UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

|                               |               
|------------------------------ | --------------
|For the quarterly period ended | March 31, 2007



 ̈TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from __________________ to __________________



|                        |        
|----------------------- | -------
|Commission File Number: | 0-29285



|                                              
|----------------------------------------------
|MOVENTIS CAPITAL, INC.                        
|(Name of Small Business Issuer in its charter)



|                                |  |                           
|------------------------------- |  | --------------------------
|Delaware                        |  | 52-2058364                
|(state or other jurisdiction of |  | (I.R.S. Employer I.D. No.)
|incorporation or organization)  |  |                           



|                                                                
|----------------------------------------------------------------
|Suite 304, 1959-152 Street, White Rock, British Columbia V4A 9P3
|(Address of Chief Executive offices)                            



| |                           | 
| | ------------------------- | 
| | (604) 535-3900            | 
| | Issuers telephone number | 



| |                                                                                   | 
| | --------------------------------------------------------------------------------- | 
| |                                                                                   | 
| | Former name, former address, and former fiscal year, if changed since last report | 







Check whether the registrant (1) filed all reports required to be filed by sections 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 ý No  ̈

Check whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act: 
Yes  ̈  No ý

As of May 14, 2007, the registrants outstanding common stock consisted of 28,623,349 shares.

Transitional Small Business Disclosure Format (Check one): YES  ̈  NO ý



---

MOVENTIS CAPITAL, INC.

INDEX TO FORM 10QSB

|                               |         |                                                         |         
|------------------------------ | ------- | ------------------------------------------------------- | --------
|                               |         |                                                         |         
|                               |         |                                                         | PAGE NO.
|                               |         |                                                         |         
|PART I  FINANCIAL INFORMATION |        
|                               |         |                                                         |         
|                               | Item 1. | Financial Statements                                    | F1      
|                               |         |                                                         |         
|                               | Item 2. | Management Discussion and Analysis or Plan of Operation | 3       
|                               |         |                                                         |         
|                               | Item 3. | Controls and Procedures                                 | 15      
|                               |         |                                                         |         
|PART II  OTHER INFORMATION    |        
|                               |         |                                                         |         
|                               | Item 2. | Unregistered Sales of Securities and use of Proceeds    | 16      
|                               |         |                                                         |         
|                               | Item 6. | Exhibits                                                | 17      
|                               |         |                                                         |         
|SIGNATURES                     | 18     



---



PART 1  FINANCIAL INFORMATION

Item 1  Financial Statements

|                                                                                                                     |    
|-------------------------------------------------------------------------------------------------------------------- | ---
|                                                                                                                     |    
|                                                                                                                     |    
|                                                                                                                     |    
|Consolidated Balance Sheets as of March 31, 2007 (unaudited) and June 30, 2006 (audited)                             | F-2
|                                                                                                                     |    
|Consolidated Statements of Operations for the Three-and Nine-Month Periods Ended March 31, 2007 and 2006 (unaudited) | F-3
|                                                                                                                     |    
|Consolidated Statements of Cash Flows for the Nine-Month Periods Ended March 31, 2007 and 2006 (unaudited)           | F-4
|                                                                                                                     |    
|Notes to Unaudited Consolidated Financial Statements                                                                 | F-5
|                                                                                                                     |    





F-1



---



|                                            |                                                                                     |            |                |         |               |  |  |  | 
|------------------------------------------- | ----------------------------------------------------------------------------------- | ---------- | -------------- | ------- | ------------- |  |  |  | 
|MOVENTIS CAPITAL, INC.                      |                                                                                     |            |                |        
|Consolidated Balance Sheets (In US dollars) |                                                                                     |            |               
|( Unaudited Prepared by Management)         |                                                                                     |            |                |         |              
|                                            |                                                                                     |            | March 31, 2007 |         | June 30, 2006
|ASSETS                                      |                                                                                     |            |                |        
|Current Assets                              |                                                                                     |            |                |        
|                                            | Cash                                                                                |            | 239,271        |         | 96,219       
|                                            | Accounts Receivable, net of allowance for doubtful accounts of $31,453 (2006 - $ 0) | 3,731,416  |                | -      
|                                            | Related Party Receivables (note 6)                                                  |            | 152,794        |         | 6,585        
|                                            | Inventory (note 7)                                                                  |            | 3,714,157      |         | -            
|                                            | Prepaid Expenses                                                                    |            | 11,845         |         | 12,926       
|Total current assets                        |                                                                                     | 7,849,483  |                | 115,730
|                                            | Property and Equipment (note 8)                                                     |            | 898,570        |         | 9,352        
|                                            | Long term Receivable (note 9 )                                                      |            | 127,888        |         | -            
|                                            | Goodwill (note 10)                                                                  |            | 4,380,032      |         | -            
|                                            | Intangibles (note 10)                                                               |            | 670,972        |         | -            
|TOTAL ASSETS                                |                                                                                     | 13,926,944 |                | 125,082
|LIABILITIES AND SHAREHOLDERS' EQUITY        |                                                                                     |            |               
|Current liabilities                         |                                                                                     |            |                |        
|                                            | Bank indebtedness  (note 11)                                                        |            | 2,988,093      |         | -            
|                                            | Bank overdraft (note 11)                                                            |            | 170,657        |         | -            
|                                            | Accounts Payable & Accrued Liabilities                                              | 3,022,874  |                | 115,586
|                                            | Deferred Revenue                                                                    |            | 161,564        |         | -            
|                                            | Taxes Payable                                                                       |            | 157,207        |         | -            
|                                            | Convertible Debenture's & Short Term Loan (note 12)                                 | 2,425,082  |                | -      
|                                            | Other Payable (note 13)                                                             |            | 529,081        |         | -            
|                                            | Short Term Loan (note 14 )                                                          |            | 304,969        |         | -            
|                                            | Due to Related Parties (note 15 )                                                   |            | 217,279        |         | 10,733       
|Total current liabilities                   |                                                                                     | 9,976,806  |                | 126,319
|Long term liabilities                       |                                                                                     |            |                |        
|                                            | HSBC debt (note 16)                                                                 |            | 185,642        |         | -            
|                                            | Convertible Debenture's (note 17)                                                   |            | 1,849,706      |         | -            
|Total long term liabilities                 |                                                                                     | 2,035,348  |                | -      
|Shareholders' equity                        |                                                                                     |            |                |        
|                                            | Capital Stock (note 19)                                                             |            |                |         |              
|                                            | Authorized: 75,000,000 common shares                                                |            |                |        
|                                            | at $0.001 par value per share                                                       |            | 28,622         |         | 25,853       
|                                            | Issued and outstanding : 28,623,349 common shares                                   |            |                |        
|                                            | (June 30, 2006 -25,853,452)                                                         |            | 7,375,474      |         | 3,941,006    
|                                            | Other Comprehensive Income                                                          |            | 105,805        |         | (3,945)      
|                                            | Deficit                                                                             |            | (5,595,112)    |         | (3,964,151)  
|Total Equity                                |                                                                                     | 1,914,789  |                | (1,237)
|TOTAL LIABILITIES & EQUITY                  |                                                                                     | 13,926,944 |                | 125,082
|Commitments (note 18)                       |                                                                                     |            |                |        



The accompanying notes are an integral part of these financial statements



F-2



---



|                                                              |                                   |           |                              |                             |               |            |  | 
|------------------------------------------------------------- | --------------------------------- | --------- | ---------------------------- | --------------------------- | ------------- | ---------- |  | 
|MOVENTIS CAPITAL, INC.                                        |                                   |           |                              |                             |              
|Consolidated Statements of Earnings (In US dollars)           |                                   |           |                              |                            
|( Unaudited Prepared by Management)                           |                                   |           |                              |                             |              
|                                                              |                                   |           | Three months ended March 31, | Nine months ended March 31,
|                                                              |                                   |           | 2007                         | 2006                        | 2007 Restated | 2006      
|                                                              |                                   |           |                              |                             |               |           
|Revenue                                                       |                                   | 3,443,661 | -                            | 7,138,571                   | -            
|Cost of Sales                                                 |                                   | 2,740,310 | -                            | 5,811,917                   | -            
|Gross Margin                                                  |                                   | 703,351   | -                            | 1,326,654                   | -            
|Operating Expenses                                            |                                   |           |                              |                             |              
|                                                              | Sales and Marketing               |           | 52,735                       | -                           | 87,431        | -         
|                                                              | General and Administration        |           | 473,874                      | 126,156                     | 952,078       | 346,095   
|                                                              | Stock based compensation          |           | 69,400                       | 51,740                      | 282,170       | 51,740    
|                                                              | Foreign currency loss             |           | 29,014                       | -                           | 145,948       | -         
|                                                              |                                   |           | 625,023                      | 177,896                     | 1,467,627     | 397,835   
|Earnings Before Interest, taxes, deprecation and amortization | 78,328                            | (177,896) | (140,974)                    | (397,835)                  
|                                                              | Amortization                      |           | 11,401                       | 37,500                      | 11,401        | 112,500   
|                                                              | Deprecation                       |           | 63,275                       | 1,881                       | 110,325       | 7,524     
|                                                              | Amortization of Loans & Debenture |           | 6,878                        | -                           | 1,196,068     | -         
|                                                              | Interest                          |           | 68,279                       | -                           | 149,665       | -         
|Interest Revenue                                              |                                   | 4         | -                            | 6,530                       | 375          
|Earnings (loss) Before Income Taxes                           |                                   | (71,500)  | (217,277)                    | (1,601,903)                 | (517,484)    
|Income taxes                                                  |                                   | 29,058    | -                            | 29,058                      | -            
|Net (loss) earnings for the period                            |                                   | (100,559) | (217,277)                    | (1,630,961)                 | (517,484)    
|Earnings (loss)  per share                                    |                                   |           |                              |                             |              
|                                                              | Basic and fully diluted           |           | (0.00)                       | (0.01)                      | (0.06)        | (0.02)    
|Weighted average number of shares                             |                                   |           |                              |                             |              
|                                                              | Basic and fully diluted           |           | 28,262,326                   | 21,135,749                  | 27,238,400    | 23,484,166



The accompanying notes are an integral part of these financial statements





F-3



---



|                                                     |                                          |             |             |                             |           |          |  | 
|---------------------------------------------------- | ---------------------------------------- | ----------- | ----------- | --------------------------- | --------- | -------- |  | 
|MOVENTIS CAPITAL, INC.                               |                                          |             |             |                             |          
|Consolidated Statements of Cash flow (In US dollars) |                                          |             |             |                            
|( Unaudited Prepared by Management)                  |                                          |             |             |                             |          
|                                                     |                                          |             |             | Nine months ended March 31,
|                                                     |                                          |             |             | 2007 Restated               |           | 2006    
|Operating Activities                                 |                                          |             |             |                             |          
|Net (loss) earnings                                  |                                          |             | (1,630,961) |                             | (517,484)
|Adjustments to income                                |                                          |             |             |                             |          
|                                                     | Depreciation and Amortization            |             |             | 121,726                     |           | 120,024 
|                                                     | Stock based Comp                         |             |             | 282,170                     |           | 45,740  
|                                                     | Amortization of Loans & Debenture        |             |             | 1,196,068                   |           | -       
|                                                     | Due to/from related parties              |             |             | (24,906)                    |           | -       
|Changes in non-working capital items                 |                                          |             |             |                             |          
|                                                     | Accounts receivable and other receivable |             | 42,166      |                             | -        
|                                                     | Inventory                                |             |             | (133,443)                   |           | -       
|                                                     | Prepaid                                  |             |             | 4,589                       |           | (9,598) 
|                                                     | Accounts payable and other liabilities   |             | (1,533,438) |                             | 20,748   
|Net Cash provided by (used in) operating activities  |                                          | (1,676,030) |             | (340,570)                  
|Investing activities                                 |                                          |             |             |                             |          
|                                                     | Purchase of property and equipment       |             |             | (16,787)                    |           | (6,849) 
|                                                     | Purchase of PTL (note 5)                 |             |             | (2,626,970)                 |           | -       
|                                                     | Long term receivable                     |             |             | 47,212                      |           | -       
|Net Cash used in investing activities                |                                          |             | (2,596,545) |                             | (6,849)  
|Financing activities                                 |                                          |             |             |                             |          
|                                                     | Bank indebtedness                        |             |             | (454,735)                   |           | -       
|                                                     | Bank overdraft                           |             |             | 170,657                     |           | -       
|                                                     | Long term liabilities                    |             |             | (57,675)                    |           | (63,830)
|                                                     | Convertible Debenture & Short Term Loan  |             | 1,987,254   |                             | -        
|                                                     | Short term Loans                         |             |             | 304,969                     |           | -       
|                                                     | Subscription Receivable                  |             |             | -                           |           | 21,000  
|                                                     | Convertible debt                         |             |             | 1,849,706                   |           | -       
|                                                     | Shares Issued for payables               |             |             | 222,085                     |           | 31,000  
|                                                     | Issuance of shares                       |             |             | 239,286                     |           | 465,500 
|Net cash provided by financing activities            |                                          |             | 4,261,547   |                             | 453,670  
|Effect of foreign currency translation on cash       |                                          | 154,079     |             | (4,831)                    
|Net Cash increase during the period                  |                                          |             | 143,052     |                             | 101,420  
|Cash at the beginning of period                      |                                          |             | 96,219      |                             | 20,522   
|Cash at the end of the period                        |                                          |             |             | 239,271                     |           | 121,942 

The accompanying notes are an integral part of these financial statements



F-4



---

MOVENTIS CAPITAL, INC.

(A Delaware Corporation)

Notes to Consolidated Financial Statements

For the nine months March 31, 2007

(In U.S. Dollars)

Note 1. BUSINESS OPERATIONS

a)  The Company was incorporated on May 7, 1997 as Micro Millennium, Inc., under the General Corporation Act in the State of Delaware, U.S.A., and commenced business on August 1, 1997.  The Company changed its name from Micro Millennium, Inc. to Sinaloa Gold Corp. on October 16, 1997, from Sinaloa Gold Corp. to Online Innovation, Inc. on April 8, 1999 and to Moventis Capital, Inc. on February 3, 2006.

b)  The Companys business focus is that of an acquisition company targeting small to medium size, profitable businesses.  Prior to Moventis Capital, as Online Innovation, the Company was focused on developing software and internet/e-commerce websites. Prior to Online Innovation, the Company was originally in the mining resource industry.   On November 22, 2006 the Company completed the acquisition of PTL Electronics Ltd. (PTL) and these financial statements reflect the consolidated operations from this date.

c) Basis of Presentation.

These unaudited consolidated financial statements have been prepared in accordance with Accounting principles generally accepted in the United States of America for interim financial information.  These financial statements are condensed and do not include all disclosures required for annual financial statements.  The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Companys audited consolidated financial statements filed as part of the Companys June 30, 2006 Form 10-KSB.

In the opinion of the Companys management, these consolidated financial statements reflect all adjustments necessary to present fairly the Companys consolidated financial position at March 31, 2007 and June 30, 2006 and the consolidated results of operations and the consolidated statements of cash flows for the nine months ended March 31, 2007.  The results of operations for the three and nine months ended March 31, 2007 and 2006, are not necessarily indicative of the results to be expected for the entire fiscal year.



Note 2. GOING CONCERN

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assumes that the Company will realize its assets and discharge its liabilities in the normal course of business.  The Company incurred losses from inception to June 30, 2006 of $3,964,151 under its previous business models.

From July 1, 2006 to March 31, 2007 the company incurred a loss of $1,630,961 under its new business plan, for a cumulative deficit of $5,595,112.  This deficit, coupled with a working capital deficit of $2,127,323 emphasizes the need for the Company to obtain additional funding if it is to continue as a going concern.  Management is in the process of identifying sources of funds which are anticipated to be raised through the sale of common shares and/or convertible debentures and warrants.



Note 3.  SIGNIFICANT ACCOUNTING POLICIES

a) Revenue Recognition.

Revenue for manufacturing and assembly contracts is generally recognized upon shipment to the customer which represents the point at which the risks and rewards of ownership have been transferred to the customer.  We have a limited number of consignment arrangements with customers which require we retain ownership of inventory until it has been utilized by the customer in its manufacturing process.  Revenue for these arrangements is recognized upon utilization by the customer in its manufacturing process.

The Company has no obligations to customers in terms of parts since the warranty obligations remain with the vendor that supplies the parts. The Company does have an obligation for one year from date of shipment for workmanship.  Warranty costs are included as part of Costs of Goods Sold.



F-5



---

b) Inventories.

Inventories are stated at the lower of cost or net recoverable value and are comprised of raw materials and work in process.  Cost of raw materials is determined using the first-in-first-out method (FIFO). The majority of raw materials inventory is purchased upon the receipt of customer purchase orders. Cost of work in process includes materials, direct labor and overhead allocation.

c) Product Warranty Reserves.

The Company has no obligations to customers for components contained in its products as any warranty relating to customer specified components remains with the component supplier.  The Company does have a warranty obligation for workmanship for one year from date of shipment.  The Company has recorded a warranty liability which is estimated by management based on experience and has been recorded in accounts payable and accrued liabilities.  The estimation of future warranty costs requires that management make certain assumptions.  Actual warranty costs could differ from these estimates.

d) Receivables.

The Company maintains an allowance for doubtful accounts for estimated losses resulting from customer defaults.  The company performs ongoing evaluations of its customers considering among other things, the customers payment history and current ability to pay.  A provision for uncollectible amounts is adjusted based on these evaluations and historical experience.  If the financial condition of a customer were to deteriorate, resulting in an impairment of that customers ability to make payments to the Company, additional reserves may be required.  Generally, accounts are written-off upon the exhaustion of all reasonable collection efforts.

e) Property and Equipment.

Property and equipment are stated at cost. Depreciation and amortization are provided over the estimated useful lives of the property and equipment, except in the year of purchase in which the Company uses 50% of the normal rate.



|                       |                           
|---------------------- | --------------------------
|Asset Classification   | Depreciation Rate         
|Production Equipment   | 30% declining balance     
|Furniture and Fixtures | 20% declining balance     
|Computer equipment     | 45% declining balance     
|Leasehold improvements | Straight line over 5 years

Maintenance and repairs are charged to expenses as incurred.  Major improvements and tooling costs are capitalized and depreciated using the straight-line method over their estimated useful lives.  The cost and accumulated depreciated of property and equipment retired or otherwise disposed of is removed from the related accounts, and any resulting gain or loss is credited or charged to operations.

f) Goodwill.

In assessing the Companys goodwill for impairment in accordance with the Financial Accounting Standards Boards (FASB) Statement of Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible Assets, the Company is required to assess the valuation of its reporting units, which involves making significant assumptions about the future cash flows and overall performance of its reporting units.  Should these assumptions or the structure of the reporting units change in the future based upon market conditions or changes in business strategy, the Company may be required to record impairment charges in its goodwill. Goodwill will be tested on an annual basis as of July 1, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach. No impairment of goodwill has been identified during any of the periods presented.



F-6



---

Intangible assets are amortized using straight-line method over their estimated period of benefit. We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of our intangible assets are subject to amortization. No impairment of intangible assets have been identified during any of the period presented.

g) Income Taxes.

Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or income tax returns.  Deferred income tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using the currently enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized.  Income tax expense (benefit) is the tax payable (receivable) for the period and the change during the period in deferred income tax assets and liabilities.

h) Foreign Exchange.

The Companys operations and activities are conducted principally in Canada hence the Canadian dollar is the functional currency. The Company translates financial statements into the functional currency as follows, Non monetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Income statement accounts are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into the functional currency are included in current results of operations. Gains and losses resulting from foreign currency transactions are also included in current results of operations.

The companys reporting currency is the United States Dollar. The Company translates financial statements into the reporting currency as follows, assets and liabilities are translated at the rates of exchange on the balance sheet date and revenues and expenses are translated at average rates of exchange during the period. The resulting translation adjustments are recorded included as part of other comprehensive income.

i) Long-Lived Assets.

The carrying value of long lived assets, which includes property, plant and equipment, is reviewed for impairment whenever events or circumstances indicate the recoverable value may be less than the carrying amount.  Recoverable value is based on estimates of undiscounted future net cash flows expected to be recovered from specific assets or groups of assets through use or future disposition.

Impairment charges are recorded in the period in which determination of impairment is made by management.  Assets with indefinite or indeterminable lives which include goodwill are not amortized and are reviewed for impairment on a reporting period basis using fair value determinations by managements estimate of recoverable value.

Intangible Assets the determined value for Customer Relations and Contracts of PTL and is being amortized on a straight line basis over the estimated life of five years.

j) Cost of Sales.

Cost of sales includes materials, labor, and overhead costs associated with the Contract Manufacturing business.

k) Earnings (loss) Per Share.

Basic earnings per share figures have been calculated using the weighted monthly average number of shares outstanding and fully diluted shares during the period. Fully diluted shares are calculated using the Treasury method for options and warrants and the If Converted method for convertible debt.

l) Recognition Criteria.

Gains are recognized when realized.  Expenses and losses are recognized when an expenditure or previously recognized asset does not have future economic benefit.  Expenses that are not linked with specific revenues are related to a period on the basis of transactions or events occurring in that period or by allocation to the periods in which they apply.  The cost of assets that benefit more than one period is normally allocated over the periods benefited.



F-7



---

m) Risk Management.

Currency Risk.  Although the Company conducts its manufacturing business primarily in Canada, the majority of its purchases are from sources in the United States and the Peoples Republic of China.  The Company does not hedge its foreign currency exposure and accordingly may be at risk for foreign currency exchange fluctuations.

Credit Risk.  Credit risk is managed by dealing only with customers whose credit standing meets internally approved policies, and by ongoing monitoring of credit risk.  As of March 31, 2007, the Company did not have significant concentrations of credit exposure to any one customer or related groups of customers.

Interest Rate Risk.  The Company currently has potential exposure to interest rate risk due to bank indebtedness (operating line of credit) and two demand non-revolving loans with floating interest rates.  The maximum line of credit is $2,988,093 ($3,450,000 CDN) at the end of the period dated March 31, 2007.



Note 4.  RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board (FASB) Issued Statement of Financial Accounting Standard (SFAS) No. 123R, Share Based Payment. SFAS 123R is a revision of SFAS No. 123 Accounting for Stock-based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force Issue No. 96-18, Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, Employers Accounting for Employee Stock Ownership Plans. SFAS 123R requires a public entity to measure the cost of employee services received in exchange for and award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award  the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. The Company has adopted 123R in the fiscal year ended June 30, 2006 on the prospective basis.

During the quarter the Company issued 550,000 stock options at a calculated value of $171,469 using the Black-Scholes model.  $69,400 was expensed for stock based compensation relating to the outstanding stock  options  (option compensation is expensed over the vesting period of the outstanding options) in the quarter and is included in General and Administration options.

In December 2004, FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets- An Amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. SFAS No. 153 amends Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The adoption of this standard did not have a material effect on the Companys results of operations or financial position.



F-8



---

In May 2005, FASB issued SFAS No. 154 Accounting Changes and Error Corrections  a replacement of APB Opinion No. 20 and FASB Statement No. 3.  This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principles.  This statement applies to all voluntary changes in accounting principles.  It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions.  When a pronouncement includes specific transition provisions, those provisions should be followed.  This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140. This statement permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. It establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation. In addition, SFAS 155 clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133. It also clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives. SFAS 155 amends Statement 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. The adoption of this standard is not expected to have a material effect on the Companys results of operations or financial position.

On July 13, 2006, FASB issued Interpretation No. 48, Accounting for Uncertainty inIncome Taxesan interpretation of FASB Statement No. 109.Interpretation 48 clarifies the accounting for uncertainty in income taxes recognized in an entitys financial statements in accordance with Statement 109 and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Additionally, Interpretation 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Interpretation 48 is effective for fiscal years beginning after December 15, 2006, with early adoption permitted. The Company does not believe adoption of Interpretation 48 will have a material effect on its consolidated financial position, results of operations or cash flows.



In 2006, FASB issued Statement No. 157, Fair Value Measurements. This newpronouncement provides guidance for using fair value to measure assets and liabilities.  FASB believes the pronouncement also responds to investors requests for expanded information about the extent to which corporations measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value

measurements on earnings. Statement 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. The standard clarifies that for items that are not actively traded, such as certain kinds of derivatives, fair value should reflect the price in a transaction with a market participant, including an adjustment for risk, not just the companys mark-to-market value. Statement 157 also requires expanded disclosure of

the effect on earnings for items measured using unobservable data. The Company does not believe adoption of Statement 157 will have a material effect on its consolidated balance sheet, results of operations or cash flows.



Summary -On February 15, 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities, including not-for-profit organizations. Most of the provisions in Statement 159 are elective; however, the amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. Some requirements apply differently to entities that do not report net income. The FASB's stated objective in issuing this standard is as follows: "to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions."





F-9



---

The fair value option established by Statement 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. A not-for-profit organization will report unrealized gains and losses in its statement of activities or similar statement. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments.



Statement 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007.  Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects  to apply the provisions.

Note 5.  BUSINESS COMBINATION

On November 22, 2006, the Company through its wholly owned subsidiary PTL Acquisition Co., Inc. (PTL Acquisition), acquired 100% of the outstanding common shares and the shareholders loans of PTL Electronics Ltd. (PTL).  Under the terms of the Share Purchase Agreement (the SPA), the Company acquired the net assets and shareholders loans for a sum of $6,138,609 ($7,000,000 CDN). The purchase price consists of $3,064,798 ($3,500,000 CDN) in cash, short term loan and $3,073,810 ($3,500,000) in convertible debt and equity.  On close the Company paid $2,626,970 ($3,000,000 CDN) in cash and assumed a short term loan for $437,828 ($500,000 CDN) due on August 22, 2007, $1,059,800 ($1,200,000 CDN) in stock and $2,014,011 ($2,300,000 CDN) convertible debentures (see note 12), and $437,828 ($500,000 CDN) in signing bonuses  to be paid in stock options to two key executives who joined Moventis from PTL.  The PTL Management bonuses are accounted for in the cost of transaction.  The transaction has been accounted for as a business combination by the purchase method, with Moventis Capital, Inc., identified as the acquirer.  The Companys consolidated statements of operations and comprehensive income (loss) include the operating results of PTL. from November 22, 2006, the date of acquisition.

The following tables summarize the preliminary allocation of the purchase price and related acquisition costs to the fair value of the assets and liabilities assumed at the date of acquisition.

|                              |   |            |   |            
|----------------------------- | - | ---------- | - | -----------
|Purchase price breakdown     
|                              |   | US Dollars |   | CDN Dollars
|Cash                          | $ | 2,626,970  | $ | 3,000,000  
|Short Term Loan               |   | 437,828    |   | 500,000    
|Convertible Debenture         |   | 2,014,011  |   | 2,300,000  
|Common Shares                 |   | 1,059,800  |   | 1,200,000  
|Total Purchase Price          | $ | 6,138,609  | $ | 7,000,000  
|                              |   |            |   |            
|Estimated cost of Transaction |   | 829,079    |   | 953,048    
|Total Consideration           | $ | 6,967,688  | $ | 7,953,048  

Estimated cost of the transaction consist of : legal services $52,166 ($57,938 CDN), contract services $299,085 ($348,246CDN) and signing bonus $477,828 ($548,864). During the quarter ended March 31, 2007 the estimated cost of transaction increased by $209,000 .The company paid a management bonus of $40,000 and $169,000 for contract services provided to the company to complete the acquisition of PTL Electronics.

In accordance with SFAS No. 141 (SFA 141), Business Combinations the allocation of the total purchase price to PTLs tangible and unidentifiable intangible assets acquired and liabilities assumed were based on their fair values as of November 22, 2006 and the residual values were allocated to goodwill. The fair values of liabilities were determined based on market values of traded debt securities, or the present values of the amounts to be paid, unless they were expected to be settled in a short period in which case discounting was not performed.



F-10



---

The values assigned to certain acquired assets and liabilities are preliminary, are based on information available as of November 22, 2006 and may be adjusted as further information becomes available during the allocations period of up to 12 months from the acquisitions date (in accordance with SFAS 141). Additional information that may become available subsequently and may result in changes in the values allocated to various assets and liabilities includes, but is not limited to, changes in, previously unidentified claims from suppliers or other contingent obligations, including warranty liabilities and the amounts required to settle them and unidentified customer claims.  Any changes in the values allocated to tangible and specifically identified intangible assets acquired and liabilities assumed during the allocation period may result in material adjustments to goodwill.



|                                                 |   |             |   |            
|------------------------------------------------ | - | ----------- | - | -----------
|Tangible assets acquired and liabilities assumed
|                                                 |   | US Dollars  |   | CDN Dollars
|Accounts receivable                              | $ | 3,766,997   | $ | 4,310,910  
|Inventory & project cost                         |   | 3,580,714   |   | 4,089,175  
|Other current assets                             |   | 306,496     |   | 350,019    
|Property, equipment & leasehold improvements     |   | 971,355     |   | 1,109,287  
|Bank Indebtedness                                |   | (3,442,828) |   | (3,931,170)
|Accounts payable & accrued liabilities           |   | (2,073,232) |   | (2,367,631)
|Other current liabilities                        |   | (1,032,170) |   | (1,178,738)
|Long Term Debt                                   |   | (243,317)   |   | (277,868)  
|Intangible assets                                |   | 701,770     |   | 801,420    
|Goodwill                                         |   | 4,431,907   |   | 5,057,185  
|Total Consideration                              | $ | 6,967,688   | $ | 7,953,048  

Prior to the acquisition of PTL, Moventis Capital did not have a business relationship with PTL.  None of the PTL shareholders held any Moventis Capital shares prior to the acquisition.

Note 6.  RELATED PARTY RECEIVABLES

The total of the receivables from related parties is $152,794. The related parties are to reimburse the Company $96,399 which is in the form of a personal guarantee (if the investment is Periphron is written off) against the investment in Periphron that they pledged as their  equity investment in the purchase of PTL.  The remainder of the receivable of $56,395 is the related parties advance,  which will be offset against future bonuses and payments to the related parties.

Note 7.  INVENTORIES

Inventories are recorded at the lower of cost or market on a first-in, first out (FIFO) basis:

|                 |   |           |  |   |      | 
|---------------- | - | --------- |  | - | ---- | 
|                 |   | March 31, | 
|                 |   | 2007      |  |   | 2006 | 
|Raw Materials    | $ | 2,209,125 |  | $ | -    | 
|Work in Progress |   | 795,684   |  |   | -    | 
|Finished Goods   |   | 709,348   |  |   | -    | 
|Net balance      | $ | 3,714,157 |  | $ | -    | 





F-11



---

Note 8.  PROPERTY AND EQUIPMENT

The Company depreciates its property and equipment using the declining-balance basis at the rates of 45% for computers, 30% for production equipment and 20% for furniture. The Company depreciates its leasehold improvements on a straight line basis over five years.  The costs and accumulated depreciation are as follows:



|                         |   |           |          |   |           |  | 
|------------------------ | - | --------- | -------- | - | --------- |  | 
|                         |   | March 31, | June 30, |  
|                         |   | 2007      |          |   | 2006      | 
|Computers                | $ | 175,399   |          | $ | 124,830   | 
|Production equipment     |   | 1,238,373 |          |   | -         | 
|Furniture                |   | 55,882    |          |   | 694       | 
|Leasehold improvements   |   | 8,661     |          |   |           | 
|                         |   | 1,478,315 |          |   | 125,524   | 
|Accumulated depreciation |   | (579,745) |          |   | (116,172) | 
|Net balance              | $ | 898,570   |          | $ | 9,352     | 



Note 9.  LONG TERM RECEIVABLE

The long term receivable is related to an equipment lease payment negotiated as part of the purchase contract between Peripheron Technologies and the PTL shareholders.  PTL has the right to offset any royalty payments due to Peripheron against the receivable. The royalty payment is calculated at 1% of yearly sales in excess of $6,928,806 ($8,000,000 CDN) until March 2008.

Note 10.   INTANGIBLE ASSETS AND GOODWILL

From the acquisition of PTL the Company has allocated $5,133,674 of the purchase price to intangible assets. The following is a schedule of the Companys intangible assets as of March 31, 2007.

|                                                    |         |               |                          |                  |                   
|--------------------------------------------------- | ------- | ------------- | ------------------------ | ---------------- | ------------------
|                                                    | Term    | Initial Value | Accumulated Amortization | Foreign Exchange | Net Carrying Value
|Intangible Assets (Customer Relations & Contracts)* | 5 years | $701,767      | $22,924                  | ($7,871)         | $670,972          
|Goodwill                                            |         | $4,431,907    | -                        | ($51,875)        | $4,380,032        

*These numbers will fluctuate according to the prevailing balance sheet exchange rate.

Note 11.  BANK INDEBTEDNESS

PTL has a bank line of credit facility with the HSBC Group (HSBC or the Bank.) PTL has operating loan in the amount of $909,406 ($1,050,000 CDN) which bears interest at the prime bank rate plus 1.25% per annum.  The Bank has authorized an increase of the demand operating line of credit to $2,988,093 ($3,450,000 CDN) from the existing $909,406 ($1,050,000 CDN) of which $2,078,641 ($2,400,000 CDN) is a temporary increase, valid up to August 31,2007. The operating loan is margined against 50% of Inventory up to maximum of $866,101 ($1,000,000 CDN) and 75% of the companys receivables that are less then 90 days old from the invoice date.

The Bank indebtedness is secured as follows:

(i)

Personal guarantees provided by some of the previous PTL shareholders in the amount of $446,042 ($515,000 CDN),

(ii)

General Security Agreement creating a first fixed charge over all present and after acquired property,

(iii)

Security under Section 427 of the Bank Act (Canada)

(iv)

Assignment/endorsement to the Bank of all risk insurance, showing the Bank as first loss payee,

(v)

Assignment of key man life insurance in the amount of $216,525 ($250,000 CAD) for each of the Co CEOs of PTL, and

(vi)

General Security Agreement against all of the assets of PTL.



F-12



---

Financial covenants

The banking agreement provides that at all times while the Bank indebtedness is outstanding, the company will not, without the prior written consent of the Bank permit its:

(i)

Ratio of total debt to tangible net worth to exceed 2.75 prior March 31, 2006 and 2.5 commencing March 31, 2006 and thereafter,

(ii)

Current ratio at any time to be less than 1.0 prior to March 31, 2006 and 1.25 commencing March 31, 2006 and thereafter,

(iii)

Tangible net worth to be reduced to less than the sum of $649,576 ($750,000 CDN) at any time prior March 31, 2006 and thereafter,

(iv)

Debt service coverage to fall below 125% at any time commencing March 31, 2006, and

(v)

Made capital expenditures in any fiscal year in the amount exceeding the aggregate $86,610 ($100,000 CDN).



The operating line balances at the end of March 31 are as follows:

|                    |          |           |  |      | 
|------------------- | -------- | --------- |  | ---- | 
|                    | March 31 | June 30, 
|                    |          | 2007      |  | 2006
|Bank Operating Line | $        | 2,988,048 |  | -   
|Bank Overdraft      | $        | 170,657   |  | -   



Note 12. CONVERTIBLE DEBENTURE & SHORT TERM LOAN WITH PTL SHAREHOLDERS

On November 22, 2006, the Company completed the acquisition of 100% of the outstanding shares of PTL Electronics Ltd. (PTL), an electronic manufacturing services company located in British Columbia, Canada. Under the terms of the agreement, assumed convertible debentures in the amount of $2,014,011($2,300,000 CDN) and a short term loan in the amount of $433,050 ($500,000 CDN). Such debentures are non-interest bearing and can be repaid at the option of the Company by conversion into common shares of the Company within nine months after closing. The acquisition was completed in Canadian dollars, therefore it should be noted that all US dollar conversions in this note may fluctuate due to currency conversion.

The conversion price for repayment of the debenture is based on the equivalent in Canadian funds of eight-five percent (85%) of the Market Price determined as at the date of repayment, provided that such price shall not be less than US$0.35 and not more than US$1.10.  Market Price on any date, means the average, during the period of twenty (20) consecutive Trading Days ending on the fifth Trading Day before such date, of the closing prices per share at which the Common Shares have traded on the Over-the-Counter Bulletin Board (OTCBB).

The company expensed $358,422 to amortization of debenture and loans and additional paid in capital,  as there was a beneficial conversion feature with the Convertible debenture held by the PTL shareholder (see note 5).

The short term loan in the amount of $433,050 ($500,000 CDN) is payable within nine months after closing, with provisions to extend at the Companys discretion for an additional three months with interest accruing at 10% per annum on any portion that remains unpaid after August 22, 2007.



Note 13.  OTHER PAYABLE

This amount is PTLs net income (after tax) for the period January 1, 2006 until November 30, 2006 that is to be paid by the Company as part of the share purchase agreement with the selling shareholders of PTL. The amount is payable starting in April 2007 in 15 equal monthly installments



F-13



---

Note 14. SHORT TERM LOANS

Unsecured $304,969 Loan Transaction

On October 18, 2006, the Company entered into a $500,000 unsecured loan (the Loan) with Vision Capital Advisors LLP, through its Vision Opportunity Master Fund, Ltd. (Vision). The Company is required to make ten blended monthly installments of principal and interest of $52,319 commencing on November 19, 2006 and payable on the same day of each successive month until August 19, 2007.

The Loan carries an interest rate of 10% per annum for the term of the loan which is ten months.  Any monthly installment payments that are not paid on or before the due date will accrue interest at 14% per annum until such past due interest and principal is paid.  In connection with the Loan, the Company also issued to Vision warrants to purchase 2,000,000 shares of the Companys common stock within five years of the date of the warrants.  The exercise prices for the warrants are as follows:

|               |                                 
|-------------- | --------------------------------
|Exercise Price | Number of shares of common stock
|US $0.65       | First 1,000,000                 
|US $1.00       | Remaining 1,000,000             

As part of the Loan Agreement, the Company agreed to file to a registration statement on or before September 30, 2007 to register the shares of common stock underlying the warrants, and to use best efforts to have such registration statement declared effective by the Securities and Exchange Commission no later than February 5, 2008.  If the Company fails to file a registration statement on or prior to September 30, 2007 and the registration statement is not declared effective by the Commission on or prior to February 5, 2008 the Company shall pay an amount in cash as liquidated damages to each Holder equal to one percent (1%) of the amount of the Holders initial investment in the debenture for each calendar month or portion thereof thereafter from the Event Date until the applicable Event is cured; provided, however, that in no event shall the amount of liquidated damages payable at any time and from time to time to any Holder exceed an aggregate of ten percent (10%) of the amount of the Holders initial investment in the debenture.   Liquidated damages payable by the Company shall be payable on the first (1st) Business Day of each thirty (30) day period following the Event Date.

In connection with the Vision Loan, the Company paid a commission to Joseph Capital LLP (Joseph), in the amount of $35,000 cash and warrants to purchase 193,846 shares of the Companys common stock within five years of the date of the warrants.  The exercise prices for the Joseph warrants are as follows:



|               |                                 
|-------------- | --------------------------------
|Exercise Price | Number of shares of common stock
|US$0.65        | 123,846                         
|US$1.00        | 70,000                          



Note 15.  AMOUNTS DUE TO RELATED PARTIES

Amounts due to related parties as at March 31, 2007 and June 30, 2006 are as follows:

|                                  |   |                |  |  |   |                | 
|--------------------------------- | - | -------------- |  |  | - | -------------- | 
|                                  |   | March 31, 2007 |  |  |   | June 30,  2006 | 
|Snowy Creek Resources Ltd.[1]     | $ | 1,981          |  |  | $ | 7,407          | 
|Marlene C. Schluter [1]           |   | 1,321          |  |  |   | 3,236          | 
|WMK Financial Inc. [2]            |   | 11,906         |  |  |   | -              | 
|Axiom Strategy Group, Inc [2]     |   | 41,893         |  |  |   | -              | 
|Fortune Capital Management Ltd[2] |   | 36,000         |  |  |   | -              | 
|KOKO Financial Services Inc[3]    |   | 4,157          |  |  |   | -              | 
|FWP Acquisition Corp [4]          |   | 104,036        |  |  |   | -              | 
|Tom Gill[2]                       |   | 15,986         |  |  |   | -              | 
|                                  | $ | 217,279        |  |  | $ | 10,733         | 





F-14



---

[1]   Snowy Creek Resources Ltd. is a company owned by Ms. Marlene C. Schluter, director and a shareholder of the Company. The loans from Snowy Creek Resources Ltd. and Ms. Marlene C. Schluter and are scheduled to be paid back by the Company in installments ending in April 2007. All of these loans are non-interest bearing, are unsecured, and are disclosed as current liabilities in these financial statements.

[2]   The amounts owing to the other related parties are pursuant to arrangements as outlined below:

(i)  The Company pays $2,275 per month to WMK Financial Inc. (WMK) on a month-to-month basis for management services related to the duties performed as the chief financial officer of the company. WMK is a company owned and controlled by Mr. Walter Kloeble, CFO of the Company. Mr. Walter Klobe resigned as the companys CFO effective March 13, 2007

(ii)  During the period, the Company paid $10,208per month to Axiom Strategy Group, Inc. (Axiom), on a month-to-month basis for management services related to the duties performed as chief executive officer of the Company.  Axiom is a company owned and controlled by Mr. Blake Ponuick, CEO of the Company.

(iii)  The Company paid $7,500 per month to Fortune Capital Management (Fortune) on a month-to-month basis for consulting services. Fortune is a company owned and controlled by Mr. Stanley Ross, an affiliate of the Company.

(iv)   Mr. Tom Gill joined the company as the chief financial officer effective March 13, 2007 the amounts owed to him are for management services in January and February relating to the acquisition of PTL. Effective March 1, 2007 Mr. Tom Gill will be paid $8,333 for duties performed as the chief financial office of the Company

[3]  KOKO Financial Services Inc. (KOKO) is a company owned by Mr. Fraser Atkinson, director and shareholder of the Company.

[4] FWP Acquisition Corp is a company where Mr. Fraser Atkinson is President and majority shareholder. The amounts owed to FWP Acquisition Corp. are related to the $150,000 unsecured short term loan transaction entered into on November 3, 2006. The Loan carries an interest rate of 10% per annum for the term of the loan which is ten months.  Any monthly installment payments that are not paid on or before the due date will accrue interest at 14% per annum until such past due interest and principal is paid.  In connection with the Loan, the Company also issued to FWP warrants to purchase 600,000 shares of the Companys common stock within five years of the date of the warrants.  The exercise prices for the warrants are as follows:

|               |                                 
|-------------- | --------------------------------
|Exercise Price | Number of shares of common stock
|US$0.65        | First 300,000                   
|US$1.00        | Remaining 300,000               

As part of the Loan Agreement, the Company agreed to file to a registration statement on or before September 30, 2007 to register the shares of common stock underlying the warrants, and to use best efforts to have such registration statement declared effective by the Securities and Exchange Commission no later than February 5, 2008.



Note 16.  HSBC DEBT

PTL has the following demand loans.

I.)

Equipment loan for $78,397 ($90,750 CDN) with principal payments of $7,127 ($8,250 CDN) per month plus interest.  Eleven (11) months remain with current interest rate being Prime + 1.75%.

II.)

Equipment loan for $107,245 ($192,481 CDN) with principal and interest payments of $7,526 ($8,700 CDN) per month.  Five (5) payments remain, and then monthly payments increase to $9,407 ($10,875 CDN) for 12 months.  The interest rate is Prime + 1.75%.



F-15



---

Note 17.  CONVERTIBLE SECURED DEBENTURES AND WARRANTS

During the quarter the company offered a Series B $1,000,000 convertible debenture with the same terms as the original (Series A) $2,500,000 convertible debenture. During the quarter ended March 31, 2007 the Company had received an aggregate of $50,000 in subscriptions. As of March 31, 2007, the company has raised $1,849,706 under the two debentures.

In assessing the impact of the warrants attached to the debenture and any beneficial conversion features the Company adopted the following guidelines:



·

APB 14  Accounting for Convertible Debt and Debt issued with stock purchase warrants

·

EITF 00-19  provides guidance whether the warrants would be a derivative instrument and should be treated as an equity instrument or a liability instrument

·

EITF 98-5 provides guidance on accounting for Convertible Securities with Beneficial Conversion Feature of Contingently Adjustable Conversion Ratios.

·

EITF 00-27 provides guidance on accounting for Convertible Securities with Beneficial Conversion  Feature which also contain detachable warrants

Description of Convertible Secured Debentures

For accounting purposes, in the quarter ended March 31, 2007, the warrants attached to the $50,000 that was subscribed to through the series B debenture had a calculated fair value at the date of issue of $6,867. This amount was expensed to interest amortization on warrants in the quarter, as the warrants vested immediately.  The Company recorded this value as additional paid-in capital.  There was no beneficial conversion for the series B convertible debenture.

In previous quarters $297,006 has been expensed as interest amortization on the warrants relating to the series A debenture, as those warrants also vested immediately.  The Company recorded this value as additional paid-in capital.  There was a beneficial conversion feature with the series A debenture of $71,314 and this was expensed to interest amortization and additional paid in capital.

Each $25,000 Unit is comprised of (i) a convertible secured debenture and (ii) 12,295 common share purchase warrants. Each $25,000 debenture Unit is convertible, at the option of the holder, into 32,493 shares of the Companys common stock. The conversion is as follows:

a)  One-third of each $25,000 debenture Unit is convertible at a price of US$0.65 per Share into 12,819 common shares;

b)  One-third of each $25,000 debenture Unit is convertible at a price of US$0.80 per Share into 10,416 common shares; and

c)  One-third of each $25,000 debenture Unit is convertible at a price of US$0.90 per Share into 9,258 common shares.

Each $25,000 increment of debenture units entitles the purchaser to purchase 12,295 additional common shares for a period of three years from the closing date of the debenture.  6,147 of the warrants will have an exercise price of US$0.65; and 6,148 of the warrants will have an exercise price of US$0.80.

The debentures contain the following material provisions:

(i)   Series A mature September 30, 2009 and series B mature February 28, 2010,

(ii)  interest payable, semi annually, at 10% per annum in cash, increasing to a maximum of 14% in the event that the Company issues debt at a higher interest rate to a senior lender under certain circumstances,

(iii)  the Company has right of first refusal upon proposed transfers by debenture holders,

(iv)  the interest rate increases by 2% per annum in the event that the daily volume weighted average price (the VWAP) of the Companys common shares does not exceed US$0.75 per share for the ten trading days immediately preceding September 30, 2007.  If the interest rate on the debentures has previously increased as a result of the third party institutional investor adjustment outlined above, then no further increase of the interest will be made in respect to the VWAP.



F-16



---

As of March 31, 2007 the Company had received an aggregate of $1,849,706 in subscriptions which at the option of the Debenture holders could be converted into the Companys common stock as follows:

|                                                 |                  |                                                                   
|------------------------------------------------ | ---------------- | ------------------------------------------------------------------
|Principal Dollar Amount of Subscribed Debentures | Conversion Price | Aggregate Number of Common Shares Convertible by Debenture Holders
|$  616,561.36                                    | US$0.65          | 948,454                                                           
|$  616,593.37                                    | US$0.80          | 770,660                                                           
|$  616,551.27                                    | US$0.90          | 684,983                                                           

In accordance with the common share purchase warrants associated with the debenture offering, if exercised by the holders, the Company will issue to the debenture purchasers, warrants to purchase an aggregate of 909,784 of the Companys common stock with exercise prices as follows:

|               |                                                                   
|-------------- | ------------------------------------------------------------------
|Exercise Price | Aggregate Number of Common Shares exercisable by Debenture holders
|US$0.65        | 454,855                                                           
|US$0.80        | 454,929                                                           



The company may incur the following penalties relating to the interest rate and warrants attached to the debenture:

Interest rate penalties:

a.

Increased Interest Rate.  In the event that a third party institutional investor (minimum investment of $1,000,000) invests within a period of one year from the Original Issuance Date and the investment is in the form of debt and paid at an interest rate that exceeds 10% per annum, this Debenture shall automatically be deemed amended to increase the interest rate hereunder to the rate of interest set forth in the debt with such third party institutional investor thereafter, provided however, that such rate shall not exceed 14% per annum.

b.

Bonus Interest Rate.  In the event that the VWAP, as hereinafter defined, does not exceed US$0.75 per share for the ten (10) trading days immediately preceding September 30, 2007, then the applicable rate of interest payable under this Debenture shall be increased by 2.0% thereafter.  Notwithstanding the foregoing, if the interest rate applicable hereunder has been previously increased under Section 1(b) above, no increase shall be made under this Section 1(c).  For purposes of determining the Bonus Rate, the term VWAP shall mean means, for any date, the price determined by the first of the following clauses that applies: (a) if the Companys Common Shares are then listed or quoted on the American Stock Exchange, the Nasdaq Stock Market, or the New York Stock Exchange (a Trading Market), then the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares is then listed or quoted for trading; (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Shares is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Shares are then reported in the Pink Sheets published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported; or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

c.       Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 14% per annum or the maximum rate permitted by applicable law (Late Fees) which shall accrue daily from the date such interest is due hereunder through and including the date of payment in full.



F-17



---

Warrant Penalties:

a)

Cashless Exercise.  If at any time after one year from the date of issuance of this Warrant there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised at such time by means of a cashless exercise in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the VWAP on the Trading Day immediately preceding the date of such election.  VWAP means, for any date, the price determined by the first of the following clauses that applies: (a) if the Companys Common Shares are then listed or quoted on the American Stock Exchange, the Nasdaq Stock Market, or the New York Stock Exchange (a Trading Market), then the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares is then listed or quoted for trading; (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Shares is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Shares are then reported in the Pink Sheets published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported; or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.;



(B) =  the Exercise Price of this Warrant, as adjusted; and



(X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.



Note  18. LEASE COMMITMENTS

The Company has the following lease commitments as of March 31, 2007:

|              |                  
|------------- | -----------------
|Calendar Year | Commitment Amount
|2007          | $71,517[1]       
|2008          | $39,910          
|2009          | $2,654           
|2010          | $2,654           
|2011          | $2,654           
|2012          | $663             

[1]  PTLs lease on it current manufacturing space is up for renewal in March 2007 and has been extended on a month to month basis.





F-18



---

Note 19.  CAPITAL STOCK

a) Authorized: 75,000,000 common shares at $0.001 par value per share.

b) Shares issued and outstanding are as follows:

|                           |                |               |             |          
|-------------------------- | -------------- | ------------- | ----------- | ---------
|                           | March 31, 2007 | June 30, 2006
|                           | Shares         | $             | Shares      | $        
|Balance, December 31       | 27,901,302     | 6,941,447     | 23,579,166  | 3,512,900
|Shares Issued[1]           | 722,047        | 386,371       | 8,274,286   | 377,500  
|Shares Cancelled           | -              | -             | (6,000,000) | (6,000)  
|APIC Warrants & Options[2] | -              | 76,278        |             |          
|Balance                    | 28,623,349     | 7,404,096     | 25,853,452  | 3,884,400

[1] The Company during the three months ended at March 31, 2007 issued 722,047 shares of common stock at $0.535 per share.  The shares of common stock were issued for the exercise of warrants and for the payment of services received by the Company.

The issuances of the promissory notes, convertible debentures, warrants and shares issuable upon conversion of the convertible debentures and upon exercise of the warrants discussed in this Note 8 are exempt pursuant to provisions of the Securities Act of 1933, as amended (the "Act"), provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) thereunder relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S thereunder relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

[2]During the quarter ended March 31, 2007 the company charged $69,400 for stock based compensation relating to the outstanding stock options  (option compensation is expensed over the vesting period of the options).

and $6,878 for interest amortization on series B warrants to additional paid in capital.

c) Warrants outstanding and issued are as follows:



|                                                           |                  |                   |                   
|---------------------------------------------------------- | ---------------- | ----------------- | ------------------
|Outstanding Warrants in the Period                        
|                                                           | Number of Shares | Exercise Price[8] | Maturity Date     
|18 Convertible Secured Debenture Holders- Series A[1]    | 885,194          | $0.73             | September 30, 2009
|Vision Opportunity Master Fund[2]                          | 2,000,000        | $0.83             | October 18, 2011  
|Joseph Capital LLP[3]                                      | 193,846          | $0.83             | October 18, 2011  
|FWP Acquisition Corp[4]                                    | 600,000          | $0.83             | November 3, 2011  
|Stephen Pasquan [5]                                        | 125,000          | $0.65             | November 3, 2011  
|Stephen Pasquan [6]                                        | 75,000           | $0.65             | December 19, 2011 
|2 Convertible Secured Debenture Holders- Series B [7]    | 24,590           | $0.73             | February 28, 2010 
|Warrants outstanding in the period ended December 31, 2006 | 3,903,630        | $0.75             | Various           

[1] On November 22, 2006 the Company issued warrants to purchase 885,194 shares of common stock of the Company to the eighteen (18) holders of the Convertible Secured Debentures with 442,561 of the share purchase warrants having an exercise price of $0.65 and the remaining 442,633 share purchase warrants an exercise price of $0.80.  The proceeds of the debenture were used for the acquisition of PTL.



F-19



---

[2] On October 18, 2006 the Company in connection with a short term loan agreement, issued warrants to purchase 2,000,000 shares of common stock of the Company with 1,000,000 of the share purchase warrants having an exercise price of $0.65 and the remaining 1,000,000 share purchase warrants an exercise price of $1.00.

[3] On October 18, 2006 the Company as a component of the commission for the Vision Opportunity loan, issued warrants to purchase 193,846 shares of common stock of the Company with 123,846 of the share purchase warrants having an exercise price of $0.65 and the remaining 70,000 share purchase warrants an exercise price of $1.00.

[4] On November 3, 2006 the Company in connection with a short term loan agreement, issued warrants to purchase 600,000 shares of common stock of the Company with 300,000 of the share purchase warrants having an exercise price of $0.65 and the remaining 300,000 share purchase warrants an exercise price of $1.00.

[5] On November 3, 2006 the Company in connection with a short term loan agreement, issued warrants to purchase 125,000 shares of common stock of the Company with an exercise price of $0.65.

[6] On December 19, 2006 the Company in connection with a short term loan agreement, issued warrants to purchase 75,000 shares of common stock of the Company with an exercise price of $0.65.

[7] During the three months ended March 31, 2006, the Company issued warrants to purchase 24,590 shares of common stock of the Company to the two (2) holders of the Convertible Secured Debentures- Series B with 12,294 of the share purchase warrants having an exercise price of $0.65 and the remaining 12,296 share purchase warrants an exercise price of $0.80.

[8] Exercise price for outstanding warrants is the weighted average price.



|                                                                  |                  |                  
|----------------------------------------------------------------- | ---------------- | -----------------
|Warrants Issued, expired or cancelled during period              
|                                                                  | Number of Shares | Exercise Price[1]
|Warrants outstanding July 1, 2006                                 | 229,286          | $0.50            
|Warrants issued during  the 9 month period ending March 31, 2007  | 4,117,916        | $0.80            
|Warrants expired during the 9month period ending March 31, 2007   | (115,000)        | $0.50            
|Warrants exercised during the 9month period ending March 31, 2007 | 328,572          | $0.50            
|Warrants outstanding March 31, 2007                               | 3,903,630        | $0.75            



Convertible Debentures Warrants

During the nine (9) months ended March 31, 2007, the Company realized gross cash proceeds of $1,849,706 from the issuance of two separate, 10% redeemable convertible notes of the Company plus 909,784 share purchase warrants pursuant to Regulation D under the Securities Act of 1933. The notes mature on September 30, 2009 for Series A, and February 28, 2010 for Series B.  See Note 17 in these financial statements for complete details on the convertible debentures.

For accounting purposes, in the quarter ended March 31, 2007, the warrants attached to the $50,000 that was subscribed to through the series B debenture had a calculated fair value at the date of issue of $6,867. This amount was expensed to interest amortization on warrants in the quarter, as the warrants vested immediately.  The Company recorded this value as additional paid-in capital.  There was no beneficial conversion for the series B convertible debenture.



F-20



---

In previous quarters $297,006 has been expensed as interest amortization on the warrants relating to the series A debenture, as those warrants also vested immediately.  The Company recorded this value as additional paid-in capital.  There was a beneficial conversion feature for the warrants issued with the series A debenture of $71,314 and this was expensed to interest amortization and additional paid in capital.

The fair value of the warrants was calculated using the Black-Scholes derivative-pricing model with the following assumptions:  no dividend yield; volatility of 75%; risk free interest rate of 4.5% and an expected term of 3 years. Limitations of the effectiveness of the Black-Scholes derivative-pricing model are that it was developed for use in estimating the fair value of traded derivatives which have no vesting restrictions and are fully transferable and that the model requires the use of highly subjective assumptions including expected stock price volatility. Because the Companys warrants that were attached to financings sold to investors have characteristics significantly different from those of traded derivatives and because changes in the subjective input assumptions can materially affect the fair value estimate, in managements opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its warrants that were attached to financings sold to investors.

Short term loans of $850,000 Warrants

During the nine months ended March 31, 2007, the Company realized gross cash proceeds of $850,000 from the issuance of three short term loan agreements with repayment schedules from 90 days to 10 months. These loans have an interest rate of 10% with 2,800,000 warrants attached pursuant to Regulation D under the Securities Act of 1933.  See Note 14 & 15 in these financial statements for complete details of the short term liabilities and attached warrants.

For accounting purposes, the Company calculated, using the Black-Scholes derivative pricing model, the fair value of the warrants at the date of issue at $450,444 and was expensed in the period, as the warrants vested immediately and recorded this value as additional paid-in capital. The carrying value of the liability is being accreted to the value of the short term facilities over the periods that they are outstanding- 90 days to 10 months from date of issue.

The fair value of the warrants was calculated using the Black-Scholes derivative-pricing model with the following assumptions:  no dividend yield; volatility of 75%; risk free interest rate of 4.5% and an expected term that equals the life of the warrants (3 to 5 years). Limitations of the effectiveness of the Black-Scholes derivative-pricing model are that it was developed for use in estimating the fair value of traded derivatives which have no vesting restrictions and are fully transferable and that the model requires the use of highly subjective assumptions including expected stock price volatility. Because the Companys warrants that were attached to financings sold to investors have characteristics significantly different from those of traded derivatives and because changes in the subjective input assumptions can materially affect the fair value estimate, in managements opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its warrants that were attached to financings sold to investors.

e)

Options  issued and outstanding are as follows:

A summary of stock option activity for the three months ended at March 31, 2007 is as follows:

|                                         |                             |                  
|---------------------------------------- | --------------------------- | -----------------
|                                         | Incentive Stock Option Plan
|                                         | Options Issued              | Exercise Price[1]
|Balance, December 31, 2006               | 2,745,090                   | $0.45            
|Options Issued during period             | 550,000                     | $0.55            
|Options Cancelled during period          | (100,000)                   | $0.35            
|Options outstanding as at March 31, 2007 | 3,195,090                   | $0.47            





F-21



---

The following options were outstanding as of March 31, 2007.

|                                       |                     |                    |                        |                   |                                   
|-------------------------------------- | ------------------- | ------------------ | ---------------------- | ----------------- | ----------------------------------
|Range of Exercise Price                | Options Outstanding | Exercise Price [1] | Exercisable Options[1] | Exercise Price[1] | Remaining Contractual life (years)
|Incentive Stock Option Plan            |                     |                    |                        |                   |                                   
|$0.35                                  | 1,265,000           | $0.35              | 1,145,000              | $0.35             | 4.0                               
|$0.55                                  | 1,930,090           | $0.55              | -                      | -                 | 4.75                              
|Options Outstanding at  March 31, 2007 | 3,195,090           | $0.45              | 1,145,000              | $0.35             | 4.25                              

[1] Exercise price for options is the weighted average price for all options issued including any vested options.

The Company during the three months ended  March 31, 2007 determined a charge of $177,551  and expensed $69,400 in stock based compensation . This expense is attributed to the 3,195,090 options which have been issued under the Incentive Stock Option Plan.  No options were exercised during the three month period ended at March 31, 2007.



F-22



---

Item 2  Managements Discussion and Analysis or Plan of Operation

For the purposes of the discussion contained in this Report, the use of Moventis, the Company, we, our or us is meant to be referenced in such a manner as to be defined as Moventis Capital, Inc.

Forward Looking Statements

All statements, other than statements of historical facts, included in this report that address activities, events or developments that Moventis expects, believes, intends or anticipates will or may occur in the future, are forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, could differ materially from those set forth in or contemplated by the forward-looking statements herein. These risks and uncertainties include, but are not limited to, Moventis' reliance on current revenues; the uncertainties associated with the introduction of new products/services; management of growth, including the ability to attract and retain qualified employees; the ability to integrate acquisitions made by Moventis and the costs associated with such acquisitions; dependence on its Chief ExecutiveChief Executive officer; substantial competition from larger companies with greater financial and other resources than Moventis; the success of its marketing strategy; its dependence on suppliers for some of its products; currency fluctuations and other risks associated with foreign sales and foreign operations; quarterly fluctuations in revenues, income and overhead expense; potential product liability risk associated with its existing and future products; and other risks described in our Annual Report on From 10-KSB for the fiscal year ended June 30, 2006 and other reports filed with the U.S. Securities and Exchange Commission, as well as the risks described under Factors Affecting our Results of Operation and Financial Condition. Readers are cautioned not to put undue reliance on forward-looking statements. Moventis does not intend to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.

Business Strategy and Overview

Acquisition Strategy.

In February 2006, we changed our name to Moventis Capital, Inc. and changed our business strategy to acquiring controlling interests in small to medium sized businesses in key sectors like technology, manufacturing, energy and healthcare. Once a target company is acquired, we plan to assist with business development and operational growth. We intend to select established small to mid-sized growth companies that are profitable or demonstrate the potential for profitability in a short period of time.

Due to their size, these companies often face barriers to continual growth such as access to capital and management expertise. We will look to capitalize on this underserved market of smaller companies that do not meet the size or industry requirements of many of the large acquisition, private equity and investment firms.

We have implemented a criteria list and selection process for determining the suitability of target companies for acquisition. Although our selection criteria is intended to be a guideline only, and may have exceptions, the criteria guideline includes:

·

Revenue and Profitability: An established revenue base with the potential for increased revenue growth. We intend to focus on target companies with annual revenue between $5 million to $20 million. Suitable target companies should be profitable or demonstrate the potential of profitability within a short period of time, without the need for substantial capital investment.

·

Established or Defendable Market Position: Suitable target companies should demonstrate an established market position, or the potential to establish a leadership position in a specific niche market or geographic region through regulatory or technical barriers to entry. Suitable target companies may also demonstrate a defendable market position that may include proprietary technology or patents, strategic partnerships, long term customer or vendor relationships or certain exclusive rights.

·

Scalability: Suitable target companies should demonstrate a scalable business model and infrastructure that is not reliant on substantial infrastructure or capital investment.

·

Growth Potential:  We expect to select target companies that have demonstrated a history of strong growth or the potential for strong growth. Target companies should also operate in markets that are large and growing.



3



---

·

Proven Management Team:  We intend to operate primarily as a holding company of the target companies that we acquire and anticipate that these target companies will operate as wholly owned or majority owned subsidiaries. Although we expect to contribute operational, marketing, business development and financial support to help improve growth and operational performance, we plan to invest in target companies that have a proven and experienced core management team that have demonstrated the ability to professionally manage their businesses.

·

Platform Acquisition:  We intend to acquire a number of platform target companies in different markets in order to build a diverse portfolio of subsidiary companies and thereby minimize risk associated with influences beyond our control, such as economic, market or government regulatory conditions that may adversely impact the growth or viability of a single market. We further intend to select target companies that demonstrate the ability to serve as platforms for further strategic acquisitions that are complementary in terms of operational efficiencies and/or potential integration.

·

Domain Experience:  We may have a preference for target companies that operate in a market or sector in which the management or Board of Directors has experience, expertise and networks.

We currently do not have sufficient funds for the acquisition of target companies but expect that we will fund the acquisitions of target companies most often through a combination of cash and/or equity, using stock as currency for acquisitions. We expect that when we identify a target company, in order to raise sufficient capital for the acquisition, we will do acquisition-specific private placement offerings of shares and/or debt based on the revenue, profitability and assets of target companies. We expect to have a preference for target companies that will be amenable to accepting a majority of equity or debt from us as consideration for their purchase. We believe this may be more acceptable to private target companies which do not have clear liquidity or succession strategies or the potential for the same.

Acquisition Marketplace Competition

We are new to the acquisition marketplace and as such may face strong competition from entities with similar business goals and stronger competitive positions in the markets we will be active in. Our competitors include private equity funds, venture capital funds, leveraged buyout funds, hedge funds, other merger and acquisition firms, private investors and investment banks that have business objectives similar to ours. Many of these entities are well established, have substantial funds or immediate access to funds, and have extensive experience in identifying and effecting business acquisitions directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us, and our financial resources are relatively limited when compared to those of many of these competitors. While we believe there are numerous potential targets that we could acquire, our ability to compete in acquiring certain targets will be limited by our available financial resources or willingness of targets to accept equity as a form of currency. This inherent competitive limitation gives others an advantage in pursuing acquisition targets and in successfully negotiating acquisitions.

Management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately-held entities having a similar business objective in acquiring businesses with significant growth potential on favorable terms.

In addition, we believe that our focus on acquiring smaller sized private businesses seeking exit strategies places us in a quickly growing market niche which is currently under-served by our larger competitors, due to their dependence on larger dollar transactions.

PTL Electronics Acquisition

On November 22, 2006, we completed the purchase of 100% of the outstanding shares of PTL Electronics Ltd. (PTL), an electronics manufacturing services company located in British Columbia, Canada. Under the terms of the agreement, we purchased all of the outstanding capital stock and outstanding shareholder loans of PTL for a sum of $6,138,609 ($7,000,000CDN). On close, we were required to pay $2,626,970 ($3,000,000 CDN) in cash, $1,059,800 ($1,200,000 CDN) in common shares and convertible debentures in the amount of $2,014,011 ($2,300,000 CDN), with $437,828 ($500,000 CAD) short term loan due on August 22, 2007. Such debentures are non-interest bearing and can be repaid at our option by conversion into common shares within nine months of closing. The acquisition was completed in Canadian dollars, therefore it should be noted that all USD conversions in this note may fluctuate due to currency conversion.



4



---

PTL Electronics Overview

PTL operates as a wholly-owned subsidiary of Moventis and is in the business of providing advanced electronics manufacturing services (EMS) to original equipment manufacturers (OEMs) serving a variety of markets including telecommunications, industrial control systems, medical, computing, multimedia and automotive.  PTLs services include complete supply chain management and component procurement, design and development support, low-volume quick-turn and high volume board level manufacturing, testing, supply chain management, full integration and complete box builds.  PTL is able to support their customers complete manufacturing needs from initial design, to procurement and manufacturing, distribution and service, to end of life. PTL is ISO 9001:2000 certified.

PTL expects to continue to focus on a niche target of regional OEMs that require design and development support and quick-turn manufacturing of complex and high value products.

According to Electronic Trend Publications Worldwide Electronics Manufacturing Services Market report published in June 2006, the EMS market was estimated at $190 billion globally in 2005 and is forecast to grow to $328 billion by 2010.

PTL Electronics Competition

An EMS firms manufacturing capabilities and core competencies establish how they will compete in the marketplace. PTL focuses on smaller volumes and more complex printed circuit board assemblies (PCBA) for customers in local and regional markets near their manufacturing facility where they compete for the orders of more complex, smaller production runs and higher quality PCBAs from customers that are either developing newer products, or produce business-to-business products that have a high value add for PTL with smaller volume requirements.  PTL intends to establish relationships with customers that have products at early stages in the product lifecycle in order to benefit from the customers production increases. Competition for these customers and services typically comes from companies similar in size and service offerings to PTL.

Results of operations for the three and nine months ended March 31, 2007 as compared to the three and nine months ended March 31, 2006.

Net Sales:

This is the first full three month period since changing business operations that we have reported revenue.  Net sales in the three month period ended March 31, 2007 were $3,443,661, constituting an increase of $3,443,661 over the same period in 2006. Net sales in the nine month period ended March 31, 2007 were $7,138,571, constituting an increase of $7,138,571 over the same period in 2006

Gross Profit and Cost of Goods Sold:

The cost of goods sold for the three months ended March 31, 2007 was $2,740,310, resulting in a gross margin of $703,351. The cost of goods sold for the nine months ended March 31, 2007 was $5,811,917, resulting in a gross margin of $1,326,654.

Selling, General and Administrative Expenses:

(i)

General and Administrative. General and administrative costs are comprised primarily of contractor expenses as they relate to management and operational staff, stock based compensation, legal, accounting and other professional fees, travel expenses, marketing and corporate communications and facility and information technology costs. For the three months ended March 31, 2007, general and administrative expenses were $473,874, representing an increase of $347,718 or 276% over the same period in 2006. For the nine months ended March 31, 2007, general and administrative costs were $952,078, representing an increase of $605,983 or 175% over the same period in 2006. The increase in costs was primarily related to the newly acquired PTL business, costs associated with the acquisition of PTL, and an increase in activity related to the Moventis business plan.

(ii)

Accrued Operating Deficit. Since inception to June 30, 2006, Moventis has accumulated a deficit of $3,964,151. This was primarily attributed to prior business activities that required capital for product development, marketing and systems.  A deficit from current operations for the period of July 1, 2006 to March 31, 2007 of $1,630,961 has accumulated under the current acquisition business model.



5



---



(iii)

Stock-Based Compensation. In the three months ended March 31, 2007, Moventis expensed $69,400, an increase of $17,660 over the same three month period in 2006.  In the nine months ended March 31, 2007, Moventis expensed $282,170, an increase of $230,430 over the same three month period in 2006.  These amounts were directly related to the employee stock option plan.

(iv)

Foreign Currency loss (gain): In the three months ended March 31, 2007, Moventis had a foreign currency loss of $29,014, representing an increase of $29,014 from the same period in 2006.  In the nine months ended March 31, 2007, Moventis had a foreign currency loss of $145,948, an increase of $145,948 over the same nine month period in 2006. These losses were due to currency exchange rate fluctuations between the U.S. and Canada.

(v)

Interest Amortization on Warrants: In the three months ended March 31, 2007, Moventis had an amortization expense on warrants of $6,878, an increase of $6,878 over the same three month period in 2006.  In the nine months ended March 31, 2007, Moventis had an amortization expense on warrants of $1,196,068, an increase of $1,196,068 over the same nine month period in 2006.  These charges were related to warrants issued during debenture financings used in the acquisition of PTL Electronics.

(vi)

Depreciation: For the three months ended March 31, 2007, Moventis had a depreciation expense of $63,275, representing an increase of $61,394 or 3,264%.  For the nine months ended March 31, 2007, Moventis had a depreciation expense of $110,325, representing an increase of $102,801or 1,366%.  These increases are attributed to the acquisition of PTL and the depreciation of its manufacturing equipment. Our property and equipment holdings as at March 31, 2007 increased to $898,570, after depreciation, an increase of $889,218 over June 30, 2006.

Operating Profit/Loss: For the three months ended March 31, 2007, Moventis had a net loss of $100,555, representing a gain of $116,718 or 54%.over the same period in 2006 when we reported a net loss of $217,277. For the nine months ended March 31, 2007, we had a net loss of $1,630,961 compared to a net loss of $517,484 for the same period in 2006, representing a decline of $1,113,477 or 215%.   Over 90 % of the nine month operating loss, or $1,460,929 of the $1,630,961 operating deficit can be attributed to amortization, depreciation, interest and interest amortization on warrants.

Interest Expense/Income: For the three months ended March 31, 2007, Moventis incurred an interest expense of $75,157, of which $68,279 was cash and $6,878 was non-cash interest charges attributed to the interest amortization on warrants.    In the nine months ended March 31, 2007, Moventis had an interest expense of 1,345,733, of which $149,665 was cash and $1,196,068 was non-cash interest charges attributed to the interest amortization on warrants.  The cash portion of the interest expense is attributed to short term loans and other credit facilities.

Income Taxes: During the three and nine month periods ending March 31, 2007, the company incurred $29,058 income tax expense.  The tax expense was incurred by PTL.

Liquidity and Capital Resources

Financial Condition: As of March 31, 2007 we had $239,271 in cash but as compared to $96,219 in cash at June 30, 2006. The primary use of our cash flow is operations. Operating cash outflows include payments to vendors for product procurement, consultants, office rent and facilities, services and supplies. Factors that impact our operating earnings that do not impact cash flows include depreciation and amortization as well as share based compensation. Changes in working capital generally correspond to operating activity. During the last fiscal period, operating cash flow was impacted by expenses related to the payment of obligations related to finalizing the acquisition of PTL, increased legal and accounting fees and other costs associated with the due diligence and agreement to acquire PTL.

Credit Agreements:  Moventis has an operating line of credit facility with HSBC Group (HSBC) (see Note 11 in the Financial Statement notes for complete details). This operating facility is for $2,988,093 ($3,450,000 CAD). We also have two demand loans for equipment with the HSBC, which as of March 31, 2007, have a remaining balance of $185,642. All credit agreements are current and in good standing.



6



---

Financing Activities. Moventis has typically raised funds through the sales of common stock and the issuance of debt. Funds have primarily been used for the due diligence and acquisition of PTL and for operations and the reduction of debt in accordance with normal repayment terms. During the three months ended March 31, 2007, we carried out the following financing activities:

1)

Common Stock Issuance.

During the three month period ended March 31, 2007, Moventis issued 722,047 shares of common stock at a weighted average price of $0.535. These shares were issued as the result of the exercise of warrants and for the payment of contractor services related to the acquisition of PTL.  In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

2)

Convertible Secured Debenture Issuances.

During the quarter the company offered a Series B $1,000,000 convertible debenture with the same terms as the original (Series A) $2,500,000 convertible debenture. During the quarter ended March 31, 2007 the Company had received an aggregate of $50,000 in subscriptions. As of March 31, 2007, the company has raised $1,849,706 under the two debentures.

Each $25,000 Unit is comprised of (i) a convertible secured debenture and (ii) 12,295 common share purchase warrants. Each $25,000 debenture Unit is convertible, at the option of the holder, into 32,493 shares of Moventis common stock.  The conversion is as follows:

a)  One-third of each $25,000 debenture Unit is convertible at a price of US$0.65 per Share into 12,819 common shares;

b)  One-third of each $25,000 debenture Unit is convertible at a price of US$0.80 per Share into 10,416 common shares; and

c)  One-third of each $25,000 debenture Unit is convertible at a price of US$0.90 per Share into 9,258 common shares.

Each $25,000 Unit entitles the holder to purchase 12,295 additional common shares for a period of three years from the closing date of the debenture as follows:  6,147 of the warrants will have an exercise price of US$0.65; and 6,148 of the warrants will have an exercise price of US$0.80.

The debentures contain the following material provisions:

(i)   Series A mature September 30, 2009 and series B mature February 28, 2010,

(ii)  interest payable, semi annually, at 10% per annum in cash, increasing to a maximum of 14% in the event that the Company issues debt at a higher interest rate to a senior lender under certain circumstances,

(iii)  the Company has right of first refusal upon proposed transfers by debenture holders,

(iv)  the interest rate increases by 2% per annum in the event that the daily volume weighted average price (the VWAP) of the Companys common shares does not exceed US$0.75 per share for the ten trading days immediately preceding September 30, 2007.  If the interest rate on the debentures has previously increased as a result of the third party institutional investor adjustment outlined above, then no further increase of the interest will be made in respect to the VWAP.



7



---

As of March 31, 2007 the Company had received an aggregate of $1,849,706 in subscriptions which at the option of the Debenture holders could be converted into the Companys common stock as follows:

|                                                 |                  |                                                                   
|------------------------------------------------ | ---------------- | ------------------------------------------------------------------
|Principal Dollar Amount of Subscribed Debentures | Conversion Price | Aggregate Number of Common Shares Convertible by Debenture Holders
|$  616,561.36                                    | US$0.65          | 948,454                                                           
|$  616,593.37                                    | US$0.80          | 770,660                                                           
|$  616,551.27                                    | US$0.90          | 684,983                                                           

In accordance with the common share purchase warrants associated with the debenture offering, if exercised by the holders, the Company will issue to the debenture purchasers, warrants to purchase an aggregate of 909,784 of the Companys common stock with exercise prices as follows:

|               |                                                                   
|-------------- | ------------------------------------------------------------------
|Exercise Price | Aggregate Number of Common Shares exercisable by Debenture holders
|US$0.65        | 454,855                                                           
|US$0.80        | 454,929                                                           



The company may incur the following penalties relating to the interest rate and warrants attached to the debenture:

Interest rate penalties:

c.

Increased Interest Rate.  In the event that a third party institutional investor invests within a period of one year from the Original Issuance Date and the investment is in the form of debt and paid at an interest rate that exceeds 10% per annum, this Debenture shall automatically be deemed amended to increase the interest rate hereunder to the rate of interest set forth in the debt with such third party institutional investor thereafter, provided however, that such rate shall not exceed 14% per annum.

d.

Bonus Interest Rate.  In the event that the VWAP, as hereinafter defined, does not exceed US$0.75 per share for the ten (10) trading days immediately preceding September 30, 2007, then the applicable rate of interest payable under this Debenture shall be increased by 2.0% thereafter.  Notwithstanding the foregoing, if the interest rate applicable hereunder has been previously increased under Section 1(b) above, no increase shall be made under this Section 1(c).  For purposes of determining the Bonus Rate, the term VWAP shall mean means, for any date, the price determined by the first of the following clauses that applies: (a) if the Companys Common Shares are then listed or quoted on the American Stock Exchange, the Nasdaq Stock Market, or the New York Stock Exchange (a Trading Market), then the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares is then listed or quoted for trading; (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Shares is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Shares are then reported in the Pink Sheets published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported; or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

c.       Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 14% per annum or the maximum rate permitted by applicable law (Late Fees) which shall accrue daily from the date such interest is due hereunder through and including the date of payment in full.

Warrant Penalties:

b)

Cashless Exercise.  If at any time after one year from the date of issuance of this Warrant there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised at such time by means of a cashless exercise in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:



8



---

(A) = the VWAP on the Trading Day immediately preceding the date of such election.  VWAP means, for any date, the price determined by the first of the following clauses that applies: (a) if the Companys Common Shares are then listed or quoted on the American Stock Exchange, the Nasdaq Stock Market, or the New York Stock Exchange (a Trading Market), then the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares is then listed or quoted for trading; (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Shares is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Shares are then reported in the Pink Sheets published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported; or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.;



(B) =  the Exercise Price of this Warrant, as adjusted; and



(X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

3) Unsecured $304,969 Loan Transaction

On October 18, 2006, the Company entered into a $500,000 unsecured loan (the Loan) with Vision Capital Advisors LLP, through its Vision Opportunity Master Fund, Ltd. (Vision). The Company is required to make ten blended monthly installments of principal and interest of $52,319.25 commencing on November 19, 2006 and payable on the same day of each successive month until August 19, 2007.  As of March 31, 2007, there is an outstanding balance on the loan of $304,969.

The Loan carries an interest rate of 10% per annum for the term of the loan which is ten months.  Any monthly installment payments that are not paid on or before the due date will accrue interest at 14% per annum until such past due interest and principal is paid.  In connection with the Loan, the Company also issued to Vision warrants to purchase 2,000,000 shares of the Companys common stock within five years of the date of the warrants.  The exercise prices for the warrants are as follows:



|               |                                 
|-------------- | --------------------------------
|Exercise Price | Number of shares of common stock
|US$0.65        | First 1,000,000                 
|US$1.00        | Remaining 1,000,000             

As part of the Loan Agreement, the Company agreed to file to a registration statement on or before September 30, 2007 to register the shares of common stock underlying the warrants, and to use best efforts to have such registration statement declared effective by the Securities and Exchange Commission no later than February 5, 2008.  If the Company fails to file a registration statement on or prior to September 30, 2007 and the registration statement is not declared effective by the Commission on or prior to February 5, 2008 the Company shall pay an amount in cash as liquidated damages to each Holder equal to one percent (1%) of the amount of the Holders initial investment in the debenture for each calendar month or portion thereof thereafter from the Event Date until the applicable Event is cured; provided, however, that in no event shall the amount of liquidated damages payable at any time and from time to time to any Holder exceed an aggregate of ten percent (10%) of the amount of the Holders initial investment in the debenture.   Liquidated damages payable by the Company shall be payable on the first (1st) Business Day of each thirty (30) day period following the Event Date.



9



---

In connection with the Vision Loan, the Company paid a commission to Joseph Capital LLP (Joseph), in the amount of $35,000 cash and warrants to purchase 193,846 shares of the Companys common stock within five years of the date of the warrants.  The exercise prices for the Joseph warrants are as follows:



|               |                                 
|-------------- | --------------------------------
|Exercise Price | Number of shares of common stock
|US$0.65        | 123,846                         
|US$1.00        | 70,000                          



In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

4)  Unsecured $104,036 Loan Transaction

On November 3, 2006, Moventis entered into a $150,000 unsecured loan agreement (the FWP Loan) with FWP Acquisition Corp. (FWP). Under the FWP Loan, Moventis is required to pay 10 consecutive monthly payments consisting of principal and interest in the amount of $17,736.23 commencing on December 3, 2006 and payable on the same day of each successive month until September 3, 2007. Fraser Atkinson, a director of Moventis is the President and a major shareholder of FWP.  As of March 31, 2006 there is an outstanding balance on the loan of $104,036.

The FWP Loan carries an interest rate of 10% per annum for the term of the loan which is 10 months. Any monthly installment payments that are not paid on or before the due date will accrue interest at 14% per annum until such past due interest and principal is paid. In connection with the FWP Loan, Moventis issued to FWP, warrants to purchase 600,000 shares of our common stock within five years of the date of the warrants. The exercise prices for the warrants associated with the FWP Loan are as follows:



|               |                                 
|-------------- | --------------------------------
|Exercise Price | Number of shares of common stock
|US$0.65        | First 300,000                   
|US$1.00        | Remaining 300,000               



In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

Moventis has also agreed to file to a registration statement by September 30, 2007 to register the shares of common stock underlying the warrants, and to use best efforts to have such registration statement declared effective by the Securities and Exchange Commission no later than February 5, 2008.  If the Company fails to file a registration statement on or prior to September 30, 2007 and the registration statement is not declared effective by the Commission on or prior to February 5, 2008 the Company shall pay an amount in cash as liquidated damages to each Holder equal to one percent (1%) of the amount of the Holders initial investment in the debenture for each calendar month or portion thereof thereafter from the Event Date until the applicable Event is cured; provided, however, that in no event shall the amount of liquidated damages payable at any time and from time to time to any Holder exceed an aggregate of ten percent (10%) of the amount of the Holders initial investment in the debenture.   Liquidated damages payable by the Company shall be payable on the first (1st) Business Day of each thirty (30) day period following the Event Date.



10



---

Investing Activities. Cash used for investing activities generally reflects the acquisition of assets. There was no cash used for investing activities during the period ended March 31, 2007.

Cash Requirements

As of March 31, 2007, Moventis had a working capital deficit of $2,127,322 which requires us to arrange additional financing in order to fund our business activities. Continual business operational efforts will be dependent on our ability to raise additional financing. Moventis intends to use funds from both the sale of securities and current credit facilities to finance ongoing operations and for general and administrative expenses, business development and marketing.

Moventis financial statements for this fiscal period were prepared on a going concern basis in accordance with United States generally accepted accounting principles. The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Our financial condition raises doubt as to our ability to continue operations without additional equity or debt financing. Our ability to raise additional capital through debt and equity financing is presently uncertain.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenues (if any) and expenses reported in the accompanying financial statements and related footnotes. Management bases its estimates and assumptions on historical experience, industry trends and various other sources of information and factors. Actual results may differ from these estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially could result in materially different results under different assumptions and conditions. We have identified the following accounting principles that we believe are key to an understanding of our financial statements and require managements most difficult, subjective judgments.

Revenue Recognition. Revenue for manufacturing and assembly contracts is generally recognized upon shipment to the customer which represents the point at which the risks and rewards of ownership have been transferred to the customer.  We have a limited number of consignment arrangements with customers which require we retain ownership of inventory until it has been utilized by the customer in its manufacturing process.  Revenue for these arrangements is recognized upon utilization by the customer in its manufacturing process.

The Company has no obligations to customers in terms of parts since the warranty obligations remain with the vendor that supplies the parts. The Company does have an obligation for one year from date of shipment for workmanship.  Warranty costs are included as part of Costs of Goods Sold.

Inventories. Inventories are stated at the lower of cost or net recoverable value and are comprised of raw materials and work in process.  Cost of raw materials is determined using the first-in-first-out method (FIFO). The majority of raw materials inventory is purchased upon the receipt of customer purchase orders. Cost of work in process includes materials, direct labor and overhead allocation.

Product Warranty Reserves. Moventis has no obligations to customers for components contained in its products as any warranty relating to customer specified components remains with the component supplier.  Moventis does have a warranty obligation for workmanship for one year from date of shipment.  We have recorded a warranty liability which is estimated by management based on experience and has been recorded in accounts payable and accrued liabilities.  The estimation of future warranty costs requires that management make certain assumptions.  Actual warranty costs could differ from these estimates.

Receivables.  Moventis maintains an allowance for doubtful accounts for estimated losses resulting from customer defaults. Moventis performs ongoing evaluations of its customers considering among other things, the customers payment history and current ability to pay. A provision for uncollectible amounts is adjusted based on these evaluations and historical experience. If the financial condition of a customer were to deteriorate, resulting in an impairment of that customers ability to make payments to Moventis, additional reserves may be required. Generally, accounts are written-off upon the exhaustion of all reasonable collection efforts.



11



---

Property and Equipment. Property and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the property and equipment, except in the year of purchase in which the Company uses 50% of the normal rate.  Depreciation expenses on property and equipment were $63,275 for the three months ended March 31, 2007 and $1,881 for the same period in 2006.



|                       |                           
|---------------------- | --------------------------
|Asset Classification   | Depreciation Rate         
|Production Equipment   | 30% declining balance     
|Furniture and Fixtures | 20% declining balance     
|Computer equipment     | 45% declining balance     
|Leasehold improvements | Straight line over 5 years

Maintenance and repairs are charged to expenses as incurred.  Major improvements and tooling costs are capitalized and depreciated using the straight-line method over their estimated useful lives.  The cost and accumulated depreciated of property and equipment retired or otherwise disposed of is removed from the related accounts, and any resulting gain or loss is credited or charged to operations.

Stock-based Compensation.  In December 2004, the Financial Accounting Standards Board (FASB) Issued Statement of Financial Accounting Standard (SFAS) No. 123R, Share Based Payment. SFAS 123R is a revision of SFAS No. 123 Accounting for Stock-based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force Issue No. 96-18, Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, Employers Accounting for Employee Stock Ownership Plans. SFAS 123R requires a public entity to measure the cost of employee services received in exchange for and award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award  the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. The Company has adopted 123R in the fiscal year ended June 30, 2006 on the prospective basis.

During the quarter the Company issued 550,000 stock options at a calculated value of $171,469 using a Black-Scholes model.  The cost will be expensed over the vesting period of the options with a corresponding credit to Additional Paid-In Capital.  $69,400 for stock based compensation relating to the  outstanding stock  options  (option compensation is expensed over the vesting period of the options).

Goodwill.  In assessing the Companys goodwill for impairment in accordance with the Financial Accounting Standards Boards (FASB) Statement of Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible Assets, the Company is required to assess the valuation of its reporting units, which involves making significant assumptions about the future cash flows and overall performance of its reporting units.  Should these assumptions or the structure of the reporting units change in the future based upon market conditions or changes in business strategy, the Company may be required to record impairment charges in its goodwill. Goodwill will be tested on an annual basis as of July 1, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach. No impairment of goodwill has been identified during any of the periods presented.



12



---



Intangible assets are amortized using straight-line method over their estimated period of benefit. We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of our intangible assets are subject to amortization. No impairment of intangible assets have been identified during any of the period presented.

Income Taxes. Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or income tax returns.  Deferred income tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using the currently enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. Income tax expense (benefit) is the tax payable (receivable) for the period and the change during the period in deferred income tax assets and liabilities.

Foreign Exchange.  The functional currency for Moventis and its subsidiary, PTL Electronics is the Canadian dollar. The consolidated entitys financial statement presentation is in US dollars. Foreign denominated monetary assets and liabilities are translated to their US dollar equivalents using the foreign exchange rate that prevailed at the balance sheet date. Non-monetary items are translated at historical exchange, except for items carried at market value, which are translated at the rate of exchange in effect at the balance sheet date. Exchange gains or losses arising from foreign currency translation are included in the determination of net profit (loss) for the year.

Long-Lived Assets.  The carrying value of long lived assets, which includes property, plant and equipment, is reviewed for impairment whenever events or circumstances indicate the recoverable value may be less than the carrying amount. Recoverable value is based on estimates of undiscounted future net cash flows expected to be recovered from specific assets or groups of assets through use of future disposition.

Impairment charges are recorded in the period in which determination of impairment is made by management. Assets with indefinite or indeterminable lives which include goodwill are not amortized and are reviewed for impairment on a reporting period basis using fair value determinations by managements estimate of recoverable value.

Intangible Assets is the determined value of Customer Relations and Contracts of PTL and is being amortized on a straight line basis over the estimated life of five years.  $11,462 was expensed in the three month period ended March 31, 2007.

Cost of Sales.  Cost of sales includes materials, labor, and overhead costs associated with PTLs EMS contract manufacturing business.

Earnings (loss) Per Share.  Basic earnings per share figures have been calculated using the weighted monthly average number of shares outstanding and fully diluted shares during the period. Fully diluted shares are calculated using the Treasury method for options and warrants and the If Converted method for convertible debt.

Recognition Criteria.  Gains are recognized when realized. Expenses and losses are recognized when an expenditure or previously recognized asset does not have future economic benefit. Expenses that are not linked with specific revenues are related to a period on the basis of transactions or events occurring in that period or by allocation to the periods in which they apply. The cost of assets that benefit more than one period is normally allocated over the periods benefited.

Risk Management.

Currency Risk. Although Moventis conducts its manufacturing business primarily in Canada, the majority of its purchases are from sources in the United States and the Peoples Republic of China. Moventis does not hedge its foreign currency exposure and accordingly may be at risk for foreign currency exchange fluctuations.

Credit Risk.  Credit risk is managed by dealing only with customers whose credit standing meets internally approved policies, and by ongoing monitoring of credit risk.  As of March 31, 2007, the Company did not have significant concentrations of credit exposure to any one customer or related groups of customers.





13



---

Interest Rate Risk.  The Company currently has potential exposure to interest rate risk due to bank indebtedness (operating line of credit) and two demand non-revolving loans with floating interest rates.  The maximum line of credit is $2,988,093 ($3,450,000 CDN) at the end of the period dated March 31, 2007.

Factors Affecting our Results of Operation and Financial Condition

Investing in our securities involves a high degree of risk. The following risk factors should be carefully considered and other information included or incorporated by reference into this report, including our financial statements and the related notes thereto. Also to be carefully reviewed and considered are all of the risk factors set forth in our Form 10-KSB for the period ended June 30, 2006 and in our Form 10-QSB for the periods ending September 30, 2006 and December 31, 2006. However, the risk factors set forth below and in the Form 10-KSB and 10-QSBs are not the only risks that we may face. Additional risks and uncertainties that we do not presently know about, or have yet to identify, may also adversely affect our business. Our business, operating results and financial condition could be seriously harmed and an entire investment could be lost by the occurrence of any of the following risks, or by unforeseen risks not listed below or in our Form 10-KSB or 10-QSBs.

Our ownership by directors and officers.

As of May 8, 2007, our officers, directors and affiliates collectively beneficially owned approximately 16,251,000 shares, or 49.6% of our outstanding Common Stock. These stockholders, if acting together, would be able to exert significant influence on all matters requiring approval by stockholders, including the election of directors, the approval of mergers or other business combination transactions or a sale of all or substantially all of our assets.

Inability to continue business as a going concern.

Our financial statements for fiscal 2006 were prepared on a going concern basis in accordance with United States generally accepted accounting principles. The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. We may not be able to raise additional capital or achieve profitability and as a consequence may not be able to meet our liabilities and commitments in the normal course of business, which would jeopardize our ability to continue business operations in accordance with our business plan.  Our financial condition raises doubt as to our ability to continue operations without additional equity or debt financing as described in the explanatory paragraph of the report of our independent auditor and note 2 of our financial statements.

The notes to our audited financial statements raise doubt about our ability to continue as a going concern. From July 1, 2006 to March 31, 2007 Moventis incurred a loss of $1,630,961 under its new business plan, for a cumulative deficit of $5,595,112. This deficit, coupled with a working capital deficit of $2,127,323, emphasizes the need for Moventis to obtain additional funding if it is to continue as a going concern. Management is in the process of identifying sources of funds which are anticipated to be raised through the issuance of common shares and/or convertible debentures. The presentation of our financial statements assumes that we will continue as a going concern and our assets and liabilities are recorded on the basis that the business will continue for the foreseeable future. In order to continue as a going concern, we must carry out our business plan and achieve profitability, which may not occur in the foreseeable future. If we are unable to continue as a going concern, the proceeds from the liquidation of our assets may not be sufficient to discharge our liabilities as they become due, placing us at risk of legal proceedings, including bankruptcy proceedings, being initiated by our creditors. Our inability to continue as a going concern will result in a significant loss of value of our common stock.  The company needs to raise approximately $3,000,000 either through the sale of equity or long term convertible debentures, to fund its operations and meet its current obligations.



14



---



Item 3  Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports 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 management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in assessing the costs and benefits of such controls and procedures.

With the participation of management, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures at the conclusion of the period ended March 31, 2007. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosed controls and procedures were effective.

Internal Control over Financial Reporting

Management has not yet completed, and is not yet required to have completed, its assessment of the effectiveness of internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended.

There were no changes during the quarter covered by this report in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





15



---

PART II  OTHER INFORMATION

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

a)  Unregistered Sales of Equity Securities during the Quarter Ended March 31, 2007

(i)

During the period Moventis issued 280,000 shares of common stock of Moventis to a consultant for contract services related to the acquisition of PTL. The shares were issued at a value of $0.55 for aggregate proceeds of $154,000. In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

(ii)

During the period Moventis issued 328,572 shares of common stock of Moventis to warrant holders who exercised their warrants. The shares were issued at a value of $0.50 for aggregate proceeds of $164,286. In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

(iii)

During the period Moventis issued 113,475 shares of common stock of Moventis to KOKO Financial for services related to the acquisition of PTL. Koko is a company wholly owned by Fraser Atkinson, a director and shareholder. The shares were issued at a value of $0.60 for aggregate proceeds of $68,085. In issuing these securities we relied on an exemption pursuant to provisions of the Act,provided by (i) Rule 506 of Regulation D of the Act and Sections 4(2) there under relating to "accredited investors"; and/or (ii) the safe harbor provisions of Regulation S there under relating to offshore transactions. Issuances made pursuant to Regulation S were made to purchasers who were not "U.S. persons" as that term is defined in Rule 902(o) of Regulation S and the sale of the securities constituted an "offshore transaction" as that term is defined in Rule 902(i) of Regulation S.

(iv)

During the period, Moventis received $50,000 through it series B convertible secured debentures from accredited investor. Please see Note 17 to Moventis' unaudited consolidated financial statements for the reporting period ended March 31, 2007 for the terms of the debenture units.



c)  Use of proceeds
The issuance and sales of our common stock in this period was used to fund the operations of Moventis.





16



---





Item 6 - Exhibits

| |                  
| | -----------------
| |                  
| | Exhibits         
| | See Exhibit Index







17



---

SIGNATURES

In accordance with the requirements of section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|      |              |  |                        |                                    
|----- | ------------ |  | ---------------------- | -----------------------------------
|      |              |  |                        |                                    
|Date: | May 16, 2007 |  | MOVENTIS CAPITAL, INC.
|      |              |  | (Registrant)          
|      |              |  |                        |                                    
|      |              |  |                        |                                    
|      |              |  | By:                    | /s/ Blake Ponuick                  
|      |              |  |                        | Blake Ponuick, President, Director,
|      |              |  |                        | Chief Executive Officer            
|      |              |  |                        |                                    
|      |              |  |                        |                                    
|      |              |  | By:                    | /s/ Tom Gill                       
|      |              |  |                        | Tom Gill, Director,                
|      |              |  |                        | Chief Financial Officer            



In accordance with the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

|             |  |     |                                    
|------------ |  | --- | -----------------------------------
|             |  |     |                                    
|May 16, 2007 |  | By: | /s/ Blake Ponuick                  
|             |  |     | Blake Ponuick, President, Director,
|             |  |     | Chief Executive Officer            
|             |  |     |                                    
|             |  |     |                                    
|             |  |     |                                    
|             |  |     |                                    
|             |  |     |                                    
|             |  |     |                                    
|May 16, 2007 |  | By: | /s/ Tom Gill                       
|             |  |     | Tom Gill, Director,                
|             |  |     | Chief Financial Officer            
|             |  |     |                                    
|             |  |     |                                    









18



---

Exhibit Index

|                |                                                                                                                                                                    
|--------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(i).1[1],[4]   | Certificate of Incorporation dated May 7, 1997, amended October 16, 1997, April 8, 1999 and February 3, 2006.                                                      
|                |                                                                                                                                                                    
|3(ii).2[1], [2] | Bylaws of Micro Millennium, Inc, and the Resolution of the Board of Directors approving amendment to the Bylaws to affect the change to Moventis Capital, Inc.     
|                |                                                                                                                                                                    
|10.1[3]         | Agreement for the Purchase of Shares dated May 8, 2006.                                                                                                            
|                |                                                                                                                                                                    
|10.2[6]         | Form of Subscription for Units Agreement                                                                                                                           
|                |                                                                                                                                                                    
|10.3[6]         | Form of Secured Convertible Debenture Agreement dated September 30, 2006                                                                                           
|                |                                                                                                                                                                    
|10.4[6]         | Form of General Security Agreement with Secured Convertible Debenture holders dated September 30, 2006.                                                            
|                |                                                                                                                                                                    
|10.5[6]         | Form of Common Shares Purchase Warrant with Secured Convertible Debenture holders dated September 30, 2006.                                                        
|                |                                                                                                                                                                    
|10.6[6]         | Form of Registration Rights Agreement with Debenture holders                                                                                                       
|                |                                                                                                                                                                    
|10.7[7]         | Accredited Investor Private Placement document with JMS Capital Partners LLC dated September 30, 2006.                                                             
|                |                                                                                                                                                                    
|10.8[5]         | Promissory Note with Vision Opportunity Master Fund Ltd., dated October 18, 2006.                                                                                  
|                |                                                                                                                                                                    
|10.9[5]         | Common Shares Purchase Warrant with Vision Opportunity Fund Ltd., dated October 18, 2006.                                                                          
|                |                                                                                                                                                                    
|10.10[5]        | Registration Rights Agreement with Vision Opportunity Fund Ltd., dated October 18, 2006.                                                                           
|                |                                                                                                                                                                    
|10.11[7]        | Promissory Note with FWP Acquisition Corp., dated November 3, 2006.                                                                                                
|                |                                                                                                                                                                    
|10.12[7]        | Common Shares Purchase Warrant with FWP Acquisition Corp., dated November 3, 2006.                                                                                 
|                |                                                                                                                                                                    
|10.13[7]        | Registration Rights Agreement with FWP Acquisition Corp., dated November 3, 2006.                                                                                  
|                |                                                                                                                                                                    
|10.14           | .Form of Subscription for Units Agreement- Series B                                                                                                              
|                |                                                                                                                                                                    
|10.15           | Form of Secured Convertible Debenture Agreement dated January 15, 2007- Series B                                                                                 
|                |                                                                                                                                                                    
|10.16           | Form of General Security Agreement with Secured Convertible Debenture holders dated January 15, 2007- Series B.                                                  
|                |                                                                                                                                                                    
|10.17           | Form of Common Shares Purchase Warrant with Secured Convertible Debenture holders dated January 15, 2007-Series B.                                               
|                |                                                                                                                                                                    
|10.18           | Form of Registration Rights Agreement with Debenture holders- Series B                                                                                           
|                |                                                                                                                                                                    
|31.1            | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                  
|                |                                                                                                                                                                    
|31.2            | Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer                                                                                              
|                |                                                                                                                                                                    
|32.1            | Section 1350 Certification of Chief Executive Officer                                                                                                              
|                |                                                                                                                                                                    
|32.2            | Section 1350 Certification of Chief Financial Officer                                                                                                              
|                |                                                                                                                                                                    
|[1]             | Incorporated by reference from the Registration Statement on Form 10-SB filed by Moventis with the Commission on February 1, 2000.                                 
|                |                                                                                                                                                                    
|[2]             | Incorporated by reference from the Form 8-K filed by Moventis with the Commission on February 27, 2006.                                                            
|                |                                                                                                                                                                    
|[3]             | Incorporated by reference from the Form 8-K filed by Moventis with the Commission on May 16, 2006.                                                                 
|                |                                                                                                                                                                    
|[4]             | Incorporated by reference from the Annual Report on Form 10-KSB for the fiscal year ended June 30, 2006, filed by Moventis with the Commission on October 13, 2006.
|                |                                                                                                                                                                    
|[5]             | Incorporated by reference from the Form 8-K filed by Moventis with the Commission on October 23, 2006 as amended on October 24, 2006.                              





19



---



|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                 
|[6] | Incorporated by reference from the Form 8-K filed by Moventis with the Commission on October 24, 2006.                                                                          
|    |                                                                                                                                                                                 
|[7] | Incorporated by reference from the Quarterly Reports on Form 10-QSB for the fiscal quarter ended September 30, 2006, filed by Moventis with the Commission on November 13, 2006.





20