**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**Form
      10-KSB/A(Amendment No. 2)**





(Mark
      One)





**x
      ANNUAL REPORT UNDER
      SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      fiscal year ended December 31, 2006





**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      transition period from ______________ to ______________





*Commission
      File Number 0-51696*





**Trulite,
      Inc.**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            **20-1372858**State
                or Other Jurisdiction of
            IRS
                EmployerIncorporation
            Identification
                No.




Securities
      registered under Section 12(b) of the Exchange Act:





None.





Securities
      registered under Section 12(g) of the Exchange Act:





Common
      Stock, $0.0001 par value per share


(Title
      of
      Class)





Check
      whether issuer is not required to file reports pursuant to Section 13 or 15(d)
      of the Exchange Act o .





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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB o .





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





The
      issuer’s revenues for its most recent fiscal year. $8,333










The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of March
      26,
      2007, was $3,142,614.





As
      of May
      17, 2007, there were 11,785,591 shares of common stock outstanding.





**DOCUMENTS
      INCORPORATED BY REFERENCE:** None.





EXPLANATORY
      NOTE


This
          Amendment No. 2 on Form 10-KSB, or Second Amended Report, amends the Annual
          Report on Form 10-KSB of
          Trulite, In c . for
          the
          fiscal year ended December 31, 2006, filed with the Securities and Exchange
          Commission, or SEC, on
          April 2, 2007, o r the
          Original Report, as amended by Amendment No. 1 to the Original Report filed
          wi th the
          SEC on April
          30, 2007, or First Amended Report, to reflect the disclosure of events,
          as
          described in footnotes 8 and 12
          to our
          audited financial statement s
          for the
          year ended December 31, 2006, which
          occurred subsequent to the date
          of
          filing of the Original Report a nd which
          were not included in the First Amended Report. We hereby amend Item 7 of
          Part II
          of our Original Report by deleting the text of such item in its entirety
          and
          replacing it with the information provided below. This Second Amended Report
          does not affect any other items in our Original Report or First Amended
          Report.
          As a result of this amendment, we are also filing the certifications pursuant
          to
          Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 as exhibits
          to
          this Second Amended Report.
 
 Except
          as
          otherwise expressly stated for the items amended in this Second Amended
          Report,
          this Second Amended Report continues to speak as of the date of the Origin al Report
          and we have not updated the disclosure contained herein to reflect events
          that
          have occurred since the filing of the Original Report. Accordingly, this
          Second
          Amended Report should be read in conjunction with our Original Report,
          First
          Amended Report and our other filings made with the SEC subsequent to the
          filing
          of the Original Report.


2





**Item
      7. Financial Statements.**





TRULITE,
      INC.


(A
      DEVELOPMENT STAGE COMPANY)


FINANCIAL
      STATEMENTS




Report
                of Independent Registered Public Accounting Firm
            F-1Balance
                Sheets
            F-2Statements
                of Operations
            F-3Statements
                of Stockholders’ (Deficit) Equity
            F-4Statements
                of Cash Flows
            F-5Notes
                to Financial Statements
            F-6








3


REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To
        the
        Board of Directors of
 Trulite,
        Inc.
 Houston,
        Texas
 
 We
        have
        audited the accompanying balance sheets of Trulite, Inc., (a development
        stage
        company) (the “Company”) as of December 31, 2006 and 2005, and the related
        statements of operations, stockholders’ equity (deficit), and cash flows for the
        years then ended, and for the period from inception (July 15, 2004) through
        December 31, 2006. These financial statements are the responsibility of the
        Company’s management. Our responsibility is to express an opinion on these
        financial statements based on our audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Trulite, Inc. as of December
        31,
        2006 and 2005, and the results of its operations and its cash flows for the
        years then ended, and for the period from inception (July 15, 2004) through
        December 31, 2006, in conformity with accounting principles generally accepted
        in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As shown in the financial statements, the
        Company has incurred significant losses and negative cash flows from operations
        since inception. Those conditions raise substantial doubt about the Company’s
        ability to continue as a going concern. The financial statements do not include
        any adjustments that might result from the outcome of this
        uncertainty.
 
 
 /s/
        UHY
        LLP
 
 March
        30,
        2007, except for Note 8 and Note 12 as to which the date is April 5,
        2007
 Houston,
        Texas
 F-1
  **Trulite,
        Inc. (a Development Stage Company)**
 **Balance
        Sheets**
  **December
                    31,**
                
                **December
                    31,****2006**
                
                **2005****ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                275,957
                
                $
                235,982Due
                    from affiliate
                
                
                -
                
                
                23,773Accounts
                    receivable (net of allowance for doubtful accounts of $0as
                    of December 31, 2006 and December 31, 2005)
                
                
                -
                
                
                16,667Patent
                    application fees
                
                
                19,843
                
                
                19,843Prepaid
                    expenses and other current assets
                
                
                13,372
                
                
                7,844Total
                    current assets
                
                
                309,172
                
                
                304,109Property
                    and equipment, net
                
                
                50,079
                
                
                33,038Total
                    assets
                
                $
                359,251
                
                $
                337,147**LIABILITIES
                    AND STOCKHOLDERS' (DEFICIT) EQUITY**Current
                    liabilities:Accounts
                    payable and accrued expenses
                
                $
                301,907
                
                $
                44,821Notes
                    payable
                
                
                1,250,000
                
                
                -Total
                    current liabilities
                
                
                1,551,907
                
                
                44,821Commitments
                    and contingenciesStockholders'
                    (deficit) equity:8%
                    Cumulative Convertible, Series A Preferred Stock;$0.0001
                    par value, 1,500,000 shares authorized, 0 and 1,454,725shares
                    issued and outstanding as of December 31, 2006 andDecember
                    31, 2005, respectively. Liquidation value of $1.00per
                    share plus preferred dividend per share of $0.0623 and anaggregate
                    liquidation value of $1,545,354 as of December 31, 2005
                
                
                -
                
                
                90,843Common
                    Stock; $0.0001 par value, 20,000,000 shares authorized,11,785,491
                    and 3,631,500 shares issued and outstanding as ofDecember
                    31, 2006 and December 31, 2005, respectively
                
                
                1,178
                
                
                363Additional
                    paid-in-capital
                
                
                9,537,426
                
                
                1,905,094Deficit
                    accumulated during the development stage
                
                
                (10,731,260
                )
                
                (1,703,974
                )Total
                    stockholders' (deficit) equity
                
                
                (1,192,656
                )
                
                292,326Total
                    liabilities and stockholders' (deficit) equity
                
                $
                359,251
                
                $
                337,147
  The
        accompanying notes are an integral part of these financial
        statements
 F-2
  **Trulite,
        Inc. (a Development Stage Company)**
 **Statements
        of Operations**
 
 **Year
                  Ended December 31,**
              
              **Period
                  From**
                **Inception**
                **(July
                  15, 2004)**
                **Through****2006**
              
              **2005**
              
              **December
                  31, 2006**Sales
              
              $
              8,333
              
              $
              16,667
              
              $
              26,750Cost
                  of sales
              
              
              5,912
              
              
              12,216
              
              
              18,778GROSS
                  PROFIT
              
              
              2,421
              
              
              4,451
              
              
              7,972Operating
                  expenses:Research
                  and development
              
              
              1,142,472
              
              
              410,958
              
              
              2,266,539Depreciation
              
              
              14,848
              
              
              6,823
              
              
              22,811General
                  and administrative
              
              
              2,264,463
              
              
              412,877
              
              
              2,842,213TOTAL
                  OPERATING EXPENSES
              
              
              3,421,783
              
              
              830,658
              
              
              5,131,563LOSS
                  FROM OPERATIONS
              
              
              (3,419,362
              )
              
              (826,207
              )
              
              (5,123,591
              )Other
                  income (expense):Interest
                  expense
              
              
              (29,726
              )
              
              (663
              )
              
              (30,389
              )Interest
                  income
              
              
              5,794
              
              
              5,329
              
              
              11,123Other
              
              
              -
              
              
              (4,411
              )
              
              (4,411
              )TOTAL
                  OTHER INCOME (EXPENSE)
              
              
              (23,932
              )
              
              255
              
              
              (23,677
              )LOSS
                  BEFORE INCOME TAXES
              
              
              (3,443,294
              )
              
              (825,952
              )
              
              (5,147,268
              )Income
                  taxes
              
              
              -
              
              
              -
              
              
              -NET
                  LOSS
              
              
              (3,443,294
              )
              
              (825,952
              )
              $
              (5,147,268
              )Preferred
                  stock dividends
              
              
              (39,275
              )
              
              (84,074
              )Deemed
                  dividend on conversion ofpreferred
                  stock to common stock
              
              
              (1,586,150
              )
              
              -NET
                  LOSS ATTRIBUTABLE TOCOMMON
                  STOCKHOLDERS
              
              $
              (5,068,719
              )
              $
              (910,026
              )NET
                  LOSS PER COMMON SHAREBasic
                  and diluted
              
              $
              (0.37
              )
              $
              (0.23
              )Preferred
                  and deemed dividends
              
              
              (0.18
              )
              
              (0.02
              )Attributable
                  to common stockholders
              
              $
              (0.55
              )
              $
              (0.25
              )WEIGHTED
                  AVERAGE COMMONSHARES
                  OUTSTANDING:Basic
              
              
              9,139,510
              
              
              3,607,433Diluted
              
              
              9,139,510
              
              
              3,607,433
 
 The
        accompanying notes are an integral part of these financial
        statements
  F-3
  **Trulite,
        Inc. (a Development Stage Company)**
 **Statements
        of Stockholders' (Deficit) Equity**
 **For
        the Periods From Inception (July 15, 2004) Through December 31,
        2006**
 **8%
                    Cumulative**
                  **Convertible
                    Series A Preferred Stock**
                
                **Common
                    Stock**
                
                **Additional
                    Paid-in**
                
                **Accumulated****Shares**
                
                **Amount**
                
                **Shares**
                
                **Amount**
                
                **Capital**
                
                **Deficit**
                
                **Total***Cash
                    issuances:*July
                    28, 2004; issuance of preferred stock at $1.00 per share
                
                
                100,000
                
                $
                10
                
                
                -
                
                $
                -
                
                $
                99,990
                
                $
                -
                
                $
                100,000November
                    5, 2004; issuance of preferred stock at $1.00 per share
                
                
                190,000
                
                
                19
                
                
                -
                
                
                -
                
                
                189,981
                
                
                -
                
                
                190,000November
                    12, 2004; issuance of preferred stock at $1.00 per share
                
                
                10,000
                
                
                1
                
                
                -
                
                
                -
                
                
                9,999
                
                
                -
                
                
                10,000*Non-cash
                    issuances:*July
                    22, 2004; preferred stock issued in the acquisitionof
                    Trulite Technology, LC based on fair value of stock issuedof
                    $1.00 per share
                
                
                20,000
                
                
                2
                
                
                -
                
                
                -
                
                
                19,998
                
                
                -
                
                
                20,000July
                    22, 2004; common stock issued in the acquisitionof
                    Trulite Technology, LC based on fair value of stock issuedof
                    $0.20 per share (post April 2005 split)
                
                
                -
                
                
                -
                
                
                2,962,300
                
                
                296
                
                
                592,164
                
                
                -
                
                
                592,460July
                    28, 2004; common stock issued for management servicesbased
                    on fair value of stock issued of $0.20 per share(post
                    April 2005 split)
                
                
                -
                
                
                -
                
                
                343,850
                
                
                34
                
                
                68,736
                
                
                -
                
                
                68,770Accretion
                    of dividends
                
                
                -
                
                
                6,624
                
                
                -
                
                
                -
                
                
                (6,624
                )
                
                -
                
                
                -*Net
                    loss*
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (878,022
                )
                
                (878,022
                )Balance,
                    December 31, 2004
                
                
                320,000
                
                
                6,656
                
                
                3,306,150
                
                
                330
                
                
                974,244
                
                
                (878,022
                )
                
                103,208*Cash
                    issuances:*February
                    1, 2005; issuance of preferred stock, at $1.00 per share
                
                
                200,000
                
                
                20
                
                
                -
                
                
                -
                
                
                199,980
                
                
                -
                
                
                200,000June
                    1, 2005; issuance of preferred stock at $0.80 per share
                
                
                934,725
                
                
                93
                
                
                -
                
                
                -
                
                
                749,907
                
                
                -
                
                
                750,000*Non-cash
                    issuances:*January
                    28, 2005; common stock issued for management servicesbased
                    on fair value of stock issued of $0.20 per share (post April
                    2005
                    split)
                
                
                -
                
                
                -
                
                
                325,350
                
                
                33
                
                
                65,037
                
                
                -
                
                
                65,070Accretion
                    of dividends
                
                
                -
                
                
                84,074
                
                
                -
                
                
                -
                
                
                (84,074
                )
                
                -
                
                
                -*Net
                    loss*
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (825,952
                )
                
                (825,952
                )Balance,
                    December 31, 2005
                
                
                1,454,725
                
                
                90,843
                
                
                3,631,500
                
                
                363
                
                
                1,905,094
                
                
                (1,703,974
                )
                
                292,326*Cash
                    issuances:*April
                    13, 2006; issuance of common stock and warrants
                
                
                -
                
                
                -
                
                
                1,000,000
                
                
                100
                
                
                999,900
                
                
                -
                
                
                1,000,000*Non-cash
                    issuances:*April
                    26, 2006; common stock issued for consulting servicesbased
                    on fair value of stock issued of $0.95 per share
                
                
                -
                
                
                -
                
                
                300,000
                
                
                30
                
                
                284,970
                
                
                -
                
                
                285,000April
                    26, 2006; warrants to purchase common stock issuedfor
                    consulting services based on fair value of warrants issued
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                162,155
                
                
                -
                
                
                162,155Accretion
                    of dividends
                
                
                -
                
                
                39,275
                
                
                -
                
                
                -
                
                
                (39,275
                )
                
                -
                
                
                -May
                    2, 2006; accretion of preferred stock for deemeddividend
                    on conversion of accrued dividends to common stock
                
                
                -
                
                
                161,388
                
                
                -
                
                
                -
                
                
                (161,388
                )
                
                -
                
                
                -May
                    2, 2006; accretion of preferred stock for deemed dividendon
                    conversion to common stock
                
                
                -
                
                
                1,424,762
                
                
                -
                
                
                -
                
                
                (978,493
                )
                
                (446,269
                )
                
                -May
                    2, 2006; conversion of preferred stock to common stock
                
                
                (1,454,725
                )
                
                (1,716,268
                )
                
                6,853,991
                
                
                685
                
                
                6,853,306
                
                
                (5,137,723
                )
                
                -Stock-based
                    compensation
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                511,157
                
                
                -
                
                
                511,157*Net
                    loss*
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (3,443,294
                )
                
                (3,443,294
                )Deficit,
                    December 31, 2006
                
                
                -
                
                $
                -
                
                
                11,785,491
                
                $
                1,178
                
                $
                9,537,426
                
                $
                (10,731,260
                )
                $
                (1,192,656
                )
  The
          accompanying notes are an integral part of these financial
          statements
  F-4
 
 **Trulite,
        Inc. (a Development Stage Company)**
 **Statements
        of Cash Flows**
 **Year
                      Ended Ended**
                    **December
                      31,**
                  
                  **Period
                      From**
                    **Inception**
                    **(July
                      15, 2004)**
                    **Through****2006**
                  
                  **2005**
                  
                  **December
                      31, 2006**CASH
                      FLOWS FROM OPERATING ACTIVITIESNet
                      loss
                  
                  $
                  (3,443,294
                  )
                  $
                  (825,952
                  )
                  $
                  (5,147,268
                  )Adjustments
                      to reconcile net loss to netcash
                      used in operating activities:Depreciation
                  
                  
                  14,848
                  
                  
                  6,823
                  
                  
                  22,811Common
                      stock issued for consulting services
                  
                  
                  285,000
                  
                  
                  -
                  
                  
                  285,000Common
                      stock issued for management fees
                  
                  
                  -
                  
                  
                  65,070
                  
                  
                  133,840Stock-based
                      compensation expense
                  
                  
                  511,157
                  
                  
                  -
                  
                  
                  511,157Warrants
                      issued for consulting services
                  
                  
                  162,155
                  
                  
                  -
                  
                  
                  162,155Write-off
                      of research and development expenses
                  
                  
                  -
                  
                  
                  -
                  
                  
                  606,798Changes
                      in operating assets and liabilities:Due
                      from affiliate
                  
                  
                  23,773
                  
                  
                  (23,773
                  )
                  
                  -Accounts
                      receivable
                  
                  
                  16,667
                  
                  
                  (13,967
                  )
                  
                  -Patent
                      application fees
                  
                  
                  -
                  
                  
                  (13,378
                  )
                  
                  (19,843
                  )Prepaid
                      expenses and other current assets
                  
                  
                  (5,528
                  )
                  
                  (928
                  )
                  
                  (6,907
                  )Grants
                      receivable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  850Accounts
                      payable and accrued expenses
                  
                  
                  257,086
                  
                  
                  (4,627
                  )
                  
                  293,798Net
                      cash used in operating activities
                  
                  
                  (2,178,136
                  )
                  
                  (810,732
                  )
                  
                  (3,157,609
                  )CASH
                      FLOWS FROM INVESTING ACTIVITIESPurchase
                      of property and equipment
                  
                  
                  (31,889
                  )
                  
                  (29,751
                  )
                  
                  (66,434
                  )Net
                      cash used in investing activities
                  
                  
                  (31,889
                  )
                  
                  (29,751
                  )
                  
                  (66,434
                  )CASH
                      FLOWS FROM FINANCING ACTIVITIESIssuance
                      of common stock
                  
                  
                  1,000,000
                  
                  
                  -
                  
                  
                  1,000,000Issuance
                      of notes payable
                  
                  
                  1,250,000
                  
                  
                  -
                  
                  
                  1,250,000Issuance
                      of preferred stock
                  
                  
                  -
                  
                  
                  950,000
                  
                  
                  1,250,000Net
                      cash provided by financing activities
                  
                  
                  2,250,000
                  
                  
                  950,000
                  
                  
                  3,500,000NET
                      INCREASE IN CASH AND CASH EQUIVALENTS
                  
                  
                  39,975
                  
                  
                  109,517
                  
                  
                  275,957CASH
                      AND CASH EQUIVALENTS, beginning of period
                  
                  
                  235,982
                  
                  
                  126,465
                  
                  
                  -CASH
                      AND CASH EQUIVALENTS, end of period
                  
                  $
                  275,957
                  
                  $
                  235,982
                  
                  $
                  275,957NON-CASH
                      INVESTING AND FINANCING ACTIVITIES:Common
                      stock issued for consulting services
                  
                  $
                  285,000
                  
                  $
                  -
                  
                  $
                  285,000Common
                      stock issued for management fees
                  
                  $
                  -
                  
                  $
                  65,070
                  
                  $
                  133,840Warrants
                      issued for consulting services
                  
                  $
                  162,155
                  
                  $
                  -
                  
                  $
                  162,155Common
                      stock options issued for compensation
                  
                  $
                  511,157
                  
                  $
                  -
                  
                  $
                  511,157Preferred
                      stock issued for acquisition
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  20,000Common
                      stock issued for acquisition
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  592,460Cash
                      paid for interest
                  
                  $
                  28,897
                  
                  $
                  -
                  
                  $
                  28,897
 
 The
        accompanying notes are an integral part of these financial
        statements
  F-5
  **Note
        1 - Nature of Operations**
 
 Trulite,
        Inc. (the “Company”) was incorporated on July 15, 2004, in the State of
        Delaware. The Company is a development stage entity and is primarily engaged
        in
        the development of compact, lightweight hydrogen fuel cell systems.
 
 For
        the
        year ended December 31, 2006, and since inception (July 15, 2004), the Company
        has not had significant revenues. The Company has no significant operating
        history as of December 31, 2006. The accompanying financial statements have
        been
        prepared assuming the Company will continue as a going concern. From inception
        (July 15, 2004) through December 31, 2006, management has raised additional
        equity and debt financing to fund operations and to provide additional working
        capital. However, there is no assurance that future such financing will be
        in
        amounts sufficient to meet the Company’s needs.
 
 The
        accompanying financial statements do not include any adjustments to reflect
        the
        possible future effects on the recoverability and classification of assets
        or
        the amounts and classifications of liabilities that may result from the possible
        inability of the Company to continue as a going concern.
 
 **Note
        2 - Summary of Significant Accounting Policies**
 
 *Cash
        and Cash Equivalents.* Cash
        and
        cash equivalents include short-term investments with original maturities
        of
        three months or less.
 
 *Accounts
        Receivable and Allowance for Doubtful Accounts.* Accounts
        receivable are reported at outstanding principal less allowance for doubtful
        accounts. Earnings are charged with a provision for doubtful accounts based
        on a
        current review of the collectibility of the accounts. Accounts deemed
        uncollectible are applied against the allowance for doubtful
        accounts.
 
 *Concentrations
        of Credit Risk* .
        The
        Company maintains cash balances at a financial institution which at times
        exceeds federally insured amounts. The Company has not experienced any material
        losses in such accounts.
 
 *Revenue
        Recognition* .
        Revenue
        from sales is recognized on delivery.
 
 *Property
        and Equipment* .
        Property and equipment is carried at cost. The Company depreciates property
        and
        equipment using the straight-line method over the estimated useful lives
        of the
        related assets ranging from 3 to 7 years. Maintenance and repairs are charged
        to
        expense as incurred and expenditures for major improvements are capitalized.
        Gains and losses from retirement or replacement of property and equipment
        are
        included in operations.
 
 Depreciation
        expense was $14,848 and $6,823 for the years ended December 31, 2006 and
        2005,
        respectively.
 
 *Research
        and Development Costs.* Expenditures
        for research activities relating to product development and improvement are
        charged to expense as incurred.
 
 *Impairment
        of Long-Lived Assets* .
        The
        Company reviews the recoverability of its long-lived assets, such as property
        and equipment, when events or changes in circumstances occur that indicate
        the
        carrying value of the asset or asset group may not be recoverable. The
        assessment of possible impairment is based on the Company’s ability to recover
        the carrying value of the asset or asset group from the expected future pre-tax
        cash flows (undiscounted) of the related operations. If these cash flows
        are
        less than the carrying value of such asset, an impairment loss is recognized
        for
        the difference between estimated fair value and carrying value.
 
 *Income
        Taxes.* The
        liability method is used in accounting for income taxes. Under this method,
        deferred tax assets and liabilities are determined based on differences between
        financial reporting and tax bases of assets and liabilities and are measured
        using the enacted tax rates and laws that will be in effect when the differences
        are expected to reverse. The realizability of deferred tax assets are evaluated
        annually and a valuation allowance is provided if it is more likely than
        not
        that the deferred tax assets will not give rise to future benefits in the
        Company’s tax returns.
 
 *Use
        of Estimates.* The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates.
  F-6
  *Stock-Based
        Compensation.* Prior
        to
        January 1, 2006, the Company accounted for its stock option plan using the
        intrinsic value method of accounting provided under APB Opinion No. 25,
“Accounting for Stock Issued to Employees,” and related interpretations. This
        was permitted by SFAS No. 123, “Accounting for Stock-Based Compensation,”
under which no compensation expense was recognized for stock options.
        Stock-based compensation expense using the fair value method under SFAS 123
        was
        included as a pro forma disclosure in the financial statement footnotes and
        such
        disclosure continues to be provided herein for periods prior to
        2006.
 
 Effective
        January 1, 2006, the Company adopted the fair value recognition provisions
        of SFAS No. 123(R), “Share-Based Payment,” using the modified-prospective
        transition method. Under this transition method, compensation cost recognized
        in
        2006 includes: (a) compensation cost for all stock-based payments granted
        through December 31, 2005, for which the requisite service period had not
        been completed as of December 31, 2005, based on the grant date fair value
        estimated in accordance with the original provisions of SFAS No. 123 and
        (b) compensation cost for all stock-based payments granted subsequent to
        December 31, 2005, based on the grant date fair value estimated in
        accordance with the provisions of SFAS 123(R). As permitted under the transition
        rules for SFAS 123(R), results for prior periods have not been
        restated.
 
 *New
        Accounting Pronouncements:*
 
 In
        May 2005, the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting
        Changes and Error Corrections” which replaces Accounting Principles Board
        Opinion (“APB”) No. 20, “Accounting Changes,” and SFAS No. 3,
“Reporting Accounting Changes in Interim Financial Statements-An Amendment
        of
        APB Opinion No. 28.” SFAS No. 154 provides guidance on the accounting
        for and reporting of accounting changes and error corrections. SFAS No. 154
        is effective for accounting changes and correction of errors made in fiscal
        years beginning after December 15, 2005. The adoption of SFAS No. 154
        did not have an effect on the Company’s financial statements.
 
 In
        February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments.” SFAS No. 155 provides entities with relief from having
        to separately determine the fair value of an embedded derivative that would
        otherwise have to be bifurcated from its host contract in accordance with
        SFAS
        No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS
        No. 155 allows an entity to make an irrevocable election to measure such
        a
        hybrid financial instrument at fair value in its entirety, with changes in
        fair
        value recognized in earnings. SFAS No. 155 is effective for all financial
        instruments acquired, issued or subject to a remeasurement event occurring
        after
        the beginning of an entity’s first fiscal year that begins after September 15,
        2006. The Company believes that the adoption of SFAS No. 155 will not have
        a
        material impact on its financial statements.
 
 In
        March
        2006, the FASB issued SFAS No. 156, “Accounting for Serving of Financial Assets
        an Amendment to FASB Statement No. 140.” Once effective, SFAS No. 156 will
        require entities to recognize a servicing asset or liability each time they
        undertake an obligation to service a financial asset by entering into a serving
        contract in certain situations. This statement also requires all separately
        recognized servicing assets and servicing liabilities to be initially measured
        at fair value and permits a choice of either the amortization or fair value
        measurement method for subsequent measurements. The effective date of this
        statement is for annual periods beginning after September 15, 2006,
        with earlier adoption permitted as the beginning of an entity’s fiscal year
        provided the entity has not issued any financial statements for that year.
        The
        Company does not believe that this pronouncement will have a material impact
        on
        its financial statements.
 
 In
        June 2006, the FASB issued Interpretation No. 48, “Accounting for
        Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.”
This Interpretation prescribes a recognition threshold and measurement attribute
        for the financial statement recognition and measurement of a tax position
        taken
        or expected to be taken in a tax return, and provides guidance on derecognition,
        classification, interest and penalties, accounting in interim periods,
        disclosure, and transition. This Interpretation is effective for fiscal years
        beginning after December 15, 2006. The Company is currently assessing the
        impact of the interpretation on its future results of operations and financial
        position.
  F-7
 
 In
        September 2006, the FASB issued SFAS No. 157, “Fair Value
        Measurements.” SFAS No. 157 defines fair value and applies to other
        accounting pronouncements that require or permit fair value measurements
        and
        expands disclosures about fair value measurements. SFAS No. 157 is
        effective for fiscal years beginning after November 15, 2007 and interim
        periods within those fiscal years. The Company is currently evaluating the
        impact of adopting SFAS No. 157 on its financial statements.
  In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting
        For Defined Benefit Pension and Other Postretirement Plans - an amendment
        of
        FASB Statements No. 87, 88, 106 and 132(R).” The standard requires
        companies to recognize the funded status (plan obligations less the fair
        value
        of plan assets) of pension and other postretirement benefit plans on their
        balance sheets, effective for fiscal years ending after December 15, 2006.
        The statement will also require fiscal year-end measurements of plan assets
        and
        benefit obligations, effective for fiscal years ending after December 15,
        2008. SFAS No. 158 will have no effect on the Company’s financial
        statements, as the Company does not maintain defined benefit pension or other
        postretirement plans.
 
 In
        February 2007, the FASB issued SFAS 159, "The Fair Value Option for Financial
        Assets and Financial Liabilities," which permits the choice to measure certain
        financial assets and liabilities at their fair value at specified election
        dates. The new standard is effective for the Company on January 1, 2008,
        unless
        early adoption is elected. We do not expect the new standard to have any
        material impact on our financial position and results of operation.
 
 In
        September 2006, the SEC issued Staff Accounting Bulletin (“SAB”)
        No. 108, to address diversity in practice in quantifying financial
        statement misstatements and the potential for the build up of improper amounts
        on the balance sheet. SAB No. 108 identifies the approach that registrants
        should take when evaluating the effects of unadjusted misstatements on each
        financial statement, the circumstances under which corrections of misstatements
        should result in a revision to financial statements, and disclosures related
        to
        the correction of misstatements. SAB No. 108 is effective for any report
        for an interim period of the first fiscal year ending after November 16,
        2006. The Company is currently evaluating the impact of adopting SAB
        No. 108 on its financial statements.
 
 **Note
        3 - Stock-Based Compensation**
 
 The
        Company has granted options to purchase common stock to employees, consultants
        and outside directors under the Trulite, Inc. Stock Option Plan, as amended
        and
        restated (the “Plan”). A total of 3,110,805 shares are reserved for issuance,
        and as of December 31, 2006, 765,841 shares remained available for grant,
        under
        the Plan. Prior to January 1, 2006, the Company accounted for grants of options
        using the intrinsic value method under the recognition and measurement
        principles of Accounting Principles Board Opinion (“APB”) No. 25,
        Accounting for Stock Issued to Employees and related interpretations, and
        applied SFAS No. 123, Accounting for Stock-Based Compensation, as amended
        by
        SFAS No. 148, Accounting for Stock-Based Compensation - Transition and
        Disclosure, for disclosure purposes only. Under APB No. 25, stock-based
        compensation cost related to stock options was not recognized in net income
        (loss) since the options granted under those plans had exercise prices greater
        than or equal to the market value of the underlying stock on the date of
        grant.
 
 Effective
        January 1, 2006, the Company adopted SFAS No. 123R (revised 2004), Share-Based
        Payment, which revises SFAS No. 123 and supersedes APB No. 25. SFAS No. 123R
        requires that all share-based payments to employees be recognized in the
        financial statements based on their fair values at the date of grant. The
        calculated fair value is recognized as expense over the requisite service
        period, net of estimated forfeitures, using the straight-line method under
        SFAS
        No. 123R. The statement was adopted using the modified prospective method
        of
        application which requires compensation expense to be recognized in the
        financial statements for all unvested stock options beginning in the quarter
        of
        adoption. No adjustments to prior periods have been made as a result of adopting
        SFAS No. 123R. Under this transition method, compensation expense for
        share-based awards granted prior to January 1, 2006, but not yet vested as
        of
        January 1, 2006, and not previously amortized through the pro forma disclosures
        required by SFAS No. 123, will be recognized in the Company’s financial
        statements over their remaining service period. The cost was based on the
        grant-date fair value estimated in accordance with the original provisions
        of
        SFAS No. 123. As required by SFAS No. 123R, compensation expense recognized
        in
        future periods for share-based compensation granted prior to adoption of
        the
        standard will be adjusted for the effects of estimated forfeitures.
  For
        the
        year ended December 31, 2006, the total stock-based compensation expense
        recognized was $511,157. Basic and diluted loss per common share was therefore
        $0.06 lower for the year ended December 31, 2006, than if the Company had
        continued to account for the stock-based compensation under APB 25.
  F-8
  The
        total
        unrecognized compensation cost at December 31, 2006, relating to non-vested
        share-based compensation arrangements granted under the Plan, was $581,603.
        That
        cost is expected to be recognized over four years, with a weighted average
        period of 3.5 years.
 
 During
        2006, the Company granted options to purchase 2,339,465 shares of common
        stock
        under the Plan. With respect to 1,175,339 of these shares, the exercise price
        is
        $0.88 per common share, which is equivalent to the fair value of a share
        of
        common stock on the date of grant. With respect to 5,000 of these shares,
        the
        exercise price is $0.88 per common share, whereas the fair value of a share
        of
        common stock on the date of grant was $0.18. With respect to options to purchase
        the additional 1,159,126 shares of common stock, the exercise price is $1.00
        per
        common share. 1,065,407 of these options were vested upon grant, whereas
        the
        remaining 1,274,058 vest over four years and have varying contractual lives
        ranging from four to seven years. For the year ended December 31, 2005, the
        Company granted 466,692 options to purchase shares of common stock with an
        exercise price of $0.88, whereas the fair value of a share of common stock
        on
        the date of grant was $0.18. All of these options vest over four years and
        have
        a seven-year contractual life. The weighted average assumptions for the periods
        indicated are noted in the following table:
 **For
                    the Year Ended December 31,****2006**
                
                **2005**Risk
                    free rate
                
                
                4.85
                %
                
                4.14
                %Expected
                    life (in years)
                
                
                3.5
                
                
                4.8Expected
                    volatility
                
                
                71
                %
                
                83
                %Expected
                    dividends
                
                $
                -
                
                $
                -Fair
                    value
                
                $
                0.47
                
                $
                0.06
 
 The
        Company estimates the fair value of stock options under SFAS No. 123R at
        the
        date of grant using a Black-Scholes-Merton valuation model, which is consistent
        with the valuation technique previously utilized to value options for the
        footnote disclosures required under SFAS No. 123. The risk-free rate is based
        on
        the U.S. Treasury yield curve in effect at the time of grant. The expected
        term
        (estimated period of time outstanding) of options granted in 2006 is based
        on
        the “simplified” method of estimating expected term for “plain vanilla” options
        allowed by SEC Staff Accounting Bulletin No. 107, and varies based on the
        vesting period and contractual term of the option. Expected volatility for
        options granted in 2006 is based on an evaluation of similar companies’ trading
        activity. The Company has not issued any cash dividends on its common
        stock.
 
 The
        following summary presents information regarding outstanding options as of
        December 31, 2006, and the changes during the twelve months then
        ended:
 **SharesUnderOptions**
                
                **Weighted
                    Average Exercise Price Per Share**
                
                **Weighted
                    Average Remaining Contractual Term**
                
                **Aggregate
                    Intrinsic Value**Outstanding
                    at January 1, 2006
                
                
                466,692
                
                $
                0.88Granted
                
                
                2,339,465
                
                
                0.94Exercised
                
                
                (100
                )
                
                0.88Forfeited
                
                
                (461,293
                )
                
                0.89Outstanding
                    at December 31, 2006
                
                
                2,344,764
                
                
                0.94
                
                
                5.0
                    years
                
                $
                84,402Vested
                    or expected to vest at December 31, 2006
                
                
                2,216,918
                
                
                0.94
                
                
                
                
                
                83,314Exercisable
                    at December 31, 2006
                
                
                1,080,268
                
                $
                0.88
                
                
                3.3
                    years
                
                $
                74,569
  The
        following table provides the pro forma net loss attributable to common stock
        and
        net loss per common share had the Company applied the fair value method of
        SFAS
        No. 123 for the year ended December 31, 2005. The pro forma effects
        presented are not necessarily indicative of the pro forma effects in future
        years:
  F-9
 
 **Twelve
                  Months****Ended****December
                  31, 2005**Net
                  loss attributable to common stockholders, as reported
              
              $
              (910,026
              )Add:
                  Stock-based employee compensation expenseincluded
                  in reported net loss
              
              
              -Deduct:
                  Total stock-based employee compensation expensedetermined
                  under fair value based method
              
              
              2,414Pro
                  Forma net loss attributable to common stock
              
              $
              (912,440
              )Loss
                  per shareBasic
                  - as reported
              
              $
              (0.25
              )Basic
                  - pro forma
              
              $
              (0.25
              )Loss
                  per shareDiluted
                  - as reported
              
              $
              (0.25
              )Diluted
                  - pro forma
              
              $
              (0.25
              )
 
 **Note
        4 - Property and Equipment**
  **At
                    December 31,****2006**
                
                **2005**Office
                    equipment
                
                $
                59,249
                
                $
                27,360Manufacturing
                    equipment
                
                
                9,491
                
                
                9,491Test
                    equipment
                
                
                4,150
                
                
                4,150Total
                    fixed assets
                
                
                72,890
                
                
                41,001Accumulated
                    depreciation
                
                
                (22,811
                )
                
                (7,963
                )Property
                    and equipment, net
                
                $
                50,079
                
                $
                33,038
 
 **Note
        5 - Accounts Payable and Accrued liabilities**
 **At
                    December 31,****2006**
                
                **2005**Accounts
                    payable
                
                $
                197,267
                
                $
                24,531Accrued
                    expenses
                
                
                104,640
                
                
                20,290$
                301,907
                
                $
                44,821
 As
        of
        December 31, 2006, $62,363 of the $197,267 accounts payable is to Standard
        Renewable Energy Group, LLC (“SREG”). SREG owns NewPoint Energy Solutions, LP
        (“NewPoint”), the owner of approximately 45.2% of the Company’s common stock.
 
 F-10
 
 **Note
        6 - Income taxes**
 
 The
        Company did not incur any income tax expense due to operating losses and
        the
        related increase in the valuation allowance. The Company has established
        a
        valuation allowance for the full amount of the deferred tax assets as management
        does not currently believe that it is more likely than not that these assets
        will be recovered in the foreseeable future.
  The
        reconciliation of income taxes at the statutory rate of 35% applied to the
        loss
        before taxes for the years ended December 31, 2006 and 2005, respectively,
        are
        as follows:
  Twelve
                  Months Ended December 31,2006
              
              2005Computed
                  income tax benefit
              
              $
              (1,205,153
              )
              $
              (289,083
              )Increase
                  in valuation allowance
              
              
              1,205,153
              
              
              289,083Tax
                  expense
              
              $
              -
              
              $
              -
  The
        tax
        effects of the temporary differences that give rise to deferred tax assets
        and
        liabilities at December 31, 2006 are as follows:
  At
                  December 31,2006
              
              2005Deferred
                  tax assets (liabilities):Loss
                  carryforwards
              
              $
              1,342,459
              
              $
              377,575Stock-based
                  expense
              
              
              235,659
              
              
              -Other
                  temporary differences
              
              
              10,953
              
              
              6,3431,589,071
              
              
              383,918Less
                  valuation allowance
              
              
              (1,589,071
              )
              
              (383,918
              )Net
                  deferred tax asset
              
              $
              -
              
              $
              -
  At
        December 31, 2006, the Company had net operating loss carryforwards for
        federal income tax purposes of $3,835,596 that are available to offset future
        taxable income. To the extent not utilized, the net operating loss carryforwards
        will expire in 2026.
  **Note
        7 - Series A Preferred Stock**
 
 In
        May
        2006, all of the Company’s 8% Cumulative Convertible Series A Preferred Stock
        was converted into the Company’s common stock.
 
 The
        8%
        Cumulative Convertible Series A Preferred Stock (“Series A Preferred Stock”) had
        a liquidation value of $1.00 per share plus dividends whether or not earned
        or
        declared from the issuance date thereof at the annual rate of eight percent
        (8%)
        (the “Preferred Dividends”) of $1.00 per share (the “Original Issue Price”),
        payable at the option of the Company in cash or in shares of Series A Preferred
        Stock. In addition, the Preferred Stock had preferential treatment in
        liquidation to all Common Stock and any other stock of the Company ranking
        junior to the Series A Preferred Stock. Accretion of cumulative dividends
        outstanding on these shares was $39,275 and $84,074 for the twelve months
        ended
        December 31, 2006 and 2005, respectively.
 F-11
   Each
          share of Series A Preferred Stock was convertible at any time into common
          shares
          of the Company by dividing the original issue price by a conversion price
          as
          defined. The Series A Preferred Stock was redeemable at the option of the
          majority holders in cash at $1.00 per share plus all accrued and unpaid
          Preferred Dividends on the fifth anniversary of the date of initial issuance
          or
          other events relating to change in 25% or more of the outstanding voting
          stock
          of the Company or a merger or consolidation as defined. Each holder of
          Series A
          Preferred Stock was entitled to the number of votes equal to the number
          of whole
          shares of Common Stock into which the shares of Series A Preferred Stock
          was
          convertible.
 On
            May 2,
            2006, 1,454,725 shares of Series A Preferred Stock were converted into
            6,562,630
            shares of common stock. In addition, the cumulative accreted dividends
            of
            $129,973 were converted into 291,361 shares of common stock. Upon the
            conversion
            of the Series A Preferred Stock, the Company recorded a non-cash charge
            of
            $1,424,762 to reflect the deemed dividend on conversion in accordance
            with EITF
            Topic D-42, “The Effect on the Calculation of Earnings per Share for the
            Redemption or Induced Conversion of Preferred Stock.” In addition, the Company
            recorded a non-cash charge of $161,388 to reflect the deemed dividend
            on
            conversion of accreted dividends. The total of the two “deemed dividends” was
            $1,586,150. The amount of charge is equal to the difference in the value
            at the
            time of exchange of the shares of common stock exchanged for the preferred
            stock
            minus the value of the shares that the holders of the preferred stock
            otherwise
            would have had the right to receive upon conversion of the preferred
            stock. The
            charge did not affect the Company’s reported revenue, operating income, net
            loss, assets, liabilities or stockholders’ (deficit) equity.
 **Note
        8 - Notes Payable and Other Related Party Transactions**
  On
        August
        1, 2006, the Company subleased office space from Standard Renewable Energy
        Group, LLC, (“SREG”). SREG owns NewPoint Energy Solutions, LP (“NewPoint”), the
        owner of approximately 45.2% of the Company’s common stock. The monthly rent is
        $1,905 beginning August 1, 2006 (rental expense for the year was $9,525),
        with
        future rental commitment for a lease expiring in July 2007 of approximately
        $13,335.
 
 During
        the twelve months ended December 31, 2006, SREG billed the Company $71,121
        for
        management and administrative services.
 
 On
        August
        9, 2006, the Company incurred indebtedness of $250,000 pursuant to the terms
        of
        two $125,000 promissory notes. Under the terms of the first promissory note,
        the
        Company borrowed $125,000 from Contango Venture Capital Corporation, LLC
        (“CVCC”) which beneficially owns approximately 17.0% of the Company’s common
        stock. Under the terms of the second promissory note, the Company borrowed
        $125,000 from Standard Renewable Energy LP, also a wholly owned subsidiary
        of
        SREG. Both notes bear interest at a rate of 11.25% until February 8, 2007,
        at
        which time the rate will become the prime rate plus 3%. Both notes mature
        on May
        1, 2007, and may be prepaid by the Company at any time without
        penalty.
 
 On
        September 21, 2006, the Company incurred indebtedness of $250,000 pursuant
        to
        the terms of a promissory note to SREG.  The note bears interest at a rate
        of 11.25% until May 21, 2007, at which time the rate will become the prime
        rate
        plus 3%. The note matures on June 18, 2007, and may be prepaid by the Company
        at
        any time without penalty.
 
 On
        October 26, 2006, the Company incurred indebtedness of $250,000 pursuant
        to the
        terms of a promissory note with SREG. The note bears interest at a rate of
        11.25% until April 24, 2007, at which time the rate will become the prime
        rate
        plus 3%. The note matures on July 22, 2007, and may be prepaid by the Company
        at
        any time without penalty.
  On
        November 22, 2006, the Company incurred indebtedness of $400,000 pursuant
        to the
        terms of a promissory note with CVCC. The note bears interest at a rate of
        11.25% until April 24, 2007, at which time the rate will become the prime
        rate
        plus 3%. The note matures on July 22, 2007, and may be prepaid by the Company
        at
        any time without penalty.
  On
        November 28, 2006, the Company incurred indebtedness of $100,000 pursuant
        to the
        terms of a promissory note with SREG. The note bears interest at a rate of
        11.25% until April 24, 2007, at which time the rate will become the prime
        rate
        plus 3%. The note matures on July 22, 2007, and may be prepaid by the Company
        at
        any time without penalty.
  On
        April
        5, 2007, the Company entered into agreements with SREG, Standard Renewable
        Energy, LP, and CVCC to convert all of the $1,250,000 of promissory note
        borrowings outstanding at 12/31/2006, in addition to subsequent borrowings
        of
        $600,000 made in February 2007, plus accrued interest, into shares of the
        Company’s common stock. See Note 12.
  F-12
  **Note
        9 - Stockholders’ Equity**
 
 Common
        Stock Split
 
 In
        April
        2005, the Company’s Board of Directors authorized a five-for-one split of the
        Company’s common stock. In conjunction with the stock split, the Company amended
        its certificate of incorporation to increase its authorized common stock
        to
        20,000,000 shares and retained the par value of $0.0001 per share. Accordingly,
        all references to the number of common shares authorized and common shares
        issued and outstanding in the accompanying financial statements have been
        adjusted to reflect the effects of the common stock split on a retroactive
        basis.
 
 Warrants:
 
 The
        Company raised additional equity of $1,000,000 during April 2006 through
        the
        issuance of common stock for cash consideration of $1.00 per share. These
        issuances of common stock also included one year warrants to purchase an
        additional 1,000,000 shares of common stock of the Company at an exercise
        price
        of $1.50 per common share that expires on April 13, 2007. The value of the
        warrants is included as additional paid in capital.
 
 During
        2006, the Company also entered into two consulting agreements for investment
        banking services, under which the Company was required to issue 300,000 shares
        of restricted common stock and 400,000 five-year warrants to purchase the
        Company’s common stock at $3.00 per share. One of the agreements terminates on
        April 25, 2008, and the second terminates on June 30, 2008.
        The fair value of the warrants, utilizing the Black-Scholes method and assuming
        a risk-free interest rate of 4.97%, expected volatility of 77%, expected
        life of
        5 years and no dividend yield, resulted in a fair value of $162,155, which
        was
        recorded as a component of general and administrative expense in the second
        quarter of 2006.
 
 **Note
        10 - Commitments**
 
 *Leases*
 
 Rent
        expense during the twelve months ended December 31, 2006 and 2005, was $42,198
        and $10,925, respectively. Rent expense is included in general and
        administrative expenses in the accompanying statements of
        operations.
 
 As
        of
        December 31, 2006, total future rental commitments under all operating leases
        (all of which expire in 2007) total $35,913.
 
 *Other*
 
 The
        Company had employment agreements with certain employees that expire through
        2007, under which the committed obligations totaled $222,500 at December
        31,
        2006.
 F-13
 **Note
          11 - Net Loss Per Share**
 **Twelve
                    Months Ended December 31,****2006**
                
                **2005**Numerator:Net
                    loss
                
                $
                (3,443,294
                )
                $
                (825,952
                )Increases
                    to Net Loss:Preferred
                    stock dividends
                
                
                (39,275
                )
                
                (84,074
                )Deemed
                    dividend on conversionof
                    preferred stock to common stock
                
                
                (1,586,150
                )
                
                -Net
                    loss attributable to common stockholders
                
                $
                (5,068,719
                )
                $
                (910,026
                )DenominatorBasic
                    earnings per share - weighted averagecommon
                    shares outstanding
                
                
                9,139,510
                
                
                3,607,433Weighted-average
                    dilutive effect of stock-basedawards
                    and common stock issuable upon conversionof
                    preferred stock, net of assumed repurchase oftreasury
                    stock
                
                
                -
                
                
                -Fully-diluted
                    earnings per share - weightedaverage
                    common shares outstanding
                
                
                9,139,510
                
                
                3,607,433Net
                    loss per common shareBasic
                    and diluted
                
                $
                (0.37
                )
                $
                (0.23
                )Preferred
                    and deemed dividends
                
                
                (0.18
                )
                
                (0.02
                )Attributable
                    to common stockholders
                
                $
                (0.55
                )
                $
                (0.25
                )
  Basic
        and
        diluted net loss per share for the years ended December 31, 2006, and 2005,
        is
        the same since the effect of all common stock equivalents are antidilutive
        to
        the Company’s net loss in accordance with Statement of Financial Accounting
        Standards No. 128, Earnings per Share *.*
 
 The
        following weighted average securities are not included in the computation
        of
        diluted loss per share as their effect would have been
        anti-dilutive:
 **Twelve
                    Months Ended December 31,****2006**
                
                **2005**Common
                    stock options
                
                
                1,610,461
                
                
                208,679Common
                    stock warrants
                
                
                986,301
                
                
                -8%
                    cumulative convertibleseries
                    A preferred stock
                
                
                486,237
                
                
                1,407,935
 
 F-14
  **Note
        12 - Subsequent Events**
 
 On
        February 6, 2007, the Company incurred indebtedness of $360,000 pursuant
        to the
        terms of a promissory note with SREG. The note bears interest at a rate of
        11.25% until August 6, 2007, at which time the rate will become the prime
        rate
        plus 3%. The note matures on October 31, 2007, and may be prepaid by the
        Company
        at any time without penalty.
  On
        February 6, 2007, the Company incurred indebtedness of $240,000 pursuant
        to the
        terms of a promissory note with CVCC. The note bears interest at a rate of
        11.25% until August 6, 2007, at which time the rate will become the prime
        rate
        plus 3%. The note matures on October 31, 2007, and may be prepaid by the
        Company
        at any time without penalty.
  On
        February 22, 2007, the Company’s Board of Directors agreed to extend the term of
        the warrants, until April 13, 2008, that were issued during April 2006 in
        connection with the issuance of common stock for cash consideration of $1.00
        per
        share. See Note 9. These warrants entitled the holders to purchase an additional
        1,000,000 shares of common stock of the Company at an exercise price of $1.50
        per common share that expires on April 13, 2007.
  On
          April
          4, 2007, the Company entered into a consulting agreement with the Fenway
          Advisory Group (“Fenway”) for the following services: (i) identification of
          potential investors; (ii) general consulting advice regarding financing
          strategies; and (iii) general consulting advice regarding the Company’s
          business. The agreement terminates on May 31, 2007. In exchange for these
          services, we issued to Fenway 150,000 shares of common stock and warrants
          having
          a five year term to purchase 100,000 shares of common stock at an exercise
          price
          of $3.00 per share.
  On
          April
          5, 2007, the Company entered into agreements with SREG, Standard Renewable
          Energy, LP, and CVCC regarding the exchange of all of the Company’s outstanding
          promissory notes aggregating $1,850,000 in principal amount for shares
          of the
          Company’s common stock. Under each of these agreements, we and the holder of the
          note agreed that on the third business day following the last of the first
          ten
          trading days on which the Company’s common stock has been traded on the Over the
          Counter Bulletin Board, all principal and accrued but unpaid interest on
          the
          notes would be canceled, and in consideration of cancellation the Company
          would
          issue to the holder of the notes in a private transaction a number of shares
          of
          the Company’s common stock determined by multiplying 2 times the quotient of (x)
          the aggregate principal balance of and accrued but unpaid interest on the
          notes
          as of the close of business on the day before such issuance divided by
          (y) the
          average closing sale price for the Company’s common stock as quoted on the Over
          the Counter Bulletin Board for the first ten trading days. At March 31,
          2007,
          accrued but unpaid interest on the notes aggregated $45,469.
  F-15




**Item
      13. Exhibits.**




Index
      to
      Exhibits




Number
            
            Description31.1
            
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                200231.2
            
            Certification
                of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002









4




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.


**TRULITE,
                INC.**Dated:
                May 18, 2007
            By:
            /s/ Jonathan
                GodshallJonathan
                GodshallPresident
                and Chief Executive Officer














5