----

----

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

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

| UTAH                                                                                         | 87-0543981                                                |
|----------------------------------------------------------------------------------------------|-----------------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization)                | (IRS                Employer Identification No.)          |
|                                                                                         |                                                      |
| 150                West Civic Center DriveSuite                400Sandy,                Utah | 84070                                                     |
| (Address                of principal executive offices)                                      | (Zip                Code)                                 |
|                                                                                         |                                                      |
| Issuer's                telephone number: (801)                451-6141                      |                                                      |
|                                                                                         |                                                      |
| Securities                registered under Section 12(b) of the Act:                         | Name                of each exchange on which registered: |
| None                                                                                         | None                                                      |

| Securities                registered under Section 12(g) of the Act: | Common                Stock, $0.0001 par value. |
|----------------------------------------------------------------------|-------------------------------------------------|

----

|                    | TABLE                OF CONTENTS                                                                                                                                             |    |
|-------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                    |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   | PageNo. |
|                    |                                                                                                                                                                                   |    |
| PART                I.  |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
| Item                1.  | Description                of Business                                                                                                                                                 | 3       |
|                    |                                                                                                                                                                                   |    |
| Item                2.  | Description                of Property                                                                                                                                                 | 11      |
|                    |                                                                                                                                                                                   |    |
| Item                3.  | Legal                Proceedings                                                                                                                                                       | 11      |
|                    |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
| PART                II. |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
| Item                5.  | Market                for Common Equity, Related Stockholder Matters and Small Business                Issuer                Purchases of Equity Securities                            | 12      |
|                    |                                                                                                                                                                                   |    |
| Item                6.  | Management’s                Discussion and Analysis or Plan of Operation                                                                                                         | 14      |
|                    |                                                                                                                                                                                   |    |
| Item                7.  | Financial                Statements                                                                                                                                                    | 28      |
|                    |                                                                                                                                                                                   |    |
| Item                8A. | Controls                and Procedures                                                                                                                                                 | 28      |
|                    |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
| PART                III |                                                                                                                                                                                   |    |
|                    |                                                                                                                                                                                   |    |
| Item                9.  | Directors,                Executive Officers, Promoters and Control Persons and Corporate                Governance; Compliance with Section 16 (a) of the Exchange                Act | 30      |
|                    |                                                                                                                                                                                   |    |
| Item                10. | Executive                Compensation                                                                                                                                                  | 33      |
|                    |                                                                                                                                                                                   |    |
| Item                11. | Security                Ownership of Certain Beneficial Owners and Management and Related                Stockholder Matters                                                           | 40      |
|                    |                                                                                                                                                                                   |    |
| Item                12. | Certain                Relationships and Related Transactions and Director                Independence                                                                                 | 42      |
|                    |                                                                                                                                                                                   |    |
| Item                13. | Exhibits                                                                                                                                                                               | 43      |
|                    |                                                                                                                                                                                   |    |
| Item                14. | Principal                Accountant Fees and Services                                                                                                                                  | 45      |
|                    |                                                                                                                                                                                   |    |
| Signatures              |                                                                                                                                                                                   | 46      |

----

|   | · | Product                Sales – Occasionally, we sell our TrackerPAL devices as part of a                monitoring contract.  In addition, the Company sells home                security and Personal Emergency Response Systems (“PERS”). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Monitoring                Services – Following activation, our TrackerPAL customers pay a daily                monitoring fee for monitoring services provided by us through a subsidiary                corporation, SecureAlert, Inc. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Medical                Diagnostic Stains – Through another subsidiary corporation, we also sell                medical diagnostic stains and equipment to laboratories throughout                the                United States. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | 24/7                nationwide two-way voice communication; |
|--------|--------|-------------------------------------------------------------|

|   | · | Automated                reporting of location and alarms; |
|--------|--------|------------------------------------------------------------|

|   | · | Inclusion                and exclusion area alarms; |
|--------|--------|-----------------------------------------------------|

|   | · | Proximity                alarm; |
|--------|--------|---------------------------------|

|   | · | Automated                alert notification; |
|--------|--------|----------------------------------------------|

|   | · | Tamper                resistant band and alarm; |
|--------|--------|-------------------------------------------------|

|   | · | Battery                status alerts; |
|--------|--------|---------------------------------------|

|   | · | Web-based                real-time tracking; |
|--------|--------|----------------------------------------------|

|   | · | Active                monitoring; and |
|--------|--------|---------------------------------------|

|   | · | Enhanced                GPS/GSM location. |
|--------|--------|-------------------------------------------|

|   | · | Ankle                electronics, a wireless body-worn tracking device; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | OTD-Cuff,                a single-use, security-enabled band used to fasten the ankle electronics                to the offender; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fixture                for charging up to 2 batteries at once; and |
|--------|--------|--------------------------------------------------------------------|

|   | · | Rechargeable                battery pack, a custom-tooled battery used to power the ankle device. |
|--------|--------|---------------------------------------------------------------------------------------------------|

----

|   | · | The                Company has waterproofed the device by applying a chemical-based‘weld’                around the back panel seam and augmenting the seal integrity of the                rear                hatch of the device thus, significantly minimizing water ingression                into                the device. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                average battery operation time is approximately 14 hours. The Company                has                discovered the battery life can be extended if the electrical connectivity                between the battery and the device is improved. Each battery has                contact                pins which transmit the power from the battery to the device. However,                these battery pins at times become dirty, impeding transmitting the                power                from the battery to the device that reduces operational time. The                Company                is currently in the process of implementing multiple enhancements                to                improve the battery connectivity between the battery and the device. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company has encountered irregularities with the battery chargers                due to a                manufacture’s Integrated Ciruit (“IC”) chip design flaw resulting in                inconsistent charger behavior.   The battery charger issue                can only be fully addressed by replacement of these IC                chips.  The Company’s contract manufacturer is in the process of                swapping out these battery chargers from the field, replacing the                IC chip,                and redeploying the charger. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company has experienced cellular issues due to the GPS antenna currently                used in the device. The Company is redesigning and will install a                new                cellular antenna that will improve coverage and enhance tracking                offenders                using the device. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                current strap design of the device uses custom security screws covered                by                cosmetic caps. Usability improvements have been implemented for both                the                screws and the caps. The Company has noticed devices becoming damaged                as a                result of screws becoming stripped. The improvements to the attachment                mechanism have dramatically reduced the likelihood to strip screw                and have                made the strap easier to install. The cosmetic cap improvements have                made                it easier for authorized personnel to remove the cap; thus, avoiding                the                early potential to scar outer housing of the OTD when being removed                from                the ankle. Enhancing the strap design with new screws will mitigate                the                stripping of screws and damaging of the device when it is being removed. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Patent                  Title                                                                                                                              |   | Application                  /Patent Number |   | Filing                  / Issue Dates |   | Status    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|---------------------------------------|--------|-----------|
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Emergency                  Phone With Single Button activation                                                                                             |   | 7,251,471                                   |   | 7/31/07                               |   | Issued    |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Remote                  Tracking and Communication Device                                                                                                  |   | 11/202,427                                  |   | 8/10/05                               |   | Allowed   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Remotely                  Controllable Thermostat                                                                                                          |   | 6,260,765                                   |   | 7/17/01                               |   | Issued    |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Emergency                  Phone with Alternate Number Calling Capability                                                                                  |   | 7,092,695                                   |   | 8/15/06                               |   | Issued    |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Multiple                  Emergency Response Services Combination Emergency Phone and Personal                  Audio                  Device              |   | 6,285,867                                   |   | 9/4/01                                |   | Issued    |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Alarm                  and Alarm Management System for Remote Tracking Devices                                                                             |   | 11/489,992                                  |   | 7/14/06                               |   | Pending   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| A                  Remote Tracking Device and a System and Method for Two-Way Voice                  Communication Between Device and a Monitoring Center  |   | 11/486,989                                  |   | 7/14/06                               |   | Pending   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| A                  Remote Tracking System with a Dedicated Monitoring Center                                                                               |   | 11/486,976                                  |   | 7/14/06                               |   | Pending   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Remote                  Tracking System and Device with Variable Sampling                                                                                  |   | 11/486,991                                  |   | 7/14/06                               |   | Pending   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Methods                  for Establishing Emergency Communications Between a Communications                  Device                  and a Response Center |   | 11/830,398                                  |   | 7/30/07                               |   | Pending   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Remote                  Tracking and Communication Device                                                                                                  |   | PCT/US2006/030432                           |   | 8/4/06                                |   | Published |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Emergency                  Phone with Single-Button Activation                                                                                             |   | ZL                  01807350.6              |   | 10/5/05                               |   | Issued    |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Emergency                  Phone with Single-Button Activation                                                                                             |   | EP                  01924386.4              |   | 3/28/01                               |   | Pending   |
|                                                                                                                                                       |   |                                        |   |                                  |   |      |
| Emergency                  Phone with Single-Button Activation                                                                                             |   | JP                  2001-571568             |   | 3/28/01                               |   | Pending   |

----

| Alarm                  and Alarm Management System for Remote Tracking Devices                                                                          |   | PCT/US2007/072736 |   | 7/3/07 |   | Pending |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|--------|---------|
|                                                                                                                                                    |   |              |   |   |   |    |
| A                  Remote Tracking Device and a System and Method for Two-Way Communication                  Between the Device and a Monitoring Center |   | PCT/US2007/072740 |   | 7/3/07 |   | Pending |
|                                                                                                                                                    |   |              |   |   |   |    |
| A                  Remote Tracking System with a Dedicated Monitoring Center                                                                            |   | PCT/US2007/072743 |   | 7/3/07 |   | Pending |
|                                                                                                                                                    |   |              |   |   |   |    |
| Remote                  Tracking System and Device with Variable Sampling and Sending Capabilities                  Based on Environmental Factors      |   | PCT/US2007/072746 |   | 7/3/07 |   | Pending |

| Patent                Title                                                    |   | Application                /Patent Number |   | Filing                / Issue Dates |   | Status |
|--------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------------|--------|--------|
|                                                                           |   |                                      |   |                                |   |   |
| Interference                Structure for Emergency Response System Wristwatch |   | 6,366,538                                 |   | 4/2/02                              |   | Sold   |
|                                                                           |   |                                      |   |                                |   |   |
| Emergency                Phone for Automatically Summoning                     |   | 6,226,510                                 |   | 5/1/01                              |   | Sold   |
|                                                                           |   |                                      |   |                                |   |   |
| Panic                Button Phone                                              |   | 6,044,257                                 |   | 3/28/00                             |   | Sold   |

| Mark                                                                      |   | ApplicationNumber |   | Registration                Number |   | Status/Next                Action |
|---------------------------------------------------------------------------|--------|-------------------|--------|------------------------------------|--------|-----------------------------------|
|                                                                      |   |              |   |                               |   |                              |
| MOBILE911                                                                 |   | 75/615,118        |   | 2,437,673                          |   | Registered                        |
|                                                                      |   |              |   |                               |   |                              |
| MOBILE911SIREN                WITH 2-WAY VOICE COMMUNICATION & Design |   | 76/013,886        |   | 2,595,328                          |   | Registered                        |
|                                                                      |   |              |   |                               |   |                              |
| WHEN                EVERY SECOND MATTERS                                  |   | 76/319,759        |   | 2,582,183                          |   | Registered                        |
|                                                                      |   |              |   |                               |   |                              |
| MOBILEPAL                                                                 |   | 78/514,031        |   | 3,035,577                          |   | Registered                        |
|                                                                      |   |              |   |                               |   |                              |
| HOMEPAL                                                                   |   | 78/514,093        |   | 3,041,055                          |   | Registered                        |
|                                                                      |   |              |   |                               |   |                              |

----

| PAL                  SERVICES |   | 78/514,514                    |   | 3,100,192 |   | Registered                                         |
|-------------------------------|--------|-------------------------------|--------|-----------|--------|----------------------------------------------------|
|                          |   |                          |   |      |   |                                               |
| REMOTEMDX                     |   | 78/561,796                    |   |      |   | Allowed-Awaiting                  Statement of Use |
|                          |   |                          |   |      |   |                                               |
| TRACKERPAL                    |   | 78/843,035                    |   | 3,345,878 |   | Registered                                         |
|                          |   |                          |   |      |   |                                               |
| MOBILE911                     |   | 78/851,384                    |   | 3,212,937 |   | Registered                                         |
|                          |   |                          |   |      |   |                                               |
| TRACKERPAL                    |   | CA                  1,315,487 |   |      |   | Pending                                            |
|                          |   |                          |   |      |   |                                               |
| TRACKERPAL                    |   | MX                  805,365   |   | 960954    |   | Registered                                         |

|   | · | ProTech                Monitoring Inc., Odessa, FL– This company has satellite tracking software                technology that operates in conjunction with the GPS and wireless                communication networks. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | ISecuretrac                Inc., Omaha, NE – This company supplies electronic monitoring equipment                for tracking and monitoring persons on pretrial release, probation,                parole, or work release. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Sentinel                Security and Communications, Inc., Rochester NY– This company supplies                monitoring and supervision solutions for the offender population. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Omni                Link, Alpharetta, GA – This company provides a one-piece device combined                with GPS and cellular networks to electronically track an individual. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| 2006                          |   | Closing                  Price |   |
|-------------------------------|--------|--------------------------------|--------|
| First                Quarter  |   | $                              | 0.90   |   |
| Second                Quarter |   | $                              | 0.70   |   |
| Third                Quarter  |   | $                              | 1.75   |   |
| Fourth                Quarter |   | $                              | 1.99   |   |
|                          |   |                           |   |   |
| 2007                          |   |                           |   |   |
| First                Quarter  |   | $                              | 1.59   |   |
| Second                Quarter |   | $                              | 1.53   |   |
| Third                Quarter  |   | $                              | 1.68   |   |
| Fourth                Quarter |   | $                              | 2.77   |   |

|   | · | 750,000                shares were issued to an entity in connection with a registration                rights                penalty valued at $663,000. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 500,000                shares were issued to a related party to extend the line-of-credit                agreement valued at $800,000. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 3,067,853                shares were issued for services in the amount of $4,838,189; |
|--------|--------|---------------------------------------------------------------------------------------|

----

|   | · | 24,339,616                shares were issued upon the conversion of Preferred Stock of the                Company; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | 3,081,000                shares were issued for $6,162,000 in cash; |
|--------|--------|---------------------------------------------------------------------|

|   | · | 15,466,763                shares were issued from the exercise of options. |
|--------|--------|----------------------------------------------------------------------------|

|   | · | 2,854,453                shares of common stock were issued upon the exercise of options providing                $2,800,700 in cash to the Company. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 175,753                shares of common stock were issued to the holders of SecureAlert                Series A                Preferred stock for accrued dividends. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 15,000                shares of common stock were issued upon the conversion of preferred                stock. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | 70,000                shares were issued as consideration for services rendered valued                at                $480,700. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | Effective                December 1, 2007, the Company entered into a purchase agreement to                acquire                51% of the issued and outstanding capital stock of Midwest Monitoring                & Surveillance, Inc. (“MM&S”) with, at the Company’s option, the                right to acquire the remaining 49% of MM&S capital stock. The                consideration for the initial purchase of 51% of the outstanding                MM&S                shares, which will give control of MM&S to the Company, is $3.4                million, $1,800,000 payable in cash and 438,000 shares of the Company’s                common stock. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Effective                December 1, 2007, the Company entered into a purchase agreement to                acquire                51% of the issued and outstanding capital stock of Court Programs,                Inc.,                Court Programs of Northern Florida, Inc., and Court Programs of Florida                (the “CP Entities”) with, at the Company’s option, the right to acquire                the remaining 49% of CP Entities capital stock.  The                consideration for the initial purchase of 51% of the outstanding                CP                Entities shares, which will give control of CP Entities to the Company,                is                $1,145,500, $300,000 payable in cash and 212,000 shares of the Company’s                common stock. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Subsequent                to September 30, 2007, the Company entered into a stock redemption                agreement with SecureAlert Series A Preferred Stock shareholders                to redeem                all outstanding shares for $6,863,695 in cash and 3,000,000 shares                of                common stock. The stock redemption agreement will in effect amend                the                Designation of Rights and Preferences of the SecureAlert Series A                Convertible Redeemable Non-Voting Preferred Stock. The redemption                price                will eliminate all future dividends payable to SecureAlert Series                A                Preferred Stock shareholders. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The                assignment of one patent for a total consideration of $2,400,000. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | The                acquisition of Midwest Monitoring & Surveillance, Inc., a Minnesota                corporation (“MM&S”) engaged in the sale of monitoring equipment and                services, for cash and common stock of the Company.  The total                purchase price for 51% of the outstanding capital stock of this entity                was                $3,400,000, payable by delivery of $1,800,000 cash and up to 438,000                shares of the Company’s common stock.  We also acquired an                option to purchase the remaining outstanding shares of MM&S on or                before March 1, 2009. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                acquisition of Court Programs, Inc. and its affiliated entities (“CPI”),                engaged in the sale of monitoring equipment and services, for $1,147,500,                payable by delivery of cash of $300,000 and 212,000 shares of the                Company’s common stock.  We also acquired an option to purchase                the remaining outstanding shares of CPI on or before March 1, 2009. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   | Year                Ended September 30, |        |
|--------------------------------------------------------------|--------|-----------------------------------------|-------------|
|                                                         |   | 2007                                    |        |   | 2006 |   |
| Net                sales                                     |   | $                                       | 8,570,540   |   |   | $ | 1,070,141 |   |
| Cost                of goods sold                            |   |                                    | 8,974,174   |   |   |   | 940,132 |   |
| Gross                profit (loss)                           |   |                                    | (403,634    | ) |   |   | 130,009 |   |
| Research                and development expenses             |   |                                    | 4,708,256   |   |   |   | 2,087,802 |   |
| Selling,                general, and administrative expenses |   |                                    | 20,217,587  |   |   |   | 16,025,373 |   |
| Royalty                settlement expense                    |   |                                    | 1,759,010   |   |   |   | - |   |
| Loss                from operations                          |   |                                    | (27,088,487 | ) |   |   | (17,983,166 | ) |
| Gain                on sale of intellectual property         |   |                                    | 2,400,000   |   |   |   | - |   |
| Other                income (expenses):                      |   |                                    |        |   |   |   |   |   |
| Derivative                valuation gain (loss)              |   |                                    | -           |   |   |   | 629,308 |   |
| Loss                on revalued registration rights          |   |                                    | (663,000    | ) |   |   | - |   |
| Loss                on sale of asset                         |   |                                    | (228,800    | ) |   |   | - |   |
| Minority                interest allocation                  |   |                                    | 153,772     |   |   |   | - |   |
| Interest                and other income                     |   |                                    | 602,176     |   |   |   | 97,190 |   |
| Interest                expense                              |   |                                    | (1,198,573  | ) |   |   | (6,541,077 | ) |
| Net                loss                                      |   | $                                       | (26,022,912 | ) |   | $ | (23,797,745 | ) |

----

----

----

| Description                of Obligation    |   | Annual                Interest Rate |   | Maturity                Date   |   | Amount                Owing at 9/30/07 |      |
|---------------------------------------------|--------|-------------------------------------|--------|--------------------------------|--------|----------------------------------------|-----------|
|                                        |   |                                |   |                           |   |                                   |      |
| Advances                from ADP Management |   |  11%                           |   | August                31, 2009 |   | $                                      | 239,763   | (1) |
| Note                to Shareholder          |   |  5%                            |   | January                2004    |   | $                                      | 84,838    |   |
| Note                to Shareholder          |   |  5%                            |   | January                2004    |   | $                                      | 84,838    |   |
| Bank                Line of Credit          |   |  19.25%                        |   | March                1, 2008   |   | $                                      | 3,858,985 | (2) |
| Totals                                      |   |  N/A                           |   | N/A                            |   | $                                      | 4,268,424 |   |
|                                        |   |                                |   |                           |   |                                   |      |   |

|  | (1) | By                agreement dated August 19, 2004, ADP Management Corporation (“ADP                Management”), an entity owned and controlled by Messrs. Derrick and                Dalton, provided a $500,000 line-of-credit to the                Company.  During the year ended September 30, 2007, the                line-of-credit increased by $195,214 due to a monthly management                fee, that                includes the salaries of Mr. Derrick and Mr. Dalton, owed to ADP                Management and expenses incurred by ADP Management that are reimbursable                by the Company.  The Company made cash repayments to ADP                Management during the year totaling $503,310.  During the year                ended September 30, 2007, the Company increased the line of credit                from                $500,000 to $5,000,000, including any guarantees made by ADP                Management.  As a result, ADP Management was granted 500,000                restricted shares of the Company’s common stock and an increase in the                annual interest rate from 5% to 11%. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | As                of September 30, 2007, the outstanding balance of the line of credit                was                $3,858,985. The Company pays 8.25% interest to a bank and 11% to                entities                that provided and arranged for the letters of credit totaling an                interest                rate of 19.25%. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                   |   | Payments                Due By Period |      |
|----------------------------------------|--------|---------------------------------------|-----------|
|                                   |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Contractual                Obligations |   | Total                                 |      |   | Less                Than1                Year |   |   | 1–                3Years |   |   | 3–                5Years |   |   | More                than5                Years |   |
|                                   |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Notes                payable           |   | $                                     | 4,268,424 |   |   | $ | 4,028,661 |   |   | $ | 239,763 |   |   | $ | - |   |   | $ | - |   |
| Operating                leases        |   |                                  | 704,253   |   |   |   | 398,858 |   |   |   | 270,823 |   |   |   | 34,572 |   |   |   | - |   |
|                                   |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                  |   | $                                     | 4,972,677 |   |   | $ | 4,427,519 |   |   | $ | 510,586 |   |   | $ | 34,572 |   |   |   | - |   |

|   | · | Current                inventory quantities on hand; |
|--------|--------|------------------------------------------------------|

|   | · | Product                acceptance in the marketplace; |
|--------|--------|-------------------------------------------------------|

|   | · | Customer                demand; |
|--------|--------|---------------------------------|

|   | · | Historical                sales; |
|--------|--------|----------------------------------|

|   | · | Forecast                sales; |
|--------|--------|--------------------------------|

|   | · | Product                obsolescence; and |
|--------|--------|------------------------------------------|

|   | · | Technological                innovations. |
|--------|--------|-------------------------------------------|

----

No. 159 requires that unrealized      gains and losses on      items for which the fair value option has been elected be reported in earnings      at each reporting date. SFAS No. 159 is effective for fiscal years      beginning after November 15, 2007 and is required to be adopted by the      Company beginning in the first quarter of fiscal 2009. Although the Company      will      continue to evaluate the application of SFAS No. 159, management does not      currently believe adoption will have a material impact on the Company's      financial condition or operating results.

----

|                                   |   | September                30, 2007 |   | September                30, 2006 |
|----------------------------------------|--------|-----------------------------------|--------|-----------------------------------|
|                                   |   |                              |   |                              |
| Risk                free interest rate |   | 4.57%                             |   | 4.59%                             |
| Expected                life           |   | 5                Years            |   | 5                Years            |
| Dividend                yield          |   | -                                 |   | -                                 |
| Volatility                             |   | 142%                              |   | 129%                              |

|                                             |   | Shares                Under Option |      |   | Weighted                Average Exercise Price |   | Weighted                AverageRemaining                Contractual Life |   | Aggregate                Intrinsic Value |   |
|--------------------------------------------------|--------|------------------------------------|-----------|--------|------------------------------------------------|--------|--------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                             |   |                               |      |   |                                           |   |                                                                     |   |                                     |   |
| Outstanding                at September 30, 2006 |   |                               | 3,607,500 |   |                                           | $      | 0.63                                                                     |   |                                     |   |   |   |
| Granted                                          |   |                               | 320,000   |   |                                           |   | 1.58                                                                     |   |                                     |   |   |   |
| Exercised                                        |   |                               | (462,500  | )      |                                           |   | 1.06                                                                     |   |                                     |   |   |   |
| Forfeited                                        |   |                               | (100,000  | )      |                                           |   | 0.60                                                                     |   |                                     |   |   |   |
| Expired                                          |   |                               | (70,000   | )      |                                           |   | 1.46                                                                     |   |                                |   |    |   |
| Outstanding                at September 30, 2007 |   |                               | 3,295,000 |   |                                           | $      | 0.64                                                                     |   |  3.97                Years          |   |   | 7,015,700 |   |
| Exercisable                at September 30, 2007 |   |                               | 1,140,000 |   |                                           | $      | 0.69                                                                     |   |  3.98                Years          |   |   | 2,365,649 |   |

----

|                                                                                                                                                                                 |   | September                30, 2006 |                |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------------------|
|                                                                                                                                                                                 |   |                              |                |
| Net                loss applicable to common shareholders – as reported                                                                                                        |   | $                                 | (24,440,257         | ) |
|                                                                                                                                                                                 |   |                              |                |   |
| Add:  intrinsic                value of employee stock based compensation                                                                                                  |   |                              | -                   |   |
| Deduct:  total                stock based employee compensation expense determined under fair value                based method for all awards, net of related tax effects |   |                              | (1,400,148          | ) |
|                                                                                                                                                                                 |   |                              |                |   |
| Net                loss – pro forma                                                                                                                                            |   | $                                 | (25,840,405         | ) |
|                                                                                                                                                                                 |   |                              |                |   |
| Basic                and diluted loss per share – as reported                                                                                                                  |   | $                                 | (              0.44 | ) |
|                                                                                                                                                                                 |   |                              |                |   |
| Basic                and diluted loss per share – pro forma                                                                                                                    |   | $                                 | (              0.46 | ) |

----

|   | · | Develop                and introduce functional and attractive product and service offerings; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Increase                awareness of our brand and develop consumer loyalty; |
|--------|--------|------------------------------------------------------------------------------|

|   | · | Respond                to competitive and technological developments; |
|--------|--------|-----------------------------------------------------------------------|

|   | · | Build                an operational structure to support our business; and |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Attract,                retain and motivate qualified personnel. |
|--------|--------|------------------------------------------------------------------|

----

----

----

----

----

----

|   | · | Control                of the market for the                security by one or a few broker-dealers that are often related to                the                promoter or issuer; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Manipulation                of prices through                prearranged matching of purchases and sales and false and misleading                press                releases; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | “Boiler                room” practices involving                high pressure sales tactics and unrealistic price projections by                inexperienced sales persons; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Excessive                and undisclosed bid-ask                differentials and markups by selling broker-dealers;                and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                wholesale dumping of the same                securities by promoters and broker-dealers after prices have been                manipulated to a desired level, along with the inevitable collapse                of                those prices with consequent investor                losses. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Name                              |   | Age    |   | Position                                                       |
|-----------------------------------|--------|--------|--------|----------------------------------------------------------------|
|                              |   |   |   |                                                           |
| David                G. Derrick   |   | 55     |   | Chief                Executive Officer and Chairman (Director) |
| James                J. Dalton    |   | 65     |   | President                and Vice Chairman (Director)          |
| Michael                G. Acton   |   | 44     |   | Chief                Financial Officer, Secretary-Treasurer    |
| Bruce                G. Derrick   |   | 50     |   | Chief                Technology Officer                        |
| Randy                E. Olshen    |   | 44     |   | President                of SecureAlert, Inc.                  |
| G.                Scott Horrocks  |   | 46     |   | President                of Volu-Sol Reagents Corporation      |
| Peter                McCall       |   | 50     |   | Director                                                       |
| Robert                E. Childers |   | 63     |   | Director                                                       |
| David                P. Hanlon    |   | 63     |   | Director                                                       |
| Larry                G. Schafran  |   | 69     |   | Director                                                       |

----

----

----

|   | · | Retain                qualified officers. |
|--------|--------|-------------------------------------------|

|   | · | Provide                overall corporate direction for the officers and also to provide                direction                that is specific to the officer’s respective areas of                authority.  The level of compensation amongst the officer group,                in relation to one another, is also considered in order to maintain                a high                level of satisfaction within the leadership group. We consider the                relationship that the officers maintain to be one of the most important                elements of the leadership group. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Provide                a performance incentive for the officers. |
|--------|--------|------------------------------------------------------------------|

----

|   | · | achievement                of specific goals; |
|--------|--------|-----------------------------------------------|

|   | · | professional                education and development; |
|--------|--------|--------------------------------------------------------|

|   | · | creativity                in the form of innovative ideas and analysis for new programs and                projects; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | new                program implementation; |
|--------|--------|--------------------------------------------|

|   | · | attainment                of company goals, budgets, and objectives; |
|--------|--------|----------------------------------------------------------------------|

|   | · | results                oriented determination and organization; |
|--------|--------|-----------------------------------------------------------------|

|   | · | positive                and supportive direction for company personnel; and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | community                involvement. |
|--------|--------|---------------------------------------|

|   | · | Base                salary; |
|--------|--------|-----------------------------|

|   | · | Performance                bonus and commissions; |
|--------|--------|---------------------------------------------------|

|   | · | Stock                options and stock awards |
|--------|--------|-----------------------------------------------|

|   | · | Employee                benefits in the form of: |
|--------|--------|--------------------------------------------------|

|   | · | health                and dental insurance; |
|--------|--------|---------------------------------------------|

|   | · | life                insurance; |
|--------|--------|--------------------------------|

|   | · | paid                parking and auto reimbursement; and |
|--------|--------|---------------------------------------------------------|

|   | · | Other                deminimis                benefits. |
|--------|--------|---------------------------------------------------------|

----

----

| Name                  and Principal                  Position                                                            |   | Year   |   | Salary |    |   | Bonus  |   |   | Stock                  Awards |   |   | Option                  Grants |   |   | Non-Equity                  Incentive Plan                  Compensation |    |   | All                  Other                  Compensation |   |   | Total  |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|-------------------------------|--------|--------|--------------------------------|--------|--------|--------------------------------------------------------------------------|---------|--------|----------------------------------------------------------|--------|--------|--------|--------|
|                                                                                                                     |   |   |   |   |    |   |   |   |   |                          |   |   |                           |   |   |                                                                     |    |   |                                                     |   |   |   |   |
| (a)                                                                                                                      |   | (b)    |   | $(c)   |    |   | $(d)   |   |   | (e)                           |   |   | (f)                            |   |   | (g)                                                                      |    |   | (h)                                                      |   |   | $(i)   |   |
| David                  Derrick – CEO                  (1)                                                          |   | 2007   |   | $      | 240,000 |   |   | $      | 0      |                          |   | $      | 0                              |   |   | $                                                                        | 441,461 |   |                                                     | $      | 0      |   |   | $ | 94,370 |   |   | $ | 775,831 |   |
|                                                                                                                     |   |   |   |   |    |   |   |   |   |                          |   |   |                           |   |   |                                                                     |    |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Michael                  Acton – CFO                  (2)                                                          |   | 2007   |   | $      | 100,000 |   |   | $      | 25,000 |                          |   | $      | 0                              |   |   | $                                                                        | 0       |   |                                                     | $      | 0      |   |   | $ | 18,313 |   |   | $ | 143,313 |   |
|                                                                                                                     |   |   |   |   |    |   |   |   |   |                          |   |   |                           |   |   |                                                                     |    |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Jim                  Dalton – President of                  RemoteMDx, Inc. (3)                                    |   | 2007   |   | $      | 240,000 |   |   | $      | 0      |                          |   | $      | 0                              |   |   | $                                                                        | 441,461 |   |                                                     | $      | 0      |   |   | $ | 12,130 |   |   | $ | 693,591 |   |
|                                                                                                                     |   |   |   |   |    |   |   |   |   |                          |   |   |                           |   |   |                                                                     |    |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Randy                  Olshen – President of                  SecureAlert, Inc. (4)                                |   | 2007   |   | $      | 200,000 |   |   | $      | 0      |                          |   | $      | 0                              |   |   | $                                                                        | 0       |   |                                                     | $      | 0      |   |   | $ | 14,353 |   |   | $ | 214,353 |   |
|                                                                                                                     |   |   |   |   |    |   |   |   |   |                          |   |   |                           |   |   |                                                                     |    |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |
| G.Scott                  Horrocks–President                  of Volu-Sol Reagents                  Corporation (5) |   | 2007   |   | $      | 200,000 |   |   | $      | 0      |                          |   | $      | 0                              |   |   | $                                                                        | 0       |   |                                                     | $      | 0      |   |   | $ | 14,730 |   |   | $ | 214,730 |   |

| 1) | During                the year ended September 30, 2007, the Company issued a 120-day option                to                purchase 1,500,000 shares of common stock to Mr. Derrick valued at                $441,461 using the Black-Scholes option pricing method. Mr. Derrick                received additional compensation of $94,370 for health, dental, life,                and                vision insurance paid on his behalf. In addition, country club dues                are                also included. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2) | Mr.                Acton received bonuses in the                amount of $25,000.  In                addition, Mr. Acton received                additional compensation of $18,313 for                health, dental,                life, and vision insurance paid on his behalf. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3) | During                the year ended September 30, 2007, the Company issued a 120-day option                to                purchase 1,500,000 shares of common stock to Mr. Dalton valued at                $441,461                using the Black-Scholes option pricing method. Mr. Dalton received                additional compensation of $12,130 for health, dental, and vision                insurance paid on his behalf. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4) | Mr.                Olshen received additional compensation of $14,353 for health, dental,                and                vision insurance paid on his behalf. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5) | Mr.                Horrocks received additional compensation of $14,730 for health,                dental,                and vision insurance paid on his behalf. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                  |   | Options                  and Warrants                  Awards                                                      |   | Stock                  Awards                                                                                        |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|
| Name                                                                                                                  |   | Number                  of Securities Underlying                  Unexercised Options and Warrants (#) Exercisable |   | Number                  of Securities Underlying                  Unexercised Options and Warrants (#) Unexercisable |   | Equity                  Incentive Plan Awards:                  Number of Securities Underlying Unexercised Unearned Options and                  Warrants                  (#) |   | Option                  and Warrants Exercise Price                  ($) |   | Option                  and Warrants Expiration                  Date |   | Number                  of Shares or Units of Stock                  That Have Not Vested (#) |   | Market                  Value of Shares or Units of                  Stock That Have Not Vested ($) |   | Equity                  Incentive Plan Awards:                  Number of Unearned Shares, Units, or Other Rights That Have Not                  Vested                  (#) |   | Equity                  Incentive Plan Awards:                  Market or Payout Value of Unearned Shares, Units, or Other Rights                  That                  Have Not Vested ($) |
|                                                                                                                  |   |                                                                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (a)                                                                                                                   |   | (b)                                                                                                                |   | (c)                                                                                                                  |   | (d) |   | (e) |   | (f) |   | (g) |   | (h) |   | (i) |   | (j) |
| David                  Derrick – CEO                  (1)                                                       |   | 0                  (1)                                                                                             |   | 1,000,000                                                                                                            |   | 0 |   | $2.15                  (1) |   | 8/28/2012                  (1) |   | 1,000,000 |   | $620,000 |   | 1,000,000 |   | $620,000 |
|                                                                                                                  |   |                                                                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Michael                  Acton – CFO                  (2)                                                       |   | 350,000                  (2)                                                                                       |   | 250,000                  (2)                                                                                         |   | 250,000                  (2) |   | $0.60                  to $0.70                  (2) |   | Various                  Dates                  (2) |   | 250,000 |   | $542,500 |   | 250,000 |   | $542,500 |
|                                                                                                                  |   |                                                                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Jim                  Dalton– President                  of RemoteMDx, Inc.                  (3)                 |   | 0                  (1)                                                                                             |   | 1,000,000                                                                                                            |   | 0 |   | $2.15                  (1) |   | 8/28/2012                  (1) |   | 1,000,000 |   | $620,000 |   | 1,000,000 |   | $620,000 |
|                                                                                                                  |   |                                                                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Randy                  Olshen – President of                  SecureAlert, Inc. (4)                             |   | 200,000                                                                                                            |   | 800,000                                                                                                              |   | 800,000 |   | $0.60 |   | 05/17/11 |   | 800,000 |   | 1,736,000 |   | 800,000 |   | 1,736,000 |
|                                                                                                                  |   |                                                                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| G.Scott                  Horrocks– President                  of Volu-Sol Reagents                  Corporation |   | 0                                                                                                                  |   | 0                                                                                                                    |   | 0 |   | n/a |   | n/a |   | 0 |   | 0 |   | 0 |   | 0 |

| 1) | The                following warrants issued                to David                Derrickwere                outstanding as of September 30, 2007: |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                         |   | Grant                Date |   | Exp.                Date |   | Exercise                Price |   |   | #                of Warrants |   |      | Vested |   |   | Unvested |   |
|------------------------------|--------|---------------------------|--------|--------------------------|--------|-------------------------------|--------|--------|------------------------------|--------|-----------|--------|--------|--------|----------|--------|
| David                Derrick |   | 8/29/2007                 |   | 8/28/2012                |   | $                             | 2.15   |   |                         |   | 1,000,000 |   |   |   | 0        |   |   |   | 1,000,000 |   |
|                         |   |                      |   |                     |   |                          |   |   |                         |   |      |   |   |   |     |   |   |   |   |   |
| Totals                       |   |                      |   |                     |   |                          |   |   |                         |   | 1,000,000 |   |   |   | 0        |   |   |   | 1,000,000 |   |

----

| 2) | The                following warrants issued                to Michael                Actonwere outstanding                as of September 30, 2007: |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                         |   | Grant                Date |   | Exp.                Date |   | Exercise                Price |   |   | #                of Warrants |   |    | Vested |   |   | Unvested |   |
|------------------------------|--------|---------------------------|--------|--------------------------|--------|-------------------------------|--------|--------|------------------------------|--------|---------|--------|--------|--------|----------|--------|
| Michael                Acton |   | 8/25/2005                 |   | 8/24/2010                |   | $                             | 0.70   |   |                         |   | 100,000 |   |   |   | 100,000  |   |   |   | 0 |   |
| Michael                Acton |   | 5/18/2006                 |   | 5/17/2011                |   | $                             | 0.60   |   |                         |   | 500,000 |   |   |   | 250,000  |   |   |   | 250,000 |   |
|                         |   |                      |   |                     |   |                          |   |   |                         |   |    |   |   |   |     |   |   |   |   |   |
| Totals                       |   |                      |   |                     |   |                          |   |   |                         |   | 600,000 |   |   |   | 350,.000 |   |   |   | 250,000 |   |

| 3) | The                following warrants issued                to James Dalton                were outstanding as                of September 30, 2007: |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                        |   | Grant                Date |   | Exp.                Date |   | Exercise                Price |   |   | #                of Warrants |   |      | Vested |   |   | Unvested |   |
|-----------------------------|--------|---------------------------|--------|--------------------------|--------|-------------------------------|--------|--------|------------------------------|--------|-----------|--------|--------|--------|----------|--------|
| James                Dalton |   | 8/29/2007                 |   | 8/28/2012                |   | $                             | 2.15   |   |                         |   | 1,000,000 |   |   |   | 0        |   |   |   | 1,000,000 |   |
|                        |   |                      |   |                     |   |                          |   |   |                         |   |      |   |   |   |     |   |   |   |   |   |
| Totals                      |   |                      |   |                     |   |                          |   |   |                         |   | 1,000,000 |   |   |   | 0        |   |   |   | 1,000,000 |   |

| 4) | The                following options issued                to Randy Olshen                were outstanding as                of September 30, 2007: |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                        |   | Grant                Date |   | Exp.                Date |   | Exercise                Price |   |   | #                of Options |   |      | Vested |   |   | Unvested |   |
|-----------------------------|--------|---------------------------|--------|--------------------------|--------|-------------------------------|--------|--------|-----------------------------|--------|-----------|--------|--------|--------|----------|--------|
| Randy                Olshen |   | 5/18/2006                 |   | 5/17/2011                |   | $                             | 0.60   |   |                        |   | 1,000,000 |   |   |   | 200,000  |   |   |   | 800,000 |   |
|                        |   |                      |   |                     |   |                          |   |   |                        |   |      |   |   |   |     |   |   |   |   |   |
| Totals                      |   |                      |   |                     |   |                          |   |   |                        |   | 1,000,000 |   |   |   | 200,000  |   |   |   | 800,000 |   |

| Name                         |   | Grant                Date      |   | Exp.                Date       |   | Exercise                Price |   | #                of Options |   | Status    |
|------------------------------|--------|--------------------------------|--------|--------------------------------|--------|-------------------------------|--------|-----------------------------|--------|-----------|
| David                Derrick |   |                  3/6/2007 |   |                  7/4/2007 |   | $                             | 1.30   |                        |   | 1,500,000 |   | Exercised |
| James                Dalton  |   |                  3/6/2007 |   |                  7/4/2007 |   | $                             | 1.30   |                        |   | 1,500,000 |   | Exercised |
| David                Derrick |   | 8/29/2007                      |   | 8/28/2012                      |   | $                             | 2.15   |                        |   | 1,000,000 |   | Unvested |
| James                Dalton  |   | 8/29/2007                      |   | 8/28/2012                      |   | $                             | 2.15   |                        |   | 1,000,000 |   | Unvested |
|                         |   |                           |   |                           |   |                          |   |                        |   |      |   |   |
| Totals                       |   |                           |   |                           |   |                          |   |                        |   | 5,000,000 |   |   |

----

|                                |   |                                                                                            |   |                              |   | Number                  of Securities Underlying                    Unexercised Options |   | Value                  of Unexercised In-the-Money Options /                                                            |
|-------------------------------------|--------|-------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|-----------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|
|                                |   |                                                                                            |   |                              |   |                                                                                    |   |                                                                                                                    |
| Name                                |   | Shares                Acquired on Exercise (#)                                                  |   | Value                Realized ($) |   | At                9/30/2007 Exercisable / Unexercisable                                 |   | SARs                At 9/30/2007 ($) Exercisable / Unexercisable (1)                                                    |
|                                |   |                                                                                            |   |                              |   |                                                                                    |   |                                                                                                                    |
| David                G. Derrick (2) |   | 6,386,155                                                                                       |   | -                                 |   |                         0 / 1,000,000           |   |                                $0 / $620,000      |
| James                J. Dalton (2)  |   | 6,386,155                                                                                       |   | -                                 |   |                         0 / 1,000,000           |   |                                $0 / $620,000 |
| Randy                Olshen (3)     |   |                              - |   | -                                 |   |  200,000                / 800,000                                                  |   |   $434,000                / $1,736,000                                                                        |
| Michael                G. Acton (4) |   |                   100,000                                                             |   | -                                 |   |  350,000                / 250,000                                                  |   |                     $749,500 / $542,500                                                             |

| (1) | Value                is based on the fair market value of our common stock on September                30,                2007, in the amount of $2.77 per share. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                Derrick and Mr. Dalton each hold 1,000,000 warrants with exercise                prices                of $2.15 per share. None of the 1,000,000 warrants were vested at                September 30, 2007. During the year ended September 30, 2007, Mr.                Derrick                and Mr. Dalton each exercised 6,386,155 warrants with exercise prices                ranging from $0.54 to $1.30 per share. Warrants issued to ADP Management                are included in both Mr. Derrick and Mr. Dalton’s options in the table                above. See “Certain Relationships and Related Transactions.” |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                exercise price of these options is $0.60 per share. |
|-----|------------------------------------------------------------------------|

| (4) | The                exercise prices of these options range from $0.54 to $0.70 per share. |
|-----|------------------------------------------------------------------------------------------|

| Name                                |   | Shares                Acquired on Exercise (#) |   | Value                Realized ($) |   | Number                of Securities Underlying Unexercised Options At                9/30/2006 Exercisable / Unexercisable |   | Value                of Unexercised In-the-Money Options / SARs At                9/30/2006 ($) Exercisable / Unexercisable (1) |
|-------------------------------------|--------|------------------------------------------------|--------|-----------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|                                |   |                                           |   |                              |   |                                                                                                                       |   |                                                                                                                            |
| David                G. Derrick (2) |   | -                                              |   | -                                 |   |                         4,886,155 / 0                                              |   |                          $6,954,925 / $0                                           |
| James                J. Dalton (2)  |   | -                                              |   | -                                 |   |                         4,886,155 / 0                                              |   |                          $6,954,925 / $0                                           |
| Randy                Olshen (3)     |   | -                                              |   | -                                 |   |                   25,000 / 975,000                                                                               |   |  $34,570                / $1,355,250                                                                                       |
| Bryan                Dalton (4)     |   | -                                              |   | -                                 |   |    25,000                / 975,000                                                                          |   |  $34,570                / $1,355,250                                                                                       |
| Michael                G. Acton (5) |   | -                                              |   | -                                 |   |  200,000                / 500,000                                                                                     |   |   $274,000                / $695,000                                                                                  |

----

| (1) | Value                is based on the fair market value of our common stock on September                30,                2006 in the amount of $1.99 per share. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                Derrick and Mr. Dalton hold 3,250,000 options with exercise prices                ranging                from $0.54 to $0.60 per share. In addition, 1,636,155 options ranging                from                $0.54 to $0.75 per share issued to ADP Management are included in                both Mr.                Derrick and Mr. Dalton’s options in the table above. See “Certain                Relationships and Related Transactions.” |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                exercise price of these options is $0.60 per share. |
|-----|------------------------------------------------------------------------|

| (4) | The                exercise price of these options is $0.60 per share. |
|-----|------------------------------------------------------------------------|

| (5) | The                exercise prices of these options range from $0.54 to $0.70 per share. |
|-----|------------------------------------------------------------------------------------------|

|                        Name            |   | Fees                  earned or paid in cash ($) |   |   | Stock                  awards ($) |   |   | Warrants                  awards ($) |   |   | Non-equity                  incentive plan compensation ($) |   |   | All                  other compensation ($) |   |   | Total                  ($) |   |
|-----------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|-----------------------------------|--------|--------|--------------------------------------|--------|--------|-------------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------|--------|
|                                                            |   |                                             |   |   |                              |   |   |                                 |   |   |                                                        |   |   |                                        |   |   |                       |   |
|                          (a) |   | (b)                                              |   |   | (c)                               |   |   | (d)                                  |   |   | (e)                                                         |   |   | (f)                                         |   |   | (g)                        |   |
| Peter                  McCall                                   |   | $                                                | 60,000 |   |                              |   | 0      |                                 |   | $      | 78,372                                                      |   |   | $                                           | 0      |   |                       | $      | 0 |   |   | $ | 138,372 |   |
| Robert                  Childers                                |   | $                                                | 60,000 |   |                              |   | 0      |                                 |   | $      | 156,744                                                     |   |   | $                                           | 0      |   |                       | $      | 0 |   |   | $ | 216,744 |   |
| Larry                  G. Schafran                              |   | $                                                | 60,000 |   |                              |   | 0      |                                 |   | $      | 0                                                           |   |   | $                                           | 0      |   |                       | $      | 0 |   |   | $ | 60,000 |   |
| David                  P. Hanlon                                |   | $                                                | 60,000 |   |                              |   | 0      |                                 |   | $      | 0                                                           |   |   | $                                           | 0      |   |                       | $      | 0 |   |   | $ | 60,000 |   |

----

| Title                of Class | Name                and Address of Beneficial Owner                                                         | Amount                and natureof                beneficial owner | Percent                of Class |
|-------------------------------|-------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|---------------------------------|
| Common                        | VATAS                Holdings GmbH(1)Friedrichstrasse                9510117                Berlin, Germany | 17,678,926                                                         | 13.96%                          |

| (1) | Includes                10,678,926 shares of common stock, and 7,000,000 shares issuable                upon                exercise of warrants. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

| Title                of Class |   | Name                andAddress                of Beneficial Owner(9) |   | Amount                and natureof                beneficial owner                                          |   | Percent                of Class |
|-------------------------------|--------|----------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------|
| Common                        |   | David                G. Derrick (1)                                  |   |                  5,806,664                                                                             |   | 4.45%                           |
|                          |   | James                Dalton (2)                                      |   |                  5,718,387                                                                             |   | 4.38%                           |
|                          |   | Michael                G. Acton (3)                                  |   |                     800,507                                                             |   | *                               |
|                          |   | Peter                McCall (4)                                      |   |                     797,733                                                             |   | *                               |
|                          |   | Robert                Childers (5)                                   |   |                  1,068,657                                                                             |   | *                               |
|                          |   | Larry                Schafran (6)                                    |   |                     157,800                                                             |   | *                               |
|                          |   | Randy                Olshen                                          |   |                                - |   | *                               |
|                          |   | David                Hanlon                                          |   |                     195,035                                                             |   | *                               |
|                          |   | Officers                and Directors as a Group (8 persons) (7)     |   | 10,176,500                                                                                                  |   | 7.80%                           |

| (1) | Mr.                Derrick is the Chief Executive Officer and Chairman of the Board                of                Directors. Includes 1,021,714 shares of common stock and 416,667                warrants                that have vested. In addition, 4,368,283 shares of common stock in                the                name of ADP Management, an entity controlled by Messrs. Derrick and                Dalton, are included. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr.                Dalton is the President of RemoteMDx and Vice President on the Board                of                Directors. Includes 933,437 shares of commons tock and 416,667 warrants                that have been vested. In addition, 4,368,283 shares of common stock                in                the name of ADP Management, an entity controlled by Messrs. Derrick                and                Dalton, are included. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Mr.                Acton is the Chief Financial Officer of the Company. |
|-----|-------------------------------------------------------------------------|

| (4) | Mr.                McCall is a director. Includes 294,400 shares of common stock and                503,333                shares issuable upon exercise of warrants held by Mr. McCall. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Mr.                Childers is a director. Includes (a) 343,143 shares of common stock                owned                of record by the Robert E. Childers Living Trust and 255,514 shares                owned                of record by Mr. Childers. In addition, 470,000 shares issuable upon                exercise of stock warrants held by Mr. Childers have been included. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Mr.                Schafran is a director. Includes 7,800 shares of common stock owned                of                record by Mr. Schafran. In addition, 157,000 shares of common stock                issuable upon exercise of stock warrants held by Mr. Schafran have                been                included. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Duplicate                entries eliminated. |
|-----|----------------------------------------------|

----

|   | · | All                compensation plans previously approved by security holders; and |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | All                compensation plans not previously approved by security holders. |
|--------|--------|------------------------------------------------------------------------------------|

| Plan                category                                          |   | Number                of securities to be issued upon exercise of outstanding options,                warrants                and rights |   | Weighted                average exercise price of outstanding options, warrants and                rights |   | Number                of securities remaining available for future issuance |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|
|                                                                  |   |                                                                                                                                     |   |                                                                                                      |   |                                                                        |
| Equity                compensation plans approved by security holders |   | 10,000,000                                                                                                                               |   | $1.35                                                                                                     |   | 9,855,000                                                                   |

----

|   | - | has                been any time during the past three years employed by the Company                or by                any parent or subsidiary of the Company; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | has                accepted or has a family member who accepted any compensation from                the                Company in excess of $60,000 during any period of twelve consecutive                months within the three years preceding the determination of independence,                other than compensation for board or board committee service; |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | is                a family member of an individual who is, or at any time during the                past                three years was, employed by the Company as an executive officer; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | is,                or has a Family Member who is, a partner in, or a controlling shareholder                or an executive officer of, any organization to which the Company                made, or                from which the company received, payments for property or services                in the                current or any of the past three fiscal years that exceed 5% of the                recipient's consolidated gross revenues for that year, or $200,000,                whichever is more: |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | is,                or has a family member who is, employed as an executive officer of                another                entity where at any time during the past three years any of the executive                officers of the Company serve on the compensation committee of such                other                entity; or |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | is,                or has a family member who is, a current partner of the Company's                outside                auditor, or was a partner or employee of the Company's outside auditor                who                worked on the Company's audit at any time during any of the past                three                years. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Exhibits |
|-----|----------|

| ExhibitNumber | Title                  of                  Document |
|---------------|-----------------------------------------------------|

| 3.01 | Articles                  of Incorporation (incorporated by reference to the Company's Registration                  Statement and Amendments thereto on Form 10-SB, effective December                  1,                  1997). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.01(1) | Amendment                  to Articles of Incorporation for Change of Name (previously filed                  as                  Exhibit on Form 10-KSB for the year ended September 30, 2001) |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.01(2) | Amendment                  to Articles of Incorporation Amending Rights and Preferences of                  Series A                  Preferred Stock (previously filed as Exhibit on Form 10-KSB for                  the year                  ended September 30, 2001) |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.01(3) | Amendment                  to Articles of Incorporation Adopting Designation of Rights and                  Preferences of Series B Preferred Stock (previously filed as Exhibit                  on                  Form 10-QSB for the six months ended March 31, 2002) |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.01(4) | Certificate                  of Amendment to the Designation of Rights and Preferences Related                  to                  Series A 10% Cumulative Convertible Preferred Stock of RemoteMDx,                  Inc.                  (incorporated by reference to the Company’s annual report on Form 10-KSB                  for the year ended September 30, 2001) |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.01(5) | Certificate                  of Amendment to the Designation of Rights and Preferences Related                  to                  Series C 8% Convertible Preferred Stock of RemoteMDx, Inc. (incorporated                  by reference to the Company’s Current Report on Form 8-K, filed with the                  Commission on March 24, 2006) |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3.01(6) | Articles                  of Amendment to Articles of Incorporation filed July 12, 2006 (previously                  filed as exhibits to the Company’s current report on Form 8-K filed July                  18, 2006, and incorporated herein by reference). |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.02 | Bylaws                  (incorporated by reference to the Company’s Registration Statement on Form                  10-SB, effective December 1, 1997) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.03 | Articles                  of Amendment to the Fourth Amended and Restated Designation of                  Right and                  Preferences of Series A 10% Convertible Non-Voting Preferred Stock                  of                  RemoteMDx, Inc. (previously filed as Exhibit on Form 10-QSB for                  the nine                  months ended June 30, 2007, filed in August 2007). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.04 | Articles                  of Amendment to the Designation of Right and Preferences of Series                  A                  Convertible Redeemable Non-Voting Preferred Stock of SecureAlert,                  Inc.                  (previously filed as Exhibit on Form 10-QSB for the nine months                  ended June                  30, 2007, filed in August 2007). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.01 | 2006                  Equity Incentive Award Plan (previously filed in August 2006 the                  Form                  10-QSB for the nine months ended June 30, 2006) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.01 | Distribution                  and Separation Agreement (incorporated by reference to the Company's                  Registration Statement and Amendments thereto on Form 10-SB, effective                  December 1, 1997). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.02 | 1997                  Stock Incentive Plan of the Company, (incorporated by reference                  to the                  Company’s Registration Statement and Amendments thereto on Form 10-SB,                  effective December 1, 1997). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.03 | 1997                  Transition Plan (incorporated by reference to the Company’s Registration                  Statement and Amendments thereto on Form 10-SB, effective December                  1,                  1997). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.04 | Securities                  Purchase Agreement for $1,200,000 of Series A Preferred Stock                  (incorporated by reference to the Company’s Registration Statement and                  Amendments thereto on Form 10-SB, effective December 1, 1997) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.05 | Loan                  Agreement (as amended) dated June 2001 between ADP Management and                  the                  Company (incorporated by reference to the Company’s annual report on Form                  10-KSB for the year ended September 30, 2001) |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.06 | Loan                  Agreement (as amended and extended) dated March 5, 2002 between                  ADP                  Management and the Company, effective December 31, 2001 (filed                  as an                  exhibit to the Company’s quarterly report on Form 10-QSB for the quarter                  ended December 31, 2001) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.07 | Agreement                  with ADP Management, Derrick and Dalton (April 2003) (previously                  filed as                  Exhibit on Form 10-QSB for the six months ended March 31, 2003) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.08 | Security                  Agreement between Citizen National Bank and the Company (previously                  filed                  on Form 8-K in July 2006). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.09 | Promissory                  Note between Citizen National Bank and the Company (previously                  filed on                  Form 8-K in July 2006). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | Common                  Stock Purchase Agreement dated as of August 4, 2006 (previously                  filed as                  an exhibit to the Company’s current report on Form 8-K filed August 7,                  2006 and incorporated herein by reference). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Change                  in Terms Agreement between Citizen National Bank and the Company                  (previously filed as Exhibit on Form 10-KSB for the year ended                  September                  30, 2006) |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Securities                  Purchase Agreement between the Company and VATAS Holding GmbH,                  a German                  limited liability company (previously filed on Form 8-K in November                  2006). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Common                  Stock Purchase Warrant between the Company and VATAS Holding GmbH                  dated                  November 9, 2006 (previously filed as Exhibit on Form 10-QSB for                  the three                  months ended December 31, 2006, filed in February 2007). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.14 | Settlement                  Agreement and Mutual Release between the Company and Michael Sibbett                  and                  HGR Enterprises, LLC, dated as of February 1, 2007 (previously                  filed as                  Exhibit on Form 10-QSB for the three months ended December 31,                  2006, filed                  in February 2007). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15 | Distributor                  Sales, Service and License Agreement between the Company and Seguridad                  Satelital Vehicular S.A. de C.V., dated as of February 5, 2007                  (previously                  filed as Exhibit on Form 10-QSB for the three months ended December                  31,                  2006, filed in February 2007). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16 | Distributor                  Agreement between the Company and QuestGuard, dated as May 31,                  2007.                  Portions of this exhibit were redacted pursuant to a request for                  confidential treatment filed with the Securities and Exchange Commission                  (previously filed as Exhibit on Form 10-QSB for the nine months                  ended June                  30, 2007, filed in August 2007). |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17 | Stock                  Purchase Agreement between the Company and Midwest Monitoring &                  Surveillance, Inc., dated effective December 1, 2007. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18 | Stock                  Purchase Agreement between the Company and Court Programs, Inc.,                  Court                  Programs of Florida Inc., and Court Programs of Northern Florida,                  Inc.,                  dated effective December 1, 2007. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14 | Code                  of Business Conduct and Ethics. |
|----|-------------------------------------------------------|

| 31.1 | Certification                  of President and Chief Executive Officer under Section 302 of                  Sarbanes-Oxley Act o f 2002 |
|------|-------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification                  of Chief Financial Officer under Section 302 of Sarbanes-Oxley                  Act of 2002 |
|------|----------------------------------------------------------------------------------------------------------------------------|

| 32 | Certification                  under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.                  SECTION                  1350) |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | RemoteMDx,                Inc.                                        |
|--------|-----------------------------------------------------------------------|
|   |                                                                  |
|   |                                                                  |
|   | By:                /s/                David G.                Derrick |
|   |  David                G. Derrick, Chief Executive Officer        |
|   |                                                                  |
|        | Dated:                January 14, 2008                                |

| Signature                                                                                                            |   | Title                                                                  |   | Date                                                            |
|----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|-----------------------------------------------------------------|
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  David                  G. Derrick                                       |   | Director,                  Chairman, and Chief Executive Officer       |   | January                  14, 2008      |
| David                  G. Derrick                                                                                    |   | (principal                executive officer)                           |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  James                  Dalton             |   | Director,                  Vice Chairman, President                    |   | January                  14, 2008           |
| James                  Dalton                                                                                        |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  Peter                  McCall             |   | Director                                                               |   | December                  21, 2007                              |
| Peter                  McCall                                                                                        |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  Robert                  E. Childers                                               |   | Director                                                               |   | December                  21, 2007                              |
| Robert                  E. Childers                                                                                  |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  Larry                  G. Schafran                                           |   | Director                                                               |   | December                  21, 2007                              |
| Larry                  G. Schafran                                                                                   |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  David                  P. Hanlon                                   |   | Director                                                               |   | December                  21, 2007                              |
| David                  P. Hanlon                                                                                     |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
|                                                                                                                 |   |                                                                   |   |                                                            |
| /s/  Michael                  G. Acton                                            |   | Chief                  Financial Officer (principal financial officer) |   | January                  14, 2008           |
| Michael                  G. Acton                                                                                    |   |                                                                   |   |                                                            |

----

----

----

|                                                                     | Page                                     |
|--------------------------------------------------------------------------|------------------------------------------|
|                                                                     |                                     |
| Report                  of Independent Registered Public Accounting Firm | F                  -                  3  |
|                                                                     |                                     |
|                                                                     |                                     |
| Consolidated                  Balance Sheet                              | F                  -                  4  |
|                                                                     |                                     |
|                                                                     |                                     |
| Consolidated                  Statements of Operations                   | F                  -                  6  |
|                                                                     |                                     |
|                                                                     |                                     |
| Consolidated                  Statements of Stockholders’ Deficit  | F–                  7              |
|                                                                     |                                     |
|                                                                     |                                     |
| Consolidated                  Statements of Cash Flows                   | F                  -                  11 |
|                                                                     |                                     |
|                                                                     |                                     |
| Notes                  to Consolidated Financial Statements              | F–                  14             |

----

| HANSEN,                  BARNETT& MAXWELL,                  P.C.       |   |                                                |
|----------------------------------------------------------------------------|--------|-----------------------------------------------------|
| A                  Professional Corporation                                |   |                                                |
| CERTIFIED                  PUBLIC ACCOUNTANTS                              |   | Registered                  with the Public Company |
| 5                  Triad Center, Suite 750                                 |   | Accounting                  Oversight Board         |
| Salt                  Lake City, UT 84180-1128                             |   |                                                |
| Phone:                  (801) 532-2200Fax:                  (801) 532-7944 |   |                                                     |
| www.hbmcpas.com                                                            |   |                                                |

----

----

|        Assets                                                                |   |   |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                                                                                                               |   |   |       |
| Current                  assets:                                                                                                                   |   |   |       |
| Cash                                                                                                                                               |   | $      | 5,556,275  |   |
| Accounts                  receivable, net of                  allowance for doubtful accounts of $163,000                                          |   |   | 4,498,812  |   |
| Inventories,                  net of reserve of                  $46,906 (note 2)                                                                  |   |   | 51,359     |   |
| Receivables                                                                                                                                        |   |   | 605,174    |   |
| Prepaid                  expenses and other                  assets                                                                                |   |   | 318,195    |   |
| Total                  current                  assets                                                                                             |   |   | 11,029,815 |   |
|                                                                                                                                               |   |   |       |   |
| Property                  and equipment, net of                  accumulated depreciation and amortization of $1,112,018 (note                  2) |   |   | 1,430,768  |   |
| Monitoring                  equipment, net of                  accumulated depreciation of $1,047,519 (note 4)                                     |   |   | 2,787,133  |   |
| Other                  assets                                                                                                                      |   |   | 36,632     |   |
| Total                  assets                                                                                                                      |   | $      | 15,284,348 |   |

----

----

----

| Liabilities                  and Stockholders' Deficit                                                                                                                                                                                                                                                                               |   |   |         |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------|
|                                                                                                                                                                                                                                                                                                                                 |   |   |         |
| Current                  liabilities:                                                                                                                                                                                                                                                                                                |   |   |         |
| Bank                  line of credit (note                  6)                                                                                                                                                                                                                                                                       |   | $      | 3,858,985    |   |
| Accounts                  payable                                                                                                                                                                                                                                                                                                    |   |   | 3,065,187    |   |
| Accrued                  expenses (note                  5)                                                                                                                                                                                                                                                                          |   |   | 1,026,068    |   |
| Deferred                  revenues                                                                                                                                                                                                                                                                                                   |   |   | 14,247       |   |
| Notes                  payable (note                  8)                                                                                                                                                                                                                                                                             |   |   | 169,676      |   |
| Dividends                  payable (note                  9)                                                                                                                                                                                                                                                                         |   |   | 298,667      |   |
| Total                  current                  liabilities                                                                                                                                                                                                                                                                          |   |   | 8,432,830    |   |
|                                                                                                                                                                                                                                                                                                                                 |   |   |         |   |
| Long-term                  liabilities:                                                                                                                                                                                                                                                                                              |   |   |         |   |
| Related                  party line of credit (note                  7)                                                                                                                                                                                                                                                              |   |   | 239,763      |   |
| Total                  liabilities                                                                                                                                                                                                                                                                                                   |   |   | 8,672,593    |   |
|                                                                                                                                                                                                                                                                                                                                 |   |   |         |   |
| SecureAlert                  Series A preferred                  stock (note 10)                                                                                                                                                                                                                                                     |   |   | 3,590,000    |   |
| Minority                  interest (note                  11)                                                                                                                                                                                                                                                                        |   |   | 1,396,228    |   |
| Stockholders'                  deficit:                                                                                                                                                                                                                                                                                              |   |   |         |   |
| Preferred                  stock; 20,000,000 shares                  authorized; 9,397,144 shares designated;10,602,856 shares                  undesignated.                                                                                                                                                                        |   |   |         |   |
| Series                  A convertible preferred                  stock; 10% dividend, non-voting, non-participating; $0.0001 par                  value,                  $200 stated value; 40,000 shares designated; 19 shares issued and                  outstanding (aggregate liquidation preference of                  $314) |   |   | 1            |   |
| Series                  B convertible preferred                  stock; $0.0001 par value; 2,000,000 shares designated; 12,999 shares                  issued and outstanding (aggregate liquidation preference of                  $38,997)                                                                                         |   |   | 1            |   |
| Series                  C convertible preferred                  stock; $0.0001 par value; 7,357,144 shares designated; no shares                  outstanding (aggregate liquidation preference of                  $0)                                                                                                             |   |   | -            |   |
| Common                  stock, $.0001 par value,                  175,000,000 shares authorized; 127,340,085 shares issued and                  outstanding                                                                                                                                                                          |   |   | 12,734       |   |
| Additional                  paid-in                  capital                                                                                                                                                                                                                                                                         |   |   | 142,238,576  |   |
| Deferred                  compensation                                                                                                                                                                                                                                                                                               |   |   | (7,468,998   | ) |
| Subscription                  receivable                                                                                                                                                                                                                                                                                             |   |   | (407,500     | ) |
| Accumulated                  deficit                                                                                                                                                                                                                                                                                                 |   |   | (132,749,287 | ) |
| Total                  stockholders'                  equity:                                                                                                                                                                                                                                                                        |   |   | 1,625,527    |   |
| Total                  liabilities and                  stockholders' equity                                                                                                                                                                                                                                                         |   | $      | 15,284,348   |   |

----

----

----

|                                                                                                                                                                                                                                                           |   | 2007   |        |   | 2006   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                                                                                                                                                                                           |   |   |        |   |   |   |
| Sales,                  net                                                                                                                                                                                                                                    |   | $      | 8,570,540   |   |   | $      | 1,070,141 |   |
| Cost                  of goods                  sold                                                                                                                                                                                                           |   |   | 8,974,174   |   |   |   | 940,132 |   |
| Gross                  profit                  (loss)                                                                                                                                                                                                          |   |   | (403,634    | )      |   |   | 130,009 |   |
|                                                                                                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Operating                  expenses:                                                                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Research                  and                  development                                                                                                                                                                                                     |   |   | 4,708,256   |   |   |   | 2,087,802 |   |
| Selling,                  general and                  administrative(including                  $8,074,126 and                  $8,453,840 of compensation expense paid in stock or stock options                  /                  warrants, respectively) |   |   | 20,217,587  |   |   |   | 16,025,373 |   |
| Royalty                  settlement                  expense                                                                                                                                                                                                   |   |   | 1,759,010   |   |   |   | - |   |
| Loss                  from                  operations                                                                                                                                                                                                         |   |   | (27,088,487 | )      |   |   | (17,983,166 | ) |
|                                                                                                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Gain                  on sale of intellectual                  property                                                                                                                                                                                        |   |   | 2,400,000   |   |   |   | - |   |
|                                                                                                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Other                  income                  (expense):                                                                                                                                                                                                      |   |   |        |   |   |   |   |   |
| Derivative                  valuation gain                  (loss)                                                                                                                                                                                             |   |   | -           |   |   |   | 629,308 |   |
| Interest                  income                                                                                                                                                                                                                               |   |   | 117,737     |   |   |   | 30,051 |   |
| Interest                  expense(including                  $396,018 and $6,229,485                  paid in stock and warrants, respectively)                                                                                                                |   |   | (1,198,573  | )      |   |   | (6,541,077 | ) |
| Loss                  on revalued registration                  rights                                                                                                                                                                                         |   |   | (663,000    | )      |   |   | - |   |
| Loss                  on sale of                  asset                                                                                                                                                                                                        |   |   | (228,800    | )      |   |   | - |   |
| Minority                  interest                  allocation                                                                                                                                                                                                 |   |   | 153,772     |   |   |   | - |   |
| Other                  income                                                                                                                                                                                                                                  |   |   | 484,439     |   |   |   | 67,139 |   |
| Net                  loss                                                                                                                                                                                                                                      |   |   | (26,022,912 | )      |   |   | (23,797,745 | ) |
| Series                  A and C preferred stock                  dividends                                                                                                                                                                                     |   |   | (550,603    | )      |   |   | (642,512 | ) |
| Net                  loss applicable to common                  shareholders                                                                                                                                                                                   |   | $      | (26,573,515 | )      |   | $      | (24,440,257 | ) |
|                                                                                                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Net                  loss per common share - basic                  and diluted                                                                                                                                                                                |   | $      | (0.26       | )      |   | $      | (0.44 | ) |
|                                                                                                                                                                                                                                                           |   |   |        |   |   |   |   |   |
| Weighted                  average shares - basic                  and diluted                                                                                                                                                                                  |   |   | 102,826,000 |   |   |   | 55,846,000 |   |

----

----

----

|                                                                              |   | Preferred                  Stock |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |
|-----------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|---------------------------|--------|--------|---------------------------|--------|--------|-------------------------------|--------|--------|--------|--------|
|                                                                              |   | Series                  A        |    |   | Series                  B |   |   | Series                  C |   |   | Common                  Stock |   |
|                                                                              |   | Shares                           |    |   | Amount                    |   |   | Shares                    |   |   | Amount                        |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at October 1, 2005                                       |   |                             | 26,007  |   |                      | $      | 3      |                      |   |   | 1,369,157                     |   |   | $      | 137    |   |   |   | - |   |   |   | - |   |   |   | 45,129,042 |   |   | $ | 4,513 |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock for:                                    |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of Series A Preferred stock                           |   |                             | (10,843 | )      |                      |   | (1     | )                         |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 4,014,916 |   |   |   | 401 |   |
| Conversion                  of Series B Preferred stock                           |   |                             | -       |   |                      |   | -      |                      |   |   | (1,315,825                    | )      |   |   | (132   | ) |   |   | - |   |   |   | - |   |   |   | 7,171,380 |   |   |   | 717 |   |
| Services                                                                          |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 5,846,428 |   |   |   | 585 |   |
| Cash                                                                              |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 6,883,334 |   |   |   | 688 |   |
| Debt                  and accrued interest                                        |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 10,739,753 |   |   |   | 1,074 |   |
| Exercise                  of options and warrants                                 |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 350,000 |   |   |   | 35 |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of Series C Preferred Stock for:                        |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt                  and accrued interest                                        |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | 617,352 |   |   |   | 62 |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of warrants for:                                        |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt                                                                              |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Services                                                                          |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of deferred consulting and financing fees           |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of RemoteMDx Series C Preferred stock for Cash          |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | 4,739,788 |   |   |   | 474 |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Record                  beneficial conversion feature on notes                    |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of Series A & C Preferred stock for dividends       |   |                             | 2,146   |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | 175,226 |   |   |   | 17 |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred                  stock dividend on SecureAlert Series A preferred stock |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subscription                  receivable                                          |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                         |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at September  30, 2006                         |   |                             | 17,310  |   |                      | $      | 2      |                      |   |   | 53,332                        |   |   | $      | 5      |   |   |   | 5,532,366 |   |   | $ | 553 |   |   |   | 80,134,853 |   |   | $ | 8,013 |   |

----

----

----

|                                                                              |   | APIC   |        |   | Deferred                  Financing and Consulting |   |       | Preferred                  Stock Subscriptions Receivable |   |   | Consolidated                  Accumulated Deficit |   |
|-----------------------------------------------------------------------------------|--------|--------|-------------|--------|----------------------------------------------------|--------|------------|-----------------------------------------------------------|--------|--------|---------------------------------------------------|--------|
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |
| Balance                  at October 1, 2005                                       |   | $      | 76,113,623  |   |                                               | $      | (3,363,126 | )                                                         |   | $      | (504,900                                          | )      |   | $ | (80,463,694 | ) |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of common stock for:                                    |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Conversion                  of Series A Preferred stock                           |   |   | (400        | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Conversion                  of Series B Preferred stock                           |   |   | (586        | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Services                                                                          |   |   | 3,983,022   |   |                                               |   | (1,935,000 | )                                                         |   |   | -                                                 |   |   |   | - |   |
| Cash                                                                              |   |   | 7,909,312   |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Debt                  and accrued interest                                        |   |   | 6,855,629   |   |                                               |   | (1,434,550 | )                                                         |   |   | -                                                 |   |   |   | - |   |
| Exercise                  of options and warrants                                 |   |   | 251,965     |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of Series C Preferred stock                             |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Debt                  and accrued interest                                        |   |   | 1,037,090   |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of warrants for:                                        |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Debt                                                                              |   |   | 255,012     |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Services                                                                          |   |   | 5,108,869   |   |                                               |   | (2,776,889 | )                                                         |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Amortization                  of deferred consulting and financing fees           |   |   | -           |   |                                               |   | 6,860,477  |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of Remote MDX Series C Preferred stock for Cash         |   |   | 7,439,085   |   |                                               |   | -          |                                                      |   |   | (1,712,565                                        | )      |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Record                  beneficial conversion feature on notes                    |   |   | 2,786,364   |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | (2,464,936 | ) |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of Series A & C Preferred stock for dividends       |   |   | (18         | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Preferred                  stock dividend on SecureAlert Series A preferred stock |   |   | (20,877     | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Subscription                  receivable                                          |   |   | -           |   |                                               |   | -          |                                                      |   |   | 2,217,465                                         |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Net                  loss                                                         |   |   | -           |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | (23,797,745 | ) |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Balance                  at September  30, 2006                         |   | $      | 111,718,090 |   |                                               | $      | (2,649,088 | )                                                         |   | $      | -                                                 |   |   | $ | (106,726,375 | ) |

----

----

----

|                                                                                               |   | Preferred                  Stock |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|--------|---------------------------|--------|--------|---------------------------|--------|--------|-------------------------------|--------|--------|--------|--------|
|                                                                                               |   | Series                  A        |    |   | Series                  B |   |   | Series                  C |   |   | Common                  Stock |   |
|                                                                                               |   | Shares                           |    |   | Amount                    |   |   | Shares                    |   |   | Amount                        |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at October 1,                  2006                                       |   |                             | 17,310  |   |                      | $      | 2      |                      |   |   | 53,332                        |   |   | $      | 5      |   |   |   | 5,532,366 |   |   | $ | 553 |   |   |   | 80,134,853 |   |   | $ | 8,013 |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock                  for:                                    |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of Series A Preferred                  stock                           |   |                             | (18,093 | )      |                      |   | (1     | )                         |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 6,694,329 |   |   |   | 670 |   |
| Conversion                  of Series B Preferred                  stock                           |   |                             | -       |   |                      |   | -      |                      |   |   | (40,333                       | )      |   |   | (4     | ) |   |   | - |   |   |   | - |   |   |   | 351,824 |   |   |   | 35 |   |
| Conversion                  of Series C Preferred                  stock                           |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | (5,764,488 | ) |   |   | (576 | ) |   |   | 17,293,463 |   |   |   | 1,729 |   |
| Registration                  rights                  penalty                                      |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 750,000 |   |   |   | 75 |   |
| Extension                  of related-party line of                  credit                        |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 500,000 |   |   |   | 50 |   |
| Services                                                                                           |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 3,067,853 |   |   |   | 307 |   |
| Cash                                                                                               |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 3,081,000 |   |   |   | 308 |   |
| Exercise                  of options and                  warrants                                 |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 15,466,763 |   |   |   | 1,547 |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of warrants for                  services                                |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of deferred                  consulting and financing fees           |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of Series A & C                  Preferred stock for dividends       |   |                             | 802     |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | 232,122 |   |   |   | 23 |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred                  stock dividend on                  SecureAlert Series A preferred stock |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subscription                  receivable                                                           |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                          |   |                             | -       |   |                      |   | -      |                      |   |   | -                             |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                             |    |   |                      |   |   |                      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at                  September  30, 2007                         |   |                             | 19      |   |                      | $      | 1      |                      |   |   | 12,999                        |   |   | $      | 1      |   |   |   | - |   |   | $ | - |   |   |   | 127,340,085 |   |   | $ | 12,734 |   |

----

----

----

|                                                                              |   | APIC   |        |   | Deferred                  Financing and Consulting |   |       | Preferred                  Stock Subscriptions Receivable |   |   | Consolidated                  Accumulated Deficit |   |
|-----------------------------------------------------------------------------------|--------|--------|-------------|--------|----------------------------------------------------|--------|------------|-----------------------------------------------------------|--------|--------|---------------------------------------------------|--------|
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |
| Balance                  at October 1, 2006                                       |   | $      | 111,718,090 |   |                                               | $      | (2,649,088 | )                                                         |   | $      | -                                                 |   |   | $ | (106,726,375 | ) |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of common stock for:                                    |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Conversion                  of Series A Preferred stock                           |   |   | (668        | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Conversion                  of Series B Preferred stock                           |   |   | (31         | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Conversion                  of Series C Preferred stock                           |   |   | (1,153      | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Registration                  rights penalty                                      |   |   | 662,925     |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Extension                  of related-party line of credit                        |   |   | 799,950     |   |                                               |   | (800,000   | )                                                         |   |   | -                                                 |   |   |   | - |   |
| Services                                                                          |   |   | 4,837,883   |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Cash                                                                              |   |   | 6,161,692   |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
| Exercise                  of options and warrants                                 |   |   | 11,377,486  |   |                                               |   | -          |                                                      |   |   | (6,081,024                                        | )      |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of warrants for services                                |   |   | 6,988,864   |   |                                               |   | (4,970,162 | )                                                         |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Amortization                  of deferred consulting and financing fees           |   |   | -           |   |                                               |   | 950,252    |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Issuance                  of Series A & C Preferred stock for dividends       |   |   | (220        | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Preferred                  stock dividend on SecureAlert Series A preferred stock |   |   | (306,242    | )      |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Subscription                  receivable                                          |   |   | -           |   |                                               |   | -          |                                                      |   |   | 5,673,524                                         |   |   |   | - |   |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Net                  loss                                                         |   |   | -           |   |                                               |   | -          |                                                      |   |   | -                                                 |   |   |   | (26,022,912 | ) |
|                                                                              |   |   |        |   |                                               |   |       |                                                      |   |   |                                              |   |   |   |   |   |
| Balance                  at September  30, 2007                         |   | $      | 142,238,576 |   |                                               | $      | (7,468,998 | )                                                         |   | $      | (407,500                                          | )      |   | $ | (132,749,287 | ) |

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----

----

|                                                                                                          |   | 2007   |        |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                                          |   |   |        |   |   |   |
| Cash                  flows from operating                  activities:                                       |   |   |        |   |   |   |
| Net                  loss                                                                                     |   | $      | (26,022,912 | )      |   | $      | (23,797,745 | ) |
| Adjustments                  to reconcile net loss                  to net cash used in operating activities: |   |   |        |   |   |   |   |   |
| Depreciation                  and                  amortization                                               |   |   | 2,067,421   |   |   |   | 231,982 |   |
| Registration                  payment arrangement                  expense                                    |   |   | 663,000     |   |   |   | - |   |
| Amortization                  of debt                  discount                                               |   |   | -           |   |   |   | 1,223,092 |   |
| Amortization                  of deferred                  consulting and financing services                  |   |   | 950,252     |   |   |   | 6,826,077 |   |
| Amortization                  of interest expense                  related to debt                            |   |   | -           |   |   |   | 1,809,643 |   |
| Beneficial                  conversion feature                  recorded as interest expense                  |   |   | -           |   |   |   | 321,429 |   |
| Derivative                  liability                  valuation                                              |   |   | -           |   |   |   | (629,308 | ) |
| Common                  stock issued for                  services                                            |   |   | 4,641,390   |   |   |   | 2,048,606 |   |
| Common                  stock issued to settle                  lawsuit                                       |   |   | 196,800     |   |   |   | - |   |
| Common                  stock issued for                  interest                                            |   |   | -           |   |   |   | 88,100 |   |
| Common                  stock options and warrants                  issued to board of directors              |   |   | 235,116     |   |   |   | - |   |
| Options                  and warrants issued to                  consultants for services                     |   |   | 900,664     |   |   |   | 2,366,378 |   |
| Options                  and warrants issued to                  related party for services                   |   |   | 882,922     |   |   |   | - |   |
| Impairment                  of monitoring                  equipment                                          |   |   | 1,454,784   |   |   |   | - |   |
| Interest                  income on restricted                  cash                                          |   |   | -           |   |   |   | 5,628 |   |
| Increase                  in related party line of                  credit for services                       |   |   | 698,524     |   |   |   | 662,007 |   |
| Loss                  on sale of                  receivable                                                  |   |   | 228,800     |   |   |   | - |   |
| Minority                  interest in net                  loss                                               |   |   | (153,772    | )      |   |   | - |   |
| Changes                  in operating assets and                  liabilities:                                |   |   |        |   |   |   |   |   |
| Accounts                  receivable                                                                          |   |   | (4,498,184  | )      |   |   | (132,647 | ) |
| Interest                  receivable                                                                          |   |   | 14,026      |   |   |   | (15,604 | ) |
| Inventories                                                                                                   |   |   | (12,083     | )      |   |   | 7,300 |   |
| Prepaid                  expenses and other                  assets                                           |   |   | 1,594,090   |   |   |   | (2,476,280 | ) |
| Accounts                  payable                                                                             |   |   | 1,369,022   |   |   |   | 338,880 |   |
| Accrued                  liabilities                                                                          |   |   | 621,201     |   |   |   | (275,443 | ) |
| Deferred                  revenues                                                                            |   |   | (3,570      | )      |   |   | 278 |   |
| Net                  cash used in operating                  activities                                       |   |   | (14,172,509 | )      |   |   | (11,397,627 | ) |

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----

----

|                                                                                                                              |   | 2007   |       |   | 2006   |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                                              |   |   |       |   |   |   |
| Cash                  flows from investing                  activities:                                                           |   |   |       |   |   |   |
| Purchase                  of property and                  equipment                                                              |   |   | (573,174   | )      |   |   | (1,093,690 | ) |
| Net                  purchases in monitoring                  equipment                                                           |   |   | (3,684,216 | )      |   |   | (2,241,800 | ) |
| Proceeds                  from the disposal of                  fixed assets                                                      |   |   | -          |   |   |   | 1,507 |   |
| Net                  cash used in investing                  activities                                                           |   | $      | (4,257,390 | )      |   | $      | (3,333,983 | ) |
|                                                                                                                              |   |   |       |   |   |   |   |   |
| Cash                  flows from financing                  activities:                                                           |   |   |       |   |   |   |   |   |
| Payments                  under a related-party                  line of credit                  /                  advances |   | $      | (503,310   | )      |   | $      | (635,073 | ) |
| Payments                  on SecureAlert Series A                  dividends                                                      |   |   | (28,452    | )      |   |   | - |   |
| Payments                  on a bank line of                  credit                                                               |   |   | (366,126   | )      |   |   | (3,952 | ) |
| Proceeds                  from bank line of                  credit                                                               |   |   | 328,000    |   |   |   | 3,900,640 |   |
| Decrease                  in subscription                  receivable                                                             |   |   | -          |   |   |   | 504,900 |   |
| Payment                  on notes                  payable                                                                        |   |   | -          |   |   |   | (2,043,623 | ) |
| Proceeds                  form the exercise of                  options and warrants                                              |   |   | 10,971,533 |   |   |   | 252,000 |   |
| Proceeds                  from note                  payable                                                                      |   |   | -          |   |   |   | 517,500 |   |
| Proceeds                  from the issuance of                  SecureAlert Series A                                              |   |   |       |   |   |   |   |   |
| Preferred                  stock                                                                                                  |   |   | -          |   |   |   | 600,000 |   |
| Proceeds                  from the issuance of                  Series C Preferred stock                                          |   |   | -          |   |   |   | 7,439,558 |   |
| Proceeds                  from issuance of                  debt                                                                  |   |   | -          |   |   |   | 1,746,153 |   |
| Proceeds                  from the issuance of                  subsidiary common stock                                           |   |   | 1,550,000  |   |   |   | - |   |
| Proceeds                  from sale of common                  stock                                                              |   |   | 6,162,000  |   |   |   | 7,910,000 |   |
| Net                  cash provided by financing                  activities                                                       |   |   | 18,113,645 |   |   |   | 20,188,103 |   |
|                                                                                                                              |   |   |       |   |   |   |   |   |
| Net                  increase (decrease) in                  cash                                                                 |   |   | (316,254   | )      |   |   | 5,456,493 |   |
|                                                                                                                              |   |   |       |   |   |   |   |   |
| Cash,                  beginning of                  year                                                                         |   |   | 5,872,529  |   |   |   | 416,036 |   |
|                                                                                                                              |   |   |       |   |   |   |   |   |
| Cash,                  end of                  year                                                                               |   | $      | 5,556,275  |   |   | $      | 5,872,529 |   |
|                                                                                                                              |   |   |       |   |   |   |   |   |
|                                                                                                                              |   |   |       |   |   |   |   |   |
| Supplemental                  Cash Flow                  Information:                                                             |   |   |       |   |   |   |   |   |
|                                                                                                                              |   | 2007   |       |   | 2006   |   |
| Cash                  paid for interest and                  taxes:                                                               |   |   |       |   |   |   |   |   |
| Cash                  paid for income                  taxes                                                                      |   |   | -          |   |   |   | - |   |
| Cash                  paid for                  interest                                                                          |   | $      | 802,554    |   |   | $      | 311,592 |   |

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|                                                                                                                                                                                                                                     |   | 2007   |    |   | 2006   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Supplemental                  schedule of non-cash                  investing and financing activities:                                                                                                                                  |   |   |    |   |   |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |
| Issuance                  of 6,694,329 and                  4,014,916 common                  shares, respectively, in exchange                  for 18,093 and 10,843                  shares of Series A Preferred stock, respectively |   | $      | 670     |   |   | $      | 401 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Issuance                  of 351,824 and 7,171,380                  common shares, respectively, in exchange for 40,333 and 1,315,825                  shares                  of Series B Preferred stock, respectively                 |   |   | 35      |   |   |   | 717 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Issuance                  of 17,293,463 and zero                  common shares, respectively, in exchange for 5,764,488 and zero                  shares of                  Series C Preferred stock, respectively                     |   |   | 1,729   |   |   |   | - |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Issuance                  of 500,000 and 4,057,500                  common shares, respectively, for deferred consulting and financing                  services                                                                         |   |   | 800,000 |   |   |   | 3,369,550 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Preferred                  Series A and C stock                  dividends                                                                                                                                                               |   |   | 550,603 |   |   |   | 642,512 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
|  SecureAlert                  Series A                  Preferred stock dividends accrued                                                                                                                                           |   |   | 298,667 |   |   |   | 20,877 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
|  Notes                  payable and accrued                  interest converted into zero and 7,586,299 shares of common stock,                  respectively                                                                       |   |   | -       |   |   |   | 2,671,653 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Notes                  payable and accrued interest                  converted into zero and 736,400 shares of Series C Preferred stock,                  respectively                                                                   |   |   | -       |   |   |   | 1,037,152 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Series                  B and C debentures                  converted into zero and 2,030,184 shares of common stock,                  respectively                                                                                      |   |   | -       |   |   |   | 913,583 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Issuance                  of zero and 400,000                  common shares, respectively, for establishing letters of credit                  to secure                  line of credit                                                |   |   | -       |   |   |   | 656,000 |   |
|                                                                                                                                                                                                                                     |   |   |    |   |   |   |   |   |
| Issuance                  of 280,000 and zero                  shares of common stock, respectively from the increase in subscription                  receivables                                                                       |   |   | 407,500 |   |   |   | - |   |

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| 1.                    Organization and Nature of Operations |   | RemoteMDx,                  Inc., was originally incorporated in Utah in July 1995 under the                  name                  Volu-Sol, Inc. ("Volu-Sol"). Effective                  July 27, 2001, Volu-Sol changed its name to RemoteMDx, Inc. RemoteMDx,                  Inc., and its subsidiaries are collectively referred to as the                  "Company."                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                  |   | Historically,                  the Company's strategy was to capitalize on the global medical                  diagnostic                  industry by providing "building block" stains and reagents. Although                  the                  Company continues to conduct its medical stains and solutions business,                  over the past three years, management has begun to pursue a more                  expanded                  role engaging in the business of manufacturing and marketing mobile                  emergency and personal security systems, and tracking devices used                  to                  monitor convicted offenders in the criminal justice system. The                  Company's                  revenues for the year ended September 30, 2007, were generated                  primarily                  from the sale and monitoring of parolee tracking devices and secondarily                  from the sale of medical stains and reagents.                                 |
|                                                                  |   | Going                  ConcernThe                  Company incurred a net loss and has negative cash flows from operating                  activities for the years ended September 30, 2007 and 2006.  In                  addition, the Company has a stockholders' deficit for the year                  ended                  September 30, 2007. These factors raise substantial doubt about                  the                  Company's ability to continue as a going concern. The financial                  statements                  do not include any adjustments that might result from the outcome                  of this                  uncertainty.                                                                                                                                                                                                                                                                                                                                                               |
|                                                                  |   | In                  order for the Company to remove substantial doubt about its ability                  to                  continue as a going concern, the Company must generate positive                  cash flows                  from operations and obtain the necessary funding to meet its projected                  capital investment requirements.  Management’s plans with                  respect to this uncertainty include raising additional capital                  from the                  exercise of warrants and expanding its market for its tracking                  products.  There can be no assurance that revenues will increase                  rapidly enough to offset operating losses and repay debts.  If                  the Company is unable to increase revenues or obtain additional                  financing,                  it will be unable to continue the development of its products and                  may have                  to cease operations. |

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| 1.                    Organization and Nature of OperationsContinued  |   | Principles                  of ConsolidationThe                  accompanying consolidated financial statements include the accounts                  of                  RemoteMDx, Inc., and its subsidiaries, Volu-Sol Reagents, Inc.,                  and                  SecureAlert, Inc.  All intercompany balances and transactions                  have been eliminated upon consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.                    Summary of Significant Accounting Policies           |   | Use                  of Estimates in the Preparation of Financial StatementsThe                  preparation of financial statements in conformity with U.S. generally                  accepted accounting principles 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 revenues and expenses                  during the reporting period. Actual results could differ from these                  estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                 |   | Fair                  Value of Financial StatementsThe                  carrying amounts reported in the accompanying consolidated financial                  statements for cash, accounts receivable, accounts payable, accrued                  liabilities, and other debt obligations approximate fair values                  because of                  the immediate or short-term maturities of these financial                  instruments.  The carrying amounts of the Company’s debt                  obligations approximate fair value. Concentration                  of Credit RiskThe                  Company has cash in bank accounts that, at times, may exceed federally                  insured limits.  The Company has not experienced any losses in                  such accounts.                    In                  the normal course of business, the Company provides credit terms                  to its                  customers. Accordingly, the Company performs ongoing credit evaluations                  of                  its customers' financial condition and requires no collateral from                  its                  customers.  The Company maintains an allowance for uncollectable                  accounts receivable based upon the expected collectability of all                  accounts                  receivable.    |

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| 2.                    Summary of Significant Accounting Policies |   | The                  Company had sales to entities which represent more than 10% as                  follows for                  the years ended September 30: |
|----------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | 2007   |      |   | 2006   |   |
|----------------------------|--------|--------|-----------|--------|--------|--------|
| Company                  A |   | $      | 3,229,760 |   |   | $      | - |   |
| Company                  B |   |   | 1,000,000 |   |   |   | - |   |
| Company                  C |   |   | 928,800   |   |   |   | - |   |
| Company                  D |   |   | -         |   |   | $      | 228,437 |   |

|   |   | Cash                  and Cash EquivalentsCash                  and cash equivalents consist of cash and investments with original                  maturities to the Company of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | Accounts                  ReceivableAccounts                  receivable are carried at original invoice amount less an estimate                  made                  for doubtful receivables based on a review of all outstanding amounts                  on a                  monthly basis.  Specific reserves are estimated by management                  based on certain assumptions and variables, including the customer’s                  financial condition, age of the customer’s receivables and changes in                  payment histories.  Trade receivables are written off when                  deemed uncollectible.  Recoveries of trade receivables                  previously written off are recorded when received.  A trade                  receivable is considered to be past due if any portion of the receivable                  balance has not been received by the contractual pay                  date.  Interest is not charged on trade receivables that are                  past due.  |
|   |   | InventoriesInventories                  are recorded at the lower of cost or market, cost being determined                  on a                  first-in, first-out ("FIFO") method. Substantially all items included                  in                  inventory are finished goods and consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

| Reagent                  stains                     |   | $      | 98,265  |   |
|-----------------------------------------------------|--------|--------|---------|--------|
| Reserve                  for inventory obsolescence |   |   | (46,906 | )      |
| Total                  inventory                    |   | $      | 51,359  |   |

|   |   | Provisions,                  when required, are made to reduce excess and obsolete inventories                  to their                  estimated net realizable values. Due to competitive pressures and                  technological innovation, it is possible that estimates of the                  net                  realizable value could change in the near term.  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2.   Summary                  of Significant Accounting PoliciesContinued |   | Property                  and EquipmentProperty                  and equipment are stated at cost, less accumulated depreciation                  and                  amortization.  Depreciation and amortization are determined                  using the straight-line method over the estimated useful lives                  of the                  assets, typically three to seven years.  Leasehold improvements                  are amortized over the shorter of the estimated useful lives of                  the asset                  or the term of the lease.  Expenditures for maintenance and                  repairs are expensed while renewals and improvements over $500                  are                  capitalized.  When property and equipment are disposed, any                  gains or losses are included in the results of operations.  |
|------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                     |   | Property                  and equipment consisted of the following as of September 30,                  2007:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| Equipment                                 |   | $      | 1,453,661  |   |
|-------------------------------------------|--------|--------|------------|--------|
| Tooling                  and dies         |   |   | 500,683    |   |
| Leasehold                  improvements   |   |   | 358,029    |   |
| Furniture                  and fixtures   |   |   | 230,413    |   |
|                                      |   |   | 2,542,786  |   |
| Accumulated                  depreciation |   |   | (1,112,018 | )      |
|                                      |   |   |       |   |
|                                      |   | $      | 1,430,768  |   |

|   |   | Depreciation                  expense for the years ended September 30, 2007 and 2006, was $485,436                  and                  $129,868, respectively. Impairment                  of Long-Lived Assets and Goodwill The                  Company reviews its long-lived assets for impairment when events                  or                  changes in circumstances indicate that the book value of an asset                  may not                  be recoverable.  The Company evaluates, at each balance sheet                  date, whether events and circumstances have occurred which indicate                  possible impairment. The Company uses an estimate of future undiscounted                  net cash flows of the related asset or group of assets over the                  estimated                  remaining life in measuring whether the assets are                  recoverable.  If the carrying amount of an asset exceeds its                  estimated future cash flows, an impairment charge is recognized                  for the                  amount by which the carrying amount exceeds the estimated fair                  value of                  the asset.  Impairment of long-lived assets is assessed at the                  lowest levels for which there are identifiable cash flows that                  are                  independent of other groups of assets.  Assets to be disposed of                  are reported at the lower of the carrying amount or fair value,                  less the                  estimated costs to sell.  During the years ended September 30,                  2007 and 2006, the Company disposed of $1,454,784 and $0, respectively,                  in                  monitoring equipment due to units disposed of during the year that                  were                  initially test units that had served their useful life.  This                  expense, valued at historical costs, was classified as research                  and                  development expense. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2.   Summary                  of Significant Accounting PoliciesContinued |   | Revenue                  RecognitionThe                  Company derives its revenue primarily from the sale and lease of                  its                  mobile security products, monitoring services, and sale of reagent                  stains.                  Revenue, less reserves for returns, is recognized upon shipment                  to the                  customer.  Revenues from products sold with long-term service                  contracts are recognized ratably over the expected life of the                  contract.  Amounts received in advance of shipment are recorded                  as deferred revenue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                     |   | Shipping                  and handling fees are included as part of net sales. The related                  freight                  costs and supplies directly associated with shipping products to                  customers                  are included as a component of cost of goods sold.  Monitoring                  equipment revenue is recognized on the earlier of the activation                  of the                  device or 21 days from receipt by the customer.  The customer is                  charged a daily monitoring rate and is invoiced monthly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                     |   | Research                  and Development CostsAll                  expenditures for research and development are charged to expense                  as                  incurred. These expenditures in both 2007 and 2006 were for the                  development of SecureAlert’s TrackerPAL device and associated services.                  For the years ended September 30, 2007 and 2006, research and development                  expenses were $4,708,256 and $2,087,802, respectively. Included                  in the                  $4,708,256 in research and development for the year ended September                  30,                  2007, is $1,454,784 in monitoring equipment disposed of during                  the year                  that were initially test units that had served their useful                  life.   Advertising                  CostsThe                  Company expenses advertising costs as incurred.  Advertising                  expenses for the years ended September 30, 2007 and 2006, were                  approximately $155,981 and $118,300,                  respectively. |

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| 2.                    Summary of Significant Accounting PoliciesContinued |   | Stock-Based                  CompensationEffective                  October 1, 2006, the Company adopted Statement of Financial Accounting                  Standards (SFAS) No. 123R, using the modified prospective method.                  SFAS                  123R requires the recognition of the cost of employee services                  received in                  exchange for an award of equity instruments in the financial statements                  and is measured based on the grant date fair value of the award.                  SFAS 123R                  also requires the stock option compensation expense to be recognized                  over                  the period during which an employee is required to provide service                  in                  exchange for the award (the vesting period). Prior to adopting                  SFAS 123R,                  the Company accounted for its stock-based compensation plans under                  Accounting Principles Board Opinion ("APB") No. 25, "Accounting                  for Stock                  Issued to Employees" ("APB 25"). Under APB 25, generally no compensation                  expense is recorded when the terms of the award are fixed and the                  exercise                  price of the employee stock option equals or exceeds the fair value                  of the                  underlying stock on the date of grant. The Company adopted the                  disclosure-only provision of SFAS No. 123,"Accounting for Stock-Based                  Compensation" ("SFAS 123"). Listed                  below is the SFAS 123                  disclosure table for the year ended September 30,                  2006: |
|-------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                      |   | September                  30, 2006 |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|
| Net                  loss applicable to common shareholders – as reported                                                                                                                           |   | $                                   | (24,440,257 | ) |
|                                                                                                                                                                                                      |   |                                |        |   |
| Add:  intrinsic                  value of employee stock based compensation                                                                                                                     |   |                                | -           |   |
| Deduct:  total                  stock based employee compensation expense determined under fair                  value                  based method for all awards, net of related tax effects |   |                                | (1,400,148  | ) |
|                                                                                                                                                                                                      |   |                                |        |   |
| Net                  loss – pro forma                                                                                                                                                               |   | $                                   | (25,840,405 | ) |
|                                                                                                                                                                                                      |   |                                |        |   |
| Basic                  and diluted loss per share – as reported                                                                                                                                     |   | $                                   | (.44        | ) |
|                                                                                                                                                                                                      |   |                                |        |   |
| Basic                  and diluted loss per share – pro forma                                                                                                                                       |   | $                                   | (.46        | ) |

|   |   | For                  the year ended September 30, 2007, the Company calculated compensation                  expense of $900,664 related to the vesting of previously granted                  stock                  options and additional options granted during the                  period. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2.                    Summary of Significant Accounting PoliciesContinued |   | For                  options granted subsequent to October 1, 2006, the fair value of                  each                  stock option grant is estimated on the date of grant using the                  Black-Scholes option pricing model. The Company granted 320,000                  and                  3,140,000 stock options to employees during the years ended September                  30,                  2007 and 2006, respectively.  The weighted average fair value of                  stock options at the date of grant during the year ended September                  30,                  2007 and 2006, was $1.43 and $0.76, respectively. The                  expected life of stock options represents the period of time that                  the                  stock options granted are expected to be outstanding based on historical                  exercise trends. The expected volatility is based on the historical                  price                  volatility of common stock. The risk-free interest rate represents                  the                  U.S. Treasury bill rate for the expected life of the related stock                  options. The dividend yield represents the Company’s anticipated cash                  dividend over the expected life of the stock options. The                  following are the weighted-average assumptions used for options                  granted                  during the year ended September 30, 2007 and 2006,                  respectively:  |
|-------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                             |   | Years                  EndedSeptember                  30, |                                              |
|--------------------------------------------------|--------|------------------------------------------------------------|---------------------------------------------------|
|                                             |   | 2007                                                       |                                              |   | 2006 |   |
|                                             |   |                                                       |                                              |   |   |   |
| Expected                  dividend yield         |   |                                                       |                        - |   |   |   |                          - |   |
| Expected                  stock price volatility |   |                                                       | 142%                                         |   |   |   |                    129%   |   |
| Risk-free                  interest rate         |   |                                                       | 4.57%                                   |   |   |   |  4.59%    |   |
| Expected                  life of options        |   | 5                  years                                   |                                              |   | 5                  years |   |

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| 2.   Summary                  of Significant Accounting PoliciesContinued |   | A                  summary of stock option activity for the year ended September 30,                  2007, is                  presented below: |
|------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   |   |      |   | Weighted |   | Weighted                  Average |   |                        |
|----------------------------------------------------|--------|--------|-----------|--------|----------|--------|-----------------------------------|--------|-----------------------------|
|                                               |   | Shares |      |   | Average  |   | Remaining                         |   | Aggregate                   |
|                                               |   | Under  |      |   | Exercise |   | Contractual                       |   | Intrinsic                   |
|                                               |   | Option |      |   | Price    |   | Life                              |   | Value                       |
|                                               |   |   |      |   |     |   |                              |   |                        |
| Outstanding                  at September 30, 2006 |   |   | 3,607,500 |   |     | $      | 0.63                              |   |                        |   |   |
| Granted                                            |   |   | 320,000   |   |     |   | 1.58                              |   |                        |   |   |
| Exercised                                          |   |   | (462,500  | )      |     |   | 1.06                              |   |                        |   |   |
| Forfeited                                          |   |   | (100,000  | )      |     |   | 0.60                              |   |                        |   |   |
| Expired                                            |   |   | (70,000   | )      |     |   | 1.46                              |   |                        |   |   |
|                                               |   |   |      |   |     |   |                              |   |                        |   |   |
| Outstanding                  at September 30, 2007 |   |   | 3,295,000 |   |     | $      | 0.64                              |   | 3.97                  Years |   | 7,015,700 |
|                                               |   |   |      |   |     |   |                              |   |                        |   |   |
| Exercisable                  at September 30, 2007 |   |   | 1,140,000 |   |     | $      | 0.69                              |   | 3.98                  Years |   | 2,365,649 |

|   |   | Income                  TaxesThe                  Company recognizes deferred income tax assets or liabilities for                  the                  expected future tax consequences of events that have been recognized                  in                  the financial statements or income tax returns. Deferred income                  tax assets                  or liabilities are determined based upon the difference between                  the                  financial statement and tax bases of assets and liabilities using                  enacted                  tax rates expected to apply when the differences are expected to                  be                  settled or realized.  Deferred income tax assets are reviewed                  periodically for recoverability and valuation allowances are provided                  as                  necessary. Net                  Loss Per Common ShareBasic                  net loss per common share ("Basic EPS") is computed by dividing                  net loss                  available to common stockholders by the weighted average number                  of common                  shares outstanding during the period.  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2.                    Summary of Significant Accounting PoliciesContinued |   | Diluted                  net loss per common share ("Diluted EPS") is computed by dividing                  net loss                  by the sum of the weighted-average number of common shares outstanding                  and                  the weighted-average dilutive common share equivalents then                  outstanding.  The computation of Diluted EPS does not assume                  exercise or conversion of securities that would have an anti-dilutive                  effect.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                |   | Common                  share equivalents consist of shares issuable upon the exercise                  of common                  stock options and warrants, and shares issuable upon conversion                  of                  preferred stock.  As of September 30, 2007 and 2006, there were                  approximately 19,029,546 and 45,132,452 outstanding common share                  equivalents, respectively, that were not included in the computation                  of                  diluted net loss per common share as their effect would be                  anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                |   | Recent                  Accounting PronouncementsIn                  June 2006, the Financial Accounting Standards Board (“FASB”) issued                  FASB Interpretation No. ("FIN") 48, Accounting for Uncertainty                  in Income                  Taxes-an Interpretation of FASB Statement No. 109. FIN 48 clarifies                  the accounting for uncertainty in income taxes by creating a framework                  for                  how companies should recognize, measure, present, and disclose                  in their                  financial statements uncertain tax positions that they have taken                  or                  expect to take in a tax return. FIN 48 is effective for fiscal                  years                  beginning after December 15, 2006, and is required to be adopted by                  the Company beginning in the first quarter of fiscal 2008. Although                  the                  Company will continue to evaluate the application of FIN 48, management                  does not currently believe adoption will have a material impact                  on the                  Company's financial condition or operating results. In                  September 2006, the FASB issued SFAS No. 157, Fair Value                  Measurements, which defines fair value, provides a framework for                  measuring                  fair value, and expands the disclosures required for fair value                  measurements. SFAS No. 157 applies to other accounting pronouncements                  that require fair value measurements; it does not require any new                  fair                  value measurements. SFAS No. 157 is effective for fiscal years                  beginning after November 15, 2007, and is required to be adopted by                  the Company beginning in the first quarter of fiscal 2009. Although                  the                  Company will continue to evaluate the application of SFAS No. 157,                  management does not currently believe adoption will have a material                  impact                  on the Company's financial condition or operating results. |

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| 2.                    Summary of Significant Accounting PoliciesContinued |   | In                  February 2007, the FASB issued SFAS No. 159, The Fair Value                  Option for Financial Assets and Financial Liabilities-including                  an                  amendment of FASB Statement No. 115 ("SFAS No. 159"). SFAS                  No. 159 allows companies to choose to elect measuring eligible                  financial instruments and certain other items at fair value that                  are not                  required to be measured at fair value. SFAS No. 159 requires                  that unrealized gains and                  losses on items for which the fair value option has been elected                  be                  reported in earnings at each reporting date. SFAS No. 159 is                  effective for fiscal years beginning after November 15, 2007 and is                  required to be adopted by the Company beginning in the first quarter                  of                  fiscal 2009. Although the Company will continue to evaluate the                  application of SFAS No. 159, management does not currently believe                  adoption will have a material impact on the Company's financial                  condition                  or operating results.  |
|-------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.   Receivables                                                     |   | As                  of September 30, 2007, the Company had $605,174 in                  receivables.  Of the $605,174 in receivables, $601,578 resulted                  from the sale of three patents to an unrelated entity for a total                  purchase                  price of $2,400,000.  A description of each patent sold is shown                  below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

| Patent                  Title                                                    |   | PatentNumber |   | IssueDate                      |   | Status |
|----------------------------------------------------------------------------------|--------|--------------|--------|--------------------------------|--------|--------|
|                                                                             |   |         |   |                           |   |   |
| Interference                  Structure for Emergency Response System Wristwatch |   | 6,366,538    |   |                    4/2/02 |   | Sold   |
|                                                                             |   |         |   |                           |   |   |
| Emergency                  Phone for Automatically Summoning                     |   | 6,226,510    |   |                    5/1/01 |   | Sold   |
|                                                                             |   |         |   |                           |   |   |
| Panic                  Button Phone                                              |   | 6,044,257    |   | 3/28/00                        |   | Sold   |

|   |   | As                  of December 14, 2007, the Company received $1,800,000 and the remaining                  $601,578 is currently shown as a note receivable which includes                  accrued                  interest.  The note is due on March 15, 2008, and bears interest                  at 6% per annum.  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 4.                    Monitoring Equipment |   | Monitoring                  equipment at September 30, 2007, is as follows: |
|------------------------------------------------------|--------|-----------------------------------------------------------------------------|

| Monitoring                  equipment          |   | $      | 3,834,652  |   |
|------------------------------------------------|--------|--------|------------|--------|
| Less                  accumulated depreciation |   |   | (1,047,519 | )      |
| Monitoring                  Equipment, net     |   | $      | 2,787,133  |   |

|                                             |   | The                  Company began leasing monitoring equipment to agencies for offender                  tracking in April 2006 under the terms of operating                  leases.  During the year ended September 30, 2007, the Company                  had sold or leased 10,424 TrackerPAL devices.  The monitoring                  equipment is depreciated on the straight-line method over the estimated                  useful lives of the related assets over 3 years. Amortization                  expense for the years ended September 30, 2007 and 2006, was $1,581,985                  and $102,114, respectively.  |
|--------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 5.                    Accrued Expenses |   | Accrued                  expenses consisted of the following at September 30,                  2007:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

| Accrued                  payroll and payroll taxes   |   | $      | 282,350   |   |
|------------------------------------------------------|--------|--------|-----------|--------|
| Accrued                  cellular costs              |   |   | 234,448   |   |
| Accrued                  legal expenses              |   |   | 146,000   |   |
| Accrued                  board of director fees      |   |   | 145,000   |   |
| Accrued                  manufacturing costs         |   |   | 79,415    |   |
| Accrued                  interest                    |   |   | 77,940    |   |
| Accrued                  bonuses                     |   |   | 30,000    |   |
| Accrued                  commissions and other costs |   |   | 30,915    |   |
| Total                  accrued expenses              |   | $      | 1,026,068 |   |

| 6.                    Bank Line of Credit |   | During                  the year ended September 30, 2007, the Company had a $4 million                  line of                  credit with Citizen National Bank.  The interest rate is 8.25%                  and the line of credit matures on March 1, 2008.  The line of                  credit is secured by letters of credit for a total of $4 million                  and                  SecureAlert’s assets including TrackerPAL products.  This note                  can be expanded up to $10 million under certain terms and                  conditions.  The letters of credit were provided as collateral                  by four entities.  The entities received a total of 400,000                  shares valued at $240,000 of the Company’s common stock and were                  reimbursed $40,000 in cash for expenses related to establishing                  the                  letters of credit.  |
|-----------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 6.                    Bank Line of CreditContinued |   | In                  addition, the Company pays 11% annual interest rate, paid monthly,                  on the                  line of credit to the entities that provided and arranged for the                  letters                  of credit.  As of September 30, 2007, the outstanding balance of                  the line of credit was $3,858,985 due and payable on March 1,                  2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 7.                    Related Party Transactions   |   | The                  Company has entered into certain transactions with related parties.                  These                  transactions consist mainly of financing transactions and consulting                  arrangements. Related                  Party Advances PayableAs                  of September 30, 2007, the Company owed $239,763 to ADP Management,                  an                  entity owned and controlled by two of the Company’s officers and                  directors, under a line-of-credit agreement.  Outstanding                  amounts on the line of credit accrue at 11% and are due on August                  31,                  2009.  During the year ended September 30, 2007, the Company                  increased the line of credit from $500,000 to $5,000,000, including                  any                  guarantees made by ADP Management.  As a result, ADP Management                  was granted 500,000 restricted shares of the Company’s common stock and an                  increase in the annual interest rate from 5% to 11%. During                  the year ended September 30, 2007, the line of credit increased                  $698,524                  due to a monthly management fee owed to ADP Management, including                  salaries                  for Mr. Derrick and Mr. Dalton and expenses incurred by ADP Management                  that are reimbursable by the Company. The Company made cash repayments                  during the year of $503,310. Consulting                  ArrangementsIn                  March 2000, the Company agreed to pay consulting fees to ADP Management                  for assisting the Company to develop its new business direction                  and                  business plan and to provide introductions to strategic technical                  and                  financial partners.  Under the terms of this agreement, ADP                  Management was paid a consulting fee of $40,000 per month and the                  Company                  agreed to reimburse the expenses incurred by ADP Management in                  the course                  of performing services under the consulting arrangement. The                  ADP Management agreement also requires ADP Management to pay the                  salaries                  of David Derrick as Chief Executive Officer and Chairman of the                  Board of                  Directors of the Company and James Dalton as president and Vice-Chairman                  of the Board of Directors of the Company.  The Board of                  Directors, which at the time did not include either of these individuals,                  approved both of these arrangements.  |

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| 8.                    Notes Payable |   | As                  of September 30, 2007, the Company had unsecured notes of $169,676                  payable                  to former SecureAlert shareholders, with interest at 5%, payable                  in                  installments of $80,000 per month until paid in full. These                  notes are currently in default, although these notes are subject                  to an                  offset provision which has never been provided to the                  Company.  The                  following schedule shows the principal payments due under the Company’s bank line of credit, related-party line                  of credit                  and notes payable as of September 30,                  2007: |
|-----------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year                  Ending September                  30: |   | Amount |      |
|-------------------------------------------------------------|--------|--------|-----------|
| 2007                                                        |   | $      | 4,028,661 |   |
| 2008                                                        |   |   | -         |   |
| 2009                                                        |   |   | 239,763   |   |
|                                                        |   |   |      |   |
| Total                                                       |   | $      | 4,268,424 |   |

| 9.   Preferred                  Stock |   | The                  Company is authorized to issue up to 20,000,000 shares of preferred                  stock,                  $0.0001 par value per share. The Company's Board of Directors has                  the                  authority to amend the Company's Articles of Incorporation, without                  further stockholder approval, to designate and determine, in whole                  or in                  part, the preferences, limitations and relative rights of the preferred                  stock before any issuance of the preferred stock and to create                  one or more                  series of preferred stock.  |
|------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                 |   | Series                  A 10 % Convertible Non-Voting Preferred StockThe                  Company has designated 40,000 shares of preferred stock as Series                  A 10%                  Convertible Non-Voting Preferred Stock ("Series A Preferred Stock").                  As of                  September 30, 2007, there were 19 shares of Series A Preferred                  Stock                  outstanding, which represent 7,178 common stock equivalents at                  a                  conversion rate of 370 for 1.                                                                                                                    |

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| 9.                    Preferred StockContinued |   | DividendsThe                  remaining holder of the Series A Preferred Stock, is entitled to                  dividends                  at the rate of 10 percent per year on the stated value of the Series                  A                  Preferred Stock (or $200 per share), payable in cash, additional                  shares of                  Series A Preferred Stock, or common shares at the discretion of                  the Board                  of Directors. Dividends are fully cumulative and accrue from the                  date of                  original issuance to the holders of record as recorded on the books                  of the                  Company at the record date or date of declaration if no record                  date is                  set.  During the years ended September 30, 2007 and 2006, the                  Company recorded $160,638 and $348,133 in dividends on Series A                  Preferred                  Stock, respectively.                                                                                                                                                             |
|----------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                     |   | ConvertibilitySeries                  A Preferred Stock is convertible at 370 shares of common stock                  for each                  share of Series A Preferred Stock. During                  the year ended September 30, 2007, 18,093 shares of Series A Preferred                  Stock were converted into 6,694,329 shares of common                  stock.  During the year ended September 30, 2006, 10,843 shares                  of Series A Preferred Stock were converted into 4,014,916 shares                  of common                  stock.  As of September 30, 2007, there were 19 shares of Series                  A Preferred stock outstanding, which may convert into 7,178 shares                  of                  common stock.                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                     |   | Voting                  Rights and                  Liquidation PreferenceThe                  holders of Series A Preferred Stock have no voting rights and are                  entitled                  to a liquidation preference of $2.00 per share plus unpaid dividends                  multiplied by 133 percent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                     |   | Optional                  RedemptionThe                  Company may, at its option, redeem up to two-thirds of the                  total   number of shares of Series A Preferred Stock at any                  time. As of September 30, 2007, the redemption price was 133 percent                  of                  the conversion price of Series A Preferred Stock; however, the                  Company may                  designate a different and lower conversion price for all shares                  of Series                  A Preferred Stock called for redemption by the Company. Through                  September                  30, 2007, the Company has not exercised its option to redeem shares                  of                  Series A Preferred Stock. Issuances                  of Series A                  Preferred StockDuring                  the years ended September 30, 2007 and 2006, the Company had recorded                  and                  issued 802 and 2,146 shares, respectively, of Series A Preferred                  Stock for                  payment of Series A accrued dividends.    |

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| 9.                    Preferred StockContinued |   | Series                  B Convertible Preferred StockOn                  June 7, 2001, the holders of the Company's Series A Preferred Stock                  approved the designation of 2,000,000 shares of a new series of                  preferred                  stock, the Series B Convertible Preferred Stock ("Series B Preferred                  Stock") previously approved by the Board of Directors. DividendsThe                  Company will not pay dividends on the Series B Preferred Stock                  unless                  dividends are declared by the Board of Directors, in which case                  the Series                  B Preferred Stock would be paid dividends prior and in preference                  to any                  declaration or payment of any dividends to common stock, and subject                  to                  the preferences of the holders of the Series A Preferred                  Stock. ConvertibilityEach                  share of Series B Preferred Stock is convertible at any time into                  shares                  of common stock at an initial rate of $3.00 per share of common.                  Each                  share of Series B Preferred Stock will automatically convert into                  shares                  of common stock at the then effective conversion rate on the closing                  of a                  firm commitment underwritten public offering with an aggregate                  public                  offering price of not less than $20,000,000. The Company has issued                  shares                  of common stock or securities convertible into common stock for                  consideration per share less than $3.00 per share.  The                  conversion rate will automatically be adjusted to a price equal                  to the                  aggregate consideration received by the Company for that issuance                  divided                  by the number of shares of common stock issued. As                  of September 30, 2007, there were 12,999 shares of Series B Preferred                  stock outstanding, which may convert into 134,472 shares of common                  stock. Voting                  Rights and                  Liquidation PreferenceHolders                  of shares of Series B Preferred Stock are entitled to one vote                  per share                  of Series B Preferred Stock on all matters upon which holders of                  the                  common stock of the Company are entitled to vote. The holders of                  Series B                  Preferred Stock are entitled to a liquidation preference of $3.00                  per                  share, plus all accrued and unpaid dividends.  For purposes of                  this liquidation preference, the Series A Preferred Stock ranks                  on a                  parity with the Series B Preferred Stock.  |
|----------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 9.                    Preferred StockContinued |   | Optional                  RedemptionThe                  Company may redeem the Series B Preferred Stock at its option at                  any time.                  The redemption price will be a minimum of 110 percent of the conversion                  price at the date of redemption. Series                  C Convertible Preferred StockThe                  Company has designated                  7,357,144 shares preferred stock as Series C Convertible Preferred                  Stock,                  $.0001 par value per share.  During the year ended                  September 30, 2006, the Company issued 5,357,143 shares of Series                  C                  Preferred Stock for $7,439,558 in cash and $1,037,152 from conversion                  of                  debt and accrued interest. ConvertibilityOne                  share of Series C Convertible Preferred Stock is convertible into                  three                  shares of the Company’s common stock, subject to adjustments. During the                  year ended September 30, 2007, the holders of Series C Preferred                  Stock                  converted 5,764,488 shares of Series C Preferred stock into 17,293,463                  shares of common stock. DividendsThe                  stock has an 8% dividend that may be paid in cash or additional                  shares of                  Series C Convertible Preferred Stock at the option of the                  Company.  During the years ended September 30, 2007 and 2006,                  the Company recorded $389,965 and $294,379 in dividends on Series                  C                  Preferred Stock, respectively.  For the years ended September                  30, 2007 and 2006, the Company issued 232,122 and 175,226 shares,                  respectively of Series C Preferred Stock for dividends. Voting                  Rights and                  Liquidation PreferenceHolders                  of shares of Series C Preferred Stock are entitled to one vote                  per share                  of Series C Preferred Stock on all matters upon which holders of                  the                  common stock of the Company are entitled to vote. Generally the                  holders of                  Series C Preferred Stock are entitled to a liquidation preference                  of $1.68                  per share, plus all accrued and unpaid dividends.  For purposes                  of this liquidation preference, the Series C Preferred Stock ranks                  on a                  parity with the Series B Preferred Stock.  |
|----------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 9.   Preferred                  StockContinued |   | Optional                  RedemptionThe                  Company may redeem the Series C Preferred Stock at its option at                  any                  time.  The redemption price payable by the Company shall be                  equal to the greater of (a) $4.00 plus any and all accrued dividends                  or                  (b) 110% of the current Conversion Price per share at the time                  of the                  redemption, as adjusted for stock dividends, stock splits, stock                  combinations, other dividends or distributions, reclassifications,                  exchanges, or substitutions plus any and all accrued                  dividends. During                  the year ended September 30, 2007, the Company sent out a letter                  to all                  Series C Preferred shareholders giving them notice to redeem all                  Series C                  Preferred Stock.  The holders were required to convert their                  shares of Series C Preferred into common stock or redeem them for                  $4 per                  share.  During the year ended September 30, 2007, 5,764,488                  shares of Series C Preferred shares converted into 17,293,463 shares                  of                  common stock.  As of September 30, 2007, there were no shares of                  Series C Preferred Stock outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.                  SecureAlert Preferred Stock              |   | SecureAlert,                  Inc. Series A Preferred SharesDuring                  the year ended September 30, 2007, and pursuant to Board of Director                  approval, the Company amended the articles of incorporation of                  its                  subsidiary, SecureAlert, Inc. to establish 3,590,000 shares of                  preferred                  stock designated as Series A Convertible Redeemable Non-Voting                  Preferred                  Stock. DividendsThe                  holders of shares of Series A Preferred Stock shall be entitled                  to receive                  quarterly dividends out of any of SecureAlert’s assets legally available                  therefore, prior and in preference to any declaration or payment                  of any                  dividend on the common stock of SecureAlert, at the rate of $1.54                  per day                  times the number of SecureAlert’s parolee contracts calculated in days                  during the quarter.  For example, if there were an average of                  10,000 parolee contracts outstanding during the quarter, the total                  dividend would be $1,386,000 ($1.54 x 90 days x 10,000 contracts)                  or                  $0.386 per share of Series A Preferred Stock.  In no case will a                  dividend be paid if the gross revenue per contract per day to SecureAlert                  averages less than $4.50.  Dividends will be paid in cash to the                  holders of record of shares of Series A Preferred Stock as they                  appear on                  the books and records of SecureAlert on such record dates not less                  than                  ten (10) days nor more than sixty (60) days preceding the payment                  dates                  thereof, as may be fixed by the Board of Directors of the Company.                  During                  the years ended September 30, 2007 and 2006, the Company recorded                  $306,242                  and $20,877 in dividends on SecureAlert Series A Preferred                  Stock.  |

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| 10.                  SecureAlert Preferred StockContinued |   | ConvertibilityAs                  a group, all Series A Preferred Stock may be converted at the holder’s                  option at any time into an aggregate of 20% ownership of the common                  shares                  of SecureAlert, Inc. As                  of September 30, 2007, the total outstanding Series A Preferred                  shares                  were 3,590,000.  Because the preferred stock sold was Series A                  Preferred Stock of the Company’s subsidiary, SecureAlert, Inc., the                  consideration received from the sale has been recorded similar                  to minority                  interest as a separate component of the balance sheet outside of                  permanent                  equity. Subsequent                  to September 30, 2007, the Company entered into a stock redemption                  agreement with SecureAlert Series A Preferred Stock shareholders                  to redeem                  all outstanding shares for $6,863,695 in cash and 3,000,000 shares                  of                  RemoteMDx common stock.  The stock redemption agreement will in                  effect amend the Designation of Rights and Preferences of the SecureAlert                  Series A Convertible Redeemable Non-Voting Preferred Stock. The                  redemption                  price will eliminate all future dividends due to SecureAlert Series                  A                  Preferred Stock shareholders.  |
|-----------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 11.                  Minority Interest                    |   | During                  the year ended September 30, 2007, Messrs. Derrick and Dalton exercised                  their previously granted right (which was granted in February 2006)                  to                  purchase from the Company 2,500,000 shares of Volu-Sol Reagents                  common                  stock for cash proceeds of $400,000 or $0.16 per share.  Prior                  to the sale, the Company owned 100% of Volu-Sol Reagents common                  stock.  The sale decreased the Company’s ownership to                  70%.  During the year ended September 30, 2007, Volu-Sol                  Reagents negotiated a non-exclusive license agreement with the                  Company.  Additionally, the Company issued 3,375,000 shares of                  common stock, with a three year anti-dilution provision, for net                  cash                  proceeds of $1,150,000 or $0.34 per share to various                  shareholders.  These transactions decreased the Company’s                  ownership of Volu-Sol Reagents to 50%.                                                                                                                                                                                                                                                                                                                                                                                                                             |

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| 12. Common                  Stock    |   | Authorized                  SharesThe                  Company is authorized to issue up to 175,000,000 shares of common                  stock. Common                  Stock IssuancesDuring                  the year ended September 30, 2007, the Company issued 47,205,232                  shares of                  common stock.  Of these shares, 6,694,329 shares were issued                  upon conversion of 18,093 shares of Series A Preferred Stock; 351,824                  shares were issued upon conversion of 40,333 shares of Series B                  Preferred                  Stock; 17,293,463 shares were issued upon conversion of 5,764,488                  shares                  of Series C Preferred Stock; 750,000 shares were issued pursuant                  to a                  registration payment arrangement; 500,000 shares were issued to                  a related                  party to increase the line of credit; 3,067,853 shares were issued                  for                  services in the amount of $4,837,883; 3,081,000 shares were issued                  for                  cash proceeds of $6,162,000; and 15,466,763 shares were issued                  from the                  exercise of options and warrants.  |
|-------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |   | During                  the year ended September 30, 2006, the Company issued 35,005,811                  shares of                  common stock.  Of these shares, 5,846,428 shares were issued for                  services in the amount of $3,983,607; 4,014,916 shares were issued                  upon                  the conversion of 10,843 shares of Series A Preferred Stock; 7,171,380                  shares were issued upon the conversion of 1,315,825 shares of Series                  B                  Preferred Stock; 10,739,753 shares were issued for debt and accrued                  interest of $7,893,782; 350,000 were issued from the exercise of                  options                  and warrants; and the remaining 6,883,334 were issued for                  cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 13.                  Options and Warrants |   | Stock                  Incentive PlanDuring                  the year ended September 30, 2006, the shareholders approved the                  2006                  Equity Incentive Award Plan (the “2006 Plan”).    The                  2006 Plan provides for the grant of incentive stock options and                  nonqualified stock options, restricted stock, stock appreciation                  rights,                  performance shares, performance stock units, dividend equivalents,                  stock                  payments, deferred stock, restricted stock units, other stock-based                  awards                  and performance-based awards to employees and certain non-employees                  who                  have important relationships with the Company.  A total of                  10,000,000 shares are authorized for issuance pursuant to awards                  granted                  under the 2006 Plan.  During the year ended September 30, 2007,                  the Company granted 145,000 options under this plan.                                                                                                                                                                 |

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| 13.                  Options and WarrantsContinued |   | A                  summary of stock option and warrant activity, including stock options                  and                  warrants granted inside and outside the plans discussed above,                  for the                  years ended September 30, 2007 and 2006, is as                  follows: |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   | Number                  ofOptions                  andWarrants |        |   | ExercisePrice                  PerShare |                          |
|----------------------------------------------------|--------|----------------------------------------------------------------|-------------|--------|-----------------------------------------|-------------------------------|
| Outstanding                  at September 30, 2005 |   |                                                           | 13,766,043  |   |                                    | $                             | .54                to 3.00 |   |
| Granted                                            |   |                                                           | 11,529,076  |   |                                    | .56                  to 1.41  |   |
| Expired                  or cancelled              |   |                                                           | (3,347,727  | )      |                                    | .70                  to 3.00  |   |
| Exercised                                          |   |                                                           | (350,000    | )      |                                    | .54                  to 0.75  |   |
|                                               |   |                                                           |        |   |                                    |                          |   |   |
| Outstanding                  at September 30, 2006 |   |                                                           | 21,597,392  |   |                                    | $                             | .54                to 3.00 |   |
| Granted                                            |   |                                                           | 13,509,000  |   |                                    | 1.23                  to 2.15 |   |
| Expired                  or cancelled              |   |                                                           | (751,733    | )      |                                    | .60                  to 3.00  |   |
| Exercised                                          |   |                                                           | (15,466,763 | )      |                                    | .50                  to 1.85  |   |
|                                               |   |                                                           |        |   |                                    |                          |   |   |
| Outstanding                  at September 30, 2007 |   |                                                           | 18,887,896  |   |                                    | $                             | .54                to 3.00 |   |

|   |   | The                  following table summarizes information about stock options and                  warrants                  outstanding at September 30, 2007: |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | Options                  and Warrants                  Outstanding |   | Options                  and Warrants                  Exercisable |
|------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------------------------------------------------------------------|
|                                                 |   |                                                               |   | Weighted                                                           |   |   |   |   |   |   |
|                                                 |   |                                                               |   | Average                                                            |   |   |   |   |   |   |
|                                                 |   |                                                               |   | Remaining                                                          |   | Weighted |   |   |   | Weighted |
| Range                  of                            |   |                                                               |   | Contractual                                                        |   | Average |   |   |   | Average |
| Exercise                                             |   | Number                                                             |   | Life                                                               |   | Exercise |   | Number |   | Exercise |
| Prices                                               |   | Outstanding                                                        |   | (Years)                                                            |   | Price |   | Exercisable |   | Price |
|                                                 |   |                                                               |   |                                                               |   |   |   |   |   |   |
| $   .54                  – 3.00 |   | 18,887,896                                                         |   | 2.68                                                               |   | $   0.64 |   | 13,548,150 |   | $   1.45 |

|   |   | As                  of September 30, 2007, 13,548,150 of the 18,887,896 outstanding                  options                  and warrants were vested. During                  the year ended September 30, 2007, the Company issued 13,509,000                  common                  stock options and warrants as follows: 7,189,000 in connection                  with the                  sale of common stock, 320,000 to employees, 350,000 to consultants,                  650,000 to the Board of Directors, and 5,000,000 to related parties                  (David                  Derrick and James Dalton).  The exercise prices range from $1.23                  to $2.15 per share.  The exercise price for the options granted                  during the year ended September 30, 2007 were based upon the market                  price                  of the Company’s shares on the date of grant.  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 13.                  Options and WarrantsContinued |   | During                  the year ended September 30, 2006, the Company issued 11,529,076                  common                  stock options as follows: 3,170,000 to employees, 600,000 to SecureAlert                  Series A Preferred shareholders, 365,150 for debt, 5,413,926 to                  consultants, 480,000 to the Board of Directors, and 1,500,000 to                  related                  parties (David Derrick and James Dalton).  The exercise prices                  range from $0.56 to $1.41 per share. The exercise price for the                  options                  granted during the year ended September 30, 2006 were based upon                  the                  market price of the Company’s shares on the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|----------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 14.                   Income Taxes            |   | For                  the years ended September 30, 2007 and 2006, the Company incurred                  net                  operating losses of approximately $26,022,912 and $23,798,000,                  respectively, for income tax purposes.  The amount and ultimate                  realization of the benefits from the net operating losses is dependent,                  in                  part, upon the tax laws in effect, the Company's future earnings,                  and                  other future events, the effects of which cannot be                  determined.  The Company has established a valuation allowance                  for all deferred income tax assets not offset by deferred income                  tax                  liabilities due to the uncertainty of their                  realization.  Accordingly, there is no benefit for income taxes                  in the accompanying consolidated statements of operations. At                  September 30, 2007, the Company has net operating loss carryforwards                  available to offset future taxable income of approximately $88,491,000                  which will begin to expire in 2018.  The utilization of the net                  operating loss carryforwards is dependent upon the tax laws in                  effect at                  the time the net operating loss carryforwards can be                  utilized.  The Internal Revenue Code contains provisions that                  likely could reduce or limit the availability and utilization of                  these net                  operating loss carryforwards.  For example, limitations are                  imposed on the utilization of net operating loss carryforwards                  if certain                  ownership changes have taken place or will take place.  Due to                  the frequency of equity transactions within the Company, it is                  likely that                  the use of net operating loss carry forwards will be                  limited.  The Company will perform an analysis to determine                  whether any such limitations have occurred as the net operating                  losses are                  utilized.  Deferred income taxes are determined based on the                  estimated future effects of differences between the financial statement                  and income tax reporting bases of assets and liabilities given                  the                  provisions of currently enacted tax laws and the tax rates expected                  to be                  in place.  The deferred income tax assets (liabilities) are                  comprised of the following at September 30, 2007:  |

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|                                              |   | 2007   |        |
|---------------------------------------------------|--------|--------|-------------|
| Net                  operating loss carryforwards |   | $      | 33,007,000  |   |
| Depreciation                  and reserves        |   |   | 5,000       |   |
| Accruals                  and reserves            |   |   | 54,000      |   |
| Valuation                  allowance              |   |   | (33,066,000 | ) |
|                                              |   | $      | -           |   |

|   |   | Reconciliations                  between the benefit for income taxes at the federal statutory income                  tax                  rate and the Company's benefit for income taxes for the years ended                  September 30, 2007 and 2006 are as                  follows: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                    |   | 2007   |        |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                                    |   |   |        |   |   |   |
| Federal                  income tax benefit at  statutory rate                                |   | $      | 8,848,000   |   |   | $      | 8,092,000 |   |
| State                  income tax benefit, net of  federal income tax                  effect |   |   | 1,302,000   |   |   |   | 1,190,000 |   |
| Loss                  on non-deductible expenses                                                        |   |   | (79,000     | )      |   |   | (118,000 | ) |
| Change                  in valuation allowance                                                          |   |   | (10,071,000 | )      |   |   | (9,164,000 | ) |
|                                                                                                    |   |   |        |   |   |   |   |   |
| Benefit                  for income taxes                                                               |   | $      | -           |   |   | $      | - |   |

| 15.                  Commitment and Contingencies |   | Legal                  MattersOnyx                  Consulting Group,                  LLC v. RemoteMDx, Inc.  The dispute arises out of an                  agreement between Onyx and the Company pursuant to which Onyx agreed                  to                  provide investor relations related services to the Company.  On                  October 9, 2007, Onyx served its Statement of Claim, in which it                  asserted                  a claim for breach of contract, seeking as damages the value of                  750,000                  shares of restricted RemoteMDx common stock it claims it is due                  under the                  agreement.  An arbitrator has been appointed but discovery has                  not yet commenced.  The arbitration hearing is scheduled for                  April 2008.  The Company has asserted counterclaims against Onyx                  for breach of contract and rescission.  The Company intends to                  vigorously defend itself against Onyx’s claim and to prosecute its                  counterclaims against Onyx.   The Company has not accrued                  any potential loss as the probability of incurring such losses                  is deemed                  remote.  |
|---------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 15.                  Commitment and ContingenciesContinued |   | SecureAlert,                  Inc. v.                  The Jaxara Group, LLC, et al.  SecureAlert,                  Inc. filed a Complaint for breach of contract and other claims                  against defendants Jaxara Group, LLC, Daniel Boice and Alexander                  Petty                  (collectively, “Jaxara”) in the United States District Court for the                  District of Utah.  The action arose out of contracts between                  SecureAlert and Jaxara for certain software programming work to                  be                  performed by Jaxara.  Jaxara responded by asserting breach of                  contract and other counterclaims against SecureAlert.  Although                  SecureAlert believed its claims to be meritorious, in June, 2007,                  SecureAlert agreed to settle the action based primarily on Jaxara’s                  limited financial ability to pay any judgment obtained in the                  action.  SecureAlert received Jaxara’s $25,000 settlement                  payment in July, 2007 and, pursuant to the parties’ stipulated request for                  dismissal, the Court dismissed the entire action with prejudice                  on August                  22, 2007. Strategic                  Growth                  International, Inc. v. RemoteMDx, Inc., This action was filed in                  response to an action previously filed by the Company against SGI                  in                  Utah.  The action arises out of a contract between SGI and the                  Company for certain investor relations related services to be performed                  by                  SGI.  The SGI Defendants’ Complaint alleges a single claim for                  Breach of Contract and seeks recovery of: 1) the balance they claim                  remains due under the contract (approximately $80,000); 2) the                  value of                  options to purchase 500,000 shares of restricted RemoteMDx common                  stock at                  $0.50 per share; and 3) the value of one million shares of restricted                  RemoteMDx common stock.  In its Answer and Counterclaims, the                  Company denied the SGI Defendants’ allegations and asserted counterclaims                  for:  (1) Breach of Contract; (2) Rescission; and (3)                  Declaratory Judgment.  On October 29, 2007, with the approval of                  the court, the Company amended its Answer and Counterclaims to                  assert an                  additional claim against SGI for Fraudulent inducement. The Company                  seeks                  rescission of its contract with SGI and the return of amounts the                  Company                  paid SGI under the contract.  Discovery is ongoing and a final                  pretrial conference is set for January 16, 2008.  The Company                  intends to vigorously defend itself against the SGI Defendants’ claim and                  to prosecute its counterclaims against the SGI Defendants.  The                  Company has not accrued any potential loss as the probability of                  incurring                  such losses is deemed remote. |
|------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 15.                  Commitment and ContingenciesContinued |   | Lease                  ObligationsIn                  March 2005, the Company entered into an agreement to lease a facility                  under a noncancellable operating lease that expires in November                  2008.                  Future minimum rental payments under the non-cancelable operating                  lease as                  of September 30, 2007, are approximately as                  follows: |
|------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year                  Ending September                  30: |   | Amount |    |
|-------------------------------------------------------------|--------|--------|---------|
| 2008                                                        |   | $      | 212,126 |   |
| 2009                                                        |   |   | 36,049  |   |
|                                                        |   | $      | 248,175 |   |

|   |   | Rent                  expense related to this non-cancelable operating lease was approximately                  $213,222 and $122,000 for the years ended September 30, 2007 and                  2006, respectively. The increase in rent expense from 2006 to 2007                  of                  $91,222 resulted from an expansion of approximately 5,000 square                  feet of                  office space. In                  addition, the Company’s subsidiary, Volu-Sol Reagents Corporation, leases                  a facility under a non-cancelable operating lease that expires                  in November                  2010.  Future minimum rental payments under the non-cancelable                  operating lease as of September 30, 2007 are approximately as                  follows: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year                  Ending September                  30: |   | Amount |    |
|-------------------------------------------------------------|--------|--------|---------|
| 2008                                                        |   | $      | 71,720  |   |
| 2009                                                        |   |   | 73,584  |   |
| 2010                                                        |   |   | 75,496  |   |
| 2011                                                        |   |   | 12,636  |   |
|                                                        |   | $      | 233,436 |   |

|   |   | Rent                  expense related to this non-cancelable operating lease was approximately                  $71,000 and $69,000 for the years ended September 30, 2007 and                  2006,                  respectively.  |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 15.                  Commitment and ContingenciesContinued |   | Indemnification                  AgreementsIn                  November 2001, the Company's Board of Directors agreed that the                  Company                  would indemnify officers and directors of the Company against personal                  liability incurred by them in the conduct of their duties for the                  Company.                  In the event that any of the officers or directors of the Company                  are sued                  or claims or actions are brought against them in connection with                  the                  performance of their duties and the individual is required to pay                  an                  amount, the Company will immediately repay the obligation together                  with                  interest thereon at the greater of 10 percent per year or the interest                  rate of any funds borrowed by the individual to satisfy their                  liability. Cellular                  Access AgreementDuring                  the year ended September 30, 2006, the Company entered into several                  agreements with cellular organizations to provide cellular services.                  The                  cost to the Company during the years ended September 30, 2007 and                  2006,                  was approximately $2,592,951 and $290,000, respectively.                                                                                                                                                        |
|------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 16.                  Segment Information                   |   | The                  Company is organized into two business segments based primarily                  on the                  nature of the Company's products. The Company's Reagents segment                  is                  engaged in the business of manufacturing and marketing medical                  diagnostic                  stains, solutions and related equipment to hospitals and medical                  testing                  labs. The Company's SecureAlert segment is engaged in the business                  of                  developing, distributing and marketing mobile emergency and personal                  security systems to distributors and consumers, and tracking devices                  for                  monitoring offenders in the criminal justice system. Other (unallocated)                  loss consists of research and development, selling, general and                  administrative expenses related to the Company's corporate activities,                  including remote health monitoring and market and business development                  activities. The                  accounting policies of the business segments are the same as those                  described in the summary of significant accounting policies (see                  Note                  2). The                  following table reflects certain financial information relating                  to each                  reportable segment for each of the years ended September 30, 2007 and                  2006: |

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|                                            |   | 2007   |        |   | 2006   |   |
|-------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Net                  sales:                     |   |   |        |   |   |   |
| SecureAlert                                     |   | $      | 7,915,209   |   |   | $      | 391,600 |   |
| Reagents                                        |   |   | 655,331     |   |   |   | 678,541 |   |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | 8,570,540   |   |   | $      | 1,070,141 |   |
|                                            |   |   |        |   |   |   |   |   |
| Operating                  income (loss):       |   |   |        |   |   |   |   |   |
| SecureAlert                                     |   | $      | (16,371,069 | )      |   | $      | (6,061,427 | ) |
| Reagents                                        |   |   | (504,219    | )      |   |   | (68,201 | ) |
| Other                  (unallocated)            |   |   | (10,213,199 | )      |   |   | (11,853,538 | ) |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | (27,088,487 | )      |   | $      | (17,983,166 | ) |
|                                            |   |   |        |   |   |   |   |   |
| Depreciation                  and amortization: |   |   |        |   |   |   |   |   |
| SecureAlert                                     |   | $      | 2,054,150   |   |   | $      | 218,701 |   |
| Reagents                                        |   |   | 6,301       |   |   |   | 2,542 |   |
| Other                  (unallocated)            |   |   | 6,970       |   |   |   | 10,739 |   |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | 2,067,421   |   |   | $      | 231,982 |   |
|                                            |   |   |        |   |   |   |   |   |
| Capital                  expenditures:          |   |   |        |   |   |   |   |   |
| SecureAlert                                     |   | $      | 537,333     |   |   | $      | 1,073,217 |   |
| Reagents                                        |   |   | 35,841      |   |   |   | 20,473 |   |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | 573,174     |   |   | $      | 1,093,690 |   |
|                                            |   |   |        |   |   |   |   |   |
| Interest                  income:               |   |   |        |   |   |   |   |   |
| SecureAlert                                     |   | $      | 249         |   |   | $      | 3,272 |   |
| Reagents                                        |   |   | 11,765      |   |   |   | - |   |
| Other                  (unallocated)            |   |   | 105,723     |   |   |   | 26,779 |   |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | 117,737     |   |   | $      | 30,051 |   |
|                                            |   |   |        |   |   |   |   |   |
| Interest                  expense:              |   |   |        |   |   |   |   |   |
| SecureAlert                                     |   | $      | 16,954      |   |   | $      | 271,696 |   |
| Reagents                                        |   |   | -           |   |   |   | 3 |   |
| Other                  (unallocated)            |   |   | 1,181,619   |   |   |   | 6,269,378 |   |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | 1,198,573   |   |   | $      | 6,541,077 |   |
|                                            |   |   |        |   |   |   |   |   |
| Identifiable                  assets:           |   |   |        |   |   |   |   |   |
| SecureAlert                                     |   | $      | 8,981,149   |   |   |   |   |   |
| Reagents                                        |   |   | 984,331     |   |   |   |   |   |
| Other                  (unallocated)            |   |   | 5,318,868   |   |   |   |   |   |
|                                            |   |   |        |   |   |   |   |   |
|                                            |   | $      | 15,284,348  |   |   |   |   |   |

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| 17.                  Subsequent Events |   | Subsequent                  to September 30, 2007, the Company entered into the following                  transactions: 1)  2,854,453                  shares of common stock were issued upon the exercise of options                  providing                  $2,800,700 in cash to the Company. 2)                   175,753 shares of common stock were issued for SecureAlert Series                  A                  Preferred stock dividends. 3)  15,000                  shares of common stock were issued from the conversion of Preferred                  stock. 4)  70,000                  shares of common stock were issued for services rendered valued                  at                  $480,700. 5)  (Unaudited)                  The Company entered into a purchase agreement to acquire 51% of                  the issued                  and outstanding capital stock of Midwest Monitoring & Surveillance,                  Inc. (“MM&S”) with, at the Company’s option, the right to acquire the                  remaining 49% of MM&S capital stock. The consideration for the initial                  purchase of 51% of the outstanding MM&S shares, which will give                  control of MM&S to the Company, is $3.4 million, $1,800,000 payable in                  cash and 438,000 shares of the Company’s common stock. 6)  (Unaudited)                  The Company entered into a Stock Purchase Agreement to acquire                  51% of the                  issued and outstanding capital stock of Court Programs, Inc., Court                  Programs of Northern Florida, Inc., and Court Programs of Florida                  (the “CP                  Entities”) with, at the Company’s option, the right to acquire the                  remaining 49% of the CP Entities’ capital stock.  The                  consideration for the initial purchase of 51% of the outstanding                  CP                  Entities’ shares, which will give control of CP Entities to the Company,                  is $1,145,500, $300,000 payable in cash and 212,000 shares of the                  Company’s common stock. 7)  The                  Company entered into a stock redemption agreement with SecureAlert                  Series                  A Preferred Stock shareholders to redeem all outstanding shares                  for                  $6,863,695 in cash and 3,000,000 shares of common stock.  The                  stock redemption agreement will in effect amend the Designation                  of Rights                  and Preferences of the SecureAlert Series A Convertible Redeemable                  Non-Voting Preferred Stock. The redemption price will eliminate                  all future                  dividends due to SecureAlert Series A Preferred Stock                  shareholders. |
|----------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 17.                  Subsequent EventsContinued |   | 8)  (Unaudited)                  On December 20, 2007, the Company sold and assigned its rights                  under                  Patent Number 6,636,732 (issued October 21, 2003) for the sum of                  $2,400,000.  Half the purchase price was paid at the time the                  agreement was executed and a total of $1,200,000 of the purchase                  price for                  this patent assignment is payable on or before January 11,                  2008. |
|-------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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