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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-K







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

For the fiscal year ended September 30, 2010

OR



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

For the transition period from  to

Commission File Number 000-09358





BULOVA TECHNOLOGIES GROUP, INC

(Exact name of registrant as specified in its charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Florida                                                        |  | 83-0245581                       
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification No.)

19337 U.S. Highway 19 North, Suite
525

Clearwater, Florida 33764

(Address of principal executive offices) (Zip Code)

(727) 536-6666

(Registrants telephone number, including area code)





Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.001 par value

(Title of Class)





Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.    Yes   ̈    No  x

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

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



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

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

As of January 7, 2011, the aggregate market value of the voting stock held by non-affiliates of the Company was $3,640,148, which excludes voting stock held by directors, executive officers and
holders of 5 percent or more of the voting power of the Companys common stock (without conceding that such persons are affiliates of the Company for purposes of federal securities laws). The Company has no outstanding
non-voting common equity.

As of January 7, 2011, the Company had 141,269,127 shares of Common Stock issued and outstanding.





DOCUMENTS INCORPORATED BY REFERENCE

There are no documents incorporated by reference









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BULOVA TECHNOLOGIES GROUP, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2010

TABLE OF CONTENTS



|                                                                                                                                                                            |  |                                                                                                |  |  |    | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  |  | -- | 
|                                                                                                                                                                            |  | Page                                                                                           | 
|                                                                                                                                                                            | 
|PART I                                                                                                                                                                      |  |                                                                                                |  | 
|                                                                                                                                                                            |  |                                                                                               
|Item 1.                                                                                                                                                                     |  | Business                                                                                       |  |  | 3  | 
|Item 2.                                                                                                                                                                     |  | Properties                                                                                     |  |  | 6  | 
|Item 3.                                                                                                                                                                     |  | Legal Proceedings                                                                              |  |  | 6  | 
|Item 4.                                                                                                                                                                     |  | Submission of Matters to a Vote of Security Holders                                            |  |  | 7  | 
|                                                                                                                                                                            | 
|PART II                                                                                                                                                                     |  |                                                                                                |  | 
|                                                                                                                                                                            |  |                                                                                               
|Item 5.                                                                                                                                                                     |  | Market for Registrants Common Equity and Related Stockholder Matters                          |  |  | 7  | 
|Item 7.                                                                                                                                                                     |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations          |  |  | 7  | 
|Item 8.                                                                                                                                                                     |  | Consolidated Financial Statements                                                              |  |  | 10 | 
|Item 9.                                                                                                                                                                     |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure           |  |  | 34 | 
|Item 9A.                                                                                                                                                                    |  | Controls and Procedures                                                                        |  |  | 34 | 
|                                                                                                                                                                            | 
|PART III                                                                                                                                                                    |  |                                                                                                |  | 
|                                                                                                                                                                            |  |                                                                                               
|Item 10.                                                                                                                                                                    |  | Directors, Executive Officers and Corporate Governance of the Registrant                       |  |  | 34 | 
|Item 11.                                                                                                                                                                    |  | Executive Compensation                                                                         |  |  | 35 | 
|Item 12.                                                                                                                                                                    |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters |  |  | 36 | 
|Item 13.                                                                                                                                                                    |  | Certain Relationships and Related Transactions and Director Independence                       |  |  | 36 | 
|Item 14.                                                                                                                                                                    |  | Principal Accountant Fees and Services                                                         |  |  | 37 | 
|                                                                                                                                                                            | 
|PART IV                                                                                                                                                                     |  |                                                                                                |  | 
|                                                                                                                                                                            |  |                                                                                               
|Item 15.                                                                                                                                                                    |  | Exhibits and Financial Statement Schedules                                                     |  |  | 38 | 
|                                                                                                                                                                            |  |                                                                                               
|                                                                                                                                                                            |  | Signatures                                                                                     |  |  | 38 | 
|                                                                                                                                                                            | 
|EX-31.1 Rule 13a-14(a) Certification of President and Principal Executive
Officer                                                                                           |  |                                                                                                |  | 
|EX-31.2 Rule 13a-14(a) Certification of Treasurer and Principal Financial
Officer                                                                                           |  |                                                                                                |  | 
|EX-32.1 Certification of President and Principal Executive Officer pursuant to 18 U.S.C. Section 1350
 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |                                                                                                |  | 
|EX-32.2 Certification of Treasurer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350
 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |                                                                                                |  | 



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PART I

FORWARD LOOKING STATEMENTS

Certain portions of this report, and
particularly the Managements Discussion and Analysis of Financial Condition and Results of Operations, and the Notes to Consolidated Financial Statements, contain forward-looking statements which represent the Companys expectations or
beliefs concerning future events. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements,

Item 1. Business

Bulova Technologies Group, Inc. (BLVT or the Company) was originally incorporated in Wyoming in 1979 as Tyrex Oil Company. During 2007, the Company divested itself of
all assets and previous operations. During 2008, the Company filed for domestication to the State of Florida, and changed its name to Bulova Technologies Group, Inc. and changed its fiscal year from June 30 to September 30. The Company
operates as a government contractor and a contract manufacturer in the United States. Headquarter facilities are in Clearwater and Brandon, Florida and its operating facilities are located in Clearwater, Mayo and Melbourne, Florida.

On January 1, 2009, the Company acquired the stock of 3Si Holdings, Inc. (3Si) a privately held Florida corporation controlled by the
majority stockholder of the Company in exchange for 40,000,000 shares of its common stock. The assets and operations of 3Si are accounted for in three operating subsidiaries, BT Manufacturing Company LLC, Bulova Technologies Ordnance Systems LLC,
and Bulova Technologies Combat Systems LLC.

BT Manufacturing Company LLC  located in Melbourne, Florida, in a 100,000
square foot facility, assembles a wide range of printed circuit boards, including single sided through 14 layers, through-hole, surface mount and mixed. It manufactures cable assemblies and complete systems and offers value-add services such as
direct-ship to end customers, depot repair and design assistance. In June 2010, the Company determined to dispose of this business segment, and has accounted for it as a discontinued operation in this Form 10K.

Bulova Technologies Ordnance Systems LLC.  located on 261 acres in Mayo, Florida is a load, assembly, and pack facility specializing
in fuzes, safe and arming devices and explosive simulators. Bulova Technologies Ordnance Systems LLC is registered with the United States Department of State Directorate of Defense Trade Controls (DDTC). It produces a variety of pyrotechnic devices,
ammunition and other energetic materials for the U. S. Government and other allied governments throughout the world.

Bulova
Technologies Combat Systems LLC located in the Companys corporate headquarters in Clearwater, Florida, Combat Systems was formed to administer an acquisition contract that Bulova Technologies Ordnance Systems LLC was awarded
from the U.S. Department of Defense in January 2009. Bulova Technologies Combat Systems LLC functions as a broker to facilitate the movement of military articles across friendly borders to support soldiers throughout the world

Bulovatech Labs, Inc., located in Clearwater, Florida was formed to incubate, develop and license commercial applications of technologies
pertinent to the defense, alternative energy and healthcare industries. Subsequent to its formation Bulovatech Labs, Inc. has made various loans and investments in both private and public companies. On June 25, 2010, the Company sold all of its
interest in Bulovatech Labs in exchange for 200,000,000 shares of Growth Technologies International, Inc. (GRWT)

Segments

Commencing with the Companys acquisition of 3Si Holdings, Inc. in January of 2009, the Company operates in two business segments, government
contracting and contract manufacturing. Once the disposal of BT Manufacturing Company LLC is accomplished, the Company will no longer be operating a contract manufacturing segment.

Item 1A. Risk Factors

You should carefully consider the following risk factors and
other information contained or incorporated by reference in this Form 10-K, including Part II  Item 7  Managements Discussion and Analysis of Financial Condition and Results of Operations. Any of these risks could
materially adversely affect our business and our financial condition, results of operations and cash flows, which could in turn materially adversely affect the price of our common stock.

Our contracts (revenue arrangements) with U.S. Government customers entail certain risks.

A decline in or a redirection of the U.S. defense budget could result in a material decrease in our sales, earnings and cash flows.



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Our government contracts are primarily dependent upon the U.S. defense budget. We, as well as other defense
contractors, have benefited from increased overall Department of Defense (DoD) spending over recent years, including supplemental appropriations for military operations in Iraq, Afghanistan and the Global War on Terror (GWOT). However, future DoD
budgets could be negatively affected by several factors, including events we cannot foresee, U.S. Government budget deficits, current or future economic conditions, new administration priorities, U.S. national security strategies, a change in
spending priorities, the cost of sustaining U.S. military and related security operations in Iraq and Afghanistan and other locales around the world where U.S. military support may be pivotal, and other related exigencies and contingencies. While we
are unable to predict the impact and outcome of these uncertainties, the effect of changes in these DoD imperatives could cause the DoD budget to remain unchanged or to decline (or even to increase). A significant decline in or redirection of U.S.
military expenditures in the future could result in a decrease to our sales, earnings and cash flows. The loss or significant reduction in government funding of a large program in which we participate could also result in a decrease in our future
sales, earnings and cash flows. U.S. Government contracts are also conditioned upon continuing approval by Congress of the amount of necessary spending.

Congress usually appropriates funds for a given program on a September 30 fiscal year basis, even though contract periods of performance may extend over many years. Consequently, at the beginning of
a major program, the contract is usually partially funded, and additional monies are normally committed to the contract by the procuring agency only as appropriations are made by Congress for future fiscal years. Given the potential for uncertainty
in the DoD fiscal process as we begin a new political era in the United States, and given the dangerous and volatile global condition in which the U.S. is a primary stabilizing force, our approach to future business planning will include our best
assessments and judgments on how to account for change and adapt to new conditions and circumstances.

We rely predominantly on sales to
U.S. Government entities, and the loss of a significant number of our contracts would have a material adverse effect on our results of operations and cash flows.

Our sales are predominantly derived from contracts (revenue arrangements) with agencies of, and prime system contractors to, the U.S. Government. The loss of all or a substantial portion of our sales to
the U.S. Government would have a material adverse effect on our results of operations and cash flows.

A substantial majority of our total
sales are for products and services under contracts with various agencies and procurement offices of the DoD or with prime contractors to the DoD. Although these various agencies, procurement offices and prime contractors are subject to common
budgetary pressures and other factors, our customers exercise independent purchasing decisions. Because of this concentration of contracts, if a significant number of our DoD contracts and subcontracts are simultaneously delayed or cancelled for
budgetary, performance or other reasons, it would have a material adverse effect on our results of operations and cash flows.

In addition to
contract cancellations and declines in agency budgets, our backlog and future financial results may be adversely affected by:



| |  |  | curtailment of the U.S. Governments use of technology or other services and products providers, including curtailment due to government budget
reductions and related fiscal matters;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | developments in Iraq, Afghanistan or other geopolitical developments that affect demand for our products and services;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to hire and retain personnel to meet increasing demand for our services; and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | technological developments that impact purchasing decisions or our competitive position.
| | - |  | ----------------------------------------------------------------------------------------

Our government contracts contain unfavorable termination provisions and are subject to audit and modification. If a termination right is exercised by
the government, it could have a material adverse effect on our business, financial condition and results of operations.

Companies engaged
primarily in supplying defense-related equipment and services to U.S. Government agencies are subject to certain business risks peculiar to the defense industry. These risks include the ability of the U.S. Government to unilaterally:



| |  |  | suspend us from receiving new contracts pending resolution of alleged violations of procurement laws or regulations;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | terminate existing contracts;
| | - |  | -----------------------------



| |  |  | reduce the value of existing contracts;
| | - |  | ---------------------------------------



| |  |  | audit our contract-related costs and fees, including allocated indirect costs; and
| | - |  | ----------------------------------------------------------------------------------



| |  |  | control and potentially prohibit the export of our products.
| | - |  | ------------------------------------------------------------

All of our U.S. Government contracts can be terminated by the U.S. Government either for its convenience or if we default by failing to perform under the contract. Termination for convenience provisions
provide only for our recovery of costs incurred or committed settlement expenses and profit on the work completed prior to termination. Termination for default provisions provide for the contractor to be liable for excess costs incurred by the U.S.
Government in procuring undelivered items from another source. Our contracts with foreign governments generally contain similar provisions relating to termination at the convenience of the customer.



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U.S. Government agencies, including the Defense Contract Audit Agency and various agency Inspectors General
routinely audit and investigate costs and performance on contracts, as well as accounting and general business practices for contractors. Based on the results of such audits, the U.S. Government may adjust contract related costs and fees, including
allocated indirect costs. In addition, under U.S. Government purchasing regulations, some costs, including most financing costs, portions of research and development costs, and certain marketing expenses may not be reimbursable under U.S. Government
contracts.

We may not be able to win competitively awarded contracts or receive required licenses to export our products, which would have
a material adverse effect on our business, financial condition, results of operations and future prospects.

Our government contracts are
subject to competitive bidding. We obtain many of our U.S. Government contracts through a competitive bidding process. We may not be able to continue to win competitively awarded contracts. In addition, awarded contracts may not generate sales
sufficient to result in our profitability. We are also subject to risks associated with the following:



| |  |  | the frequent need to bid on programs in advance of the completion of their design, which may result in unforeseen technological difficulties and/or
cost overruns;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the substantial time, effort and experience required to prepare bids and proposals for competitively awarded contracts that may not be awarded to us;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | design complexity and rapid technological obsolescence; and
| | - |  | -----------------------------------------------------------



| |  |  | the constant need for design improvement.
| | - |  | -----------------------------------------

In addition to these U.S. Government contract risks, we are required to obtain licenses from U.S. Government agencies to export many of our products and systems. Additionally, we are not permitted to
export some of our products. Failure to receive required licenses would eliminate our ability to sell our products outside the United States.

We are subject to the risks of current and future legal proceedings, which could have a material adverse effect on our business, financial condition,
results of operations and future prospects.

At any given time, we are a defendant in various material legal proceedings and litigation
matters arising in the ordinary course of business, including litigation, claims and assessments that have been asserted against acquired businesses, which we have assumed. Although we maintain insurance policies, these policies may not be adequate
to protect us from all material judgments and expenses related to potential future claims and these levels of insurance may not be available in the future at economical prices or at all. A significant judgment against us, arising out of any of our
current or future legal proceedings and litigation, could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Intense competition in the industries in which our businesses operate could limit our ability to attract and retain customers.

The defense industry and the other industries in which our businesses operate and the market for defense applications is highly competitive. We expect that the DoDs increased use of commercial
off-the-shelf products and components in military equipment will continue to encourage new competitors to enter the market. We also expect that competition for original equipment manufacturing business will increase due to the continued emergence of
merchant suppliers. Additionally, some of our competitors are larger than we are and have more financial and other resources than we have.

Our level of debt and our ability to make payments on or service our indebtedness may adversely affect our financial and operating activities or
ability to incur additional debt.

With our January 1 2009 acquisition of 3Si Holdings, Inc., we assumed a certain amount of
indebtedness associated with the business operations acquired. At September 30, 2010, we had approximately $4.3 million in aggregate principal amount of outstanding debt related to continuing operations.

In addition, at September 30, 2010, we had approximately $4.3 million of indebtedness to shareholders under revolving credit facilities with our
Chairman and Chief Executive Officer.

In the future, we may need to increase our borrowings, subject to limitations imposed on us by our debt
agreements. Further discussion concerning the scheduled maturity of our outstanding debt, is included in Item 7Managements Discussion and Analysis of Financial Condition and Results of Operations  Liquidity and Capital
Resources.

Our ability to make scheduled payments of principal and interest on our indebtedness and to refinance our existing debt, including
the scheduled maturities of our outstanding debt, depends on our future financial performance as well as our ability to access the capital markets, and the relative attractiveness of available financing terms. We do not have complete control over
our future financial performance because it is subject to economic, political, financial (including credit market conditions), competitive, regulatory and other factors affecting the defense industry, as well as commercial industries in which we
operate. It is possible that in the future our business may not generate sufficient cash flow from operations to allow us to service our debt and make necessary capital expenditures. If this situation occurs, we may have to reduce costs and
expenses, sell assets, restructure debt or obtain additional equity capital. We may not be able to do so in a timely manner or upon acceptable terms in accordance with the restrictions contained in our debt agreements.



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Our level of indebtedness has important consequences to us. These consequences may include:



| |  |  | requiring a substantial portion of our net cash flow from operations to be used to pay interest and principal on our debt and therefore be unavailable
for other purposes, including acquisitions, capital expenditures, paying dividends to our shareholders, repurchasing shares of our common stock, research and development and other investments;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limiting our ability to obtain additional financing for acquisitions, working capital, investments or other expenditures, which, in each case, may
limit our ability to carry out our acquisition strategy;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increasing interest expenses due to higher interest rates on our borrowings that have variable interest rates;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | heightening our vulnerability to downturns in our business or in the general economy and restricting us from making acquisitions, introducing new
technologies and products or exploiting business opportunities; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | impacting debt covenants that limit our ability to borrow additional funds, dispose of assets, or repurchase shares of our common stock. Failure to
comply with such covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our outstanding indebtedness.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Environmental laws and regulations may subject us to significant liability.

Our
operations are subject to various U.S. federal, state and local laws and regulations relating to the discharge, storage, treatment, handling, disposal and remediation of certain materials, substances and wastes used in our operations.

New laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of
new clean-up requirements may require us to incur a significant amount of additional costs in the future and could decrease the amount of free cash flow available to us for other purposes, including capital expenditures, research and development and
other investments and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Termination of our backlog of orders could negatively impact our results of operations and cash flows.

We currently have a backlog of orders, primarily under contracts with the U.S. Government. As described above, the U.S. Government may unilaterally
modify or terminate its contracts. Accordingly, most of our backlog could be modified or terminated by the U.S. Government, which would negatively impact our results of operations and cash flows.

Global economic recession, continued tightening of credit markets, and U.S. Government intervention in financial and other industries may adversely
affect our results.

Domestic and foreign economies and equity and fixed income markets have recently experienced significant declines,
and severely diminished liquidity and credit availability. These economic conditions are currently negatively impacting, and could continue to adversely affect, our sales to the commercial markets in which we operate, including our contract
manufacturing business.

Additionally, while we are unable to predict the impact and outcome of these economic events and the U.S.
Governments intervention to shore up financial and other industries, these events could also negatively affect future U.S. defense budgets and spending and, consequently, our financial condition, results of operations and cash flows.

Item 1B. Unresolved Staff Comments

None.

Item 2. Property

At September 30, 2010 the Company operated corporate and administrative offices in two leased facilities, one in Clearwater, Florida, approximating
2,400 square feet, and the other in Brandon, Florida, approximating 5,000 square feet.

The Company temporarily operated its contract
manufacturing business segment in a 100,000 square facility located in Melbourne, Florida through November of 2009, at which time the operation was relocated to a new location of approximately 35,000 square feet. Once the disposal of the business
segment operated at this facility is accomplished, the Company will no longer operate this space.

Our government contracting business segment
is located on 261 acres owned by the Company in Mayo, Florida, where we operate a load, assembly, and pack facility specializing in fuzes, safe and arming devices and explosive simulators. There are more than 38 buildings on the property consisting
of warehouses, storage, and manufacturing facilities.

Item 3. Legal Proceedings

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no
current matters that would have a material effect on the Companys financial position or results of operations.



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

During the year ended September 30, 2010 no matters were presented to our shareholders for approval.

PART II

Item 5. Market for Registrants Common Equity and Related Stockholder Matters

Our Common Stock was traded on the pink
sheets operated by the National Association of Securities Dealers, Inc., under the trading symbol TSIH from January 2, 1987 until April 2005. Our Common Stock traded on the Over-the-Counter Bulletin Board under the same
symbol, but because of our failure to timely file reports pursuant to the Securities Exchange Act of 1934, as amended, we were delisted from trading on the OTCBB. As of the date of this report, our Common Stock is traded again on the pink
sheets under the trading symbol BLVT We intend to cause an application to be filed to allow us to return to the Bulletin Board once we become current in our filings. However, there can be no assurances that our application will be
approved.

The range of closing bid prices shown below is as reported by these markets. The quotations shown reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not necessarily represent actual transactions.



|                   |  |      |      |  |     |   |      | 
|------------------ |  | ---- | ---- |  | --- | - | ---- | 
|Quarter Ending     |  | High |      |  | Low |  
|                   |  |     
|December 31, 2008  |  | $    | 3.30 |  |     | $ | 0.15 | 
|March 31, 2009     |  |      | 3.30 |  |     |   | 0.15 | 
|June 30, 2009      |  |      | 2.75 |  |     |   | 1.00 | 
|September 30, 2009 |  |      | 1.50 |  |     |   | 0.30 | 
|                   |  |     
|December 31, 2009  |  | $    | 0.70 |  |     | $ | 0.09 | 
|March 31, 2010     |  |      | 0.25 |  |     |   | 0.06 | 
|June 30, 2010      |  |      | 0.20 |  |     |   | 0.06 | 
|September 30, 2010 |  |      | 0.25 |  |     |   | 0.05 | 

The closing bid price of our Common
Stock on January 6, 2011, was $.06

As of January 6, 2011, there were approximately 1,500 shareholders of record of our Common
Stock, not including those persons who hold their shares in street name.

We have not paid any dividends on our Common Stock since
our inception. We do not foresee that we will have the ability to pay a dividend on our Common Stock in the fiscal year ended September 30, 2011.

As of the date of this Report, our Common Stock is traded on the pink sheets operated by the National Association of Securities Dealers.

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING STATEMENTS

Certain portions of this report, and particularly the Managements Discussion and Analysis of Financial Condition and Results of Operations, and the Notes to Consolidated Financial Statements,
contain forward-looking statements which represent the Companys expectations or beliefs concerning future events. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ
materially from those in the forward-looking statements.

Overview:

Bulova Technologies Group, Inc. currently operates in two business segments. The Government Contracting segment is focused on the production and procurement of military articles for the US. Government and
other Allied Governments throughout the world, and is accounted for through two of the Companys wholly owned subsidiaries, Bulova Technologies Ordnance Systems LLC., and Bulova Technologies Combat Systems LLC, The Contract Manufacturing
segment produces cable assemblies, circuit boards as well as complete systems, and is accounted for through BT Manufacturing Company, LLC, another of its wholly owned subsidiaries. In June 2010, the Company determined to dispose of this business
segment, and has accounted for it as a discontinued operation in this 10K.

Strategic Restructuring Accomplished

Over the course of this past two years, the Company has accomplished some very significant milestones in restructuring the Company to focus on its core
competencies. With the acquisition of 3Si Holdings, Inc., and the assets and operations associated with it, the Company has brought in as our Chief Executive Officer, Stephen L Gurba. Mr. Gurbas 30 plus years of experience in defense
contracting as outlined in Item 10 of this report provide the basis for our focus on that industry.

Our first issue was to bring the Company
current with its filings with the Securities and Exchange Commission. This was a larger task than anticipated and involved curing delinquencies as far back as the form 10K for the year ended June 30, 2006. Since March of 2010, the Company has had
its books and records audited by an independent Certified Public Accounting firm for each fiscal year ended June 30th through June of 2008, its transitional period of changing its fiscal year to September 30, 2008 and its fiscal years ended
September 30, 2009 and 2010. Concurrently with accomplishing the audit of its financial statements, the Company filed its delinquent reports encompassing thirteen (13) forms 10Q and five (5) forms 10K (including this one). With the filing of this
10K, the Company is now current.

In the course of bringing the financial reporting to its now current status, the Company also determined to
eliminate those operations outside of defense contracting, and took actions to eliminate Bulovatech Labs and BT Manufacturing LLC. Both of these entities proved to be financial drains to the Company either through the usage of funds for investment
or operational losses.



| |  |  | Our ownership interest in Bulovatech Labs has been exchanged for a passive interest in Growth Technologies International.
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | The operations of BT Manufacturing Company LLC have ceased as of December 31, 2010, and the accounting treatment for discontinued operations allowed us
to take the anticipated losses from this discontinuance in our current fiscal year, although the ultimate termination of this business segment will probably carry into the second quarter of our fiscal year ended September 30, 2011.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

This strategic restructuring of our Company will provide us a controlled environment to focus our operations on
profitability and cost containment. We have consolidated our administrative support to our Clearwater headquarters, and have closely evaluated our operating expenses for any excesses. The Company is optimistic that this restructuring has set the
stage for growth.

Business Outlook

The Company was awarded in December of 2010 a new Non Standard Ammunition contract which over a five year period could add up to $300,000,000 to our backlog of work. The chart below summarizes our current
backlog with the remaining contract term, a brief description and the estimated future value of these contracts. These contracts have been awarded to Bulova:



|                                     |  |                       |  |              |             | 
|------------------------------------ |  | --------------------- |  | ------------ | ----------- | 
|Existing Backlog - Awarded Contracts | 
|Term                                 |  | Description           |  | Future Value |            
|                                     |  |                      
|4 years                              |  | 2 Simulator Contracts |  | $            | 48,000,000  | 
|1.5 years                            |  | JAU-22                |  |              | 2,714,000   | 
|2 years                              |  | M142 Firing Device    |  |              | 2,400,000   | 
|5 years                              |  | Non-Std Ammo          |  |              | 300,000,000 | 
|5 years                              |  | M795                  |  |              | 5,000,000   | 
|                                     |  |                       |  |              |             | 
|                                     |  |                      
|                                     |  |                       |  | $            | 358,114,000 | 
|                                     |  |                       |  |              |             | 

In addition to the work currently on the books, we also have bids pending award over the next 90 days. The pending backlogs
that will result from receipt of these awards represent a potential value of approximately $255,000,000 over a period of 5 years. These awards represent contracts for Simulators, Two Mortar Contracts and an Artillery Contract.

In addition to the contract opportunities currently pending, the Company stays current with contract bid prospects, and continues to solicit additional
work. Assuming we were to receive the award for the Simulators, Bulova would be servicing all of the US Government simulator production needs. The simulator demands of the Government are not contingent upon military conflicts as they are utilized in
training operations that continue in times of peace as well. This is a solid core to our business and we have 261 acres in Mayo, Florida, that afford us the expansion capability for any demand the government may have in this regard.

Bulova Technologies (Europe)

During the
fourth calendar quarter of 2010, the Company introduced a pilot project to European member countries of NATO (North Atlantic Treaty Organization). NATO is a military alliance that consists of 28 member states, 2 from North America and 26 from
Europe. The North American member states are Canada and the United States. The European member states are Albania, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania,
Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Turkey and the United Kingdom. The headquarters of NATO is in Belgium. The Company introduced this project through NAMSA (NATO Ammunition Maintenance and Supply
Agency). NAMSA was established in 1958 as NATOs principal logistics support management agency. NAMSAs main task is to assist NATO nations by organizing common procurement and supply of spare parts and arranging maintenance and repair
services necessary for the support of various weapon systems in their inventories.

The United States Department of State, Directorate of
Defense Trade Controls issued brokering activities approval for Bulova to hold initial meetings with NAMSA and its member nations. The project introduced through a meeting at the headquarters of NAMSA in Luxembourg, by our Chief Executive Officer,
Stephen Gurba, is an exchange program to solve a very large inventory of expired stockpiles of hazardous Mortar Shells requiring storage, security and management by NATO member countries that have gone beyond their established shelf life for use.
Our program provides a solution that would in effect refurbish this outdated inventory to a new shelf life of 20 years as prescribed by NATO standards at a substantial savings. Various countries have followed up with us expressing a strong interest
in this project.

As this Exchange Program develops, we anticipate opening an office in Europe, in close proximity to NATO and /
or NAMSA headquarters. They have requested us to establish a physical presence to facilitate close communication with NAMSA, as this program will be funneled through it.

Although the inventory of Mortars is uncertain, through discussions with our Chief Executive Officer, it appears that the inventory across all of the 26 member nations could exceed 30 million units, and
this project if completed could generate significant revenue for the Company.



7



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##### Table of Contents

Application of critical accounting policies:

Managements Discussion and Analysis of our Financial Condition and Results of Operations is based on the Companys unaudited Consolidated Financial Statements, which have been prepared in
accordance with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and
corresponding disclosures at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we continue to evaluate our estimates which in large part are based on
historical experience and on various assumptions that we believe to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily
available from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Results of
operations :

Discontinued Operations

For the year ended September 30, 2010 compared to the year ended September 30, 2009.

The results of operations of BT Manufacturing Company LLC, reported as discontinued operations reflect an operational loss of $3,621,754 and an estimated loss on disposal of $3,550,000 for the year ended
September 30, 2010 as compared to an operational loss of $3,422,066 for the year ended September 30, 2009

Continuing Operations

Revenue for continuing operations for the year ended September 30, 2010 of $11,669,862 is a decrease of $7,494,207 when compared to
the revenue for the year ended September 30, 2009 of $19,164,069. The revenue in the prior fiscal year included the bulk of a large weapons contract.

Cost of revenues for continuing operations for the year ended September 30, 2010 of $8,576,134 is a decrease of $7,379,774 when compared to the cost of revenues for the year ended September 30,
2009 of $15,955,908.

Gross profit for continuing operations for the year ended September 30, 2010 of $3,093,728 is a decrease of
$114,433 when compared to the gross profit for the year ended September 30, 2009 of $3,208,161.

Selling and administrative expenses for
continuing operations for the year ended September 30, 2010 of $4,403,871 is an increase of $1,054,433 when compared to selling and administrative expense for the year ended September 30, 2009 of $3,349,438.

Stock based compensation for continuing operations for the year ended September 30, 2010 of $584,046 is an increase of $584,046,when compared to
stock based compensation for the year ended September 30, 2009, as the Company did not have any stock based compensation for that period.

Depreciation and amortization expense for continuing operations for the year ended September 30, 2010 of $625,729 is an increase of $507,212 when
compared to depreciation and amortization for the year ended September 30, 2007 of $118,517. The increase relates primarily to amortization of loan costs of approximately $462,000 associated with new debt incurred during the current fiscal year

Interest expense for continuing operations for the year ended September 30, 2010 of $731,908 is an increase of $578,054 when compared to
interest expense for the year ended September 30, 2009 of $153,854 and is due to increased debt incurred during the current fiscal year.

The Companys net loss from continuing operations for the year ended September 30, 2010 of $3,251,885 is an increase of $2,844,668 when
compared to the net loss for the year ended September 30, 2009 of $407,217.

Liquidity and capital resources:

As of September 30, 2010, the Companys sources of liquidity were new debt and loans from shareholders.

As of September 30, 2010, we had $12,605 in cash and cash equivalents.

Cash flows used in operating activities was $1,947,542 for the year ended September 30, 2010. Continuing operations used cash flows of $230,671, while discontinued operations used $1,716,871.

Cash flows used in investing activities was $561,028 for the year ended September 30, 2010. Continuing operations used cash flows of
$303,971 which consisted of $42,853 of cash disposed of with the sale of Bulovatech Labs, $256,545 of investments through Bulovatech Labs prior to its disposal, and acquisitions of property, plant and equipment of $4,573. Discontinued operations
used $257,057.

Cash flows from financing activities were $2,451,880 for the year ended September 30, 2010. Cash flows provided by
continuing operations in the amount of $2,292,331 consisted primarily of new debt in the amount of $2,000,000 and increased loans from shareholders in the amount of $404,126. Discontinued operations provided $159,549.

The Companys ability to cover its operating and capital expenses, and make required debt service payments will depend primarily on its ability to
generate substantial operating cash flows.



8



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##### Table of Contents

The Companys business may not generate cash flows at sufficient levels, and it is possible that
currently anticipated contract awards may not be achieved. If we are unable to generate sufficient cash flow from operations to service our debt, we may be required to reduce costs and expenses, sell assets, reduce capital expenditures, refinance
all or a portion of our existing debt as well as our operating needs, or obtain additional financing and we may not be able to do so on a timely basis, on satisfactory terms, or at all. Our ability to make scheduled principal payments or to pay
interest on or to refinance our indebtedness depends on our future performance and financial results, which, to a certain extent, are subject to general conditions in or affecting the U.S. defense industry and to general economic, political,
financial, competitive, legislative and regulatory factors beyond our control.

While the Company believes that anticipated revenues resulting
from additional contract awards accompanied by its efforts will be sufficient to bring profitability and a positive cash flow to the Company, it is uncertain that these results can be achieved. Accordingly, the Company will, in all likelihood have
to raise additional capital to operate. There can be no assurance that such capital will be available when needed, or that it will be available on satisfactory terms.

There are no off-balance sheet arrangements.

Our ability to utilize net operating loss carry
forwards may be limited

As of September 30, 2010, the Company had net operating loss carry forwards (NOLs) of
approximately $9.8 million for federal income tax purposes that will begin to expire between the years of 2020 and 2030. These NOLs may be used to offset future taxable income, to the extent we generate any taxable income, and thereby reduce or
eliminate our future federal income taxes otherwise payable. Section 382 of the Internal Revenue Code imposes limitations on a corporations ability to utilize NOLs if it experiences an ownership change as defined in
Section 382. In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percent over a three-year period. In the event that an ownership
change has occurred, or were to occur, utilization of our NOLs would be subject to an annual limitation under Section 382 determined by multiplying the value of our stock at the time of the ownership change by the applicable long-term
tax-exempt rate as defined in the Internal Revenue Code. Any unused annual limitation may be carried over to later years. We may be found to have experienced an ownership change under Section 382 as a result of events in the past or the
issuance of shares of common stock upon a conversion of notes, or a combination thereof. If so, the use of our NOLs, or a portion thereof, against our future taxable income may be subject to an annual limitation under Section 382, which
may result in expiration of a portion of our NOLs before utilization.



9



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##### Table of Contents

Item 8. Consolidated Financial Statements

BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                           |  |      |    | 
|---------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                           |  | Page |   
|                                                                                                           | 
|Report of Independent Registered Public Accounting Firm                                                    |  |      | 11 | 
|                                                                                                           | 
|Consolidated Balance Sheets as of September 30, 2010 and 2009                                              |  |      | 12 | 
|                                                                                                           | 
|Consolidated Statements of Operations for the Years Ended September 30, 2010 and
2009                      |  |      | 13 | 
|                                                                                                           | 
|Consolidated Statements of Cash Flows for the Years Ended September 30, 2010 and
2009                      |  |      | 14 | 
|                                                                                                           | 
|Consolidated Statement of Changes in Stockholders Equity for the Years Ended September 
30, 2010 and 2009 |  |      | 17 | 
|                                                                                                           | 
|Notes to Consolidated Financial Statements                                                                 |  |      | 19 | 



10



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##### Table of Contents

Randall N. Drake, C.P.A., P.A.

1981 Promenade Way

Clearwater, FL 33760

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of Bulova Technologies Group, Inc.

We have audited the accompanying consolidated balance sheets of Bulova Technologies Group, Inc. and subsidiaries as of September 30, 2010 and 2009, and the related consolidated statements of
operations, stockholders equity and cash flows for the years then ended. 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
audits.

We conducted our audits 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 at this time 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 controls over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits 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 Bulova Technologies Group, Inc. and subsidiaries as of September 30, 2010 and 2009, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.



|                             
|-----------------------------
|/s/ Randall N. Drake, CPA, PA
|                             
|Randall N. Drake, CPA, PA    
|Clearwater, Florida          
|                             
|January 27, 2011             



11



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BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                                                                                                  |  | September 30, |            
|                                                                                                                                                                  |  | 2010          |             |   | 2009 |  
|                                                                                                                                                                  |  |              
|ASSETS                                                                                                                                                            |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|Cash and cash equivalents                                                                                                                                         |  | $             | 12,605      |   |      | $ | 69,295      |  
|Accounts receivable                                                                                                                                               |  |               | 451,793     |   |      |   | 513,700     |  
|Contract claim receivable                                                                                                                                         |  |               |            |   |      |   |            |  
|Inventory                                                                                                                                                         |  |               | 1,240,031   |   |      |   | 1,304,789   |  
|Other current assets                                                                                                                                              |  |               |            |   |      |   | 10,460      |  
|Current assets held for sale                                                                                                                                      |  |               | 1,305,707   |   |      |   | 1,992,441   |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|Total Current Assets                                                                                                                                              |  |               | 3,010,136   |   |      |   | 3,890,685   |  
|                                                                                                                                                                  |  |              
|Property, plant and equipment                                                                                                                                     |  |               | 2,501,704   |   |      |   | 2,661,685   |  
|Investments                                                                                                                                                       |  |               | 1,766,855   |   |      |   | 2,058,385   |  
|Other assets                                                                                                                                                      |  |               | 548,748     |   |      |   | 549,839     |  
|Non-current assets held for sale                                                                                                                                  |  |               | 2,594,707   |   |      |   | 1,265,144   |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|                                                                                                                                                                  |  | $             | 10,422,150  |   |      | $ | 10,425,738  |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                                             |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|Accounts payable                                                                                                                                                  |  | $             | 231,365     |   |      | $ | 107,873     |  
|Accrued expenses                                                                                                                                                  |  |               | 6,451,243   |   |      |   | 1,958,767   |  
|Advance payments and billings in excess of cost                                                                                                                   |  |               | 1,451,287   |   |      |   | 4,327,946   |  
|Current portion of long term debt                                                                                                                                 |  |               | 2,941,376   |   |      |   | 1,361,749   |  
|Current liabilities associated with assets held for sale                                                                                                          |  |               | 5,277,590   |   |      |   | 437,386     |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|Total current liabilities                                                                                                                                         |  |               | 16,352,861  |   |      |   | 8,193,721   |  
|                                                                                                                                                                  |  |              
|Deferred revenue                                                                                                                                                  |  |               |            |   |      |   | 540,531     |  
|Shareholder loans and accrued interest                                                                                                                            |  |               | 4,409,469   |   |      |   | 4,294,589   |  
|Long term debt, net of current portion                                                                                                                           |  |               | 1,396,022   |   |      |   | 1,512,444   |  
|Non-current liabilities associated with assets held for sale                                                                                                      |  |               | 1,160,000   |   |      |   |            |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|                                                                                                                                                                  |  |               | 23,318,352  |   |      |   | 14,541,285  |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|Commitments and contingencies                                                                                                                                     |  |               |            |   |      |   |            |  
|                                                                                                                                                                  |  |              
|Shareholders deficit                                                                                                                                             |  |               |             |   |      |   |             |  
|Common stock, $.001 par; authorized 150,000,000 shares, 81,902,405 and 72,355,910 issued and 81,902,405 and 72,352,910
outstanding at September 30, 2010 and 2009 |  |               | 81,902      |   |      |   | 72,355      |  
|Additional paid in Capital in excess of par                                                                                                                       |  |               | 8,002,412   |   |      |   | 6,407,159   |  
|Retained earnings (deficit)                                                                                                                                       |  |               | (20,980,516 | ) |      |   | (10,556,877 | )
|Treasury stock at cost  3,000 shares                                                                                                                             |  |               |            |   |      |   | (38,184     | )
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |               | (12,896,202 | ) |      |   | (4,115,547  | )
|                                                                                                                                                                  |  |               |             |   |      |   |             |  
|                                                                                                                                                                  |  |              
|                                                                                                                                                                  |  | $             | 10,422,150  |   |      | $ | 10,425,738  |  
|                                                                                                                                                                  |  |               |             |   |      |   |             |  

See accompanying notes to consolidated financial statements.



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BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                    |  |                           |             |   |      |   |            |  
|--------------------------------------------------- |  | ------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                    |  | Years Ended September 30, |            
|                                                    |  | 2010                      |             |   | 2009 |  
|                                                    |  |                          
|Revenues                                            |  | $                         | 11,669,862  |   |      | $ | 19,164,069 |  
|Cost of revenues                                    |  |                           | 8,576,134   |   |      |   | 15,955,908 |  
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Gross profit                                        |  |                           | 3,093,728   |   |      |   | 3,208,161  |  
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Selling and administrative expenses                 |  |                           | 4,403,871   |   |      |   | 3,349,438  |  
|Stock based compensation                            |  |                           | 584,046     |   |      |   |           |  
|Depreciation and amortization expense               |  |                           | 625,729     |   |      |   | 118,517    |  
|Interest expense                                    |  |                           | 731,908     |   |      |   | 153,854    |  
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Total expenses                                      |  |                           | 6,345,554   |   |      |   | 3,621,809  |  
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Loss from operations                                |  |                           | (3,251,826  | ) |      |   | (413,648   | )
|                                                    |  |                          
|Other income (expense)                              |  |                           |             |   |      |   |            |  
|Other income (expense)                              |  |                           | (59         | ) |      |   | 6,431      |  
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Loss from continuing operations before income taxes |  |                           | (3,251,885  | ) |      |   | (407,217   | )
|                                                    |  |                          
|Income tax expense                                  |  |                           |            |   |      |   |           |  
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Loss from continuing operations                     |  |                           | (3,251,885  | ) |      |   | (407,217   | )
|Loss from discontinued operations, net of tax       |  |                           | (7,171,754  | ) |      |   | (3,422,066 | )
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Net loss                                            |  | $                         | (10,423,639 | ) |      | $ | (3,829,283 | )
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Basic and diluted net loss per common share         |  |                           |             |   |      |   |            |  
|Loss from continuing operations                     |  | $                         | (.041       | ) |      | $ | (007       | )
|Loss from discontinued operations                   |  |                           | (.091       | ) |      |   | (.061      | )
|                                                    |  |                           |             |   |      |   |            |  
|Net loss                                            |  | $                         | (.132       | ) |      | $ | (.068      | )
|                                                    |  |                           |             |   |      |   |            |  
|                                                    |  |                          
|Weighted average common shares, basic and diluted   |  |                           | 78,530,187  |   |      |   | 55,927,339 |  
|                                                    |  |                           |             |   |      |   |            |  

See notes to consolidated financial statements.



13



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BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                                      |  |                           |             |   |      |   |            |  
|----------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                                                                      |  | Years Ended September 30, |            
|                                                                                                      |  | 2010                      |             |   | 2009 |  
|                                                                                                      |  |                          
|Cash flows from operating activities:                                                                 |  |                           |             |   |      |   |            |  
|Net loss                                                                                              |  | $                         | (10,423,639 | ) |      | $ | (3,829,283 | )
|Loss from discontinued operations                                                                     |  |                           | 7,171,754   |   |      |   | 3,422,066  |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|Loss from continuing operations                                                                       |  |                           | (3,251,885  | ) |      |   | (407,2176  | )
|Adjustments to reconcile loss from continuing operations to net cash flows from operating activities: |  |                           |             |   |      |   |            |  
|Depreciation and amortization                                                                         |  |                           | 625,729     |   |      |   | 59,161     |  
|Recognition of deferred revenue                                                                       |  |                           | (136,349    | ) |      |   | (21,913    | )
|Stock based compensation                                                                              |  |                           | 584,046     |   |      |   | 2,000      |  
|Changes in operating assets and liabilities                                                           |  |                           |             |   |      |   |            |  
|Accounts receivable                                                                                   |  |                           | 61,907      |   |      |   | (530,178   | )
|Inventory                                                                                             |  |                           | 64,758      |   |      |   | 1,785,694  |  
|Prepaid expenses and other assets                                                                     |  |                           | 81,814      |   |      |   | (520,081   | )
|Accounts payable and accrued expenses                                                                 |  |                           | 4,615,968   |   |      |   | (1,115,497 | )
|Advance payments and billings in excess of costs                                                      |  |                           | (2,876,659  | ) |      |   | 3,228,612  |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Net cash flows from operating activities  continuing operations                                      |  |                           | (230,671    | ) |      |   | 2,766,202  |  
|Net cash flows from operating activities  discontinued operations                                    |  |                           | (1,716,871  | ) |      |   | (3,584,531 | )
|                                                                                                      |  |                           |             |   |      |   |            |  
|Net cash flows from operating activities                                                              |  |                           | (1,947,542  | ) |      |   | (818,329   | )
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Cash flows from investing activities:                                                                 |  |                           |             |   |      |   |            |  
|Cash acquired in business acquisition                                                                 |  |                           |            |   |      |   | 21,662     |  
|Cash disposed of in business disposition                                                              |  |                           | (42,853     | ) |      |   |           |  
|Investments in multiple companies                                                                     |  |                           | (256,545    | ) |      |   | (694,011   | )
|Purchase of property and equipment                                                                    |  |                           | (4,573      | ) |      |   | (50,829    | )
|                                                                                                      |  |                           |             |   |      |   |            |  
|Net cash flows from investing activities  continuing operations                                      |  |                           | (303,971    | ) |      |   | (723,178   | )
|Net cash flows from investing activities  discontinued operations                                    |  |                           | (257,057    | ) |      |   | (75,399    |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|Net cash flows from investing activities                                                              |  |                           | (561,028    | ) |      |   | (798,577   | )
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Cash flows from financing activities                                                                  |  |                           |             |   |      |   |            |  
|Shareholder advances                                                                                  |  |                           | 404,126     |   |      |   | 1,856,443  |  
|Increases in long term debt                                                                           |  |                           | 2,000,000   |   |      |   |           |  
|Repayments of long term debt                                                                          |  |                           | (111,795    | ) |      |   | (49,827    | )
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Net cash flows from financing activities  continuing operations                                      |  |                           | 2,292,331   |   |      |   | 1,806,616  |  
|Net cash flows from financing activities  discontinued operations                                    |  |                           | 159,549     |   |      |   |           |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|Net cash flows from financing activities                                                              |  |                           | 2,451,880   |   |      |   | 1,806,616  |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Increase (decrease) in cash and cash equivalents                                                      |  |                           | (56,690     | ) |      |   | 189,710    |  
|Cash and cash equivalents, beginning                                                                  |  |                           | 69,295      |   |      |   |           |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Cash and cash equivalents, ending                                                                     |  | $                         | 12,605      |   |      | $ | 189,710    |  
|                                                                                                      |  |                           |             |   |      |   |            |  
|                                                                                                      |  |                          
|Cash paid for interest                                                                                |  | $                         | 550,161     |   |      | $ | 108,254    |  
|                                                                                                      |  |                          
|Cash paid for taxes                                                                                   |  | $                         |            |   |      | $ |           |  



14



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##### Table of Contents

Supplemental schedule of non-cash financing and investing activities:



| |  |  | November 4, 2008, the Company issued 14,000,000 shares of common stock to pay down the amount of loan payable  related party  eSPG,
reducing the remaining balance to $24,375
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | January 1, 2009, the Company issued 8,000,000 shares of common stock in conjunction with the acquisition of 3Si Holdings, Inc. The shares have
been issued as satisfaction of a warrant obligation assumed, and are being held in trust for the warrant holder, Webster Business Capital Corporation.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | January 1, 2009, the Company issued 40,000,000 shares of common stock in exchange for the stock of 3Si Holdings, Inc. valued as follows:
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



|                                         |  |   |            |  
|---------------------------------------- |  | - | ---------- | -
|Cash                                     |  | $ | 21,662     |  
|                                         | 
|Inventory                                |  |   | 3,153,155  |  
|                                         | 
|Contract claim receivable                |  |   | 3,200,597  |  
|                                         | 
|Contract claim reserve                   |  |   | (3,200,597 | )
|                                         | 
|Property and equipment - net             |  |   | 4,021,146  |  
|                                         | 
|Other assets                             |  |   | 37,262     |  
|                                         | 
|Accounts payable and accrued expenses    |  |   | (1,101,128 | )
|                                         | 
|Advance payments on government contracts |  |   | (3,200,597 | )
|                                         | 
|Shareholder loans payable                |  |   | (693,477   | )
|                                         | 
|Long term debt                           |  |   | (2,526,287 | )
|                                         | 
|Deficit equity acquired                  |  |   | 288,264    |  
|                                         |  |   |            |  
|                                         | 
|Value of common stock issued             |  | $ |           |  
|                                         |  |   |            |  



| |  |  | May 7, 2009, the Company received 45,000,000 shares of Pangenex Corporation common stock in exchange for a license to certain technologies owned
by the company. The shares were valued at $613,575.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | July 1, 2009, the Company received 48,083,333 shares of New Green Technologies, Inc. common stock as satisfaction of a loan receivable from New
Green. The shares were valued at the face amount of the receivable satisfied of $672,500.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | July 13, 2009, the Company issued 2,000,000 shares of common stock to pay off the remaining amount of loan payable  related party 
eSPG in the amount of $24,375
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | October 16, 2009, the Company issued 249,999 shares of common stock to acquire Cybercare
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | November 24, 2009, the Company issued 2,100,000 shares of common stock in satisfaction of debt to unrelated parties
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | December 16, 2009, the Company issued 2,500,000 shares of common stock to securitized debt
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | December 22, 2009, the Company issued warrants to acquire 2,500,000 shares of common stock in conjunction with the acquisition of new debt
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | December 22, 2009, the Company incurred debt in the amount of $1,672,451 to acquire equipment and settle a related party lease
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



15



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##### Table of Contents



| |  |  | January 20, 2010, the Company issued 2,000,000 shares to securitize debt and recorded it as stock based compensation
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | February 8, 2010, the Company issued 850,000 shares to various individuals as stock based compensation
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | June 25, 2010, the Company sold all of its interest in Bulovatech Labs in exchange for 200,000,000 shares of Growth Technologies International,
Inc. (GRWT).
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the month of August 2010  the Company issued 1,849,496 shares to various individuals as stock based compensation
| | - |  | ------------------------------------------------------------------------------------------------------------------------

See notes to consolidated financial statements.



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY



|                                                                   |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               |             |   |       |   |         |   |  |   |             |  
|------------------------------------------------------------------ |  | --------------- | ----------- | - | ------ | - | -------- | ------------------------ |  | - | -------------------- | - |  | ------------- | ----------- | - | ----- | - | ------- | - |  | - | ----------- | -
|                                                                   |  | Common Stock    |             |   |        |   |          |                          |  |   |                      |   |  |               |            
|                                                                   |  | Number ofShares |             |   | Amount |   |          | AdditionalPaid inCapital |  |   | Accumulated(deficit) |   |  | TreasuryStock |             |   | Total |  
|                                                                   |  |                 |             |   |        |  
|Balances, September 30, 2008  as previously stated - par $.01     |  |                 | 95,326,943  |   |        |   | 953,269  |                          |  |   | 5,617,509            |   |  |               | (6,727,594  | ) |       |   | (38,184 | ) |  |   | (195,000    | )
|                                                                   |  |                 |             |   |        |  
|Adjustment to reflect reverse split of 1 for 15 common shares      |  |                 | (88,971,033 | ) |        |   | (889,710 | )                        |  |   | 889,710              |   |  |               |             |   |       |   |         |   |  |   |            |  
|                                                                   |  |                 |             |   |        |  
|Adjustment to reflect change in par value from $.01 to $.001       |  |                 |             |   |        |   | (57,204  | )                        |  |   | 57,204               |   |  |               |             |   |       |   |         |   |  |   |            |  
|                                                                   |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               |             |   |       |   |         |   |  |   |             |  
|                                                                   |  |                 |             |   |        |  
|Balances, September 30, 2008  as restated - par $.001             |  |                 | 6,355,910   |   |        |   | 6,355    |                          |  |   | 6,564,423            |   |  |               | (6,727,594  | ) |       |   | (38,184 | ) |  |   | (195,000    | )
|                                                                   |  |                 |             |   |        |  
|Issuance of shares for reduction of related party debt             |  |                 | 14,000,000  |   |        |   | 14,000   |                          |  |   | 156,625              |   |  |               |             |   |       |   |         |   |  |   | 170,625     |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares to acquire 3Si Holdings, Inc.                   |  |                 | 40,000,000  |   |        |   | 40,000   |                          |  |   | (40,000              | ) |  |               |             |   |       |   |         |   |  |   |            |  
|                                                                   |  |                 |             |   |        |  
|Deficit equity acquired with the acquisition of 3Si Holdings, Inc. |  |                 |             |   |        |   |          |                          |  |   | (288,264             | ) |  |               |             |   |       |   |         |   |  |   | (288,264    | )
|                                                                   |  |                 |             |   |        |  
|Issuance of shares in satisfaction of warrant obligation           |  |                 | 8,000,000   |   |        |   | 8,000    |                          |  |   | (8,000               | ) |  |               |             |   |       |   |         |   |  |   |            |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares for securitization                              |  |                 | 2,000,000   |   |        |   | 2,000    |                          |  |   |                      |   |  |               |             |   |       |   |         |   |  |   | 2,000       |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares for reduction of related party debt             |  |                 | 2,000,000   |   |        |   | 2,000    |                          |  |   | 22,375               |   |  |               |             |   |       |   |         |   |  |   | 24,375      |  
|                                                                   |  |                 |             |   |        |  
|Net loss for the year ended September 30, 2009                     |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               | (3,829,283  | ) |       |   |         |   |  |   | (3,829,283  | )
|                                                                   |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               |             |   |       |   |         |   |  |   |             |  
|                                                                   |  |                 |             |   |        |  
|Balances, September 30, 2009                                       |  |                 | 72,355,910  |   |        | $ | 72,355   |                          |  | $ | 6,407,159            |   |  | $             | (10,556,877 | ) |       | $ | (38,184 | ) |  | $ | (4,115,547  | )
|                                                                   |  |                 |             |   |        |  
|Issuance of shares to acquire Cybercare                            |  |                 | 249,999     |   |        |   | 250      |                          |  |   | 102,250              |   |  |               |             |   |       |   |         |   |  |   | 102,500     |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares in satisfaction of debt                         |  |                 | 2,100,000   |   |        |   | 2,100    |                          |  |   | 422,900              |   |  |               |             |   |       |   |         |   |  |   | 425,000     |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares for securitization of debt                      |  |                 | 2,500,000   |   |        |   | 2,500    |                          |  |   | 272,500              |   |  |               |             |   |       |   |         |   |  |   | 275,000     |  
|                                                                   |  |                 |             |   |        |  
|Issuance of warrants associated with new debt                      |  |                 |             |   |        |   |          |                          |  |   | 256,438              |   |  |               |             |   |       |   |         |   |  |   | 256,438     |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares for securitization of debt                      |  |                 | 2,000,000   |   |        |   | 2,000    |                          |  |   | 338,000              |   |  |               |             |   |       |   |         |   |  |   | 340,000     |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares as stock based compensation                     |  |                 | 850,000     |   |        |   | 850      |                          |  |   | 92,650               |   |  |               |             |   |       |   |         |   |  |   | 93,500      |  
|                                                                   |  |                 |             |   |        |  
|Issuance of shares as stock based compensation                     |  |                 | 1,849,496   |   |        |   | 1,850    |                          |  |   | 148,696              |   |  |               |             |   |       |   |         |   |  |   | 150,546     |  
|                                                                   |  |                 |             |   |        |  
|Cancellation of treasury shares                                    |  |                 | (3,000      | ) |        |   | (3       | )                        |  |   | (38,181              | ) |  |               |             |   |       |   | 38,184  |   |  |   |            |  
|                                                                   |  |                 |             |   |        |  
|Net loss for the year ended September 30, 2010                     |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               | (10,423,639 | ) |       |   |         |   |  |   | (10,423,639 | )
|                                                                   |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               |             |   |       |   |         |   |  |   |             |  
|                                                                   |  |                 |             |   |        |  
|Balances, September 30, 2010                                       |  |                 | 81,902,405  |   |        |   | 81,902   |                          |  |   | 8,002,412            |   |  |               | (20,980,516 | ) |       |   |        |   |  |   | (12,896,202 | )
|                                                                   |  |                 |             |   |        |   |          |                          |  |   |                      |   |  |               |             |   |       |   |         |   |  |   |             |  

See notes to consolidated financial statements.



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##### Table of Contents

|1. | Description of business:
|-- | ------------------------

Bulova Technologies Group, Inc. (BLVT or the Company) was originally incorporated in Wyoming in 1979 as Tyrex Oil Company. During 2007, the Company divested itself of
all assets and previous operations. During 2008, the Company filed for domestication to the State of Florida, and changed its name to Bulova Technologies Group, Inc. and changed its fiscal year from June 30 to September 30. On
January 1, 2009 the Company acquired the stock of a private company that was under common control and began operations in Florida. The Company operates as a government contractor and a contract manufacturer in the United States. Headquarter
facilities are in Clearwater and Brandon, Florida and its operating facilities are located in Clearwater, Mayo and Melbourne, Florida.



|2. | Principles of consolidation and basis of presentation:
|-- | ------------------------------------------------------

These consolidated financial statements include the assets and liabilities of Bulova Technologies Group, Inc. and its subsidiaries as of September 30, 2010 and 2009. The results of operations for the
acquired company and subsidiaries have been included from the date of acquisition, January 1, 2009 forward. All material intercompany transactions have been eliminated.

On January 1, 2009, the Company acquired the stock of 3Si Holdings, Inc. (3Si) a privately held Florida corporation controlled by the majority stockholder of the Company in exchange for
40,000,000 shares of its common stock. The assets and operations of 3Si are accounted for in three operating subsidiaries, BT Manufacturing Company LLC, Bulova Technologies Ordnance Systems LLC, and Bulova Technologies Combat Systems LLC.

BT Manufacturing Company LLC  located in Melbourne, Florida, in a 35,000 square foot facility, assembles a
wide range of printed circuit boards, including single sided through 14 layers, through-hole, surface mount and mixed. It manufactures cable assemblies and complete systems and offers value-add services such as direct-ship to end customers, depot
repair and design assistance. In June 2010, the Company determined to dispose of this business segment, and has accounted for it as a discontinued operation in this Form 10K.

Bulova Technologies Ordnance Systems LLC.  located on 261 acres in Mayo, Florida is a load, assembly, and pack facility specializing in fuzes, safe and arming devices and explosive
simulators. Bulova Technologies Ordnance Systems LLC is registered with the United States Department of State Directorate of Defense Trade Controls (DDTC). It produces a variety of pyrotechnic devices, ammunition and other energetic materials for
the U. S. Government and other allied governments throughout the world.

Bulova Technologies Combat Systems LLC located in the Companys corporate headquarters in Clearwater, Florida, Combat Systems was formed to administer an acquisition contract that Bulova Technologies Ordnance Systems LLC was awarded from the U.S. Department of Defense in
January 2009. Bulova Technologies Combat Systems LLC functions as a broker to facilitate the movement of military articles across friendly borders to support soldiers throughout the world

Bulovatech Labs, Inc., located in Clearwater, Florida was formed to incubate, develop and license commercial applications of
technologies pertinent to the defense, alternative energy and healthcare industries. Subsequent to its formation Bulovatech Labs, Inc. has made various loans and investments in both private and public companies. On June 25, 2010, the Company
sold all of its interest in Bulovatech Labs in exchange for 200,000,000 shares of Growth Technologies International, Inc. (GRWT).

In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial
position as of September 30, 2010 and 2009, and the results of operations and cash flows for the years ended September 30, 2010 and 2009.

Subsequent Events

The Company has evaluated subsequent events through
January 26, 2011 to assess the need for potential recognition or disclosure in this report. Based upon this evaluation, management determined that all subsequent events that require recognition in the financial statements have been included.

Business Segments

Commencing with the Companys acquisition of 3Si Holdings, Inc. in January of 2009, the Company operates in two business segments, government contracting and contract manufacturing. Once the disposal
of BT Manufacturing Company LLC is accomplished, the Company will no longer be operating a contract manufacturing segment.



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009

Use of Estimates

The preparation of the Companys financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from
those estimates.

Financial Instruments

The carrying amounts of cash, receivables and current liabilities approximated fair value due to the short-term maturity of the instruments. Debt obligations were carried at cost, which approximated fair
value due to the prevailing market rate for similar instruments.

Fair Value Measurement

All financial and nonfinancial assets and liabilities were recognized or disclosed at fair value in the financial statements. This value
was evaluated on a recurring basis (at least annually). Generally accepted accounting principles in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction between market participants on a measurement date. The accounting principles also established a fair value hierarchy which required an entity to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs were used to measure fair value.

Level 1: Quotes market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that were corroborated by market data.

Level 3: Unobservable inputs that were not corroborated by market data.

Cash
and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all highly liquid investments
with an original maturity of three months or less to be cash equivalents. The Company maintains its cash deposits in major financial institutions in the United States. At times deposits within a bank may exceed the amount of insurance provided on
such deposits. Generally, these deposits are redeemed upon demand and, therefore, are considered by management to bear minimal risk.

Accounts receivable

Accounts receivable represent amounts due from
customers in the ordinary course of business from sales activities in each of the Companys business segments. The Company considers accounts more than 90 days old to be past due. The Company uses the allowance method for recognizing bad
debts. When an account is deemed uncollectible, it is written off against the allowance. The Company generally does not require collateral for its accounts receivable. The Company considers all accounts receivable to be collectable and consequently
has provided no allowance for doubtful accounts.

The majority of the Companys revenues and accounts receivable pertain
to contracts with the US Government.



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



Inventory

Inventory is stated at the lower of cost (first-in, first-out) or market. Market was generally considered to be net realizable value.
Inventory consisted of materials used to manufacture the Companys products work in process and finished goods ready for sale. The breakdown of inventory at September 30, 2010 and 2009 is as follows:



|                                           |  |                     |            |   |      |   |            |  
|------------------------------------------ |  | ------------------- | ---------- | - | ---- | - | ---------- | -
|                                           |  | As of September 30, |           
|                                           |  | 2010                |            |   | 2009 |  
|Finished goods                             |  | $                   | 14,733     |   |      | $ | 18,760     |  
|                                           |  |                    
|Work in process                            |  |                     | 106,119    |   |      |   | 295,952    |  
|                                           |  |                    
|Materials and supplies                     |  |                     | 2,153,992  |   |      |   | 2,303,105  |  
|                                           |  |                     |            |   |      |   |            |  
|                                           |  |                    
|Total inventory                            |  |                     | 2,274,844  |   |      |   | 2,617,817  |  
|                                           |  |                    
|Less inventory classified as held for sale |  |                     | (1,034,813 | ) |      |   | (1,313,028 | )
|                                           |  |                     |            |   |      |   |            |  
|                                           |  |                    
|Total inventory of continuing operations   |  | $                   | 1,240,031  |   |      | $ | 1,304,789  |  
|                                           |  |                     |            |   |      |   |            |  

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed by applying principally the
straight-line method to the estimated useful lives of the related assets. Useful lives range from 10 to 20 years for buildings and improvements and 5 to 10 years for machinery, equipment, furniture and fixtures. Leasehold improvements are
amortized over the shorter of the lease term or the estimated useful life of the improvements. When property or equipment is retired or otherwise disposed of, the net book value of the asset is removed from the Companys balance sheet and the
net gain or loss is included in the determination of operating income. Property, plant and equipment acquired as part of a business acquisition are valued at fair value.

Property, plant and equipment are comprised of the following at September 30, 2010 and 2009



|                                                               |  |                     |            |   |      |   |            |  
|-------------------------------------------------------------- |  | ------------------- | ---------- | - | ---- | - | ---------- | -
|                                                               |  | As of September 30, |           
|                                                               |  | 2010                |            |   | 2009 |  
|Land                                                           |  | $                   | 1,225,000  |   |      | $ | 1,225,000  |  
|Buildings and improvements                                     |  |                     | 1,170,194  |   |      |   | 1,170,194  |  
|Machinery and equipment                                        |  |                     | 3,214,054  |   |      |   | 1,919,035  |  
|Funiture and fixtures                                          |  |                     | 98,081     |   |      |   | 93,507     |  
|Leasehold improvements                                         |  |                     | 234,489    |   |      |   |           |  
|                                                               |  |                     |            |   |      |   |            |  
|                                                               |  |                    
|                                                               |  |                     | 5,941,818  |   |      |   | 4,407,736  |  
|Less accumulated depreciation                                  |  |                     | (1,037,123 | ) |      |   | (480,907   | )
|                                                               |  |                     |            |   |      |   |            |  
|                                                               |  |                    
|Net property, plant and equipment                              |  |                     | 4,904,695  |   |      |   | 3,926,829  |  
|Less property, plant and equipment classified as held for sale |  |                     | (2,402,991 | ) |      |   | (1,265,144 | )
|                                                               |  |                     |            |   |      |   |            |  
|                                                               |  |                    
|Net property, plant and equipment of continuing operations     |  | $                   | 2,501,704  |   |      | $ | 2,661,685  |  
|                                                               |  |                     |            |   |      |   |            |  

Impairment of Long-Lived Assets

The Company evaluates the carrying value of its long-lived assets at least annually. Impairment losses are recorded on long-lived assets
used in operations when indicators of impairment were present and the undiscounted future cash flows estimated to be generated by those assets were less than the assets carrying amount. If such assets were impaired, the impairment to be
recognized was measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Discontinued Operations

In accordance with ASC 205-20, Presentation of Financial Statements-Discontinued Operations (ASC 205-20), we reported the results of BT Manufacturing Company LLC, our contract
manufacturing segment as a discontinued operation. The application of ASC 205-20 is discussed in Note 5 Discontinued Operations



20



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



Revenue Recognition

Sales revenue is generally recognized upon the shipment of product to customers or the acceptance by customers of the product. Allowances
for sales returns, rebates and discounts are recorded as a component of net sales in the period the allowances were recognized. The majority of the Companys revenue is generated under various fixed and variable price contracts as follows:

Revenues on fixed-price type contracts are recognized using the Percentage-Of-Completion (POC) method of accounting as
specified in government contract accounting standards and the particular contract. Revenues earned on fixed-price production contracts under which units are produced and delivered in a continuous or sequential process are recognized as units are
delivered based on their contractual selling prices (the Units-of-Delivery basis of determination). Sales and profits on each fixed-price production contract under which units are not produced in a continuous or sequential process are
recorded based on the ratio of actual cumulative costs incurred to the total estimated costs at completion of the contract, multiplied by the total estimated contract revenue, less cumulative sales recognized in prior periods (the
Cost-to-Cost basis of determination). Under both types of basis for determining revenue earned, a single estimated total profit margin is used to recognize profit for each contract over its entire period of performance, which can exceed
one year. The estimated total profit margin is evaluated on a periodic basis by management throughout the term of an individual contract to determine if the estimated total profit margin should be adjusted.

The Company has certain contracts with the U.S. Government that are funded through Performance-Based-Payments.
Performance-based-payments are a method of financing designed by the Government to facilitate the accomplishment of the terms of the contract, and are not payments for accepted items. These financing payments are designed as a funding mechanism to
facilitate production and may be made based on performance measured by objective, the accomplishment of defined events, or other quantifiable measures of results. As units are delivered and invoiced, the U.S. Government withholds 90% of the invoiced
amount as repayment of the contract financing advances.

Cost of Revenues

The costs of revenues include direct materials and labor costs, and indirect labor associated with production and shipping costs.

Advertising Costs

The costs of advertising are expensed as incurred and are included in the Companys operating expenses. Advertising expenses for the nine months ended September 30, 2010 and 2009 were $29,904
and $21,109, respectively.

Shipping Costs

The Company includes shipping costs in cost of revenues.

Income Taxes

Income tax benefits or provisions are provided for the tax effects of transactions reported in the financial statements
and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and the tax basis of assets and liabilities for financial and income tax reporting. Deferred tax assets and liabilities represent
the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities were recovered or settled. Deferred tax assets were also recognized for operating losses that were available to
offset future taxable income and tax credits that were available to offset future federal income taxes, less the effect of any allowances considered necessary. The Company follows the guidance provided by ASC 740, Accounting for Uncertainty in
Income Taxes, for reporting uncertain tax provisions.

Loss per Common Share

Basic net loss per share includes the impact of common stock equivalents. Diluted net loss per share utilizes the average market
price per share when applying the treasury stock method in determining common stock equivalents. As of September 30, 2010, there were 2,500,000 shares that were dilutive but had no effect on loss per share.

Basic net loss per share includes the impact of common stock equivalents. Diluted net loss per share utilizes the average market price per
share when applying the treasury stock method in determining common stock equivalents.



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The
accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe
any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the
retro-active application of any accounting pronouncements issued subsequent to December 31, 2010 through the date these financial statements were issued.

3. Acquisition of 3Si Holdings, Inc.

On December 16, 2008, BT
Acquisition Company LLC purchased from Webster Business Credit Corporation, various assets including inventory, machinery and equipment, and the membership interest of Bulova Technologies Ordnance Systems LLC, an operating company,
under Section 9 of the Uniform Commercial Code as enacted in the state of New York. The primary reason for the acquisition was to acquire the rights to current and future government contracts and the operating assets of Bulova Technologies
Ordnance Systems LLC to complete those contracts.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



BT Acquisition Company LLC accounted for the assets, liabilities and
ownership interests in accordance with the provisions of ASC 805, Business Combinations for acquisitions occurring in years beginning before December 15, 2008 (formerly SFAS No. 141, Business Combinations). As such, the recorded costs of
the assets acquired were limited to the consideration given, and consequently not recorded at the fair market value of the assets received. The values recorded as of the date of acquisition are as follows:



|                             |  |   |            |  
|---------------------------- |  | - | ---------- | -
|Contract Claim               |  | $ | 3,200,597  |  
|Reserve against claim        |  |   | (3,200,597 | )
|Inventory                    |  |   | 3,153,155  |  
|Property plant and equipment |  |   | 4,021,146  |  
|Other assets                 |  |   | 34,745     |  
|                             |  |   |            |  
|                             | 
|Total assets acquired        |  | $ | 7,209,046  |  
|                             |  |   |            |  
|                             | 
|Current liabilities assumed  |  | $ | 4,195,135  |  
|Long term debt assumed       |  |   | 1,603,911  |  
|Shareholder loans            |  |   | 585,000    |  
|Acquisition debt             |  |   | 825,000    |  
|                             |  |   |            |  
|                             | 
|Total consideration given    |  | $ | 7,209,046  |  
|                             |  |   |            |  

On December 17, 2008 BT Manufacturing Company LLC was formed. Everything acquired from
Webster Business Credit Corporation except for what was part of Bulova Technologies Ordnance LLC was placed into BT Manufacturing Company LLC with the intent of starting a contract manufacturing business. During December
2008 BT Manufacturing Company LLC incurred various liabilities and paid certain expenses as a part of this process.

On January 1, 2009, Bulova Technologies Group, Inc. acquired 100% of the outstanding stock of 3Si Holdings, Inc. (Florida) by issuing 40,000,000 shares of its common stock.

The majority shareholder of Bulova Technologies Group, Inc. also held a majority interest in 3Si Holdings, Inc. and maintained his
controlling interests in both entities both before and after the transaction. Accordingly, the acquisition of 3Si Holdings, Inc. (Florida) has been accounted for as a corporate re-organization because of the retention of common control. The book
value of 3Si Holdings, Inc. (Florida) at the time of the acquisition was as follows:



|                              |  |   |            |  
|----------------------------- |  | - | ---------- | -
|Cash                          |  | $ | 41,793     |  
|Contract Claim                |  |   | 3,200,597  |  
|Reserve against claim         |  |   | (3,200,597 | )
|Inventory                     |  |   | 3,153,155  |  
|Property plant and equipment  |  |   | 4,021,146  |  
|Other assets                  |  |   | 37,262     |  
|                              |  |   |            |  
|                              | 
|Total assets                  |  | $ | 7,253,356  |  
|                              |  |   |            |  
|                              | 
|Current liabilities assumed   |  | $ | 5,244,232  |  
|Shareholder loans assumed     |  |   | 693,477    |  
|Long term debt assumed        |  |   | 1,603,911  |  
|Equity deficit acquired       |  |   | (288,264   | )
|                              |  |   |            |  
|                              | 
|Total liabilities and deficit |  | $ | 7,253,356  |  
|                              |  |   |            |  



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



Pro forma results of operations for the year ended September 30, 2010 and 2009 as
though this acquisition had taken place at October 1, 2008 for continuing operations are as follows:



|                   |  |               |            |   |      |   |            |  
|------------------ |  | ------------- | ---------- | - | ---- | - | ---------- | -
|                   |  | September 30, |           
|                   |  | 2010          |            |   | 2009 |  
|                   |  |              
|Revenues           |  | $             | 11,669,862 |   |      | $ | 19,596,004 |  
|                   |  |               |            |   |      |   |            |  
|                   |  |              
|Net loss           |  | $             | (3,251,885 | ) |      | $ | (633,170   | )
|                   |  |               |            |   |      |   |            |  
|                   |  |              
|Net loss per share |  | $             | (0.04      | ) |      | $ | (0.07      | )
|                   |  |               |            |   |      |   |            |  

The unaudited pro forma results disclosed in the table above are based on various assumptions and are not
necessarily indicative of the results of operations that would have occurred had the Company completed this acquisition on October 1, 2008.

4. Contract Claim Receivable

The acquisition of 3Si Holdings,
Inc. included the membership interest in Bulova Technologies Ordnance Systems LLC which had certain obligations to perform on then existing contracts with the US Government. Bulova Technologies Ordnance Systems,
LLC had received advance funding under these contracts by the US Government through Performance-Based-Payments, a method of financing designed by the government to provide working capital to small business contractors so they can purchase
the materials needed to fulfill the contract. At the time of the acquisition, the US Government had provided advance financing on the assumed contracts in the amount of $3,200,597.

In accordance with the provisions of Section 9-610 of the Uniform Commercial Code as enacted in the state of New York these cash
funds amounting to $3,200,597 were retained by Webster Business Capital Corporation, the secured lender that had acquired the assets pursuant to the Section 9 foreclosure proceedings. The Company has performed under the contract and has filed a
claim against the secured lender, Webster Bank, for the recovery of these funds.

The Company is attempting to resolve this
matter, and expects to be successful in recovering these amounts. However, as in all matters in litigation, the outcome is not certain and amounts recovered, if any, could be materially different than expected. These amounts, which are not carried
as assets on the balance sheet, will be recorded as revenue if and when such claims are settled.

5. Discontinued
Operations

In June of 2010, because of continuing losses in our contract manufacturing business segment, the Company
announced managements decision to market BT Manufacturing Company LLC for sale. BT Manufacturing Company LLC, a wholly owned subsidiary of the Company represents our contract manufacturing segment. As a result of the decision to sell this
business segment, the Company has identified the assets and liabilities of BT Manufacturing Company LLC as held for sale at September 30, 2010 and 2009 and has segregated its operating results and presented them separately as a discontinued
operation for all periods presented.



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



Summarized operating results for discontinued operations is as follows:



|                                              |  |                         |            |   |      |   |            |  
|--------------------------------------------- |  | ----------------------- | ---------- | - | ---- | - | ---------- | -
|                                              |  | Year EndedSeptember 30, |           
|                                              |  | 2010                    |            |   | 2009 |  
|                                              |  |                        
|Revenue                                       |  | $                       | 1,932,807  |   |      | $ | 2,333,473  |  
|Cost of Sales                                 |  |                         | (1,734,195 | ) |      |   | (1,865,962 | )
|                                              |  |                         |            |   |      |   |            |  
|Gross profit                                  |  |                         | 198,612    |   |      |   | 467,511    |  
|Operating expenses                            |  |                         | (3,892,724 | ) |      |   | (3,968,944 | )
|Other income                                  |  |                         | 72,358     |   |      |   | 79,367     |  
|                                              |  |                         |            |   |      |   |            |  
|Loss from operations                          |  |                         | (3,621,754 | ) |      |   | (3,422,066 | )
|Loss on disposal of discontinued operations   |  |                         | (3,550,000 | ) |      |   |           |  
|Income tax benefit                            |  |                         |           |   |      |   |           |  
|                                              |  |                         |            |   |      |   |            |  
|Loss from discontinued operations, net of tax |  | $                       | (7,171,754 | ) |      | $ | (3,422,066 | )
|                                              |  |                         |            |   |      |   |            |  

The loss on disposal of BT Manufacturing Company LLC has been estimated based on the premise that the sale of
this business segment will be completed within one year as follows:



|                                                       |  |   |           | 
|------------------------------------------------------ |  | - | --------- | 
|Estimated loss on disposal                             |  | $ | 2,650,000 | 
|Provision for operating losses during phase-out period |  |   | 900,000   | 
|                                                       |  |   |           | 
|                                                       | 
|                                                       |  | $ | 3,550,000 | 
|                                                       |  |   |           | 

The losses from discontinued operations above do not include any income tax effect as the Company was not in
a taxable position due to its continued losses and a full valuation allowance

Summary of assets and liabilities of
discontinued operations is as follows:



|                                                               |  |               |           |  |      |   |           | 
|-------------------------------------------------------------- |  | ------------- | --------- |  | ---- | - | --------- | 
|                                                               |  | September 30, |          
|                                                               |  | 2010          |           |  | 2009 |  
|Accounts receivable                                            |  | $             | 232,630   |  |      | $ | 633,621   | 
|Inventory                                                      |  |               | 1,034,813 |  |      |   | 1,313,028 | 
|Other current assets                                           |  |               | 38,264    |  |      |   | 45,792    | 
|                                                               |  |               |           |  |      |   |           | 
|Total current assets held for sale                             |  |               | 1,305,707 |  |      |   | 1,992,441 | 
|Property plant and equipment - net                             |  |               | 2,402,991 |  |      |   | 1,265,144 | 
|Other assets                                                   |  |               | 191,716   |  |      |   |          | 
|                                                               |  |               |           |  |      |   |           | 
|Total assets held for sale                                     |  | $             | 3,900,414 |  |      | $ | 3,257,585 | 
|                                                               |  |               |           |  |      |   |           | 
|                                                               |  |              
|Accounts payable and accrued expenses                          |  | $             | 1,055,590 |  |      | $ | 437,386   | 
|Current portion of long-term debt                              |  |               | 672,000   |  |      |   |          | 
|Provision for loss on disposal of business segment             |  |               | 3,550,000 |  |      |   |          | 
|                                                               |  |               |           |  |      |   |           | 
|Total current liabilities associated with assets held for sale |  |               | 5,277,590 |  |      |   | 437,386   | 
|Long term debt, net of current portion                         |  |               | 1,160,000 |  |      |   |          | 
|                                                               |  |               |           |  |      |   |           | 
|Total liabilities associated with assets held for sale         |  | $             | 6,437,590 |  |      | $ | 437,386   | 
|                                                               |  |               |           |  |      |   |           | 

6. Investments

Investments represent various loans and investments in both private and public companies through Bulovatech Labs. Loans are reported at cost and equity investments are valued at fair value. Equity
investments are primarily in technology development companies and are not held for resale.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



On June 25, 2010, the Company sold all of its interest in Bulovatech Labs in
exchange for 200,000,000 shares of Growth Technologies International, Inc. (GRWT). The Company still has effective control over the new investment in GRWT and as such recorded the transaction at the book value of the Bulovatech Labs at the time
of the sale. Also, due to the limited market for the GRWT stock and the common control, management believes that the book value is the best estimate of fair value in GRWT stock. No adjustment has been made to changes in market value of the
stock.

At September 30, 2010 the cost and fair values of the investments were as follows:

Investments



|                           |  |      |           |  |      |   |   |      |  |   |            |  |  |   |           | 
|-------------------------- |  | ---- | --------- |  | ---- | - | - | ---- |  | - | ---------- |  |  | - | --------- | 
|                           |  | Cost |           |  | Gain |   |   | Loss |  |   | Fair Value | 
|Level 1 Equity Investments |  | $    |          |  |      | $ |  |      |  | $ |           |  |  | $ |          | 
|Level 2 Equity Investments |  |      | 184,500   |  |      |   |  |      |  |   |           |  |  |   | 184,500   | 
|Level 2 Loans              |  |      | 1,582,355 |  |      |   |  |      |  |   |           |  |  |   | 1,582,355 | 
|                           |  |      |           |  |      |   |   |      |  |   |            |  |  |   |           | 
|                           |  |      |           | 
|                           |  | $    | 1,766,855 |  |      | $ |  |      |  | $ |           |  |  | $ | 1,766,855 | 
|                           |  |      |           |  |      |   |   |      |  |   |            |  |  |   |           | 

7. Advance Payments and Billings in Excess of Cost

Advance payments and billings in excess of costs represents liabilities of the Company associated with contracts in process as of the
balance sheet date, and consist of the following:

Advance Payments - The Company has certain contracts with the U.S.
Government that are funded through Performance-Based-Payments. Performance-based-payments are a method of financing designed by the Government to facilitate the accomplishment of the terms of the contract, and are not payments for
accepted items. These financing payments are designed as a funding mechanism to facilitate production and may be made based on performance measured by objective, the accomplishment of defined events, or other quantifiable measures of results. As
units are delivered and invoiced, the U.S. Government withholds 90% of the invoiced amount as repayment of the contract financing advances. On January 1, 2009, with the acquisition of 3Si Holdings, Inc. and membership interest of Bulova
Technologies Ordnance Systems LLC, the Company assumed certain obligations to perform contracts with the US Government with an outstanding balance at the date of acquisition of $3,200,597. The balances outstanding as of September 30, 2010 and
2009 are $1,451,287 and $1,487,637 respectively.

Billings in Excess of Cost plus Earnings on Uncompleted Contracts -
The Company accounts for fixed-price production contracts under which units are not produced in a continuous or sequential process based on the ratio of actual cumulative costs incurred to the total estimated costs at completion of the contract,
multiplied by the total estimated contract price. Billings on uncompleted contracts in excess of the costs incurred plus estimated earnings calculated on this percentage of completion method as of September 30, 2010 and 2009 are $0 and
$2,840,309 respectively.



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



Billing in Excess



|                                                                 |  |               |            |   |      |   |            |  
|---------------------------------------------------------------- |  | ------------- | ---------- | - | ---- | - | ---------- | -
|                                                                 |  | September 30, |           
|                                                                 |  | 2010          |            |   | 2009 |  
|                                                                 |  |              
|Total contract amount                                            |  | $             | 23,674,556 |   |      | $ | 23,674,556 |  
|                                                                 |  |              
|Total estimated costs                                            |  |               | 20,090,239 |   |      |   | 20,090,239 |  
|Amount incurred to date                                          |  |               | 20,090,239 |   |      |   | 14,440,539 |  
|                                                                 |  |              
|Percentage complete                                              |  |               | 100        | % |      |   | 72         | %
|                                                                 |  |              
|Amount earned to date                                            |  |               | 23,674,556 |   |      |   | 17,016,888 |  
|Amount Received to date                                          |  |               | 23,674,556 |   |      |   | 19,857,197 |  
|                                                                 |  |               |            |   |      |   |            |  
|                                                                 |  |              
|Billing in excess of costs plus earning on uncompleted contracts |  | $             |           |   |      | $ | 2,840,309  |  
|                                                                 |  |               |            |   |      |   |            |  

At September 30, 2010, the Company has included in accrued expenses an amount of approximately $6,100,000
relative to a contract performance dispute with the US Government. The Company has filed claims pursuant to this dispute to reduce or recover substantially all of the amount provided for in this accrual. There can be no assurance with respect to the
outcome of this litigation.

8. Deferred Revenue

Deferred revenue represents the unamortized portion of the fair value of the stock received for license rights to technology owned by
Bulovatech Labs. The license fee is being amortized on a straight line basis over the initial term of the license agreement, of 3 years. The revenue recognized for the year ended September 30, 2010 is $136,349. On June 25, 2010 the Company
sold all of its interest in Bulovatech Labs and will no longer have license fee revenue.

9. Long Term Debt

Long term debt consisted of the following as of:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |               |         |  |      |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ------- |  | ---- | - | ------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | September 30, |        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 2009          |         |  | 2010 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |              
|Promissory note payable to Webster Business Capital Corporation, dated December 16, 2008, in the original amount of $825,000
payable in full on March 31, 2009, with interest at 4.5% annually. This note was not repaid and is still outstanding as of the issuance of these financial statements. This note is secured by a lien on real estate, timber rights and certain
equipment with net carrying values of approximately $2,000,000 at September 30, 2010. |  | $             | 825,000 |  |      | $ | 825,000 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |              
|Mortgage payable to Bank of America, dated March 10, 2006, in the original amount of $840,000 payable in monthly fixed
principal payments of $4,667 plus variable interest at 2.5% plus the banks index rate, secured by real estate with carrying values of approximately $1,500,000 at September 30, 2010. Final payment is due on March 10, 2021.                                                                                                               |  |               | 588,000 |  |      |   | 644,000 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |              
|Note payable to Harold L. and Helene M. McCray, dated October 19, 2005, in the original amount of $1,070.000, bearing
interest at 8% per annum, payable in monthly installments of $10,225.48 secured by land and buildings with carrying values of approximately $1,500,000 at September 30, 2010. Final payment is due on December 1, 2020.                                                                                                                      |  |               | 860,365 |  |      |   | 912,279 | 



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | - |  | - | ---------- | -
|Note payable to Edward Viola, dated October 19, 2005, in the original amount of $80,000, bearing interest at 8% per annum,
payable in monthly installments of $764.52. Final payment is due on December 1, 2020.                                                                                                                                                                                                    |  |   | 64,032     |   |  |   | 67,914     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|Note payable to Sovereign Bank, dated December 22, 2009, in the original amount of $2,000,000, payable in monthly fixed
principal payments of $42,000 plus variable interest at LIBOR plus 5% with a minimum rate of 5.5%, secured by all personal property of BT Manufacturing Company, LLC with carrying values of approximately $4,000,000 at December 31, 2009. Final
balloon payment is due December 22, 2011. |  |   | 1,832,000  |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|Note payable to GovFunding, LLC, dated December 22, 2009, in the amount of $2,000,000 net of debt discount of $256,438,
bearing interest at 24%., secured by a lock box agreement tied to the proceeds of a single government contract with a carrying value of approximately $2,800,000 at September 30, 2010. Final payment is due July 31, 2010.                                                                 |  |   | 2,000,000  |   |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |            |   |  |   |            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   | 6,169,398  |   |  |   | 2,874,193  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|Less current portion pertaining to continuing operations                                                                                                                                                                                                                                                                                                                                                            |  |   | (2,941,376 | ) |  |   | (1,361,749 | )
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|Less current portion associated with assets held for sale                                                                                                                                                                                                                                                                                                                                                           |  |   | (672,000   | ) |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|Less long term portion associated with assets held for sale                                                                                                                                                                                                                                                                                                                                                         |  |   | (1,160,000 | ) |  |   |           |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |            |   |  |   |            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
|Long term debt, net                                                                                                                                                                                                                                                                                                                                                                                                 |  | $ | 1,396,022  |   |  | $ | 1,512,444  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                    |  |   |            |   |  |   |            |  

Principal maturities of long term debt for the next five years and thereafter as of September 30, 2010
are as follows:



|                           |  |   |           | 
|-------------------------- |  | - | --------- | 
|Period ended September 30, |  |   |          
|                           | 
|2011                       |  | $ | 3,613,376 | 
|                           | 
|2012                       |  |   | 1,281,387 | 
|                           | 
|2013                       |  |   | 126,814   | 
|                           | 
|2014                       |  |   | 132,691   | 
|                           | 
|2015                       |  |   | 139,057   | 
|                           | 
|Thereafter                 |  |   | 876,073   | 
|                           |  |   |           | 
|                           | 
|                           |  | $ | 6,169,398 | 
|                           |  |   |           | 

The company has not complied with various covenants related to the debt shown above including maintaining
required levels of working capital and net income. However, none of the lenders have exercised their right to declare these notes in default as of the date of these financial statements.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



10. Income Taxes

Deferred income taxes are the result of timing differences between book and tax basis of certain assets and liabilities, timing of income
and expense recognition of certain items and net operating loss carry forwards. The Company evaluates temporary differences resulting from the different treatment of items for tax and accounting purposes and records deferred tax assets and
liabilities on the balance sheet using the tax rates expected when the temporary differences reverse.

On January 1 2009 the
Company acquired for stock of 3SI Holdings in exchange for shares of the Companys common stock. For income tax purposes this transaction has been treated as a tax free reorganization under the provisions of Section 368A of the Internal Revenue
Code. 3SI Holdings had various net operating loss carry overs. Because of the change in ownership of 3SI Holdings, the net operating loss carry-overs will transfer to the Company. The transferred net operating losses are subject to an annual
limitation under the provisions of Section 382 of the Internal Revenue Code to offset future taxable income of the Company. These net operating loss carry-overs are included in the deferred tax asset of the Company.

The income tax provision consists of the following for the years ending September 30 2010 and 2009:



|                                   |  |           |   |  |           |   |   | 
|---------------------------------- |  | --------- | - |  | --------- | - | - | 
|                                   |  | 9/30/2010 |   |  | 9/30/2009 |  
|Current                            |  |           |   |  |           |   |   | 
|Federal                            |  | $         |  |  |           | $ |  | 
|State                              |  |           |  |  |           |   |  | 
|                                   |  |           |   |  |           |   |   | 
|                                   |  | $         |  |  |           | $ |  | 
|                                   |  |           |   |  |           |   |   | 
|                                   | 
|Deferred - Continuing Operations   |  |           |   |  |          
|Federal                            |  | $         |  |  |           | $ |  | 
|State                              |  |           |  |  |           |   |  | 
|                                   |  |           |   |  |           |   |   | 
|                                   |  | $         |  |  |           | $ |  | 
|                                   |  |           |   |  |           |   |   | 
|                                   | 
|Deferred - Discontinued Operations |  |           |   |  |          
|Federal                            |  | $         |  |  |           | $ |  | 
|State                              |  |           |  |  |           |   |  | 
|                                   |  |           |   |  |           |   |   | 
|                                   |  | $         |  |  |           | $ |  | 
|                                   |  |           |   |  |           |   |   | 

The Company has previously recognized an income tax benefit for its operating losses generated since
inception through September 30 2008 based on uncertainties concerning its ability to generate taxable income in future periods. Based on current events management has re-assessed the valuation allowance and the recognition of the deferred tax asset
attributable to the net operating losses and other assets. Based on the Companys history of losses and other negative evidence, the Company has determined that the valuation allowance should be increased accordingly to offset the entire
deferred tax asset.

As of September 30, 2010 the Company had federal net operating loss carry forwards of approximately
$9,832,000 and Florida net operating loss carry forwards of approximately $9,631,000. The federal net operating loss carry forwards will expire in 2020 through 2030 and state net operating loss carry forwards that will expire in 2028 through 2030.

The components of deferred tax assets and liabilities as of September 30, 2010 are as follows:



|                                    |  |         |            |   |             |   |            |  
|----------------------------------- |  | ------- | ---------- | - | ----------- | - | ---------- | -
|                                    |  | Current |            |   | Non-Current |  
|Deferred tax assets:                |  |         |            |   |             |   |            |  
|NOL and contribution carry forwards |  | $       |           |   |             | $ | 3,699,868  |  
|                                    |  |        
|Property & Equipment                |  |         |           |   |             |   | (98,056    | )
|Accrued Comp                        |  |         | 200,192    |   |             |   |           |  
|Accrued Interest                    |  |         | 101,958    |   |             |   |           |  
|Accrued Marketing Fee               |  |         | 33,682     |   |             |   |           |  
|                                    |  |        
|Share based Compensation            |  |         |           |   |             |   | 430,505    |  
|                                    |  |        
|Estimated Loss - Segment Disposal   |  |         | 1,335,865  |   |             |   |           |  
|                                    |  |         |            |   |             |   |            |  
|                                    |  |        
|                                    |  |         | 1,671,697  |   |             |   | 4,032,317  |  
|                                    |  |        
|Valuation Allowance                 |  |         | (1,671,697 | ) |             |   | (4,032,317 | )
|                                    |  |         |            |   |             |   |            |  
|                                    |  |        
|Net Deferred Tax Asset              |  | $       |           |   |             | $ |           |  
|                                    |  |         |            |   |             |   |            |  
|                                    |  |        
|Deferred tax (liabilities):         |  |         |            |   |             |   |            |  
|                                    |  |         |           |   |             |   |           |  
|                                    |  |         |            |   |             |   |            |  
|                                    |  |        
|Net Deferred Tax Liability          |  |         |           |   |             |   |           |  
|                                    |  |         |            |   |             |   |            |  
|                                    |  |        
|Net deferred tax asset (liability)  |  | $       |           |   |             | $ |           |  
|                                    |  |         |            |   |             |   |            |  

The change in the valuation allowance is as follow:



|                                |  |   |           | 
|------------------------------- |  | - | --------- | 
|September 30, 2009              |  | $ | 1,781,596 | 
|September 30, 2010              |  |   | 5,704,014 | 
|                                |  |   |           | 
|                                | 
|Increase in valuation allowance |  | $ | 3,922,418 | 
|                                |  |   |           | 

The company increased the valuation allowance by approximately $3,922,000 in the period ending September 30
2010. The valuation allowance was increased to offset the current year net operating loss and other identified tax assets.

The
income tax rate computed using the federal statutory rates is reconciled to the reported effective income tax rate as follows:



|                                        |  |           |        |    |           |  |        |   
|--------------------------------------- |  | --------- | ------ | -- | --------- |  | ------ | --
|Continuing Operations                   |  | 9/30/2010 |        |    | 9/30/2009 | 
|                                        |  |          
|Expected provision at US statutory rate |  |           | 34.00  | %  |           |  | 34.00  | % 
|State income tax net of federal benefit |  |           | 3.63   | %  |           |  | 3.63   | % 
|Permanent and Other Differences         |  |           |       |    |           |  |       |   
|Valuation Allowance                     |  |           | (37.63 | %) |           |  | (37.63 | %)
|                                        |  |           |        |    |           |  |        |   
|                                        |  |          
|Effective Income Tax Rate               |  |           |       |    |           |  |       |   
|                                        |  |           |        |    |           |  |        |   

The Company files income tax returns on a consolidated basis in the United States federal jurisdiction and
the State of Florida. As of September 30, 2010, the tax returns for the Company for the years ending 2008 through 2010 remain open to examination by the Internal Revenue Service and Florida Department of Revenue. In addition the tax returns related
to 3SI remain open to federal and state examination for the periods ending June 2005 through 2008. The Company and its subsidiaries are not currently under examination for any period.

The Company has adopted a policy to recognize interest and penalties accrued related to unrecognized tax benefits in its income tax
provision. The Company has evaluated its unrecognized tax benefits and determined that due to the NOL carry forwards, that no accrual of interest and penalties is required in the current period.

11. Commitments and Contingencies

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the
Companys financial position or results of operations.

U.S. Government agencies, including the Defense Contract Audit
Agency and various agency Inspectors General routinely audit and investigate costs and performance on contracts, as well as accounting and general business practices of contractors. Based on the results of such audits, the U.S. Government may adjust
contract related costs and fees, including allocated indirect costs. None of the Companys contracts are currently the subject of any government audits.

The Company operates corporate and administrative offices in two leased facilities, one in Clearwater, Florida, and the other in Brandon, Florida. During the quarter ended December 31, 2009, the
Clearwater location was leased for a monthly base rent of $6,717, increased by 3% each year through the expiration date of April 30, 2012 The Brandon location is leased for a monthly rental of $17,275 with an expiration date of
December 21, 2027.



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



In November 2009 the Company relocated its contract manufacturing business segment to a
new facility also located in Melbourne, Florida at a monthly rental of $18,842. The new lease expires November 2014.

The
Company leased certain equipment used in its contract manufacturing business segment from Lamar Systems Co., a related corporation owned by Stephen L Gurba, our Chief Executive Officer and a shareholder of the Company for $65,000 per month. In
December 2009, the Company bought out this lease cancelling any future obligation under this lease from that point forward and recorded $1,272,451 in equipment and a lease termination cost of $400,000, which is included in selling, general and
administrative expenses.

The Company leases certain equipment used in its contract manufacturing segment from Fleetwood
Leasing, LLC, under various leases. The lease terms are for three years with an expiration date of April 2012. The monthly lease payments through December 2009 are $6,000. The leases were modified effective January 1, 2010 whereby the monthly
lease payments were reduced to $3,371 for the remainder of the lease term.

Total rent expense for the nine months ended
June 30, 2010, was approximately $608,506.

The Companys commitments for minimum lease payments under these
operating leases for the next five years and thereafter as of September 30, 2010 are as follows:



|                          |  |   |           | 
|------------------------- |  | - | --------- | 
|Period ended September 30 |  |   |          
|                          | 
|2011                      |  | $ | 554,462   | 
|                          | 
|2012                      |  |   | 500,648   | 
|                          | 
|2013                      |  |   | 433,400   | 
|                          | 
|2014                      |  |   | 433,400   | 
|                          | 
|2015                      |  |   | 244,983   | 
|                          | 
|Thereafter                |  |   | 2,539,425 | 
|                          |  |   |           | 
|                          | 
|                          |  | $ | 4,706,318 | 
|                          |  |   |           | 

12. Related Party Transactions

The following related party transactions not disclosed elsewhere in this document are as follows:

On November 4, 2008, and then on July 13, 2009, the Company settled the full amount of the amount of the outstanding debt to
eSPG through the issuance of 14,000,000 shares and 2,000,000 shares respectively, to entities affiliated with or identified by our Chairman of the Board. Our Chairman, John D. Stanton had financed a proposed merger transaction, which letter of
intent was dated August 23, 2005 through eSPG. eSPG assigned its $195,000 balance outstanding to him, and he subsequently assigned it to other parties, some of which are the beneficiary of these share issuances. As a result of these issuances
the balance has been satisfied in full.

The acquisition of 3Si Holdings, Inc., which occurred on January 1, 2009, had
certain preexisting relationships. Our Chairman of the Board, John D. Stanton owned and/or beneficially controlled 44% of 3Si Holdings, Inc. prior to the acquisition. Stephen L Gurba, our Chief Executive Officer owned and/or beneficially controlled
35% of 3Si Holdings, Inc. prior to the acquisition. Stephen L Gurba, our Chief Executive Officer did not own any shares of Bulova Technologies Group, Inc. before this acquisition.

Bulova Technologies Ordnance Systems LLC has a Marketing Firm Agreement with Ramal Management Co. (Ramal), a related company
owned by Stephen L Gurba, our Chief Executive Officer which expires on January 1, 2011, and has not been renewed as of the date of this filing. Pursuant to the terms of the agreement, Ramal receives a marketing fee for services of 4% of net
sales generated through contracts of Bulova Technologies Ordnance Systems LLC. Marketing fees paid to Ramal for the year ended September 30, 2010 was $350,339.



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



The Company has received loans from the two (2) major shareholders totaling
$4,409,469 and $4,294,589 as of September 30, 2010 and 2009 respectively. These loans are supported by notes bearing interest at 5% annually with restricted conversion features and no repayment schedule. The notes were originally issued for
$1,500,000 for each shareholder then subsequently raised to a maximum of $5,000,000. All shareholder debt is accruing interest. Due to restrictions on the maximum amount of stock holdings allowed, the conversion feature was not operable as of
September 30, 2010.

13. Stockholders Equity

On November 4, 2008, the Company affected a 1 share for 15 shares reverse split of its common stock. As a result, the issued and
outstanding shares at September 30, 2008 were decreased from 95,326,943 shares to 6,355,910, and the treasury shares were reduced from 45,000 shares to 3,000. In addition, the par value of the common stock was decreased from $0.01 to $0.001

On November 4, 2008, the Company issued 14,000,000 shares of common stock to pay down the amount of loan payable 
eSPG, reducing the outstanding balance at that time to $24,375.

On January 1, 2009, the Company authorized, with an
effective date of January 1, 2009, the acquisition of 3Si Holdings, Inc., a Florida corporation, through a tax free exchange of shares by the issuance of 40,000,000 shares of its common stock in exchange for 100% of the outstanding shares of
3Si Holdings, Inc.

On January 1, 2009, the Company, as a part of consummating the acquisition of 3Si Holdings, Inc.,
authorized, with an effective date of January 1, 2009, the issuance of 8,000,000 shares to satisfy an obligation associated with warrants outstanding of 3Si Holdings, Inc., at the date of the acquisition.

On June 17, 2009, the Company issued 2,000,000 shares of common stock to securitize a loan.

On July 13, 2009, the Company issued 2,000,000 shares of common stock to pay the balance of the loan payable  eSPG of $24,375
satisfying the balance in full.

On October 16, 2009, the Company issued 249,999 shares of common stock as satisfaction of
the reorganization plan of Cybercare, a company acquired in Bulovatech Labs

On November 24, 2009, the Company issued
2,100,000 shares of common stock as satisfaction of debt to unrelated parties in the amount of $425,000.

On December 16,
2009 the Company authorized the issuance of 2,500,000 shares to securitize its new debt with Sovereign Bank.

On
December 22, 2009 the Company issued debt in the amount of $2,000,000 with detachable warrants. These warrants provide for the purchase of 2,500,000 shares of the Companys stock at $.10 per share for a period of 5 years. The warrants have
a fair value of $256,438 which is accounted for as a discount to the debt and amortized over the life of the debt which is 7 months.

On January 20, 2010 the Company issued 2,000,000 shares to the Companys Chief Executive Officer as stock based compensation for the purpose of securitizing debt.

On February 8, 2010 the Company issued 850,000 shares to various individuals as stock based compensation.

14. Subsequent Events

Subsequent to September 30, 2010, the Company issued additional shares of its common stock as follows:

October 2010 59,366,722 shares issued to various individuals

The Company
declared a distribution of 141,272,127 shares of its 200,000,000 shares of Growth Technologies International, Inc. to the shareholders of record as of October 29, 2010

As of December 31, 2010, the Company has ceased all operations of BT Manufacturing Company LLC at its Melbourne, Florida location. The final outcome of this discontinued operation is still being
negotiated as of the date of this filing. The assets at this location have been seized by the landlord and are currently being used by the prospective buyer in carrying on the business at this location. Pending finalizations of the sale, the
prospective buyer and the landlord have agreed not to sell, dispose, pledge, assign, transfer or otherwise convey control or title over any of BTs assets wherever located.





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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



15. Segment Information

Commencing with the Companys acquisition of 3Si Holdings, Inc. in January of 2009, the Company operates in two business segments.
The Government Contracting segment is focused on the production and procurement of military articles for the US. Government and other allied governments throughout the world, and is accounted for through two of the Companys wholly owned
subsidiaries, Bulova Technologies Ordnance Systems LLC and Bulova Technologies Combat Systems LLC. The Contract Manufacturing segment produces cable assemblies as well as complete systems, and is accounted for through BT Manufacturing Company, LLC,
another of its wholly owned subsidiaries.

(UNAUDITED)

SEGMENT INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2010 IS AS FOLLOWS:



|                                                |  |                       |            |   |                                            |   |            |       |  |   |            |  
|----------------------------------------------- |  | --------------------- | ---------- | - | ------------------------------------------ | - | ---------- | ----- |  | - | ---------- | -
|                                                |  | GovernmentContracting |            |   | ContractManufacturing(DiscontinuedSegment) |   |            | Total | 
|Revenue                                         |  | $                     | 11,533,513 |   |                                            | $ | 1,932,807  |       |  | $ | 13,466,320 |  
|Cost of Sales                                   |  |                       | 8,576,134  |   |                                            |   | 1,734,195  |       |  |   | 10,310,329 |  
|                                                |  |                       |            |   |                                            |   |            |       |  |   |            |  
|                                                |  |                       |           
|Gross profit                                    |  |                       | 2,957,379  |   |                                            |   | 198,612    |       |  |   | 3,155,991  |  
|Selling, general and administrative expenses    |  |                       | 1,881,748  |   |                                            |   | 3,305,308  |       |  |   | 5,187,056  |  
|Depreciation, amortization and interest expense |  |                       | 1,084,123  |   |                                            |   | 587,416    |       |  |   | 1,671,539  |  
|                                                |  |                       |            |   |                                            |   |            |       |  |   |            |  
|                                                |  |                       |           
|Income (loss) from operations                   |  |                       | (8,492     | ) |                                            |   | (3,694,112 | )     |  |   | (3,702,604 | )
|                                                |  |                       |           
|Other income (expense)                          |  |                       | (59        | ) |                                            |   | 72,358     |       |  |   | 72,299     |  
|Loss on disposal of business segment            |  |                       |            |   |                                            |   | (3,550,000 | )     |  |   | (3,550,000 | )
|                                                |  |                       |            |   |                                            |   |            |       |  |   |            |  
|Net Income (loss)                               |  | $                     | (8,551     | ) |                                            | $ | (7,171,754 | )     |  | $ | (7,180,305 | )
|                                                |  |                       |            |   |                                            |   |            |       |  |   |            |  
|Total Assets                                    |  | $                     | 4,651,147  |   |                                            | $ | 3,900,414  |       |  | $ | 8,551,561  |  
|                                                |  |                       |            |   |                                            |   |            |       |  |   |            |  

Reconciliation of Segment Amounts Reported to Consolidated
Amounts



|                                                             |  |   |             |  
|------------------------------------------------------------ |  | - | ----------- | -
|Revenue                                                      |  |   |             |  
|                                                             | 
|Total revenues for reportable segments                       |  | $ | 13,466,320  |  
|Amount included in loss from discontinued operations         |  |   | (1,932,807  | )
|Unallocated amounts relating to corporate operations         |  |   |             |  
|License fee revenue                                          |  |   | 136,349     |  
|                                                             |  |   |             |  
|Total consolidated revenue                                   |  | $ | 11,669,862  |  
|                                                             |  |   |             |  
|                                                             | 
|Net loss                                                     |  |   |             |  
|                                                             | 
|Total loss for reportable segments                           |  | $ | (7,180,305  | )
|                                                             | 
|Unallocated amounts relating to corporate operations         |  |   |             |  
|License fee revenue                                          |  |   | 136,349     |  
|Selling, general and administrative expenses                 |  |   | (3,106,169  | )
|Depreciation, amortization and interest expense              |  |   | (273,514    | )
|                                                             |  |   |             |  
|Total consolidated net loss                                  |  | $ | (10,423,639 | )
|                                                             |  |   |             |  
|                                                             | 
|Assets                                                       |  |   |             |  
|                                                             | 
|Total assets for reportable segment  continuing operations  |  | $ | 4,651,147   |  
|Total assets for reportable segment  discontinued operation |  |   | 3,900,414   |  
|Corporate investments and other assets                       |  |   | 1,870,589   |  
|                                                             |  |   |             |  
|                                                             | 
|Total consolidated assets                                    |  | $ | 10,422,150  |  
|                                                             |  |   |             |  



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2010 AND 2009



(UNAUDITED)

SEGMENT INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2009 IS AS FOLLOWS:



|                                             |  |                       |            |  |                                            |   |            |       |  |   |            |  
|-------------------------------------------- |  | --------------------- | ---------- |  | ------------------------------------------ | - | ---------- | ----- |  | - | ---------- | -
|                                             |  | GovernmentContracting |            |  | ContractManufacturing(DiscontinuedSegment) |   |            | Total | 
|Revenue                                      |  | $                     | 19,091,025 |  |                                            | $ | 2,333,473  |       |  | $ | 21,424,498 |  
|Cost of Sales                                |  |                       | 15,955,909 |  |                                            |   | 1,865,962  |       |  |   | 17,821,871 |  
|                                             |  |                       |            |  |                                            |   |            |       |  |   |            |  
|                                             |  |                       |           
|Gross profit                                 |  |                       | 3,135,116  |  |                                            |   | 467,511    |       |  |   | 3,602,627  |  
|Selling, general and administrative expenses |  |                       | 1,878,577  |  |                                            |   | 3,751,286  |       |  |   | 4,809,863  |  
|Depreciation and interest expense            |  |                       | 182,663    |  |                                            |   | 217,658    |       |  |   | 400,321    |  
|                                             |  |                       |            |  |                                            |   |            |       |  |   |            |  
|                                             |  |                       |           
|Income (loss) from operations                |  |                       | 1,073,876  |  |                                            |   | (3,501,433 | )     |  |   | (2,427,557 | )
|                                             |  |                       |           
|Other income (expense)                       |  |                       | 6,431      |  |                                            |   | 79,367     |       |  |   | 85,798     |  
|                                             |  |                       |            |  |                                            |   |            |       |  |   |            |  
|Net Income (loss)                            |  | $                     | 1,080,307  |  |                                            | $ | (3,422,066 | )     |  | $ | (2,341,759 | )
|                                             |  |                       |            |  |                                            |   |            |       |  |   |            |  
|Total Assets                                 |  | $                     | 4,996,360  |  |                                            | $ | 3,257,585  |       |  | $ | 8,253,945  |  
|                                             |  |                       |            |  |                                            |   |            |       |  |   |            |  

Reconciliation of Segment Amounts Reported to Condensed Consolidated Amounts



|                                                              |  |   |            |  
|------------------------------------------------------------- |  | - | ---------- | -
|Revenue                                                       |  |   |            |  
|                                                              | 
|Total revenues for reportable segments                        |  | $ | 21,424,498 |  
|Amount included in loss from discontinued operations          |  |   | (2,333,473 | )
|Unallocated amounts relating to corporate operations          |  |   |            |  
|License fee revenue                                           |  |   | 73,044     |  
|                                                              |  |   |            |  
|Total consolidated revenue                                    |  | $ | 19,164,069 |  
|                                                              |  |   |            |  
|                                                              | 
|Net loss                                                      |  |   |            |  
|                                                              | 
|Total loss for reportable segments                            |  | $ | (2,341,759 | )
|                                                              | 
|Unallocated amounts relating to corporate operations          |  |   |            |  
|License fee revenue                                           |  |   | 73,044     |  
|Selling, general and administrative expenses                  |  |   | (1,470,861 | )
|Depreciation and interest expense                             |  |   | (89,707    | )
|                                                              |  |   |            |  
|Total consolidated net loss                                   |  | $ | (3,829,283 | )
|                                                              |  |   |            |  
|Assets                                                        |  |   |            |  
|                                                              | 
|Total assets for reportable segment  continuing operations   |  | $ | 4,996,360  |  
|Total assets for reportable segment  discontinued operations |  |   | 3,257,585  |  
|Corporate investments and other assets                        |  |   | 2,171,793  |  
|                                                              |  |   |            |  
|Total consolidated assets                                     |  | $ | 10,425,738 |  
|                                                              |  |   |            |  



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##### Table of Contents

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

There were no changes in, or disagreements with, accountants on accounting or financial disclosure as defined by
Item 304 of Regulation S-K.

Item 9A. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act), the Company carried out an
evaluation of the effectiveness of the design and operation of the Companys disclosure controls and procedures as of the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation
of the Companys management, including the Companys principal executive officer and the Companys principal financial officer.

Based upon that evaluation, the principal executive officer and the principal financial officer concluded that the Companys disclosure controls and
procedures were not effective at September 30, 2010 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, but are being changed to allow timely filing in the future.

The
Company has made numerous changes in its internal control over financial reporting during the Companys most recent fiscal quarter that has materially affected, or is reasonably likely to affect, the Companys internal control over
financial reporting. The Company continues to enhance its internal controls over financial reporting, primarily by evaluating and enhancing process and control documentation. Management discusses with and discloses these matters to the Board of
Directors and the Companys auditors.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The executive officers, directors of the Company, and their ages and positions, are as follows:



|                 |  |     |  |                                                      
|---------------- |  | --- |  | -----------------------------------------------------
|Name             |  | Age |  | Office Held                                          
|John D. Stanton  |  | 63  |  | Chairman of the Board and Principal Financial Officer
|                 |  |    
|Stephen L. Gurba |  | 55  |  | Chief Executive Officer and President                

Our bylaws provide
that the number of members of our board of directors shall have up to (5) members. Our current number of directors is two (2). Directors are elected by the shareholders at the annual meeting and serve until their successors are duly elected and
qualified. Directors are elected for a term of one (1) year. All of our officers serve at the discretion of our board of directors

The
following is a biographical summary of the business experience of our directors and executive officers:

John D. Stanton is the Chairman of
the Board of Directors and also serves as our Principal Financial Officer. Mr. Stanton has served as the President and Chief Executive Officer of Florida Engineered Construction Products, Corporation. Since the early 1990s,
Mr. Stanton has been, and continues to be, involved in turn-around management for financially distressed companies, providing both management guidance and financing. In 1981, Mr. Stanton assumed the role of Chief Financial Officer for
Florida Engineered Construction Products, Corporation, a privately held manufacturer of residential and commercial construction products, located in Tampa, Florida. Mr. Stanton worked as an auditor with the international professional services
firm that is now known as Ernst & Young, LLP from 1973 through 1981. Mr. Stanton, a Vietnam veteran of the United States Army, graduated from the University of South Florida with a Bachelors Degree in Marketing and Accounting in 1972,
and with an MBA in 1973. Mr. Stanton earned the designation of Certified Public Accountant in 1974 and was a Sells Award winner in the CPA examination.

Stephen L. Gurba is our Chief Executive Officer and President. Mr. Gurba has over 30 years of experience in the design, development, production, and management of complex systems for the defense
ammunition industry as well as commercial products. His experience has included responsibility for companies with sales of up to $300 million annually and employing as many as 2000 employees. Mr. Gurba has previously held the position of Senior
Vice President of General Defense Corporation Vice President of Marketing for Olin Ordnance, President of Valentec International Corporation, President and CEO of National Manufacturing Corporation, and President, CEO, and Owner of Bulova
Technologies, LLC. Mr. Gurba received a BA in Mathematics & Natural Science in 1978, an MBA in Executive Management and Administration in 1988, and a PhD in Business administration in 1991.



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##### Table of Contents

Audit Committee

The Companys Board of Directors currently serves as the Audit Committee.

Code of
Ethics:

The Company has adopted a Code of Ethics which applies to all directors, officers and employees of the Company and its
subsidiaries including the Principal Executive Officer and the Principal Financial Officer, which meets the requirement of a code of ethics as defined in Item 406 of Regulation S-K. The Company will provide a copy of the Code
to shareholders pursuant to any request directed to the Companys principal offices.

Item 11.
Executive Compensation

The following summary compensation table sets forth certain information concerning compensation paid to our
Principal Financial Officer and Principal Executive Officer.

SUMMARY COMPENSATION TABLE - YEARS ENDED SEPTEMBER 30, 2010
AND 2009



|                                                                           |  |      |      |  |        |         |           |       |   |   |             |  |   |              |         |  |                                      |   |   |                                                                    |   |   |                       |  |   |       |   |  |   |   |   |  |   |         |           | 
|-------------------------------------------------------------------------- |  | ---- | ---- |  | ------ | ------- | --------- | ----- | - | - | ----------- |  | - | ------------ | ------- |  | ------------------------------------ | - | - | ------------------------------------------------------------------ | - | - | --------------------- |  | - | ----- | - |  | - | - | - |  | - | ------- | --------- | 
|Name and Principal Position                                                |  | Year |      |  | Salary |         |           | Bonus |   |   | StockAwards |  |   | OptionAwards |         |  | Non-EquityIncentive PlanCompensation |   |   | Change inPensionValue andnon
QualifiedDeferredCompensationEarnings |   |   | All OtherCompensation |  |   | Total |  
|                                                                           |  |      |      |  |        |         |           |       |  
|John D. Stanton, Chairman of the Board and Principal Financial Officer (1) |  |      | 2009 |  |        | $       | 180,000   |       |   | $ |            |  |   | $            |        |  |                                      | $ |  |                                                                    |   | $ |                      |  |   | $     |  |  |   | $ |  |  |   | $       | 180,000   | 
|                                                                           |  | 2010 |      |  | $      | 240,000 |           |       | $ |  |             |  | $ |             |         |  | $                                    |  |   |                                                                    | $ |  |                       |  | $ |      |   |  | $ |  |   |  | $ | 240,000 |          
|                                                                           |  |      |      |  |        |         |           |       |  
|Stephen L. Gurba, Chief Executive Officer and President                    |  |      | 2009 |  |        | $       | 252,000   |       |   | $ |            |  |   | $            |        |  |                                      | $ |  |                                                                    |   | $ |                      |  |   | $     |  |  |   | $ |  |  |   | $       | 252,000   | 
|                                                                           |  | 2010 |      |  | $      | 367,362 |           |       | $ |  |             |  | $ | 340,000      |         |  | $                                    |  |   |                                                                    | $ |  |                       |  | $ |      |   |  | $ |  |   |  | $ | 707,362 |          
|                                                                           |  |      |      |  |        |         |           |       |   |   |             |  |   |              |         |  |                                      |   |   |                                                                    |   |   |                       |  |   |       |   |  |   |   |   |  |   |         |           | 
|                                                                           |  |      |      |  |        |         |           |       |  
|                                                                           |  |      |      |  |        | $       | 1,039,362 |       |   | $ |            |  |   | $            | 340,000 |  |                                      | $ |  |                                                                    |   | $ |                      |  |   | $     |  |  |   | $ |  |  |   | $       | 1,379,362 | 
|                                                                           |  |      |      |  |        |         |           |       |   |   |             |  |   |              |         |  |                                      |   |   |                                                                    |   |   |                       |  |   |       |   |  |   |   |   |  |   |         |           | 



|(1) |  Mr. Stantons compensation is accrued at $20,000 per month; none of the compensation for 2010 and 2009 has been paid.
|--- | -----------------------------------------------------------------------------------------------------------------------

The following table summarizes that the Company does not have any Outstanding Equity Awards at fiscal year ended September 30, 2010

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END



|                 |  |                                                              |   |  |                                                                |  |   |                                                                                         |  |  |                         |  |  |                      |   |  |                                                        |  |   |                                                              |  |  |                                                                                                  |  |  |                                                                                                                 |   |  |  |  |   |  |  |  |   | 
|---------------- |  | ------------------------------------------------------------ | - |  | -------------------------------------------------------------- |  | - | --------------------------------------------------------------------------------------- |  |  | ----------------------- |  |  | -------------------- | - |  | ------------------------------------------------------ |  | - | ------------------------------------------------------------ |  |  | ------------------------------------------------------------------------------------------------ |  |  | --------------------------------------------------------------------------------------------------------------- | - |  |  |  | - |  |  |  | - | 
|                 |  | OPTION AWARDS                                                |   |  | STOCK AWARDS                                                   | 
|Name             |  | Number ofSecuritiesUnderlyingUnexercisedOptons, #Exercisable |   |  | Number ofSecuritiesUnderlyingUnexercisedOptons, #Unexercisable |  |   | Equity IncentivePlan
Awards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions (#) |  |  | OptionExercisePrice ($) |  |  | OptionExpirationDate |   |  | Number ofShares orUnits ofStock ThatHave NotVested (#) |  |   | Market Valueof Shares orUnits ofStock ThatHave NotVested ($) |  |  | Equity IncentivePlan Awards:Number ofUnearnedShares, Units orOther RightsThat Have
NotVested (#) |  |  | Equity IncentivePlan Awards:Market orPayout Value ofUnearnedShares, Units
orOther RightsThat Have NotVested (#) |  
|                 |  |                                                              |   |  |                                                                |  |   |                                                                                         | 
|John D. Stanton  |  |                                                              |  |  |                                                                |  |  |                                                                                         |  |  |                        |  |  | $                    |  |  |                                                        |  |  |                                                              |  |  |                                                                                                 |  |  | $                                                                                                               |  |  |  |  |  |  |  |  |  | 
|                 |  |                                                              |   |  |                                                                |  |   |                                                                                         | 
|Stephen L. Gurba |  |                                                              |  |  |                                                                |  |  |                                                                                         |  |  |                        |  |  | $                    |  |  |                                                        |  |  |                                                              |  |  |                                                                                                 |  |  | $                                                                                                               |  |  |  |  |  |  |  |  |  | 



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##### Table of Contents

DIRECTOR COMPENSATION



|                            |  |                                |   |  |             |  |   |              |  |  |                                      |  |  |                                                                            |   |  |                           |   |   |       |  |   |   |  |  |   |   | 
|--------------------------- |  | ------------------------------ | - |  | ----------- |  | - | ------------ |  |  | ------------------------------------ |  |  | -------------------------------------------------------------------------- | - |  | ------------------------- | - | - | ----- |  | - | - |  |  | - | - | 
|Name and Principal Position |  | Fees Earned or Paidin Cash ($) |   |  | StockAwards |  |   | OptionAwards |  |  | Non-EquityIncentive PlanCompensation |  |  | Change in Pension Valueand non Qualified DeferredCompensation
Earnings ($) |   |  | All OtherCompensation ($) |   |   | Total | 
|                            |  |                                |   |  |             |  |  
|John D. Stanton             |  | $                              |  |  |             |  |  |              |  |  |                                     |  |  |                                                                            |  |  |                           | $ |  |       |  | $ |  |  |  | $ |  | 
|                            |  |                                |   |  |             |  |  
|Stephen L. Gurba            |  | $                              |  |  |             |  |  |              |  |  |                                     |  |  |                                                                            |  |  |                           | $ |  |       |  | $ |  |  |  | $ |  | 

We maintain a policy whereby our
directors may be compensated for out of pocket expenses incurred by each of them in the performance of their relevant duties. Directors do not receive any form of compensation.

We currently do not have any employment agreements with any of our executive officers.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The table below lists the
beneficial ownership of our voting securities by each person known by us to be the beneficial owner of more than 5% of such securities, as well as by all our directors and officers. Unless otherwise indicated, the shareholders listed possess sole
voting and investment power with respect to the shares shown.

The information reflected in the following table was furnished by the persons
listed therein. The calculations of the percent of shares beneficially owned are based on 81,902,405 shares of common stock outstanding on September 30, 2010.



|               |  |                                                                             |  |                                          |            |     |                 |  |       |  
|-------------- |  | --------------------------------------------------------------------------- |  | ---------------------------------------- | ---------- | --- | --------------- |  | ----- | -
|Title of Class |  | Name and Address
of Beneficial Owner                                        |  | Amount and Nature ofBeneficial Ownership |            |     | Percentof Class | 
|               |  |                                                                             | 
|Common Stock   |  | John D. Stanton 19337 US Hwy
19, Suite 525. Clearwater, Fl 33764            |  |                                          | 17,600,000 | (1) |                 |  | 21.49 | %
|               |  |                                                                             | 
|Common Stock   |  | Stephen L. and Evelyn Gurba
19337 US Hwy 19, Suite 525 Clearwater, Fl
33764 |  |                                          | 18,000,000 | (2) |                 |  | 21.98 | %



|(1) | Includes 1,000,000 shares in the name of Mr. Stantons minor children
|--- | ---------------------------------------------------------------------

|(2) | Includes 4,000,000 shares issued in the name of Stephen L and Evelyn Gurba, but being held as security for a loan.
|--- | ------------------------------------------------------------------------------------------------------------------

Item 13. Certain Relationships and Related Transactions and Director Independence

The Company operated its contract manufacturing business segment in facilities located in Melbourne, Florida at a monthly rental of $111,111. This
facility is owned by an independent third party, and the use of the facility was provided for by Stephen L Gurba, our Chief Executive Officer and a shareholder of the Company through November of 2009, at which time the Company relocated to a
different facility under a new lease.

The Company leased certain equipment used in its contract manufacturing business segment from Lamar
Systems Co., a related corporation owned by Stephen L Gurba, our Chief Executive Officer and a shareholder of the Company for $65,000 per month. In December 2009, the Company purchased the equipment under this lease cancelling any future obligation
under this lease from that point forward.

On November 4, 2008, and then on July 13, 2009, the Company settled the full amount of
the amount of the outstanding debt to eSPG through the issuance of 14,000,000 shares and 2,000,000 shares respectively, to entities affiliated with or identified by our Chairman of the Board. Our Chairman, John D. Stanton had financed a proposed
merger transaction, which letter of intent was dated August 23, 2005 through eSPG. eSPG assigned its $195,000 balance outstanding to him, and he subsequently assigned it to other parties, some of which are the beneficiary of these share
issuances. As a result of these issuances the balance has been satisfied in full.

The acquisition of 3Si Holdings, Inc., which occurred on
January 1, 2009, had certain preexisting relationships. Our Chairman of the Board, John D. Stanton owned and/or beneficially controlled 44% of 3Si Holdings, Inc. prior to the acquisition. Stephen L Gurba, our Chief Executive Officer owned
and/or beneficially controlled 35% of 3Si Holdings, Inc. prior to the acquisition. Stephen L Gurba, our Chief Executive Officer did not own any shares of Bulova Technologies Group, Inc. before this acquisition.



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##### Table of Contents

Bulova Technologies Ordnance Systems LLC has a Marketing Firm Agreement with Ramal Management Co.
(Ramal), a related company owned by Stephen L Gurba, our Chief Executive Officer which expires on January 1, 2011. Pursuant to the terms of the agreement, Ramal receives a marketing fee for services of 4% of net sales generated
through contracts of Bulova Technologies Ordnance Systems LLC. Marketing fees paid to Ramal for the years ended September 30, 2010 and 2009 were $461,341 and $856,715.

The Company has received loans from the two (2) major shareholders in the amount of $4,409,469 and $4,294,589 as of September 30, 2010 and 2009, respectively. These loans are supported by notes
bearing interest at 5% annually with restricted conversion features and no repayment schedule. The notes were originally issued for $1,500,000 for each shareholder then subsequently raised to a maximum of $5,000,000. All shareholder debt is accruing
interest. Due to restrictions on the maximum amount of stock holdings allowed, the conversion feature was not operable as of September 30, 2010.

Item 14. Principal Accountant Fees and Services

(1)
Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by Randall N. Drake, CPA,
PA; the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or
engagements for those fiscal years was:



|     |  |   |         | 
|---- |  | - | ------- | 
|2010 |  | $ | 56,880  | 
|2009 |  | $ | 119,726 | 

(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by Randall N. Drake, CPA, PA; the
principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:



|     |  |   |   | 
|---- |  | - | - | 
|2010 |  | $ |  | 
|2009 |  | $ |  | 

(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered; the principal accountant for tax compliance, tax
advice, and tax planning was:



|     |  |   |   | 
|---- |  | - | - | 
|2010 |  | $ |  | 
|2009 |  | $ |  | 

(4) All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by Randall N. Drake, CPA, PA; the principal
accountant, other than the services reported in paragraphs (1), (2), and (3) was:



|     |  |   |   | 
|---- |  | - | - | 
|2010 |  | $ |  | 
|2009 |  | $ |  | 

(5) Our audit committees
pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.

(6) The percentage of hours expended on the principal accountants engagement to audit our financial statements for the most
recent fiscal year that were attributed to work performed by persons other than the principal accountants full time, permanent employees was 0%.



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##### Table of Contents

PART IV

Item 15. Exhibits and Financial Statement Schedules



| |                      |  |  |                                                                                                                                                                   
| | -------------------- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) and (c)          |  |  | The consolidated financial statements are included in Item 8.                                                                                                     
| |                     
| | (b)        Exhibits: |  |  |                                                                                                                                                                   
| |                     
| | 10.1                 |  |  | Acquisition and Exchange Agreement between Bulova Technologies Group, Inc. and the shareholders of 3Si Holdings, Inc., dated January 1, 2009 (*)                  
| |                     
| | 31.1                 |  |  | Rule 13a-14(a) Certification of President and Principal Executive Officer                                                                                         
| |                     
| | 31.2                 |  |  | Rule 13a-14(a) Certification of Treasurer and Principal Financial Officer                                                                                         
| |                     
| | 32.1                 |  |  | Certification of President and Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
| |                     
| | 32.2                 |  |  | Certification of Treasurer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
| |                     
| | *                    |  |  | Previously filed as Exhibit to, and incorporated by reference from, the Companys Form 10K for the year ended September 30, 2009, on November 16,
2010.           

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Company has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



Bulova Technologies Group, INC.By

/s/ Stephen L. GurbaStephen L. GurbaPrincipal Executive Officer


DATED: January 27,
2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of
the Company and on the dates indicated.



|                                      |  |  |  |                 
|------------------------------------- |  |  |  | ----------------
|/s/ Stephen L. Gurba Stephen
L. Gurba |  |  |  | January 27, 2011
|Principal Executive Officer           |  |  |  |                 
|                                      |  | 
|/s/ John D. Stanton                   |  |  |  | January 27, 2011
|John D. Stanton                       |  |  |  |                 
|Principal Financial Officer           |  |  |  |                 



38