UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549




FORM
10-Q


(MARK
ONE)




|X|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE


ACT
OF


1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 2008




|_|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES


EXCHANGE


ACT
OF 1934 FOR THE TRANSITION PERIOD FROM


__________
TO __________






COMMISSION
FILE NUMBER: 000-31431





US BIODEFENSE,
INC.


(Exact
name of registrant as specified in its charter)







Utah
            33-0052057(State
      or Other Jurisdiction of Incorporation or Organization)
            (I.R.S.
      Employer Identification No.)





300 State St.
East, Suite 226, Oldsmar, Florida 34677


(Address
of principal executive offices)





(727)
417-7807


(Registrant's
telephone number, including area code)





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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




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




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




As of
February 29, 2008, the registrant had 10,714,075 shares of common
stock, par value $0.001, outstanding.












US
      BIODEFENSE, INC.TABLE
      OF CONTENTSPART
      I. FINACIAL INFORMATION
            PageItem
      1. Financial Statements
            1Item 2. Management’s Discussion and Analysisof Financial Condition and
      Results of Operations
            2Item
      3. Quantitative and Qualitative Disclosure About
      Market Risk
            
            2Item
      4(T). Controls and
      Procedures
            
            2PART
      II. OTHER INFORMATIONItem
      1. Legal Proceedings
            3Item
      1A. Risk Factors
            3Item
      2. Unregistered Sales of Equity Securities
      and Use of Proceeds
            3Item
      3. Defaults Upon Senior Securities
            3Item
      4. Submission of Matters to a Vote of
      Security Holders
            
            3Item 5.
      Other Information
            
            3Item 6.
      Exhibits
            
            3














PART
I - FINANCIAL INFORMATION




ITEM
1. FINANCIAL STATEMENTS




Condensed
      Consolidated Financial Statements (Unaudited)
            PageBalance Sheets - February 29, 2008 and
      November 30, 2007
            F-1Statements of Operations - Three months
      ended February 29, 2008 and February 28, 2007
            F-2Statements of Cash Flows- Three months ended
      February 29, 2008 and February 28, 2007
            F-3Notes to Condensed Consolidated Financial
      Statements
            F-4






1







US Biodefense, Inc. and
      SubsidiariesBalance
    SheetsFebruary 29, 2008 and November 30,
      2007Assets
              
              2008
              
              
              2007Current
    assetsCash and cash
      equivalents
              
              $
              359
              
              
              $
              359Marketable
      securities available for sale
              
              
              -
              
              
              
              47,500Notes receivable from related
      parties
              
              
              212,000
              
              
              
              -Total Current
      assets
              
              
              212,359
              
              
              
              47,859Property and equipment, net of
      accumulated depreciation of$885 at November 30,
      2007
              
              
              -
              
              
              
              1,592Total
Assets
              
              
              212,359
              
              
              
              49,451Liabilities and Stockholders'
      Equity (Deficit)Current
      liabilitiesAccounts payable and accrued
      expenses
              
              
              42,500
              
              
              
              47,946Notes payable to related
      parties
              
              
              227,000
              
              
              
              7,200Total current
      Liabilites
              
              
              269,500
              
              
              
              55,146Settlement
      reserve
              
              
              175,000
              
              
              
              190,000Total
      liabilities
              
              
              444,500
              
              
              
              245,146Stockholders'
      equity:Common stock 100,000,000 shares
      authorized, $0.001 par value,  10,714,075 and 63,284,000
      sharesissued and outstanding at
      February 29, 2008 and November 30, 2007
              
              
              10,714
              
              
              
              63,284Additional paid in
      capital
              
              
              5,127,566
              
              
              
              4,677,496Other comprehensive
      income (deficit)
              
              
              0
              
              
              
              (52,500
              )Accumulated
      deficit
              
              
              (5,370,421
              )
              
              
              (4,883,975
              )Total stockholders' equity
      (deficit)
              
              
              (232,141
              )
              
              
              (195,695
              )Total Liabilities and
      stockholders' equity (deficit)
              
              $
              212,359
              
              
              $
              49,451


See
accompanying notes to consolidated financial statements.






F-1








US Biodefense, Inc. and
      SubsidiariesStatements of
      OperationsFor the three months ended
      February 29, 2008 and February 28, 20072008
            
            
            2007REVENUESRevenues from
      services
            $
            
            -
            
            
            $
            12,500Total
    Revenues
            
            
            -
            
            
            
            12,500EXPENSESGeneral and administrative
      expenses
            
            
            384,854
            
            
            
            6,956Impairment of
      assets
            
            
            49,092
            
            
            
            -Total
    Expenses
            
            
            433,946
            
            
            
            6,956Loss from continuing
      operations
            
            
            (433,946
            
            
            
            5,544Discontinued Operations (Note
      6)Income (loss) from operations of
      discontinued emergency disasterpreparedness
      subsidiary
            
            
            -
            
            
            
            (81,642
            )Income (loss) on discontinued
      operations
            
            
            -
            
            
            
            (81,642
            )Net loss
            
            
            (433,946
            
            
            
            (76,098
            )Weighted average number of
      sharesoutstanding
            
            
            2,287,701
            
            
            
            39,059Basic and diluted net income
      (loss)per common
      share
            $
            
            (0.19
            
            
            $
            (1.95
            )See accompanying notes to
      consolidated financial statements.






F-2







US Biodefense, Inc. and
      SubsidiariesStatements of Cash
      FlowsFor the three months ended
      February 29, 2008 and February 28, 20072008
              
              
              2007Cash flows from operating
      activities:Net
      income (loss)
              
              $
              (433,946
              )
              
              $
              (76,098
              )Adjustments to reconcile net
      income (loss) to net cashfrom operating
      activities:Depreciation
              
              
              
              
              
              
              206Deferred
      revenues
              
              
              
              
              
              
              (12,500
              )Impairment of
      assets
              
              
              49,092Stock
      issued for consulting services
              
              
              37,500Stock
      issued for compensation
              
              
              60,000Provision for bad
      debtsForgiveness of
      debtChanges in operating assets and
      liabilities:Accounts
      receivable
              
              
              
              
              
              
              (6,739
              )Inventory
              
              
              
              
              
              
              (9,837
              )Prepaid
      expensesBank
    overdraftAccounts
      payable and accrued expenses
              
              
              (5,446
              )
              
              
              53,714Accrued
      income taxesSettlement
      reserve
              
              
              (15,000
              )Total cash flows from operating
      activities
              
              
              (307,800
              )
              
              
              (51,254
              )Cash flows from financing
      activities:Advances from (repayments to)
      related parties, net
              
              
              7,800
              
              
              
              41,600Note receivable for sale of common
      stock
              
              
              212,000
              
              
              
              -Proceeds
      from sale of common stock
              
              
              88,000
              
              
              
              -Total cash flows from financing
      activities
              
              
              307,800
              
              
              
              41,600Increase (decrease in) cash and
      cash equivalents
              
              
              -
              
              
              
              (9,654
              )Cash and cash equivalents,
      beginning of period
              
              
              359
              
              
              
              22,663Cash and cash equivalents, end of
      period
              
              $
              359
              
              
              $
              13,009Income taxes
      paid
              
              $
              -
              
              
              $
              -Interest expense
      paid
              
              $
              -
              
              
              $
              -See accompanying notes to
      consolidated financial statements.


F-3








US
Biodefense, Inc.


Notes
to Financial Statements




Note 1 - Background and Summary of
Significant Accounting Policies




The Company




US
Biodefense, Inc. doing business as Elysium Internet (the "Company"), a Utah
corporation was headquartered in the City of Industry, California at November
30, 2007. Effective January 10, 2008, the Company relocated
its corporate headquarters to Oldsmar, Florida.




The
Company originally incorporated under the name Teal Eye, Inc. in Utah on June
29, 1983. The Company then merged with Terzon Corp. and amended its Articles of
Incorporation to change the name to Terzon Corp. On September 7, 1984, the
Company amended its Articles of Incorporation, as amended, changing its name to
Candy Stripers Corporation, Inc. On January 6, 1998, the Company amended its
Articles of Incorporation, as amended, changing its name to Piedmont, Inc. On
May 31, 2003, the Company amended its Articles of Incorporation, as amended, and
changed its name to US Biodefense, Inc.





Effective
January 10, 2008, the Company experienced a change in control as the result of a
series of transactions. Effective on that date, the Company executed an
employment agreement with Scott Gallagher pursuant to which he became the
Chairman of the board of directors and Chief Executive Officer of the Company.
Simultaneously, the former Chairman, David Chin, resigned as an officer and
director of the Company leaving Mr. Gallagher as its sole director. Also
effective as of that date, Mr. Gallagher and a Company controlled by him, 221
Fund, LLC acquired 95.6% of the Company, and as a result of these transactions
Mr. Gallagher assumed control of the Company. On the same date the Company
changed its business direction and began doing business as “Internet Holdings”
to focus on acquiring direct navigation Internet domain names that could be
developed into profitable business ventures.





On April
4, 2008, the Company acquired 100% of the shares of Elysium Internet, Inc., a
direct navigation Internet media company, in exchange for stock and a note to
FTS Group, Inc. Our Chairman and Chief Executive Officer, Scott Gallagher, is
also the Chairman and Chief Executive Officer of FTS Group, Inc.




Basis of
Presentation




The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company incurred
a net loss for the three months ended February 29, 2008 of $433,946 and at
February 29, 2008, had an accumulated deficit of $5,370,421. In addition, the
Company generated no revenue from its operations. These conditions raise
substantial doubt as to the Company's ability to continue as a going concern.
These financial statements do not include any adjustments that might result from
the outcome of this uncertainty. These financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts, or amounts and classification of recorded asset amounts, or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.




Management
plans to take the following steps that it believes will be sufficient to provide
the Company with the ability to continue in existence. Management
intends to raise financing through the issuance of its common stock, debt
instruments or other means that it deems necessary. Additionally,
management intends to acquire or develop business and business assets
related to its new Internet domain and media oriented business
model.




Use of
Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.




Fair
Value of Financial Instruments




For
certain of the Company's financial instruments, including cash and cash
equivalents, prepaid expenses, accounts payable and deferred revenues, the
carrying amounts approximate fair value due to their short
maturities.




Revenue
Recognition




While the
Company operated the Emergency Disaster Systems business, the Company recognized
revenue from the sale of products, and from the performance of services to both
related and non-related parties. The Company recognized revenue from the sale of
products on the gross amount charged basis. Under this method of recording the
sale of products, the cost of goods sold reflects the cost of the goods sold to
the customer plus the Company's cost of executing the transaction. The Company
chose this method since it took ownership of the products that it purchased for
resale and assumed the risks and rewards of ownership of the goods.




For sale
of products, revenue was generally recognized when persuasive evidence of an
arrangement existed, delivery had occurred, the contract price was fixed or
determinable, title and risk of loss had passed to the customer and collection
was reasonably assured. The Company's sales were typically not subject to rights
of return and, historically, sales returns were not significant.





In the
Company's current business model, the Company recognizes revenue when it makes a
sale through its directory business. Sales generated from third-party
aggregators are recognized in the month they are made.




Revenues
from services are recognized upon provision of services to the customer.
Unearned service revenue is deferred and recognized ratably over the duration of
the service term.




Accounts
receivable are reviewed to determine if their carrying value has become
impaired. The Company considers the assets to be impaired if the balances are
greater than six months old. Management regularly reviews accounts receivable
and will establish an allowance for potentially uncollectible amounts when
appropriate. When accounts are written off, they will be charged against the
allowance. Receivables are not collateralized and do not bear
interest.




Concentration
of Credit Risk




Financial
instruments that subject the Company to concentrations of credit risk
include cash and cash equivalents.




The
Company maintains its cash in well-known banks selected based upon management's
assessment of the bank's financial stability. Balances may periodically exceed
the $100,000 federal depository insurance limit.  However, the Company
has not experienced any losses on deposits. The Company extends credit based on
an evaluation of the customer's financial condition, generally without
collateral. Exposure to losses on receivables is principally dependent on each
customer's financial condition. The Company monitors its exposure for credit
losses and maintains allowances for anticipated losses, as
required.




Cash
Equivalents




For
purposes of reporting cash flows, the Company considers all short-term
investments with an original maturity of three months or less to be cash
equivalent.




Inventory




Inventory
is stated at the lower of cost or market. For the three months ended February
28, 2007, inventory consisted of purchased items held for resale. Inventory was
monitored by Company management for excess and obsolete items, and valuation
adjustments were made when required. As a result of the Emergency Disaster
Systems, Inc. spin-off, the Company has no inventory remaining at February
29, 2008.




Fixed
Assets




Fixed
assets are stated at cost, less accumulated depreciation. Depreciation is
provided principally on the straight-line method over the estimated useful lives
of the assets, which are generally 3 to 10 years. The cost of repairs and
maintenance is charged to expense as incurred. Expenditures for property
betterments and renewals are capitalized. Upon sale or other disposition of a
depreciable asset, cost and accumulated depreciation are removed from the
accounts and any gain or loss is reflected in results of
operations.




The
Company will periodically evaluate whether events and circumstances have
occurred that may warrant revision of the estimated useful lives of fixed assets
or whether the remaining balance of fixed assets should be evaluated for
possible impairment. The Company uses an estimate of the related
undiscounted cash flows over the remaining life of the fixed assets in measuring
their recoverability.




Income
Taxes




The
Company accounts for income taxes under SFAS 109, "Accounting for Income Taxes."
Under the asset and liability method of  SFAS 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.




Loss per
Share




In
accordance with SFAS No. 128, "Earnings Per Share," the basic income / (loss)
per common share is computed by dividing net income / (loss) available to common
stockholders by the weighted average number of common shares
outstanding.  Diluted income per common share is computed similar to
basic income per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive.  As of February 29, 2008 and February 28, 2007, the Company
does not have any equity or debt instruments outstanding that could be converted
into common stock.




Stock-Based
Compensation




EffectiveJanuary 1, 2006, the
Company prospectively adopted SFAS 123R, "Share-Based Payments," and related
Securities and Exchange Commission rules included in Staff Accounting
Bulletin No. 107. Under this method, compensation cost recognized beginning
January 1, 2006 includes costs related to all share-based payments granted
subsequent to December 31, 2005 based on the grant-date fair value estimated in
accordance with the provisions of SFAS 123R. Compensation cost for stock options
granted to employees is recognized ratably over the vesting period.




Recent Accounting
Pronouncements





In June 2006, FASB issued FIN No. 48,
“Accounting for Uncertainty in Income Taxes.”  The interpretation
applies to all tax positions related to income taxes subject to FASB Statement
No. 109, “Accounting for Income Taxes.”  FIN No. 48 clarifies the
accounting for uncertainty in income taxes by prescribing a minimum recognition
threshold in determining if a tax position should be reflected in the financial
statements.  Only tax positions that meet the “more likely than not”
recognition threshold may be recognized.  The interpretation also
provides guidance on classification, interest and penalties, accounting in
interim periods, disclosure, and transition requirements for uncertain tax
positions.  FIN No. 48 will be effective for the Company’s fiscal year
ending November 30, 2007.  The Company did not have material tax
positions that would have resulted in a material impact upon implementation of
FIN No. 48.





In
September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements.”  This standard establishes a single authoritative
definition of fair value, sets out a framework for measuring fair value and
expands disclosures about fair value measurements.  SFAS No. 157
applies to fair value measurements already required or permitted by existing
standards.  SFAS No. 157 will be effective for the Company’s fiscal
year ending November 30, 2008.  The Company is currently evaluating
the requirements of SFAS No. 157 and has not yet determined the impact on its
financial condition and results of operations.





In
September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
Benefit Pension and other Postretirement Plans – an amendment of FASB Statement
No. 87, 88, 106 and 132R.”  This pronouncement requires an employer to
make certain recognitions, measurements, and disclosures regarding defined
benefit postretirement plans.  The Company does not have any defined
benefit postretirement plans and SFAS No. 158 will not have any impact on its
financial condition and results of operations.





In
September 2006, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 108 “Considering the Effects of Prior Year Misstatements in Current
Year Financial Statements” (“SAB 108”).  SAB 108 provides guidance on
consideration of the effects of prior year misstatements in quantifying current
year misstatements for the purpose of a materiality assessment.  SAB
108 is effective for fiscal years ending after November 15, 2006.  The
adoption of SAB 108 did not have an impact on the Company’s consolidated
financial statements.





In
February 2007, the FASB issued SFAS No 159, “The Fair Value Option for Financial
Assets and Financial Liabilities” (“SFAS 159”), which permits entities to choose
to measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value.  SFAS 159
became effective for us on January 1, 2008.  The adoption of SFAS 159
did not have a material impact on the Company’s financial position, cash flows
and results of operations.






F-4


Note 2 - 1-For-1000
Reverse Stock Split
  In
November 2007, the Company’s Board of Directors authorized the Company to
proceed with a 1-for-1000 reverse stock split, effective on December 3, 2007,
which had been approved by our consenting stockholder at the close of business
on November 12, 2007. Effectively USBF’s common stock began trading at the
split-adjusted level on January 11, 2008.
 
 As
the reverse stock split proportionally reduced the issued and outstanding shares
of Common Stock of the Company, without any change to the authorized number of
shares or the par value, the “Common stock” balance on the condensed
consolidated balance sheet at February 29, 2008, and all share and per share
data contained in this Quarterly Report on Form 10-Q unless otherwise indicated
has been adjusted to reflect the 1-for-1000 reverse stock


Note 3 - Earnings per
share




Basic
earnings per share are calculated by dividing net income by the weighted average
number of common shares outstanding during the period.




Note 4 - Related parties and
Concentrations




The
Company owes related parties $227,000 at February 29, 2008. The notes are
non-interest bearing, and are due on demand.





The
Company had a note receivable from a related party of $212,000 at February 29,
2008. The note was non-interest bearing.




Note 5
- Common Stock Transactions




During
the three months ended May 31, 2007, the Company issued 9,245,000 shares of
common stock to two entities as consulting fees totaling $337,350.




During
the three months ended May 31, 2007, the Company issued 10,000,000 shares of
common stock to its Chief Executive Officer for salary totaling
$100,000.




During
the three months ended August 31, 2007, the Company issued 2,000,000 shares of
common stock to an individual as consulting fees totaling $22,000.




During
the three months ended August 31, 2007, the Company issued 980,000 shares of
common stock to an individual as consulting fees totaling $7,840.





During
the three months ended January 31, 2008, the Company issued 400,000 shares of
common stock to an individual as consulting fees totaling $60,000.





During
the three months ended February 29, 2008, the Company issued 5,000,000 shares of
common stock to Scott Gallagher in exchange for $150,000.





During
the three months ended February 29, 2008, the Company issued 5,000,000 shares of
common stock to 221 Fund, LLC in exchange for $150,000.




Note 6
- Discontinued Operations




As of
September 24, 2007, the Company completed the spin-off of Emergency Disaster
Systems, Inc., a wholly-owned subsidiary of US Biodefense, Inc., whereby
stockholders of record as of September 7, 2007 received one share of common
stock of Emergency Disaster Systems, Inc. for every 100 shares of common
stock of US Biodefense such holders possessed. Stockholders received cash
in lieu of fractional shares for amounts less than one full Emergency Disaster
Systems, Inc. share.




In
accordance with Statement of Financial Standards No. 144 “Accounting for the
Impairment or Disposal of Long-Lived Assets," (SFAS 144) revenues and expenses
associated with Emergency Disaster Systems, Inc. are classified as
discontinued operations for the year ended November 30, 2007. The same
classification as discontinued operations required by SFAS 144 is also required
for previously issued financial statements for each period incorporated in this
report. Consequently, the comparative income statement for the three months
ended  February 28, 2007 has been revised to reflect the operation of
Emergency Disaster Systems, Inc. as discontinued operation.




Results
from discontinued operations were as follows:










Three months
      ended February 28, 2007Revenues
            $
            88,854Cost
      of tangible products sold
            
            (60,545
            )28,309Expenses
            
            (109,951
            )Income (loss)
      from discontinued operations
            $
            (81,642
            )Basic and diluted
      net income (loss) per common share
            $
            0.00






Note 7
- Rescission Offer





Upon
taking control of the Company, new management identified a problem relating to
the Company’s spin-off of its wholly-owned subsidiary Emergency Disaster
Systems, Inc. which occurred on September 24, 2007. The Company
intends to undertake a rescission offer to recipients of shares of Emergency
Disaster Systems, Inc. in the September 24, 2007 distribution. The Company is
issuing this rescission offer because it believes the distribution may have been
in violation of certain registration requirements under the Securities Act of
1933, as amended.





The
Company estimates that the rescission offer of its September 2007 distribution
of shares of Emergency Disaster Systems could cost it $18,985 plus additional
legal and accounting expenses. The Company currently does not have sufficient
cash to pay for such rescission offer. The Company believes it will not need the
total amount of such funds because it believes the holders of a majority of the
shares distributed will not participate in such rescission. However, if the
Company does have to pay the total amount, it will have to borrow funds to cover
those expenses. The Company may not have access to such funds which could cause
further liability under federal and state law. Additionally, if the Company
borrows such funds, it will increase its debt which could inhibit the Company
from implementing its business plan. The Company has set up a reserve account of
up to $100,000 to cover any and all anticipated legal, accounting and filing
costs related to the spin-off and rescission offer.




There is
considerable legal uncertainty under both federal and state securities laws
concerning the efficacy of rescission offers and general waivers and releases
with respect to barring claims that would be based on securities law violations.
The rescission offer may not terminate any or all potential contingent liability
that the Company may have in connection with that distribution. In addition, it
may not be able to enforce the waivers it may receive in connection with the
rescission offer to bar any claims based on allegations of federal or state
securities law violations that the rescission offerees who accept the offer
may have, until the applicable statutes of limitations have run.





While the
Company believes this rescission offer will satisfy certain requirements and
laws, the conditions and criteria for satisfying federal and most state
rescission requirements are predicated primarily on factual circumstances rather
than on objective standards. Given the size of the Company and its
working capital deficit, the Company may not have sufficient funds to satisfy
any additional rescission rights and costs in which case the Company's
future results of operations could be adversely affected and it could be forced
to cease operations.




Note 8
- Commitments and Contingencies




On
November 6, 2006, Sandra Sawyer filed a suit in Los Angeles Superior Court
against US Biodefense, Inc. and David Chin, one of the Company’s officers and
directors at the time the lawsuit was filed, alleging a breach of contract by
Mr. Chin in relation to the purchase of the Company by Mr. Chin from Ms. Sawyer.
On April 20, 2007, Mr. Chin filed a cross-complaint against the plaintiff
alleging breach of contract. On November 21, 2007, the Company reached a
settlement with Ms. Sawyer, whereby the Company agreed to pay to Ms. Sawyer an
aggregate sum of $90,000 over 15 months. In the event of default, the Company
will be required to pay Ms. Sawyer a sum of $225,000 less any payments made
under this agreement. The Company was in compliance with this settlement
agreement through February 29, 2008.




Note 9 -
Subsequent Events





On April
4, 2008, the Company acquired 100% of the shares of Elysium Internet, Inc., a
direct navigation Internet media company in exchange for stock and a note to FTS
Group, Inc. The Company’s Chairman and Chief Executive officer Scott Gallagher
is also the Chairman and Chief Executive Officer of FTS Group, Inc.






F-5









Item
2. Management's Discussion and Plan of Operation





Forward-Looking
Statements





This
report on Form 10-Q contains forward-looking statements that involve risks and
uncertainties. You should not place undue reliance on these forward-looking
statements. Our actual results could differ materially from those
anticipated in the forward-looking statements for many reasons, including the
risks described in this report, our annual report on Form 10-KSB and other
filings we make from time to time with the Securities and Exchange Commission.
Although we believe the expectations reflected in the forward-looking statements
are reasonable, they relate only to events as of the date on which the
statements are made. We do not intend to update any of the forward-looking
statements after the date of this report to conform these statements to actual
results or to changes in our expectations, except as required by
law.




Overview





We
incorporated in the State of Utah on June 29, 1983 under the name Teal Eye,
Inc. In 1984, we merged with Terzon Corporation and changed our name to
Terzon Corporation. On September 7, 1984, we changed our name to Candy Stripers
Candy Corporation and engaged in the business of manufacturing and selling candy
and gift items to hospital gift shops across the country. In 1986, we
ceased the candy manufacturing operations and filed for Chapter 11 Bankruptcy
protection. After emerging from Bankruptcy in 1993, we remained dormant
until January 1998, when we changed our name to Piedmont, Inc. On May 12,
2003, we changed our name from Piedmont, Inc. to US Biodefense,
Inc.





On August
7, 2006, we completed the acquisition of Emergency Disaster Systems, Inc., a
California corporation incorporated on July 19, 2006. Emergency Disaster
Systems was engaged in the business of disaster mitigation and emergency
preparedness. We purchased a 100% interest in Emergency Disaster Systems
for an aggregate of $25,000 in cash. On September 24, 2007, we distributed
all of the shares of Emergency Disaster Systems, Inc. stock to our stockholders
on a pro rata basis and thus exited that business.





Effective
January 10, 2008, we experienced a change in control as the result of a series
of transactions. Effective on that date, we executed an employment agreement
with Scott Gallagher pursuant to which he became our Chairman of the board of
directors and Chief Executive Officer. Simultaneously, our former Chairman,
David Chin, resigned as an officer and director of the corporation leaving Mr.
Gallagher as our sole director. Also effective as of that date, Mr.
Gallagher and a Company controlled by him, 221 Fund, LLC acquired 95.6% of our
common stock. As a result of these transactions Mr. Gallagher assumed control of
our Company. On the same date, we changed our business direction and began doing
business as “Internet Holdings” to focus on acquiring direct navigation Internet
domain names that could be developed into profitable business
ventures.





On April
4, 2008, we acquired 100% of the shares of Elysium Internet, Inc., a direct
navigation Internet media company in exchange for stock and a note to FTS Group,
Inc. Our Chairman and Chief Executive Officer, Scott Gallagher, is also the
Chairman and Chief Executive Officer of FTS Group, Inc.





Results
of Operations





Revenue





The
Company reported no revenue for the period ended February 29, 2008 compared to
revenue of $12,500 for the same period ended February 28, 2007. The decrease in
revenue for the year over year period was due to the change of business
direction experienced during the quarter. During the quarter ended February 29,
2008 the Company experienced a change in management. The new management decided
to change the focus of the business to the Internet media space and to begin
acquiring and developing Internet domain related assets and
businesses.





Expenses





Total expenses for the three months
ended February 29, 2008 were $433,946 compared to expenses of $6,956 for the
period ending February 28, 2007. The expense increase of $426,990 is primarily
related to increased asset impairment costs, increased consulting and employee
related costs due to the change in business direction and management that
occurred during the period ended February 29, 2008.




General
and administrative expenses increased to $384,854 for the period ending February
29, 2008, compared to general and administrative expenses of $6,956 for the
period ended February 28, 2007. The increase in general and administrative
expenses is related to increased costs surrounding our recent business change,
management change and our spin-off of Emergency Distribution
Systems.





We expect
to continue to incur expenditures in the foreseeable future related to the
development and future expansion of our business operations. Over the next
12-month period we expect overall operating expenses to increase as we pursue
business opportunities in the Internet domain and related Internet media
space.





Losses




Our loss
from continuing operations for the three months ended February 29, 2008 was
$433,946 compared to net income from  continuing operations of $5,544
for the same period ended February 28, 2007. We experienced no
loss  from discontinued operations for the period ended February 29,
2008 compared to a loss from discontinued operations of $81,642 for the same
period of 2007. Our net loss for the period ending February 29, 2008 was
$433,946 compared to a net loss of $76,098 for the same period of 2007. The
$357,848 year over year increase in our net loss was related to increased costs
related to the change in business direction and management that occurred during
the period ended February 29, 2008 as well as increased costs relating tothe
spin-off of Emergency Disaster Systems as well as $175,000 in settlement reserve
expenses relating to a lawsuit in which we were named and the possibility that
we intend to effect a rescission offer during the next 12 months. For at least
the next 12 months, we expect net losses to continue until such time we develop
or acquire a business that can sustain itself based on operations. We believe
that as we develop or acquire Internet domain and media related assets and
businesses we can meet our goal of turning profitable in the next 12 to 24
months. However, due to funding needs, market uncertainties and a variety of
other factors that are out of our control we cannot guarantee the accuracy of
our expectations and when or if we will ever become a profitable
business.




Liquidity
and Capital Resources





As of
February 29, 2008, we had total assets of $212,359 consisting of $359 in cash
and $212,000 in notes receivable from related parties. As of February 29, 2008,
we had total liabilities of $444,500 consisting of $42,500 of accounts payable,
$227,000 due to related parties and $175,000 as a settlement
reserve.





We have
limited cash on hand and will require additional capital to support strategic
acquisitions and to fund our current expansion plans. We may be unable to
continue operations for the next 12 months if we are unable to generate revenues
or obtain capital infusions by issuing equity or debt securities in exchange for
cash. There can be no assurance that we will be able to secure additional
funds in the future to stay in business. Our principal accountants have
expressed substantial doubt about our ability to continue as a going concern
because we have limited operations.





Our
management anticipates the need to hire additional full or part-time employees
over the next 12 months as we continue to increase our operations. At this
time we believe that our operations are currently on a small scale that is
manageable by our current staff. While we believe that the addition of employees
is required over the next 12 months, we have retained two independent
consultants and contractors to perform development related activities and market
Internet related products and services we are currently developing.





Off
Balance Sheet Arrangements





We do not
have any off-balance sheet arrangements.





Item
3.  Quantitative and Qualitative Disclosures
about Market Risk





Not
applicable





Item
4(T). Controls and Procedures


Disclosure
Controls and Procedures


Our Chief
Executive Officer/Acting Chief Financial Officer evaluated the effectiveness of
our disclosure controls and procedures as of the end of the period covered by
this quarterly report on Form 10-Q. Based on this evaluation, our Chief
Executive Officer/Acting Chief Financial Officer has concluded that our
disclosure controls and procedures, including internal control over financial
reporting, were effective as of February 29, 2008, but were not effective for
the entire quarter to ensure that information we are required to disclose in
reports that we file or submit under the Securities Exchange Act of 1934, as
amended (i) is recorded, processed, summarized, and reported within the time
periods specified in Securities and Exchange Commission rules and forms, and
(ii) is accumulated and communicated to our management, including our Chief
Executive Officer/Acting Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure. Our disclosure controls and procedures
are intended to be designed to provide reasonable assurance that such
information is accumulated and communicated to our management. Our management
concluded that prior management did not maintain effective controls to ensure
the accuracy of disclosures in our financial statements and classification of
certain financial transactions in our financial statements.
  Our
disclosure controls and procedures include components of our internal control
over financial reporting. In designing and evaluating our disclosure controls
and procedures management recognizes that any controls, no matter how well
designed and operated, can provide only reasonable, but not absolute, assurance
that misstatements due to error or fraud will not occur or that all control
issues and instances of fraud, if any, with our company have been
detected.
 
 On
January 10, 2008, we experienced a change in control and Scott Gallagher was
appointed as our Chief Executive Officer and Acting Chief Financial
Officer. Our new management identified control deficiencies (a) in our
procedures for reconciling and compiling our books for the 2007 fiscal year, (b)
in our procedures for evaluating and accounting for equity transactions and (c)
in our ability to timely produce accurate financial statements that we believe
constitute individually, or in the aggregate, material weaknesses with respect
to those matters.
 
 A
“material weakness” is defined as a significant deficiency, or a combination of
significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected. A “significant deficiency” is a control deficiency, or a
combination of control deficiencies, that adversely affects a company’s ability
to initiate, authorize, record, process or report external financial data
reliably in accordance with generally accepted accounting principles such that
there is more than a remote likelihood that a misstatement of the annual or
interim financial statements that is more than inconsequential will not be
prevented or detected.
 
 In
preparing our financial statements and in reviewing the effectiveness of the
design and operation of our internal accounting controls and procedures and our
disclosure controls and procedures for the quarter ended February 29, 2008, we
performed transaction reviews and control activities in connection with
reconciling and compiling our financial records for the quarterly period ended
February 29, 2008. These reviews and procedures were undertaken in order to
confirm that our financial statements for the period ended February 29, 2008 are
prepared in accordance with generally accepted accounting principles, fairly
presented and free of material errors.
 
 Based on
our review of our accounting controls and procedures, we believe the control
deficiencies we identified on January 10, 2008, resulted primarily from the
following contributing factors:
 
 ·We had one person performing the roles
of all executive officers. As a result, we did not maintain adequate
segregation of duties within our critical financial reporting applications, the
related modules and financial reporting processes. This control
deficiency could result in a misstatement of balance sheet and income
statement accounts in our interim or annual consolidated financial statements
that would not be prevented or detected. Accordingly, management has determined
that this control deficiency constitutes a material
weakness.
 ·We had insufficient resources in the
accounting department and a lack of accounting expertise at our
Company.
 ·We failed to accurately account for
certain equity instruments, due, at least in part, to a lack of sufficient
financial expertise in prior management. Failure to maintain detailed
records and human error also may have played a role.
 
 Changes
in Internal Control over Financial Reporting
  Our new
management team has addressed the deficiencies both in the legal and accounting
areas. Management has strengthened our accounting capacity by retaining an
independent peer review accounting firm to advise management on matters relating
to internal accounting. With regards to its legal matters management has
retained retained a qualified securities law firm to advise management on legal
matters relating to its public filings. During the remainder of fiscal 2008, we
intend to continually improve our internal controls and procedures by hiring
additional employees or consultants as needed.
 
 We
believe that the steps outlined above will strengthen our internal control over
financial reporting and address the material weakness described above. As part
of our 2008 assessment of internal control over financial reporting, our
management will test and evaluate these additional controls to be implemented to
assess whether they are operating effectively.
  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our
registered public accounting firm pursuant to the temporary rules of the
Securities and Exchange Commission that permit us to provide only management’s
report in this annual report.


2









PART
II - OTHER INFORMATION





Item
1.  Legal Proceedings





On
November 6, 2006, Sandra Sawyer filed a suit in Los Angeles Superior Court
against US Biodefense, Inc. and David Chin, one of our officers and directors at
the time the lawsuit was filed, alleging a breach of contract by Mr. Chin in
relation to the purchase of our Company by Mr. Chin from Ms. Sawyer. On April
20, 2007, Mr. Chin filed a cross-complaint against the plaintiff alleging breach
of contract. On November 21, 2007, we reached a settlement with Ms. Sawyer,
whereby we agreed to pay to Ms. Sawyer an aggregate sum of $90,000 over 15
months. In the event of default, we will be required to pay Ms. Sawyer a sum of
$225,000 less any payments made under this agreement. We were in compliance with
this settlement agreement through February 29, 2008.





To our knowledge, as of February 29,
2008, there was no other threatened or pending litigation against our company or
our officers or directors in their capacity as such.





Item
1A.  Risk Factors





Not
Applicable








Item
2.  Unregistered Sales of Equity
Securities and Use of Proceeds





During
the three months ended January 31, 2008, the Company issued 400,000 shares of
common stock to an individual as consulting fees totaling $60,000.




For this
issuance, we relied on the exemption from the registration requirements of the
Securities Act provided by Rule 506 of Regulation D. The person who received
such unregistered shares was either an accredited investor (as that term is
defined in Rule 501(a) of Regulation D), or alone or through a purchaser
representative had such knowledge and experience in financial and business
matters as to be capable of evaluating the risks of the investment, and received
information regarding our Company and the acquisition transaction. All stock
certificates bear a restrictive legend stating that the shares have not been
registered under the Securities Act and cannot be sold or otherwise transferred
without an effective registration or an exemption there from.


Item
3. Defaults Upon Senior Securities





None.





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





None.





Item
5.  Other Information





None.





Item
6. Exhibits





3.1.
            Articles
      of Incorporation, dated June 24, 1983 (included as Exhibit 3.1 to the Form
      10SB12G filed September 1, 2000, and incorporated herein by
      reference).





3.2
            Amendment
      to the Articles of Incorporation, dated July 17, 1984 (included as Exhibit
      3.2 to the Form 10SB12G filed September 1, 2000, and incorporated herein
      by reference).





3.3
            Amendment
      to the Articles of Incorporation, dated September 7, 1984 (included as
      Exhibit 3.3 to the Form 10SB12G filed September 1, 2000, and incorporated
      herein by reference).





3.4
            Amended
      and Restated Articles of Incorporation, dated December 29, 1997 (included
      as Exhibit 3.4 to the Form 10SB12G filed September 1, 2000, and
      incorporated herein by reference).





3.5
            By-Laws
      (included as Exhibit 3.5 to the Form 10SB12G filed September 1, 2000, and
      incorporated herein by reference).





3.6
            Certificate
      of Amendment to the Articles of Incorporation, dated May 12, 2003
      (included as Exhibit 3 to the Form 10-QSB filed July 15, 2003, and
      incorporated herein by reference).





4.1
            US
      Biodefense, Inc. 2006 Qualified Stock Option Plan, dated April 26, 2006
      (included as Exhibit 4.1 to the Form S-8 filed July 25, 2006, and
      incorporated herein by reference).





4.2
            US
      Biodefense, Inc. 2007 Stock Incentive Plan, dated April 1, 2007 (included
      as Exhibit 4 to the Form S-8 filed May 4, 2007, and incorporated herein by
      reference).





4.3
            US
      Biodefense, Inc. 2008 Stock Incentive Plan, dated February 15, 2008
      (included as Exhibit 10.1 to the Form S-8 filed February 15, 2008, and
      incorporated herein by reference).





10.1
            Stock
      Purchase Agreement between the Company and Charles Wright, dated August 7,
      2006 (included as Exhibit 2 to the Form 8-k filed August 14, 2006, and
      incorporated herein by reference).





10.2
            Stock
      Purchase Agreement between the Company and Equity Solutions, Inc., dated
      August 7, 2006 (included as Exhibit 10.1 to the Form 8-k filed August 14,
      2006, and incorporated herein by
reference).





10.3
            Consulting
      Agreement between the Company and Charles Wright, dated August 21, 2006
      (included as Exhibit 10 to the Form 8-K filed August 30, 2006, and
      incorporated herein by reference).





10.4
            Executive
      Employment Agreement between the Company and Scott Gallagher, dated
      January 10, 2008 (included as Exhibit 10.1 to the Form 8-K filed January
      10, 2008, and incorporated herein by
reference).





10.5
            Agreement
      for Purchase and Sale of Stock between the Company and Scott Gallagher,
      dated January 10, 2008 (included as Exhibit 10.2 to the Form 8-K filed
      January 10, 2008, and incorporated herein by
  reference).





10.6
            Agreement
      for Purchase and Sale of Stock between the Company and 221 Fund, LLC,
      dated January 10, 2008 (included as Exhibit 10.3 to the Form 8-K filed
      January 10, 2008, and incorporated herein by
  reference).





10.7
            Asset
      Purchase Agreement between the Company and FTS Group, Inc., dated March
      19, 2008 (included as Exhibit 10.1 to the Form 8-K filed April 10, 2008,
      and incorporated herein by
reference).





10.8
            Promissory
      Note between due January 3, 2010, issued by the Company to FTS Group, Inc.
      (included as Exhibit 10.2 to the Form 8-K filed April 10, 2008, and
      incorporated herein by reference).





17.1
            Letter of
      Resignation to the Company from David Chin, dated January 10, 2008
      (included as Exhibit 17.1 to the Form 8-K filed January 10, 2008, and
      incorporated herein by reference).




31.1
            Certification
      of the Chief Executive Officer and Acting Chief Financial Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
      herewith).





32.1
            Certification
      of Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002 (filed
      herewith).








SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





US
BIODEFENSE, INC.





By: /s/ Scott Gallagher


Scott
Gallagher


Chief
Executive Officer, Acting Chief


Financial
Officer, Principal Accounting Officer and Chairman of the Board of
Directors





Dated:
April 21, 2008




3