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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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 March 31, 2009

OR

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Commission file number001-32289

HS3 TECHNOLOGIES,
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                           | 20-3598613                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|                                                 |                                     
|1800 Boulder Street, Suite 600, Denver CO        | 80211-6400                          
|(Address of principal executive offices)         | (Zip Code)                          

(303) 455-2550(Telephone number, including
area code)

Indicate by check mark whether the
issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 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 small 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 | [ ] |                                               | Accelerated filer         | [ ]  
|----------------------- | --- | --------------------------------------------- | ------------------------- | -----
|Non-accelerated filer   | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [ X ]

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

As of April 29, 2009, there were 41,995,802 shares of the
registrants Common Stock issued and outstanding

1

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TABLE OF CONTENTS

PART I  FINANCIAL INFORMATION

|        |                                                                                                                                                      | Page
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|        |                                                                                                                                                      | No. 
|Item 1. | Unaudited
      Condensed Consolidated Financial Statements                                                                                          | 4   
|        |                                                                                                                                                      |     
|        | Condensed
      consolidated balance sheets as of March 31, 2009 and June 30, 2008                                                                   | 5   
|        |                                                                                                                                                      |     
|        | Condensed
      consolidated statements of operations for the three and nine months ended
      March 31, 2009 and 2008                              | 6   
|        |                                                                                                                                                      |     
|        | Condensed
      consolidated statements of stockholders equity (deficit) for the year
      ended June 30, 2008 and nine months ended March 31, 2009 | 7   
|        |                                                                                                                                                      |     
|        | Condensed
      consolidated statements of cash flows for the nine months ended March 31,
      2009 and 2008                                        | 8   
|        |                                                                                                                                                      |     
|        | Notes to
      condensed consolidated financial statements                                                                                           | 9   
|        |                                                                                                                                                      |     
|Item 2. | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                                                          | 14  
|        |                                                                                                                                                      |     
|Item 3. | Quantitative
      and Qualitative Disclosures about Market Risk                                                                                     | 21  
|        |                                                                                                                                                      |     
|Item 4. | Controls and
      Procedures                                                                                                                        | 21  

PART II  OTHER INFORMATION

|Item 1.  | Legal
      Proceedings                                           | 21
|-------- | ----------------------------------------------------------------- | --
|         |                                                                   |   
|Item 1A. | Risk Factors                                                      | 22
|         |                                                                   |   
|Item 2.  | Unregistered
      Sales of Equity Securities and Use of Proceeds | 27
|         |                                                                   |   
|Item 3.  | Defaults
      upon Senior Securities                             | 27
|         |                                                                   |   
|Item 4.  | Submission
      of Matters to a Vote of Security Holders         | 27
|         |                                                                   |   
|Item 5.  | Other
      Information                                           | 27
|         |                                                                   |   
|Item 6.  | Exhibits                                                          | 28

2

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS

This Quarterly Report contains forward-looking statements
including, but not limited to the following:

- certain statements, including possible or assumed future results of operations,
    in Managements Discussion and Analysis of Financial Condition
    and Results of Operations;
- any statements contained herein regarding the prospects for our business
    or any of our services;
- any statements preceded by, followed by or that include the words may,
    should, believes, expects, anticipates,
    intends, continues, estimates, plans,
    targets predicts, attempts, is scheduled,
    or similar expressions; and
- other statements obtained herein regarding matters that are not historical
    facts.

Our business and results of
operation are subject to risk and uncertainties, many of which are beyond our
ability to control or predict. Because of these risks and uncertainties, actual
results may differ materially from those expressed or implied by forward-looking
statements, and investors are cautioned not to place undue reliance on such
statements, which speak only as of the date thereof. Important factors that
could cause actual results to differ materially from our expectations and may
adversely affect our business and results of operations, include, but are not
limited to those risk factors set forth in this report in Part II Other
Information under the heading Item 1A. Risk Factors.

In this Quarterly Report, unless
otherwise specified, all dollar amounts are expressed in United Sates dollars
and all references to common shares refer to the common shares in our capital
stock.

As used in this Quarterly Report,
the terms we, us, our, and HS3, means HS3 Technologies, Inc., unless the
context clearly requires otherwise.

3

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PART 1  FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial
Statements.

The interim unaudited condensed
consolidated financial statements of HS3 Technologies, Inc. as of and for the
three and nine month period ended March 31, 2009 are included herein beginning
on the following page. The accompanying interim unaudited condensed consolidated
financial statements should be read in conjunction with our consolidated
financial statements and related notes for the year ended June 30, 2008,
together with our discussion and analysis of financial condition and results of
operations, included in our Amended Annual Report on Form 10-K/A filed on
February 13, 2009 with the Securities and Exchange Commission (File No.
001-32289). Our financial statements are stated in United States dollars (US$)
and are prepared in accordance with United States Generally Accepted Accounting
Principles.

The unaudited condensed
consolidated financial statements include the accounts of HS3 Technologies, Inc.
and our wholly-owned subsidiary, ip-Colo , Inc.. All inter-company balances and
transactions have been eliminated.

We have no off-balance-sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to stockholders.

4

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HS3 Technologies, Inc. Condensed consolidated balance
sheets

|                                                              |   | March 31,  |   |   | June 30,   |  
|------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                              |   | 2009       |   |   | 2008       |  
|ASSETS                                                        |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|Current Assets:                                               |   |            |   |   |            |  
|Cash and cash equivalents                                     | $ | 184,988    |   | $ | 130,318    |  
|Trade accounts receivable                                     |   | 55,069     |   |   | 215,499    |  
|Other receivables                                             |   | 56,427     |   |   | -          |  
|Inventory                                                     |   | 148,590    |   |   | 92,885     |  
|                                                              |   | 445,074    |   |   | 438,702    |  
|Furniture, fixtures and equipment, net of accumulated         |   |            |   |   |            |  
|depreciation of $76,482 and
      $54,454 respectively        |   | 71,758     |   |   | 80,880     |  
|Other assets, net                                             |   | 17,500     |   |   | 24,500     |  
|                                                              | $ | 534,332    |   | $ | 544,082    |  
|                                                              |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|LIABILITIES AND EQUITY                                        |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|Current Liabilities:                                          |   |            |   |   |            |  
|Trade accounts payable                                        | $ | 61,182     |   | $ | 215,890    |  
|Other accrued liabilities                                     |   | 416,087    |   |   | 290,926    |  
|Convertible notes payable                                     |   | 1,098,000  |   |   | 212,000    |  
|Long-term debt, current portion                               |   | 127,761    |   |   | 113,237    |  
|                                                              |   | 1,703,030  |   |   | 832,053    |  
|                                                              |   |            |   |   |            |  
|Long-term debt                                                |   | 144,293    |   |   | 242,010    |  
|Other long-term liabilities                                   |   | 28,000     |   |   | 28,000     |  
|Total Liabilities                                             |   | 1,875,323  |   |   | 1,102,063  |  
|                                                              |   |            |   |   |            |  
|                                                              |   |            |   |   |            |  
|Stockholders Equity (Deficit):                               |   |            |   |   |            |  
|Preferred stock, $0.0001 par value,
      2,500,000 shares    |   |            |   |   |            |  
|authorized, none issued
      or outstanding                  |   | -          |   |   | -          |  
|Common Stock, $0.001 par value,
      50,000,000 authorized,  |   |            |   |   |            |  
|issued and outstanding
      41,995,802 and 39,945,802 shares |   |            |   |   |            |  
|at March
      31, 2009 and June 30, 2008, respectively       |   | 41,996     |   |   | 39,946     |  
|Additional paid-in capital                                    |   | 4,385,001  |   |   | 4,333,459  |  
|Accumulated deficit                                           |   | (5,767,988 | ) |   | (4,931,386 | )
|                                                              |   | (1,340,991 | ) |   | (557,981   | )
|                                                              | $ | 534,332    |   | $ | 544,082    |  

See accompanying notes to condensed consolidated financial
statements

5

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HS3 Technologies, Inc. Condensed consolidated statement
of operations

|                                     |   | Three months ended March 31, |   |   | Nine months ended March 31, |  
|------------------------------------ | - | ---------------------------- | - | - | --------------------------- | -
|                                     |   | 2009                         |   |   | 2008                        |  
|                                     |   |                              |   |   |                             |  
|                                     |   |                              |   |   |                             |  
|Revenue                              | $ | 56,837                       |   | $ | 37,087                      |  
|Cost of goods sold                   |   | 13,921                       |   |   | 25,810                      |  
|Gross profit                         |   | 42,916                       |   |   | 11,277                      |  
|                                     |   |                              |   |   |                             |  
|Operating Expenses:                  |   |                              |   |   |                             |  
|Selling, general and administrative  |   | 272,851                      |   |   | 406,983                     |  
|Depreciation and amortization        |   | 10,120                       |   |   | 5,139                       |  
|Total
      operating expenses       |   | 282,971                      |   |   | 412,122                     |  
|                                     |   |                              |   |   |                             |  
|Loss from operations                 |   | (240,055                     | ) |   | (400,845                    | )
|                                     |   |                              |   |   |                             |  
|Other income (expense):              |   |                              |   |   |                             |  
|Interest expense, net                |   | (44,798                      | ) |   | (27,772                     | )
|Total other income (expense)         |   | (44,798                      | ) |   | (27,772                     | )
|                                     |   |                              |   |   |                             |  
|Net loss                             | $ | (284,853                     | ) | $ | (428,617                    | )
|                                     |   |                              |   |   |                             |  
|Net loss per share-basic and diluted | $ | (0.007                       | ) | $ | (0.013                      | )
|                                     |   |                              |   |   |                             |  
|Weighted average number of common    |   |                              |   |   |                             |  
|shares outstanding                   |   | 41,787,469                   |   |   | 33,810,417                  |  

See accompanying notes to condensed consolidated financial
statements

6

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HS3 Technologies, Inc.Condensed consolidated
statement of stockholders equity (deficit)

|                              |  |              |  |   |         |  |   |            |   |   | Unamortized    |   |   |            |   |   |              |  
|----------------------------- |  | ------------ |  | - | ------- |  | - | ---------- | - | - | -------------- | - | - | ---------- | - | - | ------------ | -
|                              |  |              |  |   |         |  |   |            |   |   | Cost           |   |   |            |   |   | Total        |  
|                              |  |              |  |   |         |  |   | Additional |   |   | Stock/Warrants |   |   | Retained   |   |   | Stockholders |  
|                              |  | Common Stock |  |   | Paid-in |  |   | Issued for |   |   | Earnings       |   |   | Equity     |  
|                              |  | Shares       |  |   | Amount  |  |   | Capital    |   |   | Service        |   |   | (Deficit)  |   |   | (Deficit)    |  
|Balances as of June 30, 2007  |  | 31,470,802   |  | $ | 31,471  |  | $ | 3,658,713  |   | $ | (281,920       | ) | $ | (3,374,938 | ) | $ | 33,326       |  
|Shares issued for cash        |  | 5,300,000    |  |   | 5,300   |  |   | 524,700    |   |   | -              |   |   | -          |   |   | 530,000      |  
|Shares issued for services    |  | 3,175,000    |  |   | 3,175   |  |   | 204,875    |   |   | 165,920        |   |   | -          |   |   | 373,970      |  
|Warrants issued for services  |  | -            |  |   | -       |  |   | 16,135     |   |   | 116,000        |   |   | -          |   |   | 132,135      |  
|Purchase of warrants          |  | -            |  |   | -       |  |   | (70,964    | ) |   | -              |   |   | -          |   |   | (70,964      | )
|Net loss                      |  | -            |  |   | -       |  |   | -          |   |   | -              |   |   | (1,556,448 | ) |   | (1,556,448   | )
|Balances as of June 30, 2008  |  | 39,945,802   |  | $ | 39,946  |  | $ | 4,333,459  |   | $ | -              |   | $ | (4,931,386 | ) | $ | (557,981     | )
|Shares issued for cash        |  | -            |  |   | -       |  |   | -          |   |   | -              |   |   | -          |   |   | -            |  
|Shares issued for services/   |  | 2,050,000    |  |   | 2,050   |  |   | 51,542     |   |   | -              |   |   | -          |   |   | 53,592       |  
|cancellation of debt          |  |              |  |   |         |  |   |            |   |   |                |   |   |            |   |   |              |  
|Net loss                      |  | -            |  |   | -       |  |   | -          |   |   | -              |   |   | (836,602   | ) |   | (836,602     | )
|Balances as of March 31, 2009 |  | 41,995,802   |  | $ | 41,996  |  | $ | 4,385,001  |   | $ | -              |   | $ | (5,767,988 | ) | $ | (1,340,991   | )

See accompanying notes to condensed consolidated financial
statements

7

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HS3 Technologies, Inc.Condensed consolidated
statement of cash flows

|                                                        |   | Nine months ended March 31, |  
|------------------------------------------------------- | - | --------------------------- | -
|                                                        |   | 2009                        |  
|                                                        |   |                             |  
|                                                        |   |                             |  
|Cash flows from operating activities:                   |   |                             |  
|Net loss                                                | $ | (836,602                    | )
|                                                        |   |                             |  
|Adjustments to reconcile net loss to net
      cash     |   |                             |  
|provided by (used in) operations:                       |   |                             |  
|Depreciation and amortization                           |   | 29,029                      |  
|Accretion of interest                                   |   | 4,035                       |  
|Warrants, stock, and options
      issued for service   |   | 53,592                      |  
|Changes in operating assets and liabilities:            |   |                             |  
|Accounts and other receivables                          |   | 104,003                     |  
|Inventory                                               |   | (55,705                     | )
|Deposit on inventory                                    |   | -                           |  
|Accounts payable and accrued liabilities                |   | (29,547                     | )
|Net cash (used) in operating activities                 |   | (731,195                    | )
|                                                        |   |                             |  
|Cash flow from investing activities:                    |   |                             |  
|Additions to furniture, fixtures &
      equipment      |   | (12,907                     | )
|Net cash (used in) investing activities                 |   | (12,907                     | )
|                                                        |   |                             |  
|Cash flow from financing activities:                    |   |                             |  
|Sale of common stock                                    |   | -                           |  
|Acquisition of stock warrants                           |   | -                           |  
|Convertible notes payable issued for
      cancellation |   | 104,000                     |  
|of accrued liabilities                                  |   |                             |  
|Proceeds from convertible notes payable                 |   | 782,000                     |  
|Borrowings (repayments)
      long-term debt            |   | (87,228                     | )
|Net cash flow provided by financing activities          |   | 798,772                     |  
|                                                        |   |                             |  
|Increase (decrease) in cash and cash equivalents        |   | 54,670                      |  
|Cash and cash equivalents, beginning of
      period    |   | 130,318                     |  
|Cash and cash equivalents, end of period                | $ | 184,988                     |  
|                                                        |   |                             |  
|                                                        |   |                             |  
|Supplemental cash flow information:                     |   |                             |  
|Interest paid                                           | $ | 36,341                      |  
|Income taxes paid                                       | $ | -                           |  
|                                                        |   |                             |  
|Non cash financing activities:                          |   |                             |  
|Stock issued for services                               | $ | 53,592                      |  

See accompanying notes to condensed consolidated financial
statements

8

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HS3 Technologies, Inc.

Notes to condensed consolidated financial statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

(a) Nature of Business

HS3 Technologies, Inc. (HS3 or
the Company) was incorporated in Nevada on January 28, 2003. Prior to a name
change in October 2005, the Company was known as Zeno, Inc. The Company also
changed its fiscal year end from March 31 to June 30. In November 2005, the
Company acquired ip-Colo, Inc., in a reorganization, a development stage
corporation (herein referred to as ip-Colo). On the date of the
reorganization, the Company, a non-operating entity without any assets or
liabilities, was to provide advanced wireless technologies integrated with
high-speed internet, via satellite, and to provide real-time security and
monitoring for many industries.

We provide a diverse line of
cutting edge products and services to meet the growing needs of the security
industry. To meet the ever changing needs of the industry, we have launched a
combination of state-of-the art products and services that include digital video
recording technology (DVR), personal biometric identification units, CCTV, video
monitoring centers, cellular networks, wireless mesh network units and wireless
internet-linked satellite surveillance systems. This combination of products
encompasses a total line that we believe will meet many commercial,
governmental, and residential customer security needs.

Effective February 1, 2009, we
signed a ten (10) year agreement with the 131-year-old American Humane
Association (AHA"). HS3 and AHAs relationship is to create a Video Monitoring
System (VMS) which has been indicated by AHA to become a standard part of the
American Humane Certified (AHC) program, which is a voluntary fee-based
program available to producers, processors and haulers of animals raised for
food. The AHC program provides independent third-party verification that those
businesses treat and care for their animals humanely. Pursuant to the AHA
agreement, we will provide the installation, integration, and monitoring of
production facilities and the transportation of animals to ensure the husbandry
and transportation of the animals conforms to AHC certification standards.
Pursuant to the agreement, we will be paid a recurring monthly monitoring and
equipment license fee for all monitoring locations attached to the
agreement.

(b) Basis of presentation and use of estimates

The accompanying unaudited
condensed consolidated financial statements in this Quarterly Report on Form
10-Q have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, these statements reflect adjustments
(consisting only of normal recurring entries), which in our opinion, are
necessary for a fair presentation of the financial results for the interim
periods presented. Certain information and notes normally included in annual
financial statements have been condensed in or omitted from these interim
financial statements pursuant to such rules and regulations. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes for the year ended June 30,
2008, together with our discussion and analysis of financial condition and
results of operations, included in our Amended Annual Report on Form 10-K/A
filed on February 13, 2009 with Securities and Exchange Commission.

Our accounting and financial
reporting policies conform to accounting principles and practices generally
accepted in the United States of America. The accompanying consolidated
financial statements include the accounts of HS3 and its controlled
subsidiaries. All significant inter-company accounts and transactions have been
eliminated in the preparation of the accompanying condensed consolidated
financial statements.

9

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The preparation of financial
statements in accordance with United States generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses in the reporting
period. The Company regularly evaluates estimates and assumptions related to the
useful life and recoverability of long-lived assets, stock-based compensation
and deferred income tax asset valuation allowances. The Company bases its
estimates and assumptions on current facts, historical experience and various
other factors that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities and the accrual of costs and expenses that are not
readily apparent from other sources. The actual results experienced by the
Company may differ materially and adversely from the Companys estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.

(c) Cash and cash equivalents

We consider all short-term
investments with a remaining maturity of three months or less at the date of
purchase to be cash equivalents.

(d) Furniture, Fixtures and Equipment

Furniture, fixtures and equipment
are recorded at historical cost, net of accumulated depreciation. Depreciation
is computed using the straight-line method based on estimated useful lives (3-5
years). Expenditures for maintenance and repairs are charged to expense.

(e) Inventory

Inventory consists of finished
goods purchased from third-party manufacturers and component parts and is valued
at the lower of average cost or market. Average cost is determined using the
first-in, first-out method of accounting.

(f) Long-lived Assets

Long-lived assets are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable, in accordance with the Financial
Accounting Standards Board (FASB) Statement of Financial Accounting Standard
(SFAS) No.144, Accounting for the Impairment or Disposal of Long-Lived
Assets. An impairment loss would be recognized when the carrying amount of
an asset exceeds the estimated undiscounted future cash flows expected to result
from the use of the asset and its eventual disposition.

(g) Loss Per Share

Basic and diluted earnings (loss)
per share are computed using the weighted average number of shares outstanding
during the period. Diluted earnings per share gives effect to all potential
diluted common shares outstanding during the period. In periods of net loss,
there are no diluted earnings per share since the result would be
anti-dilutive.

(h) Financial Instruments

The fair value of financial
instruments is determined at a specific point in time, based on relevant
information about financial markets and specific financial instruments. As these
estimates are subjective in nature, involving uncertainties and matters of
significant judgment, they cannot be ascertained with precision. Changes in
assumptions can significantly affect estimated fair values.

The carrying value of cash and
cash equivalents, accounts payable and accrued liabilities approximate their
fair value because of the short-term nature of these instruments.

10

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(i) Income Taxes

The Company has adopted SFAS No.
109, Account for Income Taxes, which requires the Company to recognize deferred
tax liabilities and assets for the expected future tax consequences of events
that have been recognized in the Companys consolidated financial statements and
tax returns using the liability method. Under this method, deferred tax
liabilities and assets are determined based on the temporary differences between
the consolidated financial statements and tax bases of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expect to reverse.

(j) Equity-Based Compensation

Common stock, warrants, and
options issued for services are accounted for based on the fair market value at
the date the services are performed. If the awards are based on a vesting period
the fair market value of the awards is determined as vesting is earned. If the
services are to be performed over an extended period of time, the value is
amortized over the life of the period that services are performed.

(k) Concentration of Credit Risk

We sell products to customers in
diversified industries and geographical regions. We continually evaluate the
creditworthiness of our customers. We evaluate the collectability of accounts
receivable on a combination of factors. Our policies require us to record
specific reserve if we become aware of anything that would cause us to question
a specific customers inability to meet their financial obligations to us. We
will record a specific reserve for bad debts to reduce a related receivable when
we believe an amount is not collectible. We do not have any reserves for bad
debt at March 31, 2009.

(l) Revenue Recognition

We record revenue when persuasive
evidence of an arrangement exists, services have been rendered or product
delivery has occurred, the sales price to the customer is fixed or determinable,
and collectability is reasonably assured.

(m) Reclassifications

Certain amounts in the prior periods have been reclassified to
conform to the current periods presentation

2. GOING CONCERN

The accompanying condensed
consolidated financial statements have been prepared assuming that we will
continue as a going concern. Our ability to continue as a going concern is
dependent upon us obtaining additional working capital to develop our business
operations. We intend to use borrowings and/or security sales to mitigate the
affects of our cash position; however, no assurance can be given that debt or
equity financing, if and when required, will be available. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets and classification of liabilities that might
be necessary should we be unable to continue in existence.

11

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3. OTHER ACCRUED LIABILITIES

Other accrued liabilities are as follows:

|                           |   | March 31, |  |   | June 30, | 
|-------------------------- | - | --------- |  | - | -------- | 
|                           |   | 2009      |  |   | 2008     | 
|                           |   |           |  |   |          | 
|Accrued board fees         | $ | 83,332    |  | $ | 45,832   | 
|Accrued rent, officer      |   | 7,184     |  |   | 62,154   | 
|Accrued salaries, officers |   | 233,542   |  |   | 106,563  | 
|Accrued interest           |   | 74,917    |  |   | 38,075   | 
|Payroll liabilities        |   | 16,177    |  |   | 30,609   | 
|Sales tax payable          |   | 935       |  |   | 7,693    | 
|                           | $ | 416,087   |  | $ | 290,926  | 

Board fees to the two independent
board of directors are $25,000 annually and they have the option to receive cash
or convert into common stock at $0.12 per share or the rate of the last
conversion agreement.

The Company leases office space
from a company owned by an officer/director. Rent and operating expenses under
this lease was $17,365 and $48,781 for the three and nine months ended March 31,
2009, respectively. On March 31, 2009, the Company issued a $104,000 convertible
note payable to the officer/director for cancellation of the accrued rent.

Accrued interest represents interest on the convertible notes
payable.

4. CONVERTIBLE NOTES PAYABLE

The Company has been provided
with the following unsecured loans from officers and directors or private
investors pursuant to debt conversion agreements. All principle and interest are
due on demand or are converted at the discretion of the provider of the loan. If
we conduct an offering at a lower priced conversion, the below notes may be
converted at the lower conversion rate.

|From                    |   | Amount of Loans |  |  | Interest Rate |  |   | Conversion Price/Share | 
|----------------------- | - | --------------- |  |  | ------------- |  | - | ---------------------- | 
|Officers and Directors: |   |                 |  |  |               |  |   |                        | 
|Robert A Morrison       | $ | 300,000         |  |  | 12%;15%       |  | $ | .10 & .12              | 
|Mark L. Lana            |   | 27,000          |  |  | 15%           |  | $ | .12                    | 
|Charles Ferris          |   | 10,000          |  |  | 15%           |  | $ | .12                    | 
|Mike Yinger             |   | 1,000           |  |  | 15%           |  | $ | .12                    | 
|                        |   | 234,000         |  |  |               |  |   |                        | 
|Private Investors       |   | 760,000         |  |  | 15%           |  | $ | .10                    | 
|                        | $ | 1,098,000       |  |  |               |  |   |                        | 

On December 18, 2008 and February
1, 2009, we entered into $760,000 of loans with two private investors pursuant
to debt conversion agreements. The loans bear interest at 15% and a conversion
price of $.10 per share and is due on demand or converted at the option of the
private investors. The loan proceeds will be used primarily to purchase
equipment for the roll out of the monitoring locations pursuant to the agreement
with AHA and for other general working capital requirements.

On March 31, 2009, we entered
into a $104,000 loan with an officer pursuant to a debt conversion agreement for
cancellation of accrued rent to such officer

12

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5. LONG-TERM DEBT

During fiscal year ended June 30,
2008 the Company, pursuant to a loan and security agreement, entered into two
(2) $200,000 promissory notes. In addition, the Company issued to the lender a
warrant for the purchase of one million (1,000,000) shares of common stock at a
purchase price of $.12 per share with an expiration date of five (5) years after
the commencement date of the first loan.

The notes have an interest rate
of 15.499% and mature in three (3) years from the commencement date, and are
collateralized with the Companys personal property as defined in the loan and
security agreement. For the three and nine months ended March 31, 2009, we
recorded $13,797 and $39,975, respectively as interest expense pursuant to the
notes.

Each note also has a final
payment fee of $14,000 that is due on the earlier to occur of the maturity date
or prepayment. These fees are being amortized over the life of the loans with
the obligation reflected in other long-term liabilities. For the nine-months
ended March 31, 2009, we expensed $7,000.

The $400,000 proceeds were
allocated to each instrument based on the fair market value of each based on the
Black-Scholes pricing model. The assumptions used in valuing the warrants were:
stock price $.13; exercise price $.12, life  5 years; volatility 101.17%;
dividend yield 0%; and the yield of a risk free investment 3.08% . We determined
the fair value of the note and interest to be $400,000 and the fair market value
of the warrants to be $16,814. We allocated the proceeds to each based on the
respective percentages of total value. The value of the notes was $383,865 and
the warrants $16,135. The discount on the notes will be accreted into interest
expense based on the straight line method over the three (3) year life of the
loans. For year ended June 30, 2008 and the nine months ended March 31, 2009 we
recorded $2,690 and $4,035 respectively as additional interest expense. At March
31, 2009 we had $9,411 discount remaining to be amortized into interest. The
value of the loans at March 31, 2009 was $281,465. The current portion of the
debt was $127,761 after discount ($133,139 principal owed) and the long term
portion of the debt was $144,293 after discount ($148,326 principal owed).

6. COMMON STOCK

During fiscal year ended June
30, 2008 we: (a) sold 5,300,000 shares of our common stock for $.10 per share
for total cash proceeds of $530,000; (b) issued 3,175,000 shares of our common
stock for services rendered to us; (c) purchased and cancelled 5,000,000 of the
outstanding warrants for $70,964 and (d) issued 1,000,000 warrants in
conjunction with our long-term debt.

On August 15, 2008 the Company
entered into a six (6) month Financial Communications Consulting Agreement
with Wall Street Resources, Inc. to provide written analytical coverage and
consultation matters concerning corporate finance and investor communications.
The Company agreed to issue the consultant a Commencement Bonus payable in the
form of 800,000 shares of the Companys 144 restricted Common Stock and $3,000
which has been accrued for. We valued the 800,000 shares based on the quoted
trade price on August 15, 2008 ($0.015) and recorded $12,000 as
advertising/promotion/IR expense. In addition, the Company will pay the
consultant at a rate of $2,500 per month during the term of the agreement which
is due on the 15th of each month with payments accruing until the
Company raises in excess of $500,000 or becomes cash flow positive. As of March
31, 2009, $18,000 has been accrued and included in trade accounts payable
pursuant to this agreement.

On February 1, 2009, we entered
into a eleven (11) month Financial Consulting Agreement with a third party. We
issued the third party 1,000,000 shares of our common stock for services
rendered to us. We valued the 1,000,000 shares based on the quoted trade price
of February 1, 2009 ($.020) and recorded $20,000 as contract services
expense.

On March 1, 2009, we issued
250,000 shares of our common stock to a third party for cancellation of $21,592
of accounts payable due such third party. In addition, we entered into a six (6)
month consulting agreement with this third party agreeing to pay the consultant
at a rate of $9,000 per month to provide consultation maters concerning
marketing and relationships with potential producers under the AHA
agreement.

13

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Pursuant to the 2005 Stock Option
Plan, the Board of Directors had granted 2,500,000 options under the plan. At
March 31, 2009, 1,500,000 options (with an exercise price of $.1667) are
outstanding which expire in March 2012. In addition, 1,250,000 and 1,000,000
share purchase warrants with an exercise price of $.12 per share expired on
September 8, 2008 and December 4, 2008, respectively.

On January 30, 2009, we entered
into a common share purchase agreement wherein we were to acquire 2,821,391 of
our common shares from a shareholder for $56,427 in which we advanced money. The
agreement did not close as of March 31, 2009, and the parties have rescinded the
transaction and we have recorded a receivable back for the money.

Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations

Critical Accounting Polices and Estimates

The following discussion and
analysis of the results of operations and financial condition should be read in
conjunction with the accompanying unaudited condensed consolidated financial
statements.

A summary of the significant
accounting polices that we have adopted and followed in the preparation of our
condensed consolidated financial statements is detailed in our consolidated
financial statements for the year ended June 30, 2008, included in our Amended
Annual Report on Form 10-K/A filed on February 13, 2009.

Our financial statements and
accompanying notes are prepared in accordance with generally accepted accounting
principles in the United States. Preparing financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses. These estimates and assumptions are
affected by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financials.

We base our assumptions and
estimates on historical experience and other sources that we believe to be
reasonable at the time. Actual results may vary from our estimates due to
changes in circumstances, weather, politics, global economics, mechanical
problems, general business conditions and other factors. Our significant
estimates are related to the valuation of our stock issued for services,
warrants and options.

Corporate History

We were incorporated under the
laws of the State of Nevada on January 28, 2003 under the name Zeno, Inc. On
November 9, 2005, we closed on an asset purchase agreement with IP-Colo, Inc.
(IPC) wherein we acquired all of the assets of IPC. IPC was in the development
stage of providing advanced wireless technologies, integrated with high-speed
internet via satellite to provide real-time security and monitoring for many
industries. On or about October 10, 2005, we changed our name to HS3
Technologies, Inc.

On September 6, 2006, we effected
a one (1) new for four (4) old reverse stock split of our authorized, issued and
outstanding stock. As a result, our authorized capital decreased to 50,000,000
shares of common stock with a par value of $0.001 each and 2,500,000 preferred
stock with a par value of $0.001 each.

During fiscal year ended June 30,
2007 we: (a) sold 10,862,500 shares of our common stock for total cash proceeds
of $919,000; (b) issued 1,760,000 shares of our common stock for services
rendered to us; (c) issued 1,356,811 shares in conversion of notes; and (d)
issued 7,250,000 warrants for services rendered to us.

14

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During fiscal year ended June
30, 2008 we: (a) sold 5,300,000 shares of our common stock for $.10 per share
for total cash proceeds of $530,000; (b) issued 3,175,000 shares of our common
stock for services rendered to us; (c) purchased and cancelled 5,000,000 of the
outstanding warrants for $70,964 and (d) issued 1,000,000 warrants in
conjunction with our long-term debt.

During fiscal year ended June 30,
2009 thus far, we: (a) have issued 2,050,000 shares of our common stock for
services rendered to us or cancellation of various trade payables and (b)
entered into $782,000 of convertible notes payable with officers and private
investors.

Effective February 1, 2009, we
signed a ten (10) year agreement with the AHA. HS3 and AHAs relationship is to
create a Video Monitoring System which has been indicated by AHA to become a
standard part of the American Humane Certified program, which is a voluntary
fee-based program available to producers, processors and haulers of animals
raised for food. The AHC program provides independent third-party verification
that those businesses treat and care for their animals humanely. Pursuant to the
AHA agreement, we will provide the installation, integration, and monitoring of
production facilities and the transportation of animals to ensure the husbandry
and transportation of the animals conforms to AHC certification standards.
Pursuant to the agreement, we will be paid a recurring monthly monitoring and
equipment license fee for all monitoring locations attached to the
agreement.

Current Business

Currently we are primarily
focused in the security industry. We have expanded our market strategies with a
diverse new line of cutting edge products and services to meet the growing needs
of the security industry by providing a single source portal to our customers
with products and services in combinations that complete the security and
monitoring matrix. To meet the ever changing needs of the industry, we have
launched a combination of state-of-the art products and services that include
digital video recording technology (DVR), biometric access control (door locks),
personal biometric identification units, CCTV, video monitoring centers,
cellular networks, wireless mesh network units and wireless internet-linked
satellite surveillance systems. This combination of products encompasses a total
line that we believe will meet many commercial and residential customer security
needs. Our monitoring center in Denver, Colorado serves as a single point
integrated security solutions portal, integrating our proprietary analytical
software, network security, alarm monitoring and video products.

We are still in our infancy as a
viable commercial entity, and consequently our focus has been on the
identification of market needs, the development of our security products and
services to meet these needs, and the branding of our company. We anticipate
that the expected growth in revenues will assist us in attracting additional
financing to allow us to add the needed resources in order to further support
the growth of our operations.

In the long-term, our ability to
continue as a going concern is dependent upon successful and sufficient
acceptance of our current security products, services and solutions by the
market. Additionally we expect any new products or services that we may
introduce in the future will have positive impact on our success and our ability
to continue as a going concern. The continuing successful development and sales
of our products and services, and finally, achieving a profitable level of
operations will contribute to our ongoing success.

After successful beta testing of
three (3) beta sites and thirteen (13) monitoring locations, we entered into a
ten (10) year agreement with the American Humane Association, pursuant to which
we are to install and integrate Video Monitoring Systems in production,
transportation and slaughter facilities to reflect the animal species and sub
groups that the American Human Certified certifies allowing AHA to have a
system that can provide real-time analytical technology tools and increase
observation frequency. We, in conjunction with AHA, will roll out our products
and services for those producers and processors as part of the AHC program.

Corporate Strategy

Our Company integrates
technology, services and people into solutions that enhance the level of
security protection and surveillance services. Our Companys goal is to become a
security portal, with cutting-edge technology applications and solutions
specifically tailored to meet the security needs of government, commercial and
residential customers.

15

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All of the products and services,
including biometric access control, satellite remote monitoring, and DVRS are
all security related. Unlike many of the security companies that focus
exclusively on the hardware sales side of the business, our Companys value
proposition is to use our proprietary products to generate recurring revenue for
our Company in the form of monitoring fees. We view the installation of our
hardware products as the entry vehicle into a long-term technological
relationship with our customers. We continually enhance our existing products by
periodically re-designing them to accommodate to the requirement of our customer
needs.

Research indicates that the video
surveillance market is poised for explosive growth driven in part by step up
security measures according to government mandates in the coming years, a desire
for heightened security, the need to replace existing and aging infrastructures
as well as the transition from an analog based industry to a digital one.

We intend to focus our attention
on our recently signed agreement with AHA which certifies the livestock animal
production cycle from birth-to-death. There are two primary facilities that
are critical in this process; the growing house and the slaughter house. We
estimate that the number of large growing houses and slaughter houses suitable
for our services and technology to be approximately 10,000 and 300
respectively.

An additional market that we plan
to explore with our products and services are (1) the food processing and safety
stage of the business which would take the food from slaughter/death to dinner
table that is critical for ensuring food safety for the consumers. Additionally
this can obviate expensive beef and poultry recalls and theft, that cost beef
and poultry companies millions of dollars each year.

Results of Operations

Three Months Ended March 31, 2009 and 2008

Revenue and Cost of goods sold.

We derive revenue from our
operations by charging monthly fees for providing integrated equipment,
monitoring, labor and other technology services as well as equipment sales to
our customers. Our revenue and cost of goods sold for the three month period
ended March 31, 2009 and 2008 are outlined in the table below:

|                                        |   | Three months ended |  
|--------------------------------------- | - | ------------------ | -
|                                        |   | March 31,          |  
|                                        |   | 2009               |  
|                                        |   |                    |  
|VMS Revenue:                            |   |                    |  
|Equipment
      license/monitoring fees | $ | 8,775              |  
|Domain/business hosting fees            |   | 1,053              |  
|Other                                   |   | 10,000             |  
|                                        | $ | 19,828             |  
|                                        |   |                    |  
|Other Revenue:                          |   |                    |  
|Equipment sales                         | $ | 29,489             |  
|IT Services                             |   | 7,520              |  
|Other                                   |   | 0                  |  
|                                        | $ | 37,009             |  
|                                        |   |                    |  
|                                        |   |                    |  
|Revenue                                 | $ | 56,837             |  
|                                        |   |                    |  
|Cost of goods sold                      |   | (13,921            | )
|                                        | $ | 42,916             |  

16

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Our VMS revenues for the three
month period ended March 31, 2009 increased as compared to the comparative
period in 2008 as a result of the start of the roll out of the locations
pursuant to the AHA agreement. For the three months ended March 31, 2009, the
initial 13 beta monitoring locations were on revenue for the entire quarter.

IT services revenues for the
three month period ended March 31, 2009 decreased as compared to 2008 as our
staff was focusing on the manufacture of VMS units for the roll-out of the AHA
agreement as opposed to selling such services to the market

Our gross profit percent on
equipment sales was 53% for the three months ended March 31, 2009. The prior
periods gross profit percent is not comparable due to prior period adjustments
that occurred during the quarter.

Selling, general and administrative expenses.

Our selling, general and
administrative expenses for the three month period ended March 31, 2009 and 2008
are outlined in the table below:

|                                      |   | Three months ended |  
|------------------------------------- | - | ------------------ | -
|                                      |   | March 31,          |  
|                                      |   |                    |  
|                                      |   | 2009               |  
|Wages & employee benefits             | $ | 159,211            |  
|Contract services                     |   | 29,000             |  
|Computer network services             |   | 387                |  
|Accounting, audit and tax expenses    |   | 2,720              |  
|Rent                                  |   | 13,200             |  
|Legal                                 |   | 8,962              |  
|Board fees                            |   | 12,500             |  
|Telephone                             |   | 12,369             |  
|Travel, meals and entertainment       |   | 1,697              |  
|Research & development                |   | 414                |  
|Stock transfer/shareholder/proxy fees |   | (534               | )
|Insurance                             |   | 9,561              |  
|Computer server/other                 |   | 456                |  
|Utilities                             |   | 4,165              |  
|Advertising/promotion/IR              |   | 12,766             |  
|Other expenses                        |   | 5,977              |  
|Bad debt expense                      |   | -                  |  
|                                      | $ | 272,851            |  

Selling, general and
administrative expenses for the three month period ended March 31, 2009
decreased by 33% as compared to the comparative period in 2008 primarily as a
result of our management making a concentrative effort to reduce such costs.

17

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Included for the three months
ended March 31, 2009 is $20,000 of stock issued for services (under contract
services), $7,500 due Wall Street Resources pursuant to our Financial
Communications Consulting Agreement and approximately $4,200 for our website
development program (both under advertising/promotion/IR).

Nine Months Ended March 31, 2009 and 2008

Revenue and Cost of goods sold:

We derive revenue from our
operations by charging monthly fees for providing integrated equipment,
monitoring, labor and other technology services as well as equipment sales to
our customers. Our revenue and cost of goods sold for the nine month period
ended March 31, 2009 and 2008 are outlined in the table below:

|                                        |   | Nine months ended |  
|--------------------------------------- | - | ----------------- | -
|                                        |   | March 31,         |  
|                                        |   | 2009              |  
|                                        |   |                   |  
|VMS Revenue:                            |   |                   |  
|Equipment
      license/monitoring fees | $ | 11,864            |  
|Domain/business hosting fees            |   | 3,950             |  
|Other                                   |   | 10,000            |  
|                                        | $ | 25,814            |  
|                                        |   |                   |  
|                                        |   |                   |  
|Other Revenue:                          |   |                   |  
|Equipment sales                         | $ | 98,683            |  
|IT Services                             |   | 49,360            |  
|Other                                   |   | 285               |  
|                                        | $ | 148,328           |  
|                                        |   |                   |  
|Revenue                                 | $ | 174,142           |  
|                                        |   |                   |  
|Cost of goods sold                      |   | (58,929           | )
|                                        | $ | 115,213           |  

Our revenues for the nine month
period ended March 31, 2009 decreased as compared to the comparative period in
2008 as a result of our Company temporarily suspending marketing efforts for our
products and services in order to focus exclusively on the American Humane
Association beta testing consummation, signing of the agreement and the intended
roll-out and implementation.

During the nine months ended
March 31, 2008, we had approximately $725,000 of sales to Nickelodeon pursuant
to an agreement that failed to develop into a monitoring arrangement for our
Company.

Our gross profit percent on
equipment sales was 40% and 31% for the nine months ended March 31, 2009 and
2008, respectively.

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Selling, general and administrative expenses.

Our selling, general and
administrative expenses for the nine month period ended March 31, 2009 and 2008
are outlined in the table below:

|                                      |   | Nine months ended | 
|------------------------------------- | - | ----------------- | 
|                                      |   | March 31,         | 
|                                      |   | 2009              | 
|Wages & employee benefits             | $ | 450,131           | 
|Contract services                     |   | 97,426            | 
|Computer network services             |   | 26,925            | 
|Accounting, audit and tax expenses    |   | 30,345            | 
|Rent                                  |   | 39,600            | 
|Legal                                 |   | 7,281             | 
|Board fees                            |   | 37,500            | 
|Telephone                             |   | 23,613            | 
|Travel, meals and entertainment       |   | 14,163            | 
|Research and development              |   | 414               | 
|Stock transfer/shareholder/proxy fees |   | 425               | 
|Insurance                             |   | 14,738            | 
|Computer server/other                 |   | 608               | 
|Utilities                             |   | 9,181             | 
|Advertising/promotion/IR              |   | 46,090            | 
|Other expenses                        |   | 27,196            | 
|Bad debt expenses                     |   | 9,616             | 
|                                      | $ | 835,252           | 

Selling, general and
administrative expenses for the nine month period ended March 31, 2009 decreased
by 47% as compared to the comparative period in 2008 primarily as a result of
our management making a concentrative effort to reduce such costs.

Contract services for the nine
months ended March 31, 2009 decreased as compared to the comparative period in
2008 primarily as a result of the inclusion in 2008 of $135,250 of stock issued
for services to the independent directors and two third parties and $85,234 to a
former officer for services. Included in the nine months ended March 31, 2009 is
$20,000 of stock issued for services.

Advertising/promotion/IR expenses
for the nine months ended March 31, 2009 increased as compared to the
comparative period in 2008 primarily as a result of $30,000 (including stock
issued for services, $12,000) to Wall Street Resources, pursuant to our
Financial Communications Consulting Agreement and $7,300 for a web site
development project.

Other expenses for the nine
months ended March 31, 2008 includes $282,000 of amortization cost of warrants
issued late in 2006.

19

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Liquidity and Capital Resources

Our primary liquidity needs are
to fund our working capital requirements and future capital expenditures. Our
ability to continue as a going concern is dependent upon obtaining additional
working capital to develop our business operations. We intend to use borrowings
and security sales to mitigate the affects of our cash position; however, due to
current conditions in the debt and equity markets, no assurance can be given
that debt or equity financing, if and when required, will be available.

Working Capital

|                          |   |            |   |   |          |   |  | Percentage | 
|------------------------- | - | ---------- | - | - | -------- | - |  | ---------- | 
|                          |   | March 31,  |   |   | June 30, |   |  | Increase/  | 
|                          |   | 2009       |   |   | 2008     |   |  | Decrease   | 
|                          |   |            |   |   |          |   |  |            | 
|Current Assets            | $ | 445,074    |   | $ | 438,702  |   |  | 1%         | 
|Current Liabilities       |   | 1,703,030  |   |   | 832,053  |   |  | 105%       | 
|Working Capital (deficit) | $ | (1,257,956 | ) | $ | (393,351 | ) |  | 220%       | 

Cash Flows

|                                                               |   | Nine months ended |  
|-------------------------------------------------------------- | - | ----------------- | -
|                                                               |   | March 31,         |  
|                                                               |   | 2009              |  
|                                                               |   |                   |  
|Net cash (used in) operating activities                        | $ | (731,195          | )
|Net cash (used in) by investing activities                     |   | (12,907           | )
|Net cash flow provided by (used in)
      financing activities |   | 798,772           |  
|Increase (decrease) in cash and cash equivalents               | $ | 54,670            |  

Our cash on hand at March 31,
2009 was approximately $185,000. We have made a concentrated effort over the
prior twelve months to reduce our selling, general and administrative expenses,
which currently have a cash burn rate of approximately $60,000 to $75,000 per
month. Until the time period that the initial monitoring locations, pursuant to
the AHA contract, are on revenue, we may need to raise additional working
capital to fund our current business activities. We will plan to raise the
additional capital needed to meet these immediate short-term needs primarily
through borrowings from officers, directors or private investors.

Over the long term we will
require additional funds in order to acquire equipment, install and monitor
additional monitoring locations pursuant to the AHA contract, as well as any
other expansions into newer markets for us, will require additional financing.
We anticipate relying on cash flows from operations and debt financing for such
expansion. We presently do not have any arrangements for additional financing
for the expansion of our operations, and no potential lines of credit or sources
of financing are currently in place for the purpose of proceeding with our plan
of operations. We have initiated discussions with third parties to provide
either equipment leasing financing or traditional debt financing through a
revolving credit facility or term loans.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Going Concern

Our ability to continue as a
going concern is dependent upon our obtaining additional working capital to
develop business operations. We intend to use borrowings and security sales to
mitigate the affects of our cash position; however, no assurance can be given
that debt or equity financing, if and when required, will be available.

20

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Off-Balance Sheet Arrangements

We have no off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that is material to stockholders.

Item 3. Quantitative and Qualitative Disclosures About
Market Risks

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 4. Controls and Procedures

We maintain disclosure controls
and procedures that are designed to ensure that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, and that
such information is accumulated and communicated to our management, including
our chief executive officer (our principal executive officer, principal
financial officer, and principal accounting officer) to allow for timely
decisions regarding required disclosure. In designing and evaluating our
disclosure controls and procedures, our management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

As of March 31, 2009, the end of
the nine month period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our management, including
our chief executive officer, of the effectiveness of the design and operation of
our disclosure controls and procedures. Based on the foregoing, our chief
executive officer concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this quarterly report.

Notwithstanding the foregoing,
there can be no assurance that our Companys disclosure controls and procedures
will detect or uncover all failures of persons within the Company to disclose
material information otherwise required to be set forth in our Companys
periodic reports. There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human
error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable, not absolute, assurance of achieving their control objectives.

There have been no changes in our
internal controls over financial reporting that occurred during the quarter
ended March 31, 2009 that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing
or pending legal proceedings against our company, nor are we involved as a
plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any of our directors, officers or affiliates, or any
registered or beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.

21

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Item 1A. Risk Factors.

Risks Related To Our Business

We will require significant additional financing, the
availability of which cannot be assured, and if we are unable to obtain such
financing, our business may fail.

Our business plan calls for
significant expenses necessary to continue the development of our business and
expand our position in the market. There is no assurance that actual cash
requirements will not exceed our estimates. We may need to raise additional
funds to:

- support our planned growth;
- develop or enhance new and existing security products;
- increase our marketing efforts;
- acquire complementary businesses, security products or technologies; and/or
- respond to competitive pressures or unanticipated requirements.

We have not yet achieved
sustainable positive cash flows. As such, we will depend to a large extent on
outside capital over the near-term to fund our capital needs. Such outside
capital may be obtained from additional debt or equity financing. We do not
currently have any arrangement for financing and there is no assurance that
capital will be available to meet our operating costs or, if the capital is
available, that it will be on terms acceptable to us. The issuance of additional
equity securities by us would result in a dilution in the equity interests of
our current shareholders. Obtaining commercial loans, assuming those loans would
be available, will increase our liabilities and future cash commitments. If we
are unable to obtain financing in the amounts and on terms deemed acceptable to
us, we may be unable to implement our business and growth strategies, respond to
changing business or economic conditions, withstand adverse operating results,
consummate desired acquisitions or compete effectively.

We operate in a highly-competitive industry and our failure
to compete effectively may adversely affect our ability to generate
revenue.

We are aware of similar security
products and services which compete directly with our security products and
services and some of the companies developing these security products and
services have significantly greater financial, technical and marketing
resources, larger distribution networks, and generate greater revenue and have
greater name recognition than us. These companies may develop security products
superior to those of our company. Such competition will potentially affect our
chances of achieving profitability, and ultimately adversely affect our ability
to continue as a going concern.

Some of our competitors conduct
more extensive promotional activities and offer lower prices to customers than
we do, which could allow them to gain greater market share or prevent us from
increasing our market share. In the future, we may need to decrease our prices
if our competitors continue to lower their prices. Our competitors may be able
to respond more quickly to new or changing opportunities, technologies and
customer requirements.

To be successful, we must carry
out our business plan, establish and strengthen our brand awareness through
marketing, effectively differentiate our product line from those of our
competitors and build our distribution network. To achieve this we may have to
substantially increase marketing and research and development in order to
compete effectively. Such competition will potentially affect our chances of
achieving profitability, and ultimately adversely affect our ability to continue
as a going concern.

Rapid technological changes in our industry could render our
security products or services non-competitive or obsolete and consequently
affect our ability to generate revenues.

22

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We will derive all of our
revenues from the sale of security products and services. Such security products
and services are characterized and affected by rapid technological change,
evolving industry standards and regulations and changing client preferences. Our
success will depend, in significant part, upon our ability to make timely and
cost-effective enhancements and additions to our technology and to introduce new
security products and services that meet customer demands. We expect new
security products and services to be developed and introduced by other companies
that compete with our security products and services. The proliferation of new
and established companies offering similar security products and services may
reduce demand for our particular security products and services. There can be no
assurance that we will be successful in responding to these or other
technological changes, to evolving industry standards or regulations or to new
security products and services offered by our current and future competitors. In
addition, we may not have access to sufficient capital for our research and
development needs in order to develop new security products and services.

We could lose our competitive advantages if we are not able
to protect our proprietary technology and intellectual property rights against
infringement, and any related litigation could be time-consuming and
costly.

Our success and ability to
compete depends in part on our proprietary technology incorporated in our
security products. If any of our competitors copy or otherwise gain access to
our proprietary technology or develop similar technologies independently, we
would not be able to compete as effectively. We consider our technologies
invaluable to our ability to continue to develop and maintain the goodwill and
recognition associated with our brand. The measures we take to protect our
technologies, and other intellectual property rights, which presently are based
upon registered trade marks in addition to trade secrets, may not be adequate to
prevent their unauthorized use.

Although we rely, in part, on
contractual provisions to protect our trade secrets and proprietary know-how,
there is no assurance that these agreements will not be breached, that we would
have adequate remedies for any breach or that our trade secrets will not
otherwise become known or be independently developed by competitors. Further,
the laws of foreign countries may provide inadequate protection of intellectual
property rights. We may need to bring legal claims to enforce or protect our
intellectual property rights. Any litigation, whether successful or
unsuccessful, could result in substantial costs and a diversion of corporate
resources. In addition, notwithstanding any rights we have secured to our
intellectual property, other persons may bring claims against us claiming that
we have infringed on their intellectual property rights, including claims that
our intellectual property rights are not valid. Adverse determinations in
litigation in which we may become involved could subject us to significant
liabilities to third parties, require us to grant licenses to or seek licenses
from third parties and prevent us from manufacturing and selling our security
products. Any claims against us, with or without merit, could be time-consuming
and costly to defend or litigate, divert our attention and resources, result in
the loss of goodwill associated with our trademarks or require us to make
changes to our technologies. Furthermore, we cannot assure you that any pending
patent application made by us will result in an issued patent, or that, if a
patent is issued, it will provide meaningful protection against competitors or
competitor technologies.

We may not be able to hire and retain qualified personnel to
support our growth and if we are unable to retain or hire such personnel in the
future, our ability to improve our security products and services and implement
our business objectives could be adversely effected.

To continue to grow, we will need
to recruit additional senior management personnel, including persons with
financial and sales experience. In addition, we must hire, train and retain a
significant number of other skilled personnel, including persons with experience
in sales and marketing. We will encounter competition for these personnel. We
may not be able to find or retain qualified personnel, which will have a
material adverse impact on our business.

We have a history of losses and negative cash flows, which
is likely to continue unless our security products gain sufficient market
acceptance to generate a commercially viable level of sales.

Although we anticipate that we
will be able to start generating increased revenues during the next six to
twelve months, we also expect an increase in development and operating costs.
Consequently, we expect to incur operating losses and net cash outflows unless
and until our existing security products and services, and or any new security
products that we may develop or acquire, gain market acceptance sufficient to
generate a commercially viable and sustainable level of sales.

23

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We will be dependent upon third party manufacturers to
produce our security products. We could be adversely affected by an increase in
our manufacturers services or a significant decline in our manufacturers
financial condition. As a result, our business may fail and investors may lose
their entire investment.

As a cost efficiency measure, we
do not plan to manufacture our own security products but contract such
manufacturing to third parties. We could be adversely affected by an increase in
our manufacturers prices of manufacturing services or a significant decline in
our manufacturers financial condition. If the relationships with any one of our
manufacturers is terminated and we are not successful in establishing a
relationship with an alternative manufacturer who offers similar services at
similar prices, our results of operations could be adversely affected, our
business may fail and investors may lose their entire investment.

The limitation of any one of our manufactures available
manufacturing capacity due to significant disruption in their manufacturing
operation could have a material adverse effect on sales revenue and results of
operations and financial condition.

We will be dependent upon third
party manufacturers to produce our security products. If production at any one
of our manufacturers manufacturing plant is disrupted for any number of reasons,
manufacturing yields may be adversely affected and we may be unable to meet our
customers requirements. Consequently, our customers may purchase security
products from our competitors. This could result in a significant loss of
revenues and damage to our customer relationships, which could materially
adversely affect our business, results of operations or financial condition.

Unless we can establish significant sales of our current
security products and services, our potential revenues may be significantly
reduced.

We expect that a substantial
portion, if not all, of our future revenue will be derived from the sale of our
security products and security services. We expect that these security product
and security services and their extensions and derivatives will account for a
majority, if not all, of our revenue for the foreseeable future. The successful
introduction and broad market acceptance of our security products - as well as
the development, introduction and market acceptance of any future enhancements -
are, therefore, critical to our future success and our ability to generate
revenues. Unfortunately, there can be no assurance that we will be successful in
marketing our current product offerings, or any new product offerings,
applications or enhancements. Failure to achieve broad market acceptance of our
security products, as a result of competition, technological change, or
otherwise, would significantly harm our business.

There is a high risk of business failure due to the fact
that we have not commenced profitable operations.

Although we are in the initial
stages of developing and implementing the commercialization of our security
products and services, there is no assurance that we will be able to
successfully develop sales of our security products and services. Thus we have
no way of evaluating whether we will be able to operate the business
successfully, and there is no assurance that we will be able to achieve
profitable operations.

Potential investors should be
aware of the difficulties normally encountered in developing and commercializing
new security products and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
commercialization process that we plan to undertake. These potential problems
include, but are not limited to, unanticipated problems relating to development,
manufacture and financing of our security products. If we are unsuccessful in
addressing these risks, our business will most likely fail.

If we fail to effectively manage our growth our future
business results could be harmed and our managerial and operational resources
may be strained.

24

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As we proceed with the
commercialization of our security products and services, we expect to experience
significant and rapid growth in the scope and complexity of our business. We
will need to add staff to market our security services, manage operations,
handle sales and marketing efforts and perform finance and accounting functions.
We will be required to hire a broad range of additional personnel in order to
successfully advance our operations. This growth is likely to place a strain on
our management and operational resources. The failure to develop and implement
effective systems, or to hire and retain sufficient personnel for the
performance of all of the functions necessary to effectively service and manage
our potential business, or the failure to manage growth effectively, could have
a materially adverse effect on our business and financial condition.

Our security products and security services may become
obsolete and unmarketable if we are unable to respond adequately to rapidly
changing technology and customer demands.

Our industry is characterized by
rapid changes in technology and customer demands. As a result, our security
products and services may quickly become obsolete and unmarketable. Our future
success will depend on our ability to adapt to technological advances,
anticipate customer demands, develop new security products and services and
enhance our current security products and services on a timely and
cost-effective basis. Further, our security products and services must remain
competitive with those of other companies with substantially greater resources.
We may experience technical or other difficulties that could delay or prevent
the development, introduction or marketing of new security products and services
or enhanced versions of existing security products and services. Also, we may
not be able to adapt new or enhanced security products or services to emerging
industry standards, and our new security products or services may not be
favorably received.

Demand for our security products and services might be
insufficient for us to become profitable.

We cannot predict with certainty
the potential consumer demand for our security products or services or the
degree to which we will meet that demand. If demand for our security products or
services does not develop as expected and achieve consumer market acceptance, we
might not be able to generate enough revenue to become profitable or to sustain
our operations. We plan to target the sale of our security products and services
to three primary customer groups; commercial, government, and residential. We
have based our strategy to target these consumers on a number of assumptions,
some or all of which could prove to be incorrect. Even if markets for our
service develop, we could achieve a smaller share of these markets than we
currently anticipate.

Risks Related To Our Common Stock

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our
operations.

A prolonged decline in the price
of our common stock could result in a reduction in the liquidity of our common
stock and a reduction in our ability to raise capital. Because our operations
have been financed through the sale of equity securities, a decline in the price
of our common stock could be especially detrimental to our liquidity and our
continued operations. Any reduction in our ability to raise equity capital in
the future would force us to reallocate funds from other planned uses and would
have a significant negative effect on our business plans and operations,
including our ability to develop new products and continue our current
operations. If the stock price declines, there can be no assurance that we can
raise additional capital or generate funds from operations sufficient to meet
our obligations. We believe the following factors could cause the market price
of our common stock to continue to fluctuate widely and could cause our common
stock to trade at a price below the price at which you purchase your shares of
common stock:

- actual or anticipated variations in our quarterly operating results;
- announcements of new services, products, acquisitions or strategic
  relationships by us or our competitors;
- changes in accounting treatments or principles;
- changes in earnings estimates by securities analysts and in analyst
  recommendations; and
- general political, economic, regulatory and market conditions.

25

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The market price for our common
stock may also be affected by our ability to meet or exceed expectations of
analysts or investors. Any failure to meet these expectations, even if minor,
could materially adversely affect the market price of our common stock.

If we issue additional shares of common stock in the future,
it will result in the dilution of our existing shareholders.

Our certificate of incorporation
authorizes the issuance of 50,000,000 shares of common stock. Our board of
directors has the authority to issue additional shares of common stock up to the
authorized capital stated in the certificate of incorporation. Our board of
directors may choose to issue some or all of such shares of common stock to
acquire one or more businesses or to provide additional financing in the future.
The issuance of any such shares of common stock will result in a reduction of
the book value or market price of the outstanding shares of our common stock. If
we do issue any such additional shares of common stock, such issuance also will
cause a reduction in the proportionate ownership and voting power of all other
shareholders. Further, any such issuance may result in a change of control of
our corporation.

If a market for our shares of common stock does not develop,
shareholders may be unable to sell their shares of common stock.

There is currently a limited
market for our common stock, which trades through the Over-the-Counter Bulletin
Board quotation system. Trading of stock through the Over-the-Counter Bulletin
Board is frequently thin and highly volatile. There is no assurance that a
sufficient market will develop in the stock, in which case it could be difficult
for shareholders to sell their stock.

Trading of our stock may be restricted by the Securities and
Exchange Commissions penny stock regulations which may limit a stockholders
ability to buy and sell our stock.

The Securities and Exchange
Commission has adopted regulations which generally define penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customers
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customers confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock.

26

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In addition to the "penny stock"
rules described above, FINRA has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. FINRA requirements make it more difficult
for broker-dealers to recommend that their customers buy our common stock, which
may limit your ability to buy and sell our stock and have an adverse effect on
the market for our shares.

Other Risks

Trends, Risks and Uncertainties.

We have sought to identify what
we believe to be the most significant risks to our business, but we cannot
predict whether, or to what extent, any such risks may be realized nor can we
guarantee that we have identified all possible risks that might arise. Investors
should carefully consider all of the risk factors before making an investment
decision with respect to our common stock.

We may be unable to continue as a going concern in which
case our securities will have little or no value.

Our independent auditors have
noted in their report concerning our financial statements as of June 30, 2008
that we have incurred substantial losses since inception, which raises
substantial doubt about our ability to continue as a going concern. In the event
we are not able to continue operations you will likely suffer a complete loss of
your investment in our securities.

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

On February 1, 2009, we entered
into a $500,000 loan with a private investor pursuant to a debt conversion
agreement. The loan bears interest at 15% and a conversion price of $0.10 per
share and is due on demand or converted at the option of the private investor.
The loan was issued to a U.S. person pursuant to the exemption from registration
provided for under Rule 506 of Regulation D, promulgated under the United States
Securities Act of 1933, as amended.

On February 1, 2009, we entered
into an eleven (11) month Financial Consulting Agreement with a third party. We
issued the third party 1,000,000 shares of our common stock for services
rendered to us. The shares were issued to a U.S. person pursuant to the
exemption from registration provided for under Rule 506 of Regulation D,
promulgated under the United States Securities Act of 1933, as amended.

On March 1, 2009 we issued
250,000 shares of our common stock to a third party for cancellation of $21,592
of accounts payable due such third party. The shares were issued to a U.S.
person pursuant to the exemption from registration provided under Rule 506 of
Regulation D, promulgated under the United States Securities Act of 1933, as
amended.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

On January 30, 2009, we entered
into a common share purchase agreement wherein we were to acquire 2,821,391 of
our common shares from a shareholder for $56,427 in which we advanced money. The
agreement did not close as of March 31, 2009, and the parties have rescinded the
transaction.

27

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Effective February 1, 2009, we
signed a ten (10) year agreement with the AHA. HS3 and AHAs relationship is to
create a Video Monitoring System which has been indicated by AHA to become a
standard part of the American Humane Certified program, which is a voluntary
fee-based program available to producers, processors and haulers of animals
raised for food. The AHC program provides independent third-party verification
that those businesses treat and care for their animals humanely. Pursuant to the
AHA agreement, we will provide the installation, integration, and monitoring of
production facilities and the transportation of animals to ensure the husbandry
and transportation of the animals conforms to AHC certification standards.
Pursuant to the agreement, we will be paid a recurring monthly monitoring and
equipment license fee for all monitoring locations attached to the
agreement.

In conjunction with the execution
of the agreement with AHA, we entered into an additional $500,000 loan with a
private investor pursuant to a debt conversion agreement effective February 1,
2009. The loan bears interest at 15% and a conversion price of $0.10 per share
and is due on demand or converted at the option of the private investor. The
loan proceeds will be used primarily to purchase equipment for the roll out of
the monitoring locations pursuant to the agreement with AHA and for other
general working capital requirements

On February 1, 2009, we entered
into an eleven (11) month Financial Consulting Agreement with a third party.
Pursuant to the agreement, we issued the third party 1,000,000 shares of our
common stock for services rendered to us.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K

|Exhibit | Description                                                                                                                                                                                                                                                  
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                              
|(3)     | Articles of Incorporation and Bylaws                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                              
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on August 2, 2004).                                                                                                                            
|        |                                                                                                                                                                                                                                                              
|3.2     | By-laws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on August 2, 2004).                                                                                                                                              
|        |                                                                                                                                                                                                                                                              
|(4)     | Instruments Defining the Rights of Security Holders,
      Including Indentures                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                              
|4.1     | 2005 Stock Option Plan of HS3 Technologies, Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      November 10, 2005).                                                                                                     
|        |                                                                                                                                                                                                                                                              
|(10)    | Material Contracts                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                              
|10.1    | Share Purchase Agreement dated March 5, 2005 among Zeno
      Inc., Linda Smith, Acropolis Investment Holdings, LLC and Gregory S. Yanke
      Law Corporation (incorporated by reference from our Current Report on Form
      8-K filed on March 10, 2005).
|        |                                                                                                                                                                                                                                                              
|10.2    | Asset Purchase Agreement dated August 31, 2005, between
      Zeno Inc. and IP-Colo, Inc. (incorporated by reference from our Current
      Report on Form 8-K filed on September 16, 2005).                                                                 
|        |                                                                                                                                                                                                                                                              
|10.3    | Surveillance Installment and Training Agreement dated
      December 20, 2005 (incorporated by reference from our Current Report on
      Form 8-K filed December 23, 2005).                                                                                 
|        |                                                                                                                                                                                                                                                              
|10.4    | Partnership Agreement with Wright-Hennepin Cooperative
      Electric Association (incorporated by reference from our Current Report on
      Form 8-K filed on June 11, 2007).                                                                              
|        |                                                                                                                                                                                                                                                              
|10.5    | Distribution Agreement with Autostar Technology Private
      Limited (incorporated by reference from our Current Report on Form 8-K
      filed on April 4, 2007).                                                                                          

28

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|Exhibit | Description                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                          
|        |                                                                                                                                                          
|10.6    | Warrant Purchase Agreement dated
      November 6, 2007 (incorporated by reference from our Current Report on Form
      8-K filed on November 20, 2007).
|        |                                                                                                                                                          
|10.7    | Agreement with the American Humane
      Association (incorporated by reference from our Current Report on Form 8-K
      filed on August 14, 2008)      
|        |                                                                                                                                                          
|(14)    | Code of Ethics                                                                                                                                           
|        |                                                                                                                                                          
|14.1    | Code of Ethics and Business Conduct
      (incorporated by reference from our Annual Report on Form 10- KSB filed
      on October 10, 2007).            
|        |                                                                                                                                                          
|(31)    | Section 302 Certifications                                                                                                                               
|        |                                                                                                                                                          
|31.1    | Section
      302 Certification (filed herewith).                                                                                                        
|        |                                                                                                                                                          
|(32)    | Section 906 Certification                                                                                                                                
|        |                                                                                                                                                          
|32.1    | Section
      906 Certification (filed herewith).                                                                                                        

29

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

|                      | HS3
      TECHNOLOGIES, INC.                           
|--------------------- | -------------------------------------------------------
|                      | (Registrant)                                           
|                      |                                                        
|                      |                                                        
|Dated: April 29, 2009 | **/s/ Mark Lana**                                      
|                      | Mark Lana                                              
|                      | Chief Executive Officer and Director                   
|                      | (Principal Executive Officer, Principal
      Financial
|                      | Officer and Principal Accounting Officer)              

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