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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

COMMISSION FILE NUMBER: 333-04066





GEOSPATIAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|NEVADA                                                         |  | 87-0554463                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

229 Howes Run Road, Sarver, PA 16055

(Address of principal executive offices)

(724) 353-3400

(Registrants telephone number, including area code)



(Former name, former address and former fiscal year, if changed since last report)





Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     YES  x    NO   ̈

Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|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

The
number of $.001 par value common shares outstanding at September 30, 2008: 23,759,806









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FORWARD-LOOKING STATEMENT NOTICE

When used in this report, the words may, will, expect, anticipate, continue, estimate, project, intend, and similar
expressions, which are not historical, constitute Forward Looking Statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding the expectations, beliefs, intentions or strategies for the future. We intend that such Forward-Looking Statements regarding events, conditions, and financial trends that may affect the Companys future plans of
operations, business strategy, operating results, and financial position be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Persons reviewing this report are cautioned that any Forward-Looking
Statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the Forward-Looking Statements as a result of various factors. Such factors
include general economic factors and conditions that may directly or indirectly impact the Companys financial condition or results of operations. Readers are cautioned not to place undue reliance on these Forward-Looking Statements that speak
only as of the date the statement was made.



2



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TABLE OF CONTENTS



|                                                                                            |  |   
|------------------------------------------------------------------------------------------- |  | --
|PART I - FINANCIAL INFORMATION                                                              |  | 4 
|                                                                                            | 
|ITEM 1. FINANCIAL STATEMENTS                                                                |  | 4 
|                                                                                            | 
|ITEM 2. MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 17
|                                                                                            | 
|ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  | 18
|                                                                                            | 
|ITEM 4. CONTROLS AND PROCEDURES.                                                            |  | 18
|                                                                                            | 
|PART II - OTHER INFORMATION                                                                 |  | 19
|                                                                                            | 
|ITEM 1. LEGAL PROCEEDINGS                                                                   |  | 19
|                                                                                            | 
|ITEM 2. SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS                         |  | 19
|                                                                                            | 
|ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                     |  | 19
|                                                                                            | 
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                 |  | 19
|                                                                                            | 
|ITEM 5. OTHER INFORMATION                                                                   |  | 19
|                                                                                            | 
|ITEM 6. EXHIBITS.                                                                           |  | 19



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PART I - FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

GEOSPATIAL HOLDINGS, INC.

INDEX



|                                                                                     |  |     
|------------------------------------------------------------------------------------ |  | ----
|                                                                                     |  | Page
|FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 |  |     
|                                                                                     | 
|Condensed Consolidated Balance Sheets (Unaudited)                                    |  | 5   
|                                                                                     | 
|Condensed Consolidated Statements of Operations (Unaudited)                          |  | 6   
|                                                                                     | 
|Condensed Consolidated Statements of Changes in Stockholders Equity                 |  | 7   
|                                                                                     | 
|Condensed Consolidated Statements of Cash Flows (Unaudited)                          |  | 8   
|                                                                                     | 
|Notes to Condensed Consolidated Financial Statements (Unaudited)                     |  | 9   



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Geospatial Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ------------ | - | ---------- | -
|                                                                                                                                                                                    |  | September 30, |            |   | December 31, |  
|                                                                                                                                                                                    |  | 2008          |            |   | 2007*        |  
|                                                                                                                                                                                    |  | (Unaudited)   |            |   |              |  
|ASSETS                                                                                                                                                                              |  |               |            |   |              |   |            |  
|Current assets:                                                                                                                                                                     |  |               |            |   |              |   |            |  
|Cash and cash equivalents                                                                                                                                                           |  | $             | 12,030     |   |              | $ | 183,448    |  
|Accounts receivable, net of allowance for doubtful accounts of $10,000 and $0 at September 30, 2008 and December 31, 2007,
respectively                                             |  |               | 85,662     |   |              |   | 7,530      |  
|Unbilled revenues on contracts in progress                                                                                                                                          |  |               | 61,718     |   |              |   |           |  
|Notes receivable                                                                                                                                                                    |  |               | 339,417    |   |              |   | 107,585    |  
|Prepaid expenses                                                                                                                                                                    |  |               | 145,742    |   |              |   | 81,985     |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total current assets                                                                                                                                                                |  |               | 644,569    |   |              |   | 380,548    |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Property and equipment:                                                                                                                                                             |  |               |            |   |              |   |            |  
|Field equipment                                                                                                                                                                     |  |               | 905,635    |   |              |   | 891,384    |  
|Office equipment                                                                                                                                                                    |  |               | 99,616     |   |              |   | 76,698     |  
|Vehicles                                                                                                                                                                            |  |               | 17,530     |   |              |   | 17,530     |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total property and equipment                                                                                                                                                        |  |               | 1,022,781  |   |              |   | 985,612    |  
|Less: accumulated depreciation                                                                                                                                                      |  |               | (292,254   | ) |              |   | (179,283   | )
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Net property and equipment                                                                                                                                                          |  |               | 730,527    |   |              |   | 806,329    |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Other assets:                                                                                                                                                                       |  |               |            |   |              |   |            |  
|License fees                                                                                                                                                                        |  |               | 1,367,000  |   |              |   | 1,367,000  |  
|Deposit on equipment                                                                                                                                                                |  |               | 2,441,370  |   |              |   | 2,441,370  |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total other assets                                                                                                                                                                  |  |               | 3,808,370  |   |              |   | 3,808,370  |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total assets                                                                                                                                                                        |  | $             | 5,183,466  |   |              | $ | 4,995,247  |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                |  |               |            |   |              |   |            |  
|Current liabilities:                                                                                                                                                                |  |               |            |   |              |   |            |  
|Accounts payable                                                                                                                                                                    |  | $             | 423,224    |   |              | $ | 82,241     |  
|Accrued expenses                                                                                                                                                                    |  |               | 1,687,674  |   |              |   | 3,155,742  |  
|Billings in excess of revenues on contracts in progress                                                                                                                             |  |               | 13,022     |   |              |   |           |  
|Notes payable to stockholders                                                                                                                                                       |  |               | 1,178,727  |   |              |   |           |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total current liabilities                                                                                                                                                           |  |               | 3,302,647  |   |              |   | 3,237,983  |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Stockholders equity:                                                                                                                                                               |  |               |            |   |              |   |            |  
|Preferred Stock of Geospatial Holdings, Inc., $.001 par value; 5,000,000 shares authorized and no shares issued and outstanding at
September 30, 2008                               |  |               |           |   |              |   |           |  
|Common Stock of Geospatial Holdings, Inc., $.001 par value; 100,000,000 shares authorized at September 30, 2008; 23,759,806 shares issued
and outstanding at September 30, 2008     |  |               | 23,760     |   |              |   |           |  
|Preferred Stock of Geospatial Mapping Systems, Inc., $.001 par value; 10,000,000 shares authorized and no shares issued and outstanding at
December 31, 2007                        |  |               |           |   |              |   |           |  
|Common Stock of Geospatial Mapping Systems, Inc., $.001 par value; 90,000,000 shares authorized at December 31, 2007; 17,352,352 shares
issued and outstanding at December 31, 2007 |  |               |           |   |              |   | 17,352     |  
|Additional paid-in capital                                                                                                                                                          |  |               | 7,270,611  |   |              |   | 4,792,324  |  
|Accumulated deficit                                                                                                                                                                 |  |               | (5,413,552 | ) |              |   | (3,052,412 | )
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total stockholders equity                                                                                                                                                          |  |               | 1,880,819  |   |              |   | 1,757,264  |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  
|Total liabilities and stockholders equity                                                                                                                                          |  | $             | 5,183,466  |   |              | $ | 4,995,247  |  
|                                                                                                                                                                                    |  |               |            |   |              |   |            |  

|* | Condensed from audited financial statements.
|- | --------------------------------------------

The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



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Geospatial Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|---------------------------------------------------------- |  | --------------------------------------- | --------- | - | -------------------------------------- | - | -------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                           |  | For the Three MonthsEnded September 30, |           |   | For the Nine MonthsEnded September 30, |  
|                                                           |  | 2008                                    |           |   | 2007                                   |   |          | 2008 |  |   | 2007       |  
|Sales                                                      |  | $                                       | 155,375   |   |                                        | $ | 21,796   |      |  | $ | 1,469,803  |   |  | $ | 50,460     |  
|Cost of sales                                              |  |                                         | 121,556   |   |                                        |   | 12,847   |      |  |   | 548,641    |   |  |   | 17,329     |  
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Gross profit                                               |  |                                         | 33,819    |   |                                        |   | 8,949    |      |  |   | 921,162    |   |  |   | 33,131     |  
|Selling, general and administrative expenses               |  |                                         | 1,009,713 |   |                                        |   | 422,268  |      |  |   | 3,235,349  |   |  |   | 1,321,181  |  
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Loss from operations                                       |  |                                         | (975,894  | ) |                                        |   | (413,319 | )    |  |   | (2,314,187 | ) |  |   | (1,288,050 | )
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Other income (expense):                                    |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Interest income                                            |  |                                         | 6,048     |   |                                        |   | 835      |      |  |   | 14,009     |   |  |   | 1,325      |  
|Interest expense                                           |  |                                         | (18,268   | ) |                                        |   | (16,482  | )    |  |   | (24,612    | ) |  |   | (21,318    | )
|Other income                                               |  |                                         |          |   |                                        |   |         |      |  |   | 171        |   |  |   | 340        |  
|Gain (loss) on foreign currency exchange                   |  |                                         | 126,928   |   |                                        |   | (39,100  | )    |  |   | (36,521    | ) |  |   | (39,100    | )
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Total other income (expenses)                              |  |                                         | 114,708   |   |                                        |   | (54,747  | )    |  |   | (46,953    | ) |  |   | (58,753    | )
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Net loss before income taxes                               |  |                                         | (861,186  | ) |                                        |   | (468,066 | )    |  |   | (2,361,140 | ) |  |   | (1,346,803 | )
|Provision for (benefit from) income taxes                  |  |                                         |          |   |                                        |   |         |      |  |   |           |   |  |   |           |  
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Net loss                                                   |  | $                                       | (861,186  | ) |                                        | $ | (468,066 | )    |  | $ | (2,361,140 | ) |  | $ | (1,346,803 | )
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Basic and fully-diluted net loss per share of Common Stock |  | $                                       | (0.04     | ) |                                        | $ | (0.04    | )    |  | $ | (0.11      | ) |  | $ | (0.11      | )
|                                                           |  |                                         |           |   |                                        |   |          |      |  |   |            |   |  |   |            |  

The accompanying notes are an integral part of these unaudited condensed consolidated financial
statements.



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Geospatial Holdings, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders' Equity

For the Nine Months Ended September 30, 2008

(Unaudited)



|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |         |        |  |        |  |        |   |        |            |  |   |        |  |   |           |  |   |            |   |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- |  | ------------ | ------------------------- | ------ | ------------------------ | - | ------------------ | - | ------- | ------ |  | ------ |  | ------ | - | ------ | ---------- |  | - | ------ |  | - | --------- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                                           |  | Geospatial Mapping Systems, Inc. |  |              | Geospatial Holdings, Inc. |        | AdditionalPaid-InCapital |   | AccumulatedDeficit |   |         | Total  | 
|                                                                                                                           |  | Preferred Stock                  |  | Common Stock |                           |        | Preferred Stock          |   | Common Stock       |   |         |       
|                                                                                                                           |  | Shares                           |  | Amount       |                           | Shares |                          |   | Amount             |   |         | Shares |  | Amount |  | Shares |   | Amount |            |  |  
|Balance, December 31, 2007                                                                                                 |  |                                 |  | $            |                          |        | 17,352,352               |   |                    | $ | 17,352  |        |  |       |  | $      |  |        |           |  | $ |       |  | $ | 4,792,324 |  | $ | (3,052,412 | ) |  | $ | 1,757,264  |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Issuance of Common Stock for cash at $0.80 per share                                                                       |  |                                 |  |              |                          |        | 1,562,500                |   |                    |   | 1,563   |        |  |       |  |        |  |        |           |  |   |       |  |   | 1,248,437 |  |   |           |   |  |   | 1,250,000  |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Issuance of Common Stock in settlement of note at $0.80 per share                                                          |  |                                 |  |              |                          |        | 1,129,336                |   |                    |   | 1,129   |        |  |       |  |        |  |        |           |  |   |       |  |   | 902,340   |  |   |           |   |  |   | 903,469    |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Issuance of Common Stock for cash in settlement of option at $0.50 per share                                               |  |                                 |  |              |                          |        | 30,000                   |   |                    |   | 30      |        |  |       |  |        |  |        |           |  |   |       |  |   | 14,970    |  |   |           |   |  |   | 15,000     |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Issuance of shares of Geospatial Holdings, Inc. Common Stock to stockholders of Kayenta Kreations, Inc. pursuant to merger |  |                                 |  |              |                          |        |                         |   |                    |   |        |        |  |       |  |        |  |        | 3,685,618  |  |   | 3,686  |  |   | 312,540   |  |   |           |   |  |   | 316,226    |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Exchange of shares of Geospatial Mapping Systems, Inc. for shares of Geospatial Holdings, Inc.                             |  |                                 |  |              |                          |        | (20,074,188              | ) |                    |   | (20,074 | )      |  |       |  |        |  |        | 20,074,188 |  |   | 20,074 |  |   |          |  |   |           |   |  |   |           |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Net loss for the nine months ended September 30, 2008                                                                      |  |                                 |  |              |                          |        |                         |   |                    |   |        |        |  |       |  |        |  |        |           |  |   |       |  |   |          |  |   | (2,361,140 | ) |  |   | (2,361,140 | )
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |         |        |  |        |  |        |   |        |            |  |   |        |  |   |           |  |   |            |   |  |   |            |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |        
|Balance, September 30, 2008                                                                                                |  |                                 |  | $            |                          |        |                         |   |                    | $ |        |        |  |       |  | $      |  |        | 23,759,806 |  | $ | 23,760 |  | $ | 7,270,611 |  | $ | (5,413,552 | ) |  | $ | 1,880,819  |  
|                                                                                                                           |  |                                  |  |              |                           |        |                          |   |                    |   |         |        |  |        |  |        |   |        |            |  |   |        |  |   |           |  |   |            |   |  |   |            |  

The accompanying notes are an integral part of these unaudited condensed consolidated financial
statements.



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Geospatial Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                            |  |                                        |            |   |      |   |            |  
|--------------------------------------------------------------------------- |  | -------------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                            |  | For the Nine Months EndedSeptember 30, |           
|                                                                            |  | 2008                                   |            |   | 2007 |  
|Cash flows from operating activities:                                       |  |                                        |            |   |      |   |            |  
|Net loss                                                                    |  | $                                      | (2,361,140 | ) |      | $ | (1,346,803 | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                        |            |   |      |   |            |  
|Depreciation                                                                |  |                                        | 112,971    |   |      |   | 106,796    |  
|Accrued interest receivable                                                 |  |                                        | (13,900    | ) |      |   | (915       | )
|Accrued interest payable                                                    |  |                                        | 21,193     |   |      |   | 21,175     |  
|Issuance of Common Stock for reverse acquisition                            |  |                                        | 316,226    |   |      |   |           |  
|Changes in operating assets and liabilities:                                |  |                                        |            |   |      |   |            |  
|Accounts receivable                                                         |  |                                        | (78,132    | ) |      |   | (31,468    | )
|Unbilled revenues on contracts in progress                                  |  |                                        | (61,718    | ) |      |   |           |  
|Prepaid expenses                                                            |  |                                        | (63,757    | ) |      |   | (49,890    | )
|Accounts payable                                                            |  |                                        | 340,983    |   |      |   | 135,539    |  
|Accrued expenses                                                            |  |                                        | (77,758    | ) |      |   | 97,166     |  
|Billings in excess of revenues on contracts in progress                     |  |                                        | 13,022     |   |      |   |           |  
|                                                                            |  |                                        |            |   |      |   |            |  
|Net cash used in operating activities                                       |  |                                        | (1,852,010 | ) |      |   | (1,068,400 | )
|                                                                            |  |                                        |            |   |      |   |            |  
|Cash flows from investing activities:                                       |  |                                        |            |   |      |   |            |  
|Purchase of property and equipment                                          |  |                                        | (37,169    | ) |      |   | (84,395    | )
|Expenditures for license fees                                               |  |                                        | (781,900   | ) |      |   | (683,500   | )
|Deposit on equipment                                                        |  |                                        | (608,410   | ) |      |   |           |  
|Notes receivable issued                                                     |  |                                        | (217,932   | ) |      |   | (35,500    | )
|                                                                            |  |                                        |            |   |      |   |            |  
|Net cash used in investing activities                                       |  |                                        | (1,645,411 | ) |      |   | (803,395   | )
|                                                                            |  |                                        |            |   |      |   |            |  
|Cash flows from financing activities:                                       |  |                                        |            |   |      |   |            |  
|Issuance of Common Stock                                                    |  |                                        | 1,265,000  |   |      |   | 1,671,000  |  
|Net borrowings from stockholders                                            |  |                                        | 2,061,003  |   |      |   | 716,760    |  
|                                                                            |  |                                        |            |   |      |   |            |  
|Net cash provided by financing activities                                   |  |                                        | 3,326,003  |   |      |   | 2,387,760  |  
|                                                                            |  |                                        |            |   |      |   |            |  
|Net change in cash and cash equivalents                                     |  |                                        | (171,418   | ) |      |   | 515,965    |  
|Cash and cash equivalents at beginning of period                            |  |                                        | 183,448    |   |      |   | 185,967    |  
|                                                                            |  |                                        |            |   |      |   |            |  
|Cash and cash equivalents at end of period                                  |  | $                                      | 12,030     |   |      | $ | 701,932    |  
|                                                                            |  |                                        |            |   |      |   |            |  
|Supplemental disclosures:                                                   |  |                                        |            |   |      |   |            |  
|Cash paid during period for interest                                        |  | $                                      | 3,401      |   |      | $ | 143        |  
|Cash paid during period for income taxes                                    |  |                                        |           |   |      |   |           |  
|Non-cash transactions:                                                      |  |                                        |            |   |      |   |            |  
|Issuance of Common Stock in settlement of liabilities                       |  |                                        | 903,469    |   |      |   |           |  
|Issuance of Common Stock for reverse acquisition                            |  |                                        | 316,226    |   |      |   |           |  

The accompanying notes are an integral part of these unaudited condensed consolidated financial
statements.



8



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008

Note 1  Basis of Presentation

On April 25, 2008, Kayenta Kreations, Inc. (Kayenta) acquired all the outstanding Common Stock of Geospatial Mapping Systems, Inc. (GMSI) pursuant to an Agreement and Plan of Merger (the
Merger Agreement) dated March 25, 2008. Upon consummation of the Merger Agreement, GMSI became a fully-owned subsidiary of Kayenta, which was subsequently renamed Geospatial Holdings, Inc. (the Company).
Because GMSIs stockholders owned the majority of the Company upon consummation of the Merger Agreement, GMSI was deemed to be the acquiring entity. Accordingly, all historical financial information prior to the consummation of the Merger
Agreement contained in these Unaudited Condensed Consolidated Financial Statements is that of GMSI.

The Unaudited Condensed Consolidated Financial
Statements included herein have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information and regulations contained in the Securities Exchange Act of 1934, as amended. Accordingly, the
accompanying Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. The
accompanying Unaudited Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 2008 should be read in conjunction with the Financial Statements of GMSI and Kayenta as of and for the year ended
December 31, 2007. In the opinion of the Companys management, all adjustments considered necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included, and all adjustments,
unless otherwise discussed in the Notes to the Unaudited Condensed Consolidated Financial Statements, are of a normal and recurring nature. Operating results for the nine months ended September 30, 2008 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2008.

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

From GMSIs inception on May 26, 2006 through
December 31, 2007, the Company was considered a development stage company as defined by Statement of Financial Accounting Standards No. 7, Accounting and Reporting by Development Stage Enterprises. As such, the Company devoted
substantially all its efforts to establishing a new business. During 2008, the Company began to generate revenues from its planned operations, and ceased to be a development stage company.



9



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008

Note 1  Basis of Presentation (continued)



The Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries, GMSI and
Geospatial Pipeline Services, LLC. All intercompany accounts and transactions have been eliminated.

Certain amounts from GMSIs December 31,
2007 financial statements have been reclassified to conform to current year presentation.

Note 2  Merger

On April 25, 2008, Kayenta acquired all the outstanding Common Stock of GMSI pursuant to the Merger Agreement.

Pursuant to the Merger Agreement, Kayenta shareholders approved a 2.8 for 1 forward stock split, resulting in 3,685,618 shares of Kayenta Common Stock outstanding at the
closing of the Merger Agreement. Further, Kayenta issued one share of Kayentas Common Stock in exchange for each outstanding share of GMSIs Common Stock, resulting in 20,074,188 shares of Kayenta Common Stock, for a total aggregate
number of shares of Kayenta Common Stock of 23,759,806 outstanding upon consummation of the merger. Upon consummation of the merger, GMSI became a fully-owned subsidiary of Kayenta, which was subsequently renamed Geospatial Holdings,
Inc., and GMSIs shareholders obtained majority ownership of the shares of Common Stock of Geospatial Holdings, Inc. After the merger, GMSIs former stockholders owned approximately 84.5% of the Common Stock of the Company, and
Kayentas stockholders owned approximately 15.5% of the Common Stock of the Company.

In accordance with Accounting and Financial Reporting
Interpretations and Guidance issued by the staff of the United States Securities and Exchange Commission, the merger was accounted for as a recapitalization. Accordingly, all consideration paid and costs incurred pursuant to the merger were charged
to expense, and no goodwill or other intangible asset was recorded. All historical financial information prior to the consummation of the Merger Agreement is that of GMSI. Kayentas results of operations have been included in the Companys
Consolidated Statements of Operations since the completion of the merger on April 25, 2008.

Prior to the merger, Kayenta was a public shell company
as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. The acquisition was undertaken to provide the Company a public shell.



10



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008



Note 3  Accounts Receivable

Accounts receivable consisted of the following at September 30, 2008:



|                                      |  |   |         |  
|------------------------------------- |  | - | ------- | -
|Billed:                               |  |   |         |  
|Completed contracts                   |  | $ | 56,187  |  
|Contracts in progress                 |  |   | 39,475  |  
|                                      |  |   |         |  
|                                      |  |   | 95,662  |  
|                                      | 
|Less: allowance for doubtful accounts |  |   | (10,000 | )
|                                      |  |   |         |  
|                                      |  | $ | 85,662  |  
|                                      |  |   |         |  











11



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008



Note 4  Uncompleted Contracts

Costs, estimated earnings, and billings on uncompleted contracts are summarized as follows at September 30, 2008:



|                                        |  |   |         |  
|--------------------------------------- |  | - | ------- | -
|Costs incurred on uncompleted contracts |  | $ | 59,539  |  
|Estimated earnings                      |  |   | 79,146  |  
|                                        |  |   |         |  
|                                        |  |   | 138,685 |  
|                                        | 
|Billings to date                        |  |   | (89,989 | )
|                                        |  |   |         |  
|                                        |  | $ | 48,696  |  
|                                        |  |   |         |  

Included in the accompanying balance sheet under the following captions:



|                                                        |  |   |         |  
|------------------------------------------------------- |  | - | ------- | -
|Unbilled revenues on contracts in progress              |  | $ | 61,718  |  
|Billings in excess of revenues on contracts in progress |  |   | (13,022 | )
|                                                        |  |   |         |  
|                                                        |  | $ | 48,696  |  
|                                                        |  |   |         |  

Note 5  Backlog

The following schedule summarizes changes in backlog on fixed-price contracts during the three months ended September 30, 2008. Backlog represents the amount of revenue the Company expects to realize from work to
be performed on uncompleted contracts in progress at quarter end, and from contractual agreements on which work has not yet begun.



|                                                |  |   |           |  
|----------------------------------------------- |  | - | --------- | -
|Backlog balance at June 30, 2008                |  | $ | 813,905   |  
|New contracts awarded during the period         |  |   | 210,776   |  
|Contract adjustments                            |  |   |          |  
|                                                |  |   |           |  
|                                                |  |   | 1,024,681 |  
|                                                | 
|Less: contract revenue earned during the period |  |   | (151,084  | )
|                                                |  |   |           |  
|Backlog balance at September 30, 2008           |  | $ | 873,597   |  
|                                                |  |   |           |  



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008



Note 6  Related Party Transactions

The Company leases its headquarters building from Mark A. Smith, the Companys Chairman and Chief Executive Officer. The building has approximately 3,200 square feet of office space, and is used by the
Companys corporate and engineering/operations staff. The Company incurred $58,500 of lease expense for this building during the nine months ended September 30, 2008.

During 2008, Mr. Smith loaned the Company $900,000 for working capital purposes. Interest on the loan at 8% amounted to $3,469. The balance of the note, including accrued interest, amounted to $903,469, which was
settled by the issuance of 1,129,336 shares of the Companys Common Stock to Mr. Smith on February 29, 2008.

During the nine months ended
September 30, 2008, Mr. Smith loaned the Company $1,060,000 for working capital purposes. Interest on the loan at 8% amounted to $16,723 during the nine months ended September 30, 2008. At September 30, 2008, the balance due on
the note, including accrued interest, was $1,076,723.

During 2008 another stockholder, who owns approximately 14% of the Companys outstanding Common
Stock, loaned the Company $100,000 for working capital purposes. Interest on the loan at 8% amounted to $1,002 during the nine months ended September 30, 2008. At September 30, 2008, the balance due on the note, including accrued interest,
was $101,002.



13



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008



Note 7  Income Taxes

The Companys provision for (benefit from) income taxes is summarized below:



|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|------------------------- |  | --------------------------------------- | -------- | - | -------------------------------------- | - | -------- | ---- |  | - | -------- | - |  | - | -------- | -
|                          |  | For the Three MonthsEnded September 30, |          |   | For the Nine MonthsEnded September 30, |  
|                          |  | 2008                                    |          |   | 2007                                   |   |          | 2008 |  |   | 2007     |  
|Current:                  |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|Federal                   |  | $                                       |         |   |                                        | $ |         |      |  | $ |         |   |  | $ |         |  
|State                     |  |                                         |         |   |                                        |   |         |      |  |   |         |   |  |   |         |  
|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|                          |  |                                         |         |   |                                        |   |         |      |  |   |         |   |  |   |         |  
|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|Deferred:                 |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|Federal                   |  |                                         | 270,472  |   |                                        |   | 146,783  |      |  |   | 641,682  |   |  |   | 421,828  |  
|State                     |  |                                         | 85,864   |   |                                        |   | 46,598   |      |  |   | 203,613  |   |  |   | 133,914  |  
|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|                          |  |                                         | 356,336  |   |                                        |   | 193,381  |      |  |   | 845,295  |   |  |   | 555,742  |  
|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|                          |  |                                         |          |  
|Total income taxes        |  |                                         | 356,336  |   |                                        |   | 193,381  |      |  |   | 845,295  |   |  |   | 555,742  |  
|                          |  |                                         |          |  
|Less: valuation allowance |  |                                         | (356,336 | ) |                                        |   | (193,381 | )    |  |   | (845,295 | ) |  |   | (555,742 | )
|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  
|Net income taxes          |  | $                                       |         |   |                                        | $ |         |      |  | $ |         |   |  | $ |         |  
|                          |  |                                         |          |   |                                        |   |          |      |  |   |          |   |  |   |          |  

The reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:



|                                            |  |                                         |   |  |                                        |   |  |       |   |  |       |  
|------------------------------------------- |  | --------------------------------------- | - |  | -------------------------------------- | - |  | ----- | - |  | ----- | -
|                                            |  | For the Three MonthsEnded September 30, |   |  | For the Nine MonthsEnded September 30, |  
|                                            |  | 2008                                    |   |  | 2007                                   |   |  | 2008  |   |  | 2007  |  
|Federal statutory rate                      |  | 35.0                                    | % |  | 35.0                                   | % |  | 35.0  | % |  | 35.0  | %
|State income taxes (net of federal benefit) |  | 6.5                                     |   |  | 6.5                                    |   |  | 6.5   |   |  | 6.5   |  
|Valuation allowance                         |  | (41.5                                   | ) |  | (41.5                                  | ) |  | (41.5 | ) |  | (41.5 | )
|                                            |  |                                         |   |  |                                        |   |  |       |   |  |       |  
|Effective rate                              |  | 0.0                                     | % |  | 0.0                                    | % |  | 0.0   | % |  | 0.0   | %
|                                            |  |                                         |   |  |                                        |   |  |       |   |  |       |  



14



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008

Note 7  Income Taxes (continued)



Significant components of the Companys deferred tax assets and liabilities are summarized below as of
September 30, 2008 and 2007. A valuation allowance has been established as realization of such assets has not met the more-likely-than-not threshold requirement under Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes.



|                                   |  |                     |            |   |      |   |          |  
|---------------------------------- |  | ------------------- | ---------- | - | ---- | - | -------- | -
|                                   |  | As of September 30, |           
|                                   |  | 2008                |            |   | 2007 |  
|Start-up costs                     |  | $                   | 108,783    |   |      | $ | 118,617  |  
|License fees                       |  |                     | (40,972    | ) |      |   | (3,152   | )
|Depreciation                       |  |                     | (77,348    | ) |      |   | (52,011  | )
|Allowance for doubtful accounts    |  |                     | 4,150      |   |      |   |         |  
|Unrealized foreign currency losses |  |                     | 449        |   |      |   | 12,492   |  
|Uncompleted contracts              |  |                     | (32,846    | ) |      |   |         |  
|Net operating loss carryforward    |  |                     | 2,145,455  |   |      |   | 695,795  |  
|                                   |  |                     |            |   |      |   |          |  
|Deferred income taxes              |  |                     | 2,107,671  |   |      |   | 771,741  |  
|Less: valuation allowance          |  |                     | (2,107,671 | ) |      |   | (771,741 | )
|                                   |  |                     |            |   |      |   |          |  
|Net deferred income taxes          |  | $                   |           |   |      | $ |         |  
|                                   |  |                     |            |   |      |   |          |  

At September 30, 2008, the Company had federal and state net operating loss carryforwards of approximately
$5,170,000. The federal and state net operating loss carryforwards expire beginning in 2021 and 2026, respectively. The amount of the state net operating loss carryforward that can be utilized each year to offset taxable income is limited by state
law.



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##### Table of Contents

Geospatial Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2008



Note 8  Stock-Based Payments

During the nine months ended September 30, 2008, the Company granted options to purchase 1,750,000 shares of the Companys Common Stock to eligible employees under the 2007 Stock Option Plan.

On February 25, 2008, a contractor exercised options to purchase 30,000 shares of the Companys Common Stock under an agreement dated December 4, 2007.
The contractors remaining options to purchase 70,000 shares of the Companys Common Stock were cancelled.

On March 21, 2008, the Company
entered into Amendment No. 2 to Exclusive License and Distribution Agreement (the Amendment) with Reduct NV (Reduct) under which Reduct agreed to extend the payment due date for 300,000 from March 31, 2008 to
April 30, 2008, and for 300,000 from March 31, 2008 to May 31, 2008. Under the Amendment, the Company agreed to extend the exercise period of Reducts warrant to purchase 3,000,000 shares of the Companys Common Stock
to October 31, 2010. In addition, the Company agreed to place an order for the year 2008 of 3,000,000 before July 15, 2008, and make a downpayment towards the order of 1,500,000, which was due before July 15, 2008. The
Company has not yet made the downpayment due before July 15, 2008. The Company and Reduct are currently in negotiations regarding a restructuring of the Companys payment obligations.

Note 9  Net Loss Per Share of Common Stock

Basic
earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per share reflect per share amounts that would have
resulted if dilutive potential Common Stock had been converted to Common Stock. The following reconciles amounts reported in the financial statements:



|                                           |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------ |  | -------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                           |  | Three Months Ended September 30, |            |   | Nine Months Ended September 30, |  
|                                           |  | 2008                             |            |   | 2007                            |   |            | 2008 |  |   | 2007       |  
|Net loss                                   |  | $                                | (861,186   | ) |                                 | $ | (468,066   | )    |  | $ | (2,361,140 | ) |  | $ | (1,346,803 | )
|                                           |  |                                  |            |  
|Divided by:                                |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Weighted average shares outstanding        |  |                                  | 23,759,806 |   |                                 |   | 13,216,870 |      |  |   | 21,588,148 |   |  |   | 12,482,242 |  
|                                           |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic and fully-diluted net loss per share |  | $                                | (0.04      | ) |                                 | $ | (0.04      | )    |  | $ | (0.11      | ) |  | $ | (0.11      | )
|                                           |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  

The effects of options to purchase 11,550,000 shares of Common Stock, and rights to purchase 3,087,545 shares of
Common Stock were not included in the computation of diluted earnings per share because the effect of their conversion would be antidilutive.



16



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##### Table of Contents

|ITEM 2: | MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -----------------------------------------------------------------------------------

Overview

You should read the following Managements Discussion and Analysis of Financial Condition and
Results of Operations (MD&A) together with our financial statements and notes thereto as of and for the year ended December 31, 2007, filed with our Registration Statement on Form S-1 on May 29, 2008, and our financial
statements and notes thereto as of and for the three- and nine-month periods ended September 30, 2008, which appear elsewhere in this Quarterly Report on Form 10-Q.

On April 25, 2008, Kayenta Kreations, Inc. (Kayenta) acquired all the outstanding Common Stock of Geospatial Mapping Systems, Inc. (GMSI) pursuant to an Agreement and Plan of Merger (the
Merger Agreement) dated March 25, 2008. Upon consummation of the Merger Agreement, GMSI became a fully-owned subsidiary of Kayenta, which was subsequently renamed Geospatial Holdings, Inc. (the Company).
Because GMSIs stockholders owned the majority of the Company upon consummation of the Merger Agreement, GMSI was deemed to be the acquiring entity. Accordingly, all historical financial information prior to the consummation of the Merger
Agreement contained in this MD&A, and in our financial statements and notes thereto, is that of GMSI.

Prior to the Merger, Kayenta was a shell company
as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the Exchange Act). Upon consummation of the Merger Agreement, the Company adopted GMSIs business, and ceased to be a shell company as defined
in the Exchange Act. The Companys services include pipeline data acquisition, professional data management, and pipeline field services.

Results of Operations

From GMSIs inception on May 26, 2006, through December 31, 2007, we were considered a
development stage company as defined by Statement of Accounting Standards No. 7, Accounting and Reporting by Development Stage Enterprises. As such, we devoted substantially all of our efforts to establishing a new business. During 2008,
we began to generate revenues from our planned operations, and ceased to be a development stage company.

Sales were $155,375 and $1,469,803 for the three-
and nine-month periods ended September 30, 2008, respectively, compared to $21,796 and $50,460 for the three- and nine-month periods ended September 30, 2007, respectively. Cost of sales was $121,556 and $548,641 for the three- and
nine-month periods ended September 30, 2008, respectively, compared to $12,847 and $17,329 for the three- and nine-month periods ended September 30, 2007, respectively. Our sales and cost of sales increased in 2008 as we began to generate
revenues from our planned operations and ceased to be a development stage company. We expect sales and cost of sales to fluctuate as our business reaches maturity.

Selling, general and administrative (SG&A) expenses include all costs that are not directly associated with our revenue-generating activities. SG&A expenses include payroll costs for sales, administrative, and technical
personnel, sales and marketing costs, corporate costs, and facilities costs. SG&A expenses were $1,009,713 and $3,235,349 for the three- and nine-month periods ended September 30, 2008, respectively, compared to $422,268 and $1,321,181 for
the three- and nine-month periods ended September 30, 2007, respectively. The increase was primarily due to the expansion of our sales and administrative staff in 2008, and legal, accounting, and other expenses incurred in 2008 related to the
acquisition of Kayenta, legal, accounting and other expenses related to other potential acquisitions, and legal expenses related to the filing of a Registration Statement under the Securities Act of 1933, as amended, for a portion of our shares.

Other income and expenses include interest income, interest expense, non-business income and expenses, and gains or losses on foreign currency exchange.
Other income and expense was net income of $114,708 for the three-month period ended September 30, 2008, and net expense of $54,747 for the nine-month period ended September 30, 2008. Other income and expense was net expense of $46,953 and
$58,753 for the three- and nine-month periods ended September 30, 2007, respectively. Included in net income and expense was a gain on foreign currency exchange of $126,928 for the three-month period ended September 30, 2008, and a loss on
foreign currency exchange of $36,521 for the nine-month period ended September 30, 2008. There was a loss on foreign currency exchange of $39,100 for both the three- and nine-month periods ended September 30, 2007. We do not hedge our
exposure to foreign currency. Gains or losses on foreign currency may fluctuate in future periods.

We had no net benefit from income taxes, as our
deferred tax benefit was completely offset by a valuation allowance due to the uncertainty of realization of the benefit.

Off-Balance Sheet
Arrangements

The Company has no off-balance sheet arrangements as of September 30, 2008.



17



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##### Table of Contents

|ITEM 3. | QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | --------------------------------------------------------

Interest Rate RiskInterest rate risk refers to fluctuations in the value of a security resulting from changes in the general level of interest rates. We do not have significant short-term investments. Accordingly, we believe that we
do not have a material interest rate exposure.

Foreign Currency RiskOur functional currency is the United States dollar. We transact
business in foreign currencies. At the date a foreign currency transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured and recorded in United States dollars using the exchange rate
in effect at that time. At each balance sheet date, balances that will be settled in foreign currencies are adjusted to reflect the current exchange rate. Any gain or loss resulting from changes in foreign currency exchange rates is included in net
income in the period in which the exchange rate changes.

Our transactions with Reduct NV are denominated in Euros. Our liabilities
denominated in Euros amounted to approximately $1.4 million at September 30, 2008. If the value of the United States dollar declines relative to the Euro before the settlement of these liabilities, we would be adversely impacted. We have not
hedged our foreign currency exposure.

Commodity Price RiskBased on the nature of our business, we have no direct exposure to
commodity price risk.



|ITEM 4. | CONTROLS AND PROCEDURES.
|------- | ------------------------

Evaluation of Disclosure Controls
and Procedures

The Companys principal executive officer and principal financial officer are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



| | a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under their supervision, to ensure that material information
relating to the Company is made known to them by others within those entities, particularly during the period in which the periodic reports are being prepared;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under their supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | evaluated the effectiveness of the Companys disclosure controls and procedures as of the end of the fiscal quarter (the Evaluation Date).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------

Based on their evaluation as of the Evaluation Date, their conclusions about the effectiveness of the disclosure controls and procedures were that nothing indicated:



| | a. | any significant deficiencies in the design or operation of internal controls which could adversely affect the Companys ability to record, process, summarize and report
financial data;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal controls; or
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | any material weaknesses in internal controls that have been or should be identified for the Companys auditors and disclosed to the Companys auditors and the audit
committee of the board of directors (or persons fulfilling the equivalent function).
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Changes in Internal Control over Financial Reporting

There was no significant change in the Companys internal control over financial reporting that occurred during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

PART II - OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

The Company is not a party to any material
pending legal proceedings. No such action is contemplated by the Company nor, to the best of its knowledge, has any action been threatened against the Company.



|ITEM 2. | SALES OF UNREGISTERED EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

None.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.



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

None.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.



|ITEM 6. | EXHIBITS.
|------- | ---------



|        |  |                                                      
|------- |  | -----------------------------------------------------
|Exhibit |  | Description                                          
|31.1    |  | Rule 13a-14(a) Certification of Mark A. Smith        
|        | 
|31.2    |  | Rule 13a-14(a) Certification of Thomas R. Oxenreiter 
|        | 
|32.1    |  | Section 1350 Certification of Chief Executive Officer
|        | 
|32.2    |  | Section 1350 Certification of Chief Financial Officer

SIGNATURES

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



|                        |  |                           |  |                         
|----------------------- |  | ------------------------- |  | ------------------------
|                        |  | Geospatial Holdings, Inc.
|                        |  | (Registrant)             
|                        |  |                          
|Date: November 14, 2008 |  | By:                       |  | /s/ Mark A. Smith       
|                        |  | Name:                     |  | Mark A. Smith           
|                        |  | Title:                    |  | Chief Executive Officer 
|                        |  |                          
|                        |  | By:                       |  | /s/ Thomas R. Oxenreiter
|                        |  | Name:                     |  | Thomas R. Oxenreiter    
|                        |  | Title:                    |  | Chief Financial Officer 



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