MTRO Metro One Development Inc New (CE)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q/A

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended APRIL 30, 2009

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT of 1934

For the transition period from _________ to __________

Commission File Number: 333-61538

METRO ONE DEVELOPMENT, INC.

(Exact name of small business issuer as specified in its charter)

 DELAWARE 98-0231687
 ---------------------- --------------
(State or other jurisdiction of (IRS Employer
 incorporation or organization) Identification No.)

125 Avenida Mesita, San Clemente, California 92673
(Address of principal executive offices)

(949) 682-7891
(Registrant's telephone number, including area code)

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 [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

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

Large Accelerated filer [ ] Accelerated filer [ ]
Non-Accelerated filer [ ] Smaller reporting company [X]
 (Do not check if a smaller reporting company)

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

As of March 15, 2010 the Issuer had 22,495,969 shares of common stock issued and outstanding, par value $0.0001 per share.

METRO ONE DEVELOPMENT, INC.
QUARTERLY REPORT ON FORM 10-Q/A
FOR THE QUARTER ENDED APRIL 30, 2009

TABLE OF CONTENTS

 Page

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements: Index.........................................3

 Balance Sheets as of April 30, 2009 (Unaudited)
 and July 31, 2008.................................................F1

 Statements of Operations for the Three and Nine Months
 Ended April 30, 2009 and 2008 (Unaudited).........................F2

 Statement of Changes in Stockholders' Equity
 For the Nine Months Ended April 30, 2009 (Unaudited)..............F3

 Statements of Cash Flows for the Nine Months Ended
 April 30, 2009 and 2008 (Unaudited)...............................F4




 Notes to Financial Statements (Unaudited).....................F5 - F15


Item 2 - Management's Discussion and Analysis or Plan of Operation............4
Item 3 - Quantitative and Qualitative Disclosures About Market Risk...........8

Item 4T - Controls and Procedures ............................................8


PART II - OTHER INFORMATION

Item 1 - Legal Proceedings....................................................9

Item 1A - Risk Factors.......................................................10


Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.........10

Item 3 - Defaults Upon Senior Securities.....................................10

Item 4 - Submission of Matters to a Vote of Security Holders.................11

Item 5 - Other Information ..................................................11

Item 6 - Exhibits............................................................11

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

METRO ONE DEVELOPMENT, INC.

Financial Statements

Nine Months Ended April 30, 2009 and 2008 (Unaudited)

Contents

Financial Statements:

 Balance Sheets as of April 30, 2009 (Unaudited)
 and July 31, 2008..................................................F1

 Statements of Operations for the Three and Nine Months
 Ended April 30, 2009 and 2008 (Unaudited)..........................F2

 Statement of Changes in Stockholders' Equity
 For the Nine Months Ended April 30, 2009 (Unaudited)...............F3

 Statements of Cash Flows for the Nine Months Ended
 April 30, 2009 and 2008 (Unaudited)................................F4


 Notes to Financial Statements (Unaudited)......................F5 - F15

METRO ONE DEVELOPMENT, INC.
BALANCE SHEETS
APRIL 30, 2009 AND JULY 31, 2008

 (Restated -
 Note 6)
 April 30, July 31,
 2009 2008
 (Unaudited)
 ------------ ------------
ASSETS

Current assets
 Cash $ 31 $ --
 Due from Vital Products, Inc. 1 1
 ------------ ------------
 Total current assets 32 1
 ------------ ------------
Total assets $ 32 $ 1
 ============ ============

 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
 Bank overdraft $ -- $ 16,395
 Accounts payable and accrued expenses 3,610,633 3,693,578
 Loans payable to related party 248,309 158,844
 Current portion of long-term debts, net 819,315 917,134
 ------------ ------------
 Total current liabilities 4,678,257 4,785,951

Long-term debts, net -- --
 ------------ ------------
Total liabilities 4,678,257 4,785,951
 ------------ ------------
Conditionally redeemable convertible
 preferred stock; Series B 1.5%
 convertible preferred stock 1,000,000 1,000,000
 ------------ ------------
Stockholders' deficit
 Preferred stock; $0.01 par value;
 1,000,000 shares authorized,
 0 and 229,134 issued
 and outstanding, respectively 0 2,291

 Common stock; $0.0001 par value;
 1,000,000,000 shares authorized,
 22,495,969 and 657 issued and
 outstanding, respectively 2,249 0

 Additional paid-in capital 21,903,389 21,812,787
 Accumulated other comprehensive income 1,371,697 562,341
 Accumulated deficit (28,955,560) (28,163,369)
 ------------ ------------
 Total stockholders' deficit (5,678,225) (5,785,950)
 ------------ ------------
Total liabilities and stockholders' deficit $ 32 $ 1
 ============ ============

The accompanying notes are an integral part of the financial statements. F1

METRO ONE DEVELOPMENT, INC.
Statements of Operations (Unaudited)

 (Restated - (Restated -
 Note 6) Note 6)
 For the three months For the nine months
 ended April 30, ended April 30,
 2009 2008 2009 2008
 ------------ ------------ ------------ ------------

Sales $ -- $ -- $ -- $ --
Cost of revenues -- -- -- --
 ------------ ------------ ------------ ------------
 Gross profit -- -- -- --
 ------------ ------------ ------------ ------------
Operating expenses
 Selling, general
 and administrative 150,316 343,331 827,246 1,036,390
 ------------ ------------ ------------ ------------
 Total operating
 expenses 150,316 343,331 827,246 1,036,390
 ------------ ------------ ------------ ------------
 Loss from
 continuing
 operations (150,316) (343,331) ( 827,246) (1,036,390)

Other income (expense)
 Gain on recovery of
 previously written-off
 receivable 39,375 -- 170,055 --
 Interest and financing
 expense -- (541,997) -- (1,669,759)
 Loss on sale of
 Fixed assets -- -- -- (3,730)
 Other income -- 16,783 -- 16,783
 Interest income -- 76,531 -- 228,438
 ------------ ------------ ------------ ------------
 Total other
 income (expense) 39,375 (448,683) 170,055 (1,428,268)
 ------------ ------------ ------------ ------------
Loss before provision
 for income taxes (110,941) (792,014) (657,191) (2,464,658)

Provision for income taxes -- -- -- --
 ------------ ------------ ------------ ------------
Net income (loss) from
 continuing operations (110,941) (792,014) (657,191) (2,464,658)
Gain on sale of assets from
 discontinued operations -- 1,494,919 -- 1,494,919
Net income (loss) from
 discontinued operations -- (1,334,537) -- (3,709,011)
 ------------ ------------ ------------ ------------
Net loss $ (110,941) $ (631,632) $ (657,191) $(4,678,750)
Preferred stock dividend 45,000 45,000 135,000 135,000
 ------------ ------------ ------------ ------------
Net loss attributable to
 Common Stockholders $ (155,941) $ (676,632) $ (792,191) $(4,813,750)
 ============ ============ ============ ============

Earnings per share computation:
Net loss from
continuing operations

 before discontinued
 operations
 attributable to
 common
 stockholders $ (0.01) $ (792,014) $ (0.14) $(2,464,658)
 ============ ============ ============ ============
 Net income (loss) from
 discontinued
 operations $ -- $ 160,382 $ -- $(2,214,092)
 ============ ============ ============ ============
 Net loss
 attributable to
 common
 stockholders $ (0.01) $ (631,632) $ (0.14) $(4,678,750)
 ============ ============ ============ ============
Weighted average common
 shares outstanding -
 basic and diluted 17,711,086 1 5,796,191 1
 ============ ============ ============ ============

The accompanying notes are an integral part of the financial statements. F2

METRO ONE DEVELOPMENT, INC.

Statement of Changes in Stockholders' Equity For the Nine months ended April 30, 2009

(Unaudited)

 Accumulated (Restated -
 Additional Other Note 6) Total
 Preferred Stock Common Stock Paid-in Comprehensive Accumulated Stockholders'
 Shares Amount Shares Amount Capital Income(Loss) Deficit Equity
 --------- ------- ----------- ----------- ----------- ----------- ----------- -----------

Balance,
 July 31, 2008 229,134 2,291 657 -- 21,812,787 562,341 (28,163,369) (5,785,950)

Issuance of
 common stock
 for services -- -- 73,412 7 87,503 -- -- 87,510

Conversion of
 preferred stock
 into common
 stock (229,134) (2,291) 22,413,900 2,241 50 -- -- --

Issuance of
 common stock
 as principal
 payment on
 notes payable -- -- 8,000 1 3,049 -- -- 3,050

Dividend accrued
 preferred stock,
 Series B -- -- -- -- -- -- (135,000) (135,000)

Foreign currency
 translation -- -- -- -- -- 809,356 -- 809,356

Net loss -- -- -- -- -- -- (657,191) (657,191)
 --------- ------- ----------- ----------- ------------ ----------- ------------ -----------
Balance,
 April 30 2009 -- $ -- 22,495,969 $2,249 $ 21,903,389 $ 1,371,697 $(28,955,560) $(5,678,225)
 ========= ======= =========== =========== ============ =========== ============ ===========

The accompanying notes are an integral part of the financial statements. F3

METRO ONE DEVELOPMENT, INC.
Statements of Cash Flows (Unaudited)

 (Restated -
 Note 6)
 For the nine months
 ended April 30,
 2009 2008
 (unaudited) (unaudited)
 ------------ ------------


Cash flows from operating activities:
 Net loss $ (657,191) $(4,678,750)
 Adjustments to reconcile net loss to net
 cash used in operating activities:
 Stock-based compensation 87,510 3,381,227
 Financing cost related to convertible debt -- 917,765
 Depreciation and amortization -- 116,243
 Interest earned on Due from Vital Products -- (221,262)
 Impairment on goodwill -- 2,042,274
 Gain on sale of fixed assets -- (4,548)
 Gain on sale of assets from
 discontinued operations -- (1,494,919)
 Changes in operating assets and liabilities:
 Change in accounts receivable -- 3,817,473
 Change in inventory -- 159,697
 Change in prepaid expenses -- 32,334
 Change in due from Vital Products -- --
 Change in income tax receivable -- --
 Change in accounts payable and accrued
 expenses 356,355 196,171
 ------------ ------------
 Net cash (used in) provided by
 operating activities (213,326) 4,263,705
 ------------ ------------
Cash flows from investing activities:
 Advances to Vital Products -- (8,102)
 Purchase of property and equipment -- (8,111)
 ------------ ------------
 Net cash used in investing activities -- (16,213)
 ------------ ------------
Cash flows from financing activities:
 Payments on long term debt (88,705) (18,481,113)
 Payment on notes payable -- (174,123)
 Proceeds from related party loan 89,465 --
 Proceeds from long term debt -- 14,256,093
 Repayment of bank overdraft (16,395) --
 Dividend paid on preferred stock -- (135,000)
 ------------ ------------
 Net cash used in financing activities (15,635) (4,534,143)
 ------------ ------------
Effect of foreign currency exchange 228,992 (521,112)
 ------------ ------------
Net change in cash 31 (807,763)
Cash, beginning of period -- 882,131
 ------------ ------------
Cash, end of period $ 31 $ 74,368
 ============ ============

The accompanying notes are an integral part of the financial statements. F4

METRO ONE DEVELOPMENT, INC.

NOTES TO FINANCIAL STATEMENTS
April 30, 2009 AND 2008

1. BASIS OF PRESENTATION AND HISTORY OF THE COMPANY

Basis of presentation - The accompanying unaudited financial statements have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the Form 10-KSB for the year ended July 31, 2008 of Metro One Development, Inc. (the "Company").

The interim financial statements present the balance sheet, statements of operations, stockholders' equity and cash flows of the Company. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

The interim financial information is unaudited. In the opinion of management, all adjustments necessary to present fairly the financial position as of April 30, 2009 and the results of operations, stockholders' equity and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.

History of the Company - Metro One Development, Inc. formerly known as On The Go Healthcare, Inc., (the "Company") was incorporated on July 21, 2000 in the State of Delaware.

In October 2003, the Company acquired the assets and liabilities of Compuquest, Inc. through its subsidiary the International Mount Company. Compuquest is an authorized dealer of computer hardware, software and peripherals for Acer America, AST Computer, Hewlett-Packard, Microsoft and Toshiba.

On May 18, 2004, the Company signed an agreement to acquire substantially all of the assets and assume the liabilities of Vital Baby Innovations Inc. The acquisition was completed in June 2004.

On February 28, 2005, the Company acquired 1637033 Ontario Limited and its wholly-owned subsidiary, Helios/Oceana Ltd., an Ontario-based company, that provides IT professional services. The Company paid for this acquisition by acting on a security agreement on a note receivable.

In June 2005, the Company sold all of the significant assets in its childcare division to Vital Products, Inc.

On July 19, 2005, the Company acquired Infinity Technologies Inc., a computer hardware provider.

In October 2005, the Company entered into a Letter of Intent to purchase Island Corporation, a company involved in computer hardware distribution focusing in the medical field. The acquisition was completed in January 2006.

In January 2006, the Company completed the purchase of Solutions In Computing Inc., a supplier of computer hardware and software focusing in the entertainment field.

During May 2006, the Company amalgamated all of its subsidiaries into On the Go Technologies, Inc. accordingly, as of July 31, 2007, the Company conducts its operations directly.

On March 18, 2008, the Company entered into a binding agreement with FTS Group, Inc. and OTG Technologies Group, Inc., a Florida corporation and wholly-owned subsidiary of FTS Group, Inc. (together, "FTS"), whereby FTS agreed to purchase certain assets of the Company's value-added reseller business unit, dba On The Go Technologies Group, including its goodwill and intellectual property. On June 6, 2008, the Company agreed to amend certain terms of the binding agreement. On July 14, 2008, FTS notified the Company of its intention to terminate the transaction. The Company believes that FTS' termination of the transaction constitutes a breach of the binding agreement and that the promissory note issued pursuant to the binding agreement, as amended, is in default. The Company intends to pursue all remedies that are available. As of March 18, 2008, the Company has discontinued all operations as a valued-added reseller.

As a result of the sale of the value-added reseller business, the Company changed its business focus to that of a custom builder and property developer in the Greater Toronto Area in Canada and subsequently changed its name from On The Go Healthcare, Inc. to Metro One Development, Inc. on April 14, 2008.

Going concern - The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has assets totaling $32, liabilities totaling $4,678,257, and net losses for the nine months ended April 30, 2009 totaling $657,191. The Company's ability to raise additional capital through the future issuances of common stock or debt is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Financial statement items subject to significant management judgment include the valuation of due from Vital Products, Inc. and goodwill, as well as income taxes and loss contingencies. Actual results could differ from those estimates.

Principles of consolidation - The accompanying financial statements include the accounts of Metro One Development, Inc. and its wholly-owned subsidiary, On The Go Technologies, Inc. The accompanying financial statements have been prepared in accordance accounting principles generally accepted in the United States. All material inter-company accounts and transactions have been eliminated in consolidation.

Reclassifications - Certain prior year amounts were reclassified to conform to current period presentation.

Foreign currency translation - The Company considers the functional currency to be the local currency and, accordingly, their financial information is translated into U.S. dollars using exchange rates in effect at year-end for assets and liabilities and average exchange rates during each reporting period for the results of operations. Adjustments resulting from translation of foreign subsidiaries' financial statements are included as a component of other comprehensive income (loss) within stockholders' equity.

Revenue and expense recognition - The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101") as modified by Securities and Exchange Commission Staff Accounting Bulletin No. 104. Under SAB 101, revenue is recognized at the point of passage to the customer of title and risk of loss, there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured. The Company generally recognizes revenue at the time of delivery of goods. Sales are reflected net of discounts and estimated returns. Amounts billed to customers for shipping and handling are recorded as sales revenues. Costs incurred for shipping and handling are included in cost of sales.

Stock based compensation - On January 1, 2006, the Company adopted SFAS No. 123 (R) "Share-Based Payment," which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

Earnings (loss) per share - The Company reports earnings (loss) per share in accordance with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share are computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings
(loss) per share are computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share have not been presented since the effect of the assumed exercise of options and warrants to purchase common shares would have an anti-dilutive effect.

Comprehensive income (loss) - The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income," which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners or distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under the current accounting standards as a component of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. Comprehensive income is displayed in the statement of shareholders' equity and in the balance sheet as a component of shareholders' equity.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. The adoption of this standard did not have a material impact on the Company's financial statements.

New accounting pronouncements

In January 2008, Staff Accounting Bulletin ("SAB") 110, "Share-Based Payment" was issued (codified within ASC 225 -Income Statement). Registrants may continue, under certain circumstances, to use the simplified method in developing estimates of the expected term of share options as initially allowed by SAB 107, "Share-Based Payment". The adoption of SAB 110 did not have any material effect on the financial position and results of operations of the Company.

In May 2008, the FASB issued Staff Position (-FSP) APB 14-1, -Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlements) (codified within ASC 470 -Debt). This FSP requires a portion of this type of convertible debt to be recorded as equity and to record interest expense on the debt portion at a rate that would have been charged on nonconvertible debt with the same terms. This FSP takes effect in the first quarter of fiscal years beginning after December 15, 2008 and will be applied retrospectively for all periods presented. It will be effective for the Company on August 1, 2009. The adoption of APB 14-1 is not expected to have any material impact on our financial position, results of operations or cash flows.

In June 2008, the FASB issued FSP EITF 03-6-1, -Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (codified within ASC 260 -Earnings Per Share). Securities participating in dividends with common stock according to a formula are participating securities. This FSP determined that unvested shares of restricted stock and stock units with nonforfeitable rights to dividends are participating securities. Participating securities require the -two-class method to be used to calculate basic earnings per share. This method lowers basic earnings per common share. This FSP takes effect in the first quarter of fiscal years beginning after December 15, 2008 and will be applied retrospectively for all periods presented. It will be effective for the Company on August 1, 2009. The adoption of FSP EITF 03-6-1 is not expected to have any material impact on our financial position, results of operations or cash flows.

In June 2008, the FASB ratified the consensus reached on EITF Issue No. 07-05, -Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock (-EITF No. 07-05) (codified within ASC 815 -Derivatives and Hedging). EITF No. 07-05 clarifies the determination of whether an instrument (or an embedded feature) is indexed to an entity's own stock, which would qualify as a scope exception under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. EITF No. 07-05 is effective for financial statements issued for fiscal years beginning after December 15, 2008. It will be effective for the Company on August 1, 2009. Early adoption for an existing instrument is not permitted. The adoption of EITF Issue No. 07-05 is not expected to have any material impact on our financial position, results of operations or cash flows.

In February 2007 the FASB issued SFAS 159, -The Fair Value Option for Financial Assets and Financial Liabilities-including an amendment of FASB Statement No. 115 (codified within ASC 825 -Financial Instruments). The statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective 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. The statement is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. The Company will adopt this pronouncement for its fiscal year beginning August 1, 2008. The adoption of SFAS 159 did not have a material impact on our financial position, results of operations or cash flows.

In September 2006, the FASB issued Statement of Financial Accounting Standard (-SFAS) No. 157, -Fair Value Measurements (-SFAS 157) (codified within ASC 820). SFAS 157 defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. SFAS 157 does not expand or require any new fair value measures; however the application of this statement may change current practice. The requirements of SFAS 157 are first effective for our fiscal year beginning August 1, 2008. In February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2 (codified within ASC 820)., Effective Date of FASB Statement No. 157, which delayed the effective date by one year for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. In October 2008, the FASB issued FSP FAS 157-3 (codified within ASC 820)., Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active, to clarify the application of SFAS 157 in a market that is not active and provide an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. This FSP was effective immediately. The adoption of SFAS 157 did not have a material impact on our financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), - Business Combinations,
(SFAS 141(R)) (codified under ASC 805, - Business Combinations). SFAS 141(R)
establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, the goodwill acquired and any noncontrolling interest in the acquiree. This statement also establishes disclosure requirements to enable the evaluation of the nature and financial effect of the business combination. SFAS 141(R) is effective for fiscal years beginning on or after December 15, 2008. The adoption of SFAS 141(R) is not expected to have any material impact on our financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161, - Disclosures About Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133, (SFAS 161) (codified within ASC 815 - Derivatives and Hedging). SFAS 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. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The adoption of SFAS 161 did not have any material impact on our financial position, results of operations or cash flows.

In January 2009, the FASB issued FASB Staff Position No. EITF 99-20-1, - Amendments to the Impairment Guidance of EITF Issue No. 99-20 (codified within ASC 325 -Investments). This FSP amends the impairment guidance in EITF Issue No. 99-20, - Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets, to achieve more consistent determination of whether an other-than-temporary impairment has occurred. Additionally, the FSP retains and emphasizes the objective of an other-than-temporary impairment assessment and the related disclosure requirements in FASB Statement No. 115 -Accounting for Certain Investments in Debt and Equity Securities, and other related guidance. This guidance is effective for interim and annual reporting periods ending after December 15, 2008, and is applied prospectively. The adoption of EITF 99-20-1 is not expected to have any material impact on our financial position, results of operations or cash flows.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, - Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS 124-2) (codified within ASC 320 - Investments - Debt and Equity Securities). FSP FAS 115-2 and FAS 124-2 change the method for determining whether an other-than-temporary impairment exists for debt securities and the amount of the impairment to be recorded in earnings. FSP FAS 115-2 and FAS 124-2 are effective for interim and annual periods ending after June 15, 2009. The adoption of FSP FAS 115-2 and FAS 124-2 is not expected to have any material impact on our financial position, results of operations or cash flows.

In April 2009, the FASB issued FSP FAS 157-4 - Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That are Not Orderly (codified within ASC 820 - Fair Value Measurements and Disclosures). FSP FAS 157-4 provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. It also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS 157-4 becomes effective for interim and annual reporting periods after June 15, 2009 and shall be applied prospectively. The adoption of FSP FAS 157 is not expected to have any material impact on our financial position, results of operations or cash flows.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, - Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1) (codified within ASC 825 - Financial Instruments). FSP FAS 107-1 and APB 28-1 require fair value disclosures in both interim as well as annual financial statements in order to provide more timely information about the effects of current market conditions on financial instruments. FSP FAS 107-1 and APB 28-1 are effective for interim and annual periods ending after June 15, 2009. The adoption of FSP FAS 107-1 and APB 28-1 are not expected to have any material impact on our financial position, results of operations or cash flows.

In May 2009, the FASB issued SFAS No. 165, - Subsequent Events (SFAS 165) (codified within ASC 855 - Subsequent Events). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. Specifically, SFAS 165 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective prospectively for interim and annual periods ending after June 15, 2009. The adoption of SFAS 165 is not expected to have any material impact on our financial position, results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 168, - The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162 (SFAS 168) (codified within ASC 105 -Generally Accepted Accounting Principles). SFAS 168 stipulates that the FASB Accounting Standards Codification is the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. In conjunction with the issuance of SFAS 168, the SEC issued interpretive guidance Final Rule 80 (FR-80) regarding FASB's Accounting Standards Codification. Under FR-80, the SEC clarified that the ASC is not the authoritative source for SEC guidance and that the ASC does not supersede any SEC rules or regulations. Further, any references within the SEC rules and staff guidance to specific standards under U.S. GAAP should be understood to mean the corresponding reference in the ASC. FR-80 is also effective for interim and annual periods ending after September 15, 2009. The adoption of SFAS 168 is not expected to have any material impact on our financial position, results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 166, - Accounting for Transfers of Financial Assets (SFAS 166) (codified within ASC 860 -Transfers and Servicing). SFAS 166 amends the derecognition guidance in SFAS No. 140,
- Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (SFAS No. 140). SFAS 166 is effective for fiscal years beginning after November 15, 2009. The adoption of SFAS 166 is not expected to have any material impact on our financial position, results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 167, -Amendments to FASB Interpretation No. 46(R) (SFAS 167) (codified within ASC 810 -Consolidation). SFAS 167 amends the consolidation guidance applicable to variable interest entities and affects the overall consolidation analysis under FASB Interpretation No. 46(R). SFAS 167 is effective for fiscal years beginning after November 15, 2009. The adoption of SFAS 167 is not expected to have any material impact on our financial position, results of operations or cash flows.

In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, - Measuring Liabilities at Fair Value (ASU 2009-05) (codified within ASC 820 - Fair Value Measurements and Disclosures). ASU 2009-05 amends the fair value and measurement topic to provide guidance on the fair value measurement of liabilities. ASU 2009-05 is effective for interim and annual periods beginning after August 26, 2009. The adoption of ASU 2009-05 is not expected to have any material impact on our financial position, results of operations or cash flows.

In September 2009, the FASB issued ASU No. 2009-12, - Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) (ASU 2009-12) (codified within ASC 820 -Fair Value Measurements and Disclosures). ASU 2009-12 amends the input classification guidance under ASC Topic 820. ASU 2009-12 is effective for interim and annual periods ending after December 15, 2009. The adoption of ASU 2009-12 is not expected to have any material impact on our financial position, results of operations or cash flows.

In October 2009, the FASB issued ASU No. 2009-13, - Multiple Deliverable Revenue Arrangements - a consensus of the FASB Emerging Issues Task Force (ASU 2009-13) (codified within ASC Topic 605). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. The adoption of ASU 2009-13 is not expected to have any material impact on our financial position, results of operations or cash flows.

In October 2009, the FASB issued ASU 2009-15, - Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. ASU 2009-15 amends the accounting and reporting guidance for debt (and certain preferred stock) with specific conversion features or other options. ASU 2009-15 is effective for fiscal years beginning on or after December 15, 2009. Management should dislose that they are evaluating the impact of the future adoption of this standard or if already determined disclose the impact.

In December 2009, the FASB issued ASU 2009-16, - Transfers and Servicing (Topic 860) - Accounting for Transfers of Financial Assets. ASU 2009-16 amends the accounting for transfers of financials assets and will require more information about transfers of financial assets, including securitizations, and where entities have continuing exposure to the risks related to transferred financial assets. ASU 2009-16 is effective at the start of a reporting entity's first fiscal year beginning after November 15, 2009, with early adoption not permitted. The adoption of ASU 2009-16 is not expected to have any material impact on our financial position, results of operations or cash flows.

In December 2009, the FASB issued ASU 2009-17, - Consolidations (Topic 810)
- Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU 2009-17 changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controller through voting (or similar rights) should be consolidated. ASU 2009-17 also requires a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. ASU 2009-17 is effective at the start of a reporting entity's first fiscal year beginning after November 15, 2009, or January 1, 2010, for a calendar year entity. Early adoption is not permitted. The adoption of ASU 2009-17 is not expected to have any material impact on our financial position, results of operations or cash flows.

In January 2010, the FASB issued ASU 2010-01, - Equity (Topic 505) - Accounting for Distributions to Shareholders with Components of Stock and Cash. ASU 2010-01 clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or shares with a potential limitation on the amount of cash that all shareholders can elect to receive is considered a share issuance. ASU 2010-01 is effective for interim and annual periods ending on or after December 15, 2009 and should be applied on a retrospective basis. The adoption of ASU 2010-01 is not expected to have any material impact on our financial position, results of operations or cash flows.

In January 2010, the FASB issued ASU 2010-02, - Consolidation (Topic 810)
- Accounting and Reporting for Decreases in Ownership of a Subsidiary - A Scope Clarification. ASU 2010-02 clarifies the scope of the decrease in ownership provisions of Subtopic 810 and expands the disclosure requirements about deconsolidation of a subsidiary or de-recognition of a group of assets. ASU 2010-02 is effective beginning in the first interim of annual reporting period ending on or after December 15, 2009. The amendments in ASU 2010-02 must be applied retrospectively to the first period that an entity adopted SFAS 160. The adoption of ASU 2010-02 is not expected to have any material impact on our financial position, results of operations or cash flows.

In January 2010, the FASB issued ASU No. 2010-06, -Improving Disclosures about Fair Value Measurements (ASU 2010-06) (codified within ASC 820 -Fair Value Measurements and Disclosures). ASU 2010-06 improves disclosures originally required under SFAS No. 157. ASU 2010-16 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those years. The adoption of ASU 2010-06 is not expected to have any material impact on our financial position, results of operations or cash flows.

In March 2010, the FASB issued ASU No. 2010-11, - Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives (ASU 2010-11) (codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves disclosures originally required under SFAS No. 161. ASU 2010-11 is effective for interim and annual periods beginning after June 15, 2010. The adoption of ASU 2010-11 is not expected to have any material impact on our financial position, results of operations or cash flows.

3. STOCKHOLDERS' EQUITY

On August 15, 2008, the Company's common stock was adjusted to take into account a 1,000-to-1 reverse stock split. The Company's common stock has been adjusted on a retroactive basis; accordingly, all previous balances have been adjusted for this reverse stock split.

On February 5, 2009, the Company's common stock was adjusted to take into account a 1,000-to-1 reverse stock split. The Company's common stock has been adjusted on a retroactive basis; accordingly, all previous balances have been adjusted for this reverse stock split.

On February 19, 2009, the Company converted 224,134 of preferred stock owned by the Company's President into 22,413,400 shares of common stock.

During the three months ended April 30, 2009, there were no new stock options or warrants granted.

4. GAIN ON RECOVERY OF PREVIOUSLY WRITTEN-OFF RECEIVABLE

During the nine months ended April 30, 2009, the Company received 78,000,000 of shares of Vital Products, Inc. with a total fair value of $170,055 as settlement for amounts due from Vital Products, Inc., which were previously written-off during the year ended July 31, 2008. As a result, the Company has recorded a gain for the fair value of these shares totaling $170,055. The gross amount due from Vital Products, Inc. as of April 30, 2009 is $235,310 (July 31, 2008 - $2,058,293).

During the same nine months ended April 30, 2009, the Company distributed the 78,000,000 shares of Vital Products, Inc. to pay $170,055 of consulting expenses incurred during this period.

5. DISCONTINUED OPERATIONS

As discussed in Note 1, on March 18, 2008, the Company entered into a binding agreement with FTS Group, Inc. and OTG Technologies Group, Inc., a Florida corporation and wholly-owned subsidiary of FTS Group, Inc. (together, "FTS"), whereby FTS agreed to purchase certain assets of the Company's value-added reseller business unit, dba On The Go Technologies Group, including its goodwill and intellectual property. On June 6, 2008, the Company agreed to amend certain terms of the binding agreement. On July 14, 2008, FTS notified the Company of its intention to terminate the transaction. The Company believes that FTS' termination of the transaction constitutes a breach of the binding agreement and that the promissory note issued pursuant to the binding agreement, as amended, is in default. The Company intends to pursue all remedies that are available. As of March 18, 2008, the Company has discontinued all operations as a valued-added reseller.

The sale of the Company's value-added reseller business operations to FTS resulted in a loss on sale by the Company totalling $1,773,079 for the year end July 31,2008.

The sale of the Company's value added reseller business operations has been accounted for as discontinued operations in the financial statements for the periods presented herein, in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment and Disposal of Long-lived Assets."

The following is a summary of the results of discontinued operations in the statements of operations:

Three and nine months ended April 30, 2008

Net sales $ 2,270,117 $13,629,971
Cost of sales 1,683,316 10,867,103
 ----------- -----------
 586,801 2,762,868
Operating expenses 1,921,338 6,471,879
 ----------- -----------
Income (loss) from
 discontinued operations $(1,334,537) $(3,709,011)
 =========== ===========

6. RESTATEMENT

The balance sheet as of April 30, 2009 and statement of operations for the three and nine months ended April 30, 2009 included herein were restated to reflect the effect of changes to the original accounting for the distribution of Vital Products Inc. common stock ("Vital Stock") for goods and services received by the Company. The original accounting measured the value of the goods and services based on the closing price of Vital Stock on the date granted. Vital Stock for the nine month period April 30, 2009 was thinly traded and illiquid as evidenced by low trading volume and wide bid ask spreads and, as such, is not a reliably measure of fair value. Accordingly, the distribution of Vital Stock has been re-measured in these restated financial statements based on the value of goods and services received. In addition, the distribution of Vital Stock, in error, was recorded as a payment against outstanding liabilities as of April 30, 2008 and was reallocated to operating expenses in the three month period ended October 31, 2008.

The effect of these changes impacted the balance sheet and statement of operations from August 2008 through April 2009. These changes do not impact the cash flows of the Company. The balance sheet as of April 30, 2009 and statement of operations for the three and nine months ended April 30, 2009 has been restated as summarized below:

 As
 Previously As
 Reported Adjustment Restated

Balance Sheet as of April 30, 2009
Accounts payable and accrued liabilities $3,358,321 $ 252,312 $3,610,633

Statement of Operations for the three
months ended April 30, 2009
Operating expenses
 Selling, general and administrative $ 242,191 $ (91,875) $ 150,316
Other income
 Gain on recovery of previously
 written-off receivable $ 131,250 $ (91,875) $ 39,375
Statement of Operations for the nine
months ended April 30, 2009
Operating expenses
 Selling, general and administrative $2,490,629 $(1,663,383) $ 827,246
Other income
 Gain on recovery of previously
 written-off receivable $2,085,750 $(1,915,695) $ 170,055
Net loss attributable to common
stockholders $ (539,879) $ (252,312) $ (792,191)
Net loss per share attributable to
common shareholders $ (0.09) $ (0.05) $ (0.14)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

INTRODUCTION

The following discussion and analysis of financial condition and results of operations is based upon, and should be read in conjunction with, our unaudited financial statements and related notes thereto included elsewhere in this report, and in our Form 10-KSB for the year ended July 31, 2008.

Subsequent to the issuance of its financial statements for the fiscal quarter ended April 30, 2009, the Company identified an error in the accounting for the distribution of Vital Products Inc. common stock ("Vital Stock") for goods and services received by the Company. The original accounting measured the value of the goods and services based on the closing price of Vital Stock on the date granted. Vital Stock for the three month period April 30, 2009 was thinly traded and illiquid as evidenced by low trading volume and wide bid ask spreads and, as such, is not a reliably measure of fair value. Accordingly, the distribution of Vital Stock has been re-measured in these restated financial statements based on the value of goods and services received. In addition, the distribution of Vital Stock, in error, was recorded as a payment against outstanding liabilities at October 31, 2008 and has been reallocated to operating expenses. The effect of the restatement is described in Note 6 of the Notes to Financial Statements under Part I, Item 1, Financial Statements. The following management's discussion and analysis gives effect to the restatement.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains "forward-looking statements" that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including general economic conditions, the markets for and market price of our products, the strength and financial resources of our competitors, our ability to find and retain skilled personnel, the results of our financing efforts, regulatory developments and other risks described in our annual report on Form 10-KSB and our other filings with the Securities and Exchange Commission and risks described elsewhere in this report. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes. Estimates are used for, but not limited to, the accounting for impairment of long-term assets, income taxes and loss contingencies. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies, among others, may be impacted significantly by judgment, assumptions and estimates used in the preparation of the Financial Statements:

Revenue and expense recognition - We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements," or SAB 101 as modified by SAB 104. Under SAB 101, revenue is recognized at the point of passage to the customer of title and risk of loss, there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured. We generally recognize revenue at the time of delivery of goods. Sales are reflected net of discounts and estimated returns based on historical patterns.

Allowance for doubtful accounts - The allowance for doubtful accounts is maintained to provide for losses arising from customers' inability to make required payments. If there is a deterioration of our customers' credit worthiness and/or there is an increase in the length of time that the receivables are past due greater than the historical assumptions used, additional allowances may be required.

We assess the recoverability of long-lived assets whenever events or changes in business circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of the expected undiscounted future net cash flows over the remaining useful life is less than the carrying amount of the assets.

Stock-based compensation - On January 1, 2006, we adopted SFAS No. 123(R) "Share-Based Payment," which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED APRIL 30, 2009 AND 2008.

Revenues

We did not generate any revenues from sales for the nine months ended April 30, 2009 due to the sale of our value-added reseller business to FTS Group.

Cost of Sales

We did not incur any cost of revenues for the period ended April 30, 2009 due to the sale of our value-added reseller business to FTS Group.

Gross Profit

Our gross profit for the nine months ended April 30, 2009 and the three months ended April 30, 2009 totaled $0.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses decreased to $827,246 for the nine months ended April 30, 2009, from $1,036,390 for the nine months ended April 30, 2008. With the sale of our value-added reseller business to FTS Group, we changed our business focus to that of a custom builder and property developer. We are continuing to evaluate our staffing needs and other administrative expenses in order to determine how to operate and grow our business efficiently as we develop our new business model.

Interest and Financing Expense

Interest and financing expense was $0 for the nine months ended April 30, 2009, compared to $1,669,759 for the nine months ended April 30, 2008. The decrease in the nine months ended April 30, 2009 compared to the nine months ended April 30, 2008 is primarily the result of no new promissory notes.

Net loss

Our net loss of $657,191 for the nine months ended April 30, 2009, compared to a net loss of $4,678,750 for the nine months ended April 30, 2008, was attributable to a gain on a previously written-off receivable.

Liquidity and Capital Resources

As of April 30, 2009, we had current assets of $32 and current liabilities of $4,678,257, resulting in a working capital deficit of $(4,678,225).

For the nine months ended April 30, 2009, we had cash used in operations in the amount of $213,326, as compared to cash provided by operations in the amount of $4,263,705 for the nine months ended April 30, 2008. The decrease in the cash provided is due to the change in our business model after the sale of our value-added reseller business to FTS Group.

For the nine months ended April 30, 2009, cash used in investing activities was $0, as compared to $16,213 for the nine months ended April 30, 2008. The decrease in cash used in investing activities is primarily related to a decrease in purchased property and equipment during the period ended April 30, 2009, as compared to the prior year.

For the nine months ended April 30, 2009, cash used in financing activities was $15,635 as compared to cash used in financing activities of $4,534,143 for the nine months ended April 30, 2008. The primary source of financing for the nine months ended April 30, 2009 has been proceeds from a related party.

We believe the cash flow from operating activities and capital raised, as needed, through existing debt financing will not be sufficient to provide necessary capital for our operations for the next twelve months.

FINANCING ACTIVITIES

In July 2005, we entered into an equity line of credit agreement through a convertible debt facility with Laurus Master Fund, Ltd. granting us access to borrow up to $5,500,000. The financing consisted of a $500,000 secured term loan and a $5,000,000 secured revolving note. On January 13, 2006, we agreed to revise the financing facility with Laurus. The revised facility consists of (i) a $500,000 Secured Convertible Note, (ii) a Secured Convertible Minimum Borrowing Note, and (iii) a Secured Revolving Note (collectively, the "Amended and Restated Notes"). The Amended and Restated Notes are secured by a security interest in substantially all of our assets.

Pursuant to the Agreement, we agreed to amend the conversion price to $0.50 and the exercise price of the warrants to $0.65.

As of April 30, 2009, the balance for the Revolving Note totaled $819,315.

On December 6, 2006, we issued to Dutchess a convertible promissory note in the amount of $1,937,000 for a purchase price of $1,550,000. The Note was due and payable in full on July 11, 2008. Other than the $387,000 discount inherent in the purchase price, the Note is non-interest bearing and calls for monthly payments of $60,000 from January 10, 2007 through July 10, 2007 and monthly payments of $126,500 from August 10, 2007 and thereafter until the face amount of the Note is paid in full. The $387,000 inherent discount is being amortized as debt discount over the term of the note.

In connection with the Note, we paid Dutchess a facility fee of $90,000 and agreed to issue 400,000 shares of common stock as incentive shares with a fair value of $264,000. The Note is convertible into shares of common stock at the election of the Note holders. The conversion rate is at the lesser of (i) 50% of the lowest closing bid price during the 15 trading days preceding the conversion notice or (ii) 100% of the lowest bid price for the 20 days immediately preceding the convertible closing date. The convertible promissory note agreement contains a conversion limit which limits the ability of Dutchess to convert the note to not exceed 4.99% of our outstanding shares of common stock at any given time.

On March 5, 2008, we agreed to amend the terms of the Note. Pursuant to the terms of the amended Note, payments made by us in satisfaction of the Note will be in shares of our common stock, which we will issue to Dutchess on the tenth calendar day of each month until our obligations under the Note have been satisfied in full. Each payment will be convertible at 80% of the lowest closing best bid prices of our common stock for the 10 trading days prior to the payment due date. The maturity date of the Note remains the same. As of April 30, 2009, the Note was paid out.

MATERIAL TRENDS AND UNCERTAINTIES

Effective March 18, 2008, we entered into a binding agreement with FTS Group, Inc. and OTG Technologies Group, Inc., that was subsequently amended on June 6, 2008, whereby we agreed to sell certain assets in our value-added computer reseller business. As part of our decision to sell this business, we determined that it would be in the best interests of our Company and our stockholders to divest of the assets related to our value-added computer reseller business and change our business model to one that focuses on custom building and property development in the Greater Toronto Area in Canada. We have not yet fully established our new business model and do not yet have any projects underway. Additionally, as of February 13, 2009, we did not have sufficient capital to pursue our new line of business. If we do not raise sufficient capital to implement our business plan, we will not be able to generate revenue. However, we will continue to incur expenses in our next fiscal quarter and beyond associated with our remaining assets, overhead costs related to remaining a public company and expenses including salaries and office space for our remaining employees. We may not be successful in raising capital and implementing our new business model and this change in business model will have a material impact on our liquidity, capital resources and results of operations.

Our financial condition is uncertain at this time. As discussed below, Laurus Master Fund, Ltd. has filed a complaint alleging that we are in default under our Amended and Restated Security Purchase Agreement. It is too early to predict the outcome of this litigation; however, if Laurus prevails on even a fraction of the amount they are seeking, we may not have sufficient assets to pay the judgment. If that outcome occurs, we will likely have to seek bankruptcy protection. Our Secured Revolving Note with Laurus was our primary source of financing until March 17, 2008. Without this source of funding, we no longer have access to capital to allow us to develop our operations. In addition, having sold our assets as described above, we will not have a significant source of capital until we either raise funds or generate revenues pursuant to our business plan. If we do not raise sufficient funds to cover our debts and overhead, our business will likely fail.

We have, in the past, issued our common stock to employees and consultants to cover a portion of their compensation. As of August 17, 2009, the closing price of our common stock, as quoted on the Pink Sheets, was $0.23. Due to the price of our common stock, we must issue a substantial number of shares to provide adequate compensation to employees and consultants. Due to our limited capital resources, we anticipate continuing to issue common stock to compensate employees and consultants. Our issuances of common stock will dilute the stockholders of our common stock and will likely cause our stock price to decline further. As a result, we determined that it would be in the best interests of our Company and our stockholders to implement a reverse split of our common stock in order to have sufficient stock to use for compensation purposes or to raise capital. Our previous reverse stock splits have resulted in a decline in our stock price and we believe our stock price will likely decline again, particularly if we have not yet implemented our new business model.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If additional funds are raised through issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off balance sheet arrangements to report for the quarter ended April 30, 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a Smaller Reporting Company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

ITEM 4T. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q/A. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934
(i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Our disclosure controls and procedures include components of our internal control over financial reporting. Management's assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance that the control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system's objectives will be met.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On June 23, 2006, Frank Abate, Elaine Abate, John Abate and Gerhard Schmid filed a Statement of Claim in Ontario Superior Court against On The Go Healthcare, Inc. for alleged damages for breach of contract in the amount of $281,522 and damages for wrongful dismissal of Frank Abate and John Abate. We have paid severance pay for Frank Abate and John Abate's termination and we believe the plaintiffs' entire claim is frivolous. We cannot predict the outcome of such allegations; however, we intend to vigorously defend against the plaintiffs' claim. We have accrued $100,000 as at April 30, 2009.

On September 25, 2008, Laurus Master Fund, Ltd. filed a Complaint in the Supreme Court of the State of New York naming Metro One Development, Inc. and another party as defendants, alleging a breach of contract and promissory estoppel and sought damages in the amount of $874,471. The claim relates to a $5,500,000 financing agreement we entered into with Laurus on July 14, 2005, as later amended. In its complaint, Laurus alleges that we are in breach of the security agreement by selling substantially all of the assets subject to their security interest and failing to direct all present and future payments constituting collateral into an account under Laurus' control. While it is too early to determine the outcome of such allegations, we intend to continue to aggressively defend ourselves against any claims and assert all available defenses.

On October 6, 2008, Arrow Electronics, Inc. sent us and another company a formal demand for payment of $461,097 relating to product we purchased in the first nine months of the year ended July 31, 2008. We have accrued $461,097 as at April 30, 2009.

On July 15, 2008, EqualLogic Inc. filed a motion against us under our previous trade name in the State of New Hampshire for $658,464 relating to product we purchased on January 18, 2008. The letter is addressed to a third party and under a previous trade name that we had been using before selling it to the third party. We have accrued $658,464 as at April 30, 2009.

On July 31, 2008, Ingram Micro, Inc. sent us a formal demand for payment of $85,567 relating to product we purchased in the beginning of March 2008 and product purchased by another company. We have accrued $85,567 as at April 30, 2009.

On August 7, 2008, Supercom Canada, Ltd. sent us a formal demand for payment of $37,771 relating to product we purchased in 2006. We have accrued $37,771 as at April 30, 2009.

On August 7, 2008, Tech Data Canada Corporation sent us a formal demand for payment of $329,998 relating to product we purchased in the first nine months of the year ended July 31, 2008. We have accrued $329,998 as at April 30, 2009.

On August 26, 2008, Isilon Systems Inc. filed a motion of default judgment in the State of Washington against us and another company for $192,834 relating to products we purchased on October 24, 2007 and December 20, 2007. We have accrued $192,834 as at April 30, 2009.

On August 28, 2008, Synnex Canada Limited sent a formal demand for payment of $124,333 relating to products we purchased in March 2008. We have accrued $124,333 as at April 30, 2009.

On September 3, 2008, Autodesk Inc. sent us a formal demand for payment of $54,776 relating to product we purchased in January 2008. The letter is addressed under a previous trade name that had been used before selling it to a third party. We have accrued $54,776 as at April 30, 2009.

On October 20, 2008, Silicon Graphics Limited filed a claim against us with the Ontario Superior Court of Justice for $189,134 relating to products we purchased November 20, 2006. We have accrued $189,134 as at April 30, 2009.

We may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances. Other than the litigation described above, we are not aware of any pending or threatened litigation against our Company or our officers and directors in their capacity as such that could have a material impact on our operations or finances.

ITEM 1A. RISK FACTORS.

There have been no material changes from the risk factors as previously disclosed in our annual report on Form 10-KSB for the fiscal year ended July 31, 2008.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Between October 2, 2008 and October 21, 2008, Dutchess converted $3,050 principal amount of a convertible promissory note into an aggregate of 8,000 shares of our common stock, at $0.38125 per share as follows:

* On October 2, 2008, we issued 1,500 shares of our common stock;
* On October 10, 2008, we issued 2,500 shares of our common stock; and
* On October 21, 2008, we issued 4,000 shares of our common stock.

Payments under the note are due on the tenth calendar day of each month and are convertible into shares of our common stock at eighty percent of the lowest closing best bid prices of our common stock for the ten trading days prior to the payment due date.

On August 15, 2008, our common stock was adjusted to take into account a 1,000-to-1 reverse stock split. Additionally, on February 5, 2009, our common stock was adjusted to take into account a 1,000-to-1 reverse stock split. The issuances described above have been adjusted for the split that occurred on August 15, 2008 and on February 5, 2009.

With respect to the issuance of our securities as described above, we relied on the Section 4(2) exemption from securities registration under the federal securities laws for transactions not involving any public offering. No advertising or general solicitation was employed in offering the securities. The securities were sold to an accredited investor. The securities were offered for investment purposes only and not for the purpose of resale or distribution, and the transfer thereof was appropriately restricted by us.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

As of April 30, 2009, we are in default with respect to indebtedness described above including indebtedness to Laurus Master Fund, Ltd.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

During the quarter ended April 30, 2009, we did not submit any matters to a vote of security holders. On November 19, 2008, a majority of the Company's stockholders representing 86% of the outstanding votes of the Company acted by written consent to approve a 1 for 1,000 reverse stock split.

ITEM 5. OTHER INFORMATION.

On February 5, 2009, our common stock was adjusted to take into account a 1,000-to-1 reverse stock split and began trading under the new ticker symbol "MTRO.PK." The Company's common stock has been adjusted on a retroactive basis; accordingly, all previous balances have been adjusted for this reverse stock split.

ITEM 6. EXHIBITS

EXHIBIT NO. IDENTIFICATION OF EXHIBIT

2.1 Memorandum of Agreement between the Company and Elaine Abate, John Abate, Gerhard Schmid, Frank Abate, 1066865 Ontario Inc, and Infinity Technologies Inc., dated July 19, 2005 (included as Exhibit 2.1 to the Form 8-K filed July 22, 2005, and incorporated herein by reference).

3.1 Restated Certificate of Incorporation (included as Exhibit 3.4 to the Form 10-KSB filed October 27, 2004, and incorporated herein by reference).

3.2 By-laws (included as Exhibit 3.4 to the Form SB-2 filed May 24, 2001, and incorporated herein by reference).

3.3 Certificate of Amendment of the Certificate of Incorporation (included as Exhibit 3.5 to the Form 10-KSB filed October 27, 2004, and incorporated herein by reference).

3.4 Certificate of Amendment of the Certificate of Incorporation, dated June 6, 2007 (included as Exhibit 3.4 to the Form 10-QSB filed June 12, 2007, and incorporated herein by reference).

3.5 Certificate of Amendment to the Amended and Restated Certificate of Incorporation, as amended, dated August 13, 2007 (included as Exhibit 3.1 to the Form 8-K filed August 17, 2007, and incorporated herein by reference).

4.1 Certificate of Designation of Series A Convertible Preferred Stock (included as Exhibit 4.1 to the Form 10-KSB filed October 27, 2004, and incorporated herein by reference).

4.2 Secured Convertible Term Note between the Company and Laurus Master Fund, Ltd., dated July 14, 2005 (included as Exhibit 4.1 to the Form 8-K filed July 20, 2005, and incorporated herein by reference).

4.3 Secured Revolving Note between the Company and Laurus Master Fund, Ltd., dated July 14, 2005 (included as Exhibit 4.2 to the Form 8-K filed July 20, 2005, and incorporated herein by reference).

4.4 Secured Convertible Minimum Borrowing Note between the Company and
 Laurus Master Fund, Ltd., dated July 14, 2005 (included as Exhibit
 4.3 to the Form 8-K filed July 20, 2005, and incorporated herein by
 reference).

4.5 Security and Purchase Agreement between the Company and Laurus
 Master Fund, Ltd., dated July 14, 2005 (included as Exhibit 4.4 to
 the Form 8-K filed July 20, 2005, and incorporated herein by
 reference).

4.6 Master Security Agreement between the Company and Laurus Master
 Fund, Ltd., dated July 14, 2005 (included as Exhibit 4.5 to the
 Form 8-K filed July 20, 2005, and incorporated herein by reference).

4.7 Share Pledge Agreement between the Company and Laurus Master Fund,
 Ltd., dated July 14, 2005 (included as Exhibit 4.6 to the Form 8-K
 filed July 20, 2005, and incorporated herein by reference).

4.8 Form of Common Stock Purchase Warrant between the Company and Laurus
 Master Fund, Ltd., dated July 14, 2005 (included as Exhibit 4.7 to the
 Form 8-K filed July 20, 2005, and incorporated herein by reference).

4.9 Subsidiary Guaranty between the Company and Laurus Master Fund, Ltd.,
 dated July 14, 2005 (included as Exhibit 4.8 to the Form 8-K filed
 July 20, 2005, and incorporated herein by reference).

4.10 Funds Escrow Agreement between the Company and Laurus Master Fund,
 Ltd., dated July 14, 2005 (included as Exhibit 4.9 to the Form 8-K
 filed July 20, 2005, and incorporated herein by reference).

4.11 Forbearance Agreement between the Company and Laurus Master Fund,
 Ltd., dated July 14, 2005 (included as Exhibit 4.10 to the Form 8-K
 filed July 20, 2005, and incorporated herein by reference).

4.12 Joinder Agreement between the Company and Laurus Master Fund, Ltd.,
 dated July 20, 2005 (included as Exhibit 4.11 to the Form 8-K filed
 July 20, 2005, and incorporated herein by reference).

4.13 Registration Rights Agreement between the Company and Laurus Master
 Fund, Ltd., dated July 14, 2005 (included as Exhibit 4.12 to the
 Form 8-K filed July 20, 2005, and incorporated herein by reference).

4.14 Amended and Restated Secured Convertible Term Note between the Company
 and Laurus Master Fund, Ltd., dated January 13, 2006 (included as
 Exhibit 4.1 to the Form 8-K filed January 30 2006, and incorporated
 herein by reference).

4.15 Amended and Restated Secured Revolving Note between the Company and
 Laurus Master Fund, Ltd., dated January 13, 2006 (included as Exhibit
 4.2 to the Form 8-K filed January 30, 2006, and incorporated herein
 by reference).

4.16 Amended and Restated Secured Convertible Minimum Borrowing Note
 between the Company and Laurus Master Fund, Ltd., dated
 January 13, 2006 (included as Exhibit 4.3 to the Form 8-K filed
 January 30, 2006, and incorporated herein by reference).

4.17 Amended and Restated Security Purchase Agreement between the Company
 and Laurus Master Fund, Ltd., dated January 13, 2006 (included as
 Exhibit 4.4 to the Form 8-K filed January 30, 2006, and incorporated
 herein by reference).

 12

4.18 Amended and Restated Form of Common Stock Purchase Warrant between
 the Company and Laurus Master Fund, Ltd., dated January 13, 2006
 (included as Exhibit 4.5 to the Form 8-K filed January 30, 2006, and
 incorporated herein by reference).

4.19 Amended and Restated Registration Rights Agreement between the Company
 and Laurus Master Fund, Ltd., dated January 13, 2006 (included as
 Exhibit 4.6 to the Form 8-K filed January 30, 2006, and incorporated
 herein by reference).

4.20 Form of Series "D" Common Stock Purchase Warrant (included as Exhibit
 4.22 to the Form SB-2 filed February 21, 2006, and incorporated herein
 by reference).

4.21 Omnibus Agreement, dated July 11, 2007 (included as Exhibit 4.7 to the
 Form 8-K filed July 17, 2007, and incorporated herein by reference).

4.22 Second Omnibus Agreement, dated September 24, 2007 (included as
 Exhibit 4.8 to the Form 8-K filed September 28, 2007, and incorporated
 herein by reference).

4.23 Third Omnibus Agreement, dated October 15, 2007 (included as Exhibit
 4.9 to the Form 8-K filed October 19, 2007, and incorporated herein
 by reference).

10.1 Secured Promissory Note between the Company and Vital Products, Inc.,
 dated February 23, 2006 (included as Exhibit 10.1 to the Form 8-K filed
 February 27, 2006, and incorporated herein by reference).

10.2 Secured Promissory Note between the Company and Vital Products, Inc.,
 dated February 23, 2006 (included as Exhibit 10.2 to the Form 8-K filed
 February 27, 2006, and incorporated herein by reference).

10.3 2007 Stock Option Plan, dated January 16, 2007 (included as Exhibit 10.1
 to the Form S-8 filed January 16, 2007, and incorporated herein by
 reference).

10.4 Investment Agreement between the Company and Dutchess Private Equities
 Fund, Ltd., dated January 16, 2007 (included as Exhibit 10.14 to the
 Form SB-2 filed January 16, 2007, and incorporated herein by reference).

10.5 Side Letter Agreement between the Company and Dutchess Private Equities
 Fund, Ltd., dated March 19, 2007 (included as Exhibit 10.15 to the Form
 SB-2 filed March 20, 2007, and incorporated herein by reference).

10.6 2007 Stock Option Plan, dated April 24, 2007 (included as Exhibit 10.1
 to the Form S-8 filed April 25, 2007, and incorporated herein by
 reference).

10.7 On The Go Healthcare, Inc. 2007 Stock Option Plan, dated June 6, 2007
 (included as Exhibit 10.1 to the Form S-8 filed June 7, 2007, and
 incorporated herein by reference).

10.8 On The Go Healthcare, Inc. August 2007 Stock Option Plan, dated
 August 14, 2007 (included as Exhibit 10.1 to the Form S-8 filed
 August 14, 2007, and incorporated herein by reference).

 13

10.9 2007 Stock Option Plan, dated October 5, 2007 (included as Exhibit 10.1
 to the Form S-8 filed October 5, 2007, and incorporated herein by
 reference).

10.10 2007 Stock Option Plan, dated October 19, 2007 (included as Exhibit 10.1 to the Form S-8 filed October 19, 2007, and incorporated herein by reference).

10.11 2007 Stock Option Plan, dated November 19, 2007 (included as Exhibit 10.1 to the Form S-8 filed November 19, 2007, and incorporated herein by reference).

10.12 On The Go Healthcare, Inc. February 2008 Stock Option Plan, dated February 26, 2008 (included as Exhibit 10.1 to the Form S-8 filed February 26, 2008, and incorporated herein by reference).

10.13 Binding Agreement between the Company on one side and FTS Group, Inc. and OTG Technologies Group, Inc. on the other side, dated March 18, 2008 (included as Exhibit 10.1 to the Form 8-K filed March 27, 2008, and incorporated herein by reference).

10.14 Metro One Development, Inc. April 2008 Stock Option Plan, dated April 14, 2008 (included as Exhibit 10.1 to the Form S-8 filed April 14, 2008, and incorporated herein by reference).

10.15 Amendment No. 1 to Transaction Documents, dated June 6, 2008 (included as Exhibit 10.1 to the Form 8-K filed June 16, 2008, and incorporated herein by reference).

10.16 Metro One Development, Inc. June 2008 Stock Option Plan, dated June 18, 2008 (included as Exhibit 10.1 to the Form S-8 filed June 26, 2008, and incorporated herein by reference).

10.17 Metro One Development, Inc. September 2008 Stock Option Plan, dated

 September 10, 2008 (included as Exhibit 10.1 to the Form S-8 filed
 September 10, 2008, and incorporated herein by reference).

21.1 List of Subsidiaries of the Registrant (included as Exhibit 21.1 to
 the Form 10-KSB filed October 30, 2006, and incorporated herein by
 reference).

31.1 Certification of Chief Executive Officer pursuant to Section 302 of
 the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Section 302 of
 the Sarbanes-Oxley Act of 2002.

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.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

METRO ONE DEVELOPMENT, INC.

Dated: March 15, 2010 By:/s/ Stuart Turk
 ----------------------------
 Stuart Turk, President, CEO
 Chairman and Director




Dated: March 15, 2010 By:/s/ Evan Schwartzberg
 ----------------------------
 Evan Schwartzberg, Chief Financial
 and Principal Accounting Officer

Metro One Development (CE) (USOTC:MTRO)
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