**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**FORM
      10-KSB**




**xANNUAL
      REPORT UNDER
      SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**




For
      year
      ended June 30, 2007




**o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**




For
      the
      transition period from _____ to _____




**OmniReliant
      Holdings, Inc.**




(Exact
      name of registrant as specified in its charter)




Nevada
              000-51599
              54-2153837(State
                  or other jurisdiction of incorporation)
              (Commission
                  File Number)
              (I.R.S
                  Employer Identification No.)


4218
      West Linebaugh Ave.


Tampa,
      FL 33624


(Address
      of principal executive offices)





**(813)
      885-5998**


(Issuer's
      telephone number, including area code)





4902
      Eisenhower Blvd., Suite 185


Tampa,
      FL
      33634


(Former
      name or former address, if changed since last report)




**Securities
      registered pursuant to Section 12(g) of the Act: Not
      Applicable**




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




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
      not be contained, to the best of registrant's knowledge, in definitive proxy
      or
      information statements incorporated by reference in Part III of this Form 10-K
      or any amendment to this Form 10-K. o




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




State
      issuer's revenues for its most recent fiscal year. $ 2,640




The
      aggregate market value of the voting and non-voting equity held by
      non-affiliates computed by reference to the price at which common equity was
      sold, or the average bid and asked price of such common equity (i.e., does
      not
      include directors, executive officers or ten percent stockholders identified
      in
      Item 11 hereof) of the issuer as of October 4, 2007 was approximately
      $6,100,000, computed by referenced to the average of the high and low sale
      price
      on October 4, 2007 which was $3.05 and $3.05, respectively.




As
      of
      October 4, 2007, there were 14,000,000 shares of common stock
      outstanding.




Transitional
      Small Business Disclosure Format (check one) Yes o No x









**OmniReliant
      Holdings, Inc.**




**FORM
      10-KSB**




**For
      the Fiscal Year Ended June 30, 2007**







Part
                  I
              
              PageItem
                  1.
              Description
                  of Business.
              3Item
                  2.
              Description
                  of Property.
              10Item
                  3.
              Legal
                  Proceedings.
              10Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders.
              10Part
                  ll
              
              PageItem
                  5.
              Market
                  for Common Equity and Related Stockholder Matters.
              10Item
                  6.
              Management's
                  Discussion and Analysis or Plan of Operation.
              11Item
                  7.
              Financial
                  Statements
              F-1Item
                  8.
              Changes
                  In and Disagreements With Accountants on Accounting and Financial
                  Disclosure.
              14Item
                  8A.
              Controls
                  and Procedures.
              15Item
                  8B.
              Other
                  Information.
              16Part
                  lll
              
              PageItem
                  9.
              Directors,
                  Executive Officers, Promoters and Control Persons; Compliance with
                  Section
                  16(a)of
                  the Exchange Act.
              16Item
                  10.
              Executive
                  Compensation.
              18Item
                  11.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              19Item
                  12.
              Certain
                  Relationships and Related Transactions.
              20Item
                  13.
              Exhibits.
              22Item
                  14.
              Principal
                  Accountant Fees and Services.
              24Signatures.
              
              25





2




**PART
      I**





**FORWARD-LOOKING
      STATEMENTS:**





This
      Annual Report on Form 10-KSB (including the section regarding Management's
      Discussion and Analysis of Financial Condition and Results of Operations)
      contains forward-looking statements regarding our business, financial condition,
      results of operations and prospects. Words such as "expects," "anticipates,"
      "intends," "plans," "believes," "seeks," "estimates" and similar expressions
      or
      variations of such words are intended to identify forward-looking statements,
      but are not deemed to represent an all-inclusive means of identifying
      forward-looking statements as denoted in this Annual Report on Form 10-KSB.
      Additionally, statements concerning future matters are forward-looking
      statements.





Although
      forward-looking statements in this Annual Report on Form 10-KSB reflect the
      good
      faith judgment of our Management, such statements can only be based on facts
      and
      factors currently known by us. Consequently, forward-looking statements are
      inherently subject to risks and uncertainties and actual results and outcomes
      may differ materially from the results and outcomes discussed in or anticipated
      by the forward-looking statements. Factors that could cause or contribute to
      such differences in results and outcomes include, without limitation, those
      specifically addressed under the heading "Risks Related to Our Business" below,
      as well as those discussed elsewhere in this Annual Report on Form 10-KSB.
      Readers are urged not to place undue reliance on these forward-looking
      statements, which speak only as of the date of this Annual Report on Form
      10-KSB. We file reports with the Securities and Exchange Commission ("SEC").
      You
      can obtain any materials we file with the SEC at the SEC's Public Reference
      Room
      at 100 F Street, NE, Washington, DC 20549. You can obtain additional information
      about the operation of the Public Reference Room by calling the SEC at
      1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov)
      that contains reports, proxy and information statements, and other information
      regarding issuers that file electronically with the SEC, including
      us.





We
      undertake no obligation to revise or update any forward-looking statements
      in
      order to reflect any event or circumstance that may arise after the date of
      this
      Annual Report on Form 10-KSB. Readers are urged to carefully review and consider
      the various disclosures made throughout the entirety of this annual Report,
      which attempt to advise interested parties of the risks and factors that may
      affect our business, financial condition, results of operations and
      prospects.





**Item
      1. DESCRIPTION OF BUSINESS**





**Organizational
      History**





OmniReliant
      Holdings, Inc. fka Willowtree Advisor, Inc. (the “Company”) engages in the
      creation, design, distribution, and sale of affordable luxury products. The
      Company plans to make these products available to U.S. and international
      consumers through direct response infomercials, live shopping networks,
      ecommerce, direct mail and traditional retail channels.  The Company will
      first focus on bringing the Kathy Hilton “Private Beauty Spa” product line to
      market, after which the Company plans to develop other personalities and
      designer licenses. Ms. Hilton, who is the wife of Rick Hilton, the grandson
      of
      the Hilton Hotel founder, has agreed to appear in television segments and
      infomercials.





On
      November 22, 2006, the Company fka Willowtree Advisor, Inc. entered into a
      Securities Purchase Agreement (the “Common Stock Purchase Agreement”) with
      OmniReliant Corporation and Cynthia Allison, pursuant to which OmniReliant
      Corporation purchased 5,000,000 shares of the Company’s common stock from Ms.
      Allison. Also on November 22, 2006, the Company entered into an exchange
      agreement (the “Exchange Agreement”) pursuant to which the Company acquired one
      hundred percent (100%) of the equity of OmniReliant Corporation from, the
      stockholders of OmniReliant Corporation. Contemporaneously, the Company entered
      into a securities purchase agreement with an accredited investor for the sale
      of
      convertible preferred stock and warrants for an aggregate purchase price of
      $3,000,000 (the “Preferred Stock Purchase Agreement”).




The
      aforementioned transactions resulted in a change in control of the Company.
      As a
      result of the Exchange Agreement, (i) OmniReliant Corporation became a
      wholly-owned subsidiary of the Company and (ii) the Company succeeded to the
      business of OmniReliant Corporation as its sole business. As a result of the
      foregoing transactions, Willowtree changed its name to OmniReliant Holdings,
      Inc.




3




**Overview
      of Business**





OmniReliant
      engages in the creation, design, distribution, and sale of affordable luxury
      products. OmniReliant plans to make these products available to U.S. and
      international consumers through direct response infomercials, live shopping
      networks, ecommerce, direct mail and traditional retail channels.  
OmniReliant will first focus on bringing the Kathy Hilton “Private Beauty Spa”
product line to market, after which OmniReliant plans to develop other
      personalities and designer licenses. Ms. Hilton, who is the wife of Rick Hilton,
      the grandson of the Hilton Hotel founder, has agreed to appear in television
      segments and infomercials.





**Industry
      Overview**





The
      global market for anti-aging beauty care products is estimated to be worth
      approximately $50 billion dollars in 2006and is expected to hit $56 billion
      in
      2007, according to the www.CosmeticsDesign-Europe.com website.





Beauty
      care products are sold through direct response marketing such as infomercials,
      as well as on established home shopping television channels such as the Home
      Shopping Network (HSN) and QVC. Over the last several years, the trend for
      direct response marketing of beauty-related products has been to use celebrity
      spokespersons. Successfully launched brands include “Bare Essentials”, Victoria
      Principal’s “Principal Secrets Anti-Aging System”, and Susan Lucci’s “Youthful
      Essence”.





**Products**





The
      Kathy
      Hilton line of products is expected to include the following items:





·
            Skincare·
            Perfumes·
            Spa
                wellness





·
            Cosmetics·
            Fragrances
                and related products·
            Scented
                candles.





The
      retail prices for the Kathy Hilton line of products are expected to range from
      $15.00 to $295.00. **





OmniReliant’s
      first product, the “Kathy Hilton  Personal Beauty Spa Collection” is
      expected to be used as a lead-in item to a planned product line of essential
      skin care  items.   The  Kathy
      Hilton  Personal Beauty Spa Collection is a  collection
      of   innovative spa treatments for the
      skin featuring  an exclusive HOT-COLD TCT (Thermal
      Cosmetic Treatment)(R) formula developed by  the Transvital private beauty
      laboratories.  This HOT-COLD SPA (R) formula is designed to self-heat
      and self-cool rapidly before use.




OmniReliant
      has obtained from Guaber S.P.A., the parent company of Transvital, the exclusive
      right to market and distribute the HOT-COLD SPA (R) formula, under its own
      brand
      name. The exclusive rights are limited to the United States and Canada.
      OmniReliant has also obtained a non-exclusive right to market and distribute
      the
      Kathy Hilton Personal Beauty Spa Collection in other countries.





The
      Company is working on securing the rights to purchase additional
      Guaber/Transvital skincare and beauty products that will be branded under the
      Kathy Hilton name and sold throughout the world. These products are intended
      to
      be high-end products with only the best ingredients and proven
      results.





It
      is the
      Company’s intention to design, manufacture, market and distribute prestige
      fragrances and related products. The Company plans to engage contract packagers
      and professionals in the field. In the United States, our plan is to enter
      into
      agreements to distribute our products through a targeted group of department
      and
      specialty stores, such as Macy's, Foley's, Marshall Fields, Famous Barr, Belks,
      Elder Beerman, Carson Pirie Scott, and Filenes. In international markets, we
      plan to distribute our products through established prestige distribution
      channels.





4







*Salicylic
      Acid Product*





On
      June
      18, 2007, we entered into an Agreement for Acquisition of a Patent Application
      with Product & Technology Partners LLC (“Seller”). Pursuant to the
      Agreement, the Company acquired from Seller the rights to a patent-pending
      self-warming topical pharmaceutical product capable of delivering salicylic
      acid
      in a foam suitable for consumer use (the “Product”). In consideration for the
      Product, the Company agreed to pay Seller in the following manner:





a)
            Upon
                execution of the Agreement, the Company paid Seller (i) an aggregate
                of
                Twenty Five Thousand dollars ($25,000) and (ii) issued to the Seller
                Two
                Hundred Thousand (200,000) shares of the Company’s common stock .





b)
            Following
                the completion of due diligence (which shall be six months from the
                date
                of the Agreement), if the Company is satisfied with the Product and
                intends to offer Product for sale, the Company shall pay to Seller
                Twenty
                Five Thousand dollars ($25,000).





c)
            The
                Company shall also pay Seller installment payments of up to a maximum
                of
                Four Hundred Thousand Dollars ($400,000), payable over a period of
                4 years
                beginning six months from the date of the Agreement. If no revenues
                are
                generated from the sale of the Product, no installment payments shall
                be
                due hereunder.





**Marketing
      and Distribution**





OmniReliant
      plans to initially distribute its product lines via direct response television
      programming.





On
      October 13, 2006, OmniReliant has entered into a license agreement with KRH
      Licensing Company LLC, which is the owner of the Kathy Hilton Class III
      Cosmetics Trademark License (the “Kathy Hilton Trademark”). Pursuant to the
      License Agreement, OmniReliant has obtained the exclusive right to use the
      Kathy
      Hilton Trademark and to sell products bearing the Kathy Hilton Trademark. In
      addition, OmniReliant has obtained the personal services of Ms. Hilton in
      connection with the promotion and sale of products bearing the Kathy Hilton
      Trademark. In exchange, KRH Licensing will receive royalty payments in
      2007.





On
      October 19, 2007, our wholly-owned subsidiary OmniReliant Corp. (“ORC”) entered
      into and closed a share exchange agreement with ResponzeTV (the “Exchange
      Agreement”). Pursuant to the terms of the Exchange Agreement, ResponzeTV
      acquired all of the issued and outstanding shares of capital stock of KHL
      Holdings, Inc., a newly formed Florida corporation and wholly-owned subsidiary
      of ORC (“KHL”), in exchange for 9,500,000 ordinary shares of stock of
      ResponzeTV. On October 12, 2007, ORC entered into an exclusive sublicense
      agreement with KHL, pursuant to which ORC granted KHL the exclusive right and
      license to our rights to use the Kathy Hilton Trademark and to sell products
      bearing the Kathy Hilton Trademark exclusive of fragrance. The initial term
      of
      this sublicense agreement shall terminate on June 30, 2012. ORC shall have
      the
      option to renew this Agreement for an additional five year period. Kevin
      Harrington and Tim Harrington, who are directors of the Company, are officers
      and directors of ResponzeTV.





OmniReliant
      has also entered into a consulting agreement with Harrington Business
      Development LLC (“HBD”) pursuant to which HBD will oversee marketing of  
OmniReliant’s brands, including visual and audio productions. The principals of
      HBD, Kevin and Tim Harrington, are veterans of the infomercial industry and
      have
      previously launched successful products via infomercials. Pursuant to the
      consulting agreement with HBD, OmniReliant will pay HBD a fee of $15,000 per
      month for a term of six (6) months beginning on October 1, 2006. On April 1,
      2007, the Company verbally agreed to extend the consulting agreement for a
      term
      of three (3) months.





The
      Kathy
      Hilton Personal Beauty Spa Collection and Cosmetics are expected to be sold
      initially on live shopping networks. OmniReliant’s current operating plan
      includes an infomercial that is being planned to air in 2007. Kathy Hilton
      has
      agreed to personally appear in most of the live shopping network programming
      and
      all of the infomercial programming. In addition, Kathy Hilton has agreed to
      personally promote the brand by making personal appearances in various talk
      shows and industry related events.





The
      media
      exposure and subsequent branding which is expected to result from the planned
      marketing of OmniReliant’s products on live shopping networks and infomercials
      is expected to generate opportunities for retail distribution as well.
      OmniReliant plans to seek distribution arrangements with large retailers in
      the
      U.S. and abroad.





OmniReliant
      also expects that its products will be sold through web sites operated by the
      live shopping networks which agree to carry our products. In addition,
      OmniReliant plans to establish a proprietary website to sell its products at
      www.omnireliant.com. The information contained on OmniReliant's website is
      not a
      part of this Report, nor is it incorporated by reference into this
      Report.





OmniReliant
      will not directly manufacture any product, nor take large positions in
      inventory. Margins will vary depending on sales venue. Net profit margins for
      products sold on live shopping networks are estimated to be approximately 25%,
      while net profit margins for products sold in infomercials are estimated to
      be
      approximately 10%. In both cases, the margins are expected to increase as sales
      volume increases.




5




**Competition**





Other
      companies have had success selling beauty care products via direct response
      marketing as well as through established home shopping television
      channels.





Competition
      in the retailing industry is intense and may be expected to intensify. There
      are
      other, larger and well-established retailers with whom OmniReliant must compete.
      OmniReliant competes directly with several companies which generate sales from
      infomercials. OmniReliant also competes with a large number of consumer product
      companies and retailers which have substantially greater financial, marketing
      and other resources than OmniReliant, some of which have recently commenced,
      or
      indicated their intent to conduct, direct response marketing. OmniReliant also
      competes with companies that make imitations of OmniReliant's products at
      substantially lower prices. Products similar to OmniReliant's products may
      be
      sold in department stores, pharmacies, general merchandise stores and through
      magazines, newspapers, direct mail advertising and catalogs. It is management's
      opinion that all of its major competitors are better and longer established,
      better financed and with enhanced borrowing credit based on historical
      operations, and enjoy substantially higher revenues than OmniReliant does
      currently. As a new entrant into this marketing industry, OmniReliant relies
      on
      the skill, experience and innovative discernment of management in the hope
      that
      superior judgment will provide its only competitive advantage. OmniReliant's
      major competitors include Thane International, Inc.; Fitness Quest, Inc.;
      Telebrands Advertising Corporation; Tristar; Idea Village; Media Enterprises,
      Inc. and Guthy-Renker Corp. Other competitors in the direct response market
      include Avon Products, Inc. (NYSE: AVP), Nu Skin (NYSE: NUS), BeautiControl,
      Inc., Parlux, Bare Essentials, and Mary Kay Cosmetics.





**Investment
      in ResponseTV**





On
      October 19, 2007, we entered into a subscription agreement with ResponzeTV
      PLC
      (“ResponzeTV”) (the “Subscription Agreement”) pursuant to which we purchased
      8,500,000 ordinary shares of ResponzeTV and received warrants to purchase
      17,000,000 ordinary shares of ResponzeTV for an aggregate purchase price of
      US$5,100,000. The warrants are to be issued in the following manner: (i) a
      warrant to purchase 8,500,000 common shares with an exercise price of £37p, (ii)
      a
      warrant to purchase 4,250,000 common shares with an exercise price of £50p and
      (iii) 4,250,000 common shares with an exercise price of £100p. Each warrant
      shall have a term of five years from the date of issuance. Kevin Harrington
      and
      Tim Harrington, who are directors of the Company, are officers and directors
      of
      ResponzeTV.





**Government
      Regulation**





Various
      aspects of the Company's business are subject to regulation and ongoing review
      by a variety of federal, state, and local agencies, including the Federal Trade
      Commission, the United States Post Office, the Consumer Product Safety
      Commission, the Federal Communications Commission, Food and Drug Administration,
      various States' Attorneys General and other state and local consumer protection
      and health agencies. The statutes, rules and regulations applicable to the
      Company's operations, and to various products marketed by it, are numerous,
      complex and subject to change.





The
      Company will collect and remit sales tax in the states in which it has a
      physical presence. The Company is prepared to collect sales taxes for other
      states, if laws are passed requiring such collection. The Company does not
      believe that a change in the tax laws requiring the collecting of sales tax
      will
      have a material adverse effect on the Company's financial condition or results
      of operations.




**EMPLOYEES:**





As
      of
      June 30, 2007, we had 2 employees, both of whom are full-time. We consider
      our
      relations with our employees to be good.





**RISK
      FACTORS**





This
      investment has a high degree of risk. Before you invest you should carefully
      consider the risks and uncertainties described below and the other information
      in this prospectus. If any of the following risks actually occur, our business,
      operating results and financial condition could be harmed and the value of
      our
      stock could go down. This means you could lose all or a part of your
      investment.





**RISKS
      RELATED TO OUR BUSINESS:**




**WE
      ARE A DEVELOPMENT STAGE COMPANY AND WE HAVE A LIMITED OPERATING HISTORY UPON
      WHICH YOU CAN BASE AN INVESTMENT DECISION.**





We
      have a
      limited operating history upon which you can make an investment decision, or
      upon which we can accurately forecast future sales. You should, therefore,
      consider us subject to the business risks associated with a new business. The
      likelihood of our success must be considered in light of the expenses,
      difficulties and delays frequently encountered in connection with the formation
      and initial operations of a new business.




6





**TO
      DATE WE HAVE HAD SIGNIFICANT OPERATING LOSSES, AND AN ACCUMULATED DEFICIT AND
      HAVE HAD LIMITED REVENUES AND DO NOT EXPECT TO BE PROFITABLE FOR AT LEAST THE
      FORESEEABLE FUTURE, AND CANNOT PREDICT WHEN WE MIGHT BECOME PROFITABLE, IF
      EVER.**





We
      have
      been operating at a loss since our inception, and we expect to continue to
      incur
      substantial losses for the foreseeable future. Net loss for the year ended
      June
      30, 2007 was $(24,300,803) resulting in an accumulated deficit of $(24,300,803).
      We had revenue of $2,640 for the fiscal year ended June 30, 2007. Further,
      we
      may not be able to generate significant revenues in the future. In addition,
      we
      expect to incur substantial operating expenses in order to fund the expansion
      of
      our business. As a result, we expect to continue to experience substantial
      negative cash flow for at least the foreseeable future and cannot predict when,
      or even if, we might become profitable.





**OUR
      AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS
      A
      GOING CONCERN.**





In
      their
      report dated October 19, 2007, KBL LLP stated that our financial statements
      for
      the fiscal year ended June 30, 2007, were prepared assuming that we would
      continue as a going concern. Our ability to continue as a going concern is
      an
      issue raised as a result of our recurring losses from operations and our net
      capital deficiency. We continue to experience net operating losses. Our ability
      to continue as a going concern is subject to our ability to generate a profit.





**ADDITIONAL
      FINANCING IS NECESSARY FOR THE IMPLEMENTATION OF OUR GROWTH
      STRATEGY.**





We
      may require additional debt and/or equity financing to pursue our growth
      strategy. Given our limited operating history and existing losses, there can
      be
      no assurance that we will be successful in obtaining additional financing.
      Lack
      of additional funding could force us to curtail substantially our growth plans
      or cease our operations. Furthermore, the issuance by us of any additional
      securities pursuant to any future fundraising activities undertaken by us would
      dilute the ownership of existing shareholders and may reduce the price of our
      common stock.





Furthermore,
      debt financing, if available, will require payment of interest and may involve
      restrictive covenants that could impose limitations on our operating
      flexibility. Our failure to successfully obtain additional future funding may
      jeopardize our ability to continue our business and operations.





**WE
      MAY BE UNABLE TO MANAGE OUR GROWTH OR IMPLEMENT OUR EXPANSION
      STRATEGY.**





We
      may not be able to expand our product and service offerings, our client base
      and
      markets, or implement the other features of our business strategy at the rate
      or
      to the extent presently planned. Our projected growth will place a significant
      strain on our administrative, operational and financial resources. If we are
      unable to successfully manage our future growth, establish and continue to
      upgrade our operating and financial control systems, recruit and hire necessary
      personnel or effectively manage unexpected expansion difficulties, our financial
      condition and results of operations could be materially and adversely
      affected.








**FLUCTUATIONS
      IN OUR OPERATING RESULTS AND ANNOUNCEMENTS AND DEVELOPMENTS CONCERNING OUR
      BUSINESS AFFECT OUR STOCK PRICE.**




Our
      quarterly operating results, the number of stockholders desiring to sell their
      shares, changes in general economic conditions and the financial markets, the
      execution of new contracts and the completion of existing agreements and other
      developments affecting us, could cause the market price of our common stock
      to
      fluctuate substantially.







**OUR
      OFFICERS AND DIRECTORS ARE INVOLVED IN OTHER BUSINESSES WHICH MAY CAUSE THEM
      TO
      DEVOTE LESS TIME TO OUR BUSINESS.**





Our
      officers' and directors' involvement with other businesses may cause them to
      allocate their time and services between us and other entities. Consequently,
      they may give priority to other matters over our needs which may materially
      cause us to lose their services temporarily which could affect our operations
      and profitability.





**WE
      LACK SALES, MARKETING AND DISTRIBUTION CAPABILITIES AND DEPEND ON THIRD PARTIES
      TO MARKET OUR SERVICES.**





We
      have
      minimal personnel dedicated solely to sales and marketing of our services and
      therefore we must rely primarily upon third party distributors to market and
      sell our services. These third parties may not be able to market our product
      successfully or may not devote the time and resources to marketing our services
      that we require. We also rely upon third party carriers to distribute and
      deliver our services. As such, our deliveries are to a certain extent out of
      our
      control. If we choose to develop our own sales, marketing or distribution
      capabilities, we will need to build a marketing and sales force with technical
      expertise and with supporting distribution capabilities, which will require
      a
      substantial amount of management and financial resources that may not be
      available. If we or a third party are not able to adequately sell and distribute
      our product, our business will be materially harmed.




7





**OUR
      BUSINESS MAY BE AFFECTED BY FACTORS OUTSIDE OF OUR
      CONTROL.**





Our
      ability to increase sales, and to profitably distribute and sell our products
      and services, is subject to a number of risks, including changes in our business
      relationships with our principal distributors, competitive risks such as the
      entrance of additional competitors into our markets, pricing and technological
      competition, risks associated with the development and marketing of new products
      and services in order to remain competitive and risks associated with changing
      economic conditions and government regulation.





**OUR
      SUCCESS DEPENDS, IN PART, ON THE QUALITY AND SAFETY OF OUR
      PRODUCTS.**





Our
      success depends, in part, on the quality and safety of our products. If our
      products are found to be defective or unsafe, or if they otherwise fail to
      meet
      our customers’ standards, our relationship with our customers could suffer, our
      brand appeal could be diminished, and we could lose market share and/or become
      subject to liability claims, any of which could result in a material adverse
      effect on our business, results of operations and financial
      condition.





**OUR
      BUSINESS IS CONDUCTED WORLDWIDE PRIMARILY IN ONE CHANNEL, DIRECT
      SELLING** .





We
      plan
      to market our products primarily through home shopping television channels
      and
      infomercials. If consumers change their purchasing habits, such as by reducing
      purchases of beauty and related products through home shopping television
      channels and infomercials, this could reduce our sales and have a material
      adverse effect on our business, financial condition and results of
      operations.





**RISKS
      RELATING TO OUR CURRENT FINANCING ARRANGEMENT:**





**THERE
      ARE A LARGE NUMBER OF SHARES UNDERLYING OUR SERIES C CONVERTIBLE PREFERRED
      STOCK
      AND WARRANTS THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES
      MAY DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.**





On
      November 22, 2006, we entered into a Securities Purchase Agreement with Vicis
      Capital Master Fund pursuant to which Vicis purchased 3,000 shares of the
      Company’s series A 10% convertible preferred stock and 6,000,000 common stock
      purchase warrants. The Preferred Stock has a conversion price of $1.00 and
      is
      convertible into an aggregate of 3,000,000 shares of the Company’s common stock.
      The series A-1 warrants have an exercise price of $1.50, and the series A-2
      warrants have an exercise price of $3.00. **** The
      conversion price of the Preferred Stock and the exercise price of the Warrants
      are subject to adjustment in certain instances, including the issuance by the
      Company of securities with a lower conversion or exercise price. In addition,
      in
      connection with the Securities Purchase Agreement, the Company issued an
      aggregate of 900,000 common stock purchase warrants to Midtown Partners &
Co., LLC, which served as the Company’s placement agent. The warrants are
      exercisable at prices which are below the current market price of our common
      stock, as follows: one-third of the warrants issued to Midtown are exercisable
      at $1.00 per share, one-third are exercisable at $1.50 per share, and the
      remaining one-third are exercisable at $3.00 per share.





We
      entered into a Securities Purchase Agreement on May 25, 2007 with Dynamic
      Decisions Strategic Opportunities pursuant to which Dynamic Decisions purchased
      600 shares of the Company’s series A 10% convertible preferred stock (the
“Preferred Stock”) and 960,000 common stock purchase warrants. The Preferred
      Stock has a conversion price of $1.25 and is convertible into an aggregate
      of
      600,000 shares of the Company’s common stock. The series B-1 warrants have an
      exercise price of $1.87, and the series B-2 warrants have an exercise price
      of
      $3.75. **** The
      conversion price of the Preferred Stock and the exercise price of the Warrants
      are subject to adjustment in certain instances, including the issuance by the
      Company of securities with a lower conversion or exercise price. In addition,
      in
      connection with the Securities Purchase Agreement, the Company issued an
      aggregate of 144,000 common stock purchase warrants to Midtown Partners &
Co., LLC, which served as the Company’s placement agent. The warrants are
      exercisable at prices which are below the current market price of our common
      stock, as follows: one-third of the warrants issued to Midtown are exercisable
      at $1.25 per share, one-third are exercisable at $1.87 per share, and the
      remaining one-third are exercisable at $3.75 per share.




On
      October 18, 2007, we entered into securities purchase agreements (the “Purchase
      Agreements”) with Vicis Capital Master Fund (“Vicis”) and Dynamic Decisions
      Strategic Opportunities (“Dynamic Decisions”) pursuant to which Vicis and
      Dynamic Decisions purchased 6,000,000 and 400,000, shares of our series C
      convertible preferred stock (“Series C Preferred Stock”), respectively for an
      aggregate purchase price of $6,400,000. In connection with the purchase of
      the
      Series C Preferred Stock, Vicis and Dynamic Decisions received an aggregate
      amount of 16,000,000 and 1,066,668 common stock purchase warrants, respectively.
      Vicis and Dynamic Decisions received a Series C-1 warrant to purchase 8,000,000
      and 533,334 shares of common stock, respectively, at an exercise price of $1.50
      (the “C-1 Warrant”) as well as a Series C-2 warrant to purchase 8,000,000 and
      533,334 shares of common stock, respectively, at an exercise price of $2.00
      (the
“C-2 Warrant”). The C-1 Warrant shall be valid for five years from the date of
      issuance and the C-2 Warrant shall be valid for ten years from the date of
      issuance. The Series C Preferred Stock has a conversion price of $0.75 and
      is
      convertible into an aggregate amount of 8,000,000 and 533,334 shares of common
      stock, respectively. The Series C Preferred stock does not pay annual dividends
      but each holder of Series C Preferred Stock shall have the right to such number
      of votes equal to the number of shares of common stock that the Series C
      Preferred Stock shall be converted into.




8





Furthermore,
      pursuant to the terms of the Purchase Agreements, Vicis and Dynamic Decisions
      exchanged their 3,000 shares of series A preferred stock and 600 shares of
      series B preferred stock, respectively, for 3,285,354 and 624,210  shares
      of
      Series C Preferred Stock, respectively. In connection with the Purchase
      Agreements, Vicis and Dynamic Decisions received a Series C-1 Warrant to
      purchase 4,380,472 and 832,280  shares
      of
      common stock, respectively and a series C-2 Warrant to purchase 4,380,472 and
      832,280  and
      shares of common stock, respectively. The Series C-1 Warrant and the Series
      C-2
      Warrant shall have an exercise price of $1.50 and $2.00, respectively, and
      shall
      be valid for five year and ten years from the date of issuance, respectively.





Midtown
      Partners & Co., LLC, which served as the Company’s placement agent in
      connection with the Purchase Agreements, received aggregate placement agent
      fees
      of approximately $340,000, as well as
      the following common stock purchase warrants: (a) series BD-7 common stock
      purchase warrants entitling Midtown Partners to purchase 853,333 shares of
      the
      Company's common stock at an exercise price of seventy-five cents ($0.75) per
      share, and (b) series BD-8 common stock purchase warrants entitling Midtown
      Partners to purchase 853,333 shares of the Company's common stock at an exercise
      price of one dollar and fifty cents ($1.50) per share and (c) series BD-9 common
      stock purchase warrants entitling Midtown Partners to purchase 853,333 shares
      of
      the Company's common stock at an exercise price of two dollars ($2.00) per
      share. The Series BD warrants have a term of ten years. Midtown
      Partners & Co., LLC is a FINRA registered broker-dealer.





The
      sale
      of these shares underlying the Preferred Stock and Warrants may adversely affect
      the market price of our common stock.





**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 STOCKHOLDER 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. If we fail to remain current on our
      reporting requirements, we could be removed from 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.





**OUR
      DIRECTORS AND EXECUTIVE OFFICERS BENEFICIALLY OWN APPROXIMATELY 60% OF OUR
      COMMON STOCK; THEIR INTERESTS COULD CONFLICT WITH YOURS; SIGNIFICANT SALES
      OF
      STOCK HELD BY THEM COULD HAVE A NEGATIVE EFFECT ON OUR STOCK PRICE; STOCKHOLDERS
      MAY BE UNABLE TO EXERCISE CONTROL.**





As
      of
      June 30, 2007, our executive officers, directors and affiliated persons
      beneficially owned approximately 64.2% of our common stock. As a result, our
      executive officers, directors and affiliated persons will have significant
      influence to:





·
            elect
                or defeat the election of our directors;·
            amend
                or prevent amendment of our articles of incorporation or
                bylaws;·
            effect
                or prevent a merger, sale of assets or other corporate transaction;
                and·
            control
                the outcome of any other matter submitted to the stockholders for
                vote.




As
      a
      result of their ownership and positions, our directors and executive officers
      collectively are able to significantly influence all matters requiring
      stockholder approval, including the election of directors and approval of
      significant corporate transactions. In addition, sales of significant amounts
      of
      shares held by our directors and executive officers, or the prospect of these
      sales, could adversely affect the market price of our common stock. Management's
      stock ownership may discourage a potential acquirer from making a tender offer
      or otherwise attempting to obtain control of us, which in turn could reduce
      our
      stock price or prevent our stockholders from realizing a premium over our stock
      price.





**BECAUSE
      WE MAY BE SUBJECT TO THE “PENNY STOCK” RULES, YOU MAY HAVE DIFFICULTY IN SELLING
      OUR COMMON STOCK.**





If
      our
      stock price is less than $5.00 per share, our stock may be subject to the SEC’s
      penny stock rules, which impose additional sales practice requirements and
      restrictions on broker-dealers that sell our stock to persons other than
      established customers and institutional accredited investors. The application
      of
      these rules may affect the ability of broker-dealers to sell our common stock
      and may affect your ability to sell any common stock you may own.




9




According
      to the SEC, the market for penny stocks has suffered in recent years from
      patterns of fraud and abuse. Such patterns include:




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




•
            Manipulation
                of prices through prearranged matching of purchases and sales and
                false
                and misleading press releases;





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




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




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




As
      an
      issuer of “penny stock” the protection provided by the federal securities laws
      relating to forward looking statements does not apply to us.





Although
      the federal securities law provide a safe harbor for forward-looking statements
      made by a public company that files reports under the federal securities laws,
      this safe harbor is not available to issuers of penny stocks. As a result,
      if we
      are a penny stock we will not have the benefit of this safe harbor protection
      in
      the event of any claim that the material provided by us contained a material
      misstatement of fact or was misleading in any material respect because of our
      failure to include any statements necessary to make the statements not
      misleading.





**FAILURE
      TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE WITH SECTION
      404 OF THE SARBANES-OXLEY ACT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
      BUSINESS AND OPERATING RESULTS AND STOCKHOLDERS COULD LOSE CONFIDENCE IN OUR
      FINANCIAL REPORTING.**





Effective
      internal controls are necessary for us to provide reliable financial reports
      and
      effectively prevent fraud. If we cannot provide reliable financial reports
      or
      prevent fraud, our operating results could be harmed. We may be required in
      the
      future to document and test our internal control procedures in order to satisfy
      the requirements of Section 404 of the Sarbanes-Oxley Act, which requires
      increased control over financial reporting requirements, including annual
      management assessments of the effectiveness of such internal controls and a
      report by our independent certified public accounting firm addressing these
      assessments. Failure to achieve and maintain an effective internal control
      environment, regardless of whether we are required to maintain such controls
      could also cause investors to lose confidence in our reported financial
      information, which could have a material adverse effect on our stock
      price.




**Item
      2. DESCRIPTION OF PROPERTY:**





OmniReliant’s
      principal offices are located at 4218 West Linebaugh Ave., Tampa, FL 33624
      and
      are provided at no cost to the Company by one of our officers. It is anticipated
      that the Company will lease office space in the near future however no current
      lease has been negotiated.





**Item
      3. LEGAL PROCEEDINGS**





We
      are
      not a party to any pending legal proceeding, nor is its property the subject
      of
      a pending legal proceeding, that is not in the ordinary course of business
      or
      otherwise material to the financial condition of our business.





**Item
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





**None**




**PART
      II**





**Item
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**





Shares
      of
      the Company’s common stock are quoted on the Over the Counter Bulletin Board
      ("OTCBB") under the symbol ORHI. Our shares were listed for trading in July,
      2006. The following table sets forth, since July, 2006, the range of high and
      low intraday closing bid information per share of our common stock as quoted
      on
      the Over The Counter Bulletin Board.


Quarter
                  Ended
              
              High
                  ($)
              
              Low
                  ($)September
                  30, 2007
              
              
              3.40
              
              
              2.10June
                  30, 2007
              
              
              3.60
              
              
              2.50March
                  31, 2007
              
              
              3.875
              
              
              2.50December
                  31, 2006
              
              
              3.00
              
              
              0.10September
                  30, 2006
              
              
              0.10
              
              
              0.10


10





**Holders:**





As
      of
      June 30, 2007, we had approximately 12 record holders of our common stock.
      The
      number of record holders was determined from the records of our transfer agent
      and does not include beneficial owners of common stock whose shares are held
      in
      the names of various security brokers, dealers, and registered clearing
      agencies. The transfer agent of our common stock is Register and Transfer
      Company.





**Dividend
      Policy**





The
      Company has not paid or declared any dividends on its common stock and does
      not
      anticipate paying cash dividends in the foreseeable future.





The
      Series A Preferred Stock pays an annual dividend of 10% which is payable
      quarterly, at the option of OmniReliant, either in cash or in shares of
      registered common stock at a 10% discount to the Company’s stock price. On
      October 19, 2007, we exchanged all of the outstanding shares of Series A
      Preferred Stock outstanding for 3,285,354 shares of Series C Preferred
      Stock.





The
      Series B Preferred Stock pays an annual dividend of 10% which is payable
      quarterly, at the option of OmniReliant, either in cash or in shares of
      registered common stock at a 10% discount to the Company’s stock price. On
      October 19, 2007, we exchanged all of the outstanding shares of Series B
      Preferred Stock outstanding for 624,210 shares of Series C Preferred
      Stock.





The
      Series C Preferred Stock does not pay an annual dividend.




***Equity
      Compensation Plan Information***




The
      following table summarizes the equity compensation plans under which our
      securities may be issued as of June 30, 2007.




*Plan
                Category*
            
            Number
                of securities to be issued upon exercise of outstanding optionsand
                warrants
            
            Weighted-average
                exercise price of outstanding optionsand
                warrants
            
            Number
                of securities remaining available for future issuance under
                equitycompensation plansEquity
                compensation plans approved by security holders
            
            
            0
            
            
            0
            
            
            0Equity
                compensation plan not approved by security holders
            
            
            0
            
            
            0
            
            
            0











**ITEM
      6.** **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
      OPERATION**





Some
      of the information in this Form 10-KSB contains forward-looking statements
      that
      involve substantial risks and uncertainties. You can identify these statements
      by forward-looking words such as "may," "will," "expect," "anticipate,"
      "believe," "estimate" and "continue," or similar words. You should read
      statements that contain these words carefully because they:





·
            discuss
                our future expectations;·
            contain
                projections of our future results of operations or of our financial
                condition; and·
            state
                other "forward-looking"
                information.




We
      believe it is important to communicate our expectations. However, there may
      be
      events in the future that we are not able to accurately predict or over which
      we
      have no control. Our actual results and the timing of certain events could
      differ materially from those anticipated in these forward-looking statements
      as
      a result of certain factors, including those set forth under "Risk Factors,"
      "Business" and elsewhere in this Form 10-KSB. See "Risk Factors."




**Reverse
      Acquisition**




11





OmniReliant
      Corporation was incorporated on August 21, 2006 under the laws of the State
      of
      Florida. On November 22, 2006, Willowtree Advisor, Inc., an entity which was
      incorporated on June 16, 2004 under the laws of the State of Nevada, entered
      into an exchange agreement with the stockholders of OmniReliant Corporation
      (the
“Exchange Transaction”).





As
      a result of the Exchange Transaction, OmniReliant Corporation became a
      wholly-owned subsidiary of Willowtree Advisor, Inc. and succeeded to the
      business of OmniReliant Corporation as its sole business. The Exchange
      Transaction is deemed to be a reverse acquisition for accounting purposes.
      As a
      result, in accordance with the Accounting and Financial Reporting
      Interpretations and Guidance provided by the staff of the U.S. Securities and
      Exchange Commission, Willowtree Advisor, Inc. (the legal acquirer) is considered
      the accounting acquiree and OmniReliant Corporation (the legal acquiree) is
      considered the accounting acquirer. The discussions below, and the consolidated
      financial statements attached hereto, will in substance be those of OmniReliant
      Corporation, with the assets and liabilities, and revenues and expenses, of
      Willowtree Advisor, Inc. being included effective from the date of consummation
      of the Exchange Transaction.





**Plan
      of Operation - Development Stage Company**





The
      Company a development stage company with limited revenues and limited historical
      information upon which to base an evaluation of its performance.





The
      Company engages in the creation, design, distribution, and sale of affordable
      luxury products. The Company plans to make these products available to U.S.
      and
      international consumers through direct response infomercials, live shopping
      networks, ecommerce, direct mail and traditional retail channels.   The
      Company will first focus on bringing the Kathy Hilton fragrance product line
      to
      market, after which OmniReliant plans to develop other personalities and
      designer licenses. Ms. Hilton, who is the wife of Rick Hilton, the grandson
      of
      the Hilton Hotel founder, has agreed to appear in television segments and
      infomercials. We have entered into a license agreement with KRH Licensing
      Company, LLC, an affiliate of Rick and Kathy Hilton.





It
      is the
      Company’s intention to design, manufacture, market and distribute prestige
      fragrances and related products. In addition, the Company has an agreement
      to
      market and distribute hair straightening irons. The Company plans to engage
      contract packagers and professionals in the field. In the United States, our
      plan is to enter into agreements to distribute our products through a targeted
      group of department and specialty stores, such as Macy's, Foley's, Marshall
      Fields, Famous Barr, Belks, Elder Beerman, Carson Pirie Scott, and Filenes.
      In
      international markets, we plan to distribute our products through established
      prestige distribution channels. We
      hope to sell products under private label that have already reached its market
      entry point.





As
      a development stage company, we may not be successful in implementing our plan
      to manufacture,
      market and distribute prestige fragrances and related products. Until our products are successfully manufactured and marketed on a live shopping
      network or via infomercials, we will not generate significant revenues and
      may
      not be successful. If we can not generate sufficient revenues to continue
      operations, we will be forced to suspend or cease operations, and may forfeit
      our rights under license agreements.




We
      do not expect to make any significant purchases of equipment nor do we expect
      a
      significant change in the number of our employees.





Our
      officers and directors will handle our administrative duties with the help
      of a
      consultant, TotalCFO, LLC.





We
      cannot guarantee that we will be successful in our business operations. Our
      business is subject to risks inherent in the establishment of a new business
      enterprise.





**Results
      of Operations**





The
      following discussion of the financial condition and results of operations should
      be read in conjunction with the financial statements included herewith. This
      discussion should not be construed to imply that the results discussed herein
      will necessarily continue into the future, or that any conclusion reached herein
      will necessarily be indicative of actual operating results in the
      future.




***For
      the period from August 21, 2006 (inception) to fiscal year ended June 30,
      2007***





***Net
      Revenues*** *.* We had revenues
      for ****** the
      period from August 21, 2006 (inception) to June 30, 2007 of $2,640. If we are
      unable to implement our plan to manufacture, market and distribute our
      products, our revenues will not significantly increase during the upcoming
      fiscal year.





***Cost
      of Sales*** *.* Costs
      of
      Goods Sold for the period from August 21, 2006 (inception) to June 30, 2007
      were
      $1,320. If we are successful in implementing our plan to increase
      manufacturing and distribution of our products, our cost of goods sold will
      significantly increase during the upcoming fiscal year.





***Selling,
      General and Administrative Expense*** *s.* Our
      general and administrative expense consisted of accounting and professional
      fees, stock based compensation, and other general expenses. Our g eneral
      and administrative expenses for the period from August 21, 2006 (inception)
      to
      June 30, 2007 were $3,911,681 .
      Of the $3,911,681,
      $2,486,401 was attributed to stock based compensation issued to a consultant
      of
      the Company.




12




***Net
      Loss Available to Common Shareholders***





Net
      Loss available to common shareholders for the
      period from August 21, 2006 (inception) to June 30, 2007 equaled $28,095,271.





Net
      Loss
      available to common shareholders includes a deemed dividend to preferred
      shareholders of $3,600,000. Such deemed dividend is equal to the intrinsic
      value
      of the beneficial conversion features of the Series A Convertible Preferred
      Stock, Series B Convertible Preferred Stock, and warrants issued during the
      fiscal year ended June 30, 2007. Such deemed dividend does not relate to a
      cash
      dividend.





The
      Net
      Loss available to common shareholders also reflects an expense of $20,157,499,
      which relates to the change in fair value of the embedded conversion features
      of
      the Series A Convertible Preferred Stock and Series B Convertible Preferred
      Stock, and changes in the fair value of related warrants which have been
      recorded as liabilities.





**Liquidity
      and Capital Resources**





Cash
      and cash equivalents were $711,484 as of June 30, 2007.





The
      Company has suffered recurring losses while devoting substantially all of its
      efforts to raising capital, identifying and pursuing businesses opportunities.
      Moreover, the Company's total liabilities exceed its total assets and the
      Company's liquidity is substantially dependent on raising capital.





Currently
      the Company does not generate revenues from its operations, and the Company
      will
      require additional cash to develop its business plan and to pay ongoing
      operating expenses, including licensing fees.


These
        factors raise substantial doubt about the Company's ability to continue as
        a
        going concern. The accompanying consolidated financial statements have been
        prepared on a going concern basis, which contemplates continuing operations,
        realization of assets and liquidation of liabilities in the ordinary course
        of
        business. The Company's ability to continue as a going concern is dependent
        upon
        its ability to raise sufficient capital to implement a successful business
        plan
        and to generate profits sufficient to become financially
        viable.




To
      the extent that it becomes necessary to raise additional cash in the future
      as
      our current cash and working capital resources are depleted, we will seek to
      raise it through the public or private sale of debt or equity securities, the
      procurement of advances on contracts or licenses, funding from joint-venture
      or
      strategic partners, debt financing or short-term loans, or a combination of
      the
      foregoing. We also may seek to satisfy indebtedness without any cash outlay
      through the private issuance of debt or equity securities.





We
      have no assurance that future financings will be available to us on acceptable
      terms. If financing is not available to us on acceptable terms, we may be unable
      to continue our operations.





**Critical
      Accounting Policies**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our financial statements, which have been prepared in accordance
      with
      accounting principles generally accepted in the United States of America. The
      preparation of these consolidated financial statements requires us to make
      estimates and judgments that affect the reported amounts of assets, liabilities,
      revenues and expenses, and related disclosures of contingent assets and
      liabilities. For a description of those estimates, see Note 3, Summary of
      Significant Accounting Policies, contained in the explanatory notes to our
      audited financial statements for the period from August 21, 2006 (inception)
      to
      June 30, 2007 attached to this Form 10-KSB. On an on-going basis, we evaluate
      our estimates, including those related to reserves, deferred tax assets and
      valuation allowance, impairment of long-lived assets, fair value of equity
      instruments issued to consultants for services and estimates of costs to
      complete contracts. We base our estimates on historical experience and on
      various other assumptions that we believe to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying value of assets and liabilities that are not readily apparent
      from
      other sources. Actual results may differ from these estimates under different
      assumptions or conditions; however, we believe that our estimates, including
      those for the above-described items, are reasonable.





**Recent
      Accounting Pronouncements**





In
      June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
      in
      -Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48"), which
      clarifies the accounting for uncertainty in income taxes. FIN 48 prescribes
      a
      recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. The Interpretation requires that the Company recognize in the
      financial statements the impact of tax position, if that position is more likely
      than not of being sustained on audit, based on the technical merits of the
      position. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties, accounting in interim periods and disclosure. The
      provisions of FIN 48 are effective for fiscal years beginning after December
      15,
      2006 with the cumulative effect of the change in accounting principle recorded
      as an adjustment to beginning retained earnings. The adoption of this statement
      is not expected to have a material impact on the Company's consolidated
      financial position or results of operations.




13




In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
      standard defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. This statement is effective for financial statements issued
      for fiscal years beginning after November 15, 2007. Earlier application is
      encouraged. The adoption of this accounting pronouncement is not expected to
      have a material effect on our consolidated financial statements.





In
      September 2006, the Securities and Exchange Commission issued SAB No. 108
      "Considering the Effects of Prior Year Misstatements When Quantifying
      Misstatements in Current Year Financial Statements", which provides interpretive
      guidance on how the effects of the carryover or reversal of prior year
      misstatements should be considered in quantifying a current year misstatement.
      The guidance is applicable beginning fiscal 2008. The Company does not believe
      SAB No. 108 will have a material impact on the consolidated financial
      statements.








**Accounting
      for Stock-Based Compensation**





As
      of June 30, 2007, the Company had not yet created a stock incentive plan which
      authorizes the issuance of options to purchase common stock. Prior to January
      1,
      2006, the Company accounted for Stock Options and Stock Based Compensation
      under
      the recognition and measurement provisions of APB Opinion No. 25, “Accounting
      for Stock Issued to Employees”, and related Interpretations, as permitted by
      FASB Statement No. 123, “Accounting for Stock-Based Compensation”. Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      SFAS No. 123(R), Share-Based Payment, using the modified-prospective-transition
      method. Under that transition method, compensation cost for all share-based
      payments granted prior to, but not yet vested as of January 1, 2006 are based
      on
      (a) the grant date fair value estimated in accordance with the original
      provisions of SFAS No. 123, and (b) compensation cost for all share-based
      payments granted subsequent to January 1, 2006 are based on the grant-date
      fair
      value estimated in accordance with the provisions of SFAS No.123(R). Results
      for
      prior periods have not been restated.





The
      adoption of SFAS No.123(R) on January 1, 2006 did not have any effect on the
      Company's net income and earning per share for the year ended June 30, 2007
      since no options were granted.





**Off
      Balance Sheet Arrangements**





None.





**ITEM
      7. FINANCIAL STATEMENTS.**





The
      financial statements begin on Page F-1.





**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.**





On
      December 15, 2006, the Registrant notified Williams & Webster, P.S.
      ("Williams & Webster") that it was dismissing Williams & Webster as its
      certifying accountant, effective immediately. The decision to dismiss the
      accountants was recommended and approved by the Registrant's Board of
      Directors.





During
      the two fiscal years ended June 30, 2006 and 2005, and any subsequent period
      through December 15, 2006, (i) there were no disagreements between Registrant
      and Williams & Webster on any matter of accounting principles or practices,
      financial statement disclosure or auditing scope or procedure which, if not
      resolved to the satisfaction of Williams & Webster would have caused
      Williams Webster to make reference to the matter in its reports on Registrant's
      financial statements, and (ii) except for Williams & Webster’s report on
      Registrant's financial statements for the years ended June 30, 2006 and 2005
      which included an explanatory paragraph wherein they expressed substantial
      doubt
      about Registrant's ability to continue as a going concern, Williams &
Webster's reports on Registrant's financial statements did not contain an
      adverse opinion or disclaimer of opinion, and was not modified as to
      uncertainty, audit scope or accounting principles. During the two fiscal years
      ended June 30, 2006 and 2005 and through December 15, 2006, there were no
      reportable events as the term described in Item 304(a)(1)(iv) of Regulation
      S-B.





On
      December 15, 2006, Registrant engaged the firm of Wheeler, Herman, Hopkins
&
Lagor, P.A., now known as Herman, Lagor, Hopkins & Meeks, P.A., to serve as
      its independent registered public accountants for the fiscal year ending June
      30, 2007.





During
      the two fiscal years ended June 30, 2006 and 2005, and through December 15,
      2006, the Company has not consulted with Herman, Lagor, Hopkins &
Meeks, P.A. regarding either:




14





1.
      The
      application of accounting principles to any specific transaction, either
      completed or proposed, or the type of audit opinion that might be rendered
      on
      Registrants' financial statements, and neither a written report was provided
      to
      Herman, Lagor, Hopkins & Meeks, P.A. nor oral advice was provided that
      Herman, Lagor, Hopkins & Meeks, P.A. concluded was an important factor
      considered by Registrant in reaching a decision as to the accounting, auditing
      or financial reporting issue; or





2.
      Any
      matter that was either subject of disagreement or event, as defined in Item
      304(a)(1)(iv) of Regulation S-B and the related instruction to Item 304 of
      Regulation S-B, or a reportable event, as that term is explained in Item
      304(a)(1)(iv) of Regulation S-B.





On
      December 15, 2006, the Company provided Williams & Webster with a copy of
      the disclosures and has requested that Williams & Webster furnish it with a
      letter addressed to the Securities and Exchange Commission stating whether
      it
      agrees with the above statements. Such letter is filed herewith as Exhibit
      16.1
      and incorporated herein by reference.





On
      July
      20, 2007, Herman, Lagor, Hopkins & Meeks, P.A. (“HLHM”) resigned as the
      independent auditors of OmniReliant Holdings, Inc. (the "Company") and its
      subsidiaries.





Since
      HLHM did not issue a report on the Company's financial statements for the fiscal
      years ended June 30, 2006 and 2005 or for any other relevant period, no
      report of HLHM on the financial statements of the Company for either of the
      past
      two years contained an adverse opinion or disclaimer of opinion, and were
      not qualified or modified as to uncertainty, audit scope or accounting
      principles.





From
      the
      date of HLHM’s engagement, December 15, 2006 through the date of their
      resignation, July 20, 2007: (i) there have been no disagreements with HLHM
      on
      any matter of accounting principles or practices, financial statement disclosure
      or auditing scope or procedure, which disagreements, if not resolved to the
      satisfaction of HLHM, would have caused it to make reference to the subject
      matter of the disagreement in connection with its reports and (ii) HLHM did
      not
      advise the Company of any of the events requiring reporting in this Current
      Report on Form 8-K under Item 304(a)(1)(iv)(B) of Regulation S-B.




The
      Company provided to HLHM the disclosure contained in this Form 8-K and requested
      HLHM to furnish a letter addressed to the Commission stating whether it agrees
      with the statements made by the Company herein and, if not, stating the respects
      in which it does not agree. A letter from HLHM is attached as Exhibit 16.2
      and
      incorporated herein by reference.




On
      July
      20, 2007, the Board of Directors approved the Company's engagement of KBL,
      LLP
      ("KBL") as independent auditors for the Company and its subsidiary. The Company
      engaged KBL on July 20, 2007.




Neither
      the Company nor anyone on its behalf consulted KBL regarding (i) the application
      of accounting principles to a specific completed or contemplated transaction,
      (ii) the type of audit opinion that might be rendered on the Company's financial
      statements, or (iii) any matter that was the subject of a disagreement or event
      identified in response to Item 304(a)(1)(iv) of Regulation S-B (there being
      none).





**ITEM
      8A - CONTROLS AND PROCEDURES**





(a)
      Evaluation of disclosure controls and procedures.





Our
      management, with the participation of our chief executive officer and chief
      financial officer, evaluated the effectiveness of our disclosure controls and
      procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934
      as
      of June 30, 2007. In designing and evaluating the disclosure controls and
      procedures, management recognizes that any controls and procedures, no matter
      how well designed and operated, can provide only reasonable assurance of
      achieving the desired control objectives. In addition, the design of disclosure
      controls and procedures must reflect the fact that there are resource
      constraints and that management is required to apply its judgment in evaluating
      the benefits of possible controls and procedures relative to their costs.





Based
      on our evaluation, our chief executive officer and chief financial officer
      concluded that our disclosure controls and procedures are designed at a
      reasonable assurance level and are effective to provide reasonable assurance
      that information we are required to disclose in reports that we file or submit
      under the Exchange Act is recorded, processed, summarized and reported within
      the time periods specified in Securities and Exchange Commission rules and
      forms, and that such information is accumulated and communicated to our
      management, including our chief executive officer and chief financial officer,
      as appropriate, to allow timely decisions regarding required disclosure.





(b)
      Changes in internal control over financial reporting.





We regularly
      review our system of internal control over financial reporting and make changes
      to our processes and systems to improve controls and increase efficiency, while
      ensuring that we maintain an effective internal control environment. Changes
      may
      include such activities as implementing new, more efficient systems,
      consolidating activities, and migrating processes.




15




There
      were no changes in our internal control over financial reporting that occurred
      during the period covered by this Annual Report on Form 10-KSB that have
      materially affected, or are reasonably likely to materially affect, our internal
      control over financial reporting.





**ITEM
      8B - Other Information**





None .





**PART
      III**





**Item
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      16(a) OF THE EXCHANGE ACT**





The
      following table sets forth certain information with respect to our directors
      and
      executive officers.





Below
      are
      the names and certain information regarding the Company's executive officers,
      directors and director nominees. Officers are elected annually by the Board
      of
      Directors.




Name
            Age
            
            PositionChristopher
                D. Phillips
            35
            
            Chief
                Executive Officer, Chief Financial Officer, Secretary, Treasurer,
                DirectorPaul
                Morrison
            40
            
            President,
                Chief Operating OfficerLucien
                Lallouz
            62
            
            ChairmanRichard
                Diamond
            44
            
            DirectorTim
                Harrington
            41
            
            DirectorKevin
                Harrington
            51
            
            Director





**Background
      of Executive Officers and Directors**





**Paul
      Morrison** .
      On
      November 22, 2006 Mr. Morrison was elected Chief Operating Officer, President
      and Assistant Secretary of the Company. Mr. Morrison has served as the
      President, Chief Operating Officer and Assistant Secretary of OmniReliant
      Corporation since October 31, 2006. From October 2005 until October 2006, Mr.
      Morrison was the COO of WG Products, a cosmetic company, where he directed
      all
      facets of operations including production, customer service, planning,
      scheduling, maintenance, warehousing, distribution, purchasing, sales, and
      strategic initiatives. From 2001 through 2005 he managed various operations
      at
      Wyeth Pharmaceuticals. Mr. Morrison started his career working for Calvin Klein
      Cosmetics, and has accumulated sixteen years of experience serving in cosmetic
      and pharmaceutical operations management roles for Fortune 100 companies. He
      received a Bachelor’s of Science degree in Business Management from the Rutgers
      University and an Honorable discharge from the United States Air
      Force.




**Christopher
      D. Phillips** .
      On
      November 22, 2006 Mr. Phillips was named as a Director and elected Chief
      Executive Officer, Chief Financial Officer, Secretary and Treasurer of the
      Company. Mr. Phillips has served as the Chief Executive Officer of OmniReliant
      Corporation since October 31, 2006. He has also served as its Chief Financial
      Officer since October 13, 2006. From its inception in August 2006 till October
      31, 2006 Mr. Phillips held the position of President of OmniReliant Corporation.
      Mr. Phillips also currently is the Secretary and Treasurer of OmniReliant
      Corporation positions he has held since its inception in August 2006. Since
      October 2004, Chris Phillips has been the President and CEO of Apogee Financial
      Investments, Inc. a merchant bank which owns 100% of Midtown Partners & Co.,
      LLC, a FINRA licensed broker-dealer.   Mr. Phillips holds a Bachelors
      of Science Degree in Accounting and Finance and a Masters of Accountancy
      with a concentration in Tax from the University of Florida. Mr. Phillips is
      a
      Florida licensed Certified Public Accountant. ****





Mr.
      Phillips will be working for the Company on a part-time basis.





**Lucien
      Lallouz** .
      On
      November 30, 2006 Mr. Lallouz was named as a Director of the Company and was
      subsequently named as its Chairman. Mr. Lallouz has served as a Director of
      OmniReliant Corporation since October 13, 2006. Since April 2004, Mr. Lallouz
      has worked as a business development consultant to Parlux Fragrances, Inc.
      (NASDAQ:PARL) From May, 2003 to May 2005, Lucien was President and Chief
      Executive Officer of Taylor Madison, Corp., which has since changed its name
      to
      Telzuit Medical Technologies, Inc. (TZMT.OB) Mr. Lallouz had previously served
      as Taylor Madison’s Senior Vice President since June 1999. From June 2001 to
      April 2003, Mr. Lallouz was Senior Vice President of Business Development for
      ECOMV, (NASDAQ:ECMV), the parent Company of Perfumania Retail
      Stores.





**Richard
      Diamond** .
      On
      November 30, 2006 Mr. Diamond was named as a Director of the Company. Mr.
      Diamond has served as a Director of OmniReliant Corporation since its inception
      in August 2006. Since October 2004, Mr. Diamond has served as the Senior Vice
      President of Apogee Financial Investments, Inc. (“Apogee”) a private merchant
      bank incorporated in Florida. His areas of responsibility include
      administration, due diligence, document preparation and review, and assisting
      clients with corporate filings and compliance. Apogee owns 100% of Midtown
      Partners & Co., LLC, a FINRA licensed broker-dealer. From April 2000 until
      December 2005, Mr. Diamond served as Managing Member and Vice President of
      Apogee Business Consultants, LLC, a Nevada limited liability corporation
      specializing in reverse mergers and acquisitions. From October 2001 until
      December 2005, Mr. Diamond served as founder, President and sole director of
      RJ
      Diamond Consulting, Inc., a privately owned Florida corporation specializing
      in
      financial and public company consulting. From July 2003 until December 2003,
      Mr.
      Diamond served as a Director of Sabre Marketing, Inc. a private Florida
      corporation. From August 2001 until August 2002, Mr. Diamond served as the
      sole
      officer and director of Conus Holdings, Inc., a publicly reporting Nevada shell
      corporation.




16





**Tim
      Harrington** .
      On
      November 30, 2006 Mr. Harrington was named as a Director of the Company. Mr.
      Harrington has served as a Director of OmniReliant Corporation since October
      13,
      2006. Since October 2004, Tim has been President and a Managing Member of
      Reliant International Media, LLC, a Florida limited liability corporation,
      where
      he oversees the day-to-day operations, media, legal, product development and
      financial concerns. Since January 2007, Tim has been Chief Operating Officer
      of
      ResponzeTV, PLC a Hong Kong based public company that trades on the AIM exchange
      (“RETV.L”) From 1998 until August 2004 Tim held the position of President of
      Reliant Interactive Media Corp. (“RIMC”) a publicly traded Nevada corporation.
      In 1998 Tim co-founded RIMC with his brother Kevin Harrington. From May 2002
      until August 2004 Tim held the position of Vice President of Thane International
      USA.




**Kevin
      Harrington** .
      On
      November 30, 2006 Mr. Harrington was named as a Director of the Company. Mr.
      Harrington has served as a Director of OmniReliant Corporation since October
      13,
      2006. Since October 2004, Kevin has been Chairman, CEO and a Managing Member
      of
      Reliant International Media, LLC a Florida limited liability corporation. Since
      January 2007, Kevin has been Chief Executive Officer of ResponzeTV, PLC a Hong
      Kong based public company that trades on the AIM Exchange (“RETV.L”) From 1998
      until August 2004, Kevin held the positions of Chairman and CEO of Reliant
      Interactive Media Corp. (“RIMC”) a publicly traded Nevada corporation. Kevin
      co-founded RIMC with his brother Tim Harrington. From May 2002 until August
      2004
      Kevin held the positions of Co-Chairman of Thane International USA. From July
      2002 until present Kevin has served as a director and President of Harrington
      Business Development, Inc. a private Florida corporation. Kevin Harrington
      has
      considerable experience in the production of direct-response marketing
      television programming, otherwise known as "infomercials." He produced his
      first
      infomercial in 1985.





**Employment
      Agreements**





On
      October 31, 2006, OmniReliant and Paul Morrison entered into an executive
      employment agreement pursuant to which Mr. Morrison will serve as OmniReliant’s
      President and Chief Operating Officer for a term of two years. The agreement
      provides for the following compensation: (i) a base annual salary of $120,000;
      (ii) a one-time grant of 300,000 shares of common stock; (iii) an incentive
      bonus equal to 1.5% of pretax profits on the sale of all Hilton related
      products, (iv) an option to purchase 300,000 shares of common stock at an
      conversion price of $1.00.





**Committees**





Our
      business, property and affairs are managed by or under the direction of the
      board of directors. Members of the board are kept informed of our business
      through discussion with the chief executive and financial officers and other
      officers, by reviewing materials provided to them and by participating at
      meetings of the board and its committees. We presently do not have any
      committees of our board of directors, however, our board of directors intends
      to
      establish various committees at some point in the near future.





The
      total
      number of meetings of the Board of Directors during the fiscal year ended June
      30, 2007 was four. The Board of Directors decided matters by written consent
      on
      fifteen occasions. Each of the incumbent directors attended a majority of (i)
      the meetings of the Board during the year and (ii) the total number of meetings
      of all committees of the Board on which the incumbent directors
      served.





Code
      of
      Ethics





We
      have
      adopted a Code of Ethics that applies to all officers, directors and employees.
      A copy of this Code of Ethics was filed as Exhibit 14.1 to our Form 10-KSB
      for
      the period ending June 30, 2005 and is incorporated herein by reference. We
      will
      furnish a copy of this code of ethics free of charge to any shareholder upon
      written request to the Company at 4218 Linebaugh Avenue, Tampa, Florida
      33624.





COMPLIANCE
      WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT of 1934





Section
      16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires the
      Company's directors and executive officers, and persons who own more than ten
      percent of a registered class of the Company's equity securities, to file with
      the Commission initial reports of ownership and reports of changes in ownership
      of the Company's Common Stock and other equity securities of the Company.
      Officers, directors and greater than ten percent shareholders are required
      by
      the Commission's regulations to furnish the Company with copies of all Section
      16(a) forms they filed.





We
      have
      been provided with copies of all forms (3, 4 and 5) filed by officers,
      directors, or ten percent shareholders within three days of such filings. Based
      on our review of such forms that we received, or written representations from
      reporting persons that no Forms 5s were required for such persons, we believe
      that, during fiscal 2007, except for the list set forth below, all Section
      16(a)
      filing requirements have been satisfied on a timely basis for members of the
      Board of Directors and Executive Officers.




17





Name
            Section
                16 FormChris
                Phillips
            Form
                3
            5
                days lateForm
                4
            40
                days lateKRH
                Licensing Company, LLC
            Form
                3
            51
                days lateApogee
                Financial Investment, Inc.
            Form
                3
            53
                days lateForm
                4
            40
                days lateRichard
                Diamond
            Form
                3
            53
                days lateForm
                4
            40
                days lateTim
                Harrington
            Form
                3
            60
                days lateKevin
                Harrington
            Form
                3
            60
                days latePaul
                Morrison
            Form
                3
            63
                days lateZTZ
                Trust Corp.
            Form
                3
            67
                days lateLucien
                Lallouz
            Form
                3
            67
                days lateFamalom
                LLC
            Form
                3
            32
                days lateDecembra
                Diamond
            Form
                3
            34
                days late




**Item
      10. EXECUTIVE COMPENSATION**





The
      following table sets forth information concerning the annual and long-term
      compensation earned by or paid to our Chief Executive Officer and to other
      persons who served as executive officers as at and/or during the fiscal year
      ended June 30, 2007 who earned compensation exceeding $100,000 during 2006
      (the
“named executive officers” ), for services as executive officers for the last
      two fiscal years.





**Summary
      Compensation Table**




Name
                & Principal Position
            Year
            Salary
                ($)
            Bonus
                ($)
            Stock
                Awards($)
            Option
                Awards ($)
            Non-Equity
                Incentive Plan Compensation ($)
            Change
                in Pension Value and Non-Qualified Deferred Compensation Earnings
                ($)
            All
                Other Compensation ($)
            Total
                ($)Christopher
                Phillips, CEO (1)
            2007
            0
            0
            0
            0
            0
            0
            0
            0Paul
                Morrison, President
            2007
            90,000
            0
            $15,000(3)
            0
            0
            0
            0
            $105,000Cynthia
                Allison, Former CEO (2)
            2006
            0
            0
            0
            0
            0
            0
            0
            0





(1)
            Chris
                Phillips was named to the Board and elected CEO, CFO, Secretary and
                Treasurer on November 22, 2006.(2)
            Cynthia
                Allison resigned as the sole officer and director on November 22,
                2006.(3)
            Represents
                the market value of 150,000 shares of common stock granted to Mr.
                Morrison
                granted on October 19, 2006 (based on a $.10 per share, the closing
                price
                of the Company’s common stock on the Over-the-Counter Bulletin Board on
                the day of grant).




18




**Outstanding
      Equity Awards at Fiscal Year-End Table.**




Option
                Awards
            Stock
                AwardsName
            Number
              of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Exercisable
            Number
              of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Unexercisable
            Equity
              Incentive
              Plan
              Awards:
              Number
              of
              Securities
                Underlying
              Unexercised
              Unearned
              Options
              (#)
            Option
              Exercise
              Price
              ($)
            Option
              Expiration
              Date
            Number
              of
                Shares
              or
                Units
              of
                Stock
              That
                Have
              Not
              Vested
              (#)
            Market
              Value
                of
              Shares
                or
              Units
                of
              Stock
              That
                Have
              Not
              Vested
              ($)
            Equity
              Incentive
              Plan
                Awards:
              Number
              of
              Unearned
              Shares,
              Units
                or
              Other
                Rights
              That
                Have
              Not
              Vested
              (#)
            Equity
                Incentive
              Plan
                Awards:
              Market
                or Payout
              Value
              of
              Unearned
              Shares,
              Units
                or
              Other
              Rights
              That
                Have
              Not
              Vested
              ($)Chris
                Phillips, CEO
            0
            0
            0
            0
            0
            0
            0
            0
            0Paul
                Morrison, President (1)
            0
            0
            0
            0
            0
            150,000
            $540,000(2)
            0
            0





(1)
      Pursuant to the terms of his employment agreement, Mr. Morrison is to receive
      300,000 shares of common stock, of which 50% was granted immediately and the
      remaining 50% is to be given to Mr. Morrison on the one year anniversary of
      his
      employment with the Company. The market value of the 150,000 shares of common
      stock granted to Mr. Morrison is based on $.10 per share, the closing price
      of
      the Company’s common stock on the Over-the-Counter Bulletin Board on the day of
      grant.


(2)
      Represents the market value of 150,000 shares of
      common stock (based on $3.60 per share, the closing price of the Company's
      common stock on the Over-the-Counter Bulletin Board on June 29,
      2007)





**Directors’
      Compensation**





For
      the
      fiscal year ended June 30, 2007, directors did not receive any remuneration
      in
      their capacity as a director.





**Item
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**





The
      following table sets forth certain information, as of October 19, 2007 with
      respect to the beneficial ownership of the Company’s outstanding common stock by
      (i) any holder of more than five (5%) percent; (ii) each of the named executive
      officers, directors and director nominees; and (iii) our directors, director
      nominees and named executive officers as a group. Except as otherwise indicated,
      each of the stockholders listed below has sole voting and investment power
      over
      the shares beneficially owned.





Name
                of Beneficial Owner(1)
            
            Common
                Stock Beneficially Owned
            
            Percentage
                of Common Stock
              Beneficially
                Owned (2)Paul
                Morrison (3)
            
            
            
            
            
            600,000
            
            
            
            
            
            4.20%Chris
                Phillips (4)
            
            
            
            
            
            5,003,199
            
            
            
            
            
            28.58%Deecembra
                Diamond (7)
            
            
            
            
            
            4,703,199
            
            
            
            
            
            26.87%FAMALOM
                LLC (8)
            
            
            
            
            
            1,500,000
            
            
            
            
            
            10.71%ZTZ
                Trust Corp (5)
            
            
            
            
            
            3,000,000
            
            
            
            
            
            21.43%Kevin
                Harrington
            
            
            
            
            
            1,500,000
            
            
            
            
            
            10.71%Tim
                Harrington
            
            
            
            
            
            1,500,000
            
            
            
            
            
            10.71%Lucien
                Lallouz (5)
            
            
            
            
            
            3,000,000
            
            
            
            
            
            21.43%Richard
                Diamond (6)
            
            
            
            
            
            4,703,199
            
            
            
            
            
            26.87%KRH
                Licensing Company, LLC
            
            
            
            
            
            3,000,000
            
            
            
            
            
            21.43%All
                officers and directors as a group (6 persons)
            
            
            
            
            
            9,000,000
            
            
            
            
            
            65.0%




19




*
      Less
      than 1%





(1)
      Except as otherwise indicated, the address of each beneficial owner is c/o
      OmniReliant Corporation 4902 Eisenhower Blvd., Suite 185, Tampa, FL
      33634.





(2)
      Applicable percentage ownership of common stock is based on 14,000,000 shares
      of
      common stock outstanding as of October 19, 2007, together with securities
      exercisable or convertible into shares of common stock within 60 days of October
      19, 2007 for each stockholder. Beneficial ownership is determined in accordance
      with the rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities. Shares of common stock
      underlying convertible securities that are currently exercisable or exercisable
      within 60 days of October 19, 2007 are deemed to be beneficially owned by the
      person holding such securities for the purpose of computing the percentage
      of
      ownership of such person, but are not treated as outstanding for the purpose
      of
      computing the percentage ownership of any other person.





(3)
      Represents (i) 300,000 shares of common stock, and (ii) an option to purchase
      300,000 shares of common stock at a conversion price of $1.00.




(4)
      Represents (i) 1,500,000 shares of common stock owned by FAMALOM, LLC, (ii)
      900,000 common stock purchase warrants owned by Midtown Partners & Co., LLC
      and (iii) 43,200 common stock purchase warrants owned by Midtown Partners &
Co., LLC and (iv) 2,559,999 common stock purchase warrants owned by Midtown
      Partners & Co., LLC. Mr. Phillips is the Manager and sole member of FAMALOM,
      LLC. as well as a 50% owner of Apogee Financial Investments, Inc. which owns
      100% of Midtown Partners & Co., LLC, a FINRA licensed
      broker-dealer.





(5)
      Represents 3,000,000 shares of the Registrant’s outstanding common stock owned
      by ZTZ Trust Corp. Mr. Lallouz’s spouse, Sharon Lallouz Fixman, is the president
      and an owner of ZTZ Trust Corp. Mr. Lallouz disclaims beneficial ownership
      of
      the stock owned by ZTZ Trust Corp.





(6)
      Represents 1,200,000 shares of the Registrant’s common stock owned by Deecembra
      Diamond,, (ii) 900,000 common stock purchase warrants owned by Midtown Partners
      & Co., LLC (iii) 43,200 common stock purchase warrants owned by Midtown
      Partners & Co., LLC and (iv) 2,559,999 common stock purchase warrants owned
      by Midtown Partners & Co., LLC.. Mr. Diamond’s spouse, Deecembra Diamond,
      owns 40% of Apogee Financial Investments, Inc., which owns 100% of Midtown
      Partners & Co., LLC, a FINRA licensed broker-dealer. Mr. Diamond
      specifically disclaims beneficial ownership of these shares except to the extent
      of his pecuniary interests therein.





(7)
      Represents 1,200,000 shares of the Registrant’s common stock owned by Deecembra
      Diamond, (ii) 900,000 common stock purchase warrants owned by Midtown Partners
      & Co., LLC, (iii) 43,200 common stock purchase warrants owned by Midtown
      Partners & Co., LLC and (iv) 2,559,999 common stock purchase warrants owned
      by Midtown Partners & Co., LLC.. Mr. Diamond’s spouse, Deecembra Diamond,
      owns 40% of Apogee Financial Investments, Inc., which owns 100% of Midtown
      Partners & Co., LLC, a FINRA licensed broker-dealer.





(8)
      Mr.
      Phillips has sole voting and dispositive power over the shares of common stock
      held by FAMALOM, LLC





(9)
      Richard Hilton has sole voting and dispositive power over the shares of common
      stock held by KRH Licensing Company, LLC.





**Item
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





Except
      as
      set forth below, there were no transactions during the last two   fiscal
      years, and there are no proposed transactions, to which the Company was  
or is to become a party in which any director, executive officer, director
        nominee, beneficial owner of more than five percent (5%) of any class of
      our stock, or members of their immediate families had, or is to have, a direct
      or indirect material interest:





Chris
      Phillips, who is the Company’s CEO, CFO, Secretary, Treasurer and a director, is
      also the Manager and sole member of FAMALOM, LLC which is a 50% owner of Apogee
      Financial Investments, Inc., a merchant bank (“Apogee”). Apogee received a cash
      fee of $125,000 for consulting and due diligence services rendered in connection
      with the transactions. Apogee owns 100% of Midtown Partners & Co., LLC, a
      FINRA licensed broker-dealer. Midtown Partners was the placement agent for
      the
      Company’s convertible preferred stock and warrant financing, described above.
 Midtown received aggregate placement agent fees of approximately $300,000,
      as well as the following common stock purchase warrants: (a) series BD-1 common
      stock purchase warrants entitling Midtown Partners to purchase 300,000 shares
      of
      the Company's common stock at an exercise price of one dollar ($1.00) per share,
      (b) series BD-2 common stock purchase warrants entitling Midtown Partners to
      purchase 300,000 shares of the Company's common stock at an exercise price
      of
      one dollar and fifty cents ($1.50) per share, and (c) series BD-3 common stock
      purchase warrants entitling Midtown Partners to purchase 300,000 shares of
      the
      Company's common stock at an exercise price of three dollars ($3.00) per share.
      The Series BD warrants have a term of ten years.




20





OmniReliant
      has entered into a consulting agreement with Harrington Business Development
      LLC
      (“HBD”) pursuant to which HBD will oversee marketing of OmniReliant’s brands,
      including visual and audio productions. Pursuant to the consulting agreement
      with HBD, OmniReliant will pay HBD a fee of $15,000 per month for a term of
      six
      (6) months beginning on October 1, 2006. The principals of HBD, Kevin and Tim
      Harrington, own an aggregate of 3,000,000 shares, or 21.6% of the outstanding
      stock, of the Company. On April 1, 2007, the Company verbally agreed to extend
      the consulting agreement for a term of three (3) months.





Pursuant
      to the terms of the Kathy Hilton License Agreement between OmniReliant Corp.
      and
      KRH Licensing Company, LLC dated as of October 13, 2006, OmniReliant made an
      advance royalty payment in the amount of $150,000 to Lucien Lallouz in January
      2007.





On
      November 22, 2006 OmniReliant entered into a verbal agreement with TotalCFO,
      LLC
      (“TotalCFO”) pursuant to which TotalCFO will perform accounting services
      including accounting services in connection with Securities & Exchange
      Commission filings. Pursuant to the agreement with TotalCFO, OmniReliant will
      pay TotalCFO a fee of $15,000 per quarter based on a calendar year end plus
      related expenses. The Managing Member of TotalCFO, Christopher Phillips, is
      the
      CEO and CFO of OmniReliant Holdings and beneficially owns 5,003,119 shares,
      or
      28.58% of the outstanding stock of the Company. Christopher Phillips is not
      paid
      a salary by the Company.





On
      May
      25, 2007, the Company entered into the Preferred Stock Purchase Agreement with
      Dynamic Decisions Strategic Opportunities (the “Investor”), pursuant to which
      the Investor purchased 600 shares of the Company’s series B 10% convertible
      preferred stock (the “Preferred Stock”), 480,000 Series B-1 warrants, and
      480,000 series B-2 common stock purchase warrants (collectively, the “Warrants”)
      for an aggregate purchase price of $600,000. Midtown Partners LLC, which served
      as the Company’s placement agent in connection with the Preferred Stock Purchase
      Agreement, received placement agent fees of approximately $60,000, as well
      as
      the following common stock purchase warrants: (a) series BD-4 common stock
      purchase warrants entitling Midtown Partners to purchase 48,000 shares of the
      Company's common stock at an exercise price of one dollar and eighty-seven
      cents
      ($1.87) per share, and (b) series BD-5 common stock purchase warrants entitling
      Midtown Partners to purchase 48,000 shares of the Company's common stock at
      an
      exercise price of three dollars and seventy-five cents ($3.75) per share and
      (c)
      series BD-6 common stock purchase warrants entitling Midtown Partners to
      purchase 48,000 shares of the Company's common stock at an exercise price of
      one
      dollar and twenty five cents ($1.25) per share. The Series BD warrants have
      a
      term of ten years. Midtown Partners & Co., LLC is an FINRA registered
      broker-dealer. Chris Phillips, who is the Company’s CEO, CFO, Secretary,
      Treasurer and a director, is also the Manager and sole member of FAMALOM, LLC
      which is a 50% owner of Apogee Financial Investments, Inc., a merchant bank
      (“Apogee”). Apogee owns 100% of Midtown Partners & Co., LLC, a FINRA
      licensed broker-dealer.





On
      October 18, 2007, the Company entered into securities purchase agreements (the
      “Purchase Agreements”) with Vicis Capital Master Fund (“Vicis”) and Dynamic
      Decisions Strategic Opportunities (“Dynamic Decisions”) pursuant to which Vicis
      and Dynamic Decisions purchased 6,000,000 and 400,000, shares of our series
      C
      convertible preferred stock (“Series C Preferred Stock”), respectively for an
      aggregate purchase price of $6,400,000. In connection with the purchase of
      the
      Series C Preferred Stock, Vicis and Dynamic Decisions received an aggregate
      amount of 16,000,000 and 1,066,668 common stock purchase warrants, respectively.
      Vicis and Dynamic Decisions received a Series C-1 warrant to purchase 8,000,000
      and 533,334 shares of common stock, respectively, at an exercise price of $1.50
      (the “C-1 Warrant”) as well as a Series C-2 warrant to purchase 8,000,000 and
      533,334 shares of common stock, respectively, at an exercise price of $2.00
      (the
“C-2 Warrant”). The C-1 Warrant shall be valid for five years from the date of
      issuance and the C-2 Warrant shall be valid for ten years from the date of
      issuance. The Series C Preferred Stock has a conversion price of $0.75 and
      is
      convertible into an aggregate amount of 8,000,000 and 533,334 shares of common
      stock, respectively. The Series C Preferred stock does not pay annual dividends
      but each holder of Series C Preferred Stock shall have the right to such number
      of votes equal to the number of shares of common stock that the Series C
      Preferred Stock shall be converted into. Furthermore, pursuant to the terms
      of
      the Purchase Agreements, Vicis and Dynamic Decisions exchanged their 3,000
      shares of series A preferred stock and 600 shares of series B preferred stock,
      respectively, for 3,285,354 and 624,210  shares
      of
      Series C Preferred Stock, respectively. In connection with the Purchase
      Agreements, Vicis and Dynamic Decisions received a Series C-1 Warrant to
      purchase 4,380,472 and 832,280  shares
      of
      common stock, respectively and a series C-2 Warrant to purchase 4,380,472 and
      832,280  and
      shares of common stock, respectively. The Series C-1 Warrant and the Series
      C-2
      Warrant shall have an exercise price of $1.50 and $2.00, respectively, and
      shall
      be valid for five year and ten years from the date of issuance, respectively.





Midtown
      Partners & Co., LLC, which served as the Company’s placement agent in
      connection with the Purchase Agreements, received aggregate placement agent
      fees
      of approximately $340,000, as well as
      the following common stock purchase warrants: (a) series BD-7 common stock
      purchase warrants entitling Midtown Partners to purchase 853,333 shares of
      the
      Company's common stock at an exercise price of seventy-five cents ($0.75) per
      share, and (b) series BD-8 common stock purchase warrants entitling Midtown
      Partners to purchase 853,333 shares of the Company's common stock at an exercise
      price of one dollar and fifty cents ($1.50) per share and (c) series BD-9 common
      stock purchase warrants entitling Midtown Partners to purchase 853,333 shares
      of
      the Company's common stock at an exercise price of two dollars ($2.00) per
      share. The Series BD warrants have a term of ten years. Midtown
      Partners & Co., LLC is a FINRA registered broker-dealer. Chris Phillips, who
      is the Company’s CEO, CFO, Secretary, Treasurer and a director, is also the
      Manager and sole member of FAMALOM, LLC which is a 50% owner of Apogee Financial
      Investments, Inc., a merchant bank (“Apogee”). Apogee owns 100% of Midtown
      Partners & Co., LLC, a FINRA licensed broker-dealer.




21





On
      October 19, 2007, we entered into a subscription agreement with ResponzeTV
      PLC
      (“ResponzeTV”) (the “Subscription Agreement”) pursuant to which we purchased
      8,500,000 ordinary shares of ResponzeTV and received warrants to purchase
      17,000,000 ordinary shares of ResponzeTV for an aggregate purchase price of
      US$5,100,000. The warrants are to be issued in the following manner: (i) a
      warrant to purchase 8,500,000 common shares with an exercise price of £37p, (ii)
      a
      warrant to purchase 4,250,000 common shares with an exercise price of £50p and
      (iii) 4,250,000 common shares with an exercise price of £100p. Each warrant
      shall have a term of five years from the date of issuance. Kevin Harrington
      and
      Tim Harrington, who are directors of the Company, are officers and directors
      of
      ResponzeTV. Midtown Partners & Co., LLC, which served as the Company’s
      placement agent in connection with the Subscription Agreement, received
      aggregate placement agent fees of US$50,000, as well as
      500,000 ordinary shares of ResponzeTV. Midtown
      Partners & Co., LLC is a FINRA registered broker-dealer. Chris Phillips, who
      is the Company’s CEO, CFO, Secretary, Treasurer and a director, is also the
      Manager and sole member of FAMALOM, LLC which is a 50% owner of Apogee Financial
      Investments, Inc., a merchant bank (“Apogee”). Apogee owns 100% of Midtown
      Partners & Co., LLC, a FINRA licensed broker-dealer.





On
      October 19, 2007, our wholly-owned subsidiary OmniReliant Corp. (“ORC”) entered
      into and closed a share exchange agreement with ResponzeTV (the “Exchange
      Agreement”). Pursuant to the terms of the Exchange Agreement, ResponzeTV
      acquired all of the issued and outstanding shares of capital stock of KHL
      Holdings, Inc., a newly formed Florida corporation and wholly-owned subsidiary
      of ORC (“KHL”), in exchange for 9,500,000 ordinary shares of stock of
      ResponzeTV. On October 12, 2007, ORC entered into an exclusive sublicense
      agreement with KHL, pursuant to which ORC granted KHL the exclusive right and
      license to our rights to use the Kathy Hilton Trademark and to sell products
      bearing the Kathy Hilton Trademark exclusive of fragrance. The initial term
      of
      this sublicense agreement shall terminate on June 30, 2012. ORC shall have
      the
      option to renew this Agreement for an additional five year period. Kevin
      Harrington and Tim Harrington, who are directors of the Company, are officers
      and directors of ResponzeTV.





**ITEM
      13. EXHIBITS.**





Exhibit
              Number
            
            Description2.1
            
            Stock
                Exchange Agreement ***2.2
            
            Securities
                Purchase Agreement by and among OmniReliant Corporation, Willowtree
                Advisor and Cynthia Allison.***3.1
            
            Willowtree
                Advisor Articles of Incorporation *3.2
            
            Willowtree
                Advisor Bylaws *3.3
            
            Willowtree
                Advisor Certificate Designation of Series A 10% Convertible Preferred
                Stock ***3.4
            
            Articles
                of Merger******3.5
            
            Certificate
                of Designation of Series B 10% Convertible Preferred Stock
                ********3.6
            
            Certificate
                of Designation of Series C Convertible Preferred Stock4.1
            
            Form
                of Series A Common Stock Purchase Warrant ***4.2
            
            Form
                of Series B Common Stock Purchase Warrant ********4.3
            
            Form
                of Series C-1 Common Stock Purchase Warrant4.4
            
            Form
                or Series C-2 Common Stock Purchase Warrant10.1
            
            Securities
                Purchase Agreement by and among Willowtree Advisor and the Purchasers
                identified therein. ***10.2
            
            Registration
                Rights Agreement ***10.3
            
            Paul
                Morrison Executive Employment Agreement ***10.4
            
            Kathy
                Hilton License Agreement ****10.5
            
            First
                Amendment to Kathy Hilton License Agreement
                ***




22




10.6
            
            Harrington
                Business Development, LLC Consulting Agreement ***10.7
            
            Guaber
                S.P.A. International Marketing & Distribution Agreement
                ***10.8
            
            Assignment
                of Guaber S.P.A. International Marketing & Distribution Agreement
                ***10.9
            
            Midtown
                Partners & Co., LLC Placement Agent Agreement ***10.10
            
            First
                Amendment to Placement Agent Agreement ***10.11
            
            Amendment
                No. 1 to Registration Rights Agreement, dated November 22,
                2006*******10.12
            
            Securities
                Purchase Agreement by and among OmniReliant Holdings and the Purchasers
                identified therein., dated May 25, 2007 ********10.13
            
            Registration
                Rights Agreement by and between OmniReliant Holdings, Inc. and Dynamic
                Decisions Strategic Opportunities, dated May 25, 2007
                ********10.14
            
            Agreement
                for Acquistiion of Patent Application, dated June 18, 2007 by and
                between
                OmniReliant Holdings, Inc. and Product & Technology Partners
                LLC*******10.15
            
            Securities
                Purchase Agreement, dated October 18, 2007, by and between OmniReliant
                Holdings, Inc. and Vicis Capital Master Fund***********10.16
            
            Securities
                Purchase Agreement, dated October 18, 2007, by and between OmniReliant
                Holdings, Inc. and Dynamic Decisions Strategic
                Opportunities***********10.17
            
            Amended
                and Restated Registration Rights Agreement, dated October 18, 2007,
                by and
                among OmniReliant Holdings, Inc., Vicis Capital Master Fund and Dynamic
                Decisions Strategic Opportunities***********10.18
            
            Subscription
                Agreement, dated October 19, 2007, by and between OmniReliant Corp.
                and
                ResponzeTV PLC***********10.19
            
            Share
                Exchange Agreement, dated October 19, 2007 by and between OmniReliant
                Corp. and ResponzeTV PLC***********14.1
            
            Code
                of Ethics **16.1
            
            Letter
                from Williams & Webster, P.S. *****16.2
            
            Letter
                from Herman, Lagor, Hopkins & Meeks, P.A.
                **********31
            
            Certification
                by Chief Executive Officer and Chief Financial Officer, required
                by Rule
                13a-14(a) or Rule 15d-14(a) of the Exchange Act32
            
            Certification
                by Chief Executive Officer and Chief Financial Officer, required
                by Rule
                13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
                of
                Chapter 63 of Title 18 of the United States
                Code




*
      Incorporated by reference from the Registrant's Form SB-2 Registration Statement
      filed with the Securities and Exchange Commission on August 2, 2004 (File No.
      333-117840).





**
      Incorporated by reference from to the Registrant’s Form 10-KSB for the period
      ending June 30, 2005 filed with the Securities and Exchange Commission on
      November 2, 2005.





***
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on November 29, 2006.





****
      Subject to a request for confidential treatment filed with the Securities and
      Exchange Commission pursuant to Rule 24b-2 promulgated under the Securities
      Exchange Act of 1934, as amended.





*****
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on December 20, 2006.




23




******
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on December 29, 2006.





*******Incorporated
      by reference from the Registrant’s Form SB-2 (File No. 333-140800) filed with
      the Securities and Exchange Commission on February 20, 2007.




********
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on June 1, 2007.





*********
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on June 26, 2007.




**********
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on July 26, 2007.





***********
      Incorporated by reference from to the Registrant’s Form 8-K filed with the
      Securities and Exchange Commission on October 24, 2007.





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES** **.**





The
      Company's board of directors reviews and approves audit and permissible
      non-audit services performed by its independent accountants, as well as the
      fees
      charged for such services. In its review of non-audit service fees and its
      appointment of Herman, Lagor, Hopkins & Meeks, P.A. as the Company's
      independent accountants, the board of directors considered whether the provision
      of such services is compatible with maintaining independence. All of the
      services provided and fees charged by Herman, Lagor, Hopkins & Meeks, P.A.
      in 2007 and Williams & Webster, P.S. in 2006 were approved by the board of
      directors.





Audit
      Fees





The
      aggregate fees billed for professional services for the audit of the annual
      financial statements of the Company and the reviews of the financial statements
      included in the Company's quarterly reports on Form 10-QSB for 2006 and 2005
      were $55,000 and $28,000 respectively, net of expenses.





Audit-Related
      Fees





There
      were no other fees billed by during the last two fiscal years for assurance
      and
      related services that were reasonably related to the performance of the audit
      or
      review of the Company's financial statements and not reported under "Audit
      Fees"
      above.





Tax
      Fees





There
      were approximately $0 per year spent on tax filings.





All
      Other Fees





There
      were no other fees billed during the last two fiscal years for products and
      services provided.


24





**SIGNATURES**





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




**OMNIRELIANT HOLDINGS,
              INC.**Date:
                November 1, 2007
            By:
            /s/
                Christopher PhillipsChristopher
                PhillipsInterim
                Chief Executive Officer, Chief Financial Officer
              (Principal
                Executive Officer, Financial Officer and Principal
              Accounting
                Officer) and Director




Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      report has been signed by the following persons on behalf of the Registrant
      and
      in the capacities and on the dates indicated.





Name
            Position
            Date/s/
                  Christopher Phillips
              Christopher
                Phillips
            Interim
                Chief Executive Officer, Chief Financial Officer (Principal Executive
                Officer, Financial Officer and Principal Accounting Officer) and
                Director
            November
                1, 2007______________
              Lucien
                Lallouz
            Chairman
                of the Board
            November
                  1, 2007/s/
                  Richard Diamond
              Richard
                Diamond
            Director
            November
                  1, 2007/s/
                  Tim Harrington
              Tim
                Harrington
            Director
            November
                  1, 2007/s/
                  Kevin Harrington
              Kevin
                Harrington
            Director
            November
                  1, 2007





25






**OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
  **INDEX
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **Report
                    of Independent Registered Public Accounting Firm**
                
                **F-1****Consolidated
                    Balance Sheet as of June 30, 2007.**
                
                **F-2****Consolidated
                    Statements of Operations for the period from August 21, 2006
                    (inception)
                    to June 30, 2007.**
                
                **F-3****Consolidated
                    Statements of Stockholders' Equity (Deficit) for the period from
                    August
                    21, 2006 (inception) to June 30, 2007.**
                
                **F-4****Consolidated
                    Statements of Cash Flows for the period from August 21, 2006
                    (inception)
                    to June 30, 2007.**
                
                **F-7****Notes
                    to Consolidated Financial Statements.**
                
                **F-8**
  
  **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** ****
 
 To
        the
        Board of Directors and Stockholders of
 OmniReliant
        Holdings, Inc. and Subsidiary
 Tampa,
        Florida
 
 We
        have
        audited the accompanying consolidated balance sheet of OmniReliant Holdings,
        Inc
        and subsidiary as of June 30, 2007 and the related consolidated statement
        of operations, stockholders’ equity (deficit), and cash flows for the period
        from August 21, 2006 (inception) to June 30, 2007. These financial
        statements are the responsibility of the Company’s management. Our
        responsibility is to express an opinion on these financial statements based
        on
        our audit.
 
 We
        conducted our audit in
        accordance with the standards of the Public Company Accounting Oversight
        Board
        (United States). Those standards require that we plan and perform the audit
        to
        obtain reasonable assurance about whether the financial statements are free
        of
        material misstatement. The Company is not required to have, nor were we engaged
        to perform an audit of its internal control over financial reporting. Our
        audit
        included consideration of internal control over financial reporting as a
        basis
        for designing audit procedures that are appropriate in the circumstances,
        but
        not for the purpose of expressing an opinion on the effectiveness of the
        Company’s internal control over financial reporting. Accordingly, we express no
        such opinion. An audit also includes examining, on a test basis, evidence
        supporting the amounts and disclosures in the financial statements, assessing
        the accounting principles used and significant estimates made by management,
        as
        well as evaluating the overall financial statement presentation. We believe
        that
        our aud it
        provide a reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of OmniReliant Holdings,
        Inc.
        and subsidiary as of June 30, 2007, and the results of their operations,
        changes in their stockholders equity (deficit) and their cash flows for the
        period from August 21, 2006 (inception) to June 30, 2007, in conformity
        with accounting principles generally accepted in the United States of America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern.
        As shown in the financial statements and discussed in Note 1 of the accompanying
        financial statements, the Company has incurred significant recurring losses
        from
        operations since inception and is dependent on outside sources of financing
        for
        continuation of its operations. These factors raise substantial doubt about
        the
        Company's ability to continue as a going concern.
  KBL,
        LLP
 Tampa,
        Florida
 October
        19, 2007
  F-1
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        BALANCE SHEET**
  **June
                    30,****2007****ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                711,484Inventory
                
                
                120,624Prepaid
                    expenses
                
                
                33,999Total
                    current assets
                
                
                866,107Other
                    Assets:License,
                    net of accumulated amortization of $777,154
                
                
                581,357Patents
                
                
                745,000Total
                    other assets
                
                
                1,326,357**Total
                    assets**
                
                **$**
                **2,192,463****LIABILITIES
                    AND STOCKHOLDERS' EQUITY (DEFICIT)**Liabilities:Current
                    LiabilitiesAccounts
                    payable
                
                $
                24,735Accrued
                    ExpensesDividends
                
                $
                194,468Penalties
                
                $
                232,943Total
                    current liabilities
                
                
                452,146Long
                    Term LiabilitiesFair
                    Value of Redeemable Preferred Conversion Feature
                
                
                23,757,499Total
                    Liabilities
                
                
                24,209,646Stockholders'
                    equity (deficit):Common
                          stock, $0.00001 par value; 100,000,000 shares authorized; 14,000,000
                          shares issued and outstanding.
                
                
                14010%
                    Convertible Series A and B Preferred stock, $0.0001 par
                    value; 100,000,000 shares authorized; 3,600 shares issued and
                    outstanding.Series
                    A Convertible Preferred, 3,000 shares issued and
                    outstanding
                
                
                -Series
                    B Convertible Preferred, 600 shares issued and outstanding
                
                
                -Additional
                    paid in capital
                
                
                2,283,480Deficit
                    accumulated during development stage
                
                
                (24,300,803
                )Total
                    shareholders' equity (deficit)
                
                
                (22,017,183
                )**Total
                    liabilities and shareholders' equity (deficit)**
                
                **$**
                **2,192,463**
  The
        accompanying notes are an integral part of these Consolidated Financial
        Statements.
  F-2
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
  **For
                    the period from****August
                    21, 2006 (inception)****to
                    June 30, 2007**Revenue
                
                $
                2,640Cost
                    of goods sold
                
                
                1,320Gross
                    margin
                
                
                1,320Operating
                    expenses:General
                    & administrative
                
                
                3,911,681Total
                    operating expenses
                
                
                3,911,681Operating
                    income (loss)
                
                
                (3,910,361
                )Other
                    expenseChange
                      in the fair value of redeemable preferred stock conversion
                      feature
                
                
                (20,157,499
                )Finance
                    penalties
                
                
                (232,943
                )Total
                    Other expense
                
                
                (20,390,442
                )Loss
                    before provision for income taxes
                
                
                (24,300,803
                )Provision
                    for income taxes
                
                
                -**Net
                    loss**
                
                
                **($24,300,803**
                **)**Dividends
                    to preferred shareholders
                
                
                (194,468
                )Deemed
                    dividend to preferred shareholders onbeneficial
                    conversion feature
                
                
                (3,600,000
                )**Net
                    loss available to common shareholders**
                
                **$**
                **(28,095,271**
                **)****Net
                    Income/(Loss) per share (Basic)**
                
                
                **($2.64**
                **)****Net
                    Income/(Loss) per share (Fully Diluted)**
                
                
                **($2.64**
                **)****Weighted
                    average common shares outstanding**
                
                
                **10,652,363****Weighted
                    average common and common equivalent shares
                    outstanding**
                
                
                **10,652,363**
 
 The
        accompanying notes are an integral part of these Consolidated Financial
        Statements.
 
 F-3
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)**
  **Series****Preferred
                    A****Common
                    Stock**
                
                **Convertible
                    Stock****Shares**
                
                **Amount**
                
                **Shares**
                
                **Amount****Balance,
                    June 16, 2004 (Inception)**
                
                
                **-**
                
                **$**
                **-**
                
                
                **-**
                
                **$**
                **-**Initial
                    issuance of stock at $0.035 per share in exchange for services
                    and cash
                    provided by director
                
                
                5,000,000
                
                
                50
                
                
                -
                
                
                -Net
                    loss for the period ended June 30, 2004
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2004**
                
                
                **5,000,000**
                
                
                **50**
                
                
                **-**
                
                
                **-**Net
                    loss for the year ended June 30, 2005
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2005**
                
                
                **5,000,000**
                
                **$**
                **50**
                
                
                **-**
                
                **$**
                **-**Issuance
                    of stock at $0.05 per share in exchange for cash
                
                
                1,485,000
                
                
                15
                
                
                -
                
                
                -Net
                    loss for the year ended September 30, 2006
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2006**
                
                
                **6,485,000**
                
                **$**
                **65**
                
                
                **-**
                
                **$**
                **-**Net
                    loss for the period July 1, 2006 through November 22, 2006
                
                
                -
                
                
                -
                
                
                -
                
                
                -Additional
                    capital contributed by shareholders
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Balance,
                    November 22, 2006 (unaudited)**
                
                
                **6,485,000**
                
                **$**
                **65**
                
                
                **-**
                
                **$**
                **-**Recapitalization
                
                
                7,300,000
                
                
                73
                
                
                3,000
                
                
                3,000,000Reduction
                    of Series A Preferred for Beneficial Conversion Feature
                
                
                -
                
                
                -
                
                
                -
                
                
                (3,000,000
                )Amortization
                    of Beneficial Conversion Feature on Series A Preferred & Deemed
                    Dividend
                
                
                -
                
                
                -
                
                
                -
                
                
                3,000,000Reclassification
                    of Series A Preferred and warrants as a liability and marked
                    to
                    market
                
                
                -
                
                
                -
                
                
                -
                
                
                (3,000,000
                )Accrual
                    of Series A Preferred dividends
                
                
                -
                
                
                -
                
                
                -
                
                
                -Common
                    share issuance pursuant to license agreement
                
                
                15,000
                
                
                -
                
                
                -
                
                
                -Series
                    B Convertible Preferred issuance
                
                
                -
                
                
                -
                
                
                -
                
                
                -Costs
                    associated with Series B Convertible Preferred offering
                
                
                -
                
                
                -
                
                
                -
                
                
                -Reduction
                    of Series B Preferred for Beneficial Conversion Feature
                
                
                -
                
                
                -
                
                
                -
                
                
                -Amortization
                    of Beneficial Conversion Feature on Series B Preferred & Deemed
                    Dividend
                
                
                -
                
                
                -
                
                
                -
                
                
                -Reclassification
                    of Series B Preferred and warrants as a liability and marked
                    to
                    market
                
                
                -
                
                
                -
                
                
                -
                
                
                -Accrual
                    of Series B Preferred dividends
                
                
                -
                
                
                -
                
                
                -
                
                
                -Issuance
                    of 1,000,000 warrants to consultant
                
                
                -
                
                
                -
                
                
                -
                
                
                -Issuance
                    related to patent
                
                
                200,000
                
                
                2
                
                
                -
                
                
                -Net
                    loss for the period August 21, 2006 through June 30, 2007
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2007**
                
                
                **14,000,000**
                
                **$**
                **140**
                
                
                **3,000**
                
                **$**
                **-**
  The
        accompanying notes are an integral part of these Consolidated Financial
        Statements.
 
 F-4
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)**
  **Series****Preferred
                    B**
                
                **Additional****Convertible
                    Stock**
                
                **Paid-in****Shares**
                
                **Amount**
                
                **Capital****Balance,
                    June 16, 2004 (Inception)**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **-**Initial
                    issuance of stock at $0.035 per share in exchange for services
                    and cash
                    provided by director
                
                
                -
                
                
                -
                
                
                174,950Net
                    loss for the period ended June 30, 2004
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2004**
                
                
                **-**
                
                
                **-**
                
                
                **174,950**Net
                    loss for the year ended June 30, 2005
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2005**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **174,950**Issuance
                    of stock at $0.05 per share in exchange for cash
                
                
                -
                
                
                -
                
                
                74,235Net
                    loss for the year ended September 30, 2006
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2006**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **249,185**Net
                    loss for the period July 1, 2006 through November 22, 2006
                
                
                -
                
                
                -
                
                
                -Additional
                    capital contributed by shareholders
                
                
                -
                
                
                -
                
                
                5,079**Balance,
                    November 22, 2006 (unaudited)**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **254,264**Recapitalization
                
                
                -
                
                
                -
                
                
                (925,215
                )Reduction
                    of Series A Preferred for Beneficial Conversion Feature
                
                
                -
                
                
                -
                
                
                3,000,000Amortization
                    of Beneficial Conversion Feature on Series A Preferred & Deemed
                    Dividend
                
                
                -
                
                
                -
                
                
                (3,000,000
                )Reclassification
                    of Series A Preferred and warrants as a liability and marked
                    to
                    market
                
                
                -
                
                
                -
                
                
                -Accrual
                    of Series A Preferred dividends
                
                
                -
                
                
                -
                
                
                (188,635
                )Common
                    share issuance pursuant to license agreement
                
                
                -
                
                
                -
                
                
                52,500Series
                    B Convertible Preferred issuance
                
                
                600
                
                
                600,000
                
                
                -Costs
                    associated with Series B Convertible Preferred offering
                
                
                -
                
                
                -
                
                
                (95,000
                )Reduction
                    of Series B Preferred for Beneficial Conversion Feature
                
                
                -
                
                
                (600,000
                )
                
                600,000Amortization
                    of Beneficial Conversion Feature on Series B Preferred & Deemed
                    Dividend
                
                
                -
                
                
                600,000
                
                
                (600,000
                )Reclassification
                    of Series B Preferred and warrants as a liability and marked
                    to
                    market
                
                
                -
                
                
                (600,000
                )
                
                -Accrual
                    of Series B Preferred dividends
                
                
                -
                
                
                -
                
                
                (5,833
                )Issuance
                    of 1,000,000 warrants to consultant
                
                
                -
                
                
                -
                
                
                2,471,401Issuance
                    related to patent
                
                
                -
                
                
                -
                
                
                719,998Net
                    loss for the period August 21, 2006 through June 30, 2007
                
                
                -
                
                
                -
                
                
                -**Balance,
                    June 30, 2007**
                
                
                **600**
                
                **$**
                **-**
                
                **$**
                **2,283,480**
  The
        accompanying notes are an integral part of these Consolidated Financial
        Statements.
  F-5
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)**
  **Accumulated****Deficit**
                
                **Total****During**
                
                **Stockholders'****Development**
                
                **Equity****Stage**
                
                **(Deficit)****Balance,
                    June 16, 2004 (Inception)**
                
                **$**
                **-**
                
                **$**
                **-**Initial
                    issuance of stock at $0.035 per share in exchange for services
                    and cash
                    provided by director
                
                
                -
                
                
                175,000Net
                    loss for the period ended June 30, 2004
                
                
                (187,969
                )
                
                (187,969
                )**Balance,
                    June 30, 2004**
                
                
                **(187,969**
                **)**
                
                **(12,969**
                **)**Net
                    loss for the year ended June 30, 2005
                
                
                (15,007
                )
                
                (15,007
                )**Balance,
                    June 30, 2005**
                
                **$**
                **(202,976**
                **)**
                **$**
                **(27,976**
                **)**Issuance
                    of stock at $0.05 per share in exchange for cash
                
                
                -
                
                
                74,250Net
                    loss for the year ended September 30, 2006
                
                
                (34,144
                )
                
                (34,144
                )**Balance,
                    June 30, 2006**
                
                **$**
                **(237,120**
                **)**
                **$**
                **12,130**Net
                    loss for the period July 1, 2006 through November 22, 2006
                
                
                (17,209
                )
                
                (17,209
                )Additional
                    capital contributed by shareholders
                
                
                -
                
                
                5,079**Balance,
                    November 22, 2006 (unaudited)**
                
                **$**
                **(254,329**
                **)**
                **$**
                **-**Recapitalization
                
                
                254,329
                
                
                2,329,187Reduction
                    of Series A Preferred for Beneficial Conversion Feature
                
                
                -
                
                
                -Amortization
                    of Beneficial Conversion Feature on Series A Preferred & Deemed
                    Dividend
                
                
                -
                
                
                -Reclassification
                    of Series A Preferred and warrants as a liability and marked
                    to
                    market
                
                
                -
                
                
                -Accrual
                    of Series A Preferred dividends
                
                
                -
                
                
                (188,635
                )Common
                    share issuance pursuant to license agreement
                
                
                -
                
                
                52,500Series
                    B Convertible Preferred issuance
                
                
                -
                
                
                600,000Costs
                    associated with Series B Convertible Preferred offering
                
                
                -
                
                
                (95,000
                )Reduction
                    of Series B Preferred for Beneficial Conversion Feature
                
                
                -
                
                
                -Amortization
                    of Beneficial Conversion Feature on Series B Preferred & Deemed
                    Dividend
                
                
                -
                
                
                -Reclassification
                    of Series B Preferred and warrants as a liability and marked
                    to
                    market
                
                
                -
                
                
                -Accrual
                    of Series B Preferred dividends
                
                
                -
                
                
                (5,833
                )Issuance
                    of 1,000,000 warrants to consultant
                
                
                -
                
                
                2,471,401Issuance
                    related to patent
                
                
                -
                
                
                720,000Net
                    loss for the period August 21, 2006 through June 30, 2007
                
                
                (24,300,803
                )
                
                (24,300,803
                )**Balance,
                    June 30, 2007**
                
                **$**
                **(24,300,803**
                **)**
                **$**
                **(22,017,183**
                **)**
  The
        accompanying notes are an integral part of these Consolidated Financial
        Statements.
  F-6
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
  **From
                      August 21, 2006****(inception)
                      through****June
                      30, 2007****Cash
                      flows from operating activities:**Net
                      loss
                  
                  $
                  (24,300,803
                  )Adjustments
                      to reconcile net loss to net cash used
                      in operating activities:Mark
                      to market adjustment on preferred stock
                  
                  
                  20,157,499Stock
                      compensation
                  
                  
                  2,486,401Amortization
                  
                  
                  777,154Inventory
                  
                  
                  (120,624
                  )Prepaid
                      expenses
                  
                  
                  (33,999
                  )Accounts
                      payable
                  
                  
                  24,735Accrued
                      finance penalties
                  
                  
                  232,943Net
                      cash used for operating activities
                  
                  
                  (776,694
                  )**Cash
                      flows from investing activities:**Licenses
                  
                  
                  (1,006,010
                  )Patents
                  
                  
                  (25,000
                  )Net
                      cash used for investing activities
                  
                  
                  (1,031,010
                  )**Cash
                      flows from financing activities:**Proceeds
                      from sale of preferred stock
                  
                  
                  3,615,000Offering
                      costs from preferred sale
                  
                  
                  (620,000
                  )Share
                      buyback
                  
                  
                  (475,813
                  )Net
                      cash provided by financing activities
                  
                  
                  2,519,187Net
                      (decrease) increase in cash and cash equivalents
                  
                  
                  711,484Cash
                      and cash equivalents at beginning of year
                  
                  
                  -**Cash
                      and cash equivalents at end of year**
                  
                  **$**
                  **711,484****Supplemental
                      disclosure of cash flow information:**Interest
                      paid
                  
                  
                  -Income
                      taxes paid
                  
                  
                  -**Total
                      Supplemental disclosure of cash flow information**
                  
                  
                  -**Supplemental
                      schedule of non-cash investing and financing
                      activities:**Accrued
                      dividends on preferred stock
                  
                  
                  194,468Stock
                      issued for patent
                  
                  
                  720,000Stock
                      issued for license
                  
                  
                  352,500**Total
                      non-cash investing and financing transactions**
                  
                  **$**
                  **1,266,968**
 The
        accompanying notes are an integral part of these Consolidated Financial
        Statements.
 
 F-7
  **OMNIRELIANT
        HOLDINGS, INC. & SUBSIDIARY**
 **(A
        Development Stage Company)**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **NOTE
        1 - ORGANIZATION AND NATURE OF BUSINESS**
  ***Organization***
 
 Willowtree
        Advisor, Inc. ("the Company" or “OmniReliant
        Holdings, Inc” )
        was
        incorporated on June 16, 2004 under the laws of the State of Nevada to offer
        landscape advisory services. On November 22, 2006, Willowtree Advisor, Inc.
        entered into a Securities Purchase Agreement with OmniReliant Corporation
        (“OmniReliant”) and Cynthia Allison, pursuant to which OmniReliant purchased
        5,000,000 shares of the Company's common stock from Ms. Allison for $475,813.
        Pursuant to the Common Stock Purchase Agreement, OmniReliant transferred
        the
        5,000,000 shares to the Company for cancellation. The transaction with Ms.
        Allison was accounted for as a reduction of additional paid in capital.
 
 Also
        on
        November 22, 2006, Willowtree entered into an exchange agreement pursuant
        to
        which the Company acquired one hundred percent (100%) of the equity of
        OmniReliant from, the stockholders of OmniReliant. Contemporaneously, the
        Company entered into to a securities purchase agreement with an accredited
        investor for the sale of convertible preferred stock and warrants for an
        aggregate purchase price of $3,000,000. As a result of the Exchange Agreement,
        OmniReliant became a wholly-owned subsidiary of the Company and the Company
        succeeded to the business of OmniReliant as its sole business.
 
 The
        Exchange Transaction is deemed to be a reverse acquisition. In accordance
        with
        the Accounting and Financial Reporting Interpretations and Guidance provided
        by
        the staff of the U.S. Securities and Exchange Commission, WillowTree (the
        legal
        acquirer) is considered the accounting acquiree and OmniReliant (the legal
        acquiree) is considered the accounting acquirer. The consolidated financial
        statements of the combined entity will in substance be those of OmniReliant,
        with the assets and liabilities, and revenues and expenses, of WillowTree
        being
        included effective from the date of consummation of the Exchange Transaction.
        WillowTree is deemed to be a continuation of the business of OmniReliant.
        The
        outstanding stock of WillowTree prior to the Exchange Transaction will be
        accounted for at its net book value and no goodwill will be recognized.
 
 Effective
        December 29, 2006, the Registrant’s name changed from Willowtree Advisor, Inc.
        to OmniReliant Holdings, Inc. ("the
        Company").
 
 ***Nature
        of Business***
  OmniReliant
        Corporation was incorporated on August 21, 2006 under the laws of the State
        of
        Florida. The Company is in the development stage and has realized only minor
        revenues from its planned operations. OmniReliant Corporation (“OmniReliant”)
        engages in the creation, design, distribution, and sale of affordable luxury
        products. OmniReliant plans to make these products available to U.S. and
        international consumers through direct response infomercials, live shopping
        networks, ecommerce, direct mail and traditional retail
        channels. OmniReliant will first focus on bringing the Kathy Hilton
“Private Beauty Spa” product line to market, after which OmniReliant plans to
        develop other personalities and designer licenses. Ms. Hilton, who is the
        wife
        of Rick Hilton, the grandson of the Hilton Hotel founder, has agreed to appear
        in television segments and infomercials.
 
 Until
        the
        Company’s products are successfully marketed on a live shopping network or via
        infomercials, we will not generate significant revenues and may not be
        successful. If we cannot generate sufficient revenues to continue operations,
        we
        will be forced to suspend or cease operations.
 
 ***Going*** ***Concern***
 
 The
        Company has suffered recurring losses while devoting substantially all of
        its
        efforts to raising capital and identifying and pursuing businesses
        opportunities. The Company's total liabilities exceed its total assets and
        the
        Company's liquidity is substantially dependent on raising capital.
 
 These
        factors raise substantial doubt about the Company's ability to continue as
        a going concern.
        The accompanying consolidated financial statements have been prepared on
        a going concern
        basis, which contemplates continuing operations, realization of assets and
        liquidation of liabilities in the ordinary course of business. The Company's
        ability to continue as a going concern
        is dependent upon its ability to raise sufficient capital to implement a
        successful business plan and to generate profits sufficient to become
        financially viable. The consolidated financial statements do not include
        adjustments relating to the recoverability of recorded assets or liabilities
        that might be necessary should the Company be unable to continue as a going concern.
  F-8
  **NOTE
        2- BASIS OF PRESENTATION**
 
 This
        summary of significant accounting policies is presented to assist in
        understanding the financial statements. The financial statements and notes
        are
        representations of the Company’s management, which is responsible for their
        integrity and objectivity. These accounting policies conform to accounting
        principles generally accepted in the United States of America and have been
        consistently applied in the preparation of the financial
        statements.
 
 **NOTE
        3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 ***Revenue
        Recognition --*** Revenue
        is recognized when the product is shipped to a customer, or in the limited
        circumstances, at destination, when terms provide that title passes at
        destination. Estimated amounts for sales returns and allowances are recorded
        at
        the time of sale.
 
 ***Principles
        of Consolidation -*** The
        Consolidated Financial Statements include the accounts of the Company and
        its
        wholly-owned subsidiary.  All significant intercompany accounts, profits
        and transactions have been eliminated in consolidation.
  ***Use
        of Estimates*** - The
        process of preparing financial statements in conformity with accounting
        principles generally accepted in the United States of America requires the
        use
        of estimates and assumptions regarding certain types of assets, liabilities,
        revenues, and expenses. Such estimates primarily relate to unsettled
        transactions and events as of the date of the financial statements. Accordingly,
        upon settlement, actual results may differ from estimated amounts.
 
 ***Cash
        and Equivalents***  ***--*** Cash
        equivalents are comprised of certain highly liquid investments with maturity
        of
        three months or less when purchased.
 
 ***Merchandise
        Inventories -*** Merchandise
        inventories are recorded at the lower of average cost or market. In-bound
        freight-related costs from our vendors are included as part of the net cost
        of
        merchandise inventories. Other costs associated with acquiring, storing and
        transporting merchandise inventories are expensed as incurred and included
        in
        cost of goods sold.
 
 ***Trademarks
        and licenses --*** Trademarks and licenses are recorded at cost and
        those with a finite life are amortized over the estimated periods of benefit.
        Amortization expense for the period from August 21, 2006 (inception) through
        June 30, 2007 was $777,154.
 
 Indefinite-lived
        intangible assets are reviewed annually for impairment under the provisions
        of
        Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and
        Other Intangible Assets, during the Company's fourth quarter of each fiscal
        year, or sooner, if events indicate a potential impairment. The identification
        and measurement of impairment of indefinite-lived intangible assets involves
        the
        estimation of the fair value of the related asset. The estimates of fair
        value
        are based on the best information available as of the date of the assessment,
        which primarily incorporates management assumptions about discounted expected
        future cash flows. Future cash flows can be affected by changes in industry
        or
        market conditions.
 
 ***Income
        Taxes--*** Deferred
        income taxes result primarily from temporary differences between financial
        and
        tax reporting and operating loss carry forwards. Deferred tax assets and
        liabilities are determined based on the difference between the financial
        statement basis and tax basis of assets and liabilities using enacted tax
        rates.
        A valuation allowance is recorded to reduce the deferred tax asset for the
        portion that is not expected to be realized.
 
 ***Advertising-*** Advertising costs are charged to operations when incurred and are included
        in
        operating expenses. Advertising costs for the period from August 21, 2006
        (inception) through June 30, 2007 were $29,744.
 
 ***Net
        Loss Per Share***  ***-*** The
        Company uses SFAS No. 128, “ *Earnings
        Per Share* ”
for
        calculating the basic and diluted loss per share. Basic loss per share is
        computed by dividing net loss and net loss attributable to common shareholders
        by the weighted average number of common shares outstanding. Diluted loss
        per
        share is computed similar to basic loss per share except that the denominator
        is
        increased to include the number of additional common shares that would have
        been
        outstanding if the potential shares had been issued and if the additional
        shares
        were dilutive. Common equivalent shares are excluded from the computation
        of net
        loss per share as they would be anti-dilutive.
 
 ***Stock
        Based Compensation -*** In
        December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
        Payment". SFAS 123(R) will provide investors and other users of financial
        statements with more complete and neutral financial information by requiring
        that the compensation cost relating to share-based payment transactions be
        recognized in financial statements. That cost will be measured based on the
        fair
        value of the equity or liability instruments issued. SFAS 123(R) covers a
        wide
        range of share-based compensation arrangements including share options,
        restricted share plans, performance-based awards, share appreciation rights,
        and
        employee share purchase plans. SFAS 123(R) replaces FASB Statement No. 123,
        "Accounting for Stock-Based Compensation", and supersedes APB Opinion No.
        25,
        "Accounting for Stock Issued to Employees". SFAS 123, as originally issued
        in
        1995, established as preferable a fair-value-based method of accounting for
        share-based payment transactions with employees. However, that statement
        permitted entities the option of continuing to apply the guidance in Opinion
        25,
        as long as the footnotes to financial statements disclosed what net income
        would
        have been had the preferable fair-value-based method been used. Public entities
        (other than those filing as small business issuers) were required to apply
        SFAS
        123(R) as of the first interim or annual reporting period that begins after
        June
        15, 2005. For public entities that file as small business issuers, SFAS 123(R)
        was applicable as of the beginning of the first interim or annual reporting
        period that begins after December 15, 2005.
  F-9
  ***Recent
        Accounting Pronouncements***
  In
        June
        2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
        in
        -Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48"), which
        clarifies the accounting for uncertainty in income taxes. FIN 48 prescribes
        a
        recognition threshold and measurement attribute for the financial statement
        recognition and measurement of a tax position taken or expected to be taken
        in a
        tax return. The Interpretation requires that the Company recognize in the
        financial statements the impact of tax position, if that position is more
        likely
        than not of being sustained on audit, based on the technical merits of the
        position. FIN 48 also provides guidance on derecognition, classification,
        interest and penalties, accounting in interim periods and disclosure. The
        provisions of FIN 48 are effective for fiscal years beginning after December
        15,
        2006 with the cumulative effect of the change in accounting principle recorded
        as an adjustment to beginning retained earnings. The adoption of this statement
        is not expected to have a material impact on the Company's consolidated
        financial position or results of operations.
 
 In
        September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements".
        This
        standard defines fair value, establishes a framework for measuring fair value
        in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. This statement is effective for financial statements
        issued
        for fiscal years beginning after November 15, 2007. Earlier application is
        encouraged. The adoption of this accounting pronouncement is not expected
        to
        have a material effect on our consolidated financial statements.
 
 In
        September 2006, the Securities and Exchange Commission issued SAB No. 108
        "Considering the Effects of Prior Year Misstatements When Quantifying
        Misstatements in Current Year Financial Statements", which provides interpretive
        guidance on how the effects of the carryover or reversal of prior year
        misstatements should be considered in quantifying a current year misstatement.
        The guidance is applicable beginning fiscal 2008. The Company does not believe
        SAB No. 108 will have a material impact on the consolidated financial
        statements.
  **NOTE
        4 - ACCOUNTING FOR STOCK BASED COMPENSATION**
 
 As
        of
        June 30, 2007, the Company had not yet created a stock incentive plan which
        authorizes the issuance of options to purchase common stock. Prior to January
        1,
        2006, the Company accounted for Stock Options and Stock Based Compensation
        under
        the recognition and measurement provisions of APB Opinion No. 25, “Accounting
        for Stock Issued to Employees”, and related Interpretations, as permitted by
        FASB Statement No. 123, “Accounting for Stock-Based Compensation”. Effective
        January 1, 2006, the Company adopted the fair value recognition provisions
        of
        SFAS No. 123(R), Share-Based Payment, using the modified-prospective-transition
        method. Under that transition method, compensation cost for all share-based
        payments granted prior to, but not yet vested as of January 1, 2006 are based
        on
        (a) the grant date fair value estimated in accordance with the original
        provisions of SFAS No. 123, and (b) compensation cost for all share-based
        payments granted subsequent to January 1, 2006 are based on the grant-date
        fair
        value estimated in accordance with the provisions of SFAS No.123(R). Results
        for
        prior periods have not been restated.
 
 Although
        the Company acknowledges that it owes two employees a total of 350,000 options
        once it establishes a qualified stock option plan, the Company has not yet
        established the plan. The options for these employees call for an
        option
        (the "Option") to purchase 300,000 and 50,000 shares of the Company's Common
        Stock, par value $.001 per share ("Common Stock"), at an exercise price of
        $1.00. The Option may be exercised, in whole or in part, at employee’s option
        any time following execution and vesting requirements of this agreement.
        The
        Option shall expire five (5) years from the issuance date, and must be
        exercised, if at all, as shares become vested or before the Expiration Date.
        The
        Company has yet to execute the option and has not determined the vesting
        requirements. The Company reserves the right to settle any obligation that
        may
        arise in the future due to the above individuals in the Company’s common stock
        or in cash.
  The
        adoption of SFAS No.123(R) on January 1, 2006 did not have any effect on
        the
        Company's net income and earning per share for the period from August 21,
        2006
        (inception) to June 30, 2007 since no options were granted.
  F-10
  
 ***Stock
        Options and Warrants:***
 
 The
        following table summarizes the activity related to all Company stock options
        and
        warrants for the period from August 21, 2006 (inception) to June 30,
        2007.
 **Weighted
                    Average****Exercise
                    Price**
                
                **Exercise
                    Price****Stock**
                
                **Per
                    Share**
                
                **Per
                    Share****Warrants**
                
                **Options**
                
                **Warrants**
                
                **Options**
                
                **Warrants**
                
                **Options****Outstanding
                    at June 30, 2006**
                
                
                **-**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **-**Granted
                
                
                9,004,000
                
                
                -
                
                $
                1.00-3.75
                
                
                -
                
                
                2.13
                
                
                -Exercised
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Cancelled
                    or expired
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Outstanding
                    at June 30, 2007**
                
                
                **9,004,000**
                
                
                **-**
                
                **$**
                **1.00-3.75**
                
                
                **-**
                
                **$**
                **2.13**
                
                
                **-****Exercisable
                    at June 30, 2007**
                
                
                **9,004,000**
                
                
                **-**
                
                **$**
                **1.00-3.75**
                
                
                **-**
                
                **$**
                **2.13**
                
                
                **-**
  The
        warrants expire at various dates ranging from April 2010 through March
        2016.
  **NOTE
        5 - EARNINGS PER SHARE**
 **For
                    the year ended****June
                    30, 2007****Net
                    income available to common shareholders**
                
                
                **($28,095,271**
                **)**Weighted
                    average shares outstanding:Basic
                
                
                10,652,363Diluted
                
                
                10,652,363**Earnings
                    per share:****Basic**
                
                
                **($2.64**
                **)****Diluted***
                
                
                **($2.64**
                **)**
 *Diluted
        weighted average per share outstanding for the year ended June 30, 2007 does
        not
        include the effect of dilutive Series A and B Preferred Stock and Series
        A-1,
        A-2, B-1, B-2, BD-1, BD-2, BD-3, and consultant warrants because to do so
        would
        have been anti-dilutive (see detailed list of anti-diluted shares below).
        Accordingly, basic and diluted net loss per share for this period is the
        same.
 **Common****Stock****Securities**
                
                **Equivalents**Preferred:Series
                    A Preferred
                
                
                3,000,000Series
                    B Preferred
                
                
                480,000Warrants:Class
                    A-1 Warrants
                
                
                3,000,000Class
                    A-2 Warrants
                
                
                3,000,000Class
                    B-1 Warrants
                
                
                480,000Class
                    B-2 Warrants
                
                
                480,000Class
                    BD-1 Warrants
                
                
                348,000Class
                    BD-2 Warrants
                
                
                348,000Class
                    BD-3 Warrants
                
                
                348,000Warrant
                    issued to consultants
                
                
                1,000,000Total
                    antidilutive shares
                
                
                12,484,000
  F-11
  **NOTE
        6 - OTHER ASSETS**
  **As
                    of June 30, 2007****Gross
                    Carrying**
                
                **Accumulated****Amount**
                
                **Amortization**Amortized
                    intangible assetsLicense
                    agreement
                
                $
                1,306,010
                
                $
                (750,903
                )Straightening
                    iron agreement
                
                
                52,500
                
                
                (26,251
                )Total
                
                $
                1,358,510
                
                $
                (777,154
                )Unamortized
                    intangible assetsPatent
                    application
                
                $
                745,000Total
                
                $
                745,000**Aggregate
                    Amortization Expense**For
                    the year ended 6/30/07
                
                $
                777,154**Estimated
                    Amortization Expense**For
                    the year ended 6/30/08
                
                $
                1,063,498For
                    the year ended 6/30/09
                
                $
                1,037,248For
                    the year ended 6/30/10
                
                $
                1,037,248For
                    the year ended 6/30/11
                
                $
                1,037,248For
                    the year ended 6/30/12
                
                $
                1,537,248
 
 ***Licensing
        Agreement*** *-* On
        October 13, 2006, the Company entered into an agreement with a related party.
        This agreement was subsequently amended on November 20, 2006. Under the terms
        of
        the Licensing Agreement the Company obtained the exclusive right and license
        to
        certain licensed products through December 31, 2011 with an option to renew
        for
        an additional five year period provided all the minimum royalty payments
        have
        been paid during the initial term. In consideration of the license granted
        and
        the services to be performed, the Company will compensate the other party
        an
        annual guaranteed minimum (payable semi-annually) royalty as
        follows:
 **Annual**
                
                
                
                **Minimum****Period**
                
                **Dates**
                
                **Royalty**1
                
                Effective
                  Date to 12/31/07
                
                $
                1,000,0002
                
                1/1/08
                  to 12/31/08
                
                $
                1,000,0003
                
                1/1/09
                  to 12/31/09
                
                $
                1,000,0004
                
                1/1/10
                  to 12/31/10
                
                $
                1,000,0005
                
                1/1/11
                  to 12/31/11
                
                $
                1,000,0006
                
                1/1/12
                  to 12/31/15
                
                $
                1,500,000
  In
        addition to the minimum royalty payment the Company will also compensate
        the
        other party a sales royalty of eight percent (8%) on each annual period's
        net
        sales made in all venues other than infomercials; a minimum of three percent
        (3%) on each annual period's net sales made through infomercials and four
        percent (4%) should the revenues exceed media expenditures by a three to
        one
        media ratio. The sales royalty is payable on a quarterly basis within forty-five
        (45) days after the close of the prior quarter's sales. The payment of sales
        royalties are credited against the guaranteed minimum royalty payment for
        any
        annual period.
 
 In
        addition to the sales royalties and guaranteed minimum royalties being paid
        the
        Company also delivered three million (3,000,000) shares of the Company's
        common
        stock, which represented 25% of the issued and outstanding common stock on
        that
        date.
  On
        November 20, 2006 the Licensing Agreement was amended to change the date
        of the
        first annual Guaranteed Minimum Royalty payment from thirty (30) days following
        the effective date to January 3, 2007. In addition, the amendment revised
        subsequent payments to occur on January 1 st and July
        1 st of each
        annual period. On November 22, 2006 the Company made a payment of $850,000
        pursuant to this agreement. On
        January 10, 2007 the Company made a payment of $150,000 pursuant to the
        licensing agreement. The payment was the final payment of the $1,000,000
        initial
        installment due under the agreement.
  F-12
  For
        the
        year ended June 30, 2007 the Company recognized $750,903 of expense related
        to
        this agreement.
 
 ***Straightening
        Irons Agreement -*** **** On
        February 12, 2007, the Company entered into an agreement with a manufacturer
        of
        straightening irons. Pursuant to the terms of the contract the Company **** agrees
        to
        pay Licensor a Royalty payment of one percent (1.0%) of the Adjusted Gross
        Collected Revenues (“AGCR”), defined below, on all revenues generated from the
        sale of the Product and up-sells of like category sold in connection with
        the
        Product and through the inbound call. The Royalties shall be paid quarterly,
        along with sufficient reports justifying the calculation of the Royalty
        payments. Should the Infomercial’s performance exceeds a two
        point two five (2.25X) times the media ratio, meaning the revenues generated
        by
        the Infomercial, less returns and charge backs exceed two and one quarter
        times
        the expenditures on the media ratio (the “Media Ratio”), the Royalty shall
        increase to two and one half percent (2.5%) of the AGCR. Should the Media
        Ratio
        exceeds three times (3X) Media Ratio the Royalty shall be bumped to three
        and
        one half percent (3.5%) and if the Media Ratio exceeds three and one half
        times
        (3.5X) the Royalty shall be four percent (4%) and in the event the Media
        Ratio
        exceeds four times Media Ratio the Royalty shall be boosted to five percent
        (5%). The Royalty on sales in all other channels of distribution except Live
        Shopping shall be five percent (5%) of the wholesale revenues. Licensor shall
        receive six percent (6%) Royalty for Live Shopping on wholesale revenues
        less
        returns. Upon the execution of this Agreement, ORH shall issue Licensor 15,000
        common shares of OmniReliant Holdings, Inc. (ORHI )
        which
        shall be restricted stock and subject to the SEC 144 Rules.
 
 Adjusted
        Gross Collected Revenues. “AGCR”
        shall mean ORH’s Gross Revenue from sales of the Products, less all of the
        following:
  (A)
              Shipping
                  & Handling, credit card fees, refunds, credits or other allowances
                  on
                  business, as actually incurred and as reserved for (“Returns”);not
 (B)
              Sales,
                  excise, use, value added or any like
                  taxes;
 (C)
              Cost
                  of goods for purposes of liquidation or closeout (“Liquidation Sales”).
                  Licensor shall have the first right of refusal to purchase the
                  liquidation
                  inventory at a penny above ORH’s best
                  offer.
 
 The
        reserve for Returns and un-collectibles shall initially be ten percent (10%)
        of
        Adjusted Gross Revenues, and shall be adjusted periodically based upon actual
        experience.
 
 The
        Company shall have the right to sell and distribute the Products at such
        prices,
        and on such terms and conditions (including shipping and handling charges)
        as
        ORH may establish. In the event that ORH fails, during the one-year period
        commencing upon Rollout and continuing thereafter, to generate $2,000,000
        in
        Product sales per year (“Minimum Quantities”), Licensor may provide 30 days
        prior written notice to ORH make ORH’s rights hereunder non-exclusive. For the
        life of the Product, ORH or a designated third party, such as the manufacturer,
        on behalf of ORH will maintain and keep in force product liability insurance
        with an insurer approved by Licensor in the amounts not less than $2,000,000
        per
        occurrence and $5,000,000 in the aggregate covering all Products licensed
        by ORH
        from Licensor. ORH, Licensor and, upon ORH’s request, any of ORH’s subsidiaries,
        affiliates or sub-licensees who are involved with the marketing and distribution
        of the Products) shall be named as additional insured on all such insurance
        policies, each of which shall be endorsed so as to provide at least 30 days
        notice to ORH of its cancellation, termination or non-renewal.
 
 For
        the
        year ended June 30, 2007 the Company recognized $26,250 of expense related
        to
        this agreement.
 
 ***Patent
        Application Agreement -*** On June
        18, 2007, OmniReliant Holdings, Inc. (“the Company”) entered into an Agreement
        for Acquisition of a Patent Application with Product & Technology Partners
        LLC. Pursuant to the Agreement, the Company acquired from Seller the rights
        to a
        patent-pending self-warming topical pharmaceutical product capable of delivering
        salicylic acid in a foam suitable for consumer use. In consideration for
        the
        rights to the product, the Company agreed to pay Seller in the following
        manner:
 
 ·
              Upon
                  execution of the Agreement, the Company paid Seller (i) an aggregate
                  of
                  Twenty Five Thousand dollars ($25,000) and (ii) issued to the Seller
                  Two
                  Hundred Thousand (200,000) shares of the Company’s common
                  stock.
 ·
              Following
                  the completion of due diligence (which shall be six months from
                  the date
                  of the Agreement), if the Company is satisfied with the Product
                  and
                  intends to offer Product for sale, the Company shall pay to Seller
                  Twenty
                  Five Thousand dollars ($25,000).
 ·
              The
                  Company shall also pay Seller installment payments of up to a maximum
                  of
                  Four Hundred Thousand Dollars ($400,000), payable over a period
                  of 4 years
                  beginning six months from the date of the Agreement. If no revenues
                  are
                  generated from the sale of the Product, no installment payments
                  shall be
                  due.
 
 For
        the
        year ended June 30, 2007 the Company did not recognize any expense related
        to
        this agreement.
 
 **NOTE
        7 - COMMITMENTS & CONTINGENCIES**
 
 ***Consulting
        Agreement*** *-* On
        October 1, 2006 the Company entered into a six (6) month consulting agreement
        with Harrington Business Development, LLC (“HBD”) to provide services related to
        the creation, production, and editing of infomercials and also to consult
        the
        Company on marketing and distribution of its products. In consideration for
        the
        services performed the Company will compensate HBD $15,000 per month. On
        April
        1, 2007 the Company verbally extended the term of the Harrington Business
        Development, LLC consulting agreement for an additional 3 months. The
        shareholders of HBD are also shareholders of the Company. For the year ended
        June 30, 2007 the Company recognized $135,000 of expense related to this
        agreement.
  F-13
  ***Employment
        Agreement*** *-* On
        October 31, 2006 the Company entered into an employment agreement with Paul
        Morrison to act as its Chief Operating Officer and President. Under the terms
        of
        the agreement Mr. Morrison's contract will be for a term of two (2) years
        with
        automatic successive two (2) year term renewals subject to a notice of
        non-renewal. In consideration for the services he is to receive a base salary
        of
        $120,000 per year with annual pay increases of ten percent (10%); incentive
        bonus of one and half percent (1.5%) of pretax profits on the sales of certain
        products payable the day after the Company's 10-KSB annual report is filed
        with
        the SEC; the issuance of 300,000 shares the Company's restricted common stock
        payable as follows: 150,000 shares upon execution of the agreement and 150,000
        shares on the first anniversary of employment with the Company. On October
        31,
        2006, prior to the recapitalization, OmniReliant Corporation issued Mr. Morrison
        150,000 shares and recorded $15,000 of stock compensation expense related
        to
        this agreement.
 
 ***Assignment
        of Contract -*** On
        November 10, 2006 the Company entered into an agreement with Reliant
        International Media, LLC (“RIM”) to assume a marketing and distribution
        agreement RIM had with a third party manufacturer of spa related products.
        The
        original agreement was entered into on September 25, 2006 for a term of twelve
        (12) months. The agreement gives the Company exclusive rights to market and
        distribute the product in the United States and Canada. The Company also
        received the non-exclusive right to all other countries. The shareholders
        of RIM
        are also shareholders of the Company.
 
 ***International
        Distribution Agreement -*** On March
        19, 2007, the Company entered into an International Distribution Agreement
        with
        Reliant International Media LLC. Pursuant to the Agreement, the Company has
        granted Reliant the exclusive right to represent the Company with respect
        to
        sales of certain products through retail distribution channels in the United
        Kingdom, Japan and Korea. The products covered by the agreement include any
        and
        all products marketed by the Company under the Kathy Hilton name, likeness
        or
        brand, excluding all perfume and perfume related products. In consideration
        for
        Reliant’s marketing services, the Company has agreed to pay to Reliant a royalty
        equal to ten percent of the Company’s gross revenues. The shareholders of
        Reliant International Media are also shareholders of the Company. For the
        year
        ended June 30, 2007 the Company has not recognized any expense related to
        this
        agreement.
 
 ***Public
        Relations Agreement -*** On
        April
        27, 2007 the Company entered into a three year consulting agreement with
        a
        public relations firm. Pursuant to the terms of the agreement the Company
        will
        pay the following as compensation for services: $7,500 payable each month;
        1,000,000 warrants with a term of 3 years, issued at the onset, entitling
        the
        holder to purchase shares of the Company’s common stock at an exercise price of
        $1.00 per share; exclusive rights to all future public relation contracts
        awarded to the Company for Kathy Hilton licenses; and compensation at the
        rate
        of 3% of projected gross wholesale sales per year on all future Kathy Hilton
        licenses awarded to the Company. For
        the
        year ended June 30, 2007 the Company recognized $2,490,151 of expense related
        to
        this agreement, of which $2,471,401 was associated with the 1,000,000 warrants
        which were issued. The value of the warrants was determined by using the
        Black-Scholes option pricing model. The Company used a volatility percentage
        of
        23.6%, a risk free interest rate of 5.00%, and an expected life of 1 1⁄2 years in
        calculating the fair value.
  **NOTE
        8 - SHARE EXCHANGE AND EQUITY TRANSACTIONS**
 
 ***Common
        Stock Purchase Agreement*** - On
        November 22, 2006 the Company and OmniReliant entered into a securities purchase
        agreement with the Company's then principal stockholder, Cynthia Allison,
        pursuant to which OmniReliant purchased 5,000,000 shares of the Company's
        common
        stock from Ms. Allison for a purchase price of $475,813. Pursuant to the
        Common
        Stock Purchase Agreement, OmniReliant transferred the 5,000,000 shares to
        the
        Company for cancellation. The transaction with Ms. Allison was accounted
        for as
        a reduction of additional paid in capital.
 
 ***Exchange
        Agreement*** -
        Pursuant to the Exchange Agreement, dated November 22, 2006, the Company
        issued
        12,300,000 shares of common stock to the OmniReliant stockholders. The common
        stock was issued to the following stockholders pursuant to the Exchange
        Agreement:
 **Number
                    of****Name**
                
                **Shares**Apogee
                    Financial Investments, Inc.
                
                
                3,000,000ZTZ
                    Trust Inc.
                
                
                3,000,000Kevin
                    Harrington
                
                
                1,500,000Tim
                    Harrington
                
                
                1,500,000KRH
                    Licensing Company, LLC
                
                
                3,000,000Paul
                    Morrison
                
                
                300,000Total
                
                
                12,300,000
  ***Series
        A Convertible Preferred Stock Purchase Agreement*** *-* In
        conjunction with the Common Stock Purchase Agreement and Exchange Agreement
        the
        Company entered into a Preferred Stock Purchase Agreement with an investor,
        pursuant to which the investor purchased 3,000 shares of the Company's Series
        A
        10% Convertible Preferred stock, 3,000,000 Series A-1 warrants, and 3,000,000
        series A-2 common stock purchase warrants for an aggregate purchase price
        of
        $3,000,000.
 
 F-14
  The
        Preferred Stock has a fixed conversion price of $1.00 and is convertible
        into an
        aggregate of 3,000,000 shares of common stock. The series A-1 warrants have
        an
        exercise price of $1.50 and a term of five (5) years. The series A-2 warrants
        have an exercise price of $3.00 and a term of ten (10) years.
 
 Midtown
        Partners & Co. LLC, which served as the Company's placement agent in
        connection with the Preferred Stock Purchase Agreement, received an aggregate
        placement agent fee of approximately $300,000, as well as the following common
        stock purchase warrants: (a) series BD-1 common stock purchase warrants
        entitling Midtown Partners to purchase 300,000 shares of the Company's common
        stock at an exercise price of one dollar ($1.00) per share, (b) series BD-2
        common stock purchase warrants entitling Midtown Partners to purchase 300,000
        shares of the Company's common stock at an exercise price of one dollar and
        fifty cents ($1.50) per share, and (c) series BD-3 common stock purchase
        warrants entitling Midtown Partners to purchase 300,000 shares of the Company's
        common stock at an exercise price of three dollars ($3.00) per share. The
        Series
        BD warrants have a term of ten years. Midtown Partners & Co. LLC is
        a FINRA registered broker-dealer. The members of Midtown Partners & Co.
        LLC are also shareholders of the Company.
 
 Pursuant
        to a verbal agreement, Apogee Financial Investments, Inc., a merchant bank,
        received a cash fee of $125,000 for consulting and due diligence services
        rendered in connection with the transactions. Apogee Financial Investments,
        Inc.
        is owned by shareholders of the Company.
 
 The
        market value of the Company’s common stock on the date the Series A Convertible
        Preferred was issued and sold was $3.50 per share. In accordance with EITF
        Issue
        98-5 “Accounting for Convertible Securities with Beneficial Conversion Features
        or Contingently Adjustable Conversion Ratios”, as amended by EITF 00-27 “Application
        of Issue No. 98-5 to certain Convertible Instruments”, the Company evaluated the
        Series A Convertible Preferred stock and determined it had a beneficial
        conversion feature. Pursuant to EITF 98-5 and EITF 00-27 a beneficial conversion
        feature occurs when the conversion price of a security is less than the fair
        value of the Company's common stock on the measurement date. The Company
        calculated the effect of EITF 00-27 and EITF 98-5 on the issuance and determined
        on a relative fair value basis that, of the $3,000,000 raised, $2,389,849
        was
        attributable to the beneficial conversion feature of the warrants and $610,151
        was attributable to the beneficial conversion feature of the Series A
        Convertible Preferred Stock. As a result, on the date of issuance the Company
        adjusted its balance sheet to reduce the value of the Series A Convertible
        Preferred stock by $610,151 and the warrants by $2,389,849 and increased
        additional paid-in capital by $3,000,000. The Company used the Black-Scholes
        model to value the Series A-1 Common Stock Purchase warrants and Series A-2
        Common Stock Purchase warrants. For purposes of calculating the fair value
        of
        the warrants the Company used a risk free rate of return of 4.63%, an expected
        term of 2 years, and an expected volatility percentage of 23.6%.
 
 In
        accordance with EITF 98-5 and EITF 00-27 the intrinsic value of the beneficial
        conversion feature is considered a deemed dividend to the preferred shareholders
        and is to be amortized over the period of the security’s earliest conversion
        date. As a result, the beneficial conversion feature for the securities was
        recognized immediately as all securities were convertible, at the option
        of the
        holder, upon issuance. To amortize the beneficial conversion feature the
        Company
        reduced the additional paid in capital account and increased the Series A
        Preferred Convertible Stock for the amount of deemed dividend. During the
        year
        ended June 30, 2007 the Company recognized a deemed dividend related to the
        Series A Preferred Convertible Stock and warrants of $610,151 and $2,389,849,
        respectively.
  In
        addition, the Company’s Series A preferred contains certain rights and
        preferences which may require the Company to redeem the shares for cash (see *Convertible
        Preferred Stock Rights and Preferences* below
        for further details). Therefore, the preferred stock is considered to have
        an
        embedded conversion feature under SFAS No. 133 which requires separate
        accounting. Consequently, the conversion feature must be bifurcated from
        the
        preferred stock. The carrying value of the embedded derivative is adjusted
        to
        fair value at the end of each reporting period and the change in fair value
        is
        recognized in the statement of operations. On the date of issuance, the
        estimated fair value of the conversion feature was $7,500,000 which was recorded
        as a liability on the date of issue. At each balance sheet date, we adjust
        the
        carrying value of the embedded derivative to estimated fair value and recognize
        the change in such estimated value in our consolidated statements of operations.
        The estimated fair value at June 30, 2007 was $9,838,018. The Company
        classifies the redeemable convertible preferred stock as a liability on the
        consolidated balance sheet.
  Additionally,
        the warrants issued as part of the Series A preferred financing represent
        a
        liability under EITF 00-19 in that the registration rights agreement (see *Registration
        Rights Agreement* ** below
        for
        further details) contains a liquidated damages clause requiring the Company
        to
        pay cash to the holder of the instrument if the Company fails to obtain an
        effective registration statement timely, an event that is out of the Company’s
        control. The warrants therefore can not be classified as equity until the
        effective registration statement is obtained. As such, in accordance with EITF
        00-19, the warrants are recorded as a liability and measured at fair value
        at
        the reporting date, with the change in its fair value from issuance date
        reporting in the statement of operations. The estimated fair value at
        June 30, 2007 was $11,681,045. The fair value of the warrants has been
        determined using the Black-Scholes model witha
        risk
        free rate of return of 5.00%, an expected term of 2 years, and an expected
        volatility percentage of 23.6%.
  F-15
  **Total
                    Preferred Series A Proceeds**
                
                **$**
                **3,000,000**Amount
                    of proceeds allocated to Warrants
                
                
                (2,389,849
                )Amount
                    of proceeds allocated to Preferred Series A
                
                
                (610,151
                )Amortization
                    of Beneficial Conversion Feature
                
                
                3,000,000Reclassification
                    of Series A Preferred as a liability
                
                
                (610,151
                )Reclassification
                    of A-1 and A-2 warrants as a liability
                
                
                (2,389,849
                )**Preferred
                    Series A balance at June 30, 2007**
                
                **$**
                **-**
 ***Series
        B Convertible Preferred Stock Purchase Agreement*** *-* On
        May
        25, 2007, the Company entered into the Preferred Stock Purchase Agreement
        with
        an investor, pursuant to which the Investor purchased 600 shares of the
        Company’s series B 10% convertible preferred stock, 480,000 Series B-1 warrants,
        and 480,000 series B-2 common stock purchase warrants for an aggregate purchase
        price of $600,000.
 
 The
        series B-1 warrants have an exercise price of $1.87 and a term of three (3)
        years. The series B-2 warrants have an exercise price of $3.75 and a term
        of
        five (5) years.
 
 Midtown
        Partner & Co. LLC, which served as the Company’s placement agent
        in connection with the Preferred Stock Purchase Agreement, received an aggregate
        placement agent fee of approximately $60,000, as well as the following common
        stock purchase warrants: (a) series BD-1 common stock purchase warrants
        entitling Midtown Partners to purchase 48,000 shares of the Company's common
        stock at an exercise price of one dollar and eighty-seven cents ($1.87) per
        share, and (b) series BD-2 common stock purchase warrants entitling Midtown
        Partners to purchase 48,000 shares of the Company's common stock at an exercise
        price of three dollars and seventy-five cents ($3.75) per share and (c) series
        BD-3 common stock purchase warrants entitling Midtown Partners to purchase
        48,000 shares of the Company's common stock at an exercise price of one dollar
        and twenty five cents ($1.25) per share. The Series BD warrants have a term
        of
        ten years. Midtown Partners & Co. LLC is a FINRA registered
        broker-dealer. The
        members of Midtown Partners & Co. LLC are also shareholders of the
        Company.
 
 The
        market value of the Company’s common stock on the date the Series B Convertible
        Preferred was issued and sold was $3.50 per share. In accordance with EITF
        Issue
        98-5 “Accounting for Convertible Securities with Beneficial Conversion Features
        or Contingently Adjustable Conversion Ratios”, as amended by EITF 00-27 “Application
        of Issue No. 98-5 to certain Convertible Instruments”, the Company evaluated the
        Series B Convertible Preferred stock and determined it had a beneficial
        conversion feature. Pursuant to EITF 98-5 and EITF 00-27 a beneficial conversion
        feature occurs when the conversion price of a security is less than the fair
        value of the Company's common stock on the measurement date. The Company
        calculated the effect of EITF 00-27 and EITF 98-5 on the issuance and determined
        on a relative fair value basis that, of the $600,000 raised, $376,906 was
        attributable to the beneficial conversion feature of the warrants and $220,094
        was attributable to the beneficial conversion feature of the Series B
        Convertible Preferred Stock. As a result, on the date of issuance the Company
        adjusted its balance sheet to reduce the value of the Series B Convertible
        Preferred stock by $220,094 and the warrants by $376,906 and increased
        additional paid-in capital by $600,000. The Company used the Black-Scholes
        model
        to value the Series B-1 Common Stock Purchase warrants and Series B-2 Common
        Stock Purchase warrants. For purposes of calculating the fair value of the
        warrants the Company used a risk free rate of return of 4.63%, an expected
        term
        of 2 years, and an expected volatility percentage of 23.6%.
 
 In
        accordance with EITF 98-5 and EITF 00-27 the intrinsic value of the beneficial
        conversion feature is considered a deemed dividend to the preferred shareholders
        and is to be amortized over the period of the security’s earliest conversion
        date. As a result, the beneficial conversion feature for the securities was
        recognized immediately as all securities were convertible, at the option
        of the
        holder, upon issuance. To amortize the beneficial conversion feature the
        Company
        reduced the additional paid in capital account and increased the Series B
        Preferred Convertible Stock for the amount of deemed dividend. During the
        year
        ended June 30, 2007 the Company recognized a deemed dividend related to the
        Series B Preferred Convertible Stock and warrants of $220,094 and $376,906,
        respectively.
  In
        addition, the Company’s Series B preferred contains certain rights and
        preferences which may require the Company to redeem the shares for cash (see *Convertible
        Preferred Stock Rights and Preferences* below
        for further details). Therefore, the preferred stock is considered to have
        an
        embedded conversion feature under SFAS No. 133. Consequently, the
        conversion feature must be bifurcated from the preferred stock and accounted
        for
        separately. The carrying value of the embedded derivative is adjusted to
        fair
        value at the end of each reporting period and the change in fair value is
        recognized in the statement of operations. On the date of issuance, the
        estimated fair value of the conversion feature was $1,080,000 which was recorded
        as a liability on the date of issue. At each balance sheet date, we adjust
        the
        carrying value of the embedded derivative to estimated fair value and recognize
        the change in such estimated value in our consolidated statements of operations.
        The estimated fair value at June 30, 2007 was $1,393,098. The Company
        classifies the redeemable convertible preferred stock as a liability on the
        consolidated balance sheet.
  Additionally,
        the warrants issued as part of the Series B preferred financing represent
        a
        liability under EITF 00-19 in that the registration rights agreement (see *Registration
        Rights Agreement* ** below
        for
        further details) contains a liquidated damages clause requiring the Company
        to
        pay cash to the holder of the instrument if the Company fails to obtain an
        effective registration statement timely, an event that is out of the Company’s
        control. The warrants therefore can not be classified as equity until the
        effective registration statement is obtained. As such, in accordance with
        EITF
        00-19, the warrants are recorded as a liability and measured at fair value
        at
        the reporting date, with the change in its fair value from issuance date
        reporting in the statement of operations. The estimated fair value at
        June 30, 2007 was $885,297. The fair value of the warrants has been
        determined using the Black-Scholes model with a
        risk
        free rate of return of 5.00%, an expected term of 2 years, and an expected
        volatility percentage of 23.6%.
 **Total
                    Preferred Series B Proceeds**
                
                **$**
                **600,000**Amount
                    of proceeds allocated to Warrants
                
                
                (406,697
                )Amount
                    of proceeds allocated to Preferred Series B
                
                
                (193,303
                )Amortization
                    of Beneficial Conversion Feature
                
                
                600,000Reclassification
                    of Series B as a liability
                
                
                (193,303
                )Reclassification
                    of warrants B-1 and B-2 as a liability
                
                
                (406,697
                )**Preferred
                    Series B balance at June 30, 2007**
                
                **$**
                **-**
 
 F-16
  ***Convertible
        Preferred Stock Rights and Preferences*** *-* Holders
        of the Company’s Series A and B Convertible Preferred Stock are entitled to
        receive cumulative dividends at the rate per share of 10% per annum, payable
        quarterly on January 1, April 1, July 1 and October 1. The form of the dividend
        payments are determined as follows: (a) if funds are available and the "Equity
        Conditions-as defined below" have not been met during the preceeding 5
        consecutive trading days payment must be in cash; (b) if funds are available
        and
        the "Equity Conditions" have been me **t** during
        the 5 preceeding trading days the payment may be made, at the sole election
        of
        the Company, in either shares, 90% of the average of the “VWAPs-as defined
        below” for the 5 consecutive trading days prior to the payment date. If at any
        time the Company has the right to pay dividends in cash or Common Stock it
        must
        provide the holder with at least 20 Trading Days' notice of its election
        to pay
        in Common Stock. Any dividends, whether paid in cash or Common Stock, that
        are
        not paid within three Trading Days following the Dividend Payment Date continue
        to accrue and entail a late fee, which must be paid in cash, at the rate
        of 18%
        per annum. As of June 30, 2007, the Company accrued $188,635 and $5,833 in
        dividends related to the Series A and B Preferred shares, respectively.
 
 “Equity
        Conditions” means, during the period in question, (i) the Corporation shall have
        duly honored all conversions scheduled to occur or occurring by virtue of
        one or
        more Notices of Conversion of the applicable Holder on or prior to the dates
        so
        requested or required, if any, (ii) the Corporation shall have paid all
        liquidated damages and other amounts owing to the applicable Holder in respect
        of the Preferred Stock, (iii) there is an effective Conversion Shares
        Registration Statement pursuant to which the Holders are permitted to utilize
        the prospectus thereunder to resell all of the shares of Common Stock issuable
        pursuant to the Transaction Documents (and the Corporation believes, in good
        faith, that such effectiveness will continue uninterrupted for the foreseeable
        future), (iv) the Common Stock is trading on a Trading Market and all of
        the
        shares issuable pursuant to the Transaction Documents are listed for trading
        on
        such Trading Market (and the Corporation believes, in good faith, that trading
        of the Common Stock on a Trading Market will continue uninterrupted for the
        foreseeable future), (v) there is a sufficient number of authorized, but
        unissued and otherwise unreserved, shares of Common Stock for the issuance
        of
        all of the shares of Common Stock issuable pursuant to the Transaction
        Documents, (vi) there is no existing Triggering Event (see definition below)
        or
        no existing event which, with the passage of time or the giving of notice,
        would
        constitute a Triggering Event, (vii) the issuance of the shares in question
        to
        the applicable Holder would not violate the limitations set forth in Section
        6(c) herein, (viii) there has been no public announcement of a pending or
        proposed Fundamental Transaction or Change of Control Transaction that has
        not
        been consummated, (ix) the applicable Holder is in possession of any information
        that constitutes, or may constitute, material non-public information, and
        (x)
        for a period of 20 consecutive Trading Days prior to the applicable date
        in
        question, the daily trading volume for the Common Stock on the principal
        Trading
        Market exceeds 100,000 shares per Trading Day (subject to adjustment for
        forward
        and reverse stock splits and the like).
 
 “VWAP”
        means, for any date, the price determined by the first of the following clauses
        that applies: (a) if the Common Stock is then listed or quoted on a Trading
        Market, the daily volume weighted average price of the Common Stock for such
        date (or the nearest preceding date) on the Trading Market on which the Common
        Stock is then listed or quoted for trading as reported by Bloomberg Financial
        L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02
        p.m.
        (New York City time)); (b) if the OTC Bulletin Board is not a Trading Market,
        the volume weighted average price of the Common Stock for such date (or the
        nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock
        is
        not then quoted for trading on the OTC Bulletin Board and if prices for the
        Common Stock are then reported in the “Pink Sheets” published by Pink Sheets,
        LLC (or a similar organization or agency succeeding to its functions of
        reporting prices), the most recent bid price per share of the Common Stock
        so
        reported; or (d) in all other cases, the fair market value of a share of
        Common
        Stock as determined by an independent appraiser selected in good faith by
        the
        Holders and reasonably acceptable to the Corporation, the fees and expenses
        of
        which shall be paid by the Corporation.
 
 The
        conversion price of the Preferred Stock and the exercise price of the Warrants
        are subject to adjustment in certain instances, including the issuance by
        the
        Company of securities with a lower conversion or exercise price. The Series
        A
        and B preferred stock has no voting rights, except as required by law. Upon
        the
        occurrence of any “Triggering Events” (as defined below) the Company may be
        required to Redeem all or a portion the Series A preferred stock.
 
 “Triggering
        Event” means any one or more of the following events (whatever the reason and
        whether it shall be voluntary or involuntary or effected by operation of
        law or
        pursuant to any judgment, decree or order of any court, or any order, rule
        or
        regulation of any administrative or governmental body):
 
 F-17
  i.
        the
        failure of a Conversion Shares Registration Statement to be declared effective
        by the Commission on or prior to the 180 th day
        after the Original Issue Date;
 
 ii.
        if,
        during the Effectiveness Period, the effectiveness of the Conversion Shares
        Registration Statement lapses for more than an aggregate of 60 calendar days
        (which need not be consecutive calendar days) during any 12 month period,
        or the
        Holders shall not otherwise be permitted to resell Registrable Securities
        under
        the Conversion Shares Registration Statement for more than an aggregate of
        60
        calendar days (which need not be consecutive calendar days) during any 12
        month
        period;
 
 iii.
        the
        Corporation shall fail to deliver certificates representing Conversion Shares
        issuable upon a conversion hereunder that comply with the provisions hereof
        prior to the fifth Trading Day after such shares are required to be delivered
        hereunder, or the Corporation shall provide written notice to any Holder,
        including by way of public announcement, at any time, of its intention not
        to
        comply with requests for conversion of any shares of Preferred Stock in
        accordance with the terms hereof;
 
 iv.
        one
        of the Events (as defined in the Registration Rights Agreement) described
        in
        subsections (i), (ii) or (iii) of Section 2(b) of the Registration Rights
        Agreement shall not have been cured to the satisfaction of the Holders prior
        to
        the expiration of 30 calendar days from the Event Date (as defined in the
        Registration Rights Agreement) relating thereto (other than an Event resulting
        from a failure of a Conversion Shares Registration Statement to be declared
        effective by the Commission on or prior to the 180th day after the Original
        Issue Date, which shall be covered by Section 9(a)(i));
 
 v.
        the
        Corporation shall fail for any reason to pay in full the amount of cash due
        pursuant to a Buy-In within five calendar days after notice therefor is
        delivered hereunder or shall fail to pay all amounts owed on account of any
        Event (as defined in the Registration Rights Agreement) within five days
        of the
        date due;
 
 vi.
        the
        Corporation shall fail to have available a sufficient number of authorized
        and
        unreserved shares of Common Stock to issue to such Holder upon a conversion
        hereunder;
 
 vii.
        unless specifically addressed elsewhere in this Certificate of Designation
        as a
        Triggering Event, the Corporation shall fail to observe or perform any other
        covenant, agreement or warranty contained in, or otherwise commit any breach
        of
        the Transaction Documents, and such failure or breach shall not, if subject
        to
        the possibility of a cure by the Corporation, have been cured within 30 calendar
        days after the date on which written notice of such failure or breach shall
        have
        been delivered;
 
 viii.
        the
        Corporation shall redeem more than a de minimis number of Junior Securities
        other than as to repurchases of Common Stock or Common Stock Equivalents
        from
        departing officers and directors of the Corporation, provided that, while
        any of
        the Preferred Stock remains outstanding, such repurchases shall not exceed
        an
        aggregate of $100,000 from all officers and directors;
 
 ix.
        the
        Corporation shall be party to a Change of Control Transaction;
 
 x.
        there
        shall have occurred a Bankruptcy Event;
 
 xi.
        the
        Common Stock shall fail to be listed or quoted for trading on a Trading Market
        for more than five Trading Days, which need not be consecutive Trading Days;
        or
 
 xii.
        any
        monetary judgment, writ or similar final process shall be entered or filed
        against the Corporation, any Subsidiary or any of their respective property
        or
        other assets for greater than $50,000, and such judgment, writ or similar
        final
        process shall remain unvacated, unbonded or unstayed for a period of 45 calendar
        days.
 
 Upon
        the
        occurrence of a Triggering Event, each Holder shall (in addition to all other
        rights it may have hereunder or under applicable law) have the right,
        exercisable at the sole option of such Holder, to require the Corporation
        to,
        (A) with respect to the Triggering Events set forth in Sections (iii), (v),
        (vi), (vii), (viii), (ix), (ix) (as to Changes of Control approved by the
        Board
        of Directors of the Corporation) and (x) (as to voluntary filings only),
        redeem
        all of the Preferred Stock then held by such Holder for a redemption price,
        in
        cash, equal to the Triggering Redemption Amount or (B) at the option of each
        Holder and with respect to the Triggering Events set forth in Sections (i),
        (ii), (iv), (ix) (as to Changes of Control not approved by the Board of
        Directors of the Corporation), (x) (as to involuntary filings only) and (xii),
        either (a) redeem all of the Preferred Stock then held by such Holder for
        a
        redemption price, in shares of Common Stock, equal to a number of shares
        of
        Common Stock equal to the Triggering Redemption Amount divided by 75% of
        the
        average of the 10 VWAPs immediately prior to the date of election hereunder
        or
        (b) increase the dividend rate on all of the outstanding Preferred Stock
        held by
        such Holder to 18% per annum thereafter. The Triggering Redemption Amount,
        in
        cash or in shares, shall be due and payable or issuable, as the case may
        be,
        within five Trading Days of the date on which the notice for the payment
        therefor is provided by a Holder (the “Triggering Redemption Payment Date”). If
        the Corporation fails to pay in full the Triggering Redemption Amount hereunder
        on the date such amount is due in accordance with this Section (whether in
        cash
        or shares of Common Stock), the Corporation will pay interest thereon at
        a rate
        equal to the lesser of 18% per annum or the maximum rate permitted by applicable
        law, accruing daily from such date until the Triggering Redemption Amount,
        plus
        all such interest thereon, is paid in full. For purposes of this Section,
        a
        share of Preferred Stock is outstanding until such date as the applicable
        Holder
        shall have received Conversion Shares upon a conversion (or attempted
        conversion) thereof that meets the requirements hereof or has been paid the
        Triggering Redemption Amount in cash.
  F-18
  “Triggering
        Redemption Amount” means, for each share of Preferred Stock, the sum of (i) the
        greater of (A) 130% of the Stated Value and (B) the product of (a) the VWAP
        on
        the Trading Day immediately preceding the date of the Triggering Event and
        (b)
        the Stated Value divided by the then Conversion Price, (ii) all accrued but
        unpaid dividends thereon and (iii) all liquidated damages and other costs,
        expenses or amounts due in respect of the Preferred Stock.
 
 ***Registration
        Rights Agreement*** *-* In
        connection with the Series A and B Preferred agreements, the Company and
        the
        Investors entered into a registration rights agreement pursuant to which
        the
        Company agreed to file, within 90 days after the closing (the Filing Date),
        a
        registration statement covering the common stock issuable upon conversion
        of the
        Preferred Stock and exercise of the Warrants. If
        (i) a
        Registration Statement is not filed on or prior to its Filing Date (if the
        Company files a Registration Statement without affording the Holders the
        opportunity to review and comment on the same as required or (ii) the Company
        fails to file with the Commission a request for acceleration in accordance
        with
        Rule 461 promulgated under the Securities Act, within five Trading Days of
        the
        date that the Company is notified (orally or in writing, whichever is earlier)
        by the Commission that a Registration Statement will not be “reviewed,” or not
        subject to further review, or (iii) prior to its Effectiveness Date, the
        Company
        fails to file a pre-effective amendment and otherwise respond in writing
        to
        comments made by the Commission in respect of such Registration Statement
        within
        10 calendar days after the receipt of comments by or notice from the Commission
        that such amendment is required in order for a Registration Statement to
        be
        declared effective, or (iv) a Registration Statement filed or required to
        be
        filed hereunder is not declared effective by the Commission by its
“Effectiveness Date” (the 150 th calendar
        day following the date the agreement was entered into or the 180 th calendar
        day in the event of a “full review” of the initial Registration Statement by the
        Commission), or (v) after the Effectiveness Date, a Registration Statement
        ceases for any reason to remain continuously effective as to all Registrable
        Securities, for which it is required to be effective, or the Holders are
        otherwise not permitted to utilize the Prospectus therein to resell such
        Registrable Securities for more than 10 consecutive calendar days or more
        than
        an aggregate of 15 calendar days during any 12-month period (which need not
        be
        consecutive calendar days) then, in addition to any other rights the Holders
        may
        have hereunder or under applicable law, on each such Event Date and on each
        monthly anniversary of each such Event Date (if the applicable Event shall
        not
        have been cured by such date) until the applicable Event is cured, the Company
        shall pay to each Holder an amount in cash or shares of Common Stock, or
        combination thereof, as partial liquidated damages and not as a penalty,
        equal
        to 1.5% of the aggregate purchase price paid by such Holder pursuant to the
        Purchase Agreement for any Registrable Securities then held by such Holder
        (calculated as if all convertible securities had been fully converted.)
 
 The
        parties agree that (1) the Company will not be liable for liquidated damages
        under this Agreement with respect to any Warrants or Warrant Shares, (2)
        in no
        event will the Company be liable for liquidated damages under this Agreement
        in
        excess of 1.5% of the aggregate Subscription Amount of the Holders in any
        30-day
        period and (3) the maximum aggregate liquidated damages payable to a Holder
        under this Agreement shall be 9% of the aggregate Subscription Amount paid
        by
        such Holder pursuant to the Purchase Agreement. The price at which shares
        of
        Common Stock issuable in lieu of cash hereunder shall be equal to the lesser
        of
        (x) [90% of the average of the 5 consecutive VWAPs immediately prior to the
        applicable Event Date, (y) [90% of the average of the 5 consecutive VWAPs
        immediately prior to the date such damages are due or (z) the then applicable
        Conversion Price. Notwithstanding anything herein to the contrary, payment
        in
        shares of Common Stock may only occur if during the period from the applicable
        Event Date until such issuance is made in full all of the Equity Conditions
        (as
        defined above-“ *Convertible
        Preferred Stock Rights and Preferences”* )
        have
        been met and the Company shall have given the Holder written irrevocable
        notice
        within 2 Trading Days of the Event Date. Subject to the terms and conditions
        described above, the decision whether to pay partial liquidated damages in
        shares of Common Stock or cash shall be at the discretion of the Company.
        Subject to the aforementioned conditions, failure to timely provide such
        written
        notice shall be deemed an election by the Company to pay the partial liquidated
        damages on such Event Date in cash. Except as otherwise provided, if at any
        time
        the Company pays partial liquidated damages partially in cash and partially
        in
        shares of Common Stock, then such payment shall be distributed ratably among
        the
        Holders based upon the subscription amount paid by each Holder. If the Company
        fails to pay any partial liquidated damages in full within seven days after
        the
        date payable, the Company will pay interest thereon at a rate of 18% per
        annum
        (or such lesser maximum amount that is permitted to be paid by applicable
        law)
        to the Holder, accruing daily from the date such partial liquidated damages
        are
        due until such amounts, plus all such interest thereon, are paid in full.
        The
        partial liquidated damages pursuant to the terms hereof shall apply on a
        daily
        pro-rata basis for any portion of a month prior to the cure of an
        Event.
 
 As
        of
        June 30, 2007 the Company accrued $232,943 and $0 for liquidated damages
        associated with the Series A and B Preferred Stock, respectively.
 
 ***Public
        Relations Agreement -*** On
        April
        27, 2007 the Company entered into a three year consulting agreement with
        a
        public relations firm. Pursuant to the terms of the agreement the Company
        issued
        1,000,000 warrants with a term of 3 years, issued at the onset, entitling
        the
        holder to purchase shares of the Company’s common stock at an exercise price of
        $1.00 per share. For
        the
        year ended June 30, 2007 the Company recognized expense of $2,490,151 associated
        with the 1,000,000 warrants which were issued. The value of the warrants
        was
        determined by using the Black-Scholes option pricing model. The Company used
        a
        volatility percentage of 23.6%, a risk free interest rate of 5.00%, and an
        expected life of 1 1⁄2 years in calculating the fair value. See *“Public
        Relations Agreement”* above
        for additional details.
  F-19
  ***Patent
        Application Agreement -*** On June
        18, 2007, the Company entered into an Agreement for Acquisition of a Patent
        Application. The Company upon execution of the Agreement issued to the Seller
        Two Hundred Thousand (200,000) shares of the Company’s common stock. For the
        year ended June 30, 2007 the Company did not recognize any expense related
        to
        this agreement. See *“Patent
        Application Agreement”* above
        for additional details.
  **NOTE
        9 - INCOME TAXES**
  The
        income tax provision (benefit) consists of the following:
  **Income
                  Taxes:**The
                  components of the provision for income taxes are as follows:**2006**Current
                  taxes
              
              $
              (1,311,392
              )Deferred
                  taxes
              
              
              (260,627
              )Provision
                  for income taxes
              
              $
              (1,572,019
              )
  The
                  items accounting for the difference between income taxes computed
                  at the
                  federal statutory rate and the provision for income taxes are as
                  follows:
  **2006****Impact
                  on****Amount**
              
              
              **Rate**Income
                  tax at federal rate
              
              $
              (10,301,536
              )
              
              34.00
              %State
                  tax, net of Federal effect
              
              
              (1,199,826
              )
              
              3.96
              %Permanent
                  Differences:Meals
                  & Entertainment
              
              
              779
              
              
              0.00
              %Mark
                  to market of preferred stock and warrants
              
              
              9,928,563
              
              
              -32.77
              %Total
                  Permanent Differences
              
              
              9,929,342
              
              
              -32.77
              %Valuation
                  Allowance
              
              
              1,572,019
              
              
              -5.19
              %Rounding
              
              
              1
              
              
              0.00
              %Total
                  Provision
              
              $
              -
              
              
              0.00
              %
  Deferred
          income taxes reflect the net tax effects of temporary differences between
          the
          carrying amount of assets and liabilities for financial reporting purposes
          and
          the amounts used for income tax purposes. Significant components of the
          Company's net deferred income taxes are as follows:
  **2006**Current
                  Deferred Tax Assets:$
              -Total
                  Current Deferred Tax Asset
              
              
              -Non-Current
                  Deferred Tax Assets:Amortization
                  of Licenses
              
              
              260,627Valuation
                  allowance
              
              
              (260,627
              )Total
                  Non-Current Deferred Tax Assets
              
              
              -Total
                  Deferred Tax Assets (Net)
              
              $
              -
  F-20
  **NOTE
        10 - RELATED PARTY TRANSACTIONS**
 
 ***Consulting
        Agreement*** *-* On
        October 1, 2006 the Company entered into a six (6) month consulting agreement
        with Harrington Business Development, LLC (“HBD”). The shareholders of HBD are
        also shareholders of the Company. The Company has recognized expense related
        to
        this agreement in the amount of $135,000 for the year ended June 30, 2007.
        See
“ *Consulting
        Agreement* ”
above
        for further details.
 
 ***Licensing
        Agreement*** *-* On
        October 13, 2006, the Company entered into a licensing agreement with a
        shareholder of the Company. On November 22, 2006 the Company made a payment
        of
        $850,000 pursuant to the agreement. On
        January 10, 2007, pursuant to the agreement, the Company paid the remaining
        balance due of $150,000. The
        Company has recognized expense related to this agreement in the amount of
        $600,903 for the year ended June 30, 2007. S ee *“Licensing
        agreement”* above
        for further details.
  ***Assignment
        of Contract -*** On
        November 10, 2006 the Company entered into an agreement with Reliant
        International Media, LLC (“RIM”). The members of RIM are also shareholders of
        the Company. See “ *Assignment
        of Contract* ”
above
        for further details.
 
 ***Preferred
        Stock Purchase Agreement-*** Midtown
        Partner & Co. LLC, served as the Company's placement agent in
        connection with the Series A and B Preferred Stock Purchase Agreements. Midtown
        Partners & Co. LLC received an aggregate placement agent fee related to
        Series A Preferred Stock Purchase agreement of approximately $300,000, as
        well
        as the following common stock purchase warrants: (a) series BD-1 common stock
        purchase warrants entitling Midtown Partners to purchase 300,000 shares of
        the
        Company's common stock at an exercise price of one dollar ($1.00) per share,
        (b)
        series BD-2 common stock purchase warrants entitling Midtown Partners to
        purchase 300,000 shares of the Company's common stock at an exercise price
        of
        one dollar and fifty cents ($1.50) per share, and (c) series BD-3 common
        stock
        purchase warrants entitling Midtown Partners to purchase 300,000 shares of
        the
        Company's common stock at an exercise price of three dollars ($3.00) per
        share.
        The Series BD warrants have a term of ten years.
 
 In
        addition, Midtown
        Partner & Co. LLC received an aggregate placement agent related to the
        Series B Preferred Stock Purchase agreement of approximately $60,000, as
        well as
        the following common stock purchase warrants: (a) series BD-1 common stock
        purchase warrants entitling Midtown Partners to purchase 48,000 shares of
        the
        Company's common stock at an exercise price of one dollar and eighty-seven
        cents
        ($1.87) per share, and (b) series BD-2 common stock purchase warrants entitling
        Midtown Partners to purchase 48,000 shares of the Company's common stock
        at an
        exercise price of three dollars and seventy-five cents ($3.75) per share
        and (c)
        series BD-3 common stock purchase warrants entitling Midtown Partners to
        purchase 48,000 shares of the Company's common stock at an exercise price
        of one
        dollar and twenty five cents ($1.25) per share. The Series BD warrants have
        a
        term of ten years. The
        member’s of Midtown Partners & Co. LLC are also shareholders of the
        Company. See “ *Preferred
        Stock Purchase Agreement”* above
        for further details.
 
 ***Preferred
        Stock Purchase Agreement -*** ** Pursuant
        to a verbal agreement, Apogee Financial Investments, Inc., a merchant bank,
        received a cash fee of $125,000 for consulting and due diligence services
        rendered in connection with the Preferred Stock Purchase Agreement, Exchange
        Agreement and the Common Stock Purchase Agreement. Apogee Financial Investments,
        Inc. is owned by shareholders of the Company. See “ *Preferred
        Stock Purchase Agreement”* above
        for further details.
 
 ***Consulting
        Agreement*** *-* On
        December 8, 2006 the Company entered into a verbal agreement with TotalCFO,
        LLC.
        TotalCFO, LLC is owned by a shareholder of the Company. The Company has
        recognized $45,310 of expense related to this agreement for the year ended
        June
        30, 2007.
 
 ***International
        Distribution Agreement -*** On March
        19, 2007, the Company entered into an International Distribution Agreement
        with
        Reliant International Media LLC. The shareholders of Reliant International
        Media, LLC are also shareholders of the Company. See “ *International
        Distribution Agreement* ”
above
        for further details.
 
 **NOTE
        11 - SUBSEQUENT EVENTS**
 
 On
        October 18, 2007, the Company entered into securities purchase agreements
        (the
        "Purchase Agreements") with Vicis Capital Master Fund ("Vicis") and Dynamic
        Decisions Strategic Opportunities ("Dynamic Decisions") pursuant to which
        Vicis
        and Dynamic Decisions purchased 6,000,000 and 400,000, shares of our series
        C
        convertible preferred stock ("Series C Preferred Stock"), respectively for
        an
        aggregate purchase price of $6,400,000. In connection with the purchase of
        the
        Series C Preferred Stock, Vicis and Dynamic Decisions received an aggregate
        amount of 16,000,000 and 1,066,668 common stock purchase warrants, respectively.
        Vicis and Dynamic Decisions received a Series C-1 warrant to purchase 8,000,000
        and 533,334 shares of common stock, respectively, at an exercise price of
        $1.50
        (the "C-1 Warrant") as well as a Series C-2 warrant to purchase 8,000,000
        and
        533,334 shares of common stock, respectively, at an exercise price of $2.00
        (the
        "C-2 Warrant"). The C-1 Warrant shall be valid for five years from the date
        of
        issuance and the C-2 Warrant shall be valid for ten years from the date of
        issuance. The Series C Preferred Stock has a conversion price of $0.75 and
        is
        convertible into an aggregate amount of 8,000,000 and 533,334 shares of common
        stock, respectively. The Series C Preferred stock does not pay annual dividends
        but each holder of Series C Preferred Stock shall have the right to such
        number
        of votes equal to the number of shares of common stock that the Series C
        Preferred Stock shall be converted into. Furthermore, pursuant to the terms
        of
        the Purchase Agreements, Vicis and Dynamic Decisions exchanged their 3,000
        shares of series A preferred stock and 600 shares of series B preferred stock,
        respectively, for 3,285,354 and 624,210 shares of Series C Preferred Stock,
        respectively. In connection with the Purchase Agreements, Vicis and Dynamic
        Decisions received a Series C-1 Warrant to purchase 4,380,472 and 832,280
        shares
        of common stock, respectively and a series C-2 Warrant to purchase 4,380,472
        and
        832,280 and shares of common stock, respectively. The Series C-1 Warrant
        and the
        Series C-2 Warrant shall have an exercise price of $1.50 and $2.00,
        respectively, and shall be valid for five year and ten years from the date
        of
        issuance, respectively.
  F-21
  Midtown
        Partners & Co., LLC, which served as the Company's placement agent in
        connection with the Purchase Agreements, received aggregate placement agent
        fees
        of approximately $340,000, as well as the following common stock purchase
        warrants: (a) series BD-7 common stock purchase warrants entitling Midtown
        Partners to purchase 853,333 shares of the Company's common stock at an exercise
        price of seventy-five cents ($0.75) per share, and (b) series BD-8 common
        stock
        purchase warrants entitling Midtown Partners to purchase 853,333 shares of
        the
        Company's common stock at an exercise price of one dollar and fifty cents
        ($1.50) per share and (c) series BD-9 common stock purchase warrants entitling
        Midtown Partners to purchase 853,333 shares of the Company's common stock
        at an
        exercise price of two dollars ($2.00) per share. The Series BD warrants have
        a
        term of ten years. Midtown Partners & Co., LLC is a FINRA registered
        broker-dealer. Chris Phillips, who is the Company's CEO, CFO, Secretary,
        Treasurer and a director, is also the Manager and sole member of FAMALOM,
        LLC
        which is a 50% owner of Apogee Financial Investments, Inc., a merchant bank
        ("Apogee"). Apogee owns 100% of Midtown Partners & Co., LLC, a FINRA
        licensed broker-dealer.
 
 On
        October 19, 2007, we entered into a subscription agreement with ResponzeTV
        PLC
        ("ResponzeTV") (the "Subscription Agreement") pursuant to which we purchased
        8,500,000 ordinary shares of ResponzeTV and received warrants to purchase
        17,000,000 ordinary shares of ResponzeTV for an aggregate purchase price
        of
        US$5,100,000. The warrants are to be issued in the following manner: (i)
        a
        warrant to purchase 8,500,000 common shares with an exercise price of £37p,
        (ii) a
        warrant to purchase 4,250,000 common shares with an exercise price of £50p and
        (iii) 4,250,000 common shares with an exercise price of £100p. Each warrant
        shall have a term of five years from the date of issuance. Kevin Harrington
        and
        Tim Harrington, who are directors
        of the Company, are officers and directors of ResponzeTV. Midtown Partners
&
Co., LLC, which served as the Company's placement agent in connection with
        the
        Subscription Agreement, received aggregate placement agent fees of US$50,000,
        as
        well as 500,000 ordinary shares of ResponzeTV. Midtown Partners & Co., LLC
        is a FINRA registered broker-dealer. Chris Phillips, who is the Company's
        CEO,
        CFO, Secretary, Treasurer and a director, is also the Manager and sole member
        of
        FAMALOM, LLC which is a 50% owner of Apogee Financial Investments, Inc.,
        a
        merchant bank ("Apogee"). Apogee owns 100% of Midtown Partners & Co., LLC, a
        FINRA licensed broker-dealer.
 
 On
        October 19, 2007, our wholly-owned subsidiary OmniReliant Corp. ("ORC") entered
        into and closed a share exchange agreement with ResponzeTV (the "Exchange
        Agreement"). Pursuant to the terms of the Exchange Agreement, ResponzeTV
        acquired all of the issued and outstanding shares of capital stock of KHL
        Holdings, Inc., a newly formed Florida corporation and wholly-owned subsidiary
        of ORC ("KHL"), in exchange for 9,500,000 ordinary shares of stock of
        ResponzeTV. On October 12, 2007, ORC entered into an exclusive sublicense
        agreement with KHL, pursuant to which ORC granted KHL the exclusive right
        and
        license to our rights to use the Kathy Hilton Trademark and to sell products
        bearing the Kathy Hilton Trademark exclusive of fragrance. The initial term
        of
        this sublicense agreement shall terminate on June 30, 2012. ORC shall have
        the
        option to renew this Agreement for an additional five year period. Kevin
        Harrington and Tim Harrington, who are directors of the Company, are officers
        and directors of ResponzeTV.
 
 F-22