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 March 31,
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 May 14, 2009,
was 12,716,840 shares.











PART
I – FINANCIAL INFORMATION





Item
1. Financial Statements.





Noble
      Innovations, Inc.(Development
      Stage Company)Consolidated
      Balance SheetsMarch
      31,
            
            
            December
      31,2009
            
            
            2008Assets
            
            (Unaudited)
            
            
            (Restated)Current
      assets:Cash
            
            $
            3,591
            
            
            $
            71,660Inventory
            
            
            37,627
            
            
            
            55,188Total
      current assets
            
            
            41,218
            
            
            
            126,848Equipment,
      net
            
            
            61,174
            
            
            
            64,344Other
      Assets:Deposits
            
            
            15,000
            
            
            
            37,550Total
      assets
            
            $
            117,392
            
            
            $
            228,742Liabilities
      and Stockholders' Equity (Deficit)Current
      liabilities:Accounts
      payable
            
            $
            158,482
            
            
            $
            176,274Accrued
      expenses
            
            
            129,320
            
            
            
            113,597Accrued
      salaries, officer
            
            
            131,243
            
            
            
            76,943Accrued
      salaries
            
            
            150,315
            
            
            
            126,557Notes
      payable, related party
            
            
            206,500
            
            
            
            226,500Convertible
      Notes payable, net of discount of $136,526and
      $132,818 at March 31, 2009 andDecember
      31, 2008, respectively
            
            
            291,474
            
            
            
            197,182Deferred
      Income
            
            
            39,078
            
            
            
            39,078Subscriptions
      payable, 170,000 and 15,000 shares atMarch
      31, 2009 and December 31, 2008, respectively
            
            
            91,166
            
            
            
            10,328Total
      current liabilities
            
            
            1,197,578
            
            
            
            966,459Stockholders'
      equity (deficit):Preferred
      stock, $0.001 par value, 10,000,000 sharesauthorized,
      400,000 shares issued and outstandingat
      March 31, 2009 and December 31, 2008, respectively
            
            
            400
            
            
            
            400Common
      stock, $0.001 par value, 50,000,000 shares authorized,12,539,340  and
      12,504,340 shares issued and outstanding atMarch
      31, 2009 and December 31, 2008, respectively
            
            
            12,539
            
            
            
            12,504Additional
      paid-in capital
            
            
            55,656,795
            
            
            
            55,567,828(Deficit)
      accumulated during development stage
            
            
            (56,749,920
            )
            
            
            (56,318,449
            )Total
      stockholders' equity (deficit)
            
            
            (1,080,186
            )
            
            
            (737,717
            )Total
      liabilities and stockholders' equity (deficit)
            
            $
            117,392
            
            
            $
            228,742





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


1


Noble
      Innovations, Inc.(Development
      Stage Company)Consolidated
      Statements of OperationsFor
      the three months ended
            
            
            September
      27, 2002March
      31,
            
            
            (Inception)
      to2009
            
            
            2008
            
            
            March
      31, 2009(Unaudited)
            
            
            (Unaudited)
            
            
            (Restated)Revenue
            
            $
            -
            
            
            $
            -
            
            
            $
            55,069Cost
      of goods sold
            
            
            -
            
            
            
            -
            
            
            
            51,201-
            
            
            
            -
            
            
            
            3,868Expenses:General
      and administrative
            
            
            79,902
            
            
            
            49,439
            
            
            
            470,558Professional
      fees
            
            
            137,905
            
            
            
            672,252
            
            
            
            4,883,437Promotional
      and marketing
            
            
            36,488
            
            
            
            23,067
            
            
            
            221,201Salaries,
      officer
            
            
            54,300
            
            
            
            87,300
            
            
            
            1,026,054Salaries
            
            
            59,950
            
            
            
            400,050
            
            
            
            988,880Depreciation
            
            
            3,170
            
            
            
            1,218
            
            
            
            11,723Total
      expenses
            
            
            371,715
            
            
            
            1,233,326
            
            
            
            7,601,853Net
      operating (loss)
            
            
            (371,715
            )
            
            
            (1,233,326
            )
            
            
            (7,597,985
            )Other
      income (expense):Interest
      income
            
            
            -
            
            
            
            -
            
            
            
            3Interest
      expense
            
            
            (53,618
            )
            
            
            -
            
            
            
            (98,992
            )Financing
      costs
            
            
            (6,138
            )
            
            
            -
            
            
            
            (778,785
            )Impairment
      of goodwill
            
            
            -
            
            
            
            -
            
            
            
            (48,274,161
            )Total
      other income (expense)
            
            
            (59,756
            )
            
            
            -
            
            
            
            (49,151,935
            )Net
      (loss)
            
            $
            (431,471
            )
            
            $
            (1,233,326
            )
            
            $
            (56,749,920
            )Weighted
      average number of common sharesoutstanding
      - basic and fully diluted
            
            
            12,517,784
            
            
            
            260,390Net
      (loss) per share - basic & fully diluted
            
            $
            (0.03
            )
            
            $
            (4.74
            )





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








2


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
            )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
            
            
            
            
            
            
            
            98,000


3





Noble
      Innovations, Inc.(Development
      Stage Company)Statement
      of Changes in Stockholders' Equity (Deficit)Net
      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
            )Net
      loss for the period
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (746,572
            )
            
            
            (746,572
            )Balance,
      December 31, 2007
            
            
            -
            
            
            
            -
            
            
            
            250,500
            
            
            
            251
            
            
            
            349,656
            
            
            
            (922,095
            )
            
            
            (572,188
            )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)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,709,840
            )
            
            
            (2,709,840
            )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
            
            
            $
            (56,318,449
            )
            
            $
            (737,717
            )


4





Noble
      Innovations, Inc.(Development
      Stage Company)Statement
      of Changes in Stockholders' Equity (Deficit)Shares
      issued forservices
      provided
            
            
            -
            
            
            
            -
            
            
            
            35,000
            
            
            
            35
            
            
            
            24,465
            
            
            
            
            
            
            24,500Options
      granted for servicesprovided,
      related party
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            15,507
            
            
            
            
            
            
            15,507Beneficial
      conversion feature
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            48,995
            
            
            
            
            
            
            48,995Net
      loss for the period
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (431,471
            )
            
            
            (431,471
            )Balance,
      March 31, 2009 (Unaudited)
            
            
            400,000
            
            
            $
            400
            
            
            
            12,539,340
            
            
            $
            12,539
            
            
            $
            55,656,795
            
            
            $
            (56,749,920
            )
            
            $
            (1,080,186
            )





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











5


Noble
      Innovations, Inc.(Development
      Stage Company)Condensed
      Consolidated Statements of Cash FlowsFor
      the three months ended
            
            
            September
      27, 2002March
      31,
            
            
            (Inception)
      to2009
            
            
            2008
            
            
            March
      31, 2009(Unaudited)
            
            
            (Unaudited)
            
            
            (Restated)Cash
      flows from operating activitiesNet
      (loss)
            
            $
            (431,471
            )
            
            $
            (1,233,326
            )
            
            $
            (56,749,920
            )Adjustments
      to reconcile net (loss) tonet
      cash used in operating activities:Depreciation
            
            
            3,170
            
            
            
            1,218
            
            
            
            11,723Convertible
      note issued for services
            
            
            50,000
            
            
            
            -
            
            
            
            50,000Shares
      issued for services, related party
            
            
            -
            
            
            
            357,500
            
            
            
            2,363,886Shares
      issued for services
            
            
            35,338
            
            
            
            646,000
            
            
            
            1,497,805Shares
      issued for conversion of notes payable
            
            
            -
            
            
            
            -
            
            
            
            117,000Shares
      issued for financing costs
            
            
            -
            
            
            
            -
            
            
            
            772,647Amortization
      of beneficial conversion feature
            
            
            45,287
            
            
            
            -
            
            
            
            82,282Options
      granted for services
            
            
            15,507
            
            
            
            -
            
            
            
            1,808,553Impairment
      of goodwill
            
            
            -
            
            
            
            -
            
            
            
            48,274,161Decrease
      (increase) in assets:Inventory
            
            
            17,561
            
            
            
            (36,080
            )
            
            
            (37,627
            )Other
      assets
            
            
            22,550
            
            
            
            6,200
            
            
            
            (15,000
            )Increase
      (decrease) in liabilities:Accounts
      payable
            
            
            (17,792
            )
            
            
            (45,241
            )
            
            
            158,482Accrued
      expenses
            
            
            15,723
            
            
            
            38,614
            
            
            
            129,320Accrued
      salaries, officer
            
            
            54,300
            
            
            
            30800
            
            
            
            83,131Accrued
      salaries
            
            
            23,758
            
            
            
            67,783
            
            
            
            198,427Deferred
      income
            
            
            -
            
            
            
            20,650
            
            
            
            39,078Net
      cash used in operating activities
            
            
            (166,069
            )
            
            
            (145,882
            )
            
            
            (1,216,052
            )Cash
      flows from investing activitiesPurchase
      of equipment
            
            
            -
            
            
            
            -
            
            
            
            (38,725
            )Net
      cash used in investing
            
            
            -
            
            
            
            -
            
            
            
            (38,725
            )Cash
      flows from financing activitiesProceeds
      from demand notes, related party
            
            
            -
            
            
            
            173,000
            
            
            
            699,527Payments
      on demand notes, related party
            
            
            (20,000
            )
            
            
            (156,703
            )
            
            
            (424,343
            )Proceeds
      from convertible notes payable
            
            
            50,000
            
            
            
            -
            
            
            
            330,000Payments
      on notes payable
            
            
            (2,000
            )
            
            
            -
            
            
            
            (2,000
            )Proceeds
      from the sale of common stock
            
            
            70,000
            
            
            
            135,500
            
            
            
            601,057Repurchase
      of common stock
            
            
            -
            
            
            
            -
            
            
            
            (2,500
            )Donated
      capital
            
            
            -
            
            
            
            -
            
            
            
            6,500Net
      cash provided by financing activities
            
            
            98,000
            
            
            
            151,797
            
            
            
            1,258,241Net
      increase (decrease) in cash
            
            
            (68,069
            )
            
            
            5,915
            
            
            
            3,464Cash
      - beginning
            
            
            71,660
            
            
            
            6,165
            
            
            
            -Cash
      acquired in merger
            
            
            -
            
            
            
            -
            
            
            
            127Cash
      - ending
            
            $
            3,591
            
            
            $
            12,080
            
            
            $
            3,591Supplemental
      disclosures:Interest
      paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -Income
      taxes paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -Non-cash
      investing and financing activities:Stock
      issued for services provided
            
            $
            29,200
            
            
            $
            -
            
            
            $
            2,570,859Stock
      issued for note payable conversion, related party
            
            $
            -
            
            
            $
            -
            
            
            $
            117,000Stock
      issued for financing costs
            
            $
            -
            
            
            $
            -
            
            
            $
            702,834Stock
      issued for merger
            
            $
            -
            
            
            $
            -
            
            
            $
            48,377,144





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


6
 Noble
Innovations, Inc.
 (Development
Stage Company)
 Notes to
Consolidated Financial Statements
 (Unaudited)


Note
1 – Basis of presentation





The
unaudited 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 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.


7
 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.



































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


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





Combined
      Pro Forma:For
      the three months ending March 31, 2008(Unaudited)Expenses:General
      and administrative
            
            
            
            $
            49,528Professional
      fees
            
            
            
            
            668,023Promotional
      and marketing
            
            
            
            
            23,067Salaries,
      officer
            
            
            
            
            87,300Salaries
            
            
            
            
            400,050Depreciation
            
            
            
            
            3,454Total
      Expenses
            
            
            
            
            1,231,422Net
      operating (loss)
            
            
            
            
            (1,231,422)Other
      income (expenses):Interest
      income
            
            
            
            
            -Interest
      expense
            
            
            
            
            -Financing
      costs
            
            
            
            
            -Impairment
      of goodwill
            
            
            
            
            -Total
      other income (expense)
            
            
            
            
            -Net
      (loss)
            
            
            
            $
            (1,231,422)





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.





9
 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, based on the closing stock price
of the Company’s shares on the grant date. 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 $54,300 and $49,800 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, based on the
closing stock price of the Company’s shares on the grant date, 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 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,
based on the closing stock price of the Company’s shares on the grant
date.


10
 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, based
on the closing stock price of the Company’s shares on the grant
date.





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, and was expensed as professional fees.





On
September 18, 2008the Company issued 250,000
free trading S-8 shares, valued at $1,375,000, based on the closing stock price
of the Company’s shares on the grant date, 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, based on the closing stock price of the Company’s shares on the
grant date.





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, based on the closing stock price of the
Company’s shares on the grant date, 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, based on the closing stock price of the
Company’s shares on the grant date, 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, based on
the closing stock price of the Company’s shares on the grant
date.


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


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.





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,
and was expensed as professional fees.





During
the three months ending March 31, 2009 the Company repaid $20,000 on unsecured,
non-interest bearing demand notes from significant shareholders.





Note
5 – Notes payable, related parties





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


March
      31,
            
            December
      31,2009
            
            2008Related
      party - unsecured debenture, due on demand for operating expenses advanced
      from significant shareholders. The debenture is non-interest
      bearing.
            $  206,500
            
            $  226,500Less:
      current portion
            206,500
            
            226,500Long-term
      debt, less current portion
            $               -
            
            $               -





Note
6 – Notes payable





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





March
      31,
            
            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.
            $   100,000
            
            $   100,000


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





Unsecured
      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, 2008the Company issued
      5,000 shares, valued at $32,500, as a financing fee. The financing cost is
      amortized over the one year term of the notes. The Company expensed
      $13,542 in the year ended December 31, 2008.
            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, 2008the Company issued
      5,000 shares, valued at $32,500, as a financing fee. The financing cost is
      amortized over the one year term of the notes. The Company expensed
      $13,542 in the year ended December 31, 2008.
            50,000
            
            50,000Secured
      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 is to be issued as part of the agreement. The shares were unissued
      as of December 31, 2008.
            28,000
            
            30,000


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





Secured
      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
            
            -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
            
            -


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





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
            428,000
            
            330,000Less:
      discount on beneficial conversion feature
            136,526
            
            132,818Less:
      current portion
            291,474
            
            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.





The
aforementioned accounting treatment resulted in a total debt discount equal to
($136,526). 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 704,091 shares at March 31,
2009.


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





During
the three months ending March 31, 2009 and 2008, the Company recorded financial
expenses in the amount of $45,287 and $-0-, respectively, attributed to the
amortization of the aforementioned debt discount.





As of
March 31, 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 March
31, 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.





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 $13,024 and $16,825 during
the three months ending March 31, 2009 and 2008, respectively.


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





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





Year              Amount


2009
              $44,276


2010
            59,010


2011
              45,270 Total           $148,556





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.
This amount was recorded in additional paid in capital.




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.


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





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, based on the
closing stock price of the Company’s shares on the grant date.





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, based on the closing stock price of the
Company’s shares on the grant date.





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, based on the closing stock price of the Company’s shares on
the grant date.





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,
based on the closing stock price of the Company’s shares on the grant
date.





On April
17, 2008the Company
issued 3,900 shares valued at $117,000, based on the closing stock price of the
Company’s shares on the grant date, 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, based on the closing stock price of the Company’s
shares on the grant date.





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, based on the closing stock price of the
Company’s shares on the grant date.


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





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,
based on the closing stock price of the Company’s shares on the grant
date.





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, based
on the closing stock price of the Company’s shares on the grant
date.





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





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





On August
21, 2008the 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, 2008the
Company issued 7,300 shares, valued at $43,800, based on the closing stock price
of the Company’s shares on the grant date, for consulting
services.


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





On
September 18, 2008the Company issued 30,000
free trading S-8 shares, valued at $165,000, based on the closing stock price of
the Company’s shares on the grant date, for legal services
performed.





On
September 18, 2008the Company issued 250,000
free trading S-8 shares, valued at $1,375,000, based on the closing stock price
of the Company’s shares on the grant date, for consulting services to
significant shareholders.





On
September 18, 2008the Company issued 10,000
free trading S-8 shares, valued at $55,000, based on the closing stock price of
the Company’s shares on the grant date, 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, based on the closing stock price of the Company’s shares on the
grant date.





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





On
December 8, 2008the
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, based on the closing stock price of the
Company’s shares on the grant date, 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, based on the closing stock price of the
Company’s shares on the grant date, 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, based on
the closing stock price of the Company’s shares on the grant
date.


20
 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, based on the closing stock price of the Company’s shares on
the grant date.





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, based on the closing stock price of the Company’s shares on
the grant date.


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





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 for the three
months ended March 31, 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 for the three months ended March 31,
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 and was included as subscriptions
payable at March 31, 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 and was included as subscriptions
payable at March 31, 2009.





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
unissued as of March 31, 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 $727 was
recorded during the three months ending March 31, 2009, and the unamortized
balance of the beneficial conversion feature was $13,210 at March 31, 2009. In
addition, the 5,000 shares of common stock were valued at $3,223 and were
recorded as finance expense.


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





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 unissued as of March
31, 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 $674 was recorded during the three
months ending March 31, 2009, and the unamortized balance of the beneficial
conversion feature was $12,955 at March 31, 2009. In addition, the 5,000 shares
of common stock were valued at $2,915 and were recorded as finance
expense.





On March
23, 2009the 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 1, 2009 and were
included as subscriptions payable at March 31, 2009.





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, based on the
closing stock price of the Company’s shares on the grant date.





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,
and was expensed as professional fees.





Options and Warrants
Cancelled


None.





Options and Warrants
Expired


None.


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





Options and Warrants
Exercised


None.





The
following is a summary of information about the Stock Options and Warrants
outstanding at March 31, 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
            
            
            
            300,000
            
            
            4.34
      years
            
            $
            0.50
            
            
            
            300,000
            
            
            $
            0.50





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:





2009
            
            2008Average
      risk-free interest rates
            
            
            1.10
            %
            
            
            2.30
            %Average
      expected life (in years)
            
            
            5
            
            
            
            5Average
      Volatility
            
            
            263
            %
            
            
            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 and 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
March 31, 2009 was approximately $0.50 per option, or warrant.





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





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
            
            
            25,000
            
            
            
            0.45Balance,
      March 31, 2009
            
            
            300,000
            
            
            
            0.50Exercisable,
      March 31, 2009
            
            
            300,000
            
            
            $
            0.50





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. The accompanying
financial statements for the three month period ending March 31, 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 March
31, 2009:





Increase
of previously reported expenses in retained earnings:


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





Increase
of previously reported additional paid in capital:


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





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





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





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
            
            
            $
            -
            
            
            $
            176,274Accrued
      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
            
            
            3,750
            
            
            
            -
            
            
            
            3,750Subscriptions
      payable, 15,000 shares
            
            
            10,328
            
            
            
            -
            
            
            
            10,328Total
      current liabilities
            
            
            966,459
            
            
            
            -
            
            
            
            966,459Stockholders’
      (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
            )
            
            
            (2,709,840
            )
            
            
            (56,318,449
            )Total
      stockholders’ (deficit)
            
            
            (737,717
            )
            
            
            -
            
            
            
            (737,717
            )$
            228,742
            
            
            $
            -
            
            
            $
            228,742





26
 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
            
            
            
            2,426,202
            
            
            
            4,469,355Promotional
      and marketing
            
            
            101,612
            
            
            
            -
            
            
            
            101,612Salaries,
      officer
            
            
            559,254
            
            
            
            206,250
            
            
            
            765,504Salaries
            
            
            695,200
            
            
            
            9,000
            
            
            
            704,200Depreciation
            
            
            8,553
            
            
            
            -
            
            
            
            8,553Total
      expenses
            
            
            3,662,720
            
            
            
            2,641,452
            
            
            
            6,304,172Net
      operating (loss)
            
            
            (3,662,720
            )
            
            
            (2,641,452
            )
            
            
            (6,304,172
            )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
            )
            
            $
            (2,709,840
            )
            
            $
            (55,396,354
            )Weighted
      average number ofcommon
      shares outstanding-basic
      and fully diluted
            
            
            6,601,141
            
            
            
            -
            
            
            
            6,601,141Net
      (loss) per share - basicand
      fully diluted
            
            $
            (7.98
            )
            
            $
            (0.41
            )
            
            $
            (8.39
            )





Note
11 – Subsequent events





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 issued on April 1, 2009. The fair market value of the shares was $2,350
based on the closing price of the Company’s common stock on the date of
issuance.


27
 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 issued on April 1, 2009. The fair market value of the shares was $2,350
based on the closing price of the Company’s common stock on the date of
issuance.





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. The shares were reported as subscriptions payable at March 31,
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
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 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 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. The shares were reported as
subscriptions payable at March 31, 2009.











28


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.


29





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
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.





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.


30





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 Months Ended March 31, 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
March 31, 2009 and March 31, 2008.





Three
      Months Ended
              March
      31,
            Increase
      (Decrease)2009
            2008
            $
            %Expenses:General
      and administrative
            $79,903
            $49,439
            $30,464
            62%Professional
      fees
            137,905
            672,252
            (534,347)
            (79%)Promotional
      and marketing
            36,488
            23,067
            13,421
            58%Salaries,
      officer
            54,300
            87,300
            (33,000)
            (38%)Salaries
            59,950
            400,050
            (340,100)
            (85%)Depreciation
            3,170
            1,218
            1,952
            160%Total
      expenses
            371,715
            1,233,326
            (861,611)
            (70%)Net
      operating (loss)
            (371,715)
            (1,233,326)
            (861,611)
            (70%)Other
      income (expense):Interest
      expense
            (53,618)
            -
            53,618
            --Financing
      costs
            (6,138)
            -
            6,138
            --Total
      other income (expense)
            (59,756)
            -
            59,756
            --Net
      (loss)
            $(431,471)
            $(1,233,326)
            $(801,855)
            (65%)





31





General
and Administrative Expenses:





General
and administrative expenses for the three months ended March 31, 2009 were
$79,903, an increase of $30,464, or 62%, from $49,439 for the three months ended
March 31, 2008.  The primary increase in general and administrative
expenses 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 three months ended March 31, 2009 were $137,905, a decrease of
$534,347, or 79%, from $672,252 for the three months ended March 31,
2008.  The decrease in professional fees was the result of fewer
payments to professionals in common stock and common stock
options.  Professional fees during the three months ending March 31,
2008 were primarily made up of stock being issued to multiple consultants for
services performed for the Company. As the Company’s stock price was traded at
much higher levels in 2008 than 2009 the shares issued in 2008 carried a much
greater value than in 2009 as accounted for under SFAS 123(R).  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 months ended March 31, 2009 were $36,488,
an increase of $13,421, or 58%, from $23,067 for the three months ended March
31, 2008.  The increase in promotional and marketing 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 months ended March 31, 2009 decreased by
38% as compared to the same period of 2008.  The decrease in officer
salaries was due to stock based bonus awards during the three months ending
March 31, 2008 that were not awarded in the same period in 2009.





Salaries





Salaries
expenses for the three months ended March 31, 2009 were $59,950, a decrease of
$340,100, or 85%, from $400,050 for the three months ended March 31,
2008.  The decrease in salaries was due to stock based bonus awards
during the three months ending March 31, 2008 that were not awarded in the same
period in 2009.


32





Depreciation





Depreciation
expenses for the three months ended March 31, 2009 were $3,170, an increase of
$1,952, or 160%, from $1,218 for the three months ended March 31,
2008.  Depreciation expenses increased as a result of additional
assets being depreciated that were acquired in the acquisition of Noble Systems,
Inc. on June 16, 2008, which were not on hand during the three months ending
March 31, 2008.





Net
Operating (Loss):





The net
operating loss for the three months ended March 31, 2009 was $371,715 versus a
net loss of $1,233,326 for the three months ended March 31, 2008, which was a
decrease in net loss of $861,611 or 70%.  The decrease in net
operating loss was primarily a result of fewer stock based compensation
issuances in the first three months of 2009 than in the same period in
2008.





Interest
Expense





Interest expense for the three months
ended March 31, 2009 were $53,618, as compared to $-0- for the same period 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 months
ended March 31, 2009 were $6,138, as compared to $-0- for the same period in
2008.  Our financing costs in the first quarter of 2009 were higher
because of the issuance of common stock as part of convertible loan agreements
that did not occur in the same period in 2008.





Net
(Loss)





Our net
loss for the three months ended March 31, 2009 was $431,471, a decrease of
$801,855, or 65%, from $1,233,326 for the three months ended March 31,
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.





Liquidity
and Capital Resources





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


33





March
      31,
              2009
            December
      31, 2008
            Increase
      / (Decrease)$
            %Current
      Assets
            $        41,218
            $   128,848
            $(128,8480)
            (68%)Current
      Liabilities
            $   1,197,578
            $   966,459
            $    231,119
            24%Working
      Capital (Deficit)
            $(1,156,360)
            $(839,611)
            $
      (316,749)
            (38%)





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
March 31, 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.





During
the second quarter of 2008 we issued 400,000 shares of 6% Series A
Non-Convertible Preferred Stock to Mr. James Cole as payment of his accrued
wages.  The Preferred Stock carries a mandatory 12-month redemption
clause in which the shares may be redeemed for cash at a rate of $0.60 per
share.  Additionally, the holder of the Preferred Stock will be
entitled to a preferred dividend at a rate of 6% per annum, which will be
cumulative and may be paid in cash or additional shares of Preferred Stock at a
price equal to $0.38 per share.





During
the third quarter of 2008, we conducted a private placement of our shares to
accredited investors whereby we sold shares at a price of $2.00 per share and
raised approximately $108,000.  During the fourth quarter of 2008, we
conducted a private placement of our shares to an accredited investor whereby we
sold shares at a price of $0.60 per share and raised approximately
$50,400.





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 mature 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.


34





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
March 31, 2009, our cash balance was $3,591, which will not be enough to pursue
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.


35





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. The
first installment of the shares is scheduled to be issued on April 16, 2009. No
shares have been issued as of March 31, 2009.


36





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. The
first installment of the shares is scheduled to be issued on April 31, 2009. No
shares have been issued as of March 31, 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. The first installment of the shares was to be issued on March 20,
2009, but wasn’t issued until April 1, 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. The first installment of the shares was to be issued on March 20,
2009, but wasn’t issued until April 1, 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. The
first installment of the shares is scheduled to be issued on May 10, 2009. No
shares have been issued as of March 31, 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. The
first installment of the shares is scheduled to be issued on May 16, 2009. No
shares have been issued as of March 31, 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. No shares have been issued as of March 31,
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.


37





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.


38





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.





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.


39





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.





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.


40





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.





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


41





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 one late
filing reported by FINRA.





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.


42





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.





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.


43





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





On
January 6, 2009, we granted 25,000 options to a consultant pursuant to a
consulting agreement, exercisable at $1.00 per share over a five year term. We
believe the grant 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 recipient of
the options was afforded an opportunity for effective access to our files and
records of that contained the relevant information needed to make his investment
decision, including our financial statements and 34 Act reports. We reasonably
believed that the recipient had such knowledge and experience in the Company’s
financial and business matters that he was capable of evaluating the merits and
risks of his investment.





On
February 4, 2009, we issued 10,000 shares of common stock to L. Fred Huggins,
the Company’s former Vice President of Sales and Marketing, as payment in lieu
of cash on accrued salaries. The 10,000 shares were registered in a Registration
Statement on Form S-8 filed on September 22, 2008.





On March
9, 2009, we issued 25,000 shares of common stock to Ivan Mlachak as a retainer
for legal services. The 25,000 shares were registered in a Registration
Statement on Form S-8 filed on September 22, 2008.





On April
3, 2009, we issued 2,500 shares of commons stock to Rod W. Luker pursuant to a
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 Cory A. Pace pursuant to a
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.


44





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.


45





Subsequent
Issuances





April 3,
2009, we issued 15,000 shares of common stock to Michael H. and Sarah M. Fouts
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.





On April
13, 2009, we issued 25,000 shares of common stock to Walker & Peskind PLLC
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 Ronald Barney 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. 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, we issued 5,000 shares of common stock to Kalyor E. Shemberger for
stock subscriptions sold as part of a convertible debenture on March 13, 2009.
On April 20, 2009 the Company issued 5,000 shares for stock subscriptions sold
as part of a convertible debenture on March 13, 2009. The shares were reported
as subscriptions payable at March 31, 2009.





Issuer
Purchases of Equity Securities





We did not repurchase any of our
securities during the quarter ended September 30, 2008.





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 quarter ended March 31, 2009.





Item
5. Other Information





None.


46





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


47





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: May
22, 2009







48