivablesits receivable from its retail distributors.distributor. Management reviews accounts receivable on a regular basis to determine if any receivables will potentially be uncollectible. The Company has one national retail distributor, GNC, and several regional natural products distributors as of December 31, 2008.September 30, 2009. Our national distributor comprises 59%approximately 66% of the Company’s customer accounts receivable balance as of December 31, 2008.September 30, 2009. Based on the current aging of its accounts receivable, the Company believes that it is not necessary to maintain an allowance for doubtful accounts.

     For credit card sales to independent distributors and direct sales customers, the Company verifies the customer’s credit card prior to shipment of product. PaymentAny payment not yet received from credit card sales is treated as a deposit in transit and is not reflected as a receivable on the accompanying balance sheet. As of June 30, 2009 the Company’s credit card processor put a hold on approximately $533,000 of credit card sales due to higher sales volumes and perceived credit card risks from the Company’s change to a network marketing sales channel for distribution of its products. During the three months ended September 30, 2009 the Company changed its credit card processor and has subsequently received substantially all of the reserve deposit.

Based on the Company’s verification process for customer credit cards and historical information available, management does not believe that there is justification for an allowance for doubtful accounts on credit card sales related to its direct and independent distributor sales as of

     The Company expenses all costs related to research and development activities as incurred. Research and development expenses for the sixthree month periodsperiod ended December 31,September 30, 2009 and 2008 were $106,892 and 2007 were $118,515 and $218,889 respectively.

     The Company considers only its monetary liquid assets with original maturities of three months or less as cash and cash equivalents.

     FromThe Company has, from time to time, the Company has invested in marketable securities, including auction rate preferred securities of closed-end funds (“ARPS”) to maximize interest income. As the auction process for resetting interest rates has ceased as of mid-February 2008, we have been notified by several of the Corporate entities that have issued ARPS of plans to refinance these instruments. The Company has classified its investment in these instruments as marketable securities available for sale, in accordance with SFAS 115.sale.

Investment in marketable securities are summarized as follows as of December 31, 2008September 30, 2009 and June 30, 2008:2009:

     Shipping and handling costs associated with inbound freight and freight out to customers, including independent distributors, are included in cost of sales. Shipping and handling fees charged to all customers are included in sales.

     The Company has adopted the provisions of Statement of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets,(“SFAS 142”). SFAS 142 establishes standards for accounting for goodwill and other intangibles acquired in business combinations. Goodwill and other intangibles with indefinite lives are not amortized.

     We issued convertible debt in Issue No. 00-19, (“EITF 05-02”)September and review the appropriate classification under the provisions of Statement of Financial Accounting Standards No. 133,Accounting for Derivative Instruments and Hedging Activities, (“SFAS 133”), and EITF 00-19.

convertible debt and equity instruments, we may issue freestanding options or warrants that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity. For option-based derivative financial instruments, we use the Black-Scholes option pricing model to value the derivative instruments.

     When the embedded conversion option in a convertible debt instrument is not required to be bifurcated and accounted for separately as a derivative instrument, we review the terms of the instrument to determine whether it is necessary to record a beneficial conversion feature, in accordance with Emerging Issues Task Force Issue No. 98-05,Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios,(“EITF 98-05”), and Emerging Issues Task Force Issue No. 00-27,Application of Issue No. 98-5 to Certain Convertible Instruments, (“EITF 00-27”).feature. When the effective conversion rate of the instrument at the time it is issued is less than the fair value of the common stock into which it is convertible, we recognize a beneficial conversion feature, which is credited to equity and reduces the initial carrying value of the instrument.

     As a result of accounting guidance effective July 1, 2009, we re-evaluated the anti-dilution provisions associated with the convertible debt issued in September and October 2007 and as a result we recorded a derivative liability as of September 30, 2009. This liability was recorded as a cumulative effect accounting adjustment to retained earnings as of July 1, 2009 and the liability was recorded at fair market value at July 1, 2009 and September 30, 2009. See Note 1 — Restatement.

When convertible debt is initially recorded at less than its face value as a result of allocating some or all of the proceeds received in accordance with Accounting Principles Board Opinion No. 14,Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, (“APB 14”), to

When an assessment forassessing impairment of long-lived assets, long-lived assets to be disposed of, and certain identifiable intangibles related to those assets is performed, the Company is required to compare the net carrying value of long-lived assets on the lowest level at which cash flows can be determined on a consistent basis to the related estimates of future undiscounted net cash flows for such properties. If the net carrying value exceeds the net cash flows, then impairment is recognized to reduce the carrying value to the estimated fair value, generally equal to the future discountedundiscounted net cash flow.

     In accordance with the provisions of APB Opinion No. 14,Upon subsequent evaluation the Company allocated the proceeds received in the private placement to the convertible debenturesembedded conversion derivative liability based on the fair market value at the issuance date and the relative fair value of the warrants to purchase common stock based on their relative estimated fair values. In accordance with EITF Issues 98-5 and 00-27,

     In accordance with SFAS 123(R), paymentsDuring the three months ended September 30, 2009, the Company issued common stock and warrants in a private offering, resulting in gross proceeds to the Company of approximately $904,000. The Company sold an aggregate of 2,583,668 shares of common stock and warrants to purchase 516,724 shares of common stock to participants in the offering. These warrants are exercisable for a period of three years from the date of issuance at an exercise price of $0.50 per share.

     Payments in equity instruments for goods or services are accounted for byunder the guidance of share based payments, which require use of the fair value method. For the three and six months ended December 31,September 30, 2009 and 2008, stock based compensation of $90,064$802,248 and $216,087$126,022, respectively, was reflected as an increase to additional paid in capital. Of the $90,064$802,248 stock based compensation for the three months ended December 31, 2008, $62,797September 30, 2009, $438,867 was employee related and $27,267$363,381 was non-employee related. ForOf the six months ended December 31, 2008,$126,022 stock based compensation of $150,797for the three months ended September 30, 2008, $88,000 was employee related and $65,290$38,022 was non-employee related.

     WarrantsCompensation based warrants for the purchase of 240,000 and 520,000280,000 shares of the Company’s common stock were granted to consultants for services rendered during the three and six month periodsperiod ended December 31, 2008, respectively.September 30, 2008. The value of thethese warrants granted werewas estimated at $25,148$49,235, and $74,383 forwas expensed over the service period. No compensation based warrants were granted during the three and six month periodsperiod ended December 31, 2008, respectively. No options were granted to employees during the same periods.September 30, 2009.

     The Company’s Articles of Incorporation authorize the issuance of preferred shares. However, as of December 31, 2008,September 30, 2009, none have been issued nor have any rights or preferences been assigned to the preferred shares by the Company’s Board of Directors.

     This management’s discussion and analysis discusses the financial condition and results of operations of Lifevantage Corporation (the “Company”, “LifeVantage”“Lifevantage”, or “we”, “us” or “our”) and its wholly-owned subsidiary, Lifeline Nutraceuticals Corporation (“LNC”). The Company experienced a significant change in fair value of its derivative liabilities of approximately $6,028,000 which was recorded as other income during the three month period ended September 30, 2009. Absent the effect of the change in fair value of the derivative warrant liability, the Company would have reported a loss.

     At present,We are a publicly traded dietary supplement company which markets and sells its products through the network marketing or multi-level marketing industry and seeks to enhance life through anti-aging and wellness products while creating business opportunities for all people. We offer products backed by facts and by science in two principal categories: dietary supplements that combat oxidative stress and anti-aging skincare. Currently, we primarilymanufacture, market, distribute and sell a singletwo products, our centerpiece product, Protandim^®. We developed Protandim^®, a proprietary blend of ingredients that has (through studies on animalsdietary supplement, and humans) demonstrated the ability to increase the production of antioxidant enzymes including superoxide dismutase (“SOD”) and catalase (“CAT”) in brain, liver, and blood, the primary battlefields for oxidative stress. Protandim^® is designed to induce the human body to produce more of its own catalytic antioxidants, and to decrease the process of lipid peroxidation, an indicator of oxidative stress. Each component of Protandim^® has been selected for its ability to meet these criteria. Low, safe doses of each component help prevent unwanted additional effects that might be associated with one or another of the components, none of which have been seenour Lifevantage TrueScience™ Anti-Aging Cream. We primarily sell our products in the formulation.

     DuringOur revenue significantly depends upon the six months ended December 31, 2008, the Company has recognized all deferrednumber and productivity of our independent distributors. As a result, it is vital to our business that we continuously leverage our research and development resources to develop and introduce innovative products. We have developed a distributor compensation plan and other incentives designed to motivate our independent distributors to market and sell our products and to build sales organizations. If we experience delays or difficulties in introducing compelling products or attractive initiatives to independent distributors, this can have a negative impact on our revenue and expenses from GNC and Vitamin Cottage, as the Company has determined it has sufficient history to reasonably estimate returns and meets the retail sales recognition requirements pursuant to Staff Accounting Bulletin No. 104,Revenue Recognition, corrected copy(“SAB 104”). Excluding the recognition of prior period deferred revenue of approximately $511,000 from GNC and Vitamin Cottage, sales for the six months ended December 31, 2008 were approximately $1,341,000.harm our business.

     Our research efforts to date have been focused on investigating various aspects and consequences of the imbalance of oxidants and antioxidants, an abnormality which is a central underlying feature in many disorders.antioxidants. We intend to continue our research, development, and documentation of the efficacy of Protandim^® to provide credibility to the market. We also anticipate undertaking research, development, testing, and licensing efforts to be able to introduce additional

     Net revenue from Protandim^® sales totaled approximately $1,858,000 for the independent distributorships,three months ended September 30, 2009 and approximately $1,274,000 for the three months ended September 30, 2008. During the three months ended September 30, 2008, the Company will continuehas recognized all deferred revenue and expenses from GNC and Vitamin Cottage (retail customers at the time which had unlimited right of return requirements), as the Company has determined it has sufficient history to sell Protandim^® through itsreasonably estimate returns and meets the retail sales recognition requirements. Excluding the recognition of prior period deferred revenue of approximately $511,000 from GNC and direct to consumer channels.Vitamin Cottage, sales for the three months ended September 30, 2008 were approximately $763,000.

     The Company commencedissued common stock and warrants in a private placement offering with aggregate gross proceeds to the Company of equity in January 2009approximately $904,000. The Company sold an aggregate of up to $2 million with an option to issue an additional $0.5 million at the Company’s discretion. The offering is for $10,000 units which include 50,000 shares of common stock and a warrant to purchase 50,0002,583,668 shares of common stock at a purchase price of $0.35 per share and issued warrants exercisable for 516,724 shares of common stock. The warrants have an exercise price of $0.50 per share forand may be exercised at any time following issuance during the three years (the “Units”). There can be no assurance thatyear exercise period.

     Effective September 15, 2009, the Company will be successfulreceived a bridge loan in raising capital at all or on terms acceptable tothe amount of $100,000 from each of Mr. Thompson and Mr. Mauro, members of the Company’s board of directors and related parties of the Company. The terms of the notes are for one month with interest payable at a rate of 10% per annum. Accrued interest is payable in cash by the Company has not yet sold any Units inupon repayment of the private placement.note at the maturity date. All parties have agreed to an extension of the term of these two bridge loans.

     Sales We generated net revenuesales from the sale of our product, Protandim®, of approximately $578,000products approximating $1,858,000 during the three months ended December 31, 2008September 30, 2009, and approximately $796,000 during the three months ended December 31, 2007. We generated revenuesnet sales of approximately $1,852,000 during the six months ended December 31, 2008$763,000 and approximately $1,604,000 during the six months ended December 31, 2007. Included in net revenue for the six months ended December 31, 2008 arerecognized approximately $511,000 of previously deferred revenue, or a total of approximately $1,274,000, during the three months ended September 30, 2008. Excluding the recognition of prior period deferred revenue of approximately $511,000 from its retail sales.GNC and Vitamin Cottage, sales for the three months ended September 30, 2008 were approximately $763,000.

     Our primary liquidity and capital resource requirements are to finance the cost of additional personnel required for the rollout of our plannednetwork marketing efforts andsales channel strategy including the compensation plan to distributors, the manufacture and sale of Protandim^®our products and to pay our general and administrative expenses. The Company’s recent hiring of additional personnel for its network marketing sales channel has resulted in substantial additional costs and expenses. In order to meet these increased expense requirements, the Company’s sales must continue to increase or the Company must raise sufficient amounts of additional capital, and there is no guarantee that either of these events will occur. To reduce cash outflow related to increased expenses, the Company has reviewed job functions and eliminated redundant positions.

     Our primary sources of liquidity are cash flow from the sales of our product and funds raised from our 2007 and 2009 private placement. During Januaryplacements. As of September 30, 2009, the Company commenced a private placement of equity up to $2 million with an option to issue an additional $0.5 million. The Company has not yet sold any of the equity in the private placement.

     During the sixthree months ended December 31,September 30, 2009, our net cash provided by investing activities was approximately $37,000, due to the redemption of marketable securities. During the three months ended September 30, 2008, our net cash provided by investing activities was approximately $323,000,$48,000, primarily due to the redemption of marketable securities. During the six months ended December 31, 2007, our net cash used by investing activities was approximately $1,509,000, primarily due to the purchase of marketable securities.

     Cash provided by financing activities during the sixthree months ended December 31, 2008September 30, 2009 was approximately $83,000,$1,592,000, compared to approximately $1,337,000$154,000 during the sixthree months ended December 31, 2007.September 30, 2008. Cash provided from financing activities during the sixthree month period ended December 31,September 30, 2009 was due to proceeds from the August 2009 private placement of approximately $904,000 and notes from two directors and one shareholder totaling $700,000. Cash provided from financing activities during the three months ended September 30, 2008 was due to proceeds from the revolving line of credit. Cash provided from financing activities during the six months ended December 31, 2007 was due to proceeds from the 2007 private placement.

     We maintain an investment portfolio of marketable securities that is managed by a professional financial institution. The portfolio includes ARPS of AA and AAA rated closed-end funds. These marketable securities which historically have been extremely liquid have been adversely affected by the broader national liquidity crisis.

     Based upon recent redemptionsan agreement to expand the Company’s line of credit to approximately 80%, which were $300,000 during the three

     In the third and fourth quarters of previously deferred revenue.our 2009 fiscal year, we assumed substantial overhead as we entered the network marketing sales channel and we subsequently instituted a comprehensive review of job functions to eliminate redundant positions. As a result, our management implemented cost reduction initiatives designed to reduce operating costs while increasing our efficiency and productivity. We believe these initiatives will allow us to retain the most qualified and essential personnel required for continued operations and growth of our network marketing distribution model.

     We base our spending in partOur ability to finance future operations will depend on our expectations of future revenue levelsexisting liquidity and, ultimately, on our ability to generate additional revenues and profits from the sale of Protandim^®. If our revenue for a particular period is lower than expected, weoperations. Management has projected that existing cash on hand will take further stepsbe sufficient to reduce our cash operating expenses accordingly. Cash generated from operations has been insufficient to satisfy our long-term liquidity requirements, which ledallow us to seekcontinue operations at current levels through December 31, 2009. We will need to raise additional financing. Additionalcapital to continue operations at current levels beyond that date. A shortfall from projected sales levels would also have a material adverse effect on our ability to continue operations at current levels. We are actively seeking to raise additional capital through debt, equity or equity-based financing (such as convertible debt); however financing may not be dilutive toavailable on favorable terms or at all. If we raise additional funds by selling additional shares of our capital stock, or securities convertible into shares of our capital stock, the ownership interest of our existing shareholders. In an effort to conserve our cash resources, we initiated reductions in personnel, consulting fees, advertising, andshareholders may be diluted. The amount of dilution could be increased by the issuance of warrants or securities with other general and administrative expenses from previous levels.dilutive characteristics, such as anti-dilution clauses or price resets. If we are unable to increase revenues as planned,raise additional financing in a timely manner, we maywould be requiredforced to further reduce the scopeliquidate some or all of our planned operations, which could harmassets, and/or to suspend or curtail certain or cease all of our business, financial condition and operating results.operations.

     We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments, and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Our significant accounting policies are described in Note 2 to our financial statements. Certain of these significant accounting policies require us to make difficult, subjective, or complex judgments or estimates. We consider an accounting estimate to be critical if (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

     There are other items within our financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements. Management has discussed the development and selection of these critical accounting estimates with our board of directors, and the audit committee has reviewed the foregoing disclosure.

     Allowances for Product Returns We record allowances for product returns at the time we ship the product.product based on estimated return rates of 1% to 4%. We base these accruals on the historical return rate since the inception of our selling activities, and the specific historical return patterns of the product. Our return rate is approximately 1% of sales.

     We offer a 30-day, money back unconditional guarantee to all direct customers. As of December 31, 2008,September 30, 2009, our December 2008September 2009 direct and network marketing sales shipments of approximately $167,000$658,000 were subject to the money back guarantee. We also replace product returned due to damage during shipment wholly at our cost, the total of which historically has been negligible. In addition, we allow terminating distributors to return 30% of unopened unexpired product that they have previously purchased up to twelve months prior, subject to certain consumption limitations.

     We monitor our return estimate on an ongoing basis and may revise the allowances to reflect our experience. Our allowance for product returns was approximately $92,000$62,300 on December 31, 2008,September 30, 2009, compared with approximately $98,000$68,500 on June 30, 2008. The reduction in the reserve is primarily due

     We have reviewed recently issued, but not yet effective, accounting pronouncements and do not believe any such pronouncements will have a material impact on our financial statements.

     The SEC defines the term“disclosure controls and procedures”to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’sSEC’s rules and forms. The Company’s management maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluated by the Company’s management to allow management to make timely decisions regarding required disclosure.

Members     In connection with the restatement described in Note 1 to the Company’s financial statements, members of the Company’s management, including ourits Chief Executive Officer, David Brown, and Chief Financial Officer, Bradford Amman, have evaluatedCarrie E. Carlander, re-evaluated the effectiveness of ourthe Company’s disclosure controls and procedures, as defined by Exchange Act Rules 13a-15(e) or 15d-15(e), as of December 31, 2008,September 30, 2009, the end of the period covered by this report. Based upon that evaluation, Messrs.re-evaluation, Mr. Brown and AmmanMs. Carlander concluded that ourthe Company’s disclosure controls and procedures were not effective as of December September 30, 2009.

     There have beenwere no changes in our internal control over financial reporting that occurred during the three or six monthsquarter ended December 31, 2008September 30, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. With the addition of new employees for the entry and rollout of the Company’s network marketing sales strategy, internal controls are being analyzed and modified where necessary to maintain the effectiveness of our internal control over financial reporting.

During the three months ended December 31, 2008,September 30, 2009, the Company sold 2,583,668 unregistered shares of common stock at a price of $0.35 per share. In connection with that issuance, the Company also issued warrants to purchase 240,000exercisable for 516,724 shares of the Company’sits common stock to consultants of the Company in exchange for services rendered atstock. The warrants have an exercise price of $0.11$0.50 per share and a term of three (3) years (see Notes 2 and 6 tomay be exercised at any time following issuance during the Condensed Consolidated Financial Statements included in this report). For these compensatory warrants, there was no underwriter involved in the transactions, and the warrantsthree-year exercise period. The issuances described above were issued pursuant to the exemptionexempt from registration contained in Section 4(2) ofunder the Securities Act of 1933, as amended.amended, pursuant to Section 4(2) thereof and/or Rule 506 promulgated thereunder. The transaction was not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the investors in connection with the offering.

None.

None.