UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.  20549





Form 10-Q





x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended June 30, 2009





 ̈  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





Commission file number 333-118632





NOBLE INNOVATIONS, INC


(Exact name of registrant as specified in its charter)





Nevada

71-0934772(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





3044 North 33rd AvenuePhoenix, AZ

85017(Address of principal executive offices)

(Zip Code)





(602) 455-0507


(Registrant’s telephone number, including area code)





Copies of Communications to:


Stoecklein Law Group


402 West Broadway,


Suite 690


San Diego, CA 92101


(619) 704-1310


Fax (619) 704-1325





Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x     No   ̈





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).


Yes  ̈   No  ̈





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.





Large accelerated filer   ̈
Accelerated filer   ̈Non-accelerated filer   ̈ (Do not check if a smaller reporting company)
Smaller reporting company  x





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


Yes  ̈    No x





The number of shares of Common Stock, $0.001 par value, outstanding on August 14, 2009, was 13,240,704 shares.











PART I – FINANCIAL INFORMATION





Item 1. Financial Statements.





Noble Innovations, Inc.(Development Stage Company)Consolidated Balance SheetsJune 30,


December 31,2009


2008Assets

(Unaudited)


(Restated)Current assets:Cash

$
-


$
71,660Inventory


38,443



55,188Total current assets


38,443



126,848Equipment, net


58,133



64,344Other Assets:Deposits


15,000



37,550Total assets

$
111,576


$
228,742Liabilities and Stockholders' Equity (Deficit)Current liabilities:Accounts payable

$
461,968


$
364,962Accrued expenses


144,810



113,597Accrued salaries, officer


169,267



76,943Accrued salaries


170,490



126,557Convertible notes payable, related party


196,500



226,500Convertible notes payable, net of discount of $81,824 and $132,818at June 30, 2009 and December 31, 2008, respectively


344,026



197,182Deferred Income


39,078



39,078Subscriptions payable, -0- and 15,000 shares atJune 30, 2009 and December 31, 2008, respectively


-



10,328Total current liabilities


1,526,139



1,155,147Stockholders' equity (deficit):Preferred stock, $0.001 par value, 10,000,000 sharesauthorized, 400,000 shares issued and outstanding


400



400Common stock, $0.001 par value, 50,000,000 shares authorized12,985,434  and 12,504,340 shares issued and outstandingas of June 30, 2009 and December 31, 2008, respectively


12,985



12,504Additional paid-in capital


55,991,310



55,567,828(Deficit) accumulated during development stage


(57,419,258
)


(56,507,137
)Total stockholders' equity (deficit)


(1,414,563
)


(926,405
)Total liabilities and stockholders' equity (deficit)

$
111,576


$
228,742








The accompanying notes are an integral part of these financial statements.


2


Noble Innovations, Inc.(Development Stage Company)Consolidated Statements of Operations(Unaudited)For the three months ending


For the six months ending


September 27, 2002June 30,


June 30,


(Inception) to2009


2008


2009


2008


June 30, 2009(Restated)





(Restated)


(Restated)Revenue

$
-


$
-


$
-


$
-


$
55,069Cost of goods sold


-



-



-



-



51,201-



-



-



-



3,868Expenses:General and administrative


38,211



52,513



112,491



101,952



503,147Professional fees


177,921



143,442



343,390



831,090



5,280,705Promotional and marketing


19,396



26,268



75,884



49,335



257,502Salaries, officer


54,300



259,854



108,600



309,654



1,080,354Salaries


31,750



74,050



91,700



468,100



1,020,630Depreciation


3,041



1,253



6,211



2,471



14,764Total expenses


324,619



557,380



738,276



1,762,602



8,157,102Net operating (loss)


(324,619
)


(557,380
)


(738,276
)


(1,762,602
)


(8,153,234
)Other income (expense):Interest income


-



-



-



-



3Interest expense


(64,981
)


-



(118,599
)


-



(163,973
)Financing costs


(49,108
)


(675,750
)


(55,246
)


(675,750
)


(827,893
)Impairment of goodwill


-



-



-



-



(48,274,161
)Total other income (expense)


(114,089
)


(675,750
)


(173,845
)


(675,750
)


(49,266,024
)Net (loss)

$
(438,708
)

$
(1,233,130
)

$
(912,121
)

$
(2,438,352
)

$
(57,419,258
)Weighted average number of common sharesoutstanding - basic and fully diluted


12,832,132



1,835,940



12,675,827



1,048,165Net (loss) per share - basic & fully diluted

$
(0.03
)

$
(0.67
)

$
(0.07
)

$
(2.33
)







The accompanying notes are an integral part of these financial statements.





3





Noble Innovations, Inc.(Development Stage Company)Statement of Changes in Stockholders' Equity (Deficit)(Deficit)AccumulatedAdditional


During


TotalPreferred Stock


Common Stock


Paid-in


Development


Stockholders'Shares


Amount


Shares


Amount


Capital


Stage


(Deficit)September 27, 2002 - Inception


-


$
-



-


$
-


$
-


$
-


$
-Net loss for the period






















(325
)


(325
)Balance, December 31, 2002


-



-



-



-



-



(325
)


(325
)Founders shares issuedfor cash


-



-



202,500



203



29,797







30,000Net loss for the period






















(27,604
)


(27,604
)Balance, December 31, 2003


-



-



202,500



203



29,797



(27,929
)


2,071Founders shares issuedfor cash


-



-



302,500



302



60,198







60,500Net loss for the period






















(44,000
)


(44,000
)Balance, December 31, 2004


-



-



505,000



505



89,995



(71,929
)


18,571Founders shares issuedfor cash


-



-



89,798



90



17,870







17,960Net loss for the period






















(38,000
)


(38,000
)Balance, December 31, 2005


-



-



594,798



595



107,865



(109,929
)


(1,469
)


4





Noble Innovations, Inc.(Development Stage Company)Statement of Changes in Stockholders' Equity (Deficit) [CONTINUED]Founders shares issuedfor cash


-



-



128,487



128



30,569






30,697Donated capital


-



-



-



-



6,500






6,500Shares issued for cashfrom private placement


-



-



245,000



245



97,755






98,000Net loss for the period






















(65,594
)


(65,594
)Balance, December 31, 2006


-



-



968,285



968



242,689



(175,523
)


68,134Shares issued for previouslyreceived funds


-



-



25,000



25



(25
)






-Shares issued forservices provided


-



-



5,500



6



108,744







108,750Shares purchased andcancelled


-



-



(748,285
)


(748
)


(1,752
)






(2,500
)Prior period adjustment (See Note 10)






















(379,835
)


(379,835
)Net loss for the period






















(746,572
)


(746,572
)Balance, December 31, 2007


-



-



250,500



251



349,656



(1,301,930
)


(952,023
)(as restated)


5





Noble Innovations, Inc.(Development Stage Company)Statement of Changes in Stockholders' Equity (Deficit) [CONTINUED]Shares issued for cash


-



-



172,800



173



485,922






486,095Shares issued for servicesservices provided


400,000



400



552,911



552



4,487,874






4,488,826Shares issued for merger


-



-



11,528,129



11,528



48,365,616






48,377,144Options granted for servicesprovided, related party


-



-



-



-



1,793,045






1,793,045Beneficial conversion feature


-



-



-



-



85,715






85,715Prior period adjustment (See Note 10)






















(2,518,693
)


(2,518,693
)Restated net loss for the period






















(52,686,514
)


(52,686,514
)Balance, December 31, 2008(as restated)


400,000


$
400



12,504,340


$
12,504


$
55,567,828


$
(56,507,137
)

$
(926,405
)Shares issued forservices provided


-



-



290,750



291



90,126







90,417Options granted for servicesprovided, related party


-



-



-



-



98,213







98,213Beneficial conversion feature


-



-



-



-



48,995







48,995Shares issued for cash


-



-



190,344



190



186,148







186,338Net loss for the period






















(912,121
)


(912,121
)Balance, June 30, 2009 (Unaudited)


400,000


$
400



12,985,434


$
12,985


$
55,991,310


$
(57,419,258
)

$
(1,414,563
)





The accompanying notes are an integral part of these financial statements.





6


Noble Innovations, Inc.(Development Stage Company)Consolidated Statements of Cash Flows(Unaudited)For the six months ended


September 27, 2002June 30,


(Inception) to2009


2008


June 30, 2009(Restated)


(Restated)Cash flows from operating activitiesNet (loss)

$
(912,121
)

$
(2,438,352
)

$
(57,419,258
)Adjustments to reconcile net (loss) tonet cash used in operating activities:Depreciation


6,211



2,471



14,764Convertible note issued for services


50,000



-



50,000Shares issued for services, related party


-



1,442,804



2,363,886Shares issued for services


80,090



640,000



1,542,557Shares issued for conversion of notes payable


-



117,000



117,000Shares issued for financing costs


-



-



772,647Amortization of beneficial conversion feature


99,988



-



136,983Options granted for services


98,213



-



1,891,259Impairment of goodwill


-



-



48,274,161Decrease (increase) in assets:Inventory


16,745



(36,080
)


(38,443
)Other assets


22,550



(250
)


(15,000
)Increase (decrease) in liabilities:Accounts payable


97,006



(2,119
)


461,968Accrued expenses


31,213



66,897



144,810Accrued salaries, officer


92,324



(69,400
)


121,155Accrued salaries


43,933



106,202



218,602Deferred income


-



20,650



39,078Net cash used in operating activities


(273,848
)


(150,177
)


(1,323,831
)Cash flows from investing activitiesPurchase of equipment


-



(1,000
)


(38,725
)Net cash used in investing


-



(1,000
)


(38,725
)Cash flows from financing activitiesProceeds from demand notes, related party


5,000



126,500



704,527Payments on demand notes, related party


(35,000
)


(100,843
)


(439,343
)Proceeds from notes payable


50,000



-



380,000Payments on notes payable


(4,150
)


-



(4,150
)Proceeds from the sale of common stock


186,338



135,500



717,395Repurchase of common stock


-



-



(2,500
)Donated capital


-



-



6,500Net cash provided by financing activities


202,188



161,157



1,362,429Net increase (decrease) in cash


(71,660
)


9,980



(127
)Cash - beginning


71,660



6,165



-Cash acquired in merger


-



127



127Cash - ending

$
-


$
16,272


$
-Supplemental disclosures:Interest paid

$
-


$
-


$
-Income taxes paid

$
-


$
-


$
-Non-cash investing and financing activities:Stock issued for note payable conversion, related party

$
-


$
-


$
117,000Stock issued for financing costs

$
-


$
-


$
702,834Stock issued for merger

$
-


$
48,377,235


$
48,377,144Beneficial conversion feature

$
48,994


$
-


$
48,994Shares issued for stock payable

$
10,328


$
-


$
10,328








The accompanying notes are an integral part of these financial statements.


7
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)


Note 1 – Basis of presentation





The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation.  All
such adjustments are of a normal recurring nature.  The results of operations for the interim period are not necessarily indicative of the results to be expected for a full year.  Certain amounts in the prior year statements have been reclassified to conform to the current year presentations.  The statements should be read in conjunction with the form 10-K for the year ended December 31, 2008 of Noble Innovations, Inc. (“The Company”).





The Company is considered to be in the development stage as substantially all efforts are being directed towards the research and related development of energy efficient “green” technology and the Company has not generated revenues from these principal business activities.





On May 16, 2007, the Company changed its name from XSInventory to Noble Innovations, Inc. (NII).





Reclassifications


Certain reclassifications have been made to prior year amounts to conform to the current year presentation.





Note 2 – Going concern





The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon attaining profitable
operations based on the development of products that can be sold.  We intend to use borrowings and security sales to mitigate the effects of our cash position, however, no assurance can be given that debt or equity financing, if and when required, will be available.  The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities should we be unable to continue in existence.





Note 3 – Business combination





On June 18, 2008 the Company entered into an acquisition agreement and plan of merger whereby the Company acquired the remaining 95% outstanding interest of Noble Systems, Inc. (NSI) in exchange for stock on a 1.15 to 1 basis, resulting in the issuance of 11,498,107 shares.  The fair market value of the shares was $47,717,144.
The Company had acquired the original 5% interest from an NSI shareholder on April 17, 2008 in exchange for 600,000 shares of common stock at a fair market value of $660,000.  The fair value of the consideration was $48,377,144.


8
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





The merger provides Noble with valuable intellectual property that is an integral part of our business and will continue to be so through the duration of the patent.  NSI has applied for a patent that consists of technology used in the modular heating system of tank-less water heaters.  This patent was first applied
for in May of 2008 under application number 12/151,675 and Noble will continue with the application process and have the patent assigned from NSI to Noble.





The Company has recognized the identifiable assets acquired and liabilities assumed as follows:





June 18, 2008Consideration:Equity instruments (600,000 shares issued of NII1)
$
660,000Equity instruments (11,498,107 shares issued of NII2)

47,717,144Fair value of total consideration exchanged
$
48,377,144Recognized amounts of identifiable assetsacquired and liabilities assumed:Cash
$
127Equipment

34,172Note receivable, related party

68,684Intangible assets, patents

48,274,161Total identifiable net assets
$
48,377,1441 The fair value of the 600,000 common shares issued as part of the consideration paid for 5% of NSI was determined on the basis of the closing market price of NII’s common shares on the issuance date of April 23, 2008.2 The fair value of the 11,498,129 common shares issued as part of the consideration paid for the remaining 95% of NSI was determined on the basis of the closing market price of NII’s common shares on the acquisition date of June 18, 2008.3The consideration paid in excess of the fair value of assets acquired and liabilities assumed has been allocated towards the identifiable intangible patents acquired. The estimated net future cash flows from these patents are deemed to be approximately
$3,000,000 annually based on management’s opinion at the time of acquisition.





The unaudited supplemental pro forma results of operations of the combined entity had the acquisition date been January 1, 2008 is as follows:


9
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Combined Pro Forma:For the six months ending June 30, 2008(Unaudited)Expenses:General and administrative

$
102,101Professional fees


752,260Promotional and marketing


50,950Salaries, officer


384,654Salaries


480,100Depreciation


6,943Total Expenses


1,777,008Net operating (loss)


(1,777,008
)Other income (expenses):Interest income


-Interest expense


-Financing costs


(675,750
)Impairment of goodwill


-Total other income (expense)


(675,750
)Net (loss)

$
(2,452,758
)





Management believes the patents and other assets acquired will enable the Company to enhance their product line and enable the Company to bring those products to market sooner.





Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an annual impairment test. The Company performs an annual impairment test during the fourth quarter of each fiscal year, or more frequently
if impairment indicators are present. The Company operates in one operating segment, and this segment comprises its only reporting unit. Impairment losses were identified and expensed in the amount of $48,274,161 at December 31, 2008.


10
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Note 4 – Related party





On May 16, 2007, the Company entered into a termination and retirement agreement with Michael Evangelista, the sole officer. Pursuant to the agreement, the Company agreed to pay Mr. Evangelista a payment of $2,500 and in exchange for the return all of his outstanding shares totaling 748,285 as adjusted for the 1:20 reverse stock split on
May 20, 2008.





On May 16, 2007, the Company entered into a three year employment agreement with Mr. James Cole, to serve as its President. Pursuant to the agreement, the Company has agreed to pay Mr. Cole annual compensation of $180,000 in year one; $198,000 in year two; and $218,000 in year three. Further the Company has issued 5,000 shares of its common
stock valued at $450,000 which will be amortized over the three year term of the agreement. Additionally, Mr. Cole will have the ability to earn 15,000 shares in the event certain production and sales milestone are achieved. Mr. Cole is further entitled to two (2) cash bonuses of $50,000 each. The first bonus will be earned upon completion of a marketable product and the second upon successful sale and shipment of the product. The compensation in excess of the employment agreement is a result of the fair
market value of certain stock awards issued as bonuses. The Company has expensed $108,600 and $63,500 as executive compensation during the three month periods ended March 31, 2009 and 2008, respectively.





On May 21, 2007, the Company entered into a two year employment agreement with L. Fred Huggins to serve as its Vice President of Sales and Marketing. Pursuant to the agreement, the Company has agreed to pay Mr. Huggins annual compensation in the amount of $150,000. Further the Company has agreed to issue 500 shares of its common stock valued
at $48,000. Additionally Mr. Huggins will be granted an additional 500 shares at each one year anniversary date of his employment. Mr. Huggins resigned on March 12, 2009.





On January 31, 2008 the Company issued 5,000 shares of its common stock as a bonus for services performed to its Vice President of Sales & Marketing. The fair market value of the shares was $320,000 based on the closing price of the Company’s common stock on the date of issuance.





On April 17, 2008, the Company issued 3,900 shares valued at $117,000 as repayment on previous loans from significant shareholders to fund current operations.





On April 17, 2008 the Company issued 22,525 shares of its common stock to significant shareholders as a financing cost for services provided. The fair market value of the shares was $675,750 based on the closing price of the Company’s common stock on the date of issuance.





On April 24, 2008 the Company issued 8,079 shares of its common stock as a bonus for services performed to its CEO. The fair market value of the shares was $210,054.


11
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)


On June 12, 2008 the Company issued 400,000 shares of its 6% series A non-convertible preferred stock as payment on accrued wages. The shares carry a mandatory 12-month redemption clause in which the shares may be redeemed for cash at a rate of $0.60 per share. The fair market value of the shares was $150,000.





On June 18, 2008, the Company repaid $140 of previous loans made from the CEO, and due to the consolidation of the newly acquired Company, Noble Systems, Inc. (NSI), have eliminated the remaining $68,824 note payable against an offsetting $68,824 note receivable to NSI.





On July 8, 2008 the Company granted 250,000 options upon the execution of a consulting agreement to significant shareholders, exercisable at $0.40 per share over a five year term. The estimated value using the Black-Scholes pricing Model was $1,681,292.





On September 18, 2008 the Company issued 250,000 free trading S-8 shares, valued at $1,375,000 for consulting services to significant shareholders.





On September 18, 2008 the Company issued 10,000 free trading S-8 shares to an employee as a bonus for services performed. The fair market value of the shares was $55,000.





On October 6, 2008 the Company granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term. The terms of the agreement require an additional 75,000 options to be issued in increments of 25,000 shares every ninety days thereafter. The estimated value using the
Black-Scholes pricing model was $111,753.





On November 10, 2008 the Company authorized and issued 10,000 shares of its free trading common stock valued at $49,500 to the Company’s Vice President of Sales and Marketing as payment in lieu of cash on accrued salaries.





On December 8, 2008 the Company authorized and issued 10,000 shares of its free trading common stock valued at $15,000 to the Company’s Vice President of Sales and Marketing as payment in lieu of cash on accrued salaries.





On December 8, 2008 the Company issued 150,000 shares of its free trading common stock to significant shareholders in accordance with a consulting agreement for services rendered. The fair market value of the shares was $225,000.





During the year ended, 2008, the Company received net proceeds of $226,500 from significant shareholders to fund current operations. The unsecured promissory notes are non-interest bearing and due on demand. Imputed interest was deemed immaterial and management hasn’t recorded it as such. During the six months ending June 30, 2009
the Company repaid $35,000, and received an additional $5,000 on unsecured, non-interest bearing demand notes from significant shareholders.


12
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





The Company has also incurred expenses for consulting services provided from significant shareholders. As of June 30, 2009 the invoices total $38,000 and remain unpaid as presented in accounts payable.





On April 6, 2009 the Company granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term. The estimated value using the Black-Scholes pricing model, based on a volatility rate of 282% and a call option value of $1.9643, was $49,108.





On May 15, 2009 the Company granted 75,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a two year term. The estimated value using the Black-Scholes pricing model, based on a volatility rate of 295% and a call option value of $0.4480, was $33,598.





Note 5 – Notes payable, related parties





Notes payable, related party consists of the following at June 30, 2009 and December 31, 2008, respectively:


June 30,

December 31,2009

2008Related party - unsecured debenture, due on demand for operating expenses advanced from significant shareholders. The debenture is non-interest bearing. The note holder demanded payment on August 3, 2009 and the debt is yet unpaid. As such, the Company is currently in default.
$  196,500

$  226,500Less: current portion
196,500

226,500Long-term debt, less current portion
$               -

$               -





13
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Note 6 – Notes payable





Notes payable consists of the following at June 30, 2009 and December 31, 2008, respectively:





June 30,

December 31,2009

2008Unsecured promissory note carries a 10% interest rate, maturing on August 12, 2009. In the event of default, the principal is convertible into shares of common stock at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the thirty (30) trading days prior to
the maturity date or $0.10 per share. The note holder demanded payment upon maturity at August 12, 2009 and the debt is yet unpaid. As such, the Company is currently in default.
$   100,000

$   100,000Unsecured promissory note carries a 10% interest rate, maturing on August 12, 2009. In the event of default, the principal is convertible into shares of common stock at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the thirty (30) trading days prior to
the maturity date or $0.10 per share. On August 7, 2008 the Company issued 5,000 shares, valued at $32,500 as a financing fee. The note holder demanded payment upon maturity at August 12, 2009 and the debt is yet unpaid. As such, the Company is currently in default.
50,000

50,000Unsecured promissory note carries a 10% interest rate, maturing on August 12, 2009. In the event of default, the principal is convertible into shares of common stock at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the thirty (30) trading days prior to
the maturity date or $0.10 per share. On August 7, 2008 the Company issued 5,000 shares, valued at $32,500, as a financing fee. The note holder demanded payment upon maturity at August 12, 2009 and the debt is yet unpaid. As such, the Company is currently in default.
50,000

50,000


14
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Secured convertible note carries a 12% interest rate, maturing on December 12, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to the greater of fifty percent (50%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days prior
to the conversion or $0.10 per share. The debenture is secured by the Company’s fixed assets, and 60,000 shares of the Company’s common stock to be issued in the event of default by the Company. Monthly payments of $250, consisting of $100 of interest and $150 of principal are due on the 15th day of each month. An additional 15,000 shares of the Company’s common stock was issued as part of the agreement.
25,850

30,000Secured convertible note carries an 8% interest rate, maturing on December 16, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to the lesser of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days
prior to the conversion, or $0.75 per share, and not less than $0.10 per share. The debenture is secured by the Company’s fixed assets, and 200,000 shares of the Company’s common stock to be issued in the event of default by the Company. An additional 25,000 shares of the Company’s common stock was issued as part of the agreement.
100,000

100,000Unsecured convertible note carries a 10% interest rate, maturing on March 11, 2010. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days
prior to the conversion or $0.10 per share. An additional 5,000 shares of the Company’s common stock was issued as part of the agreement.
25,000

-


15
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Unsecured convertible note carries a 10% interest rate, maturing on March 12, 2010. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days
prior to the conversion or $0.10 per share. An additional 5,000 shares of the Company’s common stock was issued as part of the agreement.
25,000

-Unsecured convertible note carries a 10% interest rate, maturing on February 1, 2010. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days
prior to the conversion or $0.10 per share. The note was issued in exchange for services rendered.
50,000

-Total debt
425,850

330,000Less: discount on beneficial conversion feature
81,824

132,818Less: current portion
344,026

197,182Long-term debt, less current portion
$               -

$               -





In accordance with APB No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants”, the Company allocated the total proceeds between the convertible debt and the stock issuances (which are recorded as additional paid-in-capital) based on the relative fair values of the two securities at the time of
issuance. The aforementioned allocation resulted in a discount on the convertible debt.





The aforementioned accounting treatment resulted in a bifurcation of the total proceeds received of $180,000 between the value attributed to the debt of $141,966 and the value attributed to the common stock issued of $38,034.





In addition, in accordance with EITF No. 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”(“EITF 98-5”) and EITF No. 00-27, “Application of Issue No. 98-5 to Certain Convertible Instruments” (“EITF 00-27”), the
Company recognized and measured the embedded beneficial conversion feature present in the convertible debt, by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price between the detachable common stock issued and the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt.


16
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)








The aforementioned accounting treatment resulted in a total debt discount equal to ($81,824) as of June 30, 2009. The discount is amortized over a one-year period, from the date of issuance until the stated redemption date of the debt.





According to the terms of the Convertible Promissory Notes, the estimated number of shares that would be received upon conversion was 1,899,782 shares at June 30, 2009.





During the six months ending June 30, 2009 and 2008, the Company recorded financial expenses in the amount of $99,988 and $-0-, respectively, attributed to the amortization of the aforementioned debt discount.





As of June 30, 2009, no shares were issued pursuant to debt conversion.





Note 7 – Commitments and contingencies





On May 16, 2007, the Company entered into a three year employment agreement with Mr. James Cole, to serve as its President. Pursuant to the agreement, the Company has agreed to pay Mr. Cole annual compensation of $180,000 in year one; $198,000 in year two; and $218,000 in year three. Further the Company has issued 5,000 shares of its common
stock valued at $450,000. Additionally, Mr. Cole will have the ability to earn 15,000 shares in the event certain production and sales milestone are achieved. Mr. Cole is further entitled to two (2) cash bonuses of $50,000 each. The first bonus will be earned upon completion of a marketable product and the second upon successful sale and shipment of the product.





On May 21, 2007, the Company entered into a two year employment agreement with L. Fred Huggins to serve as its Vice President of Sales and Marketing. Pursuant to the agreement, the Company has agreed to pay Mr. Huggins annual compensation in the amount of $150,000. Further the Company has agreed to issue 500 shares of its common stock valued
at $48,000. Additionally Mr. Huggins will be granted an additional 500 shares at each one year anniversary date of his employment. On March 12, 2009 Mr. Huggins resigned as Vice President of Sales & Marketing. The Company is currently involved in litigation with Mr. Huggins regarding his unpaid compensation. The Company does not believe the results of this will be unfavorable and the accrued compensation is not materially misstated at June 30, 2009.





On January 1, 2008, the Company entered into a two year employment agreement with a Director of Engineering. Pursuant to the agreement, the Company has agreed to pay an annual compensation in the amount of $115,000. In addition, the Company has agreed to provide an allowance of $500 to $1,000 monthly to enroll in an individual health insurance
program until the Company can establish a group plan for its employees.


17
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On July 31, 2008, the Company entered into a three year agreement to lease 6,402 square feet of warehouse space to be used for production purposes. The lease commences on October 1, 2008. Pursuant to the agreement, the Company has agreed to pay monthly payments of $4,740 for the first twelve months with annual increases thereafter. On September
12, 2008 the Company paid a $15,000 security deposit.





We lease our operating facility in Tempe, Arizona under a non-cancelable 3-year operating lease expiring September 30, 2011.  The lease provides for increases in future minimum annual rental payments based on defined annual increases beginning with monthly payments of $4,740 plus variable Common Area Maintenance (CAM) charges
and culminating in a monthly payment of $5,030 plus CAM charges on September 30, 2011.  Lease expense totaled $25,323 and $33,098 during the six months ending June 30, 2009 and 2008, respectively.





Future minimum lease payments required, excluding CAM charges are as follow:


Year                                              Amount


2009
$  31,977


2010
59,010


2011
45,270


Total                                  $136,257








Note 8 – Stockholders’ equity (as adjusted for a 1:20 reverse split of common stock on May 20, 2008)





The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 50,000,000 shares of its $0.001 par value common stock.





In 2003, the Company sold to an officer of the Company a total of 202,500 shares of its $0.001 par value common stock for cash totaling $30,000.





In 2004, the Company sold to an officer of the Company a total of 302,500 shares of its $0.001 par value common stock at for cash totaling $60,500.





In 2005, the Company sold to an officer of the Company a total of 89,798 shares of its $0.001 par value common stock at for cash totaling $17,960.





In 2006, the Company sold to an officer of the Company a total of 128,487 shares of its $0.001 par value common stock at for cash totaling $25,698.





In 2006, the Company received donated capital of $6,500 from an officer of the Company.





18
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





In 2006, the Company sold a total of 245,000 shares of its $0.001 par value common stock for cash totaling $98,000.





In 2007, the Company issued 25,000 shares of its $0.001 par value common stock to an officer of the Company for cash totaling $5,000. The cash was received in 2006.





On January 23, 2007, the Company issued a stock dividend whereby each holder of our common stock, on the record date of January 22, 2007, received a stock dividend of four additional shares for every one share held. The total shares outstanding after the dividend was 993,285 as adjusted for the 1:20 reverse split on May 20, 2008.





On May 16, 2007, the Company paid the former CEO, Mr. Evangelista, a one time payment of $2,500 in exchange for the return all of his outstanding shares totaling 748,285. The cancellation was recorded during the year ended December 31, 2007.





On May 16, 2007 the Company issued 5,000 shares of its common stock pursuant to an employment agreement with its President. The fair value of the shares was $450,000. During the year ended December 31, 2008, the Company recorded an expense of $150,000 as additional executive compensation.





On May 21, 2007, the Company authorized the issuance of 500 shares of its common stock pursuant to an agreement with it Vice President of sales, the shares were issued on August 27, 2007. The fair value of the shares was $48,000.





On January 31, 2008 the Company issued 500 shares of its common stock as a bonus for services performed to its Vice President of Sales & Marketing. The fair market value of the shares was $320,000.





On January 31, 2008 the Company issued 500 shares of its common stock to a consultant for services rendered in relation to the construction of a device used for research & development purposes. The fair market value of the shares was $320,000.





On January 31, 2008 the Company issued 500 shares of its common stock to a consultant for services rendered in relation to the development of a successful prototype consumer product. The fair market value of the shares was $320,000.





On April 17, 2008 the Company issued 3,900 shares valued at $117,000 to significant shareholders as repayment on previous loans.





On April 17, 2008 the Company issued 22,525 shares of its common stock to significant shareholders as a financing cost for services provided. The fair market value of the shares was $675,750.


19
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On April 23, 2008 the Company issued 30,000 shares of its common stock to an individual for the purchase of a 5% investment in Noble Systems, Inc. a private company. The shares were valued at $660,000.





On April 24, 2008 the Company issued 8,079 shares of its common stock as a bonus for services performed to its CEO. The fair market value of the shares was $210,054.





On April 24, 2008 the Company issued a total of 5,900 shares of common stock, as adjusted for the 20 for 1 reverse stock split on May 20, 2008, at prices ranging from $0.50 to $3.00 per share to eight accredited investors in exchange for a total of $135,500 received on various dates during the three month period ending June 30, 2008.





On May 20, 2008 the Company performed a reverse stock split of 1:20 shares of common stock. The Company’s financial statements herein have been adjusted retroactively to reflect the adjusted shares. The previous issuances of common stock disclosed within these footnotes have been adjusted for the effect of this reverse stock split.





On June 12, 2008 the Company issued 400,000 shares of its 6% series A non-convertible preferred stock as payment on accrued wages. The shares carry a mandatory 12-month redemption clause in which the shares may be redeemed for cash at a rate of $0.60 per share. The fair market value of the shares was $150,000.





On June 13, 2008, the Company issued 22 shares of common stock to various individuals for fractional shares due to rounding in the reverse stock split on May 20, 2008.





On June 18, 2008 the Company issued 11,498,107 shares of its common stock as part of a merger with Noble Systems, Inc. (NSI). The Company acquired the remaining outstanding 95% interest in NSI on a basis of 1.15 shares of Noble Innovations, Inc. (NII) in exchange for each of the 9,998,354 outstanding shares of NSI. The fair market value
of the shares was $47,717,144. (See note 3)





On August 7, 2008 the Company issued 5,000 shares, valued at $32,500, as a financing fee on a $50,000 promissory note.





On August 7, 2008 the Company issued 5,000 shares, valued at $32,500, as a financing fee on a $50,000 promissory note.





On August 21, 2008 the Company sold a total of 54,000 shares at $2.00 per share to seven accredited investors in exchange for total proceeds of $108,000.





On September 5, 2008 the Company issued 7,300 shares, valued at $43,800 for consulting services.


20
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)


On September 18, 2008 the Company issued 30,000 free trading S-8 shares, valued at $165,000 for legal services performed.





On September 18, 2008 the Company issued 250,000 free trading S-8 shares, valued at $1,375,000 for consulting services to significant shareholders.





On September 18, 2008 the Company issued 10,000 free trading S-8 shares, valued at $55,000 for consulting services.





On September 18, 2008 the Company issued 10,000 free trading S-8 shares to an employee as a bonus for services performed. The fair market value of the shares was $55,000.





On November 10, 2008 the Company authorized and issued 10,000 shares of its free trading common stock valued at $49,500 to the Company’s Vice President of Sales and Marketing as payment in lieu of cash on accrued salaries.





On December 8, 2008 the Company sold 84,000 shares at $0.60 per share to an accredited investor in exchange for proceeds of $50,400.





On December 8, 2008 the Company authorized and issued 10,000 shares of its free trading common stock valued at $15,000 to the Company’s Vice President of Sales and Marketing as payment in lieu of cash on accrued salaries.





On December 8, 2008 the Company authorized and issued 10,000 shares of its free trading common stock valued at $15,000 to an employee as payment in lieu of cash on accrued salaries.





On December 8, 2008 the Company issued 150,000 shares of its free trading common stock to significant shareholders in accordance with a consulting agreement for services rendered. The fair market value of the shares was $225,000.


21
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On December 12, 2008 the Company received proceeds of $30,000 in exchange for the sale of 15,000 shares of the Company’s common stock and a secured convertible note, which carries a 12% interest rate, maturing on December 12, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price
equal to fifty percent (50%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days prior to the conversion. The debenture is secured by the Company’s fixed assets, and 60,000 shares of the Company’s common stock to be issued in the event of default by the Company. Monthly payments of $750, consisting of $300 of interest and $450 of principal are due on the 15th day of each
month. The shares 15,000 shares were issued on April 1, 2009. A beneficial conversion discount valued at $19,672 was recorded against the debt to present the bifurcation of the conversion feature between debt and equity. Amortization expense of $1,024 was recorded during the year ended December 31, 2008, and the unamortized balance of the beneficial conversion feature was $18,648 at December 31, 2008. In addition, the 15,000 shares of common stock were valued at $10,328 and were recorded as a finance expense
during the year ended December 31, 2008.





On December 16, 2008 the Company received proceeds of $100,000 in exchange for the sale of 25,000 shares of the Company’s common stock and a secured convertible note, which carries an 8% interest rate, maturing on December 16, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a
price equal to the lesser of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days prior to the conversion, or $0.75 per share. The debenture is secured by the Company’s fixed assets, and 200,000 shares of the Company’s common stock to be issued in the event of default by the Company. A beneficial conversion discount valued at $64,426 was recorded against the debt to present the bifurcation of the conversion feature between debt
and equity. Amortization expense of $2,648 was recorded during the year ended December 31, 2008, and the unamortized balance of the beneficial conversion feature was $61,778 at December 31, 2008. In addition, the 25,000 shares of common stock were valued at $21,569 and were recorded as a finance expense during the year ended December 31, 2008.





On December 19, 2008, the Company issued 5,000 shares of common stock in accordance with a consulting agreement for services rendered. The fair market value of the shares was $5,000.





On December 19, 2008, the Company issued 5,000 shares of common stock in accordance with a consulting agreement for services rendered. The fair market value of the shares was $5,000.





On February 4, 2009, the Company authorized and issued 10,000 shares of its free trading common stock to the Company’s Vice President of Sales and Marketing as payment in lieu of cash on accrued salaries. The fair market value of the shares was $10,000 based on the closing price of the Company’s stock on the date of issuance
and is included as a payment against his accrued salary.


22
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On February 5, 2009, the Company entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. In exchange for the testing services provided, the Company agreed to issue 2,500 shares of restricted common stock every ninety days over a one
year period. The first installment of the shares was to be issued on March 20, 2009, but wasn’t issued until April 1, 2009. The fair market value of the shares was $2,350. The shares were issued on April 3, 2009.





On February 5, 2009, the Company entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. In exchange for the testing services provided, the Company agreed to issue 2,500 shares of restricted common stock every ninety days over a one
year period. The first installment of the shares was to be issued on March 20, 2009, but wasn’t issued until April 1, 2009. The fair market value of the shares was $2,350. The shares were issued on April 3, 2009.





On March 6, 2009, the Company issued 25,000 shares of its free trading common stock as a retainer for legal services. The fair market value of the shares was $15,000 based on the closing price of the Company’s stock on the date of issuance and is included in Professional fees.





On March 12, 2009 the Company received proceeds of $25,000 in exchange for the sale of 5,000 shares of the Company’s common stock and a secured convertible note, which carries a 10% interest rate, maturing on March 11, 2010. The principal and accrued interest is convertible into shares of common stock at the discretion of the note
holder at a price equal to the greater of seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days prior to the conversion or $0.10 per share. The 5,000 shares were issued on May 26, 2009. A beneficial conversion discount valued at $13,937 was recorded against the debt to present the bifurcation of the conversion feature between debt and equity. Amortization expense of $4,211 was recorded during the six months ending June 30, 2009, and the unamortized
balance of the beneficial conversion feature was $9,726 at June 30, 2009. In addition, the 5,000 shares of common stock were valued at $3,223 and were recorded as finance expense.





On March 13, 2009 the Company received proceeds of $25,000 in exchange for the sale of 5,000 shares of the Company’s common stock and a secured convertible note, which carries a 10% interest rate, maturing on March 12, 2010. The principal and accrued interest is convertible into shares of common stock at the discretion of the note
holder at a price equal to seventy percent (70%) of the volume weighted average price of the Company’s common stock for the ten (10) trading days prior to the conversion or $0.10 per share. The 5,000 shares were issued on April 20, 2009. A beneficial conversion discount valued at $13,629 was recorded against the debt to present the bifurcation of the conversion feature between debt and equity. Amortization expense of $4,081 was recorded during the six months ending June 30, 2009, and the unamortized balance
of the beneficial conversion feature was $9,548, 2009. In addition, the 5,000 shares of common stock were valued at $2,915 and were recorded as finance expense.


23
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On March 23, 2009 the Company sold 140,000 shares at $0.50 per share to an accredited investor in exchange for total proceeds of $70,000. The shares were issued on April 3, 2009.





On April 1, 2009 the Company issued 15,000 shares for stock subscriptions sold as part of a convertible debenture on December 12, 2008. The shares were reported as subscriptions payable at March 31, 2009.





On April 1, 2009 the Company issued 140,000 shares for stock subscriptions sold on March 23, 2009.





On April 2, 2009 the Company issued 5,000 shares of common stock as part of a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $6,250 based on the closing price of the Company’s common stock on
the date of issuance.





On April 13, 2009 the Company issued 25,000 shares of common stock for legal services rendered. The fair market value of the shares was $25,250 based on the closing price of the Company’s common stock on the date of issuance.





On April 14, 2009 the Company issued 7,500 shares of common stock as part of a January 16, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $7,575 based on the closing price of the Company’s
common stock on the date of issuance.





On April 20, 2009 the Company issued 5,000 shares for stock subscriptions sold as part of a convertible debenture on March 13, 2009.





On April 30, 2009 the Company issued 6,250 shares of restricted common stock as part of a January 31, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $5,313 based on the closing price of the Company’s
common stock on the date of issuance.





On May 6, 2009 the Company sold 20,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $10,000.





On May 10, 2009 the Company issued 10,000 shares of restricted common stock as part of a February 10, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $7,500 based on the closing price of the Company’s
common stock on the date of issuance.


24
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On May 15, 2009 the Company sold 100,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $50,000.





On May 16, 2009 the Company issued 5,000 shares of restricted common stock as part of a February 16, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $2,750 based on the closing price of the Company’s
common stock on the date of issuance.





On May 19, 2009 the Company issued 5,000 shares of restricted common stock as part of a February 19, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $2,500 based on the closing price of the Company’s
common stock on the date of issuance.





On May 26, 2009 the Company issued 2,500 shares of restricted common stock as part of a February 5, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $1,500 based on the closing price of the Company’s
common stock on the date of issuance.





On May 26, 2009 the Company issued 2,500 shares of restricted common stock as part of another February 5, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $1,500 based on the closing price of the
Company’s common stock on the date of issuance.





On May 26, 2009 the Company issued 5,000 shares for stock subscriptions sold as part of a convertible debenture on March 12, 2009.





On June 1, 2009 the Company sold 10,194 shares at $0.74 per share to an accredited investor in exchange for proceeds of $5,097.





On June 1, 2009 the Company sold 10,150 shares at $0.50 per share to an accredited investor in exchange for proceeds of $5,075.





On June 5, 2009 the Company sold 20,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $10,000.





On June 10, 2009 the Company sold 30,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $15,000.


25
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On June 26, 2009 the Company issued 5,000 shares of restricted common stock as part of another March 6, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $1,700 based on the closing price of the Company’s
common stock on the date of issuance.





On June 26, 2009 the Company issued 2,500 shares of restricted common stock as part of another March 11, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $850 based on the closing price of the Company’s
common stock on the date of issuance.





On June 26, 2009 the Company issued 2,000 shares of restricted common stock as part of another March 11, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $680 based on the closing price of the Company’s
common stock on the date of issuance.





On June 26, 2009 the Company issued 2,500 shares of restricted common stock as part of another March 12, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $850 based on the closing price of the Company’s
common stock on the date of issuance.





On June 26, 2009 the Company issued 5,000 shares of restricted common stock as part of another October 13, 2008 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The fair market value of the shares was $1,700 based on the closing price of the
Company’s common stock on the date of issuance.





Note 9 – Stock options and warrants





Options and Warrants Granted


On July 8, 2008 the Company granted 250,000 options upon the execution of a consulting agreement to significant shareholders, exercisable at $0.40 per share over a five year term. The estimated value using the Black-Scholes pricing Model was $1,681,292.





On October 6, 2008 the Company granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term. The terms of the agreement require an additional 75,000 options to be issued in increments of 25,000 shares every ninety days thereafter. The estimated value using the
Black-Scholes pricing model was $111,753.


26
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





On January 6, 2009 the Company granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term. The estimated value using the Black-Scholes pricing model, based on a volatility rate of 263% and a call option value of $0.6203, was $15,507.





On April 6, 2009 the Company granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term. The estimated value using the Black-Scholes pricing model, based on a volatility rate of 282% and a call option value of $1.9643, was $49,108.





On May 15, 2009 the Company granted 75,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a two year term. The estimated value using the Black-Scholes pricing model, based on a volatility rate of 295% and a call option value of $0.4480, was $33,598.





Options and Warrants Cancelled


None.





Options and Warrants Expired


None.





Options and Warrants Exercised


None.





The following is a summary of information about the Stock Options and Warrants outstanding at June 30, 2009.


Shares UnderlyingShares Underlying Options and Warrants Outstanding

Options and Warrants ExercisableWeightedShares

Average

Weighted

Shares

WeightedUnderlying

Remaining

Average

Underlying

AverageRange of

Options

Contractual

Exercise

Options

ExerciseExercise Prices

Outstanding

Life

Price

Exercisable

Price$
0.40 - 1.00



400,000


3.71 years

$
0.63



400,000


$
0.63





The fair value of each option and warrant grant are estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:


27
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





2009

2008Average risk-free interest rates


1.30
%


2.30
%Average expected life (in years)


5



5Average Volatility


278
%


211
%





The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s
employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During 2009 there were 25,000 options issued with an exercise price below the fair value of the underlying stock at the grant date. In 2008, there were no options
granted with an exercise price below the fair value of the underlying stock at the grant date.





The weighted average fair value of options and warrants granted with exercise prices at the current fair value of the underlying stock during the three months ending June 30, 2009 was approximately $0.63 per option, or warrant.





The following is a summary of activity of outstanding stock options under the 2008 Stock Option Plan:





WeightedAverageNumber

ExerciseOf Shares

PriceBalance, December 31, 2008


275,000


$
0.45Options cancelled


-0-



-0-Options expired


-0-



-0-Options vested during the period


125,000



1.00Balance, June 30, 2009


400,000



0.63Exercisable, June 30, 2009


400,000


$
0.63





28
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Note 10 - Correction of Errors





The Company intends to restate its previously issued December 31, 2008 financial statements for matters related to the following previously reported items: stock based compensation issued pursuant to various agreements were previously being amortized over the life of the agreement, however, in accordance with SFAS 123(R) the issuance of
stock based compensation should have been expensed in the period granted as the agreements didn’t include a vesting period, or weren’t held in escrow until the terms of the agreement were satisfied. In addition, the Company is restating certain unrecorded liabilities and adjustments to their accounts payable balance for duplicate liabilities. The accompanying financial statements for the six month period ending June 30, 2009 have been restated to reflect the corrections in accordance with Statement
of Accounting Standards Board No. 154, “Accounting Change and Error Correction”.  The following is a summary of the restatements for December 31, 2008 as of June 30, 2009:





Increase of previously reported expenses in retained earnings:


- unrecorded value of stock based compensation                                                                       $2,709,840


- unrecorded value of consulting services                                                                                  $   202,638





Decrease of previously reported expenses in retained earnings:


- duplicate invoices reported in accounts payable                                                                      $    13,950





Increase of previously reported additional paid in capital:


- unrecorded amount of additional paid in capital on stock issuance                                    
 $2,709,840





Increase of previously reported accounts payable:


- unrecorded liabilities in accounts payable (net)                                                                      $   188,688





The above amounts include the following adjustments to the restated financial statements for the year ended December 31, 2007:





Increase of previously reported expenses in retained earnings:


- unrecorded value of stock based compensation                                                                     $   389,250


- unrecorded value of consulting services                                                                                $       1,440





Decrease of previously reported expenses in retained earnings:


- duplicate invoices reported in accounts payable                                                                       $  10,855





Increase of previously reported additional paid in capital:


- unrecorded amount of additional paid in capital on stock issuance                                      
$389,250





Decrease of previously reported accounts payable:


- unrecorded liabilities in accounts payable (net)                                                                         $   9,415


29
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)


The effect on the Company’s previously issued December 31, 2008 financial statements are summarized as follows:





Consolidated Balance Sheet as of December 31, 2008:





Previously Reported


Net
Change


RestatedAssetsCurrent assetsCash

$
71,660


$
-


$
71,660Inventory


55,188







55,188Total current assets


126,848



-



126,848Equipment, net


64,344



-



64,344Other assets, net


37,550



-



37,550$
228,742


$
-


$
228,742Current liabilitiesAccounts payable

$
176,274


$
188,688


$
364,962Accrued expenses


113,597



-



113,597Accrued salaries, officer


76,943



-



76,943Accrued salaries


126,557



-



126,557Notes payable, related party


226,500



-



226,500Notes payable, net of discountof $132,818


197,182



-



197,182Deferred income


39,078



-



39,078Subscriptions payable,15,000 shares


10,328



-



10,328Total current liabilities


966,459



188,688



1,155,147Stockholders’ (deficit)Preferred stock


400



-



400Common stock


12,504



-



12,504Additional paid-in capital


52,857,988



2,709,840



55,567,828Accumulated deficit


(53,608,609
)


(2,898,528
)


(56,507,137
)Total stockholders’ (deficit)


(737,717
)


(188,688
)


(926,405
)$
228,742


$
-


$
228,742





30
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Consolidated Statements of Operations as of December 31, 2008:





Previously Reported


Net
Change


RestatedRevenue

$
-


$
-


$
-Cost of goods sold


-



-



--



-



-ExpensesGeneral and administrative


254,948



-



254,948Professional fees


2,043,153



2,521,788



4,564,941Promotional and marketing


101,612



(3,095
)


98,517Salaries, officer


559,254



206,250



765,504Salaries


695,200



9,000



704,200Depreciation


8,553



-



8,553Total expenses


3,662,720



2,733,943



6,396,663Net operating (loss)


(3,662,720
)


(2,733,943
)


(6,396,663
)Other income (expense)Interest income


-



-



-Interest expense


(45,374
)


-



(45,374
)Financing costs


(704,259
)


(68,388
)


(772,647
)Impairment of goodwill


(48,274,161
)


-



(48,274,161
)Total other income (expense)


(49,023,794
)


(68,388
)


(49,092,182
)Net loss

$
(52,686,514
)

$
(2,802,331
)

$
(55,488,845
)Weighted average number ofcommon shares outstanding-basic and fully diluted


6,601,141



-



6,601,141Net (loss) per share - basicand fully diluted

$
(7.98
)

$
(0.44
)

$
(8.42
)





31
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)





Consolidated Statements of Operations for the three months ending June 30, 2008:





Previously Reported


Net
Change


RestatedRevenue

$
-


$
-


$
-Cost of goods sold


-



-



--



-



-ExpensesGeneral and administrative


52,513



-



52,513Professional fees


84,237



59,205



143,442Promotional and marketing


27,883



(1,615
)


26,268Salaries, officer


297,354



(37,500
)


259,854Salaries


80,050



(6,000
)


74,050Depreciation


1,253



-



1,253Total expenses


543,290



14,090



557,380Net operating (loss)


(543,290
)


(14,090
)


(557,380
)Other income (expense)Financing costs


(675,750
)


-



(675,750
)Total other income (expense)


(675,750
)


-



(675,750
)Net loss

$
(1,219,040
)

$
(14,090
)

$
(1,233,130
)Weighted average number ofcommon shares outstanding-basic and fully diluted


1,835,940



1,835,940



1,835,940Net (loss) per share - basicand fully diluted

$
(0.66
)

$
(0.01
)

$
(0.67
)





32
 Noble Innovations, Inc.
 (Development Stage Company)
 Notes to Consolidated Financial Statements
 (Unaudited)


Consolidated Statements of Operations for the six months ending June 30, 2008:





Previously Reported


Net
Change


RestatedRevenue

$
-


$
-


$
-Cost of goods sold


-



-



--



-



-ExpensesGeneral and administrative


101,952



-



101,952Professional fees


756,489



74,601



831,090Promotional and marketing


50,950



(1,615
)


49,335Salaries, officer


384,654



(75,000
)


309,654Salaries


480,100



(12,000
)


468,100Depreciation


2,471



-



2,471Total expenses


1,776,616



(14,014
)


1,762,602Net operating (loss)


(1,776,616
)


14,014



(1,762,602
)Other income (expense)Financing costs


(675,750
)


-



(675,750
)Total other income (expense)


(675,750
)


-



(675,750
)Net loss

$
(2,452,366
)

$
14,014


$
(2,438,352
)Weighted average number ofcommon shares outstanding-basic and fully diluted


1,048,165



1,048,165



1,048,165Net (loss) per share - basicand fully diluted

$
(2.34
)

$
0.01


$
(2.33
)





Note 11 – Subsequent events





On July 6, 2009 the Company granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term.





On July 8, 2009 the Company issued 240,270 free trading S-8 shares, valued at $60,068 for legal services performed.


On July 22, 2009 the Company issued 15,000 free trading S-8 shares, valued at $5,100 for accounting services performed.





33


FORWARD-LOOKING STATEMENTS





This document contains forward-looking statements.  All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other
financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.





Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the
date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.  Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer.  You
should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.





Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements.  Our future financial condition and results of operations,
as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.  The factors impacting these risks and uncertainties include, but are not limited to:





o
our ability to diversify our operations;


o
our ability to successfully compete in the energy efficient industry;


o
inability to raise additional financing for working capital;


o
the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain;


o
our ability to attract key personnel;


o
our ability to operate profitably;


o
deterioration in general or regional economic conditions;


o
changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;


o
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;


o
inability to achieve future sales levels or other operating results;


o
the inability of management to effectively implement our strategies and business plans;


o
the unavailability of funds for capital expenditures; and


o
other risks and uncertainties detailed in this report.


34





For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Item 1A. Risk Factors in this document and in our Annual Report on Form 10-K for the year ended December 31, 2008.





AVAILABLE INFORMATION





We file annual, quarterly and special reports and other information with the SEC that can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330.
The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed rates.





Item 2. Management’s Discussion and Analysis and Plan of Operation





OVERVIEW





During the second quarter of 2007, we determined it in the best interest of our stockholders to elect a new board member and hire new management to assist us in establishing new methods of generating revenues.  On May 16, 2007, we obtained majority consent of our stockholders and changed our name from XSInventory to Noble Innovations,
Inc. in anticipation of changing our business plan.





In connection with the name change and the intention to pursue a new line of business, on May 16, 2007, we appointed James A. Cole to serve as our new Chief Executive Officer of the Company as well as a member of the board of directors.  As a result of these executive changes, our
focus has shifted to pursuing energy efficient technology that is classified as “green” in nature.




OVERVIEW OF CURRENT OPERATIONS





Since transitioning our business focus to providing and distributing “green” products, the Company has focused on pursuing various energy efficient technologies and has begun associating ourselves with various associations and societies that emphasize innovative, energy efficient and environmentally sensitive products in the
building community.  During the fourth quarter of 2007, we showcased our first “green” product; the Viridian Truly Tankless water heater. We are now in the development stage of bringing that product to market, and are currently seeking approval by the Underwriters Laboratory (UL).





On June 18, 2008, we completed an acquisition and plan of merger with Noble Systems Incorporated (“Noble Systems”), a Delaware corporation.  With the acquisition of Noble Systems, we acquired all the outstanding assets of Noble Systems, which consisted of testing machinery
and miscellaneous small machine tools used in the development of the Viridian Tankless Water heaters as well as the intellectual property of a provisional patent granted for the water heater.  Pursuant to the acquisition and plan of merger agreement, Noble Systems merged into Noble Innovations, Inc.


35





Recent Developments





On February 2, 2009, we issued a press release announcing that the Viridian Tankless Water Heater was displayed at the International Building Industry Show in Las Vegas.





On February 19, 2009, we issued a press release announcing that the Virdian Tankless Water Heater will be displayed at the Kitchen and Bath Industry Show in Atlanta.





On March 16, 2009, we issued a press release announcing that the Viridian Tankless Water Heater will be displayed at the Connect 2009 – PHCC Convention in New Orleans.





Result of Operations for the Three and Six Months Ended June 30, 2009 and 2008





Our new business plan is still in the early stage of development and as a result we have not experienced any revenues or cost of goods related to this change in business operations.





OPERATING EXPENSES:





The following table summarizes selected items from the statement of operations at June 30, 2009 and June 30, 2008.





Three Months Ended
June 30,

Increase/(Decrease)

Six Months Ended
June 30,

Increase/(Decrease)2009

2008

$
%

2009

2008

$
%(Restated)






(Restated)Expenses:General and
administrative

$38,211

$52,513

$(14,302)
(27%)

$112,491

$101,952

$10,539
10%Professional fees

177,921

143,442

34,479
24%

343,390

831,090

487,700
59%Promotional and
marketing

19,396

26,268

(6,872)
(26%)

75,884

49,335

26,549
54%Salaries, officer

54,300

259,854

(205,554)
(79%)

108,600

309,654

(201,054)
(65%)Salaries

31,750

74,050

(42,300)
(57%)

91,700

468,100

(376,400)
(80%)Depreciation

3,041

1,253

1,788
143%

6,211

2,471

3,740
151%Total Expenses

324,619

557,380

(232,761)
(42%)

738,276

1,762,602

(1,024,326)
58%Net operating (loss)

(324,619)

(557,380)

(232,761)
(42%)

(738,276)

(1,762,602)

(1,024,326)
(58%)Other income
(expense):Interest expense

(64,981)

-

64,981
-

(118,599)

-

118,599
-Financing costs

(49,108)

(675,750)

(626,642)
(93%)

(55,246)

(675,750)

(620,504)
(92%)Total other
income (expense)

(114,089)

(675,750)

(561,661)
(83%)

(173,845)

675,750

501,905
(74%)Net (loss)

$(438,708)

$(1,233,130)

$(794,422)
(64%)

$(173,845)

$(2,438,352)

$(2,264,507)
(93%)











36





General and Administrative Expenses:





General and administrative expenses for the three and six months ended June 30, 2009 were $38,211 and $112,491, a decrease of $14,302, or 27%, from $52,513 for the three months ended June 30, 2008 and an increase of $10,539, or 10%, from $101,952 for the six months ended June 30, 2008.  The decrease in general and administrative
expenses in the three months ended in 2009 was due to A reduction in stock based compensation for administrative services and a reduction in unnecessary spending.  The primary increase in general and administrative expenses in the six months ended was due to the development of our tank-less water heater technology.  As we progress toward launching our new tank-less water heater products we expect to incur higher general and administrative expenses as evidenced in the increases shown during
the period ended in 2009.





Professional Fees





Professional fees for the for the three and six months ended June 30, 2009 were $177,921 and $343,390, an increase of $34,479, or 24%, from $143,422 for the three months ended June 30, 2008 and an increase of $487,700, or 59%, from $131,090 for the six months ended June 30, 2008.   The increase in professional fees was the
result of an increase in stock based compensation as payment for professional fees. As we experience difficult cash flow constraints we rely more heavily on the use of stock based compensation to pay for our professional services.  We expect that we will continue to experience high professional fees as we continue to utilize consultants’ services.





Promotional and Marketing





Promotional and marketing expenses for the three and six months ended June 30, 2009 were $19,396 and $75,884, a decrease of $6,872, or 26%, from $26,268 for the three months ended June 30, 2008 and an increase of $26,549, or 54%, from $49,335 for the six months ended June 30, 2008.  The decrease in promotional and marketing expenses
for the three months ended is 2009 was the result of reductions implemented to conserve cash during difficult economic periods. As our cash flow position improves we expect to resume spending on promotional and marketing matters. The increase in promotional and marketing in the six months ended in 2009 was the result of enhanced efforts to disseminate information about our new product line, as well as, our Company financing activities.





Salaries, Officer





Our total officer salaries expenses for the three and six months ended June 30, 2009 decreased by 79% and 65% as compared to the same period in 2008.  The decrease in officer salaries was due to stock based bonus awards during the period ending in 2008 that were not awarded in the same period in 2009.





Salaries





Salaries for the three and six months ended June 30, 2009 were $31,750 and $91,700, a decrease of $42,300, or 57%, from $74,050 for the three months ended June 30, 2008 and a decrease of $376,400, or 80%, from $468,100 for the six months ended June 30, 2008.  The decrease in salary
expenses for the three months ended June 30, 2009 was due to stock based bonus awards during the period ending 2008 that were not awarded in the same period in 2009, and the loss of one of our highly compensated employees.





Depreciation





Depreciation expenses for the three and six months ended June 30, 2009 were $3,041 and $6,211, an increase of $1,788, or 143%, from $1,253 for the three months ended June 30, 2008 and an increase of $3,740, or 151%, from $2,471 for the six months ended June 30, 2008.  Depreciation expenses increased as a result of the acquisition
of depreciable assets via the merger with Noble Systems, Inc. on June 18, 2008.





Net Operating (Loss):





The net operating loss for the three and six months ended June 30, 2009 were $324,619 and $738,276, a decrease of $276,261, or 46%, from $600,880 for the three months ended June 30, 2008 and a decrease of $1,024,326, or 58%, from $1,762,602 for the six months ended June 30, 2008.  The decrease in net operating loss was primarily
a result of fewer stock based compensation issuances in the first months of 2009 than in the same period in 2008.





Interest Expense





Interest expense for the three and six months ended June 30, 2009 was $64,981 and $118,599 as compared to $-0- for the same periods in 2008.  Our interest expense in 2009 was higher because of an increase in loans requiring interest payments and interest expense resulting from the beneficial conversion feature of convertible
debt instruments.





Financing Costs





Financing costs for the three and six months ended June 30, 2009 were $49,108 and $55,246, a decrease of $626,642, or 93%, from $675,750 for the three months ended June 30, 2008 and a decrease of $620,504, or 92%, from $675,750 for the six months ended June 30, 2008.  Our financing costs in 2009 were lower because of stock based
compensation for services not performed in 2009.





Net (Loss)





Our net loss for the three and six months ended June 30, 2009 was $438,708 and $173,845, a decrease of $794,422, or 64%, from $1,233,130 for the three months ended June 30, 2008 and a decrease of $2,264,507, or 93%, from $2,438,352 for the six months ended June 30, 2008.  We continue to have a net loss and believe the loss will
be reduced and profitability will be attained in the future as we bring our products to market.


37





Liquidity and Capital Resources





The following table summarizes total current assets, total current liabilities and working capital at June 30, 2009 compared to December 31, 2008.





June 30,
2009
December 31, 2008
Increase / (Decrease)$
%Current Assets
$38,443
$   128,848
$(90,405)
(70%)Current Liabilities
$1,526,139
$   966,459
$559,680
58%Working Capital (Deficit)
$(1,487,696)
$(837,611)
$650,085
78%





Liquidity is a measure of a company’s ability to meet potential cash requirements.  We have historically met our capital requirements through the issuance of stock and by borrowings.  In the future, we anticipate we will be able to provide the necessary liquidity we need by the revenues generated from the sales
of our products.





As of June 30, 2009, we continue to use traditional and/or debt financing to provide the capital we need to run the business.  In the future, we need to generate enough revenues from the sales of our products in order for us to not have to sell additional stock or obtain additional loans.





Our future capital requirements will depend on many factors, including the expansion of our business in the energy efficient products, established sales of these products, addition of new revenue sources, cost and availability of third-party financing for development, and the legal and administrative expenses.  As we expand our
activities in a new business plan, we may continue to experience net negative cash flows from operations.





Notes Payable





Further, our indebtedness is comprised of various secured and unsecured notes intended to provide capital for the ongoing manufacturing of our tankless water heaters.  As of December 31, 2008 we had one unsecured note due on demand to a related party for $226,500.  Additionally, we executed three unsecured promissory
notes in August for a total of $200,000 that carry a 10% interest rate.  These notes all matured in August of 2009.  In accordance with the terms of default, if the note has not been repaid, we have agreed to issue on the date of maturity restricted shares of our common stock at a price equal to the lesser of 70% of the volume weighted average price of the 30 day average closing price per share as quoted by Bloomberg LP or equivalent quotation system as satisfaction for the note.


38





We also executed two secured convertible notes in December 2008.  The first convertible note is for $30,000 and carries a 12% interest rate.  The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to 50% of the volume weighted average price of the Company’s
common stock 10 days prior to conversion.  The note is secured by our fixed assets and 60,000 shares of our common stock, which is to be issued upon an event of default.  The second convertible note is for $100,000 and carries an 8% interest rate.  The principal is convertible into shares of our common stock at the discretion of the note holder at a price equal to the lesser of 70% of the volume weighted average price of the Company’s common stock 10 days prior to conversion
or $0.75 per share.  The note is secured by our fixed assets and 200,000 shares of our common stock, which is to be issued upon an event of default.





We believe the capital raised will be sufficient to fund our short term capital and liquidity needs.  However, it is anticipated that we will need to sell additional equity, debt securities, obtain credit facilities from financial institutions or generate significant earnings from our operations to meet our long-term liquidity
and capital requirements.





We anticipate we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets. To address these risks, we must, among other things, develop products in our new line of business, eventually obtain a customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial
condition and results of operations.





Satisfaction of our cash obligations for the next 12 months.





During the last year, we capitalized our company with loans from officers and related parties, which had been used for operational expenses in addition to executing promissory notes and convertible notes.





Prior to changing our business line in the second quarter of 2007, the Company had originally received its initial capitalization through the sale of our common stock registered under an SB-2 registration in the amount of $98,000. We utilized those funds for our corporate organization, payment of audit fees, inventory purchases, general
and administrative expenses, and payment of employee salaries.





As of June 30, 2009, we have a $0 cash balance, which prevents us from pursuing our energy efficient product line of business.  With the intention to pursue a line of business focused on energy efficient products during the next twelve months we plan to seek financing opportunities.  We plan to seek additional funding
for operations through equity and/or debt or other means that may become available to us.  If we are not able to receive any additional funds, we cannot continue our proposed business operations.


39





Going Concern





The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon attaining profitable
operations based on the development of products that can be sold.  We intend to use borrowings and security sales to mitigate the effects of our cash position, however, no assurance can be given that debt or equity financing, if and when required, will be available.  The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities should we be unable to continue in existence.





Summary of product and research and development that we will perform for the term of our plan.





We anticipate contracting with outside engineering firms to provide the necessary research and development for our new line of business in energy efficient products as needed.  However, at this point in time, we are unable to estimate how much those costs may be.





Expected purchase or sale of plant and significant equipment.





As we engage in our proposed line of business of energy efficient products, we will need to purchase and install assembly fixtures and equipment over the next twelve months.  We anticipate we will need benches, fixtures, hand tools, and other material handling equipment; however, the exact amount is unknown at this point in time.  However,
we did acquire some equipment related to the production of the Viridian Tankless Water Heaters as a result of the Merger with Noble Systems during the second quarter of 2008.





Significant changes in the number of employees.





We currently employ 3 employees. We do not anticipate hiring employees over the next 12 months.  We intend to use the services of consultants to perform various professional services.  We believe that this use of third-party service providers may enhance our ability to contain general and administrative expenses.





Consultants





On January 16, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The agreement may be terminated by either party for any reason. In exchange for the testing services provided, we agreed to issue 7,500 shares of restricted
common stock every ninety days over a one year period. We began issuing the shares of common stock pursuant to the agreement in April 2009.


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On January 31, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The agreement may be terminated by either party for any reason. In exchange for the testing services provided, we agreed to issue 6,250 shares of restricted
common stock every ninety days over a two year period. We began issuing the shares of common stock pursuant to the agreement in May 2009.





On February 5, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. In exchange for the testing services provided, we agreed to issue 2,500 shares of restricted common stock every ninety days over a one year period. We
began issuing the shares of common stock pursuant to the agreement in May 2009.





On February 5, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. In exchange for the testing services provided, we agreed to issue 2,500 shares of restricted common stock every ninety days over a one year period. We
began issuing the shares of common stock pursuant to the agreement in May 2009.





On February 10, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The agreement may be terminated by either party for any reason. In exchange for the testing services provided, we agreed to issue 10,000 shares of restricted
common stock every ninety days over a two year period. We began issuing the shares of common stock pursuant to the agreement in May 2009.





On February 16, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The agreement may be terminated by either party for any reason. In exchange for the testing services provided, we agreed to issue 5,000 shares of restricted
common stock every ninety days over a two year period. We began issuing the shares of common stock pursuant to the agreement in May 2009.





On February 19, 2009, we entered into a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The agreement may be terminated by either party for any reason. In exchange for the testing services provided, the Company agreed to issue 5,000 shares
of restricted common stock every ninety days over a one and a half (1 1⁄2) year period. The first installment of the shares is scheduled to be issued on May 19, 2009.





Off-Balance Sheet Arrangements





We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results or operations, liquidity, capital expenditures or capital resources that is deemed material.


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Critical Accounting Policies





Stock-based compensation





In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R)
is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company adopted SFAS No. 123 (R) during the fourth quarter of 2005. Stock and stock options issued for services and compensation totaled $3,544,947 and $108,750 for the years ended December 31, 2008 and 2007, respectively.





Recently Issued Accounting Standards





During May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles (“FAS 162”). FAS 162 identifies the sources of accounting principles and the framework for selecting principles
to be used in the preparation and presentation of financial statements in accordance with generally accepted accounting principles. This statement will be effective 60 days after the Securities and Exchange Commission approves the Public Company Accounting Oversight Board’s amendments to AU Section 411, The Meaning of ‘Present Fairly in Conformity With Generally Accepted Accounting Principles’. The Company does not anticipate
that the adoption of FAS 162 will have an effect on its consolidated financial statements.





During March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures About Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133(“FAS 161”). This new standard requires enhanced
disclosures for derivative instruments, including those used in hedging activities. It is effective for fiscal years and interim periods beginning after November 15, 2008, and will be applicable to the Company in the first quarter of fiscal 2009. The Company is currently evaluating the impact, if any, the adoption of FAS 161 will have on its consolidated financial statements.





Item 3. Quantitative and Qualitative Disclosure About Market Risk





This item is not applicable as we are considered a smaller reporting company.


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Item 4T. Controls and Procedures





Evaluation of Disclosure Controls and Procedures





Our Chief Executive Officer and Principal Financial Officer, Mr. James Cole, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report.  Based
on the evaluation, Mr. Cole concluded that our disclosure controls and procedures are not effective in timely alerting him to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our principal financial officer, or person performing similar functions, as appropriate to
allow timely decisions regarding required disclosure, for the following reasons:





·
The Company does not have an independent board of directors or audit committee or adequate segregation of duties;


·
All of our financial reporting is carried out by our financial consultant;


·
We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.





We plan to rectify these weaknesses by implementing an independent board of directors and hiring of additional accounting personnel once we have additional resources to do so.





Changes in Internal Control Over Financial Reporting





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





PART II – OTHER INFORMATION





Item 1. Legal Proceedings





From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material
litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.


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Item 1A. Risk Factors





Risks Relating to an Investment in Noble





We have no operating history in the energy efficient industry and there can be no assurance that we will be successful in this industry.





Our proposed operations are subject to all of the risks inherent in the establishment of a new business, including insufficient capital, unforeseen problems, and expenses and complications encountered with the early phases of operations in a business. Moreover, our lack of an operating history
in the energy efficient industrymakes it impossible to predict whether or not we will operate profitably in the industry. While we have brought on management that is familiar with this industry, there can be no assurances that we will be able to locate, hire and retain the necessary personnel to initiate, manage and operate this line of business, develop and implement necessary systems, obtain contracts and obtain financing as contemplated
in our business strategy.





We anticipate that our “green” products will be sold to new residential and commercial construction companies so our operations could be adversely affected by a decline in residential and commercial construction.





We anticipate that our products and specifically that of the tankless water heater will be marketed and sold to new residential and commercial construction companies.  The strength of residential and commercial construction depends on new housing starts and business investment,
which are a function of many factors beyond our control, including interest rates, employment levels, availability of credit and consumer confidence.  Downturns in these markets could result in lower revenues and lower profitability.  New housing starts declined in 2006, which have continued through 2008 and the pace may continue at lower levels than previously expected and decline further.





During the quarter ended June 30, 2008 we executed an acquisition and plan of merger agreement.  The acquired company and Noble Innovations has not operated as a combined entity and are not fully integrated.  Additionally, we may acquire other companies in the future, which we may
not be able to integrate them successfully.





On June 18, 2008, we executed an acquisition and plan of merger agreement with Noble Systems Incorporated.  We may in the future also look to acquire additional companies that are consistent with our business plan of energy efficient products.  Each acquisition is subject
to customary closing conditions; including the completion of due diligence reasonably satisfactory to us, the negotiation and execution of a definitive agreement, required regulatory approvals, and the acquired company providing audited financial statements as required by SEC rules and regulations.  We may not be able to complete these acquisitions if we are not satisfied with our due diligence investigation, if we are unable to negotiate definitive agreements, if we cannot obtain the required regulatory
approvals, or if the companies to be acquired cannot provided the required audited financial statements.


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Further, even if we are able to successfully complete any proposed acquisitions, the company to be acquired will have been operated as separate independent entity and we may not be able to integrate the operations of that business successfully or institute the necessary systems and procedures,
including accounting and financial reporting systems, to manage the combined enterprise on a profitable basis.  Our management may not be able to manage the combined entity effectively or to successfully implement our operating strategies.  Any inability to integrate Noble Systems Incorporated or any other future entities successfully would have a material adverse effect on our business, financial condition and results of operations.





Our auditor’s report reflects the fact that without realization of additional capital, it would be unlikely for us to continue as a going concern.





Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have suffered losses from operations during our operating history and our ability to continue as a going concern is dependent upon obtaining future profitable
operations. Although management believes that the proceeds from the sale of securities, together with funds from operations, will be sufficient to cover short-term anticipated cash requirements, we may be required to seek additional capital to fund future growth and expansion. No assurance can be given that such financing will be available or, if available, that it will be on commercially favorable terms. Moreover, favorable financing may be dilutive to investors.





We will need additional capital in the future to finance our operations, which we may not be able to raise or it may only be available on terms unfavorable to us or our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results.





We believe that current cash on hand and the other sources of liquidity will not be sufficient enough to fund our anticipated expansion of operations through fiscal 2008.  We anticipate that we will require up to approximately $5,000,000to fund our anticipated expansion
of operations in energy efficient “green” products over the next twelve months.  Additional capital will be required to effectively support the operations and to otherwise implement our overall business strategy.





Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly
limited.





An inability to access capital readily or on terms favorable to us could impair our ability to fund operations and could jeopardize our financial condition.





Access to funds is essential to our anticipated energy efficient products business.  In the future we may need to incur debt or issue equity in order to fund our working capital requirements, as well as to make acquisitions and other investments.  Our access to funding
sources could be hindered by many factors.


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The markets for our “green” products are highly competitive and revenues could decline if we are unable to respond to competition.





We anticipate that our products will compete in highly competitive markets and will compete based on product design, quality of products and services, product performance, maintenance costs, and overall price.  We will compete with manufacturers and distributors located in the United
States and throughout the world.  Some of our competitors have greater financial, marketing, manufacturing, and distribution resources than we do.  We cannot assure that our products and services will compete successfully with those of our competitors or that we will be able to acquire a strong customer base to establish profit margins.  These risks could materially and adversely affect our financial condition, results of operations, and cash flows.





Results of operations could be impacted by product liability lawsuits and claims.





Through the distribution of the tankless water heaters, we anticipate that these products could expose us to potential product liability risks that are inherent in the design, manufacture, and sale of the products.  Currently, we do not maintain product liability insurance but intend
to pursue policies regarding this.  However, we cannot assure you that we will be able to locate and maintain a policy with acceptable terms or that the insurance policy will provide adequate protection against potential liabilities.  In the event of successful claims against us, this could materially and adversely affect our reputation and our financial condition, results of operations and cash flows.





Risks Relating To Our Common Stock





If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.





Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board.  More specifically, FINRA has enacted Rule 6530,
which determines eligibility of issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in its filings with the Commission.  Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure to timely file twice in a two-year period then we will be ineligible for quotation on the OTC Bulletin Board.  As a result, the market liquidity for our securities could
be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.  As of the date of this filing, we have two late filings reported by FINRA.


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By issuing preferred stock, we may be able to delay, defer or prevent a change in control.





Our board of directors approved the issuance of 400,000 shares of 6% Series A Preferred Stock to our CEO, Mr. James Cole, which hold the same voting rights as those of our common stock.  As a result of these shares having voting rights, Mr. Cole controls a majority of the voting
shares of stock and may have an effect of delaying, deferring or preventing a change in control, discouraging bids for our common stock at a premium over the market price, or that adversely affect the market price of and voting and other rights of the holders of our common stock.





The outstanding shares of our Series A Preferred Stock are controlled by Mr. Cole thereby allowing Mr. Cole to have a majority ownership over our outstanding voting shares and the ability to control our management and the outcome of corporate actions requiring stockholder approval notwithstanding the
overall opposition of our other stockholders.





As a consequence of Mr. Cole controlling the majority voting position, acting alone he will be able to authorize the issuance of securities that may dilute and otherwise adversely affect the rights of purchasers of stock in the offering, including additional preferred stock.  Mr.
Cole will retain the ability to elect a majority of our board of directors and thereby control our management.  Mr. Cole will also have the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, going private transactions and other extraordinary transactions.   Additionally, he may authorize the issuance of these securities to anyone he wishes, including himself and his affiliates.  This concentration
of ownership by these individuals could discourage investments in our company, or prevent a potential takeover of our company which may have a negative impact on the value of our securities.





Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.





Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board
of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Noble Innovations; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Noble Innovations are being made only in accordance with authorizations of management and directors of Noble Innovations, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Noble Innovations’ assets that could have a material effect on the financial statements.


47





We have one individual, our president and chief executive officer, performing the functions of all officers and directors. This individual is responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting
to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.





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





On April 3, 2009, we issued 2,500 shares of commons stock to a consultant pursuant to its consulting agreement relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. In exchange for the testing services provided, we agreed to issue 2,500 shares of restricted common stock every ninety
days over a one year period. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including
our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On April 3, 2009, we issued 2,500 shares of common stock to a consultant pursuant to its consulting agreement relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. In exchange for the testing services provided, we agreed to issue 2,500 shares of restricted common stock every ninety days
over a one year period. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including
our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.


48





On March 12, 2009, we received proceeds of $25,000 in exchange for the sale of 5,000 shares of the Company’s common stock and a secured convertible note, which carries a 10% interest rate, maturing on March 11, 2010. The principal and accrued interest is convertible into shares of common stock at the discretion of the note holder
at a price equal to the greater of seventy percent (70%) of the volume weighted average price of our common stock for the ten (10) trading days prior to the conversion or $0.10 per share. The 5,000 shares were issued on April 3, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The
recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On March 13, 2009, we received proceeds of $25,000 in exchange for the sale of 5,000 shares of our common stock and a secured convertible note, which carries a 10% interest rate, maturing on March 12, 2010. The principal and accrued interest is convertible into shares of common stock at the discretion of the note holder at a price equal
to seventy percent (70%) of the volume weighted average price of our common stock for the ten (10) trading days prior to the conversion or $0.10 per share. The 5,000 shares were issued on April 3, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of
the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On March 23, 2009,we sold 140,000 shares of common stock at $0.50 per share to an accredited investor in exchange for total proceeds of $70,000, all of which was paid in cash. The 140,000 shares were issued on April 3, 2009. We believe the issuance of the shares will be exempt
from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that
the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





April 3, 2009, we issued 15,000 shares of common stock to investors for stock subscriptions sold as part of a convertible debenture on December 12, 2008. On April 1, 2009, the Company issued 15,000 shares for stock subscriptions sold as part of a convertible debenture on December 12, 2008. The shares were reported as subscriptions payable
at March 31, 2009.


49





On April 13, 2009, we issued 25,000 shares of common stock for legal services rendered. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public
offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On April 14, 2009, we issued 7,500 shares of common stock to a consultant as part of a consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. On April 14, 2009, the Company issued 7,500 shares of common stock as part of a consulting agreement with
an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater.  We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files
and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On April 20, 2009, we issued 5,000 shares of common stock to an investor for stock subscriptions sold as part of a convertible debenture on March 13, 2009.  We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The
shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating
the merits and risks of their investment.





On May 26, 2009, we issued 6,250 shares of restricted common stock as part of a January 31, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus delivery
requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience
in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.


50





On May 6, 2009,we sold 20,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $10,000, all of which was paid in cash.  The 20,000 shares were issued on May 26, 2009.  We believe the issuance of the shares will be exempt from
the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients
had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On May 26, 2009, we issued 10,000 shares of restricted common stock as part of a February 10, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater.  We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On May 15, 2009,we sold 100,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $50,000.  The 100,000 shares were issued on May 26, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus delivery
requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience
in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On May 26, 2009, we issued 5,000 shares of restricted common stock as part of a February 16, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater.  We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.


51





On May 26, 2009, we issued 5,000 shares of restricted common stock as part of a February 19, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus delivery
requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience
in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On May 26, 2009, we issued 2,500 shares of restricted common stock as part of a February 5, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater.  We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On May 26, 2009, we issued 2,500 shares of restricted common stock as part of another February 5, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. The 30,000 shares were issued on June 30, 2009. We believe the issuance of the shares will
be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed
that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On May 26, 2009, we issued 5,000 shares for stock subscriptions sold as part of a convertible debenture on March 12, 2009.  We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued
directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and
risks of their investment.


52





On June 1, 2009, we sold 10,194 shares at $0.74 per share to an accredited investor in exchange for proceeds of $5,097.  The 10,194 shares were issued on June 2, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section
4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they
were capable of evaluating the merits and risks of their investment.





On June 1, 2009,we sold 10,150 shares at $0.50 per share to an accredited investor in exchange for proceeds of $5,075.  The 10,150 shares were issued on June 2, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus delivery requirement
of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s
financial and business matters that they were capable of evaluating the merits and risks of their investment.





On June 5, 2009,we sold 20,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $10,000.  The 20,000 shares were issued on June 30, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus delivery
requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience
in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On June 10, 2009the Company sold 30,000 shares at $0.50 per share to an accredited investor in exchange for proceeds of $15,000.  The 30,000 shares were issued on June 30, 2009. We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.


53


On June 30, 2009, we issued 5,000 shares of restricted common stock as part of another March 6, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On June 30, 2009, we issued 2,500 shares of restricted common stock as part of another March 11, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.








On June 30, 2009, we issued 2,000 shares of restricted common stock as part of another March 11, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





On June 30, 2009, we issued 2,500 shares of restricted common stock as part of another March 12, 2009 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.


54








On June 30, 2009, we issued 5,000 shares of restricted common stock as part of another October 13, 2008 consulting agreement with an individual relating to the installation and testing of the Company’s new Viridian Truly Tank-less Water Heater. We believe the issuance of the shares will be exempt from the registration and prospectus
delivery requirement of the Securities Act of 1933 by virtue of Section 4(2).  The shares are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the shares were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and
experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.





Subsequent Issuances





On July 6, 2009, we granted 25,000 options as part of a consulting agreement to significant shareholders, exercisable at $1.00 per share over a five year term.  We believe the issuance of the options will be exempt from the registration and prospectus delivery requirement of the
Securities Act of 1933 by virtue of Section 4(2).  The options are to be issued directly by us and do not involve a public offering or general solicitation.  The recipients of the options were afforded an opportunity for effective access to our files and records of that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s
financial and business matters that they were capable of evaluating the merits and risks of their investment.





On July 8, 2009, we issued 240,270 shares of our common stock for legal services rendered to the Company.  The shares issued were registered in a Registration Statement on Form S-8 filed on July 1, 2009.








On July 27, 2009,we issued 15,000 shares of our common stock for accounting services rendered to the Company.  The shares issued were registered in a Registration Statement on Form S-8 filed on September 22, 2008.




Issuer Purchases of Equity Securities





The Company did not repurchase any of its equity securities during the quarter ended June 30, 2009.





Item 3. Defaults Upon Senior Securities





None.





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





We did not submit any matters to a vote of our security holders during the fourth quarter of 2008 and as of June 30, 2009.


55





Item 5. Other Information





None.





Item 6. Exhibits





Exhibit
number
Exhibit description
Filed
herewith
Form
Period
ending
Exhibit
Filing date2.1
Acquisition and Plan of Merger between Noble Innovations, Inc. and Noble Systems Incorporated

8-K

2-1
06/25/083(i)(a)
Articles of Incorporation of XSInventory

SB-2

3(i)(a)
8/27/043(i)(b)
Articles of Incorporation of Creative Excess

SB-2

3(i)(b)
8/27/043(i)(c)
Articles of Incorporation of Noble Innovations

10-Q
3/31/08
3(i)(c)
6/04/083(i)(d)
Certificate of Change

10-Q
3/31/08
3(i)(d)
6/04/083(i)(e)
Amendment to Articles of Incorporation

8-K

3(i)(e)
6/25/083(i)(f)
Amendment to Articles of Incorporation of

8-K

3(i)(f)
6/25/083(ii)(a)
Bylaws of the XSInventory

SB-2

3(ii)(a)
8/27/043(ii)(b)
Bylaws of Creative Excess

SB-2

3(ii)(b)
8/27/044
Stock Certificate Specimen

SB-2

4(c)
8/27/044.2
Certificate of Designation of Series A Preferred Stock

8-K

4
6/25/0810.1
Restated Lock Up Agreement

SB-2

10.1
8/27/0410.2
Office Lease

SB-2

10.2
8/27/0410.3
Renewal Addendum to Office Lease 2005

SB-2

10.3
8/27/0410.4
User Agreement

SB-2

10.4
8/27/0410.5
Agent for the Issuer Letter Agreement

SB-2

10.5
8/27/0410.6
Subscription Agreement

SB-2

10.6
8/27/0410.7
Termination and Retirement Agreement with Michael Evangelista

8-K

10.7
5/23/0710.8
Employment Agreement with James Cole

8-K

10.8
5/23/0710.9
Employment Agreement with Fred Huggins

8-K

10.9
6/27/0731
Certification pursuant to Section 302 of the Sarbanes-Oxley Act
X32
Certification pursuant to Section 906 of the Sarbanes-Oxley Act
X99.1
Press Release – Announcing the Selection of Executive Advisory Board Member Michael Fouts

10-Q
9/30/08
99.1
11/14/0899.2
Press Release – Announcing Exhibit at ISH-North America Trade Show

10-Q
9/30/08
99.2
11/14/0899.3
Press Release – Announcing Partnership with Zoppas Industries for its Heating Element Technology

10-Q
9/30/08
99.3
11/14/0899.4
Press Release Announcing Viridian Tankless Water Heater as top product for 2008 by leading building industry magazine

10-K
12/31/08
99.1
4/15/0999.5
Press Release Announcing Brody Hanssen to the Executive Advisory Board

10-K
12/31/08
99.2
4/15/09


56





Exhibit
number
Exhibit description
Filed
herewith
Form
Period
ending
Exhibit
Filing date99.6
Press Release Announcing Viridian Tankless Water Heater displayed at International Building Industry Show

10-K
12/31/08
99.3
4/15/0999.7
Press Release Announcing Viridian Tankless Water Heater displaying at Kitchen and Bath Industry Show

10-K
12/31/08
99.4
4/15/0999.8
Press Release Announcing Viridian Tankless Water Heater displaying at Connection 2009 PHCC Convention

10-K
12/31/08
99.5
4/15/09








SIGNATURES










Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.







NOBLE INNOVATIONS, INC.


(Registrant)











By:/S/ James A. Cole


James A. Cole, President &


Chief Executive Officer (On behalf of


the registrant and as principal accounting


officer)







Date: August 19, 2009







57