##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 x
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2008o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
  LIBERATOR MEDICAL HOLDINGS, INC.
  NEVADA
    
    87-0267292(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer Identification No.)
 2979 SE Gran Park Way, Stuart, Florida 34997
 (772) 287-2414
  x o
  o x
 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
  o o
 APPLICABLE ONLY TO CORPORATE ISSUERS
  Class
    
    Outstanding as of May 6, 2008Common Stock, $.001
    
    32,050,366
 o x




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##### 



TABLE OF CONTENTS
  
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheet (Unaudited)
    
    
    3Condensed Consolidated Statements of Operations (Unaudited)
    
    
    4Condensed Consolidated Statement of Changes in Stockholders Deficiency (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis or Results of Operations
    
    
    12Item 3. Controls and Procedures
    
    
    16PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults Upon Senior Securities
    
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    17SIGNATURES
    
    
    18EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
   
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 Liberator Medical Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
March 31, 2008
(Unaudited)
 AssetsCurrent AssetsCash
    
    $
    104,227Accounts receivable, net of allowance for doubtful accounts of $471,385
    
    
    830,654Prepaid and other expenses
    
    
    584,576Inventory, net of allowance for obsolete inventory of $50,000
    
    
    302,791Deferred advertising, current portion
    
    
    225,036Total Current Assets
    
    
    2,047,284Property and EquipmentProperty and Equipment, net of accumulated depreciation of $593,010
    
    
    771,492Other AssetsDeferred advertising, net of current portion
    
    
    179,748Deposits
    
    
    83,321Total Other Assets
    
    
    263,069Total Assets
    
    $
    3,081,845Liabilities and Stockholders DeficiencyCurrent LiabilitiesAccounts payable
    
    $
    779,764Accrued liabilities
    
    
    210,007Stockholder loan
    
    
    1,664,649Notes payable, current portion
    
    
    301,342Capital lease obligations, current portion
    
    
    41,605Deferred rent liability, current portion
    
    
    47,074Total Current Liabilities
    
    
    3,044,441Long-Term LiabilitiesLong-Term Debt and Capital Lease Obligations, net of current portion
    
    
    73,725Deferred rent liability, net of current portion
    
    
    236,028Total Long-Term Liabilities
    
    
    309,753Total Liabilities
    
    
    3,354,194Stockholders DeficiencyCommon stock, $.001 par value, 200,000,000 shares authorized,
32,050,366 shares issued and outstanding
    
    
    32,050Additional paid-in capital
    
    
    10,105,295Accumulated deficit
    
    
    (10,409,694
    )Total Stockholders Deficiency
    
    
    (272,349
    )Total Liabilities and Stockholders Deficiency
    
    $
    3,081,845
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Liberator Medical Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the three and six months ended March 31, 2008 and 2007
(Unaudited)
 Three Months Ended March 31,
    
    
    Six Months Ended March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Sales
    
    $
    1,425,293
    
    
    $
    657,877
    
    
    $
    2,854,759
    
    
    $
    1,366,123Cost of Sales
    
    
    513,577
    
    
    
    292,523
    
    
    
    1,035,202
    
    
    
    669,327Gross Profit
    
    
    911,716
    
    
    
    365,354
    
    
    
    1,819,557
    
    
    
    696,796General and Administrative ExpensesPayroll, taxes and benefits
    
    
    590,062
    
    
    
    429,785
    
    
    
    1,157,547
    
    
    
    1,000,582Advertising
    
    
    77,195
    
    
    
    38,277
    
    
    
    144,861
    
    
    
    77,874Insurance
    
    
    16,416
    
    
    
    10,304
    
    
    
    25,564
    
    
    
    18,830Interest
    
    
    62,131
    
    
    
    104,985
    
    
    
    113,389
    
    
    
    222,353Rent
    
    
    97,835
    
    
    
    90,608
    
    
    
    195,599
    
    
    
    174,338Professional fees
    
    
    226,667
    
    
    
    40,333
    
    
    
    404,853
    
    
    
    107,229Bad debts
    
    
    151,019
    
    
    
    53,670
    
    
    
    305,935
    
    
    
    132,300Depreciation
    
    
    45,900
    
    
    
    49,022
    
    
    
    91,800
    
    
    
    96,195Administrative
    
    
    289,489
    
    
    
    104,256
    
    
    
    604,181
    
    
    
    213,446Total General and Administrative Expenses
    
    
    1,556,714
    
    
    
    921,240
    
    
    
    3,043,729
    
    
    
    2,043,147Loss before Income Taxes
    
    
    (644,998
    )
    
    
    (555,886
    )
    
    
    (1,224,172
    )
    
    
    (1,346,351
    )Provision for Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Loss
    
    $
    (644,998
    )
    
    $
    (555,886
    )
    
    $
    (1,224,172
    )
    
    $
    (1,346,351
    )Basic and diluted loss per common share
    
    $
    (0.02
    )
    
    $
    (0.02
    )
    
    $
    (0.04
    )
    
    $
    (0.05
    )Weighted average basic and diluted
common shares outstanding
    
    
    31,864,212
    
    
    
    25,447,956
    
    
    
    31,583,528
    
    
    
    25,447,956
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Liberator Medical Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders Deficiency
For the six months ended March 31, 2008
(Unaudited)
 Par $.001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalCommon
    
    
    Common
    
    
    Paid in
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalance at September 30, 2007
    
    
    30,464,014
    
    
    $
    30,464
    
    
    $
    9,092,858
    
    
    $
    (9,185,522
    )
    
    $
    (62,200
    )Shares issued for cash
    
    
    1,286,352
    
    
    
    1,286
    
    
    
    684,914
    
    
    
    
    
    
    
    686,200Options issued to employees
    
    
    
    
    
    
    
    
    
    
    4,875
    
    
    
    
    
    
    
    4,875Warrants issued with convertible debt
    
    
    
    
    
    
    
    
    
    
    58,696
    
    
    
    
    
    
    
    58,696Warrants issued for services
    
    
    
    
    
    
    
    
    
    
    24,252
    
    
    
    
    
    
    
    24,252Shares issued for services
    
    
    300,000
    
    
    
    300
    
    
    
    239,700
    
    
    
    
    
    
    
    240,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,224,172
    )
    
    
    (1,224,172
    )Balance at March 31, 2008
    
    
    32,050,366
    
    
    $
    32,050
    
    
    $
    10,105,295
    
    
    $
    (10,409,694
    )
    
    $
    (272,349
    )
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Liberator Medical Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the six months ended March 31, 2008 and 2007
(Unaudited)
 2008
    
    
    2007Cash flow from operating activities:Net Loss
    
    $
    (1,224,172
    )
    
    $
    (1,346,351
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    91,800
    
    
    
    96,195Equity based compensation
    
    
    269,252
    
    
    
    44,800Bad debt expense
    
    
    305,935
    
    
    
    132,300Amortization of interest on warrant valuation
    
    
    4,359
    
    
    
    Loss on abandonment of leasehold improvements
    
    
    
    
    
    
    12,777Changes in operating assets and liabilties:Accounts receivable
    
    
    (652,727
    )
    
    
    164,238Prepaid expenses
    
    
    218,169
    
    
    
    17,679Deposits
    
    
    (2,335
    )
    
    
    (3,167
    )Inventory
    
    
    (3,938
    )
    
    
    72,981Accounts payable
    
    
    380,156
    
    
    
    (103,985
    )Accrued expenses
    
    
    6,384
    
    
    
    76,449Deferred rent
    
    
    (20,991
    )
    
    
    (11,455
    )Deferred advertising
    
    
    (92,170
    )
    
    
    28,859Net Cash Flows Used in Operating Activities
    
    
    (720,278
    )
    
    
    (818,680
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (135,294
    )
    
    
    (18,914
    )Net Cash Flows Used in Investing Activities
    
    
    (135,294
    )
    
    
    (18,914
    )Cash flows from financing activities:Proceeds from sale of stock
    
    
    686,075
    
    
    
    132,600Proceeds from notes payable
    
    
    175,295
    
    
    
    704,350Payments of long-term debt and capital lease obligations
    
    
    (78,391
    )
    
    
    (9,537
    )Net Cash Flows Provided by Financing Activities
    
    
    782,979
    
    
    
    827,413Net decrease in cash
    
    
    (72,593
    )
    
    
    (10,181
    )Cash at beginning of period
    
    
    176,820
    
    
    
    80,955Cash at end of period
    
    $
    104,227
    
    
    $
    70,774Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    109,030
    
    
    $
    228,704
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Liberator Medical Holdings, Inc. and Subsidiaries
Notes To The Condensed Consolidated Financial Statements
March 31, 2008
 Note 1 Condensed Consolidated Financial Statements
 Note 2 Summary of Significant Accounting Policies  Inventories
 Income Taxes
   Note 3 Recent Accounting Pronouncements  , The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115.
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Liberator Medical Holdings, Inc. and Subsidiaries
Notes To The Condensed Consolidated Financial Statements
March 31, 2008
 SFAS Fair Value Measures.
 Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51 (FASB No. 160)
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Liberator Medical Holdings, Inc. and Subsidiaries
Notes To The Condensed Consolidated Financial Statements
March 31, 2008
 Note 4  Going Concern
 Note 5  Warrants and Options  Warrants
 AmountBalance at September 30, 2007
    
    
    3,084,342Issued in FY 2008
    
    
    864,667Exercised in FY 2008
    
    
    0Expired in FY 2008
    
    
    33,333Balance at March 31, 2008
    
    
    3,915,676
  Options
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Note 6  Sale of Common Stock
 Note 7  Private Offering of Convertible Debt
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Liberator Medical Holdings, Inc. and Subsidiaries
Notes To The Condensed Consolidated Financial Statements
March 31, 2008
 Note 8  Diluted Loss per Common Share
 Note 9  Income Taxes
   March 31, 2008Loss carry forward for tax purposes
    
    $
    6,290,000Deferred tax asset (35%)
    
    
    2,202,000Valuation allowance
    
    
    (2,202,000
    )Net deferred tax asset
    
    $
    0
 Note 10  Commitments
 AmountYear ending September 30:2008
    
    $
    166,2192009
    
    
    273,8662010
    
    
    251,6802011
    
    
    264,2602012
    
    
    229,300$
    1,185,325
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Item 2. Managements Discussion and Analysis or Plan of Operation.  This Managements Discussion and Analysis or Plan of Operation and other parts of this quarterly
report on Form 10-QSB contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as intends, anticipates,
expects, believes, plans, predicts, and similar terms. Forward-looking statements are not
guarantees of future performance and our actual results may differ significantly from the results
discussed in the forward-looking statements. Factors that might cause such differences include, but
are not limited to, those set forth below under Certain Risk Factors. The following discussion
should be read in conjunction with our unaudited consolidated financial statements and notes
thereto included in this Form 10-QSB and the audited financial statements of Liberator Medical
Holdings, Inc. (LMH), included in our current report on Form 10-KSB dated January 18, 2008, filed
with the Securities and Exchange Commission and managements discussion and analysis contained
therein. We assume no obligation to revise or update any forward-looking statements for any reason,
except as required by law.
 Overview
   Results of Operations
 Revenues:
  Gross Profit:
  General and Administrative Expenses (G&A):
  Interest Expense:
  Net Loss:
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Liquidity and Capital Resources
   Financing Activities
 Outlook
  13




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
    
    Obtain additional funding through a combination of debt and equity;
    
    Increase advertising over the prior periods;
    
    Increase our customer base;
    
    Continue to service our current customer base and increase the retention rate;
    
    Increase the collections of our accounts receivable.
  
    
    Identified products and related target customers through extensive market research.
    
    Established efficient and cost effective methods to reach qualified customers.
    
    Established an infrastructure of management and knowledgeable staff to support substantial
growth in sales with a minimal amount of additional staff members.
    
    Leased a 25,000 square foot facility which has only been built out 50 percent to accommodate
our current operations including room for growth. The other 50 percent will be built out in
stages as additional growth requires the additional office space.
    
    Created a HIPPA compliant IT infrastructure and staff to accommodate additional growth in sales.
    
    Established a marketing plan that can be monitored for effectiveness and is flexible enough to
adjust to changing market conditions.
    
    Tested our advertising methods and established methods of testing additional advertising
methods to meet with changing market conditions.
    Contractual Commitments
  Off-Balance Sheet Arrangements
 Certain Risk Factors
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
    
    We have incurred significant net losses every year since the inception of LMS.
    
    The Company has aggressive marketing plans that require the Company to spend substantial
sums. The Company will need additional capital to continue its business plan.
    
    Our future operating results remain difficult to predict.
    
    Sales of a significant portion of our products depend on the continued availability of
reimbursement of our customers by government and private insurance plans.
    
    Our ability to operate at a profit is highly dependent on recurring orders from
customers, as to which there is no assurance.
    
    We may not be able to market our diabetes products or otherwise to operate our diabetes
supply business segment at a profit because of marketing costs, competition, or other
reasons not now foreseen.
    
    We could be liable for harm caused by products that we sell.
    
    Competition from other sellers of products sold by us is intense and expected to increase.
    
    If we or our suppliers do not comply with applicable government regulations, we may be
prohibited from selling our products.
    
    We may make acquisitions that will strain our financial and operational resources.
  Critical Accounting Policies
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Effect of Inflation
 Qualitative and Quantitative Disclosure about Market Risk
 
 Item 3. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
    Change in Internal Controls
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
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SIGNATURES
  LIBERATOR MEDICAL HOLDINGS, INC.Registrant/s/ Mark A. Libratore

Mark A. Libratore
    
    President
    
    May 15, 2008/s/ Robert J. Davis

Robert J. Davis
    
    Chief Financial Officer
    
    May 15, 2008
 18