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| (Mark      one)                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| [X]           Quarterly      report under Section 13 or 15(d) of the Securities Exchange Act of      1934                         |
|                                                                                                                                                       |
| For      the quarterly period ended March 31, 2007                                                                                                                                  |
|                                                                                                                                                       |
| [   ]           Transition      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934 |
|                                                                                                                                                       |
| For      the transition period from ___________ to  ____________                                                                                                                         |
|                                                                                                                                                       |
| Commission      File Number:  0-11582                                                                                                                                          |
|                                                                                                                                                       |
| AUTO UNDERWRITERS OF      AMERICA, INC. (Exact      Name of Small Business Issuer as Specified in its    Charter)                                                                        |
|                                                                                                                                                       |
| California (State      or Other Jurisdiction of  Incorporation      or Organization)                                                                                                     | 94-2915849 (IRS      Employer  Identification      No.) |
|                                                                                                                                                       |
| 2670      South White Road  Suite      241 San Jose, CA      95148 (Address      of Principal Executive Offices)                                                                         | (408)      270-3587 (Issuer’s      Telephone Number) |
|                                                                                                                                                       |
| (Former      Name, Former Address and Former Fiscal Year, if Changed Since Last      Report)                                                                                             |

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| AUTO      UNDERWRITERS OF AMERICA, INC.   TABLE      OF CONTENTS |
|-----------------------------------------------------------------------|

|                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | PAGE                                                                                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                                                 |                     |
| PART I.                                                                                                                                    | FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                               |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 1.                                                                                                                                    | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                               |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
|                                                                                                                                       | Balance      Sheets as of March 31, 2007 and June 30, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3                                                                                                                  |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
|                                                                                                                                       | Statements of Operations for the Three and Nine Months Ended      March 31, 2007and 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 4                                                                                                                  |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
|                                                                                                                                       | Statements of Cash Flows for the Nine Months Ended March 31,      2007 and 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 5                                                                                                                  |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
|                                                                                                                                       | Notes      to Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 6      – 15                                                                                                  |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 2.                                                                                                                                    | Management’s Discussion and Analysis of Financial      Condition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 16      – 18                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 3.                                                                                                                                    | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 19                                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| PART II.                                                                                                                                   | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                               |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 1.                                                                                                                                    | Legal      Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 21                                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 2.                                                                                                                                    | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 22                                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 3.                                                                                                                                    | Default Upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 22                                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 4.                                                                                                                                    | Submission of Matters to a Vote of Security      Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 23                                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 5.                                                                                                                                    | Other      Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 23                                                                                                                 |
|                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                               |
| Item 6.                                                                                                                                    | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 23                                                                                                                 |

----

 Part I 

 Item 1 

 Auto 

|                                                                                      |   | March      31, 2007 |       |   | June      30, 2006 |   |
|-------------------------------------------------------------------------------------------|--------|---------------------|------------|--------|--------------------|--------|
| Assets:                                                                              |   | (RESTATED)          |       |   |               |   |
| Cash      and cash equivalents                                                            |   | $                   | 503,672    |   |               | $      | 4,161 |   |
| Finance      receivables, net of allowance $2,304,803 and $2,417,300,      respectively   |   |                | 8,298,184  |   |               |   | 8,430,105 |   |
| Other      receivables                                                                    |   |                | 71,368     |   |               |   | 47,022 |   |
| Inventory                                                                                 |   |                | 966,191    |   |               |   | 285,135 |   |
| Fixed      assets, net of accumulated depreciation $92,161 and $33,668,      respectively |   |                | 117,017    |   |               |   | 138,152 |   |
| Prepaid      and other assets                                                             |   |                | 22,415     |   |               |   | 63,502 |   |
| Deferred      financing costs                                                             |   |                | 52,361     |   |               |   | 261,595 |   |
| Total      assets                                                                         |   | $                   | 10,031,208 |   |               | $      | 9,229,672 |   |

|                                                       |   |   |       |   |   |   |
|------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Liabilities      and stockholders’ equity (deficit): |   |   |       |   |   |   |
| Accounts      payable and accrued liabilities              |   | $      | 872,177    |   |   | $      | 1,048,670 |   |
| Drafts      payable and floor plan liabilities             |   |   | 823,080    |   |   |   | - |   |
| Dividends      payable                                     |   |   | 36,555     |   |   |   | - |   |
| Other      notes payable                                   |   |   | 481,349    |   |   |   | 2,590,695 |   |
| Senior      debts - revolving line of credit               |   |   | 9,068,896  |   |   |   | 9,013,025 |   |
| Deferred      sales tax                                    |   |   | 891,883    |   |   |   | 794,990 |   |
| Advances      from related parties                         |   |   | 673,846    |   |   |   | 677,794 |   |
| Total      liabilities                                     |   |   | 12,847,786 |   |   |   | 14,125,174 |   |
|                                                       |   |   |       |   |   |   |   |   |
| Commitments      and contingencies                         |   |   | -          |   |   |   | - |   |

| Stockholders’      equity/(deficit):                                                                                  |   |   |        |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Preferred      stock: no par value: 10,000,000 authorized, 1,515,020 issued and      outstanding                            |   |   | 3,232,455   |   |   |   | - |   |
| Common      stock: no par value: 100,000,000 authorized, issued and outstanding: 7,040,575      and 6,020,053, respectively |   |   | 10,012,656  |   |   |   | 5,768,364 |   |
| Retained      deficit                                                                                                       |   |   | (16,061,689 | )      |   |   | (10,663,866 | ) |
| Total      stockholders’ equity/(deficit)                                                                             |   |   | (2,816,578  | )      |   |   | (4,895,502 | ) |
|                                                                                                                        |   |   |        |   |   |   |   |   |
| Total      liabilities and stockholders’ equity/(deficit)                                                             |   | $      | 10,031,208  |   |   | $      | 9,229,672 |   |

----

 Auto 

|                                               |   | Three      Months Ended  March      31, |      |   | Nine      Months Ended  March      31, |   |
|----------------------------------------------------|--------|-----------------------------------------|-----------|--------|----------------------------------------|--------|
|                                               |   | 2007                                    |      |   | 2006                                   |   |   | 2007 |   |   | 2006 |   |
|                                               |   | (RESTATED)                              |      |   |                                   |   |   | (RESTATED) |   |   |   |   |
| Revenues:                                          |   |                                    |      |   |                                   |   |   |   |   |   |   |   |
| Sales                                              |   | $                                       | 3,557,413 |   |                                   | $      | 2,814,314 |   |   | $ | 6,229,008 |   |   | $ | 10,073,274 |   |
| Interest      income                               |   |                                    | 360,604   |   |                                   |   | 480,703 |   |   |   | 1,100,619 |   |   |   | 1,549,299 |   |
| Other                                              |   |                                    | 88,067    |   |                                   |   | 47,912 |   |   |   | 131,691 |   |   |   | 302,043 |   |
|                                               |   |                                    | 4,006,084 |   |                                   |   | 3,342,929 |   |   |   | 7,461,318 |   |   |   | 11,924,616 |   |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                           |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of sales                                 |   |                                    | 2,502,516 |   |                                   |   | 1,863,911 |   |   |   | 4,041,655 |   |   |   | 7,254,413 |   |
| Selling,      general and administrative           |   |                                    | 1,015,039 |   |                                   |   | 979,359 |   |   |   | 3,114,305 |   |   |   | 2,870,622 |   |
| Provision      for credit losses                   |   |                                    | 819,368   |   |                                   |   | 752,916 |   |   |   | 1,582,598 |   |   |   | 3,234,742 |   |
| Discount      on sales of receivables              |   |                                    | -         |   |                                   |   | - |   |   |   | - |   |   |   | 83,744 |   |
| Interest      expense – warrants             |   |                                    | -         |   |                                   |   | - |   |   |   | 561,045 |   |   |   | - |   |
| Interest      expense – other                |   |                                    | 446,512   |   |                                   |   | 372,219 |   |   |   | 1,202,844 |   |   |   | 987,015 |   |
| Depreciation      and amortization                 |   |                                    | 99,933    |   |                                   |   | 91,560 |   |   |   | 300,125 |   |   |   | 198,549 |   |
|                                               |   |                                    | 4,883,368 |   |                                   |   | 4,059,965 |   |   |   | 10,802,572 |   |   |   | 14,629,085 |   |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      before income taxes                      |   |                                    | (877,285  | )      |                                   |   | (717,036 | ) |   |   | (3,341,254 | ) |   |   | (2,704,469 | ) |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income tax (income tax benefit) |   |                                    | -         |   |                                   |   | - |   |   |   | - |   |   |   | (121,676 | ) |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Loss                                      |   | $                                       | (877,285  | )      |                                   | $      | (717,036 | ) |   | $ | (3,341,254 | ) |   | $ | (2,582,793 | ) |
| Preferred      deemed dividends                    |   |                                    | -         |   |                                   |   | - |   |   |   | (2,056,629 | ) |   |   | - |   |
| Net      loss available to common stockholders     |   | $                                       | (877,285  | )      |                                   | $      | (1,945,270 | ) |   | $ | (5,397,883 | ) |   | $ | (2,582,7930 | ) |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted net Loss per share:         |   | $                                       | (0.13     | )      |                                   | $      | (0.12 | ) |   | $ | (0.82 | ) |   | $ | (0.43 | ) |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding:          |   |                                    | 6,666,555 |   |                                   |   | 6,020,053 |   |   |   | 6,550,708 |   |   |   | 6,019,555 |   |
|                                               |   |                                    |      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |

----

 Auto 

|                                                                |   | Nine      Months Ended  March      31, |       |
|---------------------------------------------------------------------|--------|----------------------------------------|------------|
|                                                                |   | 2007                                   |       |   | 2006 |   |
| Operating      activities:                                          |   |                                   |       |   |   |   |
| Net      loss                                                       |   | $                                      | (3,341,254 | ) |   | $ | (2,582,793 | ) |
| Stock      compensation expense                                     |   |                                   | 127        |   |   |   | 20,000 |   |
| Warrant      expense                                                |   |                                   | 561,045    |   |   |   | - |   |
| Bad      debt expense                                               |   |                                   | 35,000     |   |   |   | - |   |
| Gain      on written off loan                                       |   |                                   | (21,490    | ) |   |   | - |   |
| Depreciation      and amortization                                  |   |                                   | 300,125    |   |   |   | 198,549 |   |
| Discount      on sale of finance receivables                        |   |                                   | -          |   |   |   | 83,744 |   |
| Imputed      interest                                               |   |                                   | 30,045     |   |   |   | 30,256 |   |
| Changes      in finance receivables, net:                           |   |                                   |       |   |   |   |   |   |
| Finance      receivables originations and purchased, net ofpayments |   |                                   | (2,741,043 | ) |   |   | (4,134,310 | ) |
| Provision      for credit losses                                    |   |                                   | 1,582,598  |   |   |   | 3,234,742 |   |
| Inventory      acquired in repossession                             |   |                                   | 1,290,364  |   |   |   | 1,633,432 |   |
| Subtotal      finance receivables                                   |   |                                   | 131,919    |   |   |   | 733,864 |   |
| Changes      in operating assets and liabilities:0                  |   |                                   |       |   |   |   |   |   |
| Deferred      financing cost                                        |   |                                   | (52,361    | )  |   |   | (283,500 | ) |
| Other      receivables                                              |   |                                   | (24,346    | ) |   |   | (43,466 | ) |
| Inventory                                                           |   |                                   | (681,054   | ) |   |   | (343,054 | ) |
| Prepaid      and other assets                                       |   |                                   | 6,087      |   |   |   | (28,896 | ) |
| Accounts      payable and accrued liabilities                       |   |                                   | (176,432   | ) |   |   | 328,682 |   |
| Income      tax payable                                             |   |                                   | -          |   |   |   | (121,676 | ) |
| Drafts      payable and floor plan liabilities                      |   |                                   | 823,080    |   |   |   | (769,886 | ) |
| Deferred      sales tax                                             |   |                                   | 96,893     |   |   |   | 73,398 |   |
| Net      cash used in operating activities                          |   |                                   | (2,312,616 | ) |   |   | (2,704,778 | ) |
|                                                                |   |                                   |       |   |   |   |   |   |
| Investing      activities:                                          |   |                                   |       |   |   |   |   |   |
| Purchase      of property, equipment and leasehold improvements     |   |                                   | (11,380    | ) |   |   | (3,564 | ) |
| Purchase      of loan portfolio                                     |   |                                   | -          |   |   |   | 64,526 |   |
| Net      cash (used in) provided by investing activities            |   |                                   | (11,380    | ) |   |   | 60,962 |   |
|                                                                |   |                                   |       |   |   |   |   |   |
| Financing      activities:                                          |   |                                   |       |   |   |   |   |   |
| Repayments      of other notes payable                              |   |                                   | (460,871   | )  |   |   | (35,252 | ) |
| Proceeds      from Series A Preferred Stock                         |   |                                   | 3,232,455  |   |   |   | 990,000 |   |
| Proceeds      from secured notes payable                            |   |                                   | -          |   |   |   | 1,000,000 |   |
| Proceeds      from revolving credit facilities, net                 |   |                                   | 55,871     |   |   |   | 633,801 |   |
| Proceeds      from (repayments to) related parties, net             |   |                                   | (3,948     | ) |   |   | 6,965 |   |
| Net      cash provided by financing activities                      |   |                                   | 2,823,507  |   |   |   | 2,595,514 |   |
|                                                                |   |                                   |       |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents               |   |                                   | 499,511    |   |   |   | (48,302 | ) |
| Cash      at: Beginning of period                                   |   |                                   | 4,161      |   |   |   | 68,112 |   |
| Cash      at: End of period                                         |   | $                                      | 503,672    |   |   | $ | 19,810 |   |
|                                                                |   |                                   |       |   |   |   |   |   |
| Cash      paid for:                                                 |   |                                   |       |   |   |   |   |   |
| Income      tax                                                     |   | $                                      | -          |   |   | $ | - |   |
| Interest                                                            |   |                                   | 1,078,275  |   |   |   | 934,775 |   |
|                                                                |   |                                   |       |   |   |   |   |   |
| Non-cash      supplemental disclosures:                             |   |                                   |       |   |   |   |   |   |
| Preferred      deemed dividend                                      |   | $                                      | 2,020,074  |   |   |   | - |   |
| Common      stock issued to repay debt                              |   | $                                      | 1,633,000  |   |   |   | 75,000 |   |
| Shares      issued to purchase receivables                          |   |                                   | -          |   |   |   | 162,776 |   |

----

 Auto 

| Balance      Sheets                                                               |   | As      Previously Reported |        |   | Effect      of Restatement |   |       | As      Restated |   |
|-----------------------------------------------------------------------------------|--------|-----------------------------|-------------|--------|----------------------------|--------|------------|------------------|--------|
| Assets                                                                            |   |                        |        |   |                       |   |       |             |   |
|    Finance      receivables                                        |   |                        | 8,498,184   |   |                       |   | (200,000   | )                |   |   | 8,298,184 |   |
|    Prepaid      and other current assets                           |   |                        | 88,915      |   |                       |   | (66,500    | )                |   |   | 22,415 |   |
| Total      assets                                                                 |   |                        | 10,297,706  |   |                       |   | (266,500   | )                |   |   | 10,031,208 |   |
|                                                                              |   |                        |        |   |                       |   |       |             |   |   |   |   |
| Liabilities      and Stockholders’ Deficit                                  |   |                        |        |   |                       |   |       |             |   |   |   |   |
|    Liabilities                                                     |   |                        |        |   |                       |   |       |             |   |   |   |   |
|       Accounts      payable and accrued liabilities |   |                        | (849,416    | )      |                       |   | (22,761    | )                |   |   | (872,177 | ) |
|       Dividends      payable                        |   |                        | -           |   |                       |   | (36,555    | )                |   |   | (36,555 | ) |
|       Deferred      sales tax                       |   |                        | (522,652    | )      |                       |   | (369,231   | )                |   |   | (891,883 | ) |
|    Total      liabilities                                          |   |                        | (12,419,238 | )      |                       |   | (428,548   | )                |   |   | (12,847,786 | ) |
|                                                                              |   |                        |        |   |                       |   |       |             |   |   |   |   |
|    Stockholders’      equity/(deficit)                       |   |                        |        |   |                       |   |       |             |   |   |   |   |
|       Common      stock                             |   |                        | (7,306,841  | )      |                       |   | (2,705,815 | )                |   |   | (10,012,656 | ) |
|       Retained      deficit                         |   |                        | 12,660,828  |   |                       |   | 3,400,861  |             |   |   | (16,061,689 | ) |
|    Total      stockholders’ equity/(deficit)                 |   |                        | 2,121,532   |   |                       |   | 695,046    |             |   |   | 2,816,578 |   |

| Statements      of Operations – three months ended  March 31,      2007 |   | As      Previously Reported |     |   | Effect      of Restatement |   |     | As      Restated |   |
|-----------------------------------------------------------------------------------------|--------|-----------------------------|----------|--------|----------------------------|--------|----------|------------------|--------|
| Selling,      general and administrative                                                |   |                        | 980,700  |   |                       |   | 34,339   |             |   |   | 1,015,039 |   |
| Provision      for credit losses                                                        |   |                        | 813,918  |   |                       |   | 5,450    |             |   |   | 819,368 |   |
| Interest      expense – other                                                     |   |                        | 341,972  |   |                       |   | 104,540  |             |   |   | 446,512 |   |
| Net      loss                                                                           |   |                        | (732,955 | )      |                       |   | (144,330 | )                |   |   | (877,285 | ) |
| Loss      per share – basic and diluted                                           |   |                        | (0.11    | )      |                       |   | (0.02    | )                |   |   | (0.13 | ) |

----

| Statements      of Operations – nine months ended March 31, 2007 |   | As      Previously Reported |       |   | Effect      of Restatement |   |       | As      Restated |   |
|------------------------------------------------------------------------|--------|-----------------------------|------------|--------|----------------------------|--------|------------|------------------|--------|
| Selling,      general and administrative                               |   |                        | 2,665,686  |   |                       |   | 448,619    |             |   |   | 3,114,305 |   |
| Interest      expense – warrants                                 |   |                        | -          |   |                       |   | 561,045    |             |   |   | 561,045 |   |
| Interest      expense – other                                    |   |                        | 1,078,275  |   |                       |   | 124,569    |             |   |   | 1,202,844 |   |
| Net      loss                                                          |   |                        | (1,997,021 | )      |                       |   | (1,344,233 | )                |   |   | (3,341,254 | ) |
| Preferred      deemed dividends                                        |   |                        | -          |   |                       |   | (2,056,629 | )                |   |   | (2,056,629 | ) |
| Net      loss available to common stockholders                         |   |                        | (1,997,021 | )      |                       |   | (3,400,862 | )                |   |   | (5,397,883 | ) |
| Income      (loss) per share – basic and diluted                 |   |                        | (0.28      | )      |                       |   | (0.54      | )                |   |   | (0.82 | ) |

|  Statements of Cash      Flows            |   | As      Previously Reported |       |   | Effect      of Restatement |   |     | As      Restated |   |
|------------------------------------------------|--------|-----------------------------|------------|--------|----------------------------|--------|----------|------------------|--------|
| Net      cash used in Operating Activities     |   |                        | (1,935,068 | )      |                       |   | (377,548 | )                |   |   | (2,312,616 | ) |
| Net      cash provided by Financing Activities |   |                        | 2,445,959  |   |                       |   | 377,548  |             |   |   | 2,823,507 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                   |                           | March      31 |       |   | June      30                   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|---------------|------------|--------|--------------------------------|--------|
| Finance      receivables                                                                                                                                                                                                                                                                                                                                                                               |                           | $             | 10,602,987 |   |                           | $      | 10,847,405 |   |
| Less:      allowance for credit losses                                                                                                                                                                                                                                                                                                                                                                 |                           |          | (2,304,803 | )      |                           |   | (2,417,300 | ) |
|                                                                   |                           |          |       |   |       |   |                       |   |
| Finance      receivables, net                                                                                                                                                                                                                                                                                                                                                                          |       | $             | 8,298,184  |   |                           | $      | 8,430,105 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                   |                           | 2007   |       |   | 2006                           |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------|------------|--------|--------------------------------|--------|
| Balance      at beginning of the period                                                                                                                                                                                                                                                                                                                                                                |                           | $      | 2,417,300  |   |                           | $      | 2,323,089 |   |
| Provision      for credit losses                                                                                                                                                                                                                                                                                                                                                                       |                           |   | 1,582,598  |   |                           |   | 5,056,597 |   |
| Recoveries                                                                                                                                                                                                                                                                                                                                                                                             |                           |   | 1,290,364  |   |                           |   | 3,343,683 |   |
| Net      charge-offs                                                                                                                                                                                                                                                                                                                                                                                   |                           |   | (2,985,459 | )      |                           |   | (8,306,069 | ) |
|                                                                   |                           |   |       |   |       |   |   |   |
| Balance      at end of year                                                                                                                                                                                                                                                                                                                                                                            |       | $      | 2,304,803  |   |                           | $      | 2,417,300 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                   |                           | March      31,  2007 |    |   | June      30,  2006            |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|----------------------|---------|--------|--------------------------------|--------|
| Accounts      payable                                                                                                                                                                                                                                                                                                                                                                                  |                           | $                    | 206,522 |   |                           | $      | 289,081 |   |
| Payroll      and related taxes                                                                                                                                                                                                                                                                                                                                                                         |                           |                 | 372,963 |   |                           |   | 372,641 |   |
| Recourse      obligation                                                                                                                                                                                                                                                                                                                                                                               |                           |                 | 175,000 |   |                           |   | 152,440 |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                  |                           |                 | 117,692 |   |                           |   | 234,508 |   |
|                                                                   |                           |                 |    |   |       |   |                       |   |
| Total      liabilities                                                                                                                                                                                                                                                                                                                                                                                 |       | $                    | 872,177 |   |                           | $      | 1,048,670 |   |

| Lender                                                                                                                         |                           | Facility  Amount                                                                                                         |                           | Interest  Rate                                                                                                           |                           | Maturity                                                                                                                 |                           | March      31, 2007  Balance                                                                                             |                           | June 30,      2006  Balance                                                                                         |
|--------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------|
|                       |                           |                      |                           |                      |                           |                      |                           |                      |                           |                      |
| Oak      Rock Financial, LLC                                                                                                   |       | $ 10,000,000                                                                                                        |       | Prime      + 7%                                                                                                          |       | March      31, 2008                                                                                                      |       | $  9,068,896                                                                                                   |       | $       9,013,025                                                                                                   |

|                                               |   | March      31,  2007 |    |   | June      30, 2006 |   |
|----------------------------------------------------|--------|----------------------|---------|--------|--------------------|--------|
| Unsecured      Convertible Promissory Notes        |   | $                    | 57,000  |   |               | $      | 990,000 |   |
|                                               |   |                 |    |   |               |   |   |   |
| Secured      Promissory Notes                      |   |                 | 50,000  |   |               |   | 1,000,000 |   |
|                                               |   |                 |    |   |               |   |   |   |
| Notes      Payable – Gunnels Interests, Inc. |   |                 | 369,349 |   |               |   | 590,243 |   |
|                                               |   |                 |    |   |               |   |   |   |
| Notes      Payable – Other                   |   |                 | 5,000   |   |               |   | 26,490 |   |
|                                               |   |                 |    |   |               |   |   |   |
|                                               |   | $                    | 481,349 |   |               | $      | 2      ,590,695 |   |

----

----

|                           |   | Number      of Common Stock Shares |      |   | Weighted      Average Exercise Price |   |
|--------------------------------|--------|------------------------------------|-----------|--------|--------------------------------------|--------|
| Balance      at June 30, 2005  |   |                               | 0         |   |                                 |   | - |   |
|   Granted            |   |                               | 1,250,000 |   |                                 | $      | 1.10 |   |
| Balance      at June 30, 2006  |   |                               | 1,250,000 |   |                                 |   | 1.10 |   |
|   Granted            |   |                               | 907,510   |   |                                 |   | 4.46 |   |
|   Cancelled          |   |                               | (422,000  | )      |                                 |   | 1.00 |   |
| Balance      at March 31, 2007 |   |                               | 1,735,510 |   |                                 |   | 2.88 |   |

----

| Exercise      Price |   | Number      Outstanding |   | Weighted      Average Remaining  Contractual      Life (Years) |
|---------------------|--------|-------------------------|--------|----------------------------------------------------------------|
| $1.00               |   | 578,000                 |   | 4.00                                                           |
| 1.50                |   | 250,000                 |   | 3.92                                                           |
| 1.75                |   | 150,000                 |   | 4.34                                                           |
| 5.00                |   | 757,510                 |   | 5.18                                                           |
|                |   | 1,735,510               |   |                                                           |

| Weighted      average estimated value per share |   | $      | 1.86 |   |
|-------------------------------------------------|--------|--------|------|--------|
| Expected      option life in years              |   |   | 4.0  |   |
| Weighted      average expected volatility       |   |   | 141  | %      |
| Expected      dividend yield                    |   |   | 0    | %      |
| Weighted      average risk free interest rate   |   |   | 4.8  | %      |

----

| Year      Ended March 31,                                 |   | Stock      Option Compensation Expense |    |
|-----------------------------------------------------------|--------|----------------------------------------|---------|
|                                                      |   |                                   |    |
| 2008                                                      |   | $                                      | 46,522  |   |
| 2009                                                      |   |                                   | 46,395  |   |
| 2010                                                      |   |                                   | 46,395  |   |
| 2011                                                      |   |                                   | 46,141  |   |
| Total      estimated future non-cash compensation expense |   | $                                      | 185,453 |   |

|                            |   | Options      Outstanding |    |   | Weighted-Average      Exercise Prices |   |
|---------------------------------|--------|--------------------------|---------|--------|---------------------------------------|--------|
| Balance      at June 30, 2005   |   |                     | 50,000  |   |                                  | $      | 0.50 |   |
|          Granted |   |                     | 0       |   |                                  |   | 0.00 |   |
| Balance      at June 30,2006    |   |                     | 50,000  |   |                                  |   | 0.50 |   |
| Granted                         |   |                     | 100,000 |   |                                  |   | 2.50 |   |
| Balance      at March 31, 2007  |   |                     | 150,000 |   |                                  | $      | 1.83 |   |

----

----

|   | · | Unsecured Convertible      Promissory Notes – Subsequent to March 31, 20007, the balance of      $57,000 was repaid. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | Secured Promissory Notes –      Outstanding notes totaling $50,000 were repaid in November      2007. |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Short-term Bridge Loans –      On or about June 8, 2007, Auto Underwriters sold $1,100,000 in      Secured Promissory Notes in a private placement to a limited number of      accredited investors. The offer and sale was conducted on behalf of the      Company by a NASD-licensed broker-dealer who served as managing dealer      (the “Managing Dealer”)and received a sales commission of 6%, a due      diligence fee of 1% and a non-accountable expense allowance of 3% of the      gross proceeds. In addition to the cash payment, we also issued to the      Managing Dealer a five year warrant to purchase 110,000 shares of our      common stock at an exercise price of $1.50 per share.  The Secured      Promissory Notes consist of: (i) Secured Promissory Notes which have in      the aggregate a principal amount of $1,100,000 bearing interest at a rate      of 10% per annum (issuable in individual notes in $100,000 increments)      (the “Note”); (ii) for each $100,000 Note, a five-year warrant to purchase      15,000 shares of common stock of the Company at an exercise price of $2.50      per share with piggyback registration rights and cashless exercise and net      issuance provisions (the “Bridge Warrant”); and (iii) possibly, for each      $100,000 Note, a five-year warrant with the same terms as the Bridge      Warrant to purchase 15,000 shares of the common stock of the Company for      every 30 days that the Company fails to repay the Note (the “Liquidated      Damages Warrant”) (the Bridge Warrant and the Liquidated Damages Warrant      may be referred to collectively as the “Warrants”).  There were      165,000 warrants issued with the Secured Promissory Notes. In November      2007, the Company repaid $302,500 of the notes leaving a balance of      $797,500. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

 Item 2 

|   | · | our      ability to continue operating as a going  concern; |
|--------|--------|-------------------------------------------------------------|

|   | · | resolution      and payment of unpaid federal and state  taxes; |
|--------|--------|-----------------------------------------------------------------|

|   | · | unfavorable      outcome with respect to pendinglitigation; |
|--------|--------|-------------------------------------------------------------|

|   | · | general      economic and industryconditions; |
|--------|--------|-----------------------------------------------|

|   | · | our      capital requirements and dependence on the sale of our equity      securities; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | the      liquidity of the Company’s common stock will be affected by the lack of,      or limited trading market; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | intense      industry competition; |
|--------|--------|------------------------------------|

|   | · | our      ability to purchase installmentcontracts; |
|--------|--------|----------------------------------------------------|

|   | · | the      creditworthiness of contractobligors; |
|--------|--------|------------------------------------------------|

|   | · | shortages      in availability of qualifiedpersonnel; |
|--------|--------|-------------------------------------------------------|

|   | · | legal      and financial implications of unexpected catastrophic      events; |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | regulatory      or legislative changes effecting the automobile finance industry;      and |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | reliance      on, and the ability to attract, key  personnel. |
|--------|--------|---------------------------------------------------------------|

----

|   | · | Our      ability to procure suitable lot locations at reasonable      costs. |
|--------|--------|------------------------------------------------------------------------------|

|   | · | Our      ability to build our management strength to support the store      growth. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Our      ability to maintain competitive direct retail and direct lending      operations. |
|--------|--------|--------------------------------------------------------------------------------------------|

----

|                                                  |   | Nine      Months Ended  December      31, |       |
|-------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                  |   |                                      | 2007       |   |   | 2006 |   |
| Operating      activities:                            |   |                                      |       |   |   |   |   |
| Net      loss                                         |   | $                                         | (3,341,254 | ) |   | $ | (2,582,793 | ) |
| Stock      compensation expense                       |   |                                      | 127        |   |   |   | 20,000 |   |
| Warrant      expense                                  |   |                                      | 561,045    |   |   |   | - |   |
| Bad      debt expense                                 |   |                                      | 35,000     |   |   |   | - |   |
| Gain      on written off loan                         |   |                                      | (21,490    | ) |   |   | - |   |
| Depreciation      and amortization                    |   |                                      | 300,125    |   |   |   | 198,549 |   |
| Discount      on sale of finance receivables          |   |                                      | -          |   |   |   | 83,744 |   |
| Imputed      interest                                 |   |                                      | 30,045     |   |   |   | 30,256 |   |
| Changes      in working capital accounts:             |   |                                      | (8,133     | ) |   |   | (1,188,398 | ) |
| Changes      in finance receivables, net:             |   |                                      | 131,919    |   |   |   | 733,864 |   |
| Net      cash used in operating activities            |   |                                      | (2,312,616 | ) |   |   | (2,704,778 | ) |
|                                                  |   |                                      |       |   |   |   |   |   |
| Cash      (used in) provided by investing activities: |   |                                      | (11,380    | ) |   |   | 60,962 |   |
| Cash      provided by financing activities:           |   |                                      | 2,823,507  |   |   |   | 2,595,514 |   |
| Increase      (decrease) in cash                      |   | $                                         | 499,511    |   |   | $ | (48,302 | ) |

----

 Item 3 

|   | · | The      current organization of the accounting department does not provide the      Company with the adequate skills to accurately account for and disclose      significant transactions or disclosures within the time periods as      specified by SEC rules andforms. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The      process that the Company is currently using to monitor the ongoing quality      of internal controls performance, identify deficiencies and trigger timely      corrective action is not working  effectively. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | There      is no adequate means of accurately capturing and recording certain      significant and complex business  transactions. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

----

 PARTII 

 ITEM 1 

----

 ITEM 2 

 ITEM 3 

----

 ITEM 4 

 ITEM 5 

 ITEM 6. 

----

| SIGNATURES |
|------------|

|                                         | Auto      Underwriters of America, Inc.                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                       |                                                                                       |
|                                                                                                                                                                                                                                       | By:   /s/ Dean      Antonis                                                 |
|                                                                                                                                                                                                                                       | Dean      Antonis                                                                          |
|                                                                                                                                                                                                                                       | President      and Treasurer (Principal Executive,  Financial      and Accounting Officer) |