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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 June 30, 2007

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: None

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

Common
Stock, $.01 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  x    No   ̈

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
March 29, 2010, the aggregate market value of the voting stock held by non-affiliates of the Company was $4,915,600, 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 March 29, 2010, the Company had 80,052,909 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 JUNE 30, 2007

TABLE OF CONTENTS



|                                                                                                                                                                            |  |                                                                                                |  |     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                                            |  |                                                                                                |  | Page
|                                                                                                                                                                           
|PART I                                                                                                                                                                     
|                                                                                                                                                                            |  |                                                                                               
|Item 1.                                                                                                                                                                     |  | Business                                                                                       |  | 3   
|Item 2.                                                                                                                                                                     |  | Property                                                                                       |  | 6   
|Item 3.                                                                                                                                                                     |  | Legal Proceedings                                                                              |  | 6   
|Item 4.                                                                                                                                                                     |  | Submission of Matters to a Vote of Security Holders                                            |  | 6   
|                                                                                                                                                                           
|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           |  | 21  
|Item 9A.                                                                                                                                                                    |  | Controls and Procedures                                                                        |  | 21  
|                                                                                                                                                                           
|PART III                                                                                                                                                                   
|                                                                                                                                                                            |  |                                                                                               
|Item 10.                                                                                                                                                                    |  | Directors, Executive Officers and Corporate Governance of the Registrant                       |  | 22  
|Item 11.                                                                                                                                                                    |  | Executive Compensation                                                                         |  | 23  
|Item 12.                                                                                                                                                                    |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters |  | 24  
|Item 13.                                                                                                                                                                    |  | Certain Relationships and Related Transactions and Director Independence                       |  | 25  
|Item 14.                                                                                                                                                                    |  | Principal Accountant Fees and Services                                                         |  | 25  
|                                                                                                                                                                           
|PART IV                                                                                                                                                                    
|                                                                                                                                                                            |  |                                                                                               
|Item 15.                                                                                                                                                                    |  | Exhibits and Financial Statement Schedules                                                     |  | 26  
|                                                                                                                                                                            |  |                                                                                               
|                                                                                                                                                                            |  | Signatures                                                                                     |  | 26  
|                                                                                                                                                                            | 
|EX-31.1 Rule 13a-14(a) Certification of President and Principal Executive Officer                                                                                           |  | 27                                                                                            
|EX-31.2 Rule 13a-14(a) Certification of Treasurer and Principal Financial Officer                                                                                           |  | 28                                                                                            
|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 |  | 29                                                                                            
|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 |  | 30                                                                                            



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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

Business Development

Bulova Technologies Group, Inc. (we, us,
our, or the Company) was originally created as a Wyoming corporation formed in 1979 under the name Tyrex Oil Company. In 2008, the Company filed for domestication to the State of Florida, and in November 2008, the
Company changed its name to Bulova Technologies Group, Inc. We had two wholly owned subsidiaries for the year ended June 30, 2007, including 3Si, Inc., a Colorado corporation (3Si), where all of our operations were conducted during the period
covered by this report, and KEWi.net, Inc., also a Colorado corporation, which was dormant. On May 28, 1997, we acquired 3Si through a reverse merger by issuing 72% or our outstanding stock to the 3Si shareholders in exchange for 100% of their
common stock. All references to us herein below include Bulova Technologies Group, Inc. and 3Si, Inc jointly, unless specifically stated otherwise.

For the fiscal year being reported on, the Company was engaged in the marketing, sales and integration of our proprietary software product, iKEW(TM), and the licensing of the iKEW(TM) Internet-based customer support system. The
Companys operations include data consolidation and business coordination. Our iKEW(TM) (Internet powered Knowledge, Experience and Wisdom) products provide our customers business process tools and support. Portal Management, Content
Management, Request Tracking and Workflow Processing are all integrated and presented through the customers look and feel.

Segments

The Company does not operate in more than one business segment.

Description of Business

The Company provides the ability to create, manage, and share
enterprise intelligence with anyone, anywhere, anytime over the Internet, with an easy to use, integrated suite of portal management, content management, request tracking, and workflow management technology to businesses of all sizes and types. Our
principal markets have consisted of large corporations located in the United States. The principal services provided are portal and collaborative tools, web-site development and notification system implementation using the iKEW(TM) products and
licensing of the iKEW(TM) Internet-based content management and collaboration.

Creating a highly customer centric experience differentiates
iKEW(TM) from the traditional IT deployment model. Being customer centric means iKEW(TM) accommodates and reflects the way the customers business works, thus minimizing the need for training and change to their organization. Organizations
typically spend thousands or millions of dollars and months or years bringing their disparate systems together. This type of deployment needs to be maintained by a specialized staff and resources, at significant expense. The simplicity of an
iKEW(TM) deployment reduces the time and cost of bringing disparate systems together while enabling the customers IT staff to focus on their core business.

We continued to experience a slowdown in finalizing contracts, which we believe was the result of budget concerns related to current economic conditions.

On June 17, 2007, the Company entered into a purchase agreement to sell all of its current business operations, and its wholly owned
subsidiaries to certain members of management. The transaction conveyed all equity interests in 3Si, Inc., and KEWi.net, Inc., all assets, tangible and intangible, the cancellation of all outstanding options, and the assumption of all liabilities,
with the exception of the $195,000 remaining outstanding to eSPG. In addition, all shares owned by the certain members of management were conveyed to the control of the management of eSPG. The transaction was closed and settled effective
July 1, 2007.

Description of Products/Services  for the year ended June 30, 2007

iKEW(TM) is a collaboration of content management and business process management tools. iKEW(TM) is also provided as a series of solution sets of services.
These can be contracted as a whole group, individually or in combination, including the following:



| |  | Portal Management
|- |  | -----------------



| |  | Content Management
|- |  | ------------------



| |  | Request Tracking
|- |  | ----------------



| |  | Workflow Management
|- |  | -------------------



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| |  | Discussion Forums
|- |  | -----------------



| |  | Queue Manager
|- |  | -------------

Portal
Management encompasses document and content management, among other things. Portal Management includes the entire body of knowledge maintained by an organization and how it is packaged, presented to, and accessed by a variety of audiences. Based on
need and preference, portals vary in a number of ways, including:



| |  | How the user is welcomed
|- |  | ------------------------



| |  | Single sign-on for business applications
|- |  | ----------------------------------------



| |  | Unique branding of the user interface
|- |  | -------------------------------------



| |  | Type of information featured and highlighted
|- |  | --------------------------------------------



| |  | Content filtering/searching, Meta tags
|- |  | --------------------------------------



| |  | Tone of the language and graphics used
|- |  | --------------------------------------



| |  | Access privileges within the site
|- |  | ---------------------------------



| |  | User interface with consistent navigation elements
|- |  | --------------------------------------------------

Content Management

By simplifying the process of knowledge capture and distribution
to appropriate personnel, iKEW(TM) ensures that web sites become dynamic and efficient. They reflect what is happening in real time. Behind the scenes, valuable IT resources are freed up. This is accomplished by:



| |  | Capturing and creating knowledge at the source
|- |  | ----------------------------------------------



| |  | Aggregating and improving that knowledge
|- |  | ----------------------------------------



| |  | Managing distribution securely through the Internet and wireless devices
|- |  | ------------------------------------------------------------------------



| |  | Unifying disparate information and data
|- |  | ---------------------------------------



| |  | Inputting the knowledge is as easy as using MS Word
|- |  | ---------------------------------------------------



| |  | Searching using key words, proprietary algorithms, and, techniques that allow each customer to define their own organizational communication
terminology. Over time the iKEW(TM) knowledge base reflects the most frequently requested information.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Request
Tracking

iKEW(TM)s request tracking is capable of reflecting requests which are part of an enterprises everyday work
process. If a request goes out to an individual and that request is not answered in a specified amount of time, it will automatically go to the next person in line. Multiple levels of escalation are available, which can incorporate the following
features:



| |  | Call logging
|- |  | ------------



| |  | Escalation and notification (wireless and E-mail)
|- |  | -------------------------------------------------



| |  | Two-way communication with a support representative (wireless and Internet)
|- |  | ---------------------------------------------------------------------------



| |  | File attachments to call tickets
|- |  | --------------------------------



| |  | Customer profile management
|- |  | ---------------------------



| |  | On-line status for customers as well as management
|- |  | --------------------------------------------------



| |  | Reporting
|- |  | ---------



| |  | Migration of solutions to the iKEW(TM) knowledge database
|- |  | ---------------------------------------------------------

Workflow

Workflow Processing enables customers to define approval processes,
escalate requests, and mange business processes. These functions are enabled by an easy to use Wizard interface. Workflow Processing provides the following:



| |  | Application features like security, personalization, content management, and search are much more powerful when shared across applications via
workflow. This enables users to work across departments and applications without worrying about different logins, reducing repetitive task.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Approval Process - once entered, if an Approval Process is needed the Document/Content automatically gets routed to the individual who has Approval
rights. Multiple levels of Approval are available.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Escalation Notification - if a request goes out to an individual and that request is not answered in a specified amount of time it will automatically
go to the next person in line. Multiple levels of Escalation are available.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Process Management - The flexible workflow infrastructure allows the customer to set up business processes based on the current status and priority of
the process object. Business process information can be interfaced with external data sources.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The individual components of
iKEW(TM) can address separate markets and therefore it is very difficult to estimate the total size of the consolidated market for our integrated product. At the present time, the total worldwide market for all collaborative tools is estimated to be
at least $22 billion dollars according to a Forester Report. For example, in 2002 estimates for the size of the portal market varied from $550



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million to $800 million with growth rates ranging from 20 percent to 40 percent through 2007. Market share estimates also vary, with Gartner Group estimating that competing products offered by
companies such as Plumtree, IBM, and SAP all had a 7 percent share (June 6, 2002). Similar variances are found in the collaboration and content management markets, but indicated that there is no dominant player in these markets.

Therefore, because iKEW(TM) is a more tightly integrated product, we believe it has a broader market appeal. By marketing a tightly integrated product, we
are able to provide our customers with enhanced functionality for substantially less than our competitors. We further believe that our product has an advantage over its competitors because it significantly reduces the number of technical personnel
necessary to accomplish an implementation of the product. This allows us to leverage the low cost of implementation of the iKEW(TM) product to more companies, and thus increase our market presence and revenues.

We believed that opportunities exist for all components of iKEW(TM) in enterprises ranging from small to large, including government and military, and
public/private education institutions. We will continue to pursue these opportunities as a key factor for growth and brand recognition. We anticipate that large enterprises will generate significant revenue from licensing and reselling. These
customers are cost sensitive and will provide the user volume needed to allow us to become profitable and generate positive cash flow. The architecture of iKEW(TM) allows support for multiple customers from a single infrastructure, keeping costs low
and attractive to this market. Further, because iKEW(TM) is Real World SimplicitySM, customers do not require expensive information technology professionals for support. This allows iKEW to serve a broader base of customers ranging from
small to the large enterprises.

Enterprise Market

Large enterprises can reap significant benefits from installation and utilization of the iKEW(TM) Product. These companies have very large, expensive information technology staffs, and their priorities
are to support and focus on mission critical systems. They tend to be geared toward large, complex projects, and find it difficult to adjust to rapidly changing business requiring web enabled technologies. Our strategy for these organizations is to
offer them a license, with annual maintenance and an application tool set. The Real World SimplicitySM of iKEW(TM) does not require the corporations information technology human resources for implementation or maintenance, freeing them to
focus on the mission critical systems.

Channel Sales

Channel sales are those sales provided by resellers of the iKEW(TM) Product. These resellers typically focus on using the iKEW(TM) product in their vertical markets, such as professional services or price
comparison products. Channel sales could have been a significant growth vehicle because we did not have the resources to hire a global sales force at this time.

Vertical Markets

Education is one of the markets that we will continue to focus on. One
issue that the iKEW(TM) product addresses is how to deliver training in a cost effective manner. They want to limit or eliminate travel related expense to keep the cost of training as low as possible. Another issue faced is how to secure this
environment over the Internet, and iKEW(TM) solves this with world-class proprietary security. We continue to pursue educational initiatives through the internal organizations of various companies, as well as public and private educational
institutions.

Price comparison solutions is another market that we intend to continue to target. One example of the price comparison market
is an overnight mail service price comparison solution, which we developed for one of our larger clients. Because of contractual obligations, we are precluded from releasing the name of this client, but it is a large San Francisco based financial
firm. With overnight mail service, addresses are certified against the United States Postal Service database, prices from different carriers are provided, labels are created, and links are available to track packages. This resulted in our customer
generating substantial savings in overnight mail service costs with improved reliability of delivery. This was a license sale.

Governments at
all levels have time-to-market requirements as well. We believe that an iKEW(TM) product implementation could provide increased productivity achieved by simplification of information distribution, reduction in IT resources, and a reduction in
travel. Significant opportunity exists within government for the complete set of iKEW(TM) capabilities. All public school districts are potential customers for iKEW(TM). iKEW(TM) provides services that cost effectively link administrators, teachers,
students, and parents. Budget limitations have created an environment where school districts cannot afford expensive IT solutions, yet they need to leverage technology to maximize the tax dollars they receive. iKEW(TM) deployed as an Application
Service Provider (ASP) service reduces or eliminates the need for schools to maintain expensive hardware platforms and provides the security schools require.

Small to Medium-Sized Business Market

Small to medium-sized enterprises can take advantage
of iKEW(TM)s strengths, low cost, and rapid implementation. These types of enterprises need to be very cost conscious and, at the same time, improve their time to market. iKEW(TM)s ASP delivery model reduces the need for any capital
investment. All that is required is access to a web browser and an Internet connection to take advantage of the iKEW(TM) capabilities.



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iKEW Overview

iKEW is a total knowledge management system encompassing business collaboration and data consolidation that is delivered as an application development tool kit. The key to effective knowledge management
is to consolidate data so an authorized user can discover, access and utilize it. iKEW combines the following packages under one interface: Portal Management, Content Management, Request Tracking, Workflow Processing, Authoring, Quizzing, Reporting,
Scheduling, and Discussion Groups. These packages can be delivered as a combined solution under one look and feel or the customer can choose individual packages and incorporate them into their current environment. The goal is to add packages without
adding additional interfaces, while cutting cost and protecting the customers current investments in technology. Additionally, our proprietary database interface product, Queue Manager, integrates diverse backend systems.

Employees

During fiscal year 2007, we had
five employees. None of our employees are members of any union and we consider our employee labor relations to be good.

Competitive
Conditions

Our industry is highly competitive and includes both small firms and large diversified firms that have greater financial,
technical and marketing capabilities than we currently have available. Our industry is not dominated by any one firm.

Because of the unique
nature of our product, we offer the same solutions/services along various industry segments, including portals, content management, business process management, document management, customer relationship management and instant collaboration. None of
our competitors attempt to offer their products to all of these categories. Separated by these categories, our competitors include, but are not limited to Hummingbird, IBM and Oracle (portals), Stellent and FileNet (content management and document
management), Megastorm and Pega (business process management), Remedy and Siebel (customer relationship management) and Genesis and Raindance (instant collaboration).

We compete on the basis of competitive pricing, a reputation for quality and the unique nature of our software. We believe that it is our tightly coupled and highly integrated product that allows us to
cross the different market categories enabling us to deliver projects quicker and for less cost than our competitors. A large number of established and well-financed entities are active in our industry. Many such entities have significantly greater
financial resources, technical expertise and managerial capabilities than ours and, consequently, we are and will continue to be at a competitive disadvantage.

Government Regulations

We are not subject to any extraordinary government regulations.

Patents and Trademarks

In
addition to rights provided at common law, we have submitted trademark/service mark applications with the U.S. Patent & Trademark Office to register the marks iKEW and REAL WORLD SIMPLICITY and to have them listed in
its principal register. In November 2005, we were advised that our applications were accepted.

Item 2.
Property

Our principal place of business as of the end of this fiscal year, June 30, 2007, was located at Suite 100,19 N. Tejon
Street, Colorado Springs, Colorado 80903, consists of 1955 square feet of general office space, and has been leased for a 36*-month term at an initial rent of $2,000 per month through February 28, 2007, then increasing to $2,450 per month
through April 30 2007, $2,524 per month through April 30, 2008, and $2,599 per month through April 30, 2009.

We own furniture,
fixtures and computer equipment. In addition we have a Hosting agreement with Verizon Business for our Production Server environment.

Item 3. Legal Proceedings

There are no material legal proceedings that are pending or have been threatened against us of which
our management is aware.

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

During the year ended Jun 30, 2007, no matters were presented to our shareholders for approval.



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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
|                   |  |     
|September 30, 2005 |  | $    | 0.75 |     | $ | 0.01
|December 31, 2005  |  |      | 0.75 |     |   | 0.22
|March 31, 2006     |  |      | 0.90 |     |   | 0.30
|June 30, 2006      |  |      | 1.50 |     |   | 0.30
|                   |  |     
|September 30, 2006 |  | $    | 0.75 |     | $ | 0.22
|December 31, 2006  |  |      | 0.45 |     |   | 0.15
|March 31, 2007     |  |      | 0.30 |     |   | 0.15
|June 30, 2007      |  |      | 0.75 |     |   | 0.15

The closing bid price of our Common
Stock on March 29, 2010 was $.134

As of March 29, 2010, there were approximately 120 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 June 30, 2008.

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



|1. | 
|-- | 

The following discussion should
be read in conjunction with the financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995,
we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this Report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange
Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are necessarily based upon estimates and
assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on, our behalf. We disclaim any obligation to update
forward-looking statements.

Overview

Bulova Technologies Group, Inc. was originally created as a Wyoming corporation formed in 1979 under the name Tyrex Oil Company. In 2008, the Company filed for domestication to the State of
Florida, and in November 2008, the Company changed its name to Bulova Technologies Group, Inc. For the years ended June 30, 2007 and 2006, we had two wholly owned subsidiaries, including 3Si, Inc., a Colorado corporation (3Si),
where all of our operations were conducted, and KEWi.net, Inc., also a Colorado corporation, which was dormant for the periods presented.

The Company is engaged in the marketing, sales and integration of our proprietary software product, iKEW(TM), and the licensing of the iKEW(TM) Internet-based customer support system. Our operations
include data consolidation and business coordination. Our iKEW(TM) (Internet powered Knowledge, Experience and Wisdom) products provide our customers business process tools and support. Portal Management, Content Management, Request Tracking and
Workflow Processing are all integrated and presented through the customers look and feel.



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The following information is intended to highlight developments in our operations, to
present our results of operations, to identify key trends affecting our businesses and to identify other factors affecting our results of operations for the periods indicated.

Results of Operations

Comparison of our Results of Operations for the Fiscal Years Ended June 30, 2007 and 2006.

We generated revenues of $549,376 during our fiscal year ended June 30, 2007, compared to revenues of $881,378 during our fiscal year ended June 30, 2006, a decrease of $332,002.

Our cost of sales during our fiscal year ended June 30, 2007 was $264,305, compared to $240,100 in 2006, an increase of $24,205.

During our fiscal year ended June 30, 2007, our operating expenses were $559,666, compared to operating expenses of
$588,121 during our fiscal year ended June 30, 2006, a decrease of $28,455.

Interest expense remained relatively
constant in our fiscal year ended June 30, 2007, compared to the similar period in 2006, as we incurred $28,700 in 2007, compared to $27,872 in 2006, an increase of $828.

As a result of the above circumstances, we incurred a loss of $303,295 for the fiscal year ended June 30, 2007, compared to incurring a
profit of $25,286 during the fiscal year ended June 30, 2006.

Liquidity and Capital Resources

At June 30, 2007, we had $6,069 in cash and cash equivalents.

At June 30, 2007, we had accounts receivable in the amount of $5,952, compared to $470 at June 30, 2006.

Beginning in February 2003 through April 2005, our former President and CEO (who is still a director and principal stockholder) loaned us
the principal sum of $495,412. He resigned his positions as our CEO and President in February 2005. At that time we renegotiated that debt pursuant to the following terms:

$345,000 of the debt was converted to a seven-year note payable from us which provides for quarterly interest only payments, with interest
accruing at eight percent (8%) per year ($6,900 per payment), with a balloon payment of $345,000 plus the last interest payment of $6,900 due at the end of the note period. The $345,000 debt has been classified as long term on our accompanying
balance sheet. The balance of $150,000 was utilized to exercise an outstanding option to purchase 3,000,000 shares of our Common Stock at a conversion price of $.05 per share.

Cash advances and accrual of salaries and expenses which are listed as accounts payable to related parties were made to us from an
individual who is one of our officers, a director and a principal stockholder and two of our other directors and principal stockholders.

We also established a line of credit with Wells Fargo Bank that was granted based upon our former CTO/CFOs personal guarantee. This $45,000 line of credit accrues at an interest rate equal to 9.25%.
The amount outstanding as of June 30, 2007 was approximately $43,000, and is included in accounts payable.

On
August 23, 2005, we entered into a Letter of Intent to engage in a business combination with Entellectual Solutions Properties Group, Inc. (eSPG) based in Tampa, Florida. As part of the terms of the Letter of Intent, eSPG loaned us
the principal sum of $195,000. The relevant LOI does not contain a charge for interest on this loan.

During the year ended
June 30, 2007, the Company determined that it would be beneficial to the shareholders of the Company to dispose of the current business operations, as the accumulated deficit in equity had now reached in excess of $1,000,000. On June 17,
2007  The Company entered into a purchase agreement to sell all of its current business operations, and its wholly owned subsidiaries to certain members of management. The transaction conveyed all equity interests in 3Si, Inc., and
KEWi.net, Inc., all assets, tangible and intangible, the cancellation of all outstanding options, and the assumption of all liabilities, with the exception of the $195,000 remaining outstanding to eSPG. In addition, all shares owned by the certain
members of management were conveyed to the control of the management of eSPG. The transaction was closed and settled effective July 1, 2007. This afforded the Company the opportunity, under new leadership, to forge in directions that would provide a
return to the shareholders in the long run.

The report issued by our independent accountants to our audited financial
statements included below in this Report contains a separate paragraph stating, The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note A to our financial
statements, we have suffered recurring losses from operations and have working capital and stockholders deficits. These factors raise substantial doubt about our ability to continue as a going concern. Managements plans in regard to
these matters are described above, as well as in Note A. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.



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##### Table of Contents

Subsequent Event

July 1, 2007  the Company settled the agreement with certain members of management, and conveyed all of its current business
operations, and its wholly owned subsidiaries, including the assumption of all liabilities associated with those subsidiaries, and the cancellation of all outstanding options, with the exception of the $195,000 remaining outstanding to eSPG.
The management of eSPG has taken over the responsibility of managing the Company.

March 11, 2008  the Company
issued 56,000,000 shares of common stock as stock based compensation to John Stanton, Chairman of the Board, for services rendered from the inception of his involvement with the Company.

October 28, 2008  the Company authorized a reverse split of its then current issued and outstanding shares of common stock in a
ratio of one for fifteen, and changed its par value from $.01 to $.001 per share.

November 4, 2008  The Company
filed an amendment to its articles of incorporation and changed its legal name to Bulova Technologies Group, Inc.,

November 4, 2008  the Company settled the amount of the outstanding debt to eSPG of $195,000 through the issuance of 14,000,000 shares to entities affiliated with or controlled by John Stanton, our current Chairman of the Board.
Mr. Stanton had financed the proposed merger transaction, which letter of intent was dated August 23, 2005 through eSPG, eSPG assigned the $195,000 balance outstanding to Mr. Stanton.

January 1, 2009  The Company authorized with an effective date of January 1, 2009, the acquisition of 3Si Holdings, Inc., a
Florida Corporation, through the issuance of 40,000,000 shares of common stock in exchange for all of its outstanding shares. As a part of consummating this transaction, the Company also authorized with the same effective date, the issuance of
8,000,000 shares to satisfy an obligation associated with warrants outstanding of 3Si Holdings, Inc., the Florida corporation.

Trends

As much as our sales model was beginning to be accepted by our customer base, we believe that the
amount of investment required over time to reach those companies within our target market segments has become excessive, and beyond the grasp of our financing capabilities.

We believe that the lack of working capital has been the principal reason behind our inability to grow our business during our fiscal year
ended June 30, 2007, and this shortage of capital has caused customers as well as potential business partners to have concern about doing business with us.

Inflation

Although our operations are influenced by general economic
conditions, we do not believe that inflation had a material effect on our results of operations during our fiscal year ended June 30, 2007.

Critical Accounting Policies and Estimates

We believe our revenue
recognition policies are in compliance with all applicable accounting regulations, including American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) 97-2 and 98-4, Software Revenue
Recognition. These statements provide criteria to be met in order for revenue to be recognized. In summary, we recognize revenues from the sale of software products when it can be determined that persuasive evidence of an arrangement exists,
delivery and acceptance has occurred, the vendors fee is fixed or determinable and collectability is probable. Revenues from other contract services are generally recognized under the percentage-of-completion method, as measured by achievement
of the milestones specified in the agreements. Maintenance and support revenues are recognized ratably over the term of the related agreements. The iKEW software purchased via our ASP model is licensed to the users on a monthly subscription basis.
License revenue is recognized monthly as the service is provided unless the customer has purchased an enterprise site license.

Details regarding our use of these policies and the related estimates are described in the accompanying financial statements as of June 30, 2007 and 2006, and for the years then ended. During the year ended June 30, 2007, there
have been no material changes to our critical accounting policies that impacted our consolidated financial condition or results of operations.



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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 June 30, 2007 and 2006                                                 |  | 12  
|                                                                                                         | 
|Consolidated Statements of Operations for the Years Ended June 30, 2007 and 2006                         |  | 13  
|                                                                                                         | 
|Consolidated Statements of Cash Flows for the Years Ended June 30, 2007 and 2006                         |  | 14  
|                                                                                                         | 
|Consolidated Statement of Changes in Stockholders (Deficit) for the Years Ended June 
30, 2007 and 2006 |  | 15  
|                                                                                                         | 
|Notes to Consolidated Financial Statements                                                               |  | 16  



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

1981 Promenade Way

Clearwater, Florida 33760

Phone: (727) 536-4863





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Bulova Technologies Group, Inc. and Subsidiary:

We have audited the accompanying consolidated
balance sheet of Bulova Technologies Group, Inc. and Subsidiary as of June 30, 2007 and 2006 and the related consolidated statements of operations, stockholders equity, and cash flows for each of the years ended June 30, 2007 and 2006. These
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our 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 audit provided a reasonable basis for our opinion.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of June 30, 2007 and 2006 and the results of its operations and its cash flows for each of the years ended June 30, 2007 and 2006 in conformity with accounting principles generally accepted in the United
States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going
concern. As discussed in Note A to the consolidated financial statements, the Company has had recurring losses and negative cash flows from operations. These conditions raise substantial doubt about its ability to continue as a going concern.
Managements plans regarding those matters also are described in Note A. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Randall N. Drake, CPA, PA

Randall N. Drake, CPA,
PA

Clearwater, Florida

March 31,
2010



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS



|                                                                                                         |  |          |            |   |      |   |            |  
|-------------------------------------------------------------------------------------------------------- |  | -------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                         |  | June 30, |           
|                                                                                                         |  | 2007     |            |   | 2006 |  
|                                                                                                         |  |         
|ASSETS                                                                                                   |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|Cash and cash equivalents                                                                                |  | $        | 6,069      |   |      | $ | 135,334    |  
|Accounts receivable                                                                                      |  |          | 5,952      |   |      |   | 470        |  
|Prepaid and other                                                                                        |  |          | 303        |   |      |   | 18,000     |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|Total Current Assets                                                                                     |  |          | 12,324     |   |      |   | 153,804    |  
|                                                                                                         |  |         
|Computer systems and software                                                                            |  |          | 250,514    |   |      |   | 246,047    |  
|Furniture and fixtures                                                                                   |  |          | 15,436     |   |      |   | 14,395     |  
|Vehicle                                                                                                  |  |          | 20,397     |   |      |   | 20,397     |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |          | 286,347    |   |      |   | 280,839    |  
|Less: accumulated depreciation                                                                           |  |          | (245,329   | ) |      |   | (224,104   | )
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|Property and equipment, net                                                                              |  |          | 41,018     |   |      |   | 56,735     |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|                                                                                                         |  | $        | 53,342     |   |      | $ | 210,539    |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                    |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|Accounts payable and accrued expenses                                                                    |  | $        | 298,253    |   |      | $ | 175,831    |  
|Unearned revenue                                                                                         |  |          | 128,677    |   |      |   | 96,051     |  
|Shareholder advances                                                                                     |  |          | 135,850    |   |      |   | 144,800    |  
|Loan payable  eSPG                                                                                      |  |          | 195,000    |   |      |   | 195,000    |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|Total current liabilities                                                                                |  |          | 757,780    |   |      |   | 611,682    |  
|                                                                                                         |  |         
|Note payable  stockholder                                                                               |  |          | 345,000    |   |      |   | 345,000    |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|                                                                                                         |  |          | 1,102,780  |   |      |   | 956,682    |  
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|Commitments and contingencies (Note E)                                                                   |  |          |           |   |      |   |           |  
|                                                                                                         |  |         
|Shareholders deficit                                                                                    |  |          |            |   |      |   |            |  
|Common stock, $.01 par; authorized 50,000,000 shares, 39,326,943 issued and outstanding in 2007 and 2006 |  |          | 393,269    |   |      |   | 393,269    |  
|Additional paid in Capital in excess of par                                                              |  |          | 5,617,509  |   |      |   | 5,617,509  |  
|Retained earnings (deficit)                                                                              |  |          | (7,022,032 | ) |      |   | (6,718,737 | )
|Treasury stock at cost  45,000 shares                                                                   |  |          | (38,184    | ) |      |   | (38,184    | )
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|                                                                                                         |  |          | (1,049,438 | ) |      |   | (746,143   | )
|                                                                                                         |  |          |            |   |      |   |            |  
|                                                                                                         |  |         
|                                                                                                         |  | $        | 53,342     |   |      | $ | 210,539    |  
|                                                                                                         |  |          |            |   |      |   |            |  

See accompanying notes to consolidated financial statements.



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                     |  |                      |            |   |      |   |            |  
|---------------------------------------------------- |  | -------------------- | ---------- | - | ---- | - | ---------- | -
|                                                     |  | Years Ended June 30, |           
|                                                     |  | 2007                 |            |   | 2006 |  
|                                                     |  |                     
|Revenues                                             |  | $                    | 549,376    |   |      | $ | 881,378    |  
|Cost of revenues                                     |  |                      | 264,305    |   |      |   | 240,100    |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Gross profit (loss)                                  |  |                      | 285,071    |   |      |   | 641,278    |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Selling and administrative expenses                  |  |                      | 559,666    |   |      |   | 588,120    |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Income (loss) from operations                        |  |                      | (274.595   | ) |      |   | 53,158     |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Other income (expense)                               |  |                      |            |   |      |   |            |  
|Interest expense                                     |  |                      | (28,700    | ) |      |   | (27,872    | )
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Income (loss) before income taxes                    |  |                      | (303,295   | ) |      |   | 25,286     |  
|                                                     |  |                     
|Income tax expense                                   |  |                      |           |   |      |   |           |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Net Income (loss)                                    |  | $                    | (303,295   | ) |      | $ | 25,286     |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Basic and diluted net income (loss) per common share |  | $                    | (.008      | ) |      | $ | .001       |  
|                                                     |  |                      |            |   |      |   |            |  
|                                                     |  |                     
|Weighted average common shares, basic and diluted    |  |                      | 39,326,943 |   |      |   | 36,326,943 |  
|                                                     |  |                      |            |   |      |   |            |  

See accompanying notes to consolidated financial statements.



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BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                  |  |                      |          |   |      |   |          |  
|--------------------------------------------------------------------------------- |  | -------------------- | -------- | - | ---- | - | -------- | -
|                                                                                  |  | Years Ended June 30, |         
|                                                                                  |  | 2007                 |          |   | 2006 |  
|                                                                                  |  |                     
|Cash flows from operating activities:                                             |  |                      |          |   |      |   |          |  
|Net income (loss)                                                                 |  | $                    | (303,295 | ) |      | $ | 25,286   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                      |          |   |      |   |          |  
|Depreciation                                                                      |  |                      | 21,225   |   |      |   | 32,828   |  
|Changes in assets and liabilities:                                                |  |                      |          |   |      |   |          |  
|Increase in:                                                                      |  |                      |          |   |      |   |          |  
|Prepaid and other                                                                 |  |                      |         |   |      |   | (17,517  | )
|Accounts receivable                                                               |  |                      | (5,482   | ) |      |   |         |  
|Accounts payable and accrued expenses                                             |  |                      | 122,422  |   |      |   |         |  
|Unearned revenue                                                                  |  |                      | 32,626   |   |      |   |         |  
|Decrease in:                                                                      |  |                      |          |   |      |   |          |  
|Prepaid and other                                                                 |  |                      | 17,697   |   |      |   |         |  
|Accounts receivable                                                               |  |                      |         |   |      |   | 13,030   |  
|Accounts payable and accrued expenses                                             |  |                      |         |   |      |   | (138,705 | )
|Unearned revenue                                                                  |  |                      |         |   |      |   | (34,537  | )
|                                                                                  |  |                      |          |   |      |   |          |  
|                                                                                  |  |                     
|Net cash used for operating activities                                            |  |                      | (114,807 | ) |      |   | (119,616 | )
|                                                                                  |  |                      |          |   |      |   |          |  
|                                                                                  |  |                     
|Cash flows from investing activities:                                             |  |                      |          |   |      |   |          |  
|Purchase of property and equipment                                                |  |                      | (5,508   | ) |      |   | (12,411  | )
|                                                                                  |  |                      |          |   |      |   |          |  
|                                                                                  |  |                     
|Net cash used for investing activities                                            |  |                      | (5,508   | ) |      |   | (12,411  | )
|                                                                                  |  |                     
|Cash flows from financing activities:                                             |  |                      |          |   |      |   |          |  
|Repayments on capital lease obligations                                           |  |                      |         |   |      |   | (7,408   | )
|Borrowings from shareholders                                                      |  |                      |         |   |      |   | 77,200   |  
|Repayments on advances from shareholders                                          |  |                      | (8,950   | ) |      |   |         |  
|Borrowings from eSPG                                                              |  |                      |         |   |      |   | 195,000  |  
|                                                                                  |  |                      |          |   |      |   |          |  
|                                                                                  |  |                     
|Net cash provided (used) by financing activities                                  |  |                      | (8,950   | ) |      |   | 264,792  |  
|                                                                                  |  |                      |          |   |      |   |          |  
|                                                                                  |  |                     
|Increase (decrease) in cash and cash equivalents                                  |  |                      | (129,265 | ) |      |   | 132,765  |  
|Cash and cash equivalents, beginning                                              |  |                      | 135,334  |   |      |   | 2,568    |  
|                                                                                  |  |                      |          |   |      |   |          |  
|                                                                                  |  |                     
|Cash and cash equivalents, ending                                                 |  | $                    | 6,069    |   |      | $ | 135,334  |  
|                                                                                  |  |                      |          |   |      |   |          |  

See accompanying notes to consolidated financial statements.



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BULOVA TECHNOLOGIES GROUP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS (DEFICIT)



|                                                  |  |                 |  |        |         |   |                          |   |                      |  |   |               |   |  |       |         |   |  |   |            |  
|------------------------------------------------- |  | --------------- |  | ------ | ------- | - | ------------------------ | - | -------------------- |  | - | ------------- | - |  | ----- | ------- | - |  | - | ---------- | -
|                                                  |  | Common Stock    |  |        |         |   |                          |   |                      |  |   |               |   | 
|                                                  |  | Number ofShares |  | Amount |         |   | AdditionalPaid inCapital |   | Accumulated(deficit) |  |   | TreasuryStock |   |  | Total |        
|                                                  |  |                 |  |        |         |  
|Balances, June 30, 2005                           |  | 39,325,943      |  | $      | 393,358 |   |                          | $ | 5,617,420            |  | $ | (6,744,023    | ) |  | $     | (38,184 | ) |  | $ | (771,429   | )
|                                                  |  |                 |  |        |         |  
|Adjustment or presentation of common stock at par |  | 1,000           |  |        | (89     | ) |                          |   | 89                   |  |   |               |   |  |       |         |   |  |   |            |  
|                                                  |  |                 |  |        |         |  
|Net income for the year ended June 30, 2006       |  |                 |  |        |         |   |                          |   |                      |  |   | 25,286        |   |  |       |         |   |  |   | 25,286     |  
|                                                  |  |                 |  |        |         |   |                          |   |                      |  |   |               |   |  |       |         |   |  |   |            |  
|                                                  |  |                 |  |        |         |  
|Balances, June 30, 2006                           |  | 39,326,943      |  |        | 393,269 |   |                          |   | 5,617,509            |  |   | (6,718,737    | ) |  |       | (38,184 | ) |  |   | (746,143   | )
|                                                  |  |                 |  |        |         |  
|Net loss for the year ended June 30, 2007         |  |                 |  |        |         |   |                          |   |                      |  |   | (303,295      | ) |  |       |         |   |  |   | (303,295   | )
|                                                  |  |                 |  |        |         |   |                          |   |                      |  |   |               |   |  |       |         |   |  |   |            |  
|                                                  |  |                 |  |        |         |  
|Balances, June 30, 2007                           |  | 39,326,943      |  | $      | 393,269 |   |                          | $ | 5,617,509            |  | $ | (7,022,032    | ) |  | $     | (38,184 | ) |  | $ | (1,049,438 | )
|                                                  |  |                 |  |        |         |   |                          |   |                      |  |   |               |   |  |       |         |   |  |   |            |  

See accompanying notes to consolidated financial statements



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2007 AND 2006

Note A - Organization and Business

Bulova Technologies Group, inc. and Corporate Structure

Bulova Technologies Group, Inc. (BLVT or the Company) was originally incorporated in Wyoming in 1979 under the name of Tyrex Oil Company. In 2008, the Company filed for
domestication to the State of Florida, and in November 2008, the Company changed its name to Bulova Technologies Group, Inc. We had two wholly owned subsidiaries for the year ended June 30, 2007, including 3Si, Inc., a Colorado corporation
(3Si), where all of our operations were conducted during the period covered by this report, and KEWi.net, Inc., also a Colorado corporation, which was dormant

On May 28, 1997, BLVT acquired 100% of the common stock of 3Si, Inc. (3Si). 3Si was incorporated in the State of Colorado in 1979.

KEWi.net, Inc. (KEWi) was incorporated in February 1999 as a BLVT subsidiary in Colorado. BLVT owned 69% of the outstanding common stock of KEWi
as of June 30, 2003. Effective September 23, 2003, the Company acquired the 31% minority interest in KEWi and now owns 100% of KEWi.net, Inc.

The Company focused its efforts on the marketing, sales, and integration of KEWI products including its iKEW product line. The Companys principal services provided during the years ended
June 30, 2007 and 2006 were web site development using the iKEW products, and the licensing of the iKEW Internet-based customer support system.

Effective July 1, 2007, the Company no longer owns these two subsidiaries, and has disposed of all of the business operations carried on during the years ended June 30, 2007 and 2006.

Going Concern Contingency

The accompanying
financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant recurring operating losses and as of June 30, 2007 had a working capital (deficit) of ($745,456) and a
stockholders (deficit) of ($1,049,438). The Company has had limited access to additional working capital. These factors raised substantial doubt about the Companys ability to continue as a going concern. The financial statements do not
include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

On August 23, 2005, the Company entered into a Letter of Intent for a business combination with Entellectual Solutions Properties Group, Inc.
(eSPG), based in Tampa, Florida. The business combination with eSPG, as contemplated, could have provided a significant infusion of capital into the Company and provide it with the wherewithal to pursue several long-term contracts.
However, this combination did not occur, and the amount of $195,000 advanced to the Company by eSPG is stated separately as a current liability on the Companys balance sheet as of June 30, 2007 and 2006.

See Note I - Subsequent Events for further information, as the Company has disposed of all current operations, and its two wholly owned subsidiaries, in an
effort to preserve the Companys future for its shareholders.

Note B - Summary of Significant Accounting Policies

Principles of Consolidation

The
consolidated financial statements include the Companys majority-owned Subsidiary. All inter-company balances and transactions have been eliminated.

Business Segments

BLVT currently operates only in the business segment related to its iKEW
products. iKEW is a family of software products that provide collaboration, content management, and business process management tools to corporations. Revenues are all attributed to operations within the United States. Long-lived assets are all
located within the United States. See Note C for information on significant customer concentrations.



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BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2007 AND 2006



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.

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.

Property and Equipment and Depreciation

Depreciation has been provided in amounts sufficient to allocate the costs of depreciable assets to operations over their estimated useful lives of three to
seven years using the straight-line method. The Company has capitalized $103,612 of equipment that was acquired through the assumption of capital lease obligations. These assets are amortized on a straight-line basis over the lesser of lease period
or estimated useful life, depending on the lease terms.

Depreciation expense is as follows:



|           |  |                     |       
|---------- |  | ------------------- | ------
|Year Ended |  | DepreciationExpense
|           | 
|6/30/2007  |  | $                   | 21,225
|6/30/2006  |  |                     | 32,828

Revenue Recognition

The Companys revenue recognition policies are in compliance with all applicable accounting regulations, including American Institute
of Certified Public Accountants (AICPA) Statements of Position (SOP) 97-2 and 98-4, Software Revenue Recognition. These statements provide criteria to be met in order for revenue to be recognized. In summary, the
Company recognizes revenues from the sale of software products when it can be determined that persuasive evidence of an arrangement exists, delivery has occurred, the vendors fee is fixed or determinable and collect-ability is probable.
Revenues from other contract services are generally recognized under the percentage-of-completion method, as measured by achievement of the milestones specified in the agreements.

Maintenance and support revenues are recognized ratably over the term of the related agreements.

Revenue from licensed software is recognized ratably over the license period.

Earnings (Loss) Per Share

Basic earnings (loss) per share are computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares
outstanding for the year. Diluted earnings per share, if any, reflects the potential dilution that could occur if additional equity instruments (including common stock subject to redemption) were exercised or converted into common stock. For losses,
potentially dilutive securities are not included since the result would be anti-dilutive.

Fair Value of Financial Instruments

Estimated fair values of the Companys financial instruments are as follows:



|                            |  |                     |          |   |            |          |  
|--------------------------- |  | ------------------- | -------- | - | ---------- | -------- | -
|                            |  | As of June 30, 2007 |         
|                            |  | CarryingAmount      |          |   | Fair Value |         
|                            |  |                    
|Cash and cash equivalents   |  | $                   | 6,069    |   |            | 6,069    |  
|Note payable - stockholders |  |                     | (345,000 | ) |            | (345,000 | )

The fair value of debt is
based on current rates at which the Company could borrow funds with similar remaining maturities.



17



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2007 AND 2006



Software Development Costs

Software development costs are expensed as research costs until the Company has determined that the software has achieved technological feasibility, will result in probable future economic benefits, and
management has committed to funding the project. Thereafter, the costs to develop the software are capitalized and amortized using the straight-line method over the remaining estimated useful lives. To date, all software development costs have been
expensed due to the development nature of the Companys business and products.

Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards may be applicable to the Company, the
Company has not identified any standards that it believes merit further discussion. The Company expects that none of the new standards would have a significant impact on its consolidated financial statements

Note C - Notes Payable to Shareholder

Previous to 2006, the former President and CEO who is still a Director and principal stockholder had loaned $495,412 to the Company. As of June 30, 2005, the Company renegotiated that debt with the following terms and conditions:

$345,000 of the debt was converted to a Note from the Company with quarterly interest only payments at an eight percent (8%) simple
annualized interest rate equaling $6,900 per payment over a period not to exceed seven years from the first payment. The last payment shall be in the principal amount of $345,000 plus the last interest amount of $6,900. The $345,000 debt has been
classified as long term in the accompanying balance sheet.

$150,000 or a portion of a currently outstanding note to a stockholder was
extinguished in exchange for a cashless exercise of 3,000,000 stock options at $0.05 per share or $150,000.

Note D - Capital Lease
Obligations

The Company has capitalized the cost of computer systems and software totaling $103,612 that was acquired under the provisions
of long-term capital leases. As of June 30, 2007, all capital lease obligations have been paid in full.

Note E - Commitments

Operating Lease

The Company
leased office space under a month to month operating lease. Subsequent to June 30, 2007, and effective July 1, 2007, the Company sold its operations to certain members of management, who assumed all operations and corresponding commitments
and liabilities. Consequently, the Company has no further lease commitments beyond that date

Note F - Stockholders Equity (Deficit)

Stock Option Plan

On
June 18, 1998, the stockholders approved the Companys 1998 Stock Option Plan (the 1998 Plan). Under the terms of the 1998 Plan, the Company may grant options for employees and directors of the Company to acquire up to
5,000,000 shares of common stock. On March 9, 2005 the Board of Directors and a majority of the stockholders approved an action to increase the number of shares authorized in the plan to 10,000,000.

The options vest over a period of three years.



|                             |  |                      |   |  |                |       |  
|---------------------------- |  | -------------------- | - |  | -------------- | ----- | -
|                             |  | # SharesUnder Option |   |  | ExercisePrice* |      
|End of period, June 30, 2005 |  | 1,997,000            |   |  | $              | 0.05  |  
|                             |  |                     
|Granted                      |  | 500,000              |   |  |                | 0.05  |  
|Forfeited                    |  | (455,000             | ) |  |                | (0.05 | )
|                             |  |                      |   |  |                |       |  
|                             |  |                     
|End of period, June 30, 2006 |  | 2 042 000            |   |  |                | 0.05  |  
|                             |  |                     
|Granted                      |  |                     |   |  |                |      |  
|Forfeited                    |  |                     |   |  |                |      |  
|                             |  |                      |   |  |                |       |  
|                             |  |                     
|End of Period, June 30, 2007 |  | 2,042,000            |   |  | $              | 0.05  |  
|                             |  |                      |   |  |                |       |  



|* | Weighted average
|- | ----------------



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2007 AND 2006



Exercise prices of all stock options outstanding as of June 30, 2007 range from $0.05 to $0.10 per
share.

Following is a summary of the status of options outstanding at June 30, 2007:



|                    |  |                     |      |                 |                |        |          
|------------------- |  | ------------------- | ---- | --------------- | -------------- | ------ | ---------
|Outstanding Options |  | Exercisable Options
|Number              |  | Exercise Price      |      | Term Expiration |                | Number
|500,000             |  | $                   | 0.05 |                 | August 2015    |        | 125,000  
|950,000             |  |                     | 0.05 |                 | January 2015   |        | 475,000  
|250,000             |  |                     | 0.05 |                 | December 2013  |        | 187,500  
|340,000             |  |                     | 0.05 |                 | October 2011   |        | 340,000  
|2,000               |  |                     | 0.10 |                 | September 2008 |        | 2,000    
|                    |  |                     |      |                 |                |        |          
|2,042,000           |  |                     |      |                 |                |        | 1,129,500
|                    |  |                     |      |                 |                |        |          

No compensation cost was charged to operations for either of the years
ended June 30, 2007 and 2006.

In conjunction with, and as a condition precedent to the sale of all operations, and wholly owned
subsidiaries to certain members of management, effective July 1, 2007, all options have been cancelled.

Note G - Income Taxes

The Company provides for income taxes under the provisions of SFAS No. 109 Accounting for Income Taxes. SFAS No. 109
requires an asset and liability based approach in accounting for income taxes. Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of temporary differences of revenue and expense items for
financial statement and income tax purposes. Valuation allowances are provided against deferred tax assets, which are not likely to be realized.

Prior to the year ended June 30, 2004, KEWi was excluded from the filing of a consolidated income tax return. Net operating loss carry forwards as available at June 30, 2007, expires as follows:



|     |  |      |           |      |   |        
|---- |  | ---- | --------- | ---- | - | -------
|YEAR |  | TSIH |           | KEWi
|     |  |     
|2019 |  | $    | 616,000   |      | $ |       
|2020 |  |      | 196,000   |      |   | 413,000
|2021 |  |      | 99,000    |      |   |       
|2022 |  |      | 135,000   |      |   |       
|2023 |  |      | 115,000   |      |   |       
|2024 |  |      | 137,000   |      |   |       
|     |  |      |           |      |   |        
|     |  | $    | 1,298,000 |      | $ | 413,000

The Companys deferred tax
assets and liabilities are comprised of the following:



|                                                |  |      |          |  
|----------------------------------------------- |  | ---- | -------- | -
|                                                |  | 2007 |         
|                                                | 
|Non-current:                                    |  |      |          |  
|Tax benefit of net operating loss carry forward |  | $    | 667,000  |  
|Other                                           |  |      | 45,000   |  
|                                                |  |      |          |  
|                                                |  |      | 712,000  |  
|Valuation allowance                             |  |      | (712,000 | )
|                                                |  |      |          |  
|                                                | 
|Net non-current                                 |  |      |         |  
|                                                |  |      |          |  
|Net deferred tax assets                         |  | $    |         |  
|                                                |  |      |          |  



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##### Table of Contents

BULOVA TECHNOLOGIES GROUP, INC., AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2007 AND 2006



The Company may not have sufficient taxable income in future years to obtain the benefits of the net
operating loss carry forward and reversal of timing differences. A valuation allowance of $712,000 is provided at June 30, 2007 for the benefits, which the Company may not be able to use.

Reconciliation of income taxes to Federal statutory rates is as follows:



|                                                  |  |      |         |   |      |   |         |  
|------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                  |  | 2007 |         |   | 2007 |  
|                                                  |  |     
|Income taxes (benefit) expense at statutory rates |  | $    | (32,000 | ) |      | $ | (32,000 | )
|Permanent tax differences                         |  |      |         |   |      |   |         |  
|Other                                             |  |      | 5,600   |   |      |   | 5,600   |  
|State taxes and other                             |  |      | (7,000  | ) |      |   | (7,000  | )
|Valuation allowance                               |  |      | (33,400 | ) |      |   | (33,400 | )
|                                                  |  |      |         |   |      |   |         |  
|Income tax expense                                |  | $    |        |   |      | $ |        |  
|                                                  |  |      |         |   |      |   |         |  

Note H - Related Party Transaction

As further discussed in Note C, a note payable in the amount of $345,000 is outstanding to a former President and former CEO of the Company who is still a Director and principal stockholder of the
Company.

Cash advances and accrual of salaries and expenses which are listed as accounts payable to related parties were made to the Company
from an individual who is an officer, director and principal stockholder of the Company and two other directors and principal stockholders of the Company. Subsequent to June 30, 2005, the advances and accruals from the stockholders were
converted to notes payable.

The former CTO/CFO of the Company had extended the Company access to his own personal $50,000 line of credit on
the same terms and conditions. Interest is payable monthly and accrues at an interest rate equal to 9.25% as of June 30, 2007. The amount outstanding at June 30, 2007 was approximately $43,000, and is included in accounts payable.

Note I - Subsequent Events

June 17, 2007  The Company entered into a purchase agreement to sell all of its current business operations, and its wholly owned subsidiaries to certain members of management. The transaction conveyed all equity
interests in 3Si, Inc., and KEWi.net, Inc., all assets, tangible and intangible, the cancellation of all outstanding options, and the assumption of all liabilities, with the exception of the $195,000 remaining outstanding to eSPG. In addition, all
shares owned by the certain members of management were conveyed to the control of the management of eSPG. The transaction was closed and settled effective July 1, 2007.

March 11, 2008  the Company issued 56,000,000 shares of common stock as stock based compensation to John Stanton, Chairman of the Board, for services rendered from the inception of his
involvement with the Company.

October 28, 2008  the Company authorized a reverse split of its then current issued and outstanding
shares of common stock in a ratio of one for fifteen, and changed its par value from $.01 to $.001 per share.

November 4, 2008 
The Company filed an amendment to its articles of incorporation and changed its legal name to Bulova Technologies Group, Inc.,

November 4, 2008  the Company settled the amount of the outstanding debt to eSPG of $195,000 through the issuance of 14,000,000 shares to entities affiliated with or controlled by John Stanton, our current Chairman of the Board.
Mr. Stanton had financed the proposed merger transaction, which letter of intent was dated August 23, 2005 through eSPG, eSPG assigned the $195,000 balance outstanding to Mr. Stanton.

January 1, 2009  The Company authorized with an effective date of January 1, 2009, the acquisition of 3Si Holdings, Inc., a Florida
Corporation, through the issuance of 40,000,000 shares of common stock in exchange for all of its outstanding shares. As a part of consummating this transaction, the Company also authorized with the same effective date, the issuance of 8,000,000
shares to satisfy an obligation associated with warrants outstanding of 3Si Holdings, Inc., the Florida corporation.



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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

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act
of 1934 is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in the reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer, as appropriate, to allow timely
decisions regarding required disclosure.

The Company carried out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14, and concluded that our disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to satisfy our disclosure obligations under
the Exchange Act.

Changes in Internal Control Over Financial Reporting.

During the quarter ended June 30, 2007, there has been no change in the Companys internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange
Act) that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.





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##### Table of Contents

PART III

Item 10. Directors, Executive Officers and Corporate Governance of the Registrant

The information concerning directors required by this item, including the Audit Committee and the Audit Committee financial expert, is incorporated by reference to the Sections entitled Election of
Directors, Section 16(a) Beneficial Ownership Reporting Compliance, Security Ownership of Certain Beneficial Owners and Management and Audit Committee Report in the Companys Definitive Proxy for
the 2009 Annual Meeting of the Shareholders to be filed with the SEC.

The following are the executive officers of the Registrant:



|                       |  |     |  |                                                                                                           
|---------------------- |  | --- |  | ----------------------------------------------------------------------------------------------------------
|Name                   |  | Age |  | Office Held                                                                                               
|John D. Stanton (1)    |  | 58  |  | Chairman of the Board, Chief Executive Officer, President and Principal Financial Officer effective 7/1/07
|Frederick J. Slack (2) |  | 53  |  | Chief Executive Officer, President and Director through 6/30/07                                           
|Felipe L. Vadez (2)    |  | 55  |  | Secretary/Treasurer and Director through 6/30/07                                                          
|Jerome K. Thorson (2)  |  | 60  |  | Director through 6/30/07                                                                                  
|Karen M. Harned (2)    |  | 45  |  | Vice President, Sales and Marketing through 6/30/07                                                       
|Lyndell D. Gibson (2)  |  | 56  |  | Chief Technology Officer through 6/30/07                                                                  
|Amadeus Foudray (2)    |  | 33  |  | Chief Engineer through 6/30/07                                                                            



|(1) | Effective July 1, 2007, John D. Stanton assumed the positions of Chairman of the Board, Chief Executive Officer, President, and Principal Finance Officer.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Effective July 1, 2007, all of the officers resigned their respective positions with the Company
|--- | ------------------------------------------------------------------------------------------------

Our articles of incorporation and bylaws provide that the number of members of our board of directors shall be not less than one (1) and not more than
nine (9) members. Our current number of directors is three (3). 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:

Frederick J. Slack was appointed as our Chief Executive Officer, President and Chief
Financial Officer in January 2005. He has been one of our directors since 1993. From June 1999 through January 2005, he was our Executive Vice President and a director. Prior, from 1993 through June 1999, he served as our President and CEO.
Mr. Slack received a Bachelor of Science degree from the University of Northern Colorado in 1977. He devotes substantially all of his time to our business.

Felipe L. Valdez was appointed as our Chairman of the Board and Secretary in June 1999. From August 1993 to June 1999, he served as our Chief Operating Officer. Mr. Valdez obtained a Masters degree
in Business Administration from the University of Phoenix in 1992 and a Bachelor of Science degree in Business Administration from the University of Albuquerque in 1972.

Jerome K. Thorson has been a director of our Company since May 2001. Prior, from May 2001 through January 2005, he was our President and Chief Executive Officer. Since February 2005, Mr. Thorson has
also been a Managing Director of Ebbtikar, S.A., a subsidiary of Alfaisaliah Group. This organization is engaged in IT services throughout the Kingdom of Saudia Arabia. He has worked in the information technology industry for more than 30 years.



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##### Table of Contents

From 1999 to December 2000, he served as president and chief operating officer of (i)Structure Inc.,
subsidiary of Level III Communications, a technology company located in Broomfield, Colorado. For the period of 1971 to 1999, Mr. Thorson was employed by Electronic Data Systems Corporation, located in Plano, Texas, his last position being that
of a business unit president. He devotes only such time as necessary to our business activities.

Lyndell D. Gibson assumed his position with
our Company in August 2005. Prior, from April 2005 through August 2005, he was an independent consultant. From 1996 through March 2005, Mr. Gibson was a Manager and Senior Manager for MCI Worldcom, Colorado Springs, Colorado. Mr. Gibson
received a Bachelor of Science degree from the University of Missouri in 1973. He devotes substantially all of his time to our business.

Karen Harned, our Vice President of Sales, joined our Company July 1, 2001. Prior, from January 2000 through July 2001, Ms. Harned was a Sales Executive for (i)Structure, Louisville, Colorado where she reported to Mr. Thorson
then the President of (i)Structure. From 1997 through January 2000, she was a regional manager, client services, for Iron Mountain, Denver, Colorado, a records management company. Ms. Harned obtained a Bachelor of Science degree from the
University of Maryland in 1986. She devotes substantially all of her time to our business.

Amadeus Foudray became our Chief Engineer and lead
developer of our iKEW products in March 2001. Prior, from April 1999 through March 2001, he was employed by MCI Worldcom, Colorado Springs, Colorado, where he was responsible for team lead positions for systems analysis group and systems
administration groups. He received a Bachelor of Science degree from the University of Wisconsin-Madison College of Engineering in 1998. He devotes substantially all of his time to our business.

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 Treasurer (who is both the principal accounting and 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 Treasurer at the Companys principal offices.
The Company intends to disclose any amendments to, or waiver of, any provisions of the Code for the Principal Executive Officer or Treasurer, or any person performing similar functions.

The additional information required by this item is incorporated by reference to the Section entitled Corporate Governance in the Companys Definitive Proxy Statement for the 2009 Annual
Meeting of the Shareholders to be filed with the Securities and Exchange Commission.

Item 11. Executive
Compensation

The following table reflects all forms of compensation for services to us for the fiscal years ended June 30, 2007, 2006
and 2005, of our Chief Executive Officer and those other members of our management who received aggregate compensation of $100,000 or more.

SUMMARY COMPENSATION TABLE



|                            |      |      |   |                        |     |          |     |                            |     |                            |     |                           |     |                |     |                         |    
|--------------------------- | ---- | ---- | - | ---------------------- | --- | -------- | --- | -------------------------- | --- | -------------------------- | --- | ------------------------- | --- | -------------- | --- | ----------------------- | ---
|                            |      |      |   | Long Term Compensation |     |         
|                            |      |      |   | Annual Compensation    |     | Awards   |     | Payouts                    |     |                           
|Name and Principal Position |      | Year |   | Salary($)              |     | Bonus($) |     | OtherAnnualCompensation($) |     | RestrictedStockAward(s)($) |     | UnderlyingOptions/SARs(#) |     | LTIPPayouts($) |     | AllOtherCompensation($)
|                            |      |      |   |                        |     |          |     |                           
|Frederick J. Slack,CEO (1)  |      | 2007 |   |                        | -0- |          | -0- |                            | -0- |                            | -0- |                           | -0- |                | -0- |                         | -0-
|                            | 2006 |      | $ | 110,000                |     | -0-      |     | -0-                        |     | -0-                        |     | -0-                       |     | -0-            |     | -0-                    
|                            | 2005 |      | $ | 110,000                |     | -0-      |     | -0-                        |     | -0-                        |     | -0-                       |     | -0-            |     | -0-                    
|                            |      |      |   |                        |     |          |     |                           
|Frank W. Backes,CIO (1)     |      | 2007 |   | $                      | -0- |          | -0- |                            | -0- |                            | -0- |                           | -0- |                | -0- |                         | -0-
|                            | 2006 |      |   | -0-                    |     | -0-      |     | -0-                        |     | -0-                        |     | -0-                       |     | -0-            |     | -0-                    
|                            | 2005 |      | $ | 110,000                |     | -0-      |     | -0-                        |     | -0-                        |     | -0-                       |     | -0-            |     | -0-                    
|                            |      |      |   |                        |     |          |     |                           
|Jerome K. Thorson,President |      | 2007 |   |                        | -0- |          | -0- |                            | -0- |                            | -0- |                           | -0- |                | -0- |                         | -0-
|                            | 2006 |      |   | -0-                    |     | -0-      |     | -0-                        |     | -0-                        |     | -0-                       |     | -0-            |     | -0-                    
|                            | 2005 |      |   | -0-                    |     | -0-      |     | -0-                        |     | -0-                        |     | -0-                       |     | -0-            |     | -0-                    



|(1) | Mr. Slack held the position of Executive Vice President until January 2005, when he was appointed as our CEO/CFO and President upon the resignation of
Mr. Thorson as CEO.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. Backes resigned his position as our Executive Vice President and CTO in August 2005.
|--- | ----------------------------------------------------------------------------------------



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##### Table of Contents

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.

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

Stock Option Plan

In June
1998, our Board of Directors and shareholders adopted our 1998 Stock Option Plan, reserving an aggregate of 5,000,000 shares of our Common Stock for issuance thereunder. On March 9, 2005, our Board of Directors and the holders of a majority of
our issued and outstanding Common Stock approved an increase of the number of shares authorized under the plan to 10,000,000 shares. The options vest over a period of three years.

At June 30, 2007, there were 2,042,000 shares of our Common Stock subject to options under the Plan. Exercise prices of all stock options outstanding as of June 30, 2007, range from $0.05 to
$0.10 per share.

Pursuant to the agreement entered into and settled effective July 1, 2007, all options were cancelled effective that
date. (see subsequent event foot note)

Following is a summary of the status of options outstanding at June 30, 2007:



|                    |  |                     |      |                 |                |        |          
|------------------- |  | ------------------- | ---- | --------------- | -------------- | ------ | ---------
|OUTSTANDING OPTIONS |  | EXERCISABLE OPTIONS
|Number              |  | ExercisePrice       |      | Term Expiration |                | Number
|500,000             |  | $                   | 0.05 |                 | January 2015   |        | 125,000  
|950,000             |  | $                   | 0.05 |                 | December 2013  |        | 475,000  
|250,000             |  | $                   | 0.05 |                 | November 2012  |        | 187,500  
|340,000             |  | $                   | 0.05 |                 | October 2011   |        | 340,000  
|2,000               |  | $                   | .10  |                 | September 2008 |        | 2,000    
|                    |  |                     |      |                 |                |        |          
|2,042,000           |  |                     |      |                 |                |        | 1,129,500
|                    |  |                     |      |                 |                |        |          

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

(a) and (b). Security Ownership of Certain Beneficial Owners and
Management.

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. The amount of Beneficial Ownership figures include outstanding options to purchase shares of our Common Stock that may be exercised over the next 12 months in accordance
with the rules and regulations of the Securities and Exchange Commission. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.



|               |  |                                                                 |  |                                          |       |  |                 |  
|-------------- |  | --------------------------------------------------------------- |  | ---------------------------------------- | ----- |  | --------------- | -
|Title of Class |  | Name and Address of Beneficial Owner                            |  | Amount and Nature ofBeneficial Ownership |       |  | Percentof Class |  
|               |  |                                                                 | 
|Common Stock   |  | Frederick J. Slack(1) 6886 S.
Yosemite St. Centennial, CO 80112 |  | 8,027,444                                | (2)   |  | 20.4            | %
|               |  |                                                                 | 
|Common Stock   |  | Felipe L. Valdez(1) 6886 S.
Yosemite St. Centennial, CO 80112   |  | 8,250,545                                | (2)   |  | 21.0            | %
|               |  |                                                                 | 
|Common Stock   |  | Frank W. Backes(1) 6886 S.
Yosemite St. Centennial, CO 80112    |  | 8,477,777                                | (2)   |  | 21.6            | %
|               |  |                                                                 | 
|Common Stock   |  | Jerome K. Thorson (1) 6886 S.
Yosemite St. Centennial, CO 80112 |  | 3,400,000                                | (1,2) |  | 8.6             | %
|               |  |                                                                 | 
|Common Stock   |  | All Officers and Directors as
a Group (4 persons)               |  | 28,155,766                               |       |  | 71.6            | %



|(1) | Includes 400,000 shares in the name of Mr. Thorsons children
|--- | -------------------------------------------------------------

|(2) | Except for the 400,000 shares referred to above, these shares constitute the shares conveyed to the management of eSPG as referred to in the June 17, 2007
agreement to sell the operations and wholly owned subsidiaries of the Company, as well as the certain members of management consummating the transaction.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Item 13. Certain Relationships and Related Transactions and Director
Independence

From February 2003 through April 2005, our former President and CEO (who is still a director and principal stockholder)
loaned us the principal sum of $495,412. He resigned his positions as our CEO and President in February 2005. At that time we renegotiated that debt pursuant to the following terms: $345,000 of the debt was converted to a seven-year note payable
from us which provides for quarterly interest only payments, with interest accruing at eight percent (8%) per year ($6,900 per payment), with a balloon payment of $345,000 plus the last interest payment of $6,900 due at the end of the note
period. The $345,000 debt has been classified as long term on our accompanying balance sheet. The debt had previously been classified as short term. The balance of $150,000 was utilized to exercise an outstanding option to purchase 3,000,000 shares
of our Common Stock at a conversion price of $.05 per share.

Cash advances and accrual of salaries and expenses which are listed as accounts
payable to related parties were made to us from an individual who is one of our officers, a director and a principal stockholder and two of our other directors and principal stockholders.

We have established a line of credit with Wells Fargo Bank that was granted based upon our former CTO/CFOs personal guarantee. This $45,000 line of
credit accrues at an interest rate equal to 9.25% as of June 30, 2007. The amount outstanding as of June 30, 2007 was approximately $43,000, and is included in accounts payable.

June 17, 2007  Certain members of management, specifically, Mr.s Slack, Valdez, Backes and Thorson entered into a purchase agreement to
acquire all of the operations and the wholly owned subsidiaries of the Company. The transaction conveyed all equity interests in 3Si, Inc., and KEWi.net, Inc., all assets, tangible and intangible, the cancellation of all outstanding options, and the
assumption of all liabilities, with the exception of the $195,000 remaining outstanding to eSPG. In addition, all shares owned by these individuals were conveyed to the control of the management of eSPG. Their shares were to be conveyed to eSPG as
consideration for their inability to pay back the $195,000 advanced pursuant to the August 23, 2005 letter of intent between the parties, and to convey control to its management. The transaction was closed and settled effective July 1,
2007

Item 14. Principal Accountant Fees and Services



|           |  |      |       |      |   |      
|---------- |  | ---- | ----- | ---- | - | -----
|           |  | 2007 |       | 2006
|Audit fees |  | $    | 5,000 |      | $ | 5,000
|           |  |      |       |      |   |      



25



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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:
|--- | ---------



|     |  |                                                                                                                                                                   
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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

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/ John D. StantonJohn D. StantonPresident and Principal Executive Officer


DATED:
March 31, 2010

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/ John D. Stanton         |  |  |  | March 31, 2010
|John D. Stanton             |  |  |  |               
|Principal Executive Officer |  |  |  |               
|                            |  | 
|/s/ John D. Stanton         |  |  |  | March 31, 2010
|John D. Stanton             |  |  |  |               
|Principal Financial Officer |  |  |  |               



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