UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM 10-K
  þ
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
                For
      the fiscal year ended March 31,
      2008ORo
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
                For
      the transition period from _______________ to
    _______________
  Commission
File No. 333-136583
 
 EMTA
HOLDINGS, INC.
 (Name of
the small business issuer as specified in its charter)
 Nevada
                41-2145716(State
      or other jurisdiction of
                  incorporation
      or organization)
                (I.R.S.
      Employer
                  Identification
      Number)7430 E. Butherus, Suite C,
      Scottsdale, AZ
                85260(Address
      of principal executive offices)
                (Zip
      Code)
  Registrant’s telephone
number, including area code:  (480)
222-6222
  Securities
registered pursuant to Section 12(b) of the Act:  None
  Securities
registered pursuant to section 12(g) of the Act:  Common Stock, $0.001 par value


Indicate
by check mark if the registrant is a well-known seasoned issuer (as defined in
Rule 405 of the Act). Yes 
oNo þ




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes 
oNo þ




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes  þNo o





Indicate
by check mark if disclosure of delinquent filers in response 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    þ









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:




Large
      Accelerated Filer    o
                Accelerated
      Filer    o
                Non-Accelerated
      Filer   o
                Smaller
      Reporting Company    þ




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).    Yes  oNo þ




The
aggregate market value of Common Stock, $.001 par value, held by non-affiliates
of the registrant based on the closing sales price of the Common Stock on the
OCT:BB on July 10, 2008, was $7,277,736.
 
 The
number of shares of common stock outstanding as of July 10, 2008 was
60,447,283.
 
 Documents
incorporated by reference: None.


2
 
  TABLE
OF CONTENTS
  PagePart
      I
                        
                        
                        5Item
      1
                        Description
      of Business
                        5Item
      1A
                        Risk
      Factors
                        11Item
      1B
                        Unresolved
      Staff Comments
                        15Item
      2
                        Description
      of Property
                        15Item
      3
                        Legal
      Proceedings
                        15Item
      4
                        Submission
      of Matters to a Vote of Security Holders
                        16Part
      II
                        
                        
                        16Item
      5
                        Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                        16Item
      6
                        Selected
      Financial Data
                        17Item
      7
                        Management’s Discussion
      and Analysis of Financial Condition and Results of
    Operations
                        18Item
      7A
                        Quantitative
      and Qualitative Disclosure About Market Risk
                        26Item
      8
                        Financial
      Statements and Supplementary Data
                        26Item
      9
                        Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                        26Item
      9A(T)
                        Controls
      and Procedures
                        26Item
      9B
                        Other
      Information
                        27Part
      III
                        
                        
                        27Item
      10
                        Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Act
                        27Item
      11
                        Executive
      Compensation
                        30Item
      12
                        Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                        31Item
      13
                        Certain
      Relationships and Related Transactions, and Director
      Independence
                        32Item
      14
                        Principal
      Accountant Fees and Services
                        33Part
      IV
                        
                        
                        33Item
      15
                        Exhibits
                        33Signatures
                        34Exhibit
      Index
                        35Financial
      Statements
                        F-1
  3
  STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
  In addition to historical
information, this Annual Report on   Form 10-K   (“Annual Report”) for EMTA Holdings,
Inc. (“EMTA” the “Company,” “we,” “our” or “us”) contains “forward-looking”
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), including statements regarding the growth of
product lines, optimism regarding the business, expanding sales and other
statements. Words such as expects, anticipates, intends, plans, believes, sees,
estimates and variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks and uncertainties that are
difficult to predict. Actual results could vary materially from the description
contained herein due to many factors including continued market acceptance of
our products. In addition, actual results could vary materially based on changes
or slower growth in the fuel additive products market; the potential inability
to realize expected benefits from new products and products under development;
domestic and international business and economic conditions; changes in the
petroleum industry; unexpected difficulties in penetrating the commercial and
industrial markets for our products; changes in customer demand or ordering
patterns; changes in the competitive environment including pricing pressures or
technological changes; technological advances; shortages of manufactured raw
material and manufacturing capacity; future production variables impacting
excess inventory and other risk factors listed in the section of this Annual
Report entitled “Risk Factors” and from time to time in our Securities and
Exchange Commission filings under “risk factors” and
elsewhere.
  Each forward-looking statement
should be read in context with, and with an understanding of, the various
disclosures concerning our business made elsewhere in this Annual Report, as
well as other public reports filed by us with the United States Securities and
Exchange Commission. Readers should not place undue reliance on any
forward-looking statement as a prediction of actual results of developments.
Except as required by applicable law or regulation, we undertake no obligation
to update or revise any forward-looking statement contained in this Annual
Report.
  4
  PART
I





ITEM
      1.
            DESCRIPTION OF
      BUSINESS




Introduction
 
 We are
engaged in the research, development, manufacturing and distribution of a
variety of products that improve overall energy efficiency with a specific
concentration on petroleum based energy sources. We currently have three wholly
owned operating subsidiaries, EMTA Corp, Dyson Properties, Inc. and White Sands,
LLC.
 
 EMTA Corp
has developed a new type of lubricant (metal conditioner) that interacts with
metal surfaces. It hardens and smoothes the metals' surface which results in
reduced friction and therefore improves efficiency. We market this unique
product under the brand name XenTx Extreme Engine Treatment, to both
commercial/industrial users and to the general public. Today XenTx is available
at a variety of retail stores, as well as many smaller auto-parts chains
throughout the U.S. The product is also available in Canada and, more recently,
in Mexico. In addition to our core products, we utilize the same technology in
three new products that are in the initial stages of distribution, including an
all purpose spray lubricant (XenTx Extreme Lubricating Spray), friction reducing
automatic transmission fluid (XenTx Extreme Transmission Treatment), and a
gasoline system cleaner (XenTx Extreme Fuel System Treatment).
 
 Dyson
Properties, Inc. (“Dyson”) manufactures and sells automotive, industrial and
racing performance oils and lubricants under the name Synergyn Racing or
Synergyn Performance. The Synergyn products have been manufactured and
distributed for the past 20 years and are sold throughout the U.S.
 
 White
Sands' core products are primarily designed to aid in the combustion of diesel
fuel. It has developed two distinct diesel fuel additives, Clean Boost improves
combustion efficiency and reduces pollution and particulate emissions
significantly. In addition, Clean Boost Low-Emissions (“Clean Boost LE”) insures
that diesel fuel users will be able to meet or exceed the new, more stringent
emissions rules. This product was first certified by the EPA and the Texas
Commission on Environmental Quality (“TCEQ”) on March 26, 2007.  In
June, 2008 the Company received an unconditional approval for the Clean Boost LE
product from the TCEQ.
 
 Corporate
History
 
 We were
incorporated under the laws of Louisiana on June 5, 1978 under the name Forum
Mortgage Corp. We were reincorporated under the laws of the State of Nevada in
July 2004 under the name Omni Alliance Group, Inc.
 
 On March
31, 2006 we acquired EMTA Corp., Inc. (“EMTA”) in consideration for the issuance
to EMTA’s shareholders of 30,828,989 shares of our common stock. At that time we
also implemented a 233 for one reverse stock split and changed our name to EMTA
Holdings, Inc. The acquisition of EMTA was accounted for as a reverse merger. As
a result, the financial statements of EMTA Corp. became our financial
statements.
 
 EMTA
Corp. was incorporated in March 2002 under the laws of the State of Nevada under
the name Wiltex A, Inc. On October 1, 2004, Wiltex acquired the assets of Alaco
Corporation in exchange for approximately 94% of the common stock of Wiltex. On
that same date, it changed its name to EMTA Corp. Inc.
 
 The
Company acquired White Sands, L.L.C. (“White Sands”) for 897,487 shares of
Holdings common stock as of March 31, 2006, at which time White Sands became a
wholly-owned subsidiary of EMTA Holdings, Inc.
  5
  Effective
January 1, 2007, the Company took control of Dyson Properties, Inc. for an
aggregate purchase price of $2,100,000 which includes cash, stock and warrants.
An initial payment of $100,000 was made on January 9, 2007 and a second cash
payment of $150,000 was made on July 5, 2007 with the balance of $254,240 due in
July, 2008. On March 26, 2007, the Company issued the seller 1,400,000 shares of
common stock and cashless warrants to acquire 1,400,000 shares of common stock
at an exercise price of $0.75 per share. In addition, the Company agreed to pay
a royalty on all products sold that contain the Synergyn
formulations.
 
 Our
Products
 
 XenTx
Extreme Engine Treatment
 
 Through
our wholly-owned subsidiary, EMTA Corp., we market XenTx Extreme Engine
Treatment, a 100% synthetic metal conditioner that provides benefits to
automobile engines in that it prevents the build up of engine metal particles in
the walls of the engine. As an additive to standard engine oils, it attracts the
loose particles of ferrous metals present in most oils and directs those
particles to broken molecular chains that exist on the surface of the friction
environment, in this case the engine walls. The product penetrates the carbon
build up on the cylinder walls and attaches to the surface of the metal carrying
wear metals molecules with it. The product continuously fills the pits, cracks,
and slight imperfections present in all engine cylinders. In this way, it
creates a dense protective surface that is highly resistant to scuffing and
galling.
  The
process has both a cleaning effect on the engine and a smoothing effect on the
engine cylinder surface. This results in less friction, lower operating
temperatures and less power loss due to frictions and heat. With less rotations
per minute producing the same power, less fuel is consumed leading to greater
fuel efficiency as well as a reduction in exhaust emissions.
 
 Clean
Boost
 
 Through
our wholly-owned subsidiary, White Sands, we market Clean BoostTM, a fuel oil
additive that improves fuel and combustion efficiency by liberating more of the
fuel's chemical energy, in the flame zone of boilers, or during the power stroke
of diesel engines. Soot formation is prevented and less fuel is wasted in the
form of particulate emissions. Greenhouse gas and acid rain gases, soot (black
smoke), carbon build-up and fouling, slagging and cold-end corrosion are all
reduced, while engine and boiler performance improves. Turbochargers and exhaust
gas boilers remain cleaner and require less maintenance and water
washing.
  Clean
BoostTM reduces fuel consumption by 2 to 5% across a wide range of fossil fuels,
from coal and heavy residual fuel oils to intermediate fuel oil blends, refined
diesel fuels. It also lessens the emission of harmful gasses.
 
 Clean
BoostTM is effective in industrial boilers and diesel engines of all sizes and is
used in marine shipping, power generation, mining, construction, ground
transportation and wherever high fuel prices or compliance with emissions or
opacity regulations is a concern.
 
 During
the past year we completed the research and development of a second diesel fuel
additive, Clean Boost LETM which was formulated to reduce emissions. This product
when mixed with diesel fuel, reduces the exhaust gases from combustion to meet
the most stringent requirements of both Texas and California. Clean Boost LETM
was tested at a renowned test facility with both the TCEQ and EPA as observers.
The test results were submitted to Texas and then to the EPA which subsequently
certified that Clean Boost LETM met the goals of reducing diesel fuel emissions.
The EPA Certification #201920002CB-LE and the TCEQ products #TXLED-A-00009 was
issued in March of 2007.  In June, 2008 the Company received an
unconditional approval for the Clean Boost LE product from the
TCEQ.
 
 6
 These
products are used in the automotive, oil and gas, shipping and mining sectors.
We believe that both Clean BoostTM products help in the following ways in diesel
applications in the automotive and other industries to:
  ●
              
              Lower
      fuel consumption (ie. Better fuel efficiency)●
              
              Reduce
      exhaust emissions●
              
              Lower
      maintenance requirements●
              
              Reduce
      soot (carbon particles) in lubricating oil●
              
              Carbon
      deposits in the combustion chamber are reduced●
              
              Provide
      easier starting in cold weather
 
 Synergyn
 
 Through
our wholly-owned subsidiary, Dyson Properties, Inc. (“Dyson Properties”), which
was acquired effective January 1, 2007, we continue the sales and distribution
of a 64 item product line known as Synergyn Racing, Synergyn Performance and
Synergyn Lubricants. This product line was introduced over 20 years ago and has
been improved as lubrication requirements have changed. With its focus on
performance products, Synergyn sells many of its products to NASCAR, NHRA and
similar racing organization participants.
 
 Dyson
Properties also manufactures private label products for a number of customers on
a long-term contractual basis. Although some customers have unique formulas
which Dyson manufactures to their specifications, most customers utilize
Synergyn’s formulas and package and rebrand these products for their customers’
use.
 
 Other
Products
 
 We have
commenced shipping small quantities of XenTx spray lubricant, which is used as a
general multi-purpose lubricant, and a transmission fluid that is a variation of
the XenTx Extreme Engine Treatment and is primarily used for automatic
transmissions. We may from time to time introduce additional
products.
 
 Sales
and Marketing
 
 Our
objective is to market, sell and distribute our products in the most efficient,
cost effective manner possible with our distribution channel strategy providing
the widest range of customer coverage possible. We believe sales to automotive
retailers through independent sales representatives affords us the best overall
chance to gain and hold customers and allows us to control and maximize the
product value chain benefits for us and the end-user.
 
 We sell
our products through retailers, auto parts suppliers, internet sales at its our
web sites: www.xentx.com, www.synergynracing.com and direct sales through sales
representatives to commercial customers. We sell our retail and commercial
product through our sales force of three and through independent sales
representatives. Each sales representative tends to service one to a few retail
outlets with which they have long term, strong relationships. Our compensation
arrangement with these representatives is commission only.
 
 Our
products are currently sold in approximately 4,000 retail outlets in the United
States and Canada. During the year ended March 31, 2008 no retailers accounted
for more than 10% of our sales volume.  These outlets include one major
retailer, O'Reilly's Auto Parts that operate approximately 1,900 stores as well
as a variety of approximately 2,100 smaller and independent retail
outlets.
  7
 During
the last three years, we have devoted substantial efforts to developing our
sales force and retail distribution channels not only as an avenue to our
original product, XenTx Extreme Engine Treatment, but for other products some of
which are just now beginning to enter the marketplace.
 
 We
participate with retailers in advertising campaigns, marketing promotions and
other direct and indirect marketing techniques to promote and sell the products.
We expense the cost of these advertising efforts as incurred.
 
 We also
market our products directly to companies. These efforts include the sharing of
laboratory and field trial test data, sponsorship of individual customer field
trials, technical and non-technical communication through industry trade media
with messages emphasizing fuel performance enhancement through technical
innovation, fuel efficiency, maintenance cost savings, improved air quality and
“no harm” to engine or environment product attributes.
 
 Intellectual
Property
 
 The
formula and composition of XenTx is proprietary to us and is safeguarded from
disclosure through secrecy agreements with various parties. At least one of the
components of the formula is covered by a patent that is owned by Dover Chemical
Corporation (“Dover”). In addition, we have filed provisional patents on both
diesel fuel additives as the first step in patenting both formulas.
 
 We have
obtained trademark registration of our marks XenTx and Clean Boost. Generally,
these trademarks do not expire if we continue to use the trademarks and file the
required periodic forms with the United States Patent and Trademark Office. With
the acquisition of Dyson Properties, Inc., we acquired both the trademark for
Synergyn and all of the related formulas. None of the Synergyn formulas are
patented.
 
 Production
and Manufacturing
 
 With the
acquisition of Dyson Properties, Inc. (“Synergyn”) we acquired our own
manufacturing facilities. With this acquisition, the Company now has the ability
to manufacture, package and distribute its products. The plant consists of
approximately 54,000 sq. ft. of office, manufacturing and product storage
located on approximately 5.03 acres in Durant, Oklahoma. The majority of the
manufacturing process is blending various raw materials into a finished product
based upon a specific formula and a customer purchase order.
 
 Our XenTx
Extreme Engine Treatment product is produced by Dover. We do not have a written
agreement with Dover that requires us to place minimum orders or guarantees the
delivery of certain quantities of product by Dover to us. If for any reason we
lost the relationship with Dover, a disruption of the supply of our products
could result until a substitute manufacturer was found. We have entered into a
Secrecy Agreement with Dover pursuant to which that entity is required to
safeguard the proprietary nature of the XenTx formula.
 
 The
Company now manufactures and packages its own products, therefore we assume
substantially all of the risks associated with environmental, hazardous
materials, and transportation of the products from our plant through delivery to
the retailers.
 
 We carry
a product liability insurance policy for the losses customers might suffer as a
result of proper use of the our products. To date there have been no claims
against this policy.
  8
 
 Research
and Development
 
 We
continuously research new products and possible applications of our existing
product and have a R&D consultant who devotes substantially all his time
working on our projects.
 
 Testing
 
 We
utilize two primary methods of testing: laboratory bench tests and field trials.
We utilize both testing methods to further develop the body of test data
necessary to support marketing and sales efforts. As we have matured, we have
become aware of the importance of developing and managing specific testing
protocols for field-based testing and adhering to already developed, industry
recognized testing standards when engaged in laboratory bench tests. Numerous
variables exist in any testing protocol, and if not carefully managed, one
change in one variable could skew the test results. To address this challenge, a
standardized testing and trial evaluation protocol has been developed. The use
of this protocol allows us to:
 
 ●
              
              understand
      the size of the opportunity;●
              
              help
      prioritize available resources;●
              
              ensure
      approved testing is structured and conducted in a controlled
      way; and●
              
              ensure
      we will have full access to all testing results conducted by third
      parties.
 
 In
addition to extensive field-based customer trials completed or under way, we
have funded extensive laboratory bench testing at a well-known independent
testing laboratory, Southwest Research Institute in San Antonio, Texas.
Test results have confirmed the effectiveness of Clean Boost. In particular,
Clean Boost achieved an average percent reduction in fuel consumption of
approximately 3%. It also showed improved combustion efficiency, reduced ash
formation and the virtual elimination of unburned carbon in the exhaust system
and bottom ash.
 
 The test
was conducted using two identical tractors that hauled 48-foot flat beds with
concrete ballast. Fuel consumption for each vehicle was measured during a
baseline segment with commercially available #2 diesel fuel. Each of the test
trucks vehicles accumulated 1,500 miles for conditioning prior to conducting of
the test segment. Next, Clean Boost was added to the diesel fuel of the
vehicles. This procedure resulted in measurable percentage differences in fuel
consumption for each truck using fuel with the Clean Boost additive versus fuel
without the additive as follows:
 
 %
      Improvement in Fuel EconomyDiesel
      Fuel
              
              Test
      Truck A
              
              Test
      Truck B
              
              Average
      of two trucksBaseline
      Segment
              
              Commercially
      available #2 dieselTest
      Segment
              
              Commercially
      available #2 diesel with Clean Boost
              
              3.63%
              
              2.49%
              
              3.06%
 
 A second
test was done by Southwest Research Institute regarding our low emission diesel
fuel additive, Clean Boost-LE TM, with both Texas and EPA observers. The test
required approximately 15 days of running on a certified diesel engine in a
calibrated test cell. The results were then documented and presented to the
Texas Low Emission Diesel Board which after review, submitted them to the EPA
for their analysis. On March 26, 2007, the EPA certified that our product, Clean
Boost LE TM, met the stringent emissions reduction requirements and the Company
received its certification, #201920002CB-LE. In May, 2008, the TCEQ reevaluated
and implemented new standards and determined that our CB-LE meet all of the
requirements without restrictions or retesting and issued its unconditional
approval.
  9
 
 Competition
 
 Our
business is a part of the wider industry that seeks to improve overall energy
efficiency with a specific concentration on petroleum based energy sources. The
industry is composed of a few relatively large companies and a large number of
smaller, niche segment participants.
 
 Industry
participants’ products center around improved engine cleanliness and efficiency
(for example, detergency characteristics applicable to fuel injector nozzles),
improved fuel flow (for example, mitigation of fuel problems caused by low
ambient temperature) and fuel system protection (for example, improved
lubricity). These are common focus areas for the full range of gasoline and
distillate fuels. Additives designed to address specific problem areas in
specific fuel applications (for example, Cetane improver in diesel fuel) and
static electricity dissipation in turbine engines are also
significant.
 
 There are
many existing technologies that claim to have solved engine emissions problems
from alternative fueled vehicles (electric cars, fuel cell vehicles, etc.) to
engine magnets. Despite the vast amount of research that has been performed with
the intention of solving emissions problems, we believe no single technology has
yet to gain widespread acceptance from both the public (regulatory) and private
sectors. The United States government and the governments of other countries
have tried using economic incentives and tax breaks to promote the development
of a variety of emissions reduction technologies. However, the base cost of many
of these promotions, coupled with issues such as lack of appropriate
infrastructure (for example, compressed natural gas storage and delivery
systems) and technical limitations (for example, keeping alternative fuels
emulsified, significant loss of power and fuel economy with current alternative
fuels), currently makes market acceptance of many technologies and economic
feasibility unlikely over the long term.
 
 Our
direct competitors include major oil and chemical companies, many of which have
financial, technical and marketing resources significantly greater than ours. It
is possible that developments by others will render our products obsolete or
noncompetitive, that we will be not able to keep pace with new developments and
that our products will not be able to supplant established products.
  Some of
our main competitors include the following:
 
 Z-Max:a division
of Speedway Motorsports, Inc. Z-Max is a widely recognized brand product has a
retail shelf price of between $29.99 and $39.99. Speedway is a financially
strong entity that markets Z-Max in a distinct package. In addition, Z-Max has
significant signage at racetracks owned by Speedway.
  DuraLube:although the company is currently in bankruptcy, there has been talk that
an investor group may revive the company and its products. DuraLube is a
recognized brand that holds shelf placement in major stores, including
Wal-Mart.
 
 Slick
50:    is currently a Shell Lubricant Company product. The
brand is owned by Shell Oil, a well capitalized company that has the ability to
underwrite major advertising campaigns. Slick 50 is the leader in our product
market that has significant shelf placement with all major retailers except
Target.
 
 As energy
costs increase, and businesses are looking for ways to make energy products more
efficient, competition within this sector itself is growing, so we will
encounter competition from existing firms that offer competitive solutions in
this area. These competitive companies could develop products that are superior
to, or have greater market acceptance, than the products being developed and
marketed by our company. We will have to compete against other companies with
greater market recognition and greater financial, marketing and other
resources.
  10
  Government
Regulations and Supervision
 
 Government
regulations across the globe regarding fuels are continually changing. Most
regulation focuses on reducing fuel emissions. However, there is also growing
concern about dependence on oil-based fuels. Fuels regulation exists at various
levels of development and enforcement around the globe. In general, regulations
to reduce harmful emissions and to reduce dependence on oil for fuel needs will
only become more stringent. We believe this will be an advantage to us as our
products’ benefits reduce fuel consumption and can peacefully co-exist with
alternative fuel blends. As fuels regulatory compliance becomes more burdensome
to fuel suppliers and users, we anticipate that demand for the benefits our
products deliver will increase.
 
 Since we
now manufacture, store, and ship all of our products, we are required to be in
compliance regarding all applicable environmental rules and regulations that
regulate these type of activities. In addition, only our Clean Boost products
requires governmental license as this substance is used in interstate trucking.
In order for Clean Boost to be used in the United States, registration with the
Environmental Protection Agency, or EPA, is required. In Fiscal Year 2007, we
received EPA registration for one of our products and a EPA certification for
the other product both of which are used in base fuels and fuel blends. We are
also subject to similar international laws and regulations in the countries in
which we operate, such as Canada and Mexico.
 
 Employees
 
 With the
exception of our Chief Executive Officer with whom we have entered into an
employment agreement, our staff works for us on a consultant basis. Currently we
have 5 such consultants, two of which are executives, three of which work in
sales and six of which work in various administrative functions. In addition,
with the acquisition of Dyson Properties, there are 11 employees located in
Durant, Oklahoma, which are divided into 2 management personnel, 3
administrators and 6 production personnel. These employees are paid on a weekly
basis.


ITEM
    1A.
            RISK FACTORS




We are
subject to a number of risks that could have a significant impact on the
Company, its shareholders and lenders. Some of these are detailed
below.
  We
may not have effective internal controls if we fail to remedy any deficiencies
we may identify in our system of internal controls.
  In
preparation for the annual report of management regarding our evaluation of our
internal controls that is required to be included in our annual report for the
year ended March 31, 2008 by Section 404 of the Sarbanes-Oxley Act of
2002, we will need to assess the adequacy of our internal control, remediate any
weaknesses that may be identified, validate that controls are functioning as
documented and implement a continuous reporting and improvement process for
internal controls. We may discover deficiencies that require us to improve our
procedures, processes and systems in order to ensure that our internal controls
are adequate and effective and that we are in compliance with the requirements
of Section 404 of the Sarbanes -Oxley Act. If the deficiencies are not
adequately addressed, or if we are unable to complete all of our testing and any
remediation in time for compliance with the requirements of Section 404 of
the Sarbanes-Oxley Act and the SEC rules under it, we would be unable to
conclude that our internal controls over financial reporting are designed and
operating effectively, which could adversely affect our investor confidence in
our internal controls over financial reporting.
  11
  Change
in Marketing and Sales Approach
  We may
experience a reduction in sales and marketing activity due to the Company’s
significant change in the performance of these functions. The Company has
reduced its in house sales staff and is transitioning to an outside sales
representative and an independent distributor strategy. There can be no
assurance that this strategy will not damage customer relationships as well as
have a negative impact on revenues.
  The loss of or a substantial
reduction in, or change in the size or timing of, orders from distributors could
harm our business   .
  The
Company’s sales strategy is to establish long term contracts with independent
sales representatives and fuel and lubrications distributors. Our goal is to
convince the sales rep/distributor to invest a substantial amount of their
resources into selling the Company’s products to both current and future
customers. Although we believe we have established good relationships with these
sales organizations, there can be no assurances that this sales strategy will be
successful and that we can maintain a long term relationship with these
companies.
  We
do not have long term commitments from our suppliers and
manufacturers.
  We may
experience shortages of supplies and inventory because we do not have long-term
agreements with our suppliers or manufacturers. The success of our Company is
dependent on our ability to provide our customers with our products. Although we
manufacture most of our products, we are dependent on our suppliers for
component parts which are necessary for our manufacturing operations. In
addition, certain of our present and future products and product components are
(or will be) manufactured by third party manufacturers. Since we have no
long-term contracts or other contractual assurances with these manufacturers for
continued supply, pricing or access to component parts, no assurance can be
given that such manufacturers will continue to supply us with adequate
quantities of products at acceptable levels of quality and price. While we
believe that we have good relationships with our suppliers and our
manufacturers, if we are unable to extend or secure manufacturing services or to
obtain component parts or finished products from one or more manufacturers on a
timely basis and on acceptable terms, our results of operations could be
adversely affected.
  We
face intense competition, and many of our competitors have substantially greater
resources than we do.
  We
operate in a highly competitive environment. In addition, the competition in the
market for fuel and engine enhancement additive products may intensify in the
future as demands for greater efficiencies in vehicle mileage and pollutant
reductions are demanded and legislated. There are numerous well-established
companies and smaller entrepreneurial companies based in the United States with
significant resources who are developing and marketing products and services
that will compete with our products. In addition, many of our current and
potential competitors have greater financial, operational and marketing
resources. These resources may make it difficult for us to compete with them in
the development and marketing of our products, which could harm our
business.
  Our
success will depend on our ability to update our technology to remain
competitive.
  The
engine and fuel additive industry is subject to technological change. As
technological changes occur in the marketplace, we may have to modify our
products in order to become or remain competitive. While we are continuing our
research and development in new products in efforts to strengthen our
competitive advantage, no assurances can be given that we will successfully
implement technological improvements to our products on a timely basis, or at
all. If we fail to anticipate or respond in a cost-effective and timely manner
to government requirements, market trends or customer demands, or if there are
any significant delays in product development or introduction, our revenues and
profit margins may decline which could adversely affect our cash flows,
liquidity and operating results.
  12
  We
depend on market acceptance and recognition of the products of our customers. If
our products do not gain market acceptance, our ability to compete will be
adversely affected.
  The fuel
additive and engine additive industry is noted for manufacturing products that
are ineffective and have no economic value. Although the Company has developed
unique products that have been tested by independent testing and research
facilities to verify the Company’s claims, there can be no assurance that these
tests and related marketing materials will gain acceptance in the marketplace.
If we cannot convince new customers to purchase our products, our revenues will
be negatively affected.
  Failure to meet customers’
expectations or deliver expected performance of our products could result in
losses and negative publicity, which will harm our business.
  If our
products fail to perform in the manner expected by our customers, then our
revenues may be delayed or lost due to adverse customer reaction, negative
publicity about us and our products, which could adversely affect our ability to
attract or retain customers. Furthermore, disappointed customers may initiate
claims for substantial damages against us, regardless of our responsibility for
such failure.
  We
may have difficulty managing our growth.
  We have
been experiencing significant growth in the scope of our operations and the
number of our employees. This growth has placed significant demands on our
management as well as our financial and operational resources. In order to
achieve our business objectives, we anticipate that we will need to continue to
grow. If this growth occurs, it will continue to place additional significant
demands on our management and our financial and operational resources, and will
require that we continue to develop and improve our operational, financial and
other internal controls. Further, to date our business has been primarily in the
United State, Canada and Mexico and were we to launch sales and distribution in
other countries outside North America, we would further increase the challenges
involved in implementing appropriate operational and financial systems,
expanding manufacturing capacity and scaling up production, expanding our sales
and marketing infrastructure and capabilities and providing adequate training
and supervision to maintain high quality standards. The main challenge
associated with our growth has been, and we believe will continue to be, product
recognition, and effective marketing and advertising campaigns. Our inability to
scale our business appropriately or otherwise adapt to growth would cause our
business, financial condition and results of operations to suffer.
  If we are unable to protect our
intellectual property rights or our intellectual property rights are inadequate,
our competitive position could be harmed or we could be required to incur
expenses to enforce our rights   .
  Our
future success will depend, in part, on our ability to obtain and maintain
patent protection for our products and technology, to preserve our trade secrets
and to operate without infringing the intellectual property of others. In part,
we rely on patents to establish and maintain proprietary rights in our
technology and products. While we hold licenses to a number of issued patents
and have other patent applications pending on our products and technology, we
cannot assure you that any additional patents will be issued, that the scope of
any patent protection will be effective in helping us address our competition or
that any of our patents will be held valid if subsequently challenged. Other
companies also may independently develop similar products, duplicate our
products or design products that circumvent our patents.
  In
addition, if our intellectual property rights are inadequate, we may be exposed
to third-party infringement claims against us. Although we have not been a party
to any infringement claims and are currently not aware of any anticipated
infringement claim, we cannot predict whether third parties will assert claims
of infringement against us, or whether any future claims will prevent us from
operating our business as planned. If we are forced to defend against
third-party infringement claims, whether they are with or without merit or are
determined in our favor, we could face expensive and time-consuming litigation.
If an infringement claim is determined against us, we may be required to pay
monetary damages or ongoing royalties. In addition, if a third party
successfully asserts an infringement claim against us and we are unable to
develop suitable non-infringing alternatives or license the infringed or similar
intellectual property on reasonable terms on a timely basis, then our business
could suffer.
  13
  If we are unable to meet customer
demand or comply with quality regulations, our sales will suffer.
  During
the year ended March 31, 2007 we acquired our own manufacturing, production and
bottling plant in Durant Oklahoma. We manufacture and blend many of our products
at this facility. In order to achieve our business objectives, we will need to
significantly expand our capabilities to produce the quantities necessary to
meet demand. We may encounter difficulties in scaling-up production of our
products, including problems involving production capacity and yields, quality
control and assurance, component supply and shortages of qualified personnel. In
addition, our manufacturing facilities are subject to periodic inspections by
governmental regulatory agencies. Our success will depend in part upon our
ability to manufacture our products in compliance with regulatory requirements.
Our business will suffer if we do not succeed in manufacturing our products on a
timely basis and with acceptable manufacturing costs while at the same time
maintaining good quality control and complying with applicable regulatory
requirements.
  Substantially
all of our assets are secured under a credit facility with a group of lenders
and in the event of default under the credit facility we may lose all of our
assets.
  The
Company has entered into two separate financing arrangements whereby both
lenders have collateralized their loans with substantially all of our assets. In
the event of default of either credit facility, the Company could loose all of
its assets which would make it difficult to continue operations at our current
facilities. The Company would be forced to move its operations and to find
additional third party manufacturing, if possible, that would agree to produce
our products at our current prices. Our business would suffer and our ability to
raise any additional funds would be negatively impacted, both of which would
impact our ability to continue in business.
  We
may not be able to secure additional financing to meet our future capital
needs.
  We
anticipate needing significant capital to manufacture product, carry adequate
inventory levels and continue or further develop our existing products and
introduce new products, increase awareness of our brand names and expand our
operating and management infrastructure as we grow sales. We may use capital
more rapidly than currently anticipated. Additionally, we may incur higher
operating expenses and generate lower revenue than currently expected, and we
may be required to depend on external financing to satisfy our operating and
capital needs. We may be unable to secure additional debt or equity financing on
terms acceptable to us, or at all, at the time when we need such funding. If we
do raise funds by issuing additional equity or convertible debt securities, the
ownership percentages of existing stockholders would be reduced, and the
securities that we issue may have rights, preferences or privileges senior to
those of the holders of our common stock or may be issued at a discount to the
market price of our common stock which would result in dilution to our existing
stockholders. If we raise additional funds by issuing debt, we may be subject to
debt covenants, such as the debt covenants under our secured credit facility,
which could place limitations on our operations including our ability to declare
and pay dividends. Our inability to raise additional funds on a timely basis
would make it difficult for us to achieve our business objectives and would have
a negative impact on our business, financial condition and results of
operations.
  If
we cannot build and maintain strong brand loyalty our business may
suffer.
  We
believe that the importance of brand recognition will increase as more companies
produce competing products. Development and awareness of our brands will depend
largely on our ability to advertise and market successfully. If we are
unsuccessful, our brands may not be able to gain widespread acceptance among
consumers. Our failure to develop our brands sufficiently would have a material
adverse effect on our business, results of operations and financial
condition.
  14
  Risks
Relating To Our Common Stock
  There
is a limited public trading market for our common stock.
  Our
Common Stock presently trades on the Over the Counter Bulletin Board under the
symbol “EMHD.OB.” We cannot assure you, however, that such market will continue
or that you will be able to liquidate your shares acquired at the price you paid
or otherwise. We also cannot assure you that any other market will be
established in the future. The price of our common stock may be highly volatile
and your liquidity may be adversely affected in the future.
  We
have a substantial number of shares authorized but not yet issued.
  Our
Articles of Incorporation authorize the issuance of up to 250,000,000 shares of
common stock and 1,000,000 preferred capital shares. Our Board of Directors has
the authority to issue additional shares of common stock and to issue options
and warrants to purchase shares of our common stock without stockholder
approval. Future issuance of common stock and preferred stock could be at values
substantially below current market prices and therefore could represent further
substantial dilution to our stockholders. In addition, the Board could issue
large blocks of voting stock to fend off unwanted tender offers or hostile
takeovers without further shareholder approval.
  We
have historically not paid dividends and do not intend to pay
dividends.
  We have
historically not paid dividends to our stockholders and
management does not anticipate paying any cash dividends on our common stock to
our stockholders for the foreseeable future. The Company intends to retain
future earnings, if any, for use in the operation and expansion of our
business.


ITEM
      1B.
            UNRESOLVED STAFF
      COMMENTS





Smaller
reporting companies are not required to provide the information required by this
item.




ITEM
      2.
            DESCRIPTION OF
      PROPERTY




The
Company owns its operating plant and facilities in Durant Oklahoma. This
property consist of 5.03 acres of land with three buildings totaling 53,459
square feet of industrial and office space. The property is subject to a first
mortgage loan of approximately $807,062. This facility is the Company’s
blending, bottling and distribution center for its EMTA, XenTx and Synergyn
products. The Company also leases 4,100 square feet of office space in
Scottsdale Arizona for its corporate offices at an annual rental of $75,793
increasing annually to $80,409 in 2011.




ITEM
      3.
            LEGAL
      PROCEEDINGS


None.
  15


ITEM
      4.
            SUBMISSION OF MATTERS TO A VOTE
      OF SECURITY HOLDERS




No
matters were submitted for shareholders vote during the fourth
quarter.






PART
II





ITEM
      5.
            MARKET FOR REGISTRANT’S COMMON
      EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES




Market
Information
  Our
common stock has been traded on the Over the Counter Bulletin Board under the
symbol EMHD.OB. since February 9, 2007. Prior thereto and to date, our stock has
been trading on the Pink Sheets since April 8, 2006.
  The
following is the range of high and low bid prices for our common stock for the
periods indicated:
  Bid
      PricesHigh
              
              LowQuarter
      ended June 30, 2006
              
              $
              7.00
              
              
              $
              2.55Quarter
      ended September 30, 2006
              
              $
              5.25
              
              
              $
              4.40Quarter
      ended December 31, 2006
              
              $
              4.40
              
              
              $
              1.01Quarter
      ended March 31, 2007
              
              $
              1.01
              
              
              $
              0.08Quarter
      ended June 30, 2007
              
              $
              0.95
              
              
              $
              0.14Quarter
      ended September 30, 2007
              
              $
              0.44
              
              
              $
              0.06Quarter
      ended December 31, 2007
              
              $
              0.25
              
              
              $
              0.06Quarter
      ended March 31, 2008
              
              $
              0.35
              
              
              $
              0.13Quarter
      ended June 30, 2008
              
              $
              0.43
              
              
              $
              0.19
  Bid
quotations represent interdealer prices without adjustment for retail markup,
markdown and/or commissions and may not necessarily represent actual
transactions.
  Stockholders
  As of
July 9, 2008, the number of stockholders of record was approximately
1,200.
  16
  Dividends
  We have
not paid any dividends on our common stock, and we do not anticipate paying any
dividends in the foreseeable future. Our Board of Directors intends to follow a
policy of retaining earnings, if any, to finance the growth of the company. The
declaration and payment of dividends in the future will be determined by our
Board of Directors in light of conditions then existing, including the company’s
earnings, financial condition, capital requirements and other
factors.
 
 Securities
Authorized for Issuance under Equity Compensation Plans
 
 In March,
2008, the Company issued 5,415,000 stock options to employees, directors and
consultants. One third of which each become vested on October 1, 2008, April 1,
2009 and October 1, 2009 provided the participant’s continue service to the
Company. The options are exercisable for three years from the grant
date.
 Equity
Compensation Plan Information
 
 Plan
      category
              
              Number
      of securities to be issuedupon
      exercise of outstandingoptions,
      warrants and rights
              
              Weighted-average
      exercise priceof
      outstanding options,warrants
      and rights
              
              Number
      of securities remainingavailable
      for future issuance underequity
      compensation plansexcluding
      securities reflected incolumn
      (a)(a)
              
              (b)
              
              (c)Equity
      compensation plans
                approved
      by security holders
              
              0
              
              0
              
              0Equity
      compensation plans not
                approved
      by security holders
              
              5,415,000
              
              $0.20
              
              15,293,354Total
              
              5,415,000
              
              $0.20
              
              15,293,354
  (1)
              The
      options were issued pursuant to a Registration Statement on Form S-8 filed
      by the Company.
 (2)
              The
      Plan will be submitted to the shareholders for approval at the next annual
      meeting
 
 Recent
Sales of Unregistered Securities.
 
 None.




ITEM
      6.
            SELECTED FINANCIAL
      DATA




Smaller
reporting companies are not required to provide the information required by this
item.
  17


ITEM
      7.
            MANAGEMENT’S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




In addition to historical
information, this section contains “forward-looking” statements, including
statements regarding the growth of product lines, optimism regarding the
business, expanding sales and other statements. Words such as expects,
anticipates, intends, plans, believes, sees, estimates and variations of such
words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks and uncertainties that are difficult to predict. Actual
results could vary materially from the description contained herein due to many
factors including continued market acceptance of our products. In addition,
actual results could vary materially based on changes or slower growth in the
fuel additive products market; the potential inability to realize expected
benefits from new products and products under development; domestic and
international business and economic conditions; changes in the petroleum
industry; unexpected difficulties in penetrating the commercial and industrial
markets for our products; changes in customer demand or ordering patterns;
changes in the competitive environment including pricing pressures or
technological changes; technological advances; shortages of manufactured raw
material and manufacturing capacity; future production variables impacting
excess inventory and other risk factors listed in the section of this Annual
Report entitled “Risk Factors” and from time to time in our Securities and
Exchange Commission filings under “risk factors” and
elsewhere.
  Each forward-looking statement
should be read in context with, and with an understanding of, the various
disclosures concerning our business made elsewhere in this Annual Report, as
well as other public reports filed by us with the Securities and Exchange
Commission. Readers should not place undue reliance on any forward-looking
statement as a prediction of actual results of developments. Except as required
by applicable law or regulation, we undertake no obligation to update or revise
any forward-looking statement contained in this Annual Report. This section
should be read in conjunction with our consolidated financial
statements.
  RESULTS
OF OPERATIONS
  The
following table sets forth our results of operations for the years ended
March 31, 2008 and 2007 as a percentage of net sales:
  2008
                
                2007NET
      SALES
                
                
                100.0
                %
                
                100.0
                %COST
      OF SALES
                
                
                47.1
                %
                
                40.3
                %GROSS
      PROFIT
                
                
                52.9
                %
                
                59.7
                %OPERATING
      EXPENSESSelling,
      general and administrative
                
                
                97.4
                %
                
                278.2
                %Depreciation
      and amortization
                
                
                8.9
                %
                
                14.7
                %Allowance
      for bad debts
                
                
                0.0
                %
                
                (1.5)
                %Research
      and development
                
                
                4.3
                %
                
                28.9
                %TOTAL
      OPERATING EXPENSES
                
                
                110.6
                %
                
                320.3
                %LOSS FROM
      OPERATIONS
                
                
                (57.7)
                %
                
                (260.6)
                %Other
      income (expense)
                
                
                0.0
                %
                
                1.5
                %Interest
      expense
                
                
                (30.8)
                %
                
                (34.6)
                %Cost
      of curing loan default
                
                
                0.0
                %
                
                (1,324.8)
                %LOSS BEFORE
      INCOME TAXES
                
                
                (88.5)
                %
                
                (1,618.5)
                %Income
      tax benefit
                
                
                0.0
                %
                
                0.0
                %NET
      INCOME (LOSS)
                
                
                (88.5)
                %
                
                (1,618.5)
                %
 18
  Year
ended March 31, 2008 as compared to year ended March 31, 2007
  Net Sales: Net Sales increased
from $1,053,767 in 2007 to $2,769,949 in 2008 or an increase of $1,716,182. This
represents an increase of 162.9% over the prior year. This increase was due to
improved XenTx sales to the commercial/industrial market and the increase in
Dyson sales and inclusion of that revenue for the entire year 2008 while only
the prior year fourth quarter included such results. During the fourth quarter
of 2007 sales for Dyson were $396,614. Also, the company reduced its emphasis on
retail sales and concentrated on the commercial/industrial market, particularly
with long haul trucking fleets and large earth moving equipment companies. 
This has resulted in fewer stores carrying the XenTx retail products and a
substantial increase in the number of tests by major trucking and other fleet
operators.
  Gross Margin: Gross Margin
decreased to 52.9%  from 59.7% or a decrease of 6.8%. This was due to
increased petroleum based product costs used by the Dyson product
mix.
  Selling, General and Administrative
Expenses: The Company reduced its SG &A from $2,931,090 to $2,696,507
or an improvement of $234,583. This was due to the continued reduction in
personnel and reduced sales and promotional expenses, and a shift to outside
sales rep companies from in-house full time sales personnel.
  Research and Development: The
expense for research and development was reduced from $304,793 to $118,546 or a
reduction of $186,247. This was due to our decision to delay certain product
development and testing until the next year and allow more funds to be directed
to inventory and receivables as a result of increase sales
demand.
  Cost to cure: The Cost of
Curing Loan Default decreased $13,960,334 since no such cost was incurred in
2008. The Cost of Curing the Loan Default in 2007 was incurred by the Company
for its failure to file its Registration Statement with the Securities and
Exchange Commission within the designated time as required by the lenders. The
Company issued 5,000,000 warrants at an exercise price of $2.50 per share.
Taking into account the Weighted Average Term Remaining (years), Volatility,
Risk-Free Rate and Implied Value, the recorded value of this default is
$13,960,334.
  IMPACT
OF INFLATION
  Inflation
has not had a material effect on our results of operations.  We expect
the cost of petroleum base products to track the increase and decrease in the
worldwide oil prices.
  SEASONALITY
  The
seasons of the year have no material impact on the Company’s products or
services.
  FINANCIAL
LIQUIDITY AND CAPITAL RESOURCES
  We have
experienced net losses and negative cash flows from operations and investing
activities for the fiscal years 2008 and 2007. The aggregate losses from
operations and net losses for the last two fiscal years aggregated $4,344,475
and $19,506,128, respectively, reflecting improvements of these two items from
the prior two year period of $3,529,155 and $2,682,213,
respectively.   Cash consumed from operating and investing
activities in 2008 declined from an aggregate of $4,204,392 in 2007 to
$1,958,999 in 2008. We have funded our operations to date by borrowings from
third parties and investors, a substantial portion of which are convertible into
our common stock. In fiscal 2008 we completed a long term debt financing in the
gross amount of $1,469,482 and sales of common stock of $1,115,312.
  19
  OFF
BALANCE SHEET ARRANGEMENTS
  Not
applicable.
  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
  Consolidation - The
consolidated financial statements include the accounts of EMTA Holdings, Inc.
and its consolidated subsidiaries and wholly-owned limited liability company.
The financial statements for the year ended March 31, 2007 include the
operations of Dyson Properties, Inc. since December 31, 2006. All significant
intercompany transactions and profits have been eliminated.
  Use of Estimates -
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires the Company to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses, and related disclosure of contingent assets and liabilities. The
more significant estimates relate to revenue recognition, contractual allowances
and uncollectible accounts, intangible assets, accrued liabilities, derivative
liabilities, income taxes, litigation and contingencies. Estimates are based on
historical experience and on various other assumptions that the Company believes
to be reasonable under the circumstances, the results of which form the basis
for judgments about results and the carrying values of assets and liabilities.
Actual results and values may differ significantly from these
estimates.
  Cash Equivalents -
The Company invests its excess cash in short-term investments with various banks
and financial institutions. Short-term investments are cash equivalents, as they
are part of the cash management activities of the company and are comprised of
investments having maturities of three months or less when
purchased.
  Allowance for Doubtful
Accounts -  The
Company provides an allowance for doubtful accounts when management estimates
collectibility to be uncertain. Accounts receivable are continually reviewed to
determine which, if any, accounts are doubtful of collection. In making the
determination of the appropriate allowance amount, the Company considers current
economic and industry conditions, relationships with each significant customer,
overall customer credit-worthiness and historical experience. The allowance for
doubtful accounts was $34,149 at March 31, 2008 and 2007.
  Inventories -
Inventories are stated at the lower of cost or market value. Cost of inventories
is determined by the first-in, first-out (FIFO) method. Obsolete or
abandoned inventories are charged to operations in the period that it is
determined that the items are not longer viable sales products.
 
 Property, Plant, and
Equipment - Plant and equipment are carried at cost. Repair and
maintenance costs are charged against operations while renewals and betterments
are capitalized as additions to the related assets. The Company depreciates its
plant and equipment and computers on a straight line basis. Estimated useful
life of the plant is 39.5 years and the equipment ranges from 3 to
10 years.
 
 Intangible Assets -
Intangible assets consist of patents, trademarks and government approvals. For
financial statement purposes, identifiable intangible assets with a defined life
are being amortized using the straight-line method over the estimated useful
lives of the assets. Costs incurred by the Company in connection with patent,
trademark applications and approvals from governmental agencies such as the
Environmental Protection Agency, including legal fees, patent and trademark fees
and specific testing costs, are expensed as incurred. Purchased intangible costs
of completed developments are capitalized and amortized over an estimated
economic life of the asset, generally seven years. commencing on the acquisition
date. Costs subsequent to the acquisition date are expensed as
incurred.
 
 20
  Impairment of Long-Lived
Assets - In accordance with the Statement of Financial Accounting
Standards No. 144 (“FAS 144”), “Accounting for the Impairment or Disposal
of Long-Lived Assets,” the Company reviews long-lived assets, including, but not
limited to, property and equipment, patents and other assets, for impairment
annually or whenever events or changes in circumstances indicate the carrying
amounts of assets may not be recoverable. The carrying value of long-lived
assets is assessed for impairment by evaluating operating performance and future
undiscounted cash flows of the underlying assets. If the sum of the expected
future cash flows of an asset is less than its carrying value, an impairment
measurement is required. Impairment charges are recorded to the extent that an
asset’s carrying value exceeds fair value. Accordingly, actual results could
vary significantly from such estimates. There were no impairment charges during
the periods presented.
  Fair Value
Disclosures - The carrying values of cash, accounts receivable, deposits,
prepaid expenses, accounts payable and accrued expenses generally approximate
the respective fair values of these instruments due to their current
nature.
  The fair
values of debt instruments for disclosure purposes only are estimated based upon
the present value of the estimated cash flows at interest rates applicable to
similar instruments.
  The
Company generally does not use derivative financial instruments to hedge
exposures to cash flow or market risks. However, certain other financial
instruments, such as warrants and embedded conversion features that are indexed
to the Company’s common stock, are classified as liabilities when either (a) the
holder possesses rights to net-cash settlement or (b) physical or net-share
settlement is not within the control of the Company. In such instances, net-cash
settlement is assumed for financial accounting and reporting, even when the
terms of the underlying contracts do not provide for net-cash settlement. Such
financial instruments are initially recorded at fair value and subsequently
adjusted to fair value at the close of each reporting period.
  Revenue Recognition -
Revenues are recognized at the time of shipment of products to customers, or at
the time of transfer of title, if later, and when collection is reasonably
assured. All amounts in a sales transaction billed to a customer related to
shipping and handling are reported as revenues.
 
 Provisions
for sales discounts and rebates to customers are recorded, based upon the terms
of sales contracts, in the same period the related sales are recorded, as a
deduction to the sale. Sales discounts and rebates are offered to certain
customers to promote customer loyalty and encourage greater product
sales.
 
 Components of Cost of
Sales - Cost of sales is comprised of raw material costs including
freight and duty, inbound handling costs associated with the receipt of raw
materials, contract manufacturing costs, third party bottling and packaging,
maintenance and storage costs, plant and engineering overhead allocation,
terminals and other warehousing costs, and handling costs.
 
 Selling Expenses -
Included in selling and general administrative expenses are the commission
expenses for both employees and outside sales representatives ranging from 1.5%
to 11.5% per dollar of sales. The Company expends significant amounts to
advertise and distinguish its products from those of its competitors through the
use of in-store advertising, printed media, internet and broadcast
media.
 
 Research, Testing and
Development - Research, testing and development costs are expensed as
incurred. Research and development expenses, including testing, were $118,546
and $304,793 for the years ended March 31, 2008 and 2007, respectively. Costs to
acquire in-process research and development (IPR&D) projects that have no
alternative future use and that have not yet reached technological feasibility
at the date of acquisition are expensed upon acquisition.
  21
  Income Taxes - We
provide for income taxes in accordance with SFAS No. 109, “Accounting for
Income Taxes.” SFAS No. 109 requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of temporary
differences between the financial statement carrying amounts and the tax bases
of the assets and liabilities.
 
 The
recording of a net deferred tax asset assumes the realization of such asset in
the future; otherwise a valuation allowance must be recorded to reduce this
asset to its net realizable value. The Company considers future pretax income
and, if necessary, ongoing prudent and feasible tax planning strategies in
assessing the need for such a valuation allowance. In the event that the Company
determines that it may not be able to realize all or part of the net deferred
tax asset in the future, a valuation allowance for the deferred tax asset is
charged against income in the period such determination is made. The Company has
recorded full valuation allowances as of March 31, 2008 and 2007.
  Concentrations of Credit
Risks —Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash and cash
equivalents and accounts receivable. Although the amount of credit exposure to
any one institution may exceed federally insured amounts, the Company limits its
cash investments to high-quality financial institutions in order to minimize its
credit risk. With respect to accounts receivable, such receivables are primarily
from distributors and retailers located in the United States and foreign
distributors. The Company extends credit based on an evaluation of the
customer's financial condition, generally without requiring collateral. Exposure
to losses on receivables is dependent on each customer's financial
condition.  At March 31, 2008, the amounts due from two foreign
distributors were $745,952, which represents 79.9% of accounts
receivable.
 
 Segment
Information
  We
operate in one industry segment, the development, manufacture and sale of
private and commercial vehicle energy efficient enhancement products. These
products are designed to extend engine life, promote fuel efficiency and reduce
emissions. At March 31, 2008 these products are being marketed by the Company
and sales were predominantly in the United States of America, Canada, Mexico and
Nigeria.
  New accounting
pronouncements:
  GAAP
Hierarchy
  In
May 2008, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 162, "The Hierarchy of
Generally Accepted Accounting Principles." SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (the
GAAP hierarchy). SFAS No. 162 will become effective 60 days following
the SEC's approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, "The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles." EMTA does not expect the adoption of
SFAS No. 162 to have a material effect on its results of operations and
financial position.
  Convertible
Debt
  In
May 2008, the FASB issued Financial Statement Position (FSP) Accounting
Principles Board (APB) 14-1 "Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)." FSP APB 14-1 requires the issuer of certain convertible debt
instruments that may be settled in cash (or other assets) on conversion to
separately account for the liability (debt) and equity (conversion option)
components of the instrument in a manner that reflects the issuer's
non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal
years beginning after December 15, 2008 on a retroactive basis and will be
adopted by EMTA in the first quarter of fiscal 2010. EMTA is currently
evaluating the potential impact, if any, of the adoption of FSP APB 14-1 on
its results of operations and financial position.
  22
  Noncontrolling
Interests
  In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
in Consolidated Financial Statements—an amendment of Accounting Research
Bulletin No. 51." SFAS No. 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to
the noncontrolling interest, changes in a parent's ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS No. 160 is effective for
fiscal years beginning after December 15, 2008 and will be adopted by the Company in the
first quarter of fiscal 2010. We do not expect the adoption of SFAS No. 160
to have a material effect on its results of operations and financial
position.
  Fair
Value Option
  In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities—Including an Amendment of FASB
Statement No. 115," which permits an entity to measure many financial
assets and financial liabilities at fair value that are not currently required
to be measured at fair value. Entities that elect the fair value option will
report unrealized gains and losses in earnings at each subsequent reporting
date. The fair value option may be elected on an instrument-by-instrument basis,
with few exceptions. SFAS No. 159 amends previous guidance to extend the
use of the fair value option to available-for-sale and held-to-maturity
securities. The statement also establishes presentation and disclosure
requirements to help financial statement users understand the effect of the
election. This statement is effective for fiscal years beginning after
November 15, 2007. EMTA does not expect the adoption of SFAS No. 159
to have a material effect on its results of operations and financial
position.
  Fair
Value Measurements
  In
September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. This statement applies under other
accounting pronouncements that require or permit fair value measurement where
the FASB has previously determined that under those pronouncements fair value is
the appropriate measurement. This statement does not require any new fair value
measurements but may require companies to change current practice. This
statement is effective for fiscal years beginning after November 15, 2007.
EMTA does not expect the adoption of SFAS No. 157 to have a material effect
on its results of operations and financial position.
  Defined
Benefit Pension and Other Postretirement Plans
  In
September 2006, the FASB issued SFAS No. 158, "Employers' Accounting
for Defined Benefit Pension and Other Postretirement Plans." SFAS No. 158
requires employers to fully recognize the obligations associated with
single-employer defined benefit pension, retiree healthcare, and other
postretirement plans in their financial statements. The effect of adopting SFAS
No. 158 on EMTA's financial statements at March 31, 2007 and 2008 has no
effect on the Company.
  23
  Split-Dollar
Life Insurance Arrangements
  In
September 2006, the Emerging Issues Task Force (EITF) reached consensus on
EITF Issue No. 06-4, "Accounting for Deferred Compensation and
Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements." The scope of EITF No. 06-4 is limited to the recognition of
a liability and related compensation costs for endorsement split-dollar life
insurance arrangements that provide a benefit to an employee that extends to
postretirement periods. EITF No. 06-4 is effective for fiscal years
beginning after December 15, 2007. We adopted EITF No. 06-4 early, in
fiscal 2008, and its adoption did not have an impact on EMTA’s results of
operations or financial position.
  Income Taxes
  In
June 2006, the FASB issued FASB Interpretation (FIN) No. 48,
"Accounting for Uncertainty in Income Taxes," which supplements SFAS
No. 109, "Accounting for Income Taxes,' and is effective for fiscal years
beginning after December 15, 2006. FIN 48 clarifies the accounting for
uncertainties in income taxes recognized in accordance with SFAS 109 by
prescribing guidance for the recognition, de-recognition, and measurement in
financial statements of income tax positions taken in previously filed tax
returns or tax positions expected to be taken in tax returns, including a
decision whether to file or not to file in a particular jurisdiction.
FIN 48 requires that any liability created for unrecognized tax benefits be
disclosed. The application of FIN 48 may also affect the tax bases of
assets and liabilities and therefore may change or create deferred tax
liabilities or assets.
  On March
31, 2007, we adopted the provisions of FIN 48. There was no material impact
to EMTA of adopting FIN 48.
  Life
Insurance Policies
  In
March 2006, the FASB issued FSP No. FTB 85-4-1, "Accounting for Life
Settlement Contracts by Third Party Investors." FSP FTB 85-4-1 provides for
a contract-by-contract irrevocable election to account for life settlement
contracts on either a fair value basis, with changes in fair value recognized in
the condensed consolidated statements of operations, or through use of the
investment method. Under the investment method, the initial investment and
continuing costs are capitalized; however, no income is recognized until the
death of the insured party. The guidance of FSP FTB 85-4-1 will be
effective for fiscal years beginning after June 15, 2006. EMTA adopted FSP
FTB 85-4-1 as of the beginning of fiscal 2008, and its adoption did not
have an impact on EMTA’s results of operations or financial
position.
  In
September 2006, the EITF reached a conclusion on EITF Issue No. 06-5,
"Accounting for Purchases of Life Insurance—Determining the Amount That Could Be
Realized in Accordance with FASB Technical Bulletin No. 85-4, "Accounting
for Purchases of Life Insurance." The scope of EITF No. 06-5 consists of
three separate issues relating to accounting for life insurance policies
purchased by entities protecting against the loss of "key persons." The three
issues are clarifications of previously issued guidance on FASB Technical
Bulletin No. 85-4. EMTA adopted EITF No. 06-5 as of the beginning of
fiscal 2008, and its adoption did not have a material impact on EMTA’s results
of operations or financial position.
  Litigation - The
Company is and may become a party in routine legal actions or proceedings in the
ordinary course of its business. The Company is a defendant in one case for the
payment of advertising costs in which the Company does not believe that the
services were adequately performed. Management does not believe that the outcome
of these routine matters will have a material adverse effect on the Company's
consolidated financial position or results of operations.
  24
  Environmental —The
Company's operations are subject to extensive federal, state and local laws,
regulations and ordinances in the United States relating to the generation,
storage, handling, emission, transportation and discharge of certain materials,
substances and waste into the environment, and various other health and safety
matters. Governmental authorities have the power to enforce compliance with
their regulations, and violators may be subject to fines, injunctions or both.
The Company must devote substantial financial resources to ensure compliance,
and it believes that it is in substantial compliance with all the applicable
laws and regulations.


ITEM
      7A.
            QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET
RISK




Smaller
reporting companies are not required to provide the information required by this
item.


ITEM
      8.
            FINANCIAL STATEMENTS AND
      SUPPLEMENTARY DATA




The
Financial Statements that constitute Item 8 are included at the end of this
report beginning on Page F-1.


ITEM
      9.
            CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE




None.




ITEM
      9A(T).
                CONTROLS AND
      PROCEDURES
  (a)
                    EVALUATION
      OF DISCLOSURE CONTROLS AND
PROCEDURES
 
 The
Company carried out, under the supervision and with the participation of the
Company’s management, including the Company’s Chief Executive Officer and the
Company’s Chief Financial Officer, an evaluation of the effectiveness of the
design and operation of the Company’s disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act
of 1934, as amended).  Based on their evaluation, the Company’s Chief
Executive Officer and its Chief Financial Officer concluded that, as of March
31, 2008, the Company’s disclosure controls and procedures were not effective
because of the material weakness identified as of such date discussed below.
 Notwithstanding, the existence of the material weakness described below,
management has concluded that the consolidated financial statements in this Form
10-K fairly present, in all material respects, the Company’s financial position,
results of operations and cash flows for the periods and dates
presented.
 
 (b)
                    REPORT
      OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL
  REPORTING
 
 The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f) under the
Securities Exchange Act of 1934.  Our internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.
 Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements.  Also, projections of
any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions or
that the degree of compliance with the policies or procedures may
deteriorate.
  25
  With the
participation of the Company’s Chief Executive Officer and Chief Financial
Officer, management conducted an evaluation of the effectiveness of our internal
control over financial reporting as of March 31, 2008, based on the framework
and criteria established in Internal Control – Integrated
Framework , issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).
 
 A
material weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will occur and not be
detected by management before the financial statements are published.  In
its assessment of the effectiveness in internal control over financial reporting
as of March 31, 2008, the Company determined that there were control
deficiencies that constituted a material weakness, as described
below.
 
 ●
                    We
      have not assessed our control environment or entity-level controls.
       Due to time and staff constraints, we did not perform an assessment
      of our control environment or entity-level controls in accordance with
      COSO standards.
 
 ●
                    We
      have not tested the operating effectiveness of our controls over financial
      reporting.  During our review process we created and implemented new
      controls and procedures.  However due to time and staff constraints,
      we did not test our controls over financial reporting in accordance with
      COSO standards.  Since we have not completely tested our controls, we
      have determined that our controls over financial reporting were
      ineffective.
 
 Due to
these material weaknesses, management concluded that our internal control over
financial reporting was not effective as of March 31, 2008.
 
 This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting.
 Managements report was not subject to attestation by the Company’s
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management’s
report in this annual report.
 
 (c)
                    REMEDIATION
      PLAN FOR MATERIAL WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL
      REPORTING
  The
Company is in the process of developing and implementing a remediation plan to
address the material weaknesses as described above.  The Company has taken
the following actions to improve internal control over financial
reporting:
  ●
                    During
      the remaining period through the year ending March 31, 2009, we intend to
      devote resources, to properly assess, and remedy if needed, our control
      environment and entity-level
controls.
 
 ●
                    During
      the remaining period through the year ending March 31, 2009, we will
      enhance our risk assessment, internal control design and documentation and
      develop a plan for testing in accordance with COSO
    standards.
 
 ●
                    The
      Company requires that all significant or non-routine adjustments be
      thoroughly researched, analyzed, and documented by qualified personnel,
      and to provide for complete review of the resulting transaction by senior
      management prior to recording the transactions.
 
 ●
                    Develop
      and implement focused other procedures in the internal control
      function.


26
  In light
of the aforementioned material weakness, management conducted a thorough review
of all significant or non-routine adjustments for the year ended March 31, 2008.
 As a result of this review, management believes that there are no material
inaccuracies or omissions of material fact and, to the best of its knowledge,
believes that the consolidated financial statements for the year ended March 31,
2008 fairly present in all material respects the financial condition and results
of operations for the Company in conformity with U.S. generally accepted
accounting principles.


ITEM
      9B.
            OTHER
      INFORMATION




None.




PART
III







ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE
ACT




The
following persons are our executive officers and directors as of the date
hereof:
  Name
              
              Age
              
              PositionEdmond
      Lonergan
              
              62
              
              Chairman,
      President, SecretaryJames
      Marshall
              
              63
              
              Chief
      Financial Officer, DirectorKenneth
      Bennett
              
              49
              
              DirectorEdward
      Miller
              
              65
              
              DirectorPat
      Choate
              
              67
              
              Director
 
 The
following is a brief account of the education and business experience during at
least the past five years of each director, executive officer and key employee,
indicating the principal occupation during that period, and the name and
principal business of the organization in which such occupation and employment
were carried out.
 
 27
  Edmond Lonergan has been our
Chief Executive Officer and a director since March 2006 and the President and
Chief Executive Officer of EMTA Corp. since October 2004. He is also the founder
of and, since 1996, has been active at Corporate Architects, Inc., a Scottsdale,
Arizona-based consulting firm that provides mergers and acquisitions advice to
public and private companies. Corporate Architects has extensive experience in
reverse mergers, investment banking, and business and management consulting.
Prior thereto he was involved in various capacities at a number of companies in
the financial services, electronics and data processing
industries.
 
 James Marshall has been our
Chief Financial Officer since June 2006. Mr. Marshall has held certain
accounting licensure from the states of Arizona, Michigan, California, Illinois
and Florida. Mr. Marshall has been a director of REIT Americas, Inc. since
August 2005 and Chief Financial Officer since March of 2007. He has and
continues to be the chief financial officer for Safepay Solutions, Inc. since
March of 2006. Mr. Marshall was chief financial officer for Bronco Energy Fund,
Inc. from December 2004 through April 2006, and a director and chairman of the
audit committee of Fidelis Energy, Inc. from October 2003 through February 2005.
Mr. Marshall was the founder and chief executive officer of Residential
Resources Mortgage Investments Corporation, RRR AMEX, a mortgage based REIT with
assets in excess of $400 million and a staff of 42. Prior to March 1985, Mr.
Marshall was the National Finance Partner for Kenneth Leventhal & Company
and was Managing Partner of that firms Phoenix Office for five years. Career
experiences include responsibilities for major land acquisitions and
dispositions and their structuring. His audit and tax experience included
publicly-held companies for which Mr. Marshall was responsible for banks,
savings and loan associations, real estate developers, mortgage bankers,
insurance companies, builders and contractors. Mr. Marshall has more than 35
years accounting, audit and tax experience on a wide range of public and private
companies.
  Kenneth Bennetthas been a
director since 2007. From 1998 through 2006 Mr. Bennett was an Arizona State
Senator and President of the Senate during the last four years. He has served on
numerous State committees, the Arizona State Board of Education, Governor’s Task
Force on Education Reform and the Education Leaders Council in Washington, D.C.
Mr. Bennett has been President of Bennett Oil Co. in Prescott Arizona since
1984, a regional fuel distribution company.
 
 Edward A. Miller has been a
director since 2006. Since February 1996, Mr .Miller has been president and
director of DSI Consulting, a business consulting firm in Florida and New
Hampshire. For over forty years, Mr. Miller has served in senior management
roles leading and managing a series of for-profit and not-for-profit
organizations designed to develop, enhance and further the growth, capabilities
and competitiveness of US companies and government agencies involved in the
education, healthcare, environmental, energy, national security and
manufacturing sectors. Mr. Miller’s education was acquired at the Western New
England College where he received his Bachelor of Science degree in Mechanical
Engineering. He has also completed all graduate courseware towards MSEE at the
University of Massachusetts.
 
 Pat Choate has been a director
since May 2006. Pat Choate is a political economist, think tank strategist,
policy analyst, and author who studies U.S. competitiveness and public policy.
Presently, he directs a Washington-based policy institute, the Manufacturing
Policy Project, and teaches Advanced Issues Management at George Washington
University's Graduate School of Political Management. Mr. Choate also co-hosts
the nationally syndicated weekly radio program "The Week Ahead." Since the
beginning in July 2006, Pat has been a nightly newsmaker on a Washington radio
show hour where he discusses the issues of the day with guests in the news and
the call in audience. Mr. Choate has a varied career in the private and public
sectors. His public positions include that of economic advisor to two Governors
of the State of Oklahoma, Commissioner of Economic Development for the State of
Tennessee, and senior positions in the Federal Government at the US Commerce
Department and the Office of Management and Budget. In the 1980’s, Pat Choate
was Vice President for Policy for TRW, a diversified multinational corporation.
Mr. Choate is the author of six books, dozens of monographs, and hundreds of
articles on competitiveness, management, and public policy. Today, he is
Director of the Manufacturing Policy Project, a Washington based public policy
institute. He received
  28
  Board
of Directors
 
 Our
bylaws state that the Board of Directors shall consist of not less than one
person. The specific number of Board members within this range is established by
the Board of Directors and is currently set at three. The terms of all directors
will expire at the next annual meeting of our company's stockholders, or when
their successors are elected and qualified. Directors are elected each year, and
all directors serve one-year terms. Officers serve at the pleasure of the Board
of Directors. There are no arrangements or understandings between our company
and any other person pursuant to which he was or is to be selected as a
director, executive officer or nominee. There are no other persons whose
activities are material or are expected to be material to our company's
affairs.
  The Board
of Directors met three times during fiscal 2008. During that time, each Board
member attended all of the meetings of the Board held during that
period.
  Board
of Directors - Committees
  We have
an Audit Committee and a Compensation Committee.
  Audit Committee. The Audit
Committee, currently consisting of Mr. Miller and Mr. Choate, reviews the audit
and control functions of EMTA Holdings, Inc., the Company’s accounting
principles, policies and practices and financial reporting, the scope of the
audit conducted by our company's auditors, the fees and all non-audit services
of the independent auditors and the independent auditors' opinion and letter of
comment to management and management's response thereto. The Audit Committee was
designated on October 1, 2005 and held two meetings during the fiscal year ended
March 31, 2008.
  Compensation Committee. The
Compensation Committee is currently comprised of two non-employee Board members,
Pat Choate and Edward Miller. The Compensation Committee reviews and recommends
to the Board the salaries, bonuses and prerequisites of our company's executive
officers. The Compensation Committee also reviews and recommends to the Board
any new compensation or retirement plans and administers such plans. No
executive officer of our company serves as a member of the board of directors or
compensation committee of any other entity that has one or more executive
officers serving as a member of our company's Board of Directors or Compensation
Committee. The Compensation Committee held one meeting during the fiscal year
ended March 31, 2008.
  Audit
Committee Financial Expert
  The
Company has a standing Audit Committee that includes two members. Mr. Miller has
been designated as the "Audit Committee Financial Expert," as defined by
Regulation S-K, and is an “independent” director, as defined under the rules of
NASDAQ National Stock Market and the SEC rules and regulations.
 
 Section
16(a) Beneficial Ownership Reporting Compliance
 
 Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
requires our executive officers and directors, and persons who beneficially own
more than ten percent of our common stock, to file initial reports of ownership
and reports of changes in ownership with the SEC. Executive officers, directors
and greater than ten percent beneficial owners are required by SEC regulations
to furnish us with copies of all Section 16(a) forms they file. Based upon a
review of the copies of such forms furnished to us and written representations
from our executive officers and directors, we believe that as of the date of
this filing they were current in their filings.
  29


ITEM
      11.
            EXECUTIVE
      COMPENSATION


The
following table sets forth the compensation of the Company’s Chief Executive
Officer and director and each of the Company’s four other most highly
compensated executive officers during the last three fiscal years of the
Company. The remuneration described in the table does not include the cost to
the Company of benefits furnished to the named executive officers, including
premiums for health insurance and other benefits provided to such individual
that are extended in connection with the conduct of the Company’s
business.
  Summary
  Compensation
Table
  SUMMARY
      COMPENSATION TABLEName
      and Principal Position
                
                Year
                
                Salary
                  ($)
                
                
                Stock
                  Awards
                  ($)(3)
                
                
                Total
                  ($)Edmond
      L. Lonergan, Chief Executive Officer,
                
                2008
                
                $
                116,725
                
                
                $
                144,000
                
                
                $
                260,725President
      and Director, Principle Executive (1)
                
                2007
                
                $
                104,000
                
                
                $
                160,000
                
                
                $
                264,0002006
                
                $
                90,000
                
                
                $
                –
                
                
                $
                90,000James
      C. Marshall, Chief Financial Officer,
                
                2008
                
                $
                78,000
                
                
                $
                48,000
                
                
                $
                126,000Secretary,
      Treasurer and Director, Principle
                
                2007
                
                $
                90,000
                
                
                $
                56,000
                
                
                $
                146,000Accounting
      Officer (2)
                
                2006
                
                $
                –
                
                
                $
                8,000
                
                
                $
                8,000
 ____________
 (1)
                  Includes
      compensation paid by predecessor company, EMTA Corporation, prior to March
      31, 2006 reverse
merger.
 (2)
                    Received
      no compensation prior to 2006 fiscal
year.
 (3)
                      Based
      on fair market value of common stock on date of
    award.
 There
were no outstanding equity awards at the end of the year.
  Compensation
of Directors
  DIRECTOR COMPENSATION
      TABLEName
                
                Fees
      earned or
                  Paid
      in Cash
                  ($)
                
                
                Stock
      Awards
                  ($)
                
                
                Total
                  ($)Pat
      Choate
                
                $
                –
                
                
                $
                6,000
                
                
                $
                6,000Ed
      Miller
                
                $
                –
                
                
                $
                6,000
                
                
                $
                6,000
  30


ITEM
      12.
              SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS ANDMANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
  The
following tables present information, to the best of the Company’s knowledge,
about the beneficial ownership of its common stock on June 30, 2008 relating to
the beneficial ownership of the Company’s common stock by those persons known to
beneficially own more than 5% of the Company’s capital stock and by its
directors and executive officers. The percentage of beneficial ownership for the
following table is based on 60,447,283 shares of common stock
outstanding.
  Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and does not necessarily indicate beneficial ownership for
any other purpose. Under these rules, beneficial ownership includes those shares
of common stock over which the stockholder has sole or shared voting or
investment power. It also includes shares of common stock that the stockholder
has a right to acquire within 60 days through the exercise of any option,
warrant or other right. The percentage ownership of the outstanding common
stock, however, is based on the assumption, expressly required by the rules of
the Securities and Exchange Commission, that only the person or entity whose
ownership is being reported has converted options or warrants into shares of our
common stock.
  Security
Ownership of Certain Beneficial Owners
  Amount
      of
                
                PercentName
      and Address ofBeneficial Owner
                
                Beneficial
      Ownership
                
                of
      Class (1)Michael
      Brannon
                
                6,372,269
                
                10.5%7430
      E. Butherus Dr.Scottsdale,
      AZ 85260Edmond
      Lonergan
                
                5,404,167
                
                8.9%Chairman,
      CEO, President7430
      E. Butherus Dr.Scottsdale,
      AZ 85260T.
      Squared Investments LLC
                
                3,629,400
                
                6.0%1325
      Sixth Avenue, Floor 28New
      York, NY 10019All
      officers and directors as
                
                8,589,167
      (2)
                
                14.2%a
      group (5 persons)
   (1)
                Rounded
      to the nearest tenth of a
percent. (2)
                Includes
      shares beneficially owned by officers and
      directors.
   31
  Security
Ownership of Management
  Amount
      of
                
                PercentName
      andAddress ofBeneficial
      Owner
                
                Beneficial
      Ownership
                
                of Class (1)Edmond
      Lonergan
                
                5,404,167
                
                8.9%Chairman,
      President7430
      E. Butherus Dr.Scottsdale,
      AZ 85260James
      Marshall
                
                1,300,000
                
                2.2%Chief
      Financial Officer7430
      E. Butherus Dr.Scottsdale,
      AZ 85260Kenneth
      Bennett
                
                1,000,000
                
                1.7%Vice
      President and Director7430
      E. Butherus Dr.Scottsdale,
      AZ 85260Edward
      Miller
                
                695,000
                
                1.1%Director7430
      E. Butherus Dr.Scottsdale,
      AZ 85260Pat
      Choate
                
                190,000
                
                0.3%Director7430
      E. Butherus Dr.Scottsdale,
      AZ 85260Total
                
                8,589,167
                
                14.2%
 ____________
 (1)
                  Rounded
      to the nearest tenth of a
percent.


ITEM
      13.
            CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR
  INDEPENDENCE




We have
not been a party to any transaction, proposed transaction, or series of
transactions in which the amount involved exceeds $60,000, and in which, to its
knowledge, any of its directors, officers, five percent beneficial security
holder, or any member of the immediate family of the foregoing persons has had
or will have a direct or indirect material interest except that during 2007,
Michael Brannon loaned the Company $200,000 on a short term note which requires
repayment plus interest.


32


ITEM
      14.
            PRINCIPAL ACCOUNTING FEES AND
      SERVICES




On May
29, 2007, the board of Directors authorized engaging Semple, Marchal &
Cooper, LLP (“SMC”) as the Company’s new independent accountants to audit the
Company’s financial statements for the fiscal year ending March 31,
2007.
  Audit
Fees. The aggregate fees paid for the annual audit of financial statements
included in our Registration Statements including the year ended March 31,
2007 amounted to approximately $53,092 and the review of our quarterly reports
for the year ended March 31, 2008.
  Audit
Related Fees. For the year ended March 31, 2008, we paid $45,000 to SMC for
other audit related fees.
  Tax Fees.
For the years ended March 31, 2007 and March 31, 2008, we paid no fees
to SMC for tax fees.
  All Other
Fees. For the year ended March 31, 2007 and March 31, 2008, we paid no
fees to SMC for any non-audit services.
  The
above-mentioned fees are set forth as follows in tabular form:
  2008
                    
                    
                    2007Audit
      Fees
                    
                    $
                    53,092
                    
                    
                    $
                    47,175Audit
      Related Fees
                    
                    
                    45,000
                    
                    
                    
                    9,625Tax
      Fees
                    
                    
                    -0-
                    
                    
                    
                    -0-All
      Other Fees
                    
                    
                    -0-
                    
                    
                    
                    -0-
  The
members of the Company’s independent Directors of the Board of Directors serves
as the Audit Committee and has unanimously approved all audit and non-audit
services provided by the independent auditors. The independent accountants and
management are required to periodically report to the Board of Directors
regarding the extent of services provided by the independent accountants, and
the fees for the services performed to date. There have been no non-audit
services provided by our independent accountant for the year ended
March 31, 2008.




PART
IV


ITEM
      15.
                EXHIBITS
  The
information required by this Item is set forth in the section of this Annual
Report entitled “EXHIBIT INDEX” and is incorporated herein by
reference.


33


SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) the Registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


EMTA Holdings,
      Inc.Dated: 
       July 14, 2008
                By:
                /s/  Edmond L. LonerganBy: 
      Edmond L. Lonergan
                    Its:
      Chief Executive Officer (Principal Executive Officer) and
      Director


Dated: 
       July 14, 2008
                    By:
                    /s/  James C. MarshallBy:  James
      C. Marshall
                        Its:
      Chief Financial Officer (PrincipalFinancial
      Officer and
                          PrincipalAccounting
      Officer)
  In
accordance with the Exchange Act, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
 Dated: 
       July 14, 2008
                              
                              /s/  Edmond L. LonerganEdmond
      L. Lonergan — Chief Executive Officer and
    Director
 Dated: 
       July 14, 2008
                                        
                                        /s/  James C. MarshallJames
      C. Marshall —Chief
      Financial Officer and
Director
 Dated: 
       July 14, 2008
                                                  
                                                  /s/  Kenneth BennettKenneth
      Bennett —
Director
 Dated: 
       July 14, 2008
                                                            
                                                            /s/  Ed MillerEd
      Miller — Director
 Dated: 
       July 14, 2008
                                                                      
                                                                      /s/  Pat ChoatePat
      Choate —
      Director


34




EXHIBIT
INDEX
 
 Number
              
              Exhibit2.1
              
              Purchase
      and Sale Agreement dated as of January 5, 2007 between Dyson Properties,
      Inc. and ATME Acquisitions, Inc., and wholly owned subsidiary of EMTA
      Holdings, Inc. (2)3.1
              
              Certificate
      of Incorporation (1)3.2
              
              By-Laws
      (1)4.1
              
              Form
      of Callable Secured Convertible Note (1)4.2
              
              Form
      of Stock Purchase Warrant (1)4.3
              
              Amendment
      to Warrant (1)10.1
              
              Agreement,
      dated October 1, 2004, between EMTA Corp. and Corporate Architects, Inc.
      (1)10.2
              
              Agreement,
      dated June 15, 2006, between the Company and James Marshall
      (1)10.3
              
              Securities
      Purchase Agreement, dated April 28, 2006, by and among the Company,AJW
      Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New
      Millennium Capital Partners II, LLC. (1)10.4
              
              Registration
      Rights Agreement, dated April 28, 2006, by and among the Company,AJW
      Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New
      Millennium Capital Partners II, LLC. (1)10.5
              
              Security
      Agreement, dated as of April 28, 2006, by and among the Company,AJW
      Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New
      Millennium Capital Partners II, LLC. (1)10.6
              
              Intellectual
      Property Security Agreement, dated April 28, 2006, by and among the
      Company, AJW Offshore, Ltd., AJW Qualified Partners, LLC, AJW Partners,
      LLC and New Millennium Capital Partners II, LLC. (1)10.7
              
              Amendment
      No. 1 dated August 9, 2006, to Registration Rights Agreement, dated April
      28, 2006, by and among the Company, AJW Offshore, Ltd., AJW Qualified
      Partners, LLC, AJW Partners, LLC and New Millennium Capital Partners II,
      LLC. (1)10.8
              
              Securities
      Purchase Agreement (5)10.9
              
              Registration
      Rights Agreement (5)10.10
              
              Term
      Note Security Agreement (5)10.11
              
              Stock
      Pledge Agreement (5)10.12
              
              Secured
      Term Note (5)10.13
              
              Form
      of Term Note Security Agreement (5)10.14
              
              Form
      of Production Holdings Warrant (5)10.15
              
              Form
      of Exchange Warrant (5)10.16
              
              Form
      of Put Option (5)10.17
              
              Dyson
      Properties, Inc. Amended and Restated Sales/Purchase Agreement dated March
      26, 200710.18
              
              Amendment
      No. 1 to Dyson Properties, Inc. Amended and Restated Sales/Purchase
      Agreement, dated June 26, 200710.19
              
              Amended
      and Restated Secured Term Note between EMTA Production Holdings, Inc.
      and Shelter Island Opportunity Fund, LLC, dated June 30,
    200810.20
              
              Amendment
      to Securities Purchase Agreement by and among Shelter Island Opportunity
      Fund, LLC, EMTA Holdings, Inc., and EMTA Production Holdings, Inc., dated
      June 30, 200810.21
              
              Amended
      and Restated Secured Term Note between EMTA Production Holdings, Inc. and
      Shelter Island Opportunity Fund, LLC, dated December 10, 200710.22
              
              Amendment
      to Securities Purchase Agreement by and among Shelter Island Opportunity
      Fund, LLC, EMTA Holdings, Inc. and EMTA Production Holdings, Inc., dated
      December 10, 200721.1
              
              List
      of Subsidiaries31.1
              
              Officer’s
      Certificate Pursuant to Section 30231.2
              
              Officer’s
      Certificate Pursuant to Section 30232.1
              
              Certification
      Pursuant to Section 90632.2
              
              Certification
      Pursuant to Section 906


(1)
              Filed
      with registrations statement filed August 14, 2006(2)
              Filed
      with Form 8-K filed January 10, 2007(3)
              Filed
      with Form 8-K filed April 9, 2007(4)
              Filed
      with Form 8-K filed June 8, 2007(5)
              Filed
      with Form 8-K filed July 12,
2007




35
 
  Item
8.     Financial Statements and Supplementary
Data
 
 INDEX
 
 PageYears
      Ended March 31, 2008 and 2007Report
      of Independent Registered Public Accounting Firm - Semple, Marchal &
      Cooper,LLP
                
                F-2Consolidated
      Balance Sheets As of March 31, 2008 and 2007
                
                F-3Consolidated
      Statements of Operations For The Years Ended March 31, 2008 and
      2007
                
                F-4Consolidated
      Statement of Stockholders’ (Deficit) For The Years Ended March 31, 2008
      and2007
                
                F-5Consolidated
      Statements of Cash Flows For the Years Ended March 31, 2008 and
      2007
                
                F-6
      –
      F-7Notes
      to Consolidated Financial Statements March 31, 2008 and
    2007
                
                F-8
      – F-23
   F-1
 
  Report
of Independent Registered Public Accounting Firm
  
 To the
Board of Directors and Stockholders of
 EMTA
Holdings, Inc.
  
 We have
audited the accompanying consolidated balance sheet of EMTA Holdings, Inc. as of
March 31, 2008 and March 31, 2007 and the related consolidated statements of
operations, changes in stockholders’ (deficit)/equity, and cash flows for the
years then ended. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of EMTA Holdings, Inc. at March
31, 2008 and March 31, 2007, and the results of its operations, changes in
stockholders’ (deficit)/equity and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company’s significant operating losses
and negative working capital raise substantial doubt about its ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
   /s/
      Semple, Marchal & Cooper, LLPPhoenix,
      ArizonaJuly
      14, 2008
 
 F-2
 EMTA
Holdings, Inc. and Subsidiaries
 Consolidated
Balance Sheets
 March
      31,
                        
                        
                        March
      31,ASSETS
                        
                        2008
                        
                        
                        2007Current
      Assets:Cash
                        
                        $
                        59,544
                        
                        
                        $
                        101,116Accounts
      receivable
                        
                        
                        932,125
                        
                        
                        
                        67,571Notes
      receivable
                        
                        
                        137,500
                        
                        
                        
                        –Inventory
                        
                        
                        416,793
                        
                        
                        
                        586,453Prepaid
      expenses
                        
                        
                        62,849
                        
                        
                        
                        28,304Total
      Current Assets
                        
                        
                        1,608,811
                        
                        
                        
                        783,444Property,
      plant and equipment, net of accumulated depreciation
                        
                        
                        1,786,967
                        
                        
                        
                        2,035,908Other
      Assets:Other
      assets
                        
                        
                        2,351
                        
                        
                        
                        12,156Intangible
      assets
                        
                        
                        633,611
                        
                        
                        
                        760,333Total
      Other Assets
                        
                        
                        635,962
                        
                        
                        
                        772,489Total
      Assets
                        
                        $
                        4,031,740
                        
                        
                        $
                        3,591,841LIABILITIES
      AND STOCKHOLDERS’
      EQUITYCurrent
      Liabilities:Accounts
      payable
                        
                        $
                        815,932
                        
                        
                        $
                        640,852Accrued
      liabilities
                        
                        
                        1,657,416
                        
                        
                        
                        1,396,063Cashless
      warrant liability
                        
                        
                        257,379
                        
                        
                        
                        58,283Notes
      payable and amounts due within one year
                        
                        
                        1,795,398
                        
                        
                        
                        1,989,693Conversion
      share derivative liability
                        
                        
                        –
                        
                        
                        
                        2,305,999Total
      Current Liabilities
                        
                        
                        4,526,126
                        
                        
                        
                        6,390,890Notes
      payable due after one year
                        
                        
                        874,698
                        
                        
                        
                        –Conversion
      share derivative liability
                        
                        
                        2,362,815
                        
                        
                        
                        –Total
      Liabilities
                        
                        
                        7,763,639
                        
                        
                        
                        6,390,890Stockholders'
      EquityPreferred
      Stock, $0.001 par value, 1,000,000 authorized;no
      shares issued and outstanding
                        
                        
                        –
                        
                        
                        
                        –Common
      Stock, $0.001 par value, 250,000,000authorized,
      issued and outstanding 54,885.103and
      40,396,004 at March 31, 2008 and2007,
      respectively
                        
                        
                        54,885
                        
                        
                        
                        40,396Additional
      paid-in capital
                        
                        
                        23,267,228
                        
                        
                        
                        21,764,483Accumulated
      Deficit
                        
                        
                        (27,054,012
                        )
                        
                        
                        (24,603,928
                        )Total
      Stockholders' Equity
                        
                        
                        (3,731,899
                        )
                        
                        
                        (2,799,049
                        )Total
      Liabilities and Stockholders' Equity
                        
                        $
                        4,031,740
                        
                        
                        $
                        3,591,841
  See
accompanying notes to these consolidated financial statements.
  F-3
   EMTA Holdings, Inc.
and Subsidiaries
 Consolidated
Statements of Operations
 
  For
      the year ended March 31,2008
                    
                    
                    2007Revenue:Sales,
      net of returns and allowances
                    
                    $
                    2,769,949
                    
                    
                    $
                    1,053,767Cost
      of sales
                    
                    
                    1,305,328
                    
                    
                    
                    424,929Gross
      Profit
                    
                    
                    1,464,621
                    
                    
                    
                    628,838Operating
      Expenses:Selling,
      general and administrative
                    
                    
                    2,696,507
                    
                    
                    
                    2,931,090Depreciation
      and amortization
                    
                    
                    247,768
                    
                    
                    
                    154,666Allowance
      for bad debts
                    
                    
                    41
                    
                    
                    
                    (15,476
                    )Research
      and development
                    
                    
                    118,546
                    
                    
                    
                    304,793Total
      Operating Expenses
                    
                    
                    3,062,862
                    
                    
                    
                    3,375,073Loss
      From Operations
                    
                    
                    (1,598,240
                    )
                    
                    
                    (2,746,235
                    )Other
      Income and (Expense):Other
      income
                    
                    
                    –
                    
                    
                    
                    12,608Gain/(Loss)
      on disposal of assets
                    
                    
                    –
                    
                    
                    
                    2,850Interest
      expense
                    
                    
                    (851,843
                    )
                    
                    
                    (364,932
                    )Cost
      of curing loan default
                    
                    
                    –
                    
                    
                    
                    (13,960,334
                    )Loss
      before provision for income taxes
                    
                    
                    (2,450,084
                    )
                    
                    
                    (17,056,043
                    )Provision
      for/(Benefit of) income taxes
                    
                    
                    –
                    
                    
                    
                    –Net
      Loss
                    
                    $
                    (2,450,084
                    )
                    
                    $
                    (17,056,043
                    )Earning
      per share:Basic
      loss per share
                    
                    $
                    (0.06
                    )
                    
                    $
                    (0.54
                    )Weighted
      average shares outstanding
                    
                    
                    44,490,994
                    
                    
                    
                    31,410,799
 
 See
accompanying notes to these consolidated financial statements.
 
 F-4
 
  EMTA
Holdings, Inc. and Subsidiaries
 Consolidated
Statements of Stockholders (Deficit)/Equity
 
 Shares
                      
                      
                      Common
      Stock
                      
                      
                      Additional
                        Paid-in
                        Capital
                      
                      
                      Accumulated
                        Deficit
                      
                      
                      TotalBalance
      March 31, 2006
                      
                      
                      31,217,004
                      
                      
                      $
                      31,217
                      
                      
                      $
                      6,742,578
                      
                      
                      $
                      (7,547,885
                      )
                      
                      $
                      (774,090
                      )Fractional
      shares issued on reverse acquisition
                      
                      
                      4,000
                      
                      
                      
                      4
                      
                      
                      
                      (4
                      )Fair
      value of loan cure at cure date
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      13,960,334
                      
                      
                      
                      
                      
                      
                      
                      13,960,334Shares
      issued for acquisition of Dyson Properties, Inc.
                      
                      
                      1,400,000
                      
                      
                      
                      1,400
                      
                      
                      
                      110,600
                      
                      
                      
                      
                      
                      
                      
                      112,000Shares
      issued for services of employees and others
                      
                      
                      7,325,000
                      
                      
                      
                      7,325
                      
                      
                      
                      578,675
                      
                      
                      
                      
                      
                      
                      
                      586,000Shares
      issued on conversion of debt
                      
                      
                      450,000
                      
                      
                      
                      450
                      
                      
                      
                      372,300
                      
                      
                      
                      
                      
                      
                      
                      372,750Net
      loss for the year ended March 31, 2007
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (17,056,043
                      )
                      
                      
                      (17,056,043
                      )Balance
      March 31, 2007
                      
                      
                      40,396,004
                      
                      
                      
                      40,396
                      
                      
                      
                      21,764,483
                      
                      
                      
                      (24,603,928
                      )
                      
                      
                      (2,799,049
                      )Shares
      issued for cash
                      
                      
                      9,050,000
                      
                      
                      
                      9,050
                      
                      
                      
                      1,106,262
                      
                      
                      
                      
                      
                      
                      
                      1,115,312Shares
      issued for services of employees and others
                      
                      
                      4,239,099
                      
                      
                      
                      4,239
                      
                      
                      
                      297,483
                      
                      
                      
                      
                      
                      
                      
                      301,722Shares
      issued on conversion of debt
                      
                      
                      1,200,000
                      
                      
                      
                      1,200
                      
                      
                      
                      99,000
                      
                      
                      
                      
                      
                      
                      
                      100,200Net
      loss for the year ended March 31, 2008
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (2,450,084
                      )
                      
                      
                      (2,450,084
                      )Balance
      March 31, 2008
                      
                      
                      54,885,103
                      
                      
                      $
                      54,885
                      
                      
                      $
                      23,267,228
                      
                      
                      $
                      (27,054,012
                      )
                      
                      $
                      (3,731,899
                      )
 See
accompanying notes to these consolidated financial statements.
  F-5
   EMTA Holdings, Inc. and
Subsidiaries
 Consolidated
Statements of Cash Flows
 
  For
      the year ended March 31,2008
                    
                    
                    2007Cash
      Flows from Operating Activities:Net
      Loss
                    
                    $
                    (2,450,084
                    )
                    
                    $
                    (17,056,043
                    )Adjustments
      to reconcile net loss to net cashused
      by operating activities:Depreciation
      and amortization
                    
                    
                    247,768
                    
                    
                    
                    154,666Loss
      (gain) on sale of assets
                    
                    
                    –
                    
                    
                    
                    (2,850
                    )Bad
      debt provision
                    
                    
                    –
                    
                    
                    
                    (15,476
                    )Cost
      of curing loan default
                    
                    
                    –
                    
                    
                    
                    13,960,334Amortization
      of debt discount
                    
                    
                    295,050
                    
                    
                    
                    224,532Shares
      issued for services
                    
                    
                    289,722
                    
                    
                    
                    84,000Stock
      grants to employees
                    
                    
                    12,000
                    
                    
                    
                    502,000Cashless
      warrant conversion
                    
                    
                    199,096
                    
                    
                    
                    –Changes
      in assets and liabilities, excludingeffects
      of acquisitions:Accounts
      receivable
                    
                    
                    (864,554
                    )
                    
                    
                    58,309Inventories
                    
                    
                    169,660
                    
                    
                    
                    (132,878
                    )Prepaids
                    
                    
                    (34,545
                    )
                    
                    
                    9,731Other
      assets
                    
                    
                    9,805
                    
                    
                    
                    5,219Accounts
      payable
                    
                    
                    175,080
                    
                    
                    
                    (365,585
                    )Accrued
      liabilities
                    
                    
                    261,353
                    
                    
                    
                    108,257Cash
      provided (used) by operating activities
                    
                    
                    (1,689,649
                    )
                    
                    
                    (2,465,784
                    )Investing
      Activities:Capital
      expenditures
                    
                    
                    (12,089
                    )
                    
                    
                    (1,838,608
                    )Acquisitions
      of business
                    
                    
                    (119,760
                    )
                    
                    
                    100,000Note
      receivable
                    
                    
                    (137,500
                    )
                    
                    
                    –Cash
      used by investing activities
                    
                    
                    (269,349
                    )
                    
                    
                    (1,738,608
                    )Financing
      Activities:Net
      borrowings of short term debt
                    
                    
                    1,413,442
                    
                    
                    
                    4,295,692Repayment
      of debt
                    
                    
                    (611,327
                    )
                    
                    
                    –Net
      proceeds from issuance of common shares
                    
                    
                    1,115,312
                    
                    
                    
                    –Net
      cash used by financing activities
                    
                    
                    1,917,427
                    
                    
                    
                    4,295,692Net
      increase (decrease) in cash
                    
                    
                    (41,571
                    )
                    
                    
                    91,300Cash
      at beginning of period
                    
                    
                    101,116
                    
                    
                    
                    9,816Cash
      at end of period
                    
                    $
                    59,544
                    
                    
                    $
                    101,116
 (Continued)
 See
accompanying notes to these consolidated financial statements.
  F-6
  EMTA Holdings, Inc. and
Subsidiaries
 Consolidated
Statements of Cash Flows
 (Continued)
 
  For
      the year ended March 31,2008
                      
                      
                      2007Supplemental
      disclosures of cash flow information:Cash
      paid during the year for:Interest
                      
                      $
                      367,536
                      
                      
                      $
                      70,302Income
      taxes
                      
                      $
                      –
                      
                      
                      $
                      –Non
      Cash Activities:Notes
      payable converted to common stock
                      
                      $
                      (100,200
                      )
                      
                      $
                      (372,750
                      )Common
      stock issued for notes payable
                      
                      
                      1,200
                      
                      
                      
                      450Additional
      paid-in capital from conversion of note payable
                      
                      
                      99,000
                      
                      
                      
                      372,300$
                      –
                      
                      
                      $
                      –
  See
accompanying notes to these consolidated financial statements.
  F-7
 EMTA
Holdings, Inc. and Subsidiaries
 Notes
to Consolidated Financial Statements
 For
the Years Ended March 31, 2008 and 2007
 Note
1 - The Company
 The Company - EMTA
Holdings, Inc. (which is referred to herein together with its subsidiaries as
“Holdings”, ‘the Company”, "we", "us" or "our"), formerly Omni Alliance Group,
Inc., was organized and incorporated in the state of Nevada. On March 31, 2006,
we changed our name from Omni Alliance Group, Inc. to EMTA Holdings, Inc., and
our common stock now trades on the OTC- Bulletin Board market under the trading
symbol "EMHD.OB".
 
 Nature of the
Business - We are a specialty energy conservation chemical company that
produces and supplies technologies to the global transportation, industrial and
consumer markets. These technologies include gasoline, oil and diesel additives
for engines and other transportation-related fluids and industrial
lubricants.
  Acquisitions and
Mergers - Effective January 1, 2007 the Company has acquired Dyson
Properties, Inc. Dyson manufactures and sells automotive racing and performance
oils and lubricants under the name Synergyn Racing and also produces products
under contract to third parties. The Synergyn line established in 1987
compliments the XenTx line and gives EMTA manufacturing and distribution
capabilities from the Synergyn plant in Durant, OK.
  This
acquisition gives the Company the ability to manufacture, bottle and distribute
its products through the Dyson location in Durant OK. We expect to expand
distribution of both product lines through the cross marketing of each other’s
products.
  The
aggregate purchase price is $2,100,000, to be paid in cash and stock. The
initial payment of $100,000 was made on January 9, 2007. An additional $150,000
was paid on the Closing Date, July 5, 2007. The balance of $254,240 will be paid
in July 2008. In addition, on March 26, 2007 the Company issued 1,400,000 shares
of common stock to the seller and the right to 1,400,000 warrants to acquire a
like number of shares on a cashless basis at an exercise price of $0.75 per
share for a period of three years from the Closing Date. In addition, the Seller
will be entitled to a royalty for all sales of the Synergyn products for five
years at a rate of $0.20 per gallon or $0.20 per pound as the case may be, paid
quarterly on the first $600,000 of royalties earned during the royalty term and
$0.10 per gallon or per pound thereafter for the remainder of the royalty
term.  During the year ended March 31, 2008 the purchase price was
adjusted by $119,760 pursuant to the Purchase Agreement
 
 The
purchase price was allocated to the fair market value of assets acquired and
liabilities assumed as follows:
 
 Cash
      and receivables
                    
                    $
                    22,122Inventory
                    
                    
                    129,855Property
      and equipment
                    
                    
                    1,893,151Total
      assets acquired
                    
                    
                    2,045,128Total
      liabilities assumed
                    
                    
                    1,371,112Net
      assets acquired
                    
                    $
                    674,016
 
 F-8
  Continuance
of Operations
  These
consolidated financial statements have been prepared in conformity withU.S.generally
accepted accounting principles applicable to a going concern which contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business. The general business strategy of the Company is
to develop products and operate its sales force and to acquire additional
businesses.   The Company has negative working capital, has incurred
operating losses and requires additional capital to fund development activities,
meet its obligations and maintain its operations. These conditions raise doubt
about the Company's ability to continue as a going concern.  The Company
completed a private offering of its restricted common stock in April 2008 with
the sale of 10,206,000 shares, with net proceeds to the Company of
$1,211,962.  Of this amount, $1,015,312 was received in the fourth quarter
of 2008 and is included in these financial statements.  The Company is in
negotiations to obtain additional necessary capital to complete its regulatory
approvals, expand production and sales and generally meet its business
objectives. The company forecasts that the equity obtained and additional
borrowing capacity will provide sufficient funds to complete its primary
development activities and achieve profitable operations.  Accordingly,
these financial statements do not include any adjustments that might result from
this uncertainty.
  Note
2 - Significant Accounting Policies
 
 Consolidation - The
consolidated financial statements include the accounts of EMTA Holdings, Inc.
and its consolidated subsidiaries and wholly-owned limited liability company.
The financial statements for the year ended March 31, 2007 include the
operations of Dyson Properties, Inc. since December 31, 2006. All significant
intercompany transactions and profits have been eliminated.
   Use of Estimates -
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires the Company to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses, and related disclosure of contingent assets and liabilities. The
more significant estimates relate to revenue recognition, contractual allowances
and uncollectible accounts, intangible assets, accrued liabilities, derivative
liabilities, income taxes, litigation and contingencies. Estimates are based on
historical experience and on various other assumptions that the Company believes
to be reasonable under the circumstances, the results of which form the basis
for judgments about results and the carrying values of assets and liabilities.
Actual results and values may differ significantly from these
estimates.
  Cash Equivalents -
The Company invests its excess cash in short-term investments with various banks
and financial institutions. Short-term investments are cash equivalents, as they
are part of the cash management activities of the company and are comprised of
investments having maturities of three months or less when
purchased.
  Allowance for Doubtful
Accounts -  The
Company provides an allowance for doubtful accounts when management estimates
collectibility to be uncertain. Accounts receivable are continually reviewed to
determine which, if any, accounts are doubtful of collection. In making the
determination of the appropriate allowance amount, the Company considers current
economic and industry conditions, relationships with each significant customer,
overall customer credit-worthiness and historical experience. The allowance for
doubtful accounts was $34,149 at March 31, 2008 and 2007.
  Inventories -
Inventories are stated at the lower of cost or market value. Cost of inventories
is determined by the first-in, first-out (FIFO) method. Obsolete or
abandoned inventories are charged to operations in the period that it is
determined that the items are not longer viable sales products.
 
 Property, Plant, and
Equipment - Plant and equipment are carried at cost. Repair and
maintenance costs are charged against operations while renewals and betterments
are capitalized as additions to the related assets. The Company depreciates its
plant and equipment and computers on a straight line basis. Estimated useful
life of the plant is 39.5 years and the equipment ranges from 3 to
10 years.
 
 F-9
  Intangible Assets -
Intangible assets consist of patents, trademarks and government approvals. For
financial statement purposes, identifiable intangible assets with a defined life
are being amortized using the straight-line method over the estimated useful
lives of the assets. Costs incurred by the Company in connection with patent,
trademark applications and approvals from governmental agencies such as the
Environmental Protection Agency, including legal fees, patent and trademark fees
and specific testing costs, are expensed as incurred. Purchased intangible costs
of completed developments are capitalized and amortized over an estimated
economic life of the asset, generally seven years. commencing on the acquisition
date. Costs subsequent to the acquisition date are expensed as
incurred.
  Impairment of Long-Lived
Assets - In accordance with the Statement of Financial Accounting
Standards No. 144 (“FAS 144”), “Accounting for the Impairment or Disposal
of Long-Lived Assets,” the Company reviews long-lived assets, including, but not
limited to, property and equipment, patents and other assets, for impairment
annually or whenever events or changes in circumstances indicate the carrying
amounts of assets may not be recoverable. The carrying value of long-lived
assets is assessed for impairment by evaluating operating performance and future
undiscounted cash flows of the underlying assets. If the sum of the expected
future cash flows of an asset is less than its carrying value, an impairment
measurement is required. Impairment charges are recorded to the extent that an
asset’s carrying value exceeds fair value. Accordingly, actual results could
vary significantly from such estimates. There were no impairment charges during
the periods presented.
  Fair Value
Disclosures - The carrying values of cash, accounts receivable, deposits,
prepaid expenses, accounts payable and accrued expenses generally approximate
the respective fair values of these instruments due to their current
nature.
  The fair
values of debt instruments for disclosure purposes only are estimated based upon
the present value of the estimated cash flows at interest rates applicable to
similar instruments.
  The
Company generally does not use derivative financial instruments to hedge
exposures to cash flow or market risks. However, certain other financial
instruments, such as warrants and embedded conversion features that are indexed
to the Company’s common stock, are classified as liabilities when either (a) the
holder possesses rights to net-cash settlement or (b) physical or net-share
settlement is not within the control of the Company. In such instances, net-cash
settlement is assumed for financial accounting and reporting, even when the
terms of the underlying contracts do not provide for net-cash settlement. Such
financial instruments are initially recorded at fair value and subsequently
adjusted to fair value at the close of each reporting period.
   Revenue Recognition -
Revenues are recognized at the time of shipment of products to customers, or at
the time of transfer of title, if later, and when collection is reasonably
assured. All amounts in a sales transaction billed to a customer related to
shipping and handling are reported as revenues.
 
 Provisions
for sales discounts and rebates to customers are recorded, based upon the terms
of sales contracts, in the same period the related sales are recorded, as a
deduction to the sale. Sales discounts and rebates are offered to certain
customers to promote customer loyalty and encourage greater product
sales.
 
 Components of Cost of
Sales - Cost of sales is comprised of raw material costs including
freight and duty, inbound handling costs associated with the receipt of raw
materials, contract manufacturing costs, third party bottling and packaging,
maintenance and storage costs, plant and engineering overhead allocation,
terminals and other warehousing costs, and handling costs.
 
 Selling Expenses -
Included in selling and general administrative expenses are the commission
expenses for both employees and outside sales representatives ranging from 1.5%
to 11.5% per dollar of sales. The Company expends significant amounts to
advertise and distinguish its products from those of its competitors through the
use of in-store advertising, printed media, internet and broadcast
media.
 
 F-10
  Research, Testing and
Development - Research, testing and development costs are expensed as
incurred. Research and development expenses, including testing, were $118,546
and $304,793 for the years ended March 31, 2008 and 2007, respectively. Costs to
acquire in-process research and development (IPR&D) projects that have no
alternative future use and that have not yet reached technological feasibility
at the date of acquisition are expensed upon acquisition.
  Income Taxes - We
provide for income taxes in accordance with SFAS No. 109, “Accounting for
Income Taxes.” SFAS No. 109 requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of temporary
differences between the financial statement carrying amounts and the tax bases
of the assets and liabilities.
 
 The
recording of a net deferred tax asset assumes the realization of such asset in
the future; otherwise a valuation allowance must be recorded to reduce this
asset to its net realizable value. The Company considers future pretax income
and, if necessary, ongoing prudent and feasible tax planning strategies in
assessing the need for such a valuation allowance. In the event that the Company
determines that it may not be able to realize all or part of the net deferred
tax asset in the future, a valuation allowance for the deferred tax asset is
charged against income in the period such determination is made. The Company has
recorded full valuation allowances as of March 31, 2008 and 2007.
  Concentrations of Credit
Risks —Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist principally of cash and cash
equivalents and accounts receivable. Although the amount of credit exposure to
any one institution may exceed federally insured amounts, the Company limits its
cash investments to high-quality financial institutions in order to minimize its
credit risk. With respect to accounts receivable, such receivables are primarily
from distributors and retailers located in the United States and foreign
distributors. The Company extends credit based on an evaluation of the
customer's financial condition, generally without requiring collateral. Exposure
to losses on receivables is dependent on each customer's financial
condition.  At March 31, 2008, the amounts due from two foreign
distributors were $745,952, which represents 79.9% of accounts
receivable.
 
 Segment
Information
  We
operate in one industry segment, the development, manufacture and sale of
private and commercial vehicle energy efficient enhancement products. These
products are designed to extend engine life, promote fuel efficiency and reduce
emissions. At March 31, 2008 these products are being marketed by the Company
and sales were predominantly in the United States of America, Canada, Mexico and
Nigeria.
 
 New accounting
pronouncements
  GAAP
Hierarchy
  In
May 2008, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 162, "The Hierarchy of
Generally Accepted Accounting Principles." SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (the
GAAP hierarchy). SFAS No. 162 will become effective 60 days following
the SEC's approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, "The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles." EMTA does not expect the adoption of
SFAS No. 162 to have a material effect on its results of operations and
financial position.
  F-11
  Convertible
Debt
  In
May 2008, the FASB issued Financial Statement Position (FSP) Accounting
Principles Board (APB) 14-1 "Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)." FSP APB 14-1 requires the issuer of certain convertible debt
instruments that may be settled in cash (or other assets) on conversion to
separately account for the liability (debt) and equity (conversion option)
components of the instrument in a manner that reflects the issuer's
non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal
years beginning after December 15, 2008 on a retroactive basis and will be
adopted by EMTA in the first quarter of fiscal 2010. EMTA is currently
evaluating the potential impact, if any, of the adoption of FSP APB 14-1 on
its results of operations and financial position.
  Noncontrolling
Interests
  In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
in Consolidated Financial Statements—an amendment of Accounting Research
Bulletin No. 51." SFAS No. 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to
the noncontrolling interest, changes in a parent's ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS No. 160 is effective for
fiscal years beginning after December 15, 2008 and will be adopted by the Company in the
first quarter of fiscal 2010. We do not expect the adoption of SFAS No. 160
to have a material effect on its results of operations and financial
position.
  Fair
Value Option
  In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities—Including an Amendment of FASB
Statement No. 115," which permits an entity to measure many financial
assets and financial liabilities at fair value that are not currently required
to be measured at fair value. Entities that elect the fair value option will
report unrealized gains and losses in earnings at each subsequent reporting
date. The fair value option may be elected on an instrument-by-instrument basis,
with few exceptions. SFAS No. 159 amends previous guidance to extend the
use of the fair value option to available-for-sale and held-to-maturity
securities. The statement also establishes presentation and disclosure
requirements to help financial statement users understand the effect of the
election. This statement is effective for fiscal years beginning after
November 15, 2007. EMTA does not expect the adoption of SFAS No. 159
to have a material effect on its results of operations and financial
position.
  Fair
Value Measurements
  In
September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. This statement applies under other
accounting pronouncements that require or permit fair value measurement where
the FASB has previously determined that under those pronouncements fair value is
the appropriate measurement. This statement does not require any new fair value
measurements but may require companies to change current practice. This
statement is effective for fiscal years beginning after November 15, 2007.
EMTA does not expect the adoption of SFAS No. 157 to have a material effect
on its results of operations and financial position.
  Defined
Benefit Pension and Other Postretirement Plans
  In
September 2006, the FASB issued SFAS No. 158, "Employers' Accounting
for Defined Benefit Pension and Other Postretirement Plans." SFAS No. 158
requires employers to fully recognize the obligations associated with
single-employer defined benefit pension, retiree healthcare, and other
postretirement plans in their financial statements. The effect of adopting SFAS
No. 158 on EMTA's financial statements at March 31, 2007 and 2008 has no
effect on the Company.
  F-12
  Split-Dollar
Life Insurance Arrangements
  In
September 2006, the Emerging Issues Task Force (EITF) reached consensus on
EITF Issue No. 06-4, "Accounting for Deferred Compensation and
Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements." The scope of EITF No. 06-4 is limited to the recognition of
a liability and related compensation costs for endorsement split-dollar life
insurance arrangements that provide a benefit to an employee that extends to
postretirement periods. EITF No. 06-4 is effective for fiscal years
beginning after December 15, 2007. We adopted EITF No. 06-4 early, in
fiscal 2008, and its adoption did not have an impact on EMTA’s results of
operations or financial position.
  Income Taxes
  In
June 2006, the FASB issued FASB Interpretation (FIN) No. 48,
"Accounting for Uncertainty in Income Taxes," which supplements SFAS
No. 109, "Accounting for Income Taxes,' and is effective for fiscal years
beginning after December 15, 2006. FIN 48 clarifies the accounting for
uncertainties in income taxes recognized in accordance with SFAS 109 by
prescribing guidance for the recognition, de-recognition, and measurement in
financial statements of income tax positions taken in previously filed tax
returns or tax positions expected to be taken in tax returns, including a
decision whether to file or not to file in a particular jurisdiction.
FIN 48 requires that any liability created for unrecognized tax benefits be
disclosed. The application of FIN 48 may also affect the tax bases of
assets and liabilities and therefore may change or create deferred tax
liabilities or assets.
  On March
31, 2007, we adopted the provisions of FIN 48. There was no material impact
to EMTA of adopting FIN 48.
  Life
Insurance Policies
  In
March 2006, the FASB issued FSP No. FTB 85-4-1, "Accounting for Life
Settlement Contracts by Third Party Investors." FSP FTB 85-4-1 provides for
a contract-by-contract irrevocable election to account for life settlement
contracts on either a fair value basis, with changes in fair value recognized in
the condensed consolidated statements of operations, or through use of the
investment method. Under the investment method, the initial investment and
continuing costs are capitalized; however, no income is recognized until the
death of the insured party. The guidance of FSP FTB 85-4-1 will be
effective for fiscal years beginning after June 15, 2006. EMTA adopted FSP
FTB 85-4-1 as of the beginning of fiscal 2008, and its adoption did not
have an impact on EMTA’s results of operations or financial
position.
  In
September 2006, the EITF reached a conclusion on EITF Issue No. 06-5,
"Accounting for Purchases of Life Insurance—Determining the Amount That Could Be
Realized in Accordance with FASB Technical Bulletin No. 85-4, "Accounting
for Purchases of Life Insurance." The scope of EITF No. 06-5 consists of
three separate issues relating to accounting for life insurance policies
purchased by entities protecting against the loss of "key persons." The three
issues are clarifications of previously issued guidance on FASB Technical
Bulletin No. 85-4. EMTA adopted EITF No. 06-5 as of the beginning of
fiscal 2008, and its adoption did not have a material impact on EMTA’s results
of operations or financial position.
   Litigation - The
Company is and may become a party in routine legal actions or proceedings in the
ordinary course of its business. The Company is a defendant in one case for the
payment of advertising costs in which the Company does not believe that the
services were adequately performed. Management does not believe that the outcome
of these routine matters will have a material adverse effect on the Company's
consolidated financial position or results of operations.
  F-13
  Environmental —The
Company's operations are subject to extensive federal, state and local laws,
regulations and ordinances in the United States relating to the generation,
storage, handling, emission, transportation and discharge of certain materials,
substances and waste into the environment, and various other health and safety
matters. Governmental authorities have the power to enforce compliance with
their regulations, and violators may be subject to fines, injunctions or both.
The Company must devote substantial financial resources to ensure compliance,
and it believes that it is in substantial compliance with all the applicable
laws and regulations.
  Note
3 - Inventories
 
 Inventory
consists of finished goods, work in process and raw material as follows:
  March
      31,
                      2008
                    
                    
                    March
      31,
                      2007Finished
      goods
                    
                    $
                    340,087
                    
                    
                    $
                    471,173Raw
      material
                    
                    
                    76,706
                    
                    
                    
                    115,280$
                    416,793
                    
                    
                    $
                    586,453
  Note 4 - Property, Plant and
Equipment
 
 At March
31, 2008 and 2007 equipment and computers consisted of the
following:
 
 March
      31,
                      2008
                    
                    
                    March
      31,
                      2007Property
      and plant
                    
                    $
                    1,442,401
                    
                    
                    $
                    1,467,729Equipment
      and computers
                    
                    
                    518,504
                    
                    
                    
                    600,845Less
      accumulated depreciation
                    
                    
                    (173,938
                    )
                    
                    
                    (32,666
                    )Net
      equipment and Computers
                    
                    $
                    1,786,967
                    
                    
                    $
                    2,035,908
  During
the years ended March 31, 2008 and 2007 depreciation and amortization expense
was $121,046 and $27,943, respectively.
  During the year
the carrying value of assets acquired from Dyson were reduced by $119,760 in
accordance with the Purchase Agreement.
 
 Note
5 - Intangible Assets
 
 Intangible
assets consist of technology of production and license rights under the
Environmental Protection Agency to market one of the products acquired in the
acquisition of White Sands, L.L.C. on March 31, 2006. The Company intends to
market the related products as soon as production and marketing strategies can
be completed. The Company is amortizing this investment over its estimated
useful life of seven years on a straight line basis. For the year ended March
31, 2008 and March 31, 2007 amortization was $126,722 in each year.
  F-14
   Note
6 - Accrued Liabilities
 
 Accrued
liabilities consist of the following as of March 31, 2008 and 2007:
  March
      31,
                      2008
                    
                    
                    March
      31,
                      2007Accrued
      marketing and advertising
                    
                    $
                    300,000
                    
                    
                    $
                    300,000Accrued
      reimbursement to product testing partner
                    
                    
                    978,151
                    
                    
                    
                    978,151Accrued
      interest
                    
                    
                    288,046
                    
                    
                    
                    98,788Other
                    
                    
                    91,219
                    
                    
                    
                    19,124$
                    1,657,416
                    
                    
                    $
                    1,396,063
  As part
of our testing of products and new applications the Company agreed to reimburse
one of our testing partners for the costs incurred in such testing.
 
 Note
7 - Notes and Contracts Payable
  Bank
      Loans, payable in installments
                    
                    $
                    287,943Mortgage
      Loan Payable, monthly payments of principal and interest at 3 month LIBOR
      plus 4.7%. (1)
                    
                    
                    807,062Payments
      due seller of Dyson
                    
                    
                    254,240Loan
      from Dyson
                    
                    
                    35,000Notes
      payable
                    
                    
                    1,027,851Loans
      from individuals, due within one year
                    
                    
                    258,0002,670,096Less
      amounts due within one year
                    
                    
                    1,795,398Amounts
      due after one year
                    
                    $
                    874,698
  (1)
                        In
      conjunction with the acquisition of Dyson, the mortgage became payable as
      a result of the change of control of that company. The Company is in the
      process of refinancing the
property.
  Bank
Loans consist of two loans that became due in the first quarter of 2009; these
loans are secured by receivables, inventory and equipment in Durant,
Oklahoma.  The Company is working to replace these loans. The
Mortgage Loan Payable has matured as a result of the change in control of the
operations in Durant.  The Company continues to make principal and
interest payments while the Company obtains a replacement loan on the
property.  Interest is reset quarterly at Libor + 4.7%.
 
 The
amounts due sellers bear interest at a rate of 8.0% and is due in July,
2008.
 
 Notes
payable include Amounts due after one year conists of the the loan from
Shelter Island Opportunity Fund with interst at 12.25% per annum and secured by
the plant and equipment in Durant, Oklahoma.  Maturities for the
remainder of the loan are as follows:
  2009
                          
                          $
                          125,3992010
                          
                          $
                          217,4002011
                          
                          $
                          657,298
 F-15
  The
balance of the notes payable consist of commercial loans of a vehicles and
equipment in the normal course of business.
  The Loans
from individuals includes three loans are all due within one year and bear
intersest from 9% to 12%.
 Note 8
- Income Taxes
 
 Through
March 31, 2008, we recorded a valuation allowance of $4,610,750 against deferred
income tax assets primarily associated with tax loss carry forwards. Our
significant operating losses experienced in prior years establishes a
presumption that realization of these income tax benefits does not meet a “more
likely than not” standard.
  We have
net operating loss carry forwards of approximately $11,960,771. Our net
operating loss carry forwards will expire between 2025 and 2028.
  Significant
components of our deferred tax assets and liabilities at the balance sheet dates
were as follows:
  March
      31,2008
                    
                    2007Deferred
      Tax Assets and LiabilitiesDeferred
      tax assets:Net
      operating loss carryforwards
                    
                    $
                    4,594,546
                    
                    
                    $
                    3,725,691Allowance
      for doubtful accounts
                    
                    
                    16,204
                    
                    
                    
                    16,187Total
                    
                    
                    4,610,750
                    
                    
                    
                    3,741,878Less:
      Valuation allowance
                    
                    
                    (4,610,750
                    )
                    
                    
                    (3,741,878
                    )Total
      deferred tax assets
                    
                    
                    –
                    
                    
                    
                    –Total
      deferred tax liabilities
                    
                    
                    –
                    
                    
                    
                    –Net
      deferred tax liabilities
                    
                    $
                    –
                    
                    
                    $
                    –
  A reconciliation of the federal statutory rate
to the effective tax rate is as follows:
  Fiscal
      Years Ended March 31,2008
                    
                    2007ReconciliationIncome
      tax credit at statutory rate
                    
                    $
                    (765,364
                    )
                    
                    $
                    (1,043,248
                    )Effect
      of state income taxes
                    
                    
                    (103,508
                    )
                    
                    
                    (129,164
                    )Valuation
      allowance
                    
                    
                    868,872
                    
                    
                    
                    1,172,412Income
      taxes (credit)
                    
                    $
                    –
                    
                    
                    $
                    –
  Future
realization of the net operating losses is dependent on generating sufficient
taxable income prior to their expiration. Tax effects are based on a 34% Federal
income tax rate. The net operating losses expire as follows:
  AmountExpiration2025
                    
                    $
                    1,524,5412026
                    
                    
                    5,132,2982027
                    
                    
                    3,052,9022028
                    
                    
                    2,251,030Total
      net operating loss available
                    
                    $
                    11,960,771
 
 F-16
  Note
9 - Convertible Debt and Conversion Share Derivative Liability
  The
Company entered into a Convertible Loan Agreement which entitled the lenders to
warrants and convert the loans at their option to common stock of the Company.
The face value of the Convertible Notes, 6%, interest quarterly to March 31,
2008 was as follows:
 
 Maturity
                    
                    Amount
                    
                    
                    Exercised
                    
                    
                    BalanceApril
      28, 2009
                    
                    $
                    414,894
                    
                    
                    $
                    100,200
                    
                    
                    $
                    314,694August
      17, 2009
                    
                    
                    648,563
                    
                    
                    
                    –
                    
                    
                    
                    648,563October
      28, 2009
                    
                    
                    297,398
                    
                    
                    
                    –
                    
                    
                    
                    297,398November
      10, 2009
                    
                    
                    1,102,160
                    
                    
                    
                    –
                    
                    
                    
                    1,102,160Total
                    
                    $
                    2,463,015
                    
                    
                    $
                    100,200
                    
                    
                    $
                    2,362,815
  The
lenders were issued warrants to purchase 7,000,000 shares of common stock at an
exercise price of $2.50 per share. The Company also issued warrants to a broker
in the transaction for the exercise of 700,000 shares of common stock at an
exercise price of $2.50. These warrants expire if not exercised at various dates
in 2013 through November 10, 2013. All of the 7,700,000 warrants have been
issued entitling the lender to one share for each warrant at an exercise price
of $2.50 per share.
 
 The
agreements include registration rights and certain other terms and conditions
related to share settlement of the embedded conversion features and the
warrants. In this instance, EITF 00-19, “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”,
requires allocation of the proceeds between the various instruments and the
derivative elements carried at fair values.
 
 As a
result of the Company not having filed the registration statement within 30 days
of the execution of the loan agreement, the parties agreed that the Company
would issue warrants to purchase an additional 5,000,000 shares of the Company’s
common stock at $2.50 per share. The warrants expire if not exercised on August
10, 2013. These warrants were issued to cure the default that occurred on June
28, 2006 and was executed on August 10, 2006. The Company recorded the fair
value of these warrants as loan default costs as of June 28, 2006.
 
 Note 10
- Commitments and contingencies
  Concentration of Credit
Risk
 
 Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist of cash. The Company periodically evaluates the credit worthiness
of financial institutions, and maintains cash accounts only in large high
quality financial institutions, thereby minimizing exposure for deposits in
excess of federally insured amounts.
  F-17
  Lease
Commitments
 
 The
Company has a lease agreement for office space in Scottsdale, Arizona. The
remaining lease commitment is for 3 years with annual payments as
follows:
  2009
                    
                    $
                    75,7932010
                    
                    
                    78,0672011
                    
                    
                    80,4092012
                    
                    
                    6,717$
                    240,986
  Note
11 - Accounting for derivative financial instruments
 
 In April
29, 2006, the Company entered into an agreement whereby it would issued 6%
secured convertible notes in the aggregate principal amount of $3,000,000 which
are convertible into common shares of the Company at the lender’s option based
on a rate of 50% of the then current market price at the time of the conversion
election. The Company has the right at any time that the stock is trading below
$5.00 per share to call the notes at a prepayment premium of 130% of the
outstanding balance. The Company has reserved a sufficient number of its common
shares to meet these obligations.
  The
consolidated financial statements for the year ended March 31, 2007 has
recognize all features of the derivative financial instruments including the
host instruments, the embedded conversion features and the free-standing
warrants in accordance with Statement of Financial Accounting Standards No. 133,
“Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) and
EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company’s Own Stock” (“EITF 00-19”).
  Host instrument:
  The
proceeds from each financing arrangement were allocated to the various elements
of the financing resulting in discounts to the face values of the debt
instruments. These discounts were then amortized over the debt terms (in all
instances three-years) using the effective interest method.
  Free-standing
warrants:
  Proceeds
from the financing were allocated to the fair value of the warrants issued using
the binomial model. These instruments will be carried as additional paid in
capital, and their carrying values will not be adjusted to fair value at the end
of each subsequent reporting period.
  Free
standing instruments, consisting of warrants, are valued using the binomial
model valuation methodology because that model embodies all of the relevant
assumptions that address the features underlying these instruments.
 
 F-18
  Significant
assumptions included in this model as of March 31, 2008 are as follows:
  Original
                    
                    
                    DefaultWarrants
                    
                    
                    WarrantsExercise
      price
                    
                    $
                    2.50
                    
                    
                    $
                    2.50Shares
      subject to exercise
                    
                    
                    7,000,000
                    
                    
                    
                    5,000,000Weighted
      Average Term Remaining (years)
                    
                    
                    5.41
                    
                    
                    
                    5.25Volatility
                    
                    
                    115.8
                    %
                    
                    
                    115.8
                    %Risk-free
      rate
                    
                    
                    1.55-2.46
                    %
                    
                    
                    1.55-2.46
                    %Implied
      value
                    
                    $
                    945,809
                    
                    
                    $
                    658,123Recorded
      value
                    
                    $
                    –
                    
                    
                    $
                    13,960,334
  The value
of the original warrants was limited by the net loan amounts and debt conversion
value after issue costs.
  Embedded
conversion features:
  Each
hybrid instrument was analyzed in accordance with the guidance in SFAS 133 for
features that possessed the characteristics of derivative instruments. Those
instruments whose economic characteristics and risks of the embedded derivative
instrument were not “clearly and closely related” to the host instrument were
bifurcated and treated as derivatives under the guidance of SFAS 133 and
recorded at fair value with adjustments to fair value at the end of each
subsequent reporting period. This resulted in the conversion feature being
recorded as an embedded derivative at each loan funding date, April 29, 2006,
August 17, 2006, October 28, 2006 and November 10, 2006.
 
 Summary:
  As a
result of the above at March 31, 2008 the balances were as follows:
 
 Liability
                    
                    
                    ExpenseOriginal
      Warrants
                    
                    $
                    –
                    
                    
                    $
                    –Conversion
      feature
                    
                    
                    2,362,815
                    
                    
                    
                    296,944Total
                    
                    $
                    2,362,815
                    
                    
                    $
                    296,944
 
 F-19
  Note 12
- Company Stock
  Preferred
Stock
 
 At March
31, 2008 and 2007, the Company had 1,000,000 shares of $0.001 par value
authorized and no outstanding or issued shares.
 
 Common
Stock
 
 At March
31, 2008 and 2007, the Company had 250,000,000 shares authorized of $0.001 par
value common stock, of which issued and outstanding shares were 54,885,103 and
40,396,004, respectively.
 
 Warrants
 
 In
conjunction with four fundings during the year ended March 31, 2007, the Company
issued 7,000,000 warrants at an exercise price of $2.50 per share and 5,000,000
warrants to cure a default caused by late filing of the registration statement
with the Securities and Exchange Commission and 700,000 cashless warrants to the
broker that brought the loan packages to the Company. All of these warrants
expire seven years from issue.
 
 Also, the
Company issued 1,400,000 cashless warrants to the seller in conjunction with the
acquisition of Dyson Properties, Inc. that expire three years from
issue.
 
 During
the year ended March 31, 2008 the Company issued 5,775,000 warrants at an
exercise price of $0.75 per share and 519,750 shares cashless warrants at an
exercise price of $0.75 for a period of 5 years in conjunction with a loan
funding in June of 2007.  The Company also issued warrants to purchase
500,000 shares at an exercise price of $0.75 for a term of two years in
conjunction with the investors purchase of common stock.
 
 At March
31, 2008 the status of outstanding warrants is as follows:
  Issue
    Date
                    
                    Shares
      Exercisable
                    
                    Weighted
      Average
                      Exercise
      Price
                    
                    Expiration
      DateSeptember
      27, 2005
                    
                    450,000
                    
                    $
                    2.50
                    
                    September
      26,2010April
      29, 2006
                    
                    1,866,667
                    
                    $
                    2.50
                    
                    April
      28, 2013June
      28, 2006
                    
                    5,000,000
                    
                    $
                    2.50
                    
                    August
      10, 2013August
      17, 2006
                    
                    1,633,333
                    
                    $
                    2.50
                    
                    August
      17, 2013October
      28, 2006
                    
                    700,000
                    
                    $
                    2.50
                    
                    October
      28, 2013November
      10, 2006
                    
                    2,800,000
                    
                    $
                    2.50
                    
                    November
      10, 2013May
      21, 2007
                    
                    500,000
                    
                    $
                    .75
                    
                    May
      20, 2009July
      1, 2007
                    
                    5,775,000
                    
                    $
                    .75
                    
                    June
      30, 2012Cashless
      April 20-November 10, 2006
                    
                    700,000
                    
                    $
                    2.50
                    
                    April
      29 - November10,
      2015Cashless
      March 26, 2007
                    
                    1,400,000
                    
                    $
                    .75
                    
                    March
      26, 2010Cashless
      July 1, 2007
                    
                    519,750
                    
                    $
                    .75
                    
                    June
      30, 2012
  The warrants
have no intrinsic value at March 31, 2008.
 
 F-20
  Stock
Options
  At
March 31, 2008, the Company had one stock option plan under which grants
were outstanding. The stock options outstanding are for grants issued under the
Company’s 2007 Stock Incentive Plan.
  The
2007 Stock Incentive Plan
  During
the fiscal year ended March 31, 2008, the Company adopted a stock option
plan, entitled the “2007 Incentive Plan” (the “2007 Plan”), under which the
Company may grant options to purchase up to 20,000,000 shares of common
stock.
  The 2007
Plan is are administered by the Board of Directors or a Committee of the Board
of Directors which has the authority to determine the persons to whom the
options may be granted, the number of shares of common stock to be covered by
each option grant, and the terms and provisions of each option grant. Options
granted under the 2007 Plan may be incentive stock options or non-qualified
options, and may be issued to employees, consultants, advisors and directors of
the Company and its subsidiaries. The exercise price of options granted under
the 2007 Plan may not be less than the fair market value of the shares of common
stock on the date of grant, and may not be granted more than ten years from the
date of adoption of the plan or exercised more than ten years from the date of
grant.
  The
following table sets forth the Company’s stock option activity during the year
ended March 31, 2008:
  Shares
                      Underlying
                      Options
                    
                    Weighted
                      Average
                      Exercise
                      Price
                    
                    Weighted
                      Average
                      Remaining
                      Contractual
                      Life
                    
                    Aggregate
                      Intrinsic
                      ValueOutstanding
      at March 31, 2007
                    
                    –
                    
                    $
                    –
                    
                    –
                    
                    –Granted
                    
                    5,415,000
                    
                    $
                    .20
                    
                    3.0
                    
                    –Exercised
                    
                    –
                    
                    
                    –
                    
                    –
                    
                    –Canceled
                    
                    –
                    
                    
                    –
                    
                    –
                    
                    –Outstanding
      at March 31, 2008
                    
                    5,415,000
                    
                    $
                    .20
                    
                    3.0
                    
                    –Exercisable
      at March 31, 2008
                    
                    –
                    
                    $
                    –
                    
                    –
                    
                    –
  F-21
  The following table sets
forth the status of the Company’s non-vested stock options as of March 31,
2008:
  Number of
                      Options
                    
                    
                    Weighted-Average
                      Grant-Date
                      Fair
      ValueNon-vested
      as of March 31, 2007
                    
                    
                    0
                    
                    
                    $
                    –Granted
                    
                    
                    5,415,000
                    
                    
                    
                    .11Forfeited
                    
                    
                    (0
                    )
                    
                    
                    –Vested
                    
                    
                    (0
                    )
                    
                    
                    –Non-vested
      as of March 31, 2008
                    
                    
                    5,415,000
                    
                    
                    $
                    .11
  During
the year ended March 31, 2008, the Company granted options to purchase an
aggregate of 5,415,000 shares of common stock to employees, directors and
consultants for services to be provided. These options are exercisable at $0.20
per share, and vest one third on October 1, 2008, April 1, 2009 and October 1,
2009 with an expiration of three years from the date of grant for all options.
The Company has valued these at their fair value on the date of grant using the
Hull-White enhanced option-pricing model.
  Unrecognized
stock-based compensation expense related to the unvested options is
approximately $610,548 and will be recorded over the vesting periods of 18
months. This estimate is based on the number of unvested options currently
outstanding and could change based on the number of options granted or forfeited
in the future.  These options have no intrinsic value at March 31,
2008.
  The
assumptions used in calculating the fair value of stock-based payment awards
represent management’s best estimates.
  The
Company based its expected volatility on the historical volatility of similar
companies with consideration given to the expected life of the award. The
Company intends to continue to consistently use this method until sufficient
market acceptance of its stock has reached a stable level.
  The
risk-free interest rate used for each grant is equal to the U.S. Treasury yield
in effect at the time of grant for instruments with a similar expected
life.
  The
expected term of options granted was determined based on the historical exercise
behavior of similar peer groups.
  The
Company has never declared or paid a cash dividend, and has no current plans to
pay a cash dividend in the future.
  SFAS
123(R) also requires that the Company recognize compensation expense for only
the portions that are expected to vest. Therefore, the Company has estimated
expected forfeitures of stock options with the adoption of SFAS 123(R). In
developing a forfeiture rate estimate, the Company considered its historical
experience. If the actual number of forfeitures differs from those estimated by
management, additional adjustments to compensation expense may be required in
future periods.
  F-22
  The fair
value of options were estimated at the date of grant with the following
weighted-average assumptions for the fiscal years ended March 31,
2008:
  2008Risk
      Free Interest Rate
                    
                    
                    1.79
                    %Expected
      Life
                    
                    3.0 yearsExpected
      Volatility
                    
                    
                    116
                    %Expected
      Dividend Yield
                    
                    
                    0
                    %
  The per
share weighted average fair value of stock options granted for the fiscal year
ended March 31, 2008 was $0.11.
  Note 13
- Earnings (Loss) Per Share
 
 Basic
income (loss) per common share is computed by dividing the results of operations
by the weighted average number of shares outstanding during the period. For
purposes of the determining the number of shares outstanding the shares received
by the acquirer in the reverse acquisition are treated as outstanding for all
periods prior to the transaction.
 
 Diluted
income (loss) earnings per common share adjusts basic income (loss) per common
share for the effects of convertible securities, stock options, warrants and
other potentially dilutive financial instruments only in periods in which such
effect is dilutive. No instruments were dilutive at March 31, 2008 or
2007.
 
 Note
14 – Subsequent Events
 
 Sales of
unregistered common stock – Subsequent to March 31, 2008 the Company completed
the remainder of the offering and issued an additional 1,656,000 shares of
common stock for gross proceeds of $207,000.
 
 Issuance
of shares for future services – In conjunction with consulting contracts to
third parties the company issued 3,600,000 shares of restricted common stock.
The contracts are for one and two years.
 
 The
company issued 300,000 shares of its restricted common stock in conjunction with
the evaluation of a possible acquisition target.
  
 F-23