**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington
      D. C. 20549





**FORM
      10-QSB**





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





**For
      the quarterly period ended December 31, 2007**





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




For
      the
      transition period from





Commission
      file number 000-51599





**OmniReliant
      Holdings, Inc.**


(Exact
      name of small business issuer as specified in its charter)





Nevada
            54-2153837(State
                or other jurisdiction of
              incorporation
                or organization)
            (I.R.S.
                EmployerIdentification
                No.)





4218
      West
      Linebaugh Avenue


Tampa,
      FL
      33624


(Address
      of principal executive offices)





(813)
      885-5998


(Issuer's
      telephone number)





Copies
      to:


Darrin
      Ocasio, Esq.


Sichenzia
      Ross Friedman Ference LLP


61
      Broadway


New
      York,
      New York 10006


Phone:
      (212) 930-9700


Fax:
      (212) 930-9725





Check
      whether the issuer (1) has 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





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
      number of shares of the issuer's outstanding common stock on December 31, 2007
      was  14,063,112 .





Transitional
      Small Business Disclosure Format (check one): Yes o No x









**OmniReliant
      Holdings, Inc.**




**FORM
      10-QSB**




**For
      the Quarterly Period Ended December 31, 2007**





Part
                I
            
            
            
            PageItem
                1.
            
            Financial
                Statements
            
            F-1
                - F-17Item
                2.
            
            Management
                Discussion & Analysis or Plan of Operation
            
            1Item
                3.
            
            Controls
                and Procedures
            
            4Part
                llItem
                1.
            
            Legal
                Proceedings
            
            5Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            5Item
                3.
            
            Defaults
                Upon Senior Securities
            
            5Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            5Item
                5.
            
            Other
                Information
            
            5Item
                6.
            
            Exhibits
            
            5Signatures.
            
            
            
            6




F-1





**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**CONSOLIDATED
      BALANCE SHEET**


**December
                    31, 2007****ASSETS**Current
                  assets:Cash
                  and cash equivalents
              
              $
              868,153Accounts
                  receivable
              
              
              40,455Inventory
              
              
              181,236Prepaid
                  expenses
              
              
              17,508Investment
                  in available for sale securities
              
              
              14,051,506Total
                  current assets
              
              
              15,158,858Other
                  Assets:License,
                  net of accumulated amortization of $565,595
              
              
              143,387Patents
              
              
              748,335Total
                  other assets
              
              
              891,721**Total
                  assets**
              
              **$**
              **16,050,579****LIABILITIES
                  AND S TOCKHOLDERS ' EQUITY **(DEFICIT)****Liabilities:Current
                  LiabilitiesAccounts
                  payable
              
              $
              117,387Total
                  current liabilities
              
              
              117,387Stockholders'
                  equity (deficit):Common
                  stock, $0.00001 par value;100,000,000
                  shares authorized; 14,063,112 sharesissued
                  and outstanding.
              
              
              140Convertible
                  Preferred Series C stock, $0.0001 par value;100,000,000
                  shares authorized; shares 13,746,085issued
                  and outstanding.
              
              
              4,270,467Additionalpaid
                  in capital
              
              
              8,756,263Accumulated
                  other comp rehensive income
              
              
              8,622,592Deficit
                  accumulated during development stage
              
              
              (5,716,270
              )Total
                  shareholders' equity (deficit)
              
              
              15,933,192**Total
                  liabilities and shareholders' equity (deficit)**
              
              **$**
              **16,050,579**




The
      accompanying notes are an integral part of these Consolidated Financial
      Statements.




F-2




**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**and
      Comprehensive Income**


**For
                    the three month period ended December 31,**
                
                **For
                    the six month period ended December 31,**
                
                **For
                    the period from August 21, 2006 (inception) to December 31,**
                
                **For
                    the period from August 21, 2006 (inception) to December
                    31,****2007**
                
                **2006**
                
                **2007**
                
                **2006**
                
                **2007**Revenue
                
                $
                30,850
                
                $
                -
                
                $
                189,673
                
                $
                2,640
                
                $
                192,313Cost
                    of goods sold
                
                
                11,453
                
                
                -
                
                
                109,879
                
                
                1,320
                
                
                111,199Gross
                    margin
                
                
                19,397
                
                
                -
                
                
                79,794
                
                
                1,320
                
                
                81,114Operating
                    expenses:Amortization
                
                
                84,067
                
                
                -
                
                
                242,532
                
                
                
                
                
                1,019,685General
                    & administrative
                
                
                1,344,424
                
                
                415,532
                
                
                1,647,950
                
                
                419,564
                
                
                4,782,477Total
                    operating expenses
                
                
                1,428,491
                
                
                415,532
                
                
                1,890,482
                
                
                419,564
                
                
                5,802,162Operating
                    income (loss)
                
                
                (1,409,093
                )
                
                (415,532
                )
                
                (1,810,688
                )
                
                (418,244
                )
                
                (5,721,048
                )Other
                    (income)/expenseInterest
                    income
                
                
                4,779
                
                
                
                
                
                4,779
                
                
                
                
                
                4,779Change
                    in the fair value of redeemable preferredstock
                    conversion feature
                
                
                17,847,742
                
                
                -
                
                
                20,157,499
                
                
                -
                
                
                -Finance
                    penalties
                
                
                542,080
                
                
                -
                
                
                232,943
                
                
                -
                
                
                -Total
                    Other expense
                
                
                18,394,601
                
                
                -
                
                
                20,395,221
                
                
                -
                
                
                4,779Loss
                    before provision for income taxes
                
                
                16,985,508
                
                
                (415,532
                )
                
                18,584,532
                
                
                (418,244
                )
                
                (5,716,270
                )Provision
                    for income taxes
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Net
                    loss**
                
                **$**
                **16,985,508**
                
                
                **($415,532**
                **)**
                **$**
                **18,584,532**
                
                
                **($418,244**
                **)**
                
                **($5,716,270**
                **)**Dividends
                    to preferred shareholders
                
                
                (18,127
                )
                
                -
                
                
                (115,096
                )
                
                -
                
                
                (309,564
                )Deemed
                    dividend to preferred shareholders onbeneficial
                    conversion festure
                
                
                (4,270,467
                )
                
                -
                
                
                (4,270,467
                )
                
                -
                
                
                (4,270,467
                )**Net
                    income (loss)**
                
                **$**
                **12,696,914**
                
                **$**
                **(415,532**
                **)**
                **$**
                **14,198,969**
                
                **$**
                **(418,244**
                **)**
                **$**
                **(10,296,301**
                **)****Net
                    Income/(Loss) per share (Basic)**
                
                **$**
                **0.91**
                
                
                **($0.04**
                **)**
                **$**
                **1.01**
                
                
                **($0.05**
                **)****Net
                    Income/(Loss) per share (Fully Diluted)**
                
                **$**
                **0.31**
                
                
                **($0.04**
                **)**
                **$**
                **0.35**
                
                
                **($0.05**
                **)****Weighted
                    average common shares outstanding**
                
                
                **14,011,233**
                
                
                **9,613,571**
                
                
                **14,005,586**
                
                
                **8,040,738****Weighted
                    average common and common equivalent shares
                    outstanding**
                
                
                **40,697,995**
                
                
                **9,613,571**
                
                
                **40,753,928**
                
                
                **8,040,738****Other
                    Comprehensive income:**Unrealized
                    gain/loss on available for sale securities
                
                
                8,945,167
                
                
                -
                
                
                8,945,167
                
                
                -Translation
                    gain/loss on available for sale securities
                
                
                (322,575
                )
                
                -
                
                
                (322,575
                )
                
                -**Comprehensive
                    income/(loss)**
                
                
                **8,622,592**
                
                
                **-**
                
                
                **8,622,592**
                
                
                **-**


The
      accompanying notes are an integral part of these Consolidated Financial
      Statements.




F-3




**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**For
                          the six month**
                        **period
                          ended**
                        **December
                          31,**
                        **2007**
                
                **For
                        the period from**
                      **August
                        21, 2006 (inception)**
                      **to
                        December 31, 2006**
                
                **From
                      August 21, 2006**
                    **(inception)**
                    **through**
                    **December
                      31, 2007****Cash
                    flows from operating activities:**Net
                    loss
                
                $
                18,584,532
                
                
                ($418,244
                )
                $
                (5,716,271
                )Adjustments
                    to reconcile net loss to net cashused
                    in operating activities:Mark
                    to market adjustment on preferred stock and warrants
                
                
                (20,157,499
                )
                
                -
                
                
                -Stock
                    compensation
                
                
                1,134,705
                
                
                15,000
                
                
                3,621,106Amortization
                
                
                242,532
                
                
                200,300
                
                
                1,019,687Accounts
                    receivable
                
                
                (40,455
                )
                
                -
                
                
                (40,455
                )Inventory
                
                
                (190,612
                )
                
                -
                
                
                (311,236
                )Prepaid
                    expenses
                
                
                16,489
                
                
                (15,200
                )
                
                (17,510
                )Accounts
                    payable
                
                
                92,652
                
                
                10,786
                
                
                117,387Accrued
                    finance penalties
                
                
                (232,943
                )
                
                -
                
                
                -Net
                    cash used for operating activities
                
                
                (550,599
                )
                
                (207,358
                )
                
                (1,327,292
                )**Cash
                    flows from investing activities:**Licenses
                
                
                -
                
                
                (853,000
                )
                
                (1,006,010
                )Patents
                
                
                (6,811
                )
                
                -
                
                
                (31,811
                )Investment
                    in securities
                
                
                (5,100,000
                )
                
                -
                
                
                (5,100,000
                )Net
                    cash used for investing activities
                
                
                (5,106,811
                )
                
                (853,000
                )
                
                (6,137,821
                )**Cash
                    flows from financing activities:**Proceeds
                    from sale of common stock
                
                
                -
                
                
                15,000
                
                
                15,000Proceeds
                    from sale of preferred stock
                
                
                6,400,000
                
                
                3,000,000
                
                
                10,000,000Offering
                    costs from preferred sale
                
                
                (585,922
                )
                
                (475,000
                )
                
                (1,205,922
                )Share
                    buyback
                
                
                -
                
                
                (475,813
                )
                
                (475,813
                )Net
                    cash provided by financing activities
                
                
                5,814,078
                
                
                2,064,187
                
                
                8,333,265Net
                    (decrease) increase in cash and cash equivalents
                
                
                156,669
                
                
                1,003,829
                
                
                868,153Cash
                    and cash equivalents at beginning of year
                
                
                711,484
                
                
                -
                
                
                -**Cash
                    and cash equivalents at end of year**
                
                **$**
                **868,153**
                
                **$**
                **1,003,829**
                
                **$**
                **868,153****Supplemental
                    disclosure of cash flow information:**Interest
                    paid
                
                
                -
                
                
                -
                
                
                -Income
                    taxes paid
                
                
                -
                
                
                -
                
                
                -**Total
                    Supplemental disclosure of cash flow information**
                
                
                -
                
                
                -
                
                
                -**Supplemental
                    schedule of non-cash investing and financing activities:**Transfer
                    of inventory as part of investment in securities
                
                
                130,000
                
                
                
                
                
                130,000Transfer
                    of sublicense as part of investment in securities
                
                
                198,914
                
                
                
                
                
                198,914Dividends
                    paid in the form of Series C Preferred
                
                
                309,564
                
                
                -
                
                
                309,564Stock
                    issued for patent
                
                
                -
                
                
                -
                
                
                720,000Stock
                    issued for license
                
                
                -
                
                
                -
                
                
                352,500**Total
                    non-cash investing and financing transactions**
                
                **$**
                **638,478**
                
                **$**
                —
                
                **$**
                **1,710,978**




The
      accompanying notes are an integral part of these Consolidated Financial
      Statements.




F-4


**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**





**NOTE
      1- BASIS OF PRESENTATION**





The
      accompanying unaudited consolidated financial statements for the three and
      six
      month period ended December 31, 2007, the three month period ended December
      31,
      2006, the period from August 21, 2006 (inception) to December 31, 2006, and
      the
      period from August 21, 2006 (inception) to December 31, 2007 have been prepared
      in accordance with accounting principles generally accepted in the United States
      of America for interim financial information and pursuant to the rules and
      regulations of the Securities and Exchange Commission for Form 10-QSB.
      Accordingly, they do not include all the information and footnotes required
      by
      accounting principles generally accepted in the United States of America for
      complete financial statements.





The
      unaudited financial information included in this report includes all adjustments
      which are, in the opinion of management, necessary to reflect a fair statement
      of the results for the interim periods. The operations for the three and six
      month period ended December 31, 2007, the three month period ended December
      31,
      2006, the period from August 21, 2006 (inception) to December 31, 2006, and
      the
      period from August 21, 2006 (inception) to December 31, 2007 are not necessarily
      indicative of the results of the full fiscal year.





The
      condensed consolidated financial statements included in this report should
      be
      read in conjunction with the financial statements and notes thereto included
      in
      the Registrant's June 30, 2007 Annual Report on Form 10-KSB and subsequent
      filings on Form 8-K.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





***Revenue
      Recognition --*** Revenue
      is recognized when the product is shipped to a customer, or in the limited
      circumstances, at destination, when terms provide that title passes at
      destination. Estimated amounts for sales returns and allowances are recorded
      at
      the time of sale.





***Comprehensive
      Income (Loss)*** **-** The
      Company presents comprehensive income (loss) in accordance with Statement of
      Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS 130"). SFAS
      130
      states that all items that are required to be recognized under accounting
      standards as components of comprehensive income (loss) be reported in the
      financial statements. For the three and six month periods ended December 31,
      2007 the only components of comprehensive income (loss) were the net income
      (loss) for the periods, the foreign currency translation adjustments on
      investments held for sale, and change in fair market value of investments held
      for sale.





***Foreign
      Currency*** **-** As
      of
      December 31, 2007, the Company held investments which were considered available
      for sale and were denominated in Pence Sterling (“GBX”). The Company’s
      functional currency is the U.S. dollar and the consolidated financial statements
      are presented in the United States dollars (“USD). In accordance with Statement
      of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency
      Translation”, the investments were translated at the exchange rate on the
      balance sheet date. The resulting foreign currency translation adjustments
      are
      reported under other comprehensive income
      in
      accordance with SFAS No. 130, “Reporting Comprehensive Income.”
      For the three and six month periods ending December 31, 2007 the Company
      reported a foreign currency translation loss of ($322,575).





***Marketable
      Securities -*** On
      October 19, 2007, the Company entered into a subscription agreement with
      ResponzeTV PLC ("ResponzeTV") (the "Subscription Agreement") pursuant to which
      we purchased 8,500,000 ordinary shares of ResponzeTV and received warrants
      to
      purchase 17,000,000 ordinary shares of ResponzeTV for an aggregate purchase
      price of US$5,100,000. The warrants were issued in the following manner: (i)
      a
      warrant to purchase 8,500,000 common shares with an exercise price of 37p,
      (ii)
      a warrant to purchase 4,250,000 common shares with an exercise price of 50p
      and
      (iii) 4,250,000 common shares with an exercise price of 100p. Each warrant
      has a
      term of five years from the date of issuance.





Kevin
      Harrington and Tim Harrington, who are directors of the Company, are officers
      and directors of ResponzeTV. Midtown Partners & Co., LLC, which served as
      the Company's placement agent in connection with the Subscription Agreement,
      received aggregate placement agent fees of US$50,000, as well as 500,000
      ordinary shares of ResponzeTV. Midtown Partners & Co., LLC is a FINRA
      registered broker-dealer. Chris Phillips, who is the Company's CEO, CFO,
      Secretary, Treasurer and a director, is also the Manager and sole member of
      FAMALOM, LLC which is a 50% owner of Apogee Financial Investments, Inc., a
      merchant bank ("Apogee"). Apogee owns 100% of Midtown Partners & Co., LLC, a
      FINRA licensed broker-dealer.





Additionally,
      on October 19, 2007, our wholly-owned subsidiary OmniReliant Corp. ("ORC")
      entered into and closed a share exchange agreement with ResponzeTV (the
      "Exchange Agreement"). Pursuant to the terms of the Exchange Agreement,
      ResponzeTV acquired all of the issued and outstanding shares of capital stock
      of
      KHL Holdings, Inc., a newly formed Florida corporation and wholly-owned
      subsidiary of ORC ("KHL"), in exchange for 9,500,000 ordinary shares of stock
      of
      ResponzeTV. On October 12, 2007, ORC entered into an exclusive sublicense
      agreement with KHL, pursuant to which ORC granted KHL the exclusive right and
      license to our rights to use the Kathy Hilton Trademark and to sell products
      bearing the Kathy Hilton Trademark exclusive of fragrance. The initial term
      of
      this sublicense agreement shall terminate on June 30, 2012. ORC shall have
      the
      option to renew this Agreement for an additional five year period. Kevin
      Harrington and Tim Harrington, who are directors of the Company, are officers
      and directors of ResponzeTV.




F-5




**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**





The
      Company allocated additional costs to it’s investment in ResponseTV for the net
      book value of the sublicense and the merchandise inventory, which was included
      as part of the sublicense agreement, of $198,914 and $130,000, respectively.
      The
      aggregate investment in the ResponseTV securities was $5,428,914.





The
      Company accounts for its marketable securities in accordance with Statement
      of
      Financial Accounting Standards No. 115, *“Accounting
      for Certain Investments in Debt and Equity Securities”* (“SFAS
      No. 115”) and classifies marketable securities as trading,
      available-for-sale, or held-to-maturity. The Company’s investment in ResponseTV,
      which is traded on the AIM Market of the London Stock Exchange (RETV), is
      classified as current available-for-sale securities. The securities are valued
      at fair value each balance sheet date with the changes reported in other
      comprehensive income.




**Allocated**
                  
                  **Unrealized**
                  
                  **12/31/2007****Security**
                  
                  **Amount**
                  
                  **Cost**
                  
                  **Gain(Loss)**
                  
                  **Fair
                      Value**ResponseTV
                      stock
                  
                  
                  18,000,000
                  
                  $
                  3,591,096
                  
                  $
                  5,936,025
                  
                  $
                  9,527,121Warrants-£0.37
                  
                  
                  8,500,000
                  
                  
                  1,029,136
                  
                  
                  1,520,817
                  
                  
                  2,549,953Warrants-£0.50
                  
                  
                  4,250,000
                  
                  
                  464,224
                  
                  
                  680,878
                  
                  
                  1,145,102Warrants-£1.00
                  
                  
                  4,250,000
                  
                  
                  344,458
                  
                  
                  484,871
                  
                  
                  829,329**Totals**
                  
                  
                  
                  
                  **$**
                  **5,428,914**
                  
                  **$**
                  **8,622,591**
                  
                  **$**
                  **14,051,506**




For
      purposes of calculating the fair value of the warrants the Company used a risk
      free rate of return of 5.00%, an expected term of 2 years, and an expected
      volatility percentage of 122.95%.





***Use
      of Estimates*** - The
      process of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America requires the
      use
      of estimates and assumptions regarding certain types of assets, liabilities,
      revenues, and expenses. Such estimates primarily relate to unsettled
      transactions and events as of the date of the financial statements. Accordingly,
      upon settlement, actual results may differ from estimated amounts.





***Merchandise
      Inventories -*** Merchandise
      inventories are recorded at the lower of average cost or market. In-bound
      freight-related costs from our vendors are included as part of the net cost
      of
      merchandise inventories. Other costs associated with acquiring, storing and
      transporting merchandise inventories are expensed as incurred and included
      in
      cost of goods sold. As part of the sublicense agreement discussed above
      (“*Marketable
      Securities”*),
      the
      Company transferred $130,000 of merchandise inventory to
      ResponseTV.





***Trademarks
      and licenses --*** Trademarks and licenses are recorded at cost and those with a finite life are
      amortized over the estimated periods of benefit. Amortization expense for the
      three and six month periods ended December 31, 2007 were $84,067 and $242,532,
      respectively.





Indefinite-lived
      intangible assets are reviewed annually for impairment under the provisions
      of
      Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and
      Other Intangible Assets, during the Company's fourth quarter of each fiscal
      year, or sooner, if events indicate a potential impairment. The identification
      and measurement of impairment of indefinite-lived intangible assets involves
      the
      estimation of the fair value of the related asset. The estimates of fair value
      are based on the best information available as of the date of the assessment,
      which primarily incorporates management assumptions about discounted expected
      future cash flows. Future cash flows can be affected by changes in industry
      or
      market conditions.





***Stock
      Based Compensation -*** In
      December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
      Payment". SFAS 123(R) will provide investors and other users of financial
      statements with more complete and neutral financial information by requiring
      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. SFAS 123(R) covers 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. SFAS 123(R) replaces FASB Statement No. 123,
      "Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25,
      "Accounting for Stock Issued to Employees". SFAS 123, as originally issued
      in
      1995, established as preferable a fair-value-based method of accounting for
      share-based payment transactions with employees. However, that statement
      permitted entities the option of continuing to apply the guidance in Opinion
      25,
      as long as the footnotes to financial statements disclosed what net income
      would
      have been had the preferable fair-value-based method been used. Public entities
      (other than those filing as small business issuers) were required to apply
      SFAS
      123(R) as of the first interim or annual reporting period that begins after
      June
      15, 2005. For public entities that file as small business issuers, SFAS 123(R)
      was applicable as of the beginning of the first interim or annual reporting
      period that begins after December 15, 2005.




F-6






**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**





Prior
      to
      January 1, 2006, the Company accounted for Stock Options and Stock Based
      Compensation under the recognition and measurement provisions of APB Opinion
      No.
      25, “Accounting for Stock Issued to Employees”, and related Interpretations, as
      permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation”.
      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 that transition method,
      compensation cost for all share-based payments granted prior to, but not yet
      vested as of January 1, 2006 are based on (a) the grant date fair value
      estimated in accordance with the original provisions of SFAS No. 123, and (b)
      compensation cost for all share-based payments granted subsequent to January
      1,
      2006 are based on the grant-date fair value estimated in accordance with the
      provisions of SFAS No.123(R). Results for prior periods have not been restated.





*2007
      Long Term Incentive Plan*





On
      November 21, 2007 the Company established a Long Term Incentive (the “2007
      Incentive Plan”) plan for the purposes of advancing the interests of the Company
      and our shareholders by providing incentives to certain of our employees and
      other key individuals who perform services for us, including those who
      contribute significantly to the strategic and long-term performance objectives
      and growth of the Company. The 2007 Incentive Plan is administered by a
      committee (the “Committee”) appointed by the Board of Directors. Currently, the
      Committee is comprised of all members of the Board of Directors acting as a
      group. The Committee has the power to interpret the 2007 Incentive Plan and
      to
      prescribe rules, regulations and procedures in connection with the operations
      of
      the 2007 Incentive Plan. The Committee may delegate administrative
      responsibilities under the 2007 Incentive Plan to any one or more of its members
      or other persons, except as may otherwise be required under applicable law
      or
      listing standards for an exchange on which the Company’s common stock may be
      listed. The 2007 Incentive Plan provides for the granting of several types
      of
      awards, including stock options, performance grants and other awards deemed
      by
      the Committee to be consistent with the purposes of the 2007 Incentive Plan.
      Awards may be granted alone, or in conjunction with one or more other awards,
      as
      determined by the Committee.





The
      2007
      Incentive Plan was effective as of November 21, 2007, and was approved by the
      Company’s board of directors. The Company’s shareholders have not voted on
      approval of the 2007 Incentive Plan. A maximum of two million shares (2,000,000)
      shares of common stock has been authorized to be issued under the 2007 Incentive
      Plan in connection with the grant of awards, subject to adjustment for corporate
      transactions, including, without limitation, any stock dividend, forward stock
      split, reverse stock split, merger or recapitalization. Of this amount, no
      more
      than two million (2,000,000) shares of common stock may be issued as incentive
      stock options. Common stock issued under the 2007 Incentive Plan may be either
      newly issued shares, treasury shares, reacquired shares or any combination
      thereof. If common stock issued as restricted stock, restricted stock units
      or
      otherwise subject to repurchase or forfeiture rights is reacquired by us
      pursuant to such rights, or if any award is cancelled, terminates, or expires
      unexercised, the common stock which would otherwise have been issuable pursuant
      to such awards will be available for issuance under new awards. All awards
      under
      the 2007 Incentive Plan shall be granted within 10 years of the date the plan
      was adopted.





The
      Committee has exclusive discretion to select to whom awards will be granted;
      to
      determine the type, size, terms and conditions of each award; to modify or
      waive, within certain limits, the terms and conditions of any award; to
      determine the time when awards will be granted; to establish performance
      objectives; to prescribe the form of documents representing awards under the
      2007 Incentive Plan; and to make all other determinations which it deems
      necessary, advisable or desirable in the interpretation and administration
      of
      the 2007 Incentive Plan. At the discretion of the Committee, awards may be
      made
      under the 2007 Incentive Plan in assumption of, or in substitution for,
      outstanding awards previously granted by the Company, any predecessor or a
      company acquired by the Company or with which it combines. The Committee has
      the
      authority to administer and interpret the 2007 Incentive Plan, and its decisions
      are final, conclusive and binding. We anticipate that all of our employees
      and
      directors will be eligible to participate in the 2007 Incentive
      Plan.





On
      December 7, 2007 pursuant to the Long Term Incentive Plan the Company awarded
      certain employees 350,000 stock options with an exercise price of $1.00 and
      a
      term of 5 years. All of the options issued were fully vested on the grant date.
      The Company has recognized $607,705 of expense related to issuances in the
      Consolidated Statement of Operations for the three and six month periods ended
      December 31, 2007.





*Determining
      Fair-Value*




The
      Company uses the Black-Scholes option valuation model to determine the fair
      value of stock options and employee stock purchase plan shares. The
      determination of the fair value of share-based payment awards on the date of
      grant using an option-valuation
      model is affected by the Company’s stock price as well as assumptions regarding
      a number of complex variables. These variables include the Company’s expected
      stock price volatility over the term of the awards, projected employee stock
      option exercise behavior, expected risk-free interest rate and expected
      dividends.




F-7





**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**




The
      Company estimates the expected term and volatility of options granted based
      on
      values derived from its industry peer group. Our decision to use these measures
      of expected term and volatility was based upon the lack of availability of
      actively traded options in the Company’s own common stock and the Company’s
      assessment that the peer group measure of volatility is more representative
      of
      future stock price trends than the Company’s historical volatility. The Company
      bases the risk-free interest rate for option valuation on Constant Maturity
      Rates provided by the U.S. Treasury with remaining terms similar to the expected
      term of the options. The Company does not anticipate paying any cash dividends
      in the foreseeable future and therefore uses an expected dividend yield of
      zero
      in the option valuation model. In addition, SFAS No. 123(R) requires
      forfeitures of share-based awards to be estimated at the time of grant and
      revised, if necessary, in subsequent periods if actual forfeitures differ from
      those estimates. As this is the Company’s initial issuance and no historical
      data exists to estimate pre-vesting option forfeitures the Company has recorded
      stock-based compensation expense for the all the awards vested. The Company
      uses
      the straight-line attribution as its expensing method of the value of
      share-based compensation for options and awards.




Under
      SFAS No. 123(R) the Company uses the Black-Scholes option valuation model
      to estimate the fair value of the Company’s option awards. The key assumptions
      used in the model during the three and six month periods ended December 31,
      2007
      are provided below:


**December
                  31,****2007**Risk-free
                  interest rate
              
              
              5.00
              %Expected
                  volatility of stock
              
              
              122.95
              %Dividend
                  yield
              
              
              -Expected
                  option life
              
              
              2
                  years
  F-8


***Stock
      Options and Warrants:***





The
      following table summarizes the activity related to all Company stock options
      and
      warrants for the three and six month periods ended December 31,
      2007:


**Weighted
                  Average****Exercise
                  Price**
              
              **Exercise
                  Price****Stock**
              
              **Per
                  Share**
              
              **Per
                  Share****Warrants**
              
              **Options**
              
              **Warrants**
              
              **Options**
              
              **Warrants**
              
              **Options****Outstanding
                  at June 30, 2007**
              
              
              **9,004,000**
              
              
              **-**
              
              **$**
              **1.00-$3.75**
              
              $
              -
              
              $
              2.13
              
              $
              -Granted
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Exercised
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Cancelled
                  or expired
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Outstanding
                  at September 30, 2007**
              
              
              **9,004,000**
              
              
              **-**
              
              **$**
              **1.00-$3.75**
              
              
              **-**
              
              $
              2.13
              
              
              **-**Granted
              
              
              30,052,171
              
              
              350,000
              
              $
              .75-$2.00
              
              $
              1.00
              
              $
              1.72
              
              $
              1.00Exercised
              
              
              -
              
              
              (50,000
              )
              
              -
              
              $
              (1.00
              )
              
              -
              
              $
              (1.00
              )Cancelled
                  or expired
              
              
              (6,960,000
              )
              
              -
              
              $
              1.50-$3.75
              
              
              -
              
              $
              (2.33
              )
              
              -**Outstanding
                  at December 31, 2007**
              
              
              **32,096,171**
              
              
              **300,000**
              
              **$**
              **1.00-$3.75**
              
              $
              1.00
              
              $
              1.70
              
              $
              1.00**Exercisable
                  at December 31, 2007**
              
              
              **32,096,171**
              
              
              **300,000**
              
              **$**
              **1.00-$3.75**
              
              $
              1.00
              
              $
              1.70
              
              $
              1.00




The
      warrants and options expire at various dates ranging from April 2010 through
      October 2017.





***Net
      Loss Per Share******-***The
      Company uses SFAS No. 128, “*Earnings
      Per Share*”
for
      calculating the basic and diluted loss per share. Basic loss per share is
      computed by dividing net loss and net loss attributable to common shareholders
      by the weighted average number of common shares outstanding. Diluted loss per
      share is computed similar to basic loss per share except that the denominator
      is
      increased to include the number of additional common shares that would have
      been
      outstanding if the potential shares had been issued and if the additional shares
      were dilutive. Common equivalent shares are excluded from the computation of
      net
      loss per share if they would be anti-dilutive.




F-9




**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**


**For
                  the period
                  from****For
                  the**
              
              **August
                  21, 2006****For
                  the three month period**
              
              **six
                  month**
              
              **(inception)****December
                  31,**
              
              **period
                  ended**
              
              **to****2007**
              
              **2006**
              
              **December
                  31, 2007**
              
              **December
                  31, 2006****Net
                  income available to common shareholders**
              
              **$**
              **12,696,914**
              
              
              **($415,532**
              **)**
              **$**
              **14,198,970**
              
              
              **($418,244**
              **)**Weighted
                  average shares outstanding:Basic
              
              
              14,011,233
              
              
              9,613,571
              
              
              14,005,586
              
              
              8,040,738Diluted
              
              
              40,697,995
              
              
              9,613,571
              
              
              40,753,928
              
              
              8,040,738**Earnings
                  per share:****Basic**
              
              **$**
              **0.91**
              
              
              **($0.04**
              **)**
              **$**
              **1.01**
              
              
              **($0.05**
              **)****Diluted***
              
              **$**
              **0.31**
              
              
              **($0.04**
              **)**
              **$**
              **0.35**
              
              
              **($0.05**
              **)**




F-10





Below
      is
      a detailed list of the Company’s common stock equivalents:


**Exercise**
              
              **Common
                      Stock Equivalents**
                      **as
                        of**
                      **December
                        31,****Securities**
              
              **Price**
              
              **2007**
              
              **2006*****Preferred:***Series
                  A Preferred
              
              
              
              -
              
              3,000,000Series
                  C Preferred
              
              
              
              13,746,085
              
              -***Warrants:***Class
                  A-1 Warrants
              
              $
              1.50
              
              
              -
              
              
              3,000,000Class
                  A-2 Warrants
              
              $
              3.00
              
              
              -
              
              
              3,000,000Class
                  BD-1 Warrants
              
              $
              1.00
              
              
              300,000
              
              
              300,000Class
                  BD-2 Warrants
              
              $
              1.50
              
              
              300,000
              
              
              300,000Class
                  BD-3 Warrants
              
              $
              3.00
              
              
              300,000
              
              
              300,000Class
                  BD-1 Warrants
              
              $
              1.87
              
              
              48,000
              
              
              -Class
                  BD-2 Warrants
              
              $
              3.75
              
              
              48,000
              
              
              -Class
                  BD-3 Warrants
              
              $
              1.25
              
              
              48,000
              
              
              -Class
                  C-1 Warrants
              
              $
              1.50
              
              
              13,746,086
              
              
              -Class
                  C-2 Warrants
              
              $
              2.00
              
              
              13,746,086
              
              
              -Class
                  BD-7 Warrants
              
              $
              0.75
              
              
              853,333
              
              
              -Class
                  BD-8 Warrants
              
              $
              1.50
              
              
              853,333
              
              
              -Class
                  BD-9 Warrants
              
              $
              2.00
              
              
              853,333
              
              
              -Warrant
                  issued to consultants
              
              
              
              
              
              1,000,000
              
              
              -***Options***Employee
                  stock options
              
              $
              1.00
              
              
              300,000
              
              
              -Total
                  common stock equivalent shares
              
              
              
              
              
              46,142,256
              
              
              9,900,000
  F-11




**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**


***Recent
      Accounting Pronouncements***





In
      June
      2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in
      -Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48"), which
      clarifies the accounting for uncertainty in income taxes. FIN 48 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. The Interpretation requires that the Company recognize in the
      financial statements the impact of tax position, if that position is more likely
      than not of being sustained on audit, based on the technical merits of the
      position. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties, accounting in interim periods and disclosure. The
      provisions of FIN 48 are effective for fiscal years beginning after December
      15,
      2006 with the cumulative effect of the change in accounting principle recorded
      as an adjustment to beginning retained earnings. The adoption of this statement
      is not expected to have a material impact on the Company's consolidated
      financial position or results of operations.





In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
      standard defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. This statement is effective for financial statements issued
      for fiscal years beginning after November 15, 2007. Earlier application is
      encouraged. The adoption of this accounting pronouncement is not expected to
      have a material effect on our consolidated financial statements.




In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* .
      SFAS
      No. 159 permits entities to choose to measure many financial instruments and
      certain other items at fair value. SFAS No. 159 will be effective at the
      beginning of fiscal year 2008. We are presently evaluating the impact of the
      adoption of SFAS No. 159 on our results of operations and financial
      position.




In
      September 2006, the Securities and Exchange Commission issued SAB No. 108
      "Considering the Effects of Prior Year Misstatements When Quantifying
      Misstatements in Current Year Financial Statements", which provides interpretive
      guidance on how the effects of the carryover or reversal of prior year
      misstatements should be considered in quantifying a current year misstatement.
      The guidance is applicable beginning fiscal 2008. The Company does not believe
      SAB No. 108 will have a material impact on the consolidated financial
      statements.





**NOTE
      3 - COMMITMENTS AND CONTINGENCIES**





***Licensing
      Agreement*** *-* On
      October 13, 2006, the Company entered into an agreement with a related party.
      This agreement was subsequently amended on November 20, 2006 and again on
      October 12, 2007. On November 20, 2006 the Licensing Agreement was amended
      to
      change the date of the first annual Guaranteed Minimum Royalty payment from
      thirty (30) days following the effective date to January 3, 2007. In addition,
      the amendment revised subsequent payments to occur on January 1 st and July
      1 st of each
      annual period.




F-12





Under
      the
      terms of the Licensing Agreement the Company obtained the exclusive right and
      license to certain licensed products through December 31, 2011 with an option
      to
      renew for an additional five year period provided all the minimum royalty
      payments have been paid during the initial term. In consideration of the license
      granted and the services to be performed, the Company will compensate the other
      party an annual guaranteed minimum (payable semi-annually) royalty as
      follows:




**Annual**
            
            
            
            **Minimum****Period**
            
            **Dates**
            
            **Royalty**1
            
            Effective
              Date to 6/30/08
            
            $
            1,000,0002
            
            7/1/08
              to 6/30/09
            
            $
            1,000,0003
            
            7/1/09
              to 6/30/10
            
            $
            1,000,0004
            
            7/1/10
              to 6/30/11
            
            $
            1,000,0005
            
            7/1/11
              to 6/30/12
            
            $
            1,000,0006
            
            7/1/12
              to 6/30/17
            
            $
            1,500,000





In
      addition to the minimum royalty payment the Company will also compensate the
      other party a sales royalty of eight percent (8%) on each annual period's net
      sales made in all venues other than infomercials; a minimum of three percent
      (3%) on each annual period's net sales made through infomercials and four
      percent (4%) should the revenues exceed media expenditures by a three to one
      media ratio. The sales royalty is payable on a quarterly basis within forty-five
      (45) days after the close of the prior quarter's sales. The payment of sales
      royalties are credited against the guaranteed minimum royalty payment for any
      annual period.





In
      addition to the sales royalties and guaranteed minimum royalties being paid
      the
      Company also delivered three million (3,000,000) shares of the Company's common
      stock, which represented 25% of the issued and outstanding common stock on
      that
      date.




F-13





**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**





On
      November 22, 2006 the Company made a payment of $850,000 pursuant to this
      agreement. On
      January 10, 2007 the Company made an additional payment of $150,000 pursuant
      to
      the licensing agreement. The payment was the final payment of the $1,000,000
      initial installment due under the agreement.





On
      October 19, 2007, our wholly-owned subsidiary OmniReliant Corp. ("ORC") entered
      into and closed a share exchange agreement with ResponzeTV (the "Exchange
      Agreement"). Pursuant to the terms of the Exchange Agreement, ResponzeTV
      acquired all of the issued and outstanding shares of capital stock of KHL
      Holdings, Inc., a newly formed Florida corporation and wholly-owned subsidiary
      of ORC ("KHL"), in exchange for 9,500,000 ordinary shares of stock of
      ResponzeTV. On October 12, 2007, ORC entered into an exclusive sublicense
      agreement with KHL, pursuant to which ORC granted KHL the exclusive right and
      license to our rights to use the Kathy Hilton Trademark and to sell products
      bearing the Kathy Hilton Trademark exclusive of fragrance. The initial term
      of
      this sublicense agreement shall terminate on June 30, 2012. ORC shall have
      the
      option to renew this Agreement for an additional five year period. Kevin
      Harrington and Tim Harrington, who are directors of the Company, are officers
      and directors of ResponzeTV.





Pursuant
      to the exchange of the sublicense agreement and corresponding inventory the
      Company reduced the net book value of the license agreement and inventory by
      $198,914 and $130,000, respectively.





For
      the
      three month and six month periods ended December 31, 2007 the Company recognized
      expense related to this agreement of $77,708, and $215,785,
      respectively.




**NOTE
      4 - EQUITY TRANSACTIONS**





***Series
      A Convertible Preferred Stock Purchase Agreement*** *-* On
      November 22, 2006 in conjunction with the Common Stock Purchase Agreement and
      Exchange Agreement the Company entered into a Preferred Stock Purchase Agreement
      with an investor, pursuant to which the investor purchased 3,000 shares of
      the
      Company's Series A 10% Convertible Preferred stock, 3,000,000 Series A-1
      warrants, and 3,000,000 series A-2 common stock purchase warrants for an
      aggregate purchase price of $3,000,000.





The
      Preferred Stock has a fixed conversion price of $1.00 and is convertible into
      an
      aggregate of 3,000,000 shares of common stock. The series A-1 warrants have
      an
      exercise price of $1.50 and a term of five (5) years. The series A-2 warrants
      have an exercise price of $3.00 and a term of ten (10) years.





Midtown
      Partners LLC, which served as the Company's placement agent in connection with
      the Preferred Stock Purchase Agreement, received an aggregate placement agent
      fee of approximately $300,000, as well as the following common stock purchase
      warrants: (a) series BD-1 common stock purchase warrants entitling Midtown
      Partners to purchase 300,000 shares of the Company's common stock at an exercise
      price of one dollar ($1.00) per share, (b) series BD-2 common stock purchase
      warrants entitling Midtown Partners to purchase 300,000 shares of the Company's
      common stock at an exercise price of one dollar and fifty cents ($1.50) per
      share, and (c) series BD-3 common stock purchase warrants entitling Midtown
      Partners to purchase 300,000 shares of the Company's common stock at an exercise
      price of three dollars ($3.00) per share. The Series BD warrants have a term
      of
      ten years. Midtown Partners, LLC is an NASD registered broker-dealer. The
      members of Midtown Partners, LLC are also shareholders of the
      Company.





The
      market value of the Company’s common stock on the date the Series A Convertible
      Preferred was issued and sold was $3.50 per share. In accordance with EITF
      Issue
      98-5 “Accounting for Convertible Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios”, as amended by EITF 00-27
“Application of Issue No. 98-5 to certain Convertible Instruments”, the Company
      evaluated the Series A Convertible Preferred stock and determined it had a
      beneficial conversion feature. Pursuant to EITF 98-5 and EITF 00-27 a beneficial
      conversion feature occurs when the conversion price of a security is less than
      the fair value of the Company's common stock on the measurement date. The
      Company calculated the effect of EITF 00-27 and EITF 98-5 on the issuance and
      determined on a relative fair value basis that, of the $3,000,000 raised,
      $2,389,849 was attributable to the beneficial conversion feature of the warrants
      and $610,151 was attributable to the beneficial conversion feature of the Series
      A Convertible Preferred Stock. As a result, on the date of issuance the Company
      adjusted its balance sheet to reduce the value of the Series A Convertible
      Preferred stock by $610,151 and the warrants by $2,389,849 and increased
      additional paid-in capital by $3,000,000. The Company used the Black-Scholes
      model to value the Series A-1 Common Stock Purchase warrants and Series A-2
      Common Stock Purchase warrants. For purposes of calculating the fair value
      of
      the warrants the Company used a risk free rate of return of 4.63%, an expected
      term of 2 years, and an expected volatility percentage of 23.6%.




F-14




**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**





In
      accordance with EITF 98-5 and EITF 00-27 the intrinsic value of the beneficial
      conversion feature is considered a deemed dividend to the preferred shareholders
      and is to be amortized over the period of the security’s earliest conversion
      date. As a result, the beneficial conversion feature for the securities was
      recognized immediately as all securities were convertible, at the option of
      the
      holder, upon issuance. To amortize the beneficial conversion feature the Company
      reduced the additional paid in capital account and increased the Series A
      Preferred Convertible Stock for the amount of deemed dividend. During the year
      ended June 30, 2007 the Company recognized a deemed dividend related to the
      Series A Preferred Convertible Stock and warrants of $610,151 and $2,389,849,
      respectively. As a result of the Series C Preferred financing and the retirement
      of the Series A Preferred, as discussed below, the Company reversed the effects
      of the deemed dividend during the three and six month periods ended December
      31,
      2007





The
      Company’s Series A preferred contained certain rights and preferences which
      could have required the Company to redeem the shares for cash. Therefore, the
      preferred stock was considered to have an embedded conversion feature under
      SFAS
      No. 133 which required separate accounting. Consequently, the conversion
      feature was bifurcated from the preferred stock. The carrying value of the
      embedded derivative was adjusted to fair value at the end of each reporting
      period and the change in fair value was recognized in the statement of
      operations. At each balance sheet date, we adjusted the carrying value of the
      embedded derivative to the estimated fair value and recognized the change in
      such estimated value in our consolidated statements of operations. The Company
      classified the redeemable convertible preferred stock as a liability on the
      consolidated balance sheet. As a result of the Series C Preferred offering,
      discussed below, the Series A Preferred was retired on October 18, 2007. The
      Company has recognized a gain on the retirement of the Series A Preferred of
      $8,803,109 and $9,227,868 for the three and six month periods ended December
      31,
      2007, respectively. The gains represent the aggregate change in the fair value
      of the Series A Preferred which the Company has previously reported as
      losses.





In
      addition, the warrants issued as part of the Series A preferred financing were
      considered a liability under EITF 00-19 due to certain cash clauses contained
      in
      the registration rights agreement. As such, in accordance with EITF
      00-19, the warrants were recorded as a liability and measured at fair value
      at
      each balance sheet date, with the change in its fair value reported in the
      consolidated statement of operations. As a result of the Series C Preferred
      offering, discussed below, the warrants issued as part of the Series A Preferred
      offering was retired on October 18, 2007. The Company has recognized a gain
      on
      the retirement of the warrants of $7,637,593 and $9,251,236 for the three and
      six month periods ended December 31, 2007, respectively. The gains represent
      the
      aggregate change in the fair value of the warrants which the Company has
      previously reported as losses.





***Series
      B Convertible Preferred Stock Purchase Agreement*** *-* On
      May
      25, 2007, the Company entered into the Preferred Stock Purchase Agreement with
      an investor, pursuant to which the Investor purchased 600 shares of the
      Company’s series B 10% convertible preferred stock, 480,000 Series B-1 warrants,
      and 480,000 series B-2 common stock purchase warrants for an aggregate purchase
      price of $600,000.





The
      series B-1 warrants have an exercise price of $1.87 and a term of three (3)
      years. The series B-2 warrants have an exercise price of $3.75 and a term of
      five (5) years.





Midtown
      Partners LLC, which served as the Company’s placement agent in connection with
      the Preferred Stock Purchase Agreement, received an aggregate placement agent
      fee of approximately $60,000, as well as the following common stock purchase
      warrants: (a) series BD-1 common stock purchase warrants entitling Midtown
      Partners to purchase 48,000 shares of the Company's common stock at an exercise
      price of one dollar and eighty-seven cents ($1.87) per share, and (b) series
      BD-2 common stock purchase warrants entitling Midtown Partners to purchase
      48,000 shares of the Company's common stock at an exercise price of three
      dollars and seventy-five cents ($3.75) per share and (c) series BD-3 common
      stock purchase warrants entitling Midtown Partners to purchase 48,000 shares
      of
      the Company's common stock at an exercise price of one dollar and twenty five
      cents ($1.25) per share. The Series BD warrants have a term of ten years.
      Midtown Partners, LLC is an NASD registered broker-dealer. The
      members of Midtown Partners, LLC are also shareholders of the
      Company.





The
      market value of the Company’s common stock on the date the Series B Convertible
      Preferred was issued and sold was $3.50 per share. In accordance with EITF
      Issue
      98-5 “Accounting for Convertible Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios”, as amended by EITF 00-27
“Application of Issue No. 98-5 to certain Convertible Instruments”, the Company
      evaluated the Series B Convertible Preferred stock and determined it had a
      beneficial conversion feature. Pursuant to EITF 98-5 and EITF 00-27 a beneficial
      conversion feature occurs when the conversion price of a security is less than
      the fair value of the Company's common stock on the measurement date. The
      Company calculated the effect of EITF 00-27 and EITF 98-5 on the issuance and
      determined on a relative fair value basis that, of the $600,000 raised, $376,906
      was attributable to the beneficial conversion feature of the warrants and
      $220,094 was attributable to the beneficial conversion feature of the Series
      B
      Convertible Preferred Stock. As a result, on the date of issuance the Company
      adjusted its balance sheet to reduce the value of the Series B Convertible
      Preferred stock by $220,094 and the warrants by $376,906 and increased
      additional paid-in capital by $600,000. The Company used the Black-Scholes
      model
      to value the Series B-1 Common Stock Purchase warrants and Series B-2 Common
      Stock Purchase warrants. For purposes of calculating the fair value of the
      warrants the Company used a risk free rate of return of 4.63%, an expected
      term
      of 2 years, and an expected volatility percentage of 23.6%.




F-15





**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**





In
      accordance with EITF 98-5 and EITF 00-27 the intrinsic value of the beneficial
      conversion feature is considered a deemed dividend to the preferred shareholders
      and is to be amortized over the period of the security’s earliest conversion
      date. As a result, the beneficial conversion feature for the securities was
      recognized immediately as all securities were convertible, at the option of
      the
      holder, upon issuance. To amortize the beneficial conversion feature the Company
      reduced the additional paid in capital account and increased the Series B
      Preferred Convertible Stock for the amount of deemed dividend. During the year
      ended June 30, 2007 the Company recognized a deemed dividend related to the
      Series B Preferred Convertible Stock and warrants of $220,094 and $376,906,
      respectively. As a result of the Series C Preferred financing and the retirement
      of the Series B Preferred, as discussed below, the Company reversed the effects
      of the deemed dividend during the three and six month periods ended December
      31,
      2007





The
      Company’s Series B preferred contains certain rights and preferences which could
      require the Company to redeem the shares for cash. Therefore, the preferred
      stock is considered to have an embedded conversion feature under SFAS
      No. 133. Consequently, the conversion feature must be bifurcated from the
      preferred stock and accounted for separately. The carrying value of the embedded
      derivative is adjusted to fair value at the end of each reporting period and
      the
      change in fair value is recognized in the statement of operations. At each
      balance sheet date, we adjust the carrying value of the embedded derivative
      to
      estimated fair value and recognize the change in such estimated value in our
      consolidated statements of operations. The Company classifies the redeemable
      convertible preferred stock as a liability on the consolidated balance sheet.
      As
      a result of the Series C Preferred offering, discussed below, the Series B
      Preferred was retired on October 18, 2007. The Company has recognized a gain
      on
      the retirement of the Series B Preferred of $1,128,835 and $1,173,004 for the
      three and six month periods ended December 31, 2007, respectively. The gains
      represent the aggregate change in the fair value of the Series B Preferred
      which
      the Company has previously reported as losses.





In
      addition, the warrants issued as part of the Series B preferred financing were
      considered a liability under EITF 00-19 due to certain cash clauses contained
      in
      the registration rights agreement. As such, in accordance with EITF 00-19,
      the
      warrants were recorded as a liability and measured at fair value at each balance
      sheet date, with the change in its fair value reported in the consolidated
      statement of operations. As a result of the Series C Preferred offering,
      discussed below, the warrants issued as part of the Series B Preferred offering
      was retired on October 18, 2007. The Company has recognized a gain on the
      retirement of the warrants of $278,205 and $505,391 for the three and six month
      periods ended December 31, 2007, respectively. The gains represent the aggregate
      change in the fair value of the warrants which the Company has previously
      reported as losses.




***Convertible
      Preferred Dividends*** *-* Holders
      of the Company’s Series A and B Convertible Preferred Stock were entitled to
      receive cumulative dividends at the rate per share of 10% per annum, payable
      quarterly on January 1, April 1, July 1 and October 1. The form of the dividend
      payment could be paid in either cash or stock dependant on certain conditions
      being met. During the three month period ended December 31, 2007 the Company
      accrued $18,126 of dividends payable to Series A and B Preferred shareholders.
      Prior to the Series C Preferred financing, as discussed below, the Company
      had
      accrued dividends related to the Series A and B Preferred shares of $309,564.
      In
      exchange for the accrued dividends the Series A and B Preferred shareholders
      received additional shares of Series C Preferred stock.




***Financing
      Penalties*** *-* In
      connection with the Series A and B Preferred financing agreements, the Company
      and the Investors entered into a registration rights agreement pursuant to
      which
      the Company agreed to file a registration statement covering the common stock
      issuable upon conversion of the Preferred Stock and exercise of the Warrants.
      Failure by the Company to meet certain filing deadlines related to the
      registration rights agreement would result in the imposition of liquidated
      damages penalties. Prior to the Series C Preferred financing, as discussed
      below, the Company had accrued liquidated damage penalties of $542,080. Pursuant
      to the Series C Preferred financing the Series A and B investors waived the
      liquidated damages penalties due. Accordingly, the Company recognized a gain
      on
      the extinguishment of debt for the three and six month periods ended December
      31, 2007 of $542,080 and $232,943, respectively.




***Series
      C Convertible Preferred Stock Purchase Agreement-*** On
      October 18, 2007, the Company entered into securities purchase agreements (the
      "Purchase Agreements") with Vicis Capital Master Fund ("Vicis") and Dynamic
      Decisions Strategic Opportunities ("Dynamic Decisions") pursuant to which Vicis
      and Dynamic Decisions purchased 6,000,000 and 400,000, shares of our series
      C
      convertible preferred stock ("Series C Preferred Stock"), respectively for
      an
      aggregate purchase price of $6,400,000. In connection with the purchase of
      the
      Series C Preferred Stock, Vicis and Dynamic Decisions received an aggregate
      amount of 16,000,000 and 1,066,668 common stock purchase warrants, respectively.
      Vicis and Dynamic Decisions received a Series C-1 warrant to purchase 8,000,000
      and 533,334 shares of common stock, respectively, at an exercise price of $1.50
      (the "C-1 Warrant") as well as a Series C-2 warrant to purchase 8,000,000 and
      533,334 shares of common stock, respectively, at an exercise price of $2.00
      (the
      "C-2 Warrant"). The C-1 Warrant shall be valid for five years from the date
      of
      issuance and the C-2 Warrant shall be valid for ten years from the date of
      issuance. The Series C Preferred Stock has a conversion price of $0.75 and
      is
      convertible into an aggregate amount of 8,000,000 and 533,334 shares of common
      stock, respectively. The Series C Preferred stock does not pay annual dividends
      but each holder of Series C Preferred Stock shall have the right to such number
      of votes equal to the number of shares of common stock that the Series C
      Preferred Stock shall be converted into. Furthermore, pursuant to the terms
      of
      the Purchase Agreements, Vicis and Dynamic Decisions exchanged their 3,000
      shares of series A preferred stock and 600 shares of series B preferred stock,
      respectively, for 3,285,354 and 624,210 shares of Series C Preferred Stock,
      respectively.




F-16





**OMNIRELIANT
      HOLDINGS, INC. & SUBSIDIARY**


**(A
      Development Stage Company)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(unaudited)**




In
      connection with the Purchase Agreements, Vicis and Dynamic Decisions received
      a
      Series C-1 Warrant to purchase 4,380,472 and 832,280 shares of common stock,
      respectively and a series C-2 Warrant to purchase 4,380,472 and 832,280 and
      shares of common stock, respectively. The Series C-1 Warrant and the Series
      C-2
      Warrant shall have an exercise price of $1.50 and $2.00, respectively, and
      shall
      be valid for five year and ten years from the date of issuance, respectively.





Midtown
      Partners & Co., LLC, which served as the Company's placement agent in
      connection with the Purchase Agreements, received aggregate placement agent
      fees
      of approximately $340,000, as well as the following common stock purchase
      warrants: (a) series BD-7 common stock purchase warrants entitling Midtown
      Partners to purchase 853,333 shares of the Company's common stock at an exercise
      price of seventy-five cents ($0.75) per share, and (b) series BD-8 common stock
      purchase warrants entitling Midtown Partners to purchase 853,333 shares of
      the
      Company's common stock at an exercise price of one dollar and fifty cents
      ($1.50) per share and (c) series BD-9 common stock purchase warrants entitling
      Midtown Partners to purchase 853,333 shares of the Company's common stock at
      an
      exercise price of two dollars ($2.00) per share. The Series BD warrants have
      a
      term of ten years. Midtown Partners & Co., LLC is a FINRA registered
      broker-dealer. Chris Phillips, who is the Company's CEO, CFO, Secretary,
      Treasurer and a director, is also the Manager and sole member of FAMALOM, LLC
      which is a 50% owner of Apogee Financial Investments, Inc., a merchant bank
      ("Apogee"). Apogee owns 100% of Midtown Partners & Co., LLC, a FINRA
      licensed broker-dealer.





The
      market value of the Company’s common stock on the date the Series A Convertible
      Preferred was issued and sold was $2.60 per share. In accordance with EITF
      Issue
      98-5 “Accounting for Convertible Securities with Beneficial Conversion Features
      or Contingently Adjustable Conversion Ratios”, as amended by EITF 00-27
“Application of Issue No. 98-5 to certain Convertible Instruments”, the Company
      evaluated the Series A Convertible Preferred stock and determined it had a
      beneficial conversion feature. Pursuant to EITF 98-5 and EITF 00-27 a beneficial
      conversion feature occurs when the conversion price of a security is less than
      the fair value of the Company's common stock on the measurement date. The
      Company calculated the effect of EITF 00-27 and EITF 98-5 on the issuance and
      determined on a relative fair value basis that, of the $10,309,564 raised,
      $4,270,467 was attributable to the beneficial conversion feature of the Series
      C
      Preferred and $6,039,097 was attributable to the warrants. As a result, on
      the
      date of issuance the Company adjusted its balance sheet to reduce the value
      of
      the Series C Convertible Preferred stock by $4,270,467 and increased additional
      paid-in capital by $4,270,467. The Company used the Black-Scholes model to
      value
      the Series C-1 Common Stock Purchase warrants and Series C-2 Common Stock
      Purchase warrants. For purposes of calculating the fair value of the warrants
      the Company used a risk free rate of return of 5.00%, an expected term of 2
      years, and an expected volatility percentage of 122.95%.





In
      accordance with EITF 98-5 and EITF 00-27 the intrinsic value of the beneficial
      conversion feature is considered a deemed dividend to the preferred shareholders
      and is to be amortized over the period of the security’s earliest conversion
      date. As a result, the beneficial conversion feature for the securities was
      recognized immediately as all securities were convertible, at the option of
      the
      holder, upon issuance. To amortize the beneficial conversion feature the Company
      reduced the additional paid in capital account and increased the Series C
      Preferred Convertible Stock for the amount of deemed dividend. During the three
      and six month periods ended December 31, 2007 the Company recognized a deemed
      dividend related to the Series C Preferred Convertible Stock and warrants of
      $4,270,467.





**NOTE
      5 - SUBSEQUENT EVENTS**





On
      January 23, 2008, Christopher Phillips resigned as interim chief executive
      officer and chief financial officer of OmniReliant Holdings, Inc. (the
“Company”), effective January 24, 2008. There was no disagreement or dispute
      between Mr. Phillips and the Company which led to his resignation.





On
      January 24, 2008, our Board of Directors appointed Paul Morrison as chief
      executive officer and director of the Company. There is no understanding or
      arrangement between Mr. Morrison and any other person pursuant to which Mr.
      Morrison was selected as an executive officer and director. Mr. Morrison
      presently does not serve on any committee of our Board of Directors. Mr.
      Morrison may be appointed to serve as a member of a committee although there
      are
      no current plans to appoint him to a committee as of the date hereof. Mr.
      Morrison does not have any family relationship with any director, executive
      officer or person nominated or chosen by us to become a director or an executive
      officer. Mr. Morrison has served as the Company’s President and Chief Operating
      Officer since November 22, 2006.





On
      January 24, 2008, the Company formally acquired the rights to a unique patented
      topical pharmaceutical product capable of delivering salicylic acid in a
      non-stick clear solid composition to treat acne. Omni Reliant will use the
      patented product to compliment the company’s patent pending warming foam acne
      treatment product.




F-17




**Item
      2. Management’s Discussion and Analysis and Plan of
      Operations**





**FORWARD
      LOOKING STATEMENTS**





Some
      of
      the statements contained in this Form 10-QSB that are not historical facts
      are
      "forward-looking statements" which can be identified by the use of terminology
      such as "estimates," "projects," "plans," "believes," "expects," "anticipates,"
      "intends," or the negative or other variations, or by discussions of strategy
      that involve risks and uncertainties. We urge you to be cautious of the
      forward-looking statements, that such statements, which are contained in this
      Form 10-QSB, reflect our current beliefs with respect to future events and
      involve known and unknown risks, uncertainties and other factors affecting
      our
      operations, market growth, services, products and licenses. No assurances can
      be
      given regarding the achievement of future results, as actual results may differ
      materially as a result of the risks we face, and actual events may differ from
      the assumptions underlying the statements that have been made regarding
      anticipated events. Factors that may cause actual results, our performance
      or
      achievements, or industry results, to differ materially from those contemplated
      by such forward-looking statements include without limitation:





1.
      Our
      ability to attract and retain management, and to integrate and maintain
      technical information and management information systems;




2.
      Our
      ability to generate customer demand for our services;




3.
      The
      intensity of competition; and




4.
      General economic conditions.




All
      written and oral forward-looking statements made in connection with this Form
      10-QSB that are attributable to us or persons acting on our behalf are expressly
      qualified in their entirety by these cautionary statements. Given the
      uncertainties that surround such statements, you are cautioned not to place
      undue reliance on such forward-looking statements.





**Reverse
      Acquisition**





OmniReliant
      Corporation was incorporated on August 21, 2006 under the laws of the State
      of
      Florida. On November 22, 2006, Willowtree Advisor, Inc., an entity which was
      incorporated on June 16, 2004 under the laws of the State of Nevada, entered
      into an exchange agreement with the stockholders of OmniReliant Corporation
      (the
“Exchange Transaction”).





As
      a
      result of the Exchange Transaction, OmniReliant Corporation became a
      wholly-owned subsidiary of Willowtree Advisor, Inc. and succeeded to the
      business of OmniReliant Corporation as its sole business. The Exchange
      Transaction is deemed to be a reverse acquisition for accounting purposes.
      As a
      result, in accordance with the Accounting and Financial Reporting
      Interpretations and Guidance provided by the staff of the U.S. Securities and
      Exchange Commission, Willowtree Advisor, Inc. (the legal acquirer) is considered
      the accounting acquiree and OmniReliant Corporation (the legal acquiree) is
      considered the accounting acquirer. The discussions below, and the consolidated
      financial statements attached hereto, will in substance be those of OmniReliant
      Corporation, with the assets and liabilities, and revenues and expenses, of
      Willowtree Advisor, Inc. being included effective from the date of consummation
      of the Exchange Transaction.





**Plan
      of Operation - Development Stage Company**





The
      Company a development stage company with limited revenues and limited historical
      information upon which to base an evaluation of its performance.





The
      Company engages in the creation, design, distribution, and sale of affordable
      luxury products. The Company plans to make these products available to U.S.
      and
      international consumers through direct response infomercials, live shopping
      networks, ecommerce, direct mail and traditional retail channels.   The
      Company will first focus on bringing the Kathy Hilton fragrance product line
      to
      market, after which OmniReliant plans to develop other personalities and
      designer licenses. Ms. Hilton, who is the wife of Rick Hilton, the grandson
      of
      the Hilton Hotel founder, has agreed to appear in television segments and
      infomercials. We have entered into a license agreement with KRH Licensing
      Company, LLC, an affiliate of Rick and Kathy Hilton.





It
      is the
      Company’s intention to design, manufacture, market and distribute prestige
      fragrances and related products. In addition, the Company has an agreement
      to
      market and distribute hair straightening irons. The Company plans to engage
      contract packagers and professionals in the field. In the United States, our
      plan is to enter into agreements to distribute our products through a targeted
      group of department and specialty stores, such as Macy's, Foley's, Marshall
      Fields, Famous Barr, Belks, Elder Beerman, Carson Pirie Scott, and Filenes.
      In
      international markets, we plan to distribute our products through established
      prestige distribution channels. We hope to sell products under private label
      that have already reached its market entry point.





As
      a
      development stage company, we may not be successful in implementing our plan
      to
      manufacture, market and distribute prestige fragrances and related products.
      Until our products are successfully manufactured and marketed on a live shopping
      network or via infomercials, we will not generate significant revenues and
      may
      not be successful. If we can not generate sufficient revenues to continue
      operations, we will be forced to suspend or cease operations, and may forfeit
      our rights under license agreements.




1


We
      do not
      expect to make any significant purchases of equipment nor do we expect a
      significant change in the number of our employees.





Our
      officers and directors will handle our administrative duties with the help
      of a
      consultant, TotalCFO, LLC.





We
      cannot
      guarantee that we will be successful in our business operations. Our business
      is
      subject to risks inherent in the establishment of a new business
      enterprise.




**Results
      of Operations**





The
      following discussion of the financial condition and results of operations should
      be read in conjunction with the financial statements included herewith. This
      discussion should not be construed to imply that the results discussed herein
      will necessarily continue into the future, or that any conclusion reached herein
      will necessarily be indicative of actual operating results in the
      future.




***For
      the three months ended December 31, 2007 compared to the three months ended
      December 31, 2006***





***Net
      Revenues***  *.* We had
      revenues for the three months ended December 31, 2007 of $30,850 compared to
      the
      period three months ended December 31, 2006 which was $0. This increase of
      $30,830 is primarily the result of launching our product. If we are unable
      to
      implement our plan to manufacture, market and distribute our products, our
      revenues will not significantly increase during the upcoming fiscal
      year.





***Cost
      of Sales***  *.* Costs of
      Goods Sold for the three months ended December 31, 2007 was $11,453 compared
      to
      the period three months ended December 31, 2006 which was $0. This increase
      of
      $11,453 was primarily the result of the launching our product. If we are
      successful in implementing our plan to increase manufacturing and
      distribution of our products, our cost of goods sold will significantly increase
      during the upcoming fiscal year.





***Selling,
      General and Administrative Expenses*** *.* Our
      general and administrative expense consisted of accounting and professional
      fees, stock based compensation, and other general expenses. Our general and
      administrative expenses for the three months ended September 30, 2007 was
      $1,344,424 as compared to the period three months ended December 31, 2006 which
      was $415,532. This increase of $928,892 was primarily the result of stock based
      compensation valued at $1,057,705 being issued in the current
      quarter.




***Net
      Income (Loss) Available to Common Shareholders***





Net
      Income (Loss) for the three months ended December 31, 2007 was $16,985,508
      as
      compared to the period three months ended December 31, 2006 which was
      $(415,532). This increase of $17,401,040 is primarily the result of the gain
      recognized on the retirement of the Series A Preferred, Series B Preferred,
      and
      the corresponding warrants. The Company recognized a gain of $17,847,742 as
      a
      result of previous adjustments which were made in order to reflect the Series
      A
      Preferred, Series B Preferred, and the corresponding warrants at fair value.
      Additionally, the Company recognized a gain of $542,080 on the forgiveness
      of
      the liquidation penalties which had accrued prior to the retirement.





**Liquidity
      and Capital Resources**





Cash
      and
      cash equivalents were $868,153 as of December 31, 2007.





The
      Company has suffered recurring losses while devoting substantially all of its
      efforts to raising capital, identifying and pursuing businesses opportunities.
      Moreover, the Company's total liabilities exceed its total assets and the
      Company's liquidity is substantially dependent on raising capital.





Currently
      the Company does not generate revenues from its operations, and the Company
      will
      require additional cash to develop its business plan and to pay ongoing
      operating expenses, including licensing fees.





These
      factors raise substantial doubt about the Company's ability to continue as
      a
      going concern. The accompanying consolidated financial statements have been
      prepared on a going concern basis, which contemplates continuing operations,
      realization of assets and liquidation of liabilities in the ordinary course
      of
      business. The Company's ability to continue as a going concern is dependent
      upon
      its ability to raise sufficient capital to implement a successful business
      plan
      and to generate profits sufficient to become financially viable.




To
      the
      extent that it becomes necessary to raise additional cash in the future as
      our
      current cash and working capital resources are depleted, we will seek to raise
      it through the public or private sale of debt or equity securities, the
      procurement of advances on contracts or licenses, funding from joint-venture
      or
      strategic partners, debt financing or short-term loans, or a combination of
      the
      foregoing. We also may seek to satisfy indebtedness without any cash outlay
      through the private issuance of debt or equity securities.





We
      have
      no assurance that future financings will be available to us on acceptable terms.
      If financing is not available to us on acceptable terms, we may be unable to
      continue our operations.




2





**Critical
      Accounting Policies**





***Revenue
      Recognition --*** Revenue
      is recognized when the product is shipped to a customer, or in the limited
      circumstances, at destination, when terms provide that title passes at
      destination. Estimated amounts for sales returns and allowances are recorded
      at
      the time of sale.





***Comprehensive
      Income (Loss)*** **-** The
      Company presents comprehensive income (loss) in accordance with Statement of
      Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
      130"). SFAS 130 states that all items that are required to be recognized under
      accounting standards as components of comprehensive income (loss) be reported
      in
      the financial statements. For the three and six month periods ended December
      31,
      2007 the only components of comprehensive income (loss) were the net income
      (loss) for the periods, the foreign currency translation adjustments on
      investments held for sale, and change in fair market value of investments held
      for sale.





***Foreign
      Currency*** **-** As
      of
      December 31, 2007, the Company held investments which were considered available
      for sale and were denominated in Pence Sterling (“GBX”). The Company’s
      functional currency is the U.S. dollar and the consolidated financial statements
      are presented in the United States dollars (“USD). In accordance with Statement
      of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency
      Translation”, the investments were translated at the exchange rate on the
      balance sheet date. The resulting foreign currency translation adjustments
      are
      reported under other comprehensive income in accordance with SFAS No. 130,
      “Reporting Comprehensive Income.” For the three and six month periods ending
      December 31, 2007 the Company reported a foreign currency translation loss
      of
      ($322,575).





***Marketable
      Securities -*** The
      Company accounts for its marketable securities in accordance with Statement
      of
      Financial Accounting Standards No. 115, *“Accounting
      for Certain Investments in Debt and Equity Securities”* (“SFAS
      No. 115”) and classifies marketable securities as trading,
      available-for-sale, or held-to-maturity. The Company’s investment in ResponseTV,
      which is traded on the AIM Market of the London Stock Exchange (RETV), is
      classified as current available-for-sale securities. The securities are valued
      at fair value each balance sheet date with the changes reported in other
      comprehensive income.





***Use
      of Estimates*** - The
      process of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America requires the
      use
      of estimates and assumptions regarding certain types of assets, liabilities,
      revenues, and expenses. Such estimates primarily relate to unsettled
      transactions and events as of the date of the financial statements. Accordingly,
      upon settlement, actual results may differ from estimated amounts.





***Merchandise
      Inventories -*** Merchandise
      inventories are recorded at the lower of average cost or market. In-bound
      freight-related costs from our vendors are included as part of the net cost
      of
      merchandise inventories. Other costs associated with acquiring, storing and
      transporting merchandise inventories are expensed as incurred and included
      in
      cost of goods sold. As part of the sublicense agreement discussed above
      (“ *Marketable
      Securities”* ),
      the
      Company transferred $130,000 of merchandise inventory to
      ResponseTV.





***Trademarks
      and licenses --*** Indefinite-lived intangible assets are reviewed annually for impairment under
      the provisions of Statement of Financial Accounting Standards (“SFAS”)
      No. 142, Goodwill and Other Intangible Assets, during the Company's fourth
      quarter of each fiscal year, or sooner, if events indicate a potential
      impairment. The identification and measurement of impairment of indefinite-lived
      intangible assets involves the estimation of the fair value of the related
      asset. The estimates of fair value are based on the best information available
      as of the date of the assessment, which primarily incorporates management
      assumptions about discounted expected future cash flows. Future cash flows
      can
      be affected by changes in industry or market conditions.





***Stock
      Based Compensation -*** In
      December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
      Payment". SFAS 123(R) will provide investors and other users of financial
      statements with more complete and neutral financial information by requiring
      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. SFAS 123(R) covers 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. SFAS 123(R) replaces FASB Statement No. 123,
      "Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25,
      "Accounting for Stock Issued to Employees". SFAS 123, as originally issued
      in
      1995, established as preferable a fair-value-based method of accounting for
      share-based payment transactions with employees. However, that statement
      permitted entities the option of continuing to apply the guidance in Opinion
      25,
      as long as the footnotes to financial statements disclosed what net income
      would
      have been had the preferable fair-value-based method been used. Public entities
      (other than those filing as small business issuers) were required to apply
      SFAS
      123(R) as of the first interim or annual reporting period that begins after
      June
      15, 2005. For public entities that file as small business issuers, SFAS 123(R)
      was applicable as of the beginning of the first interim or annual reporting
      period that begins after December 15, 2005.





Prior
      to
      January 1, 2006, the Company accounted for Stock Options and Stock Based
      Compensation under the recognition and measurement provisions of APB Opinion
      No.
      25, “Accounting for Stock Issued to Employees”, and related Interpretations, as
      permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation”.
      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 that transition method,
      compensation cost for all share-based payments granted prior to, but not yet
      vested as of January 1, 2006 are based on (a) the grant date fair value
      estimated in accordance with the original provisions of SFAS No. 123, and (b)
      compensation cost for all share-based payments granted subsequent to January
      1,
      2006 are based on the grant-date fair value estimated in accordance with the
      provisions of SFAS No.123(R). Results for prior periods have not been restated.




3





***Net
      Loss Per Share***  ***-*** The
      Company uses SFAS No. 128, “ *Earnings
      Per Share* ”
for
      calculating the basic and diluted loss per share. Basic loss per share is
      computed by dividing net loss and net loss attributable to common shareholders
      by the weighted average number of common shares outstanding. Diluted loss per
      share is computed similar to basic loss per share except that the denominator
      is
      increased to include the number of additional common shares that would have
      been
      outstanding if the potential shares had been issued and if the additional shares
      were dilutive. Common equivalent shares are excluded from the computation of
      net
      loss per share if they would be anti-dilutive.





***Recent
      Accounting Pronouncements***





In
      June
      2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in
      -Income Taxes-an interpretation of FASB Statement No. 109" ("FIN 48"), which
      clarifies the accounting for uncertainty in income taxes. FIN 48 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. The Interpretation requires that the Company recognize in the
      financial statements the impact of tax position, if that position is more likely
      than not of being sustained on audit, based on the technical merits of the
      position. FIN 48 also provides guidance on derecognition, classification,
      interest and penalties, accounting in interim periods and disclosure. The
      provisions of FIN 48 are effective for fiscal years beginning after December
      15,
      2006 with the cumulative effect of the change in accounting principle recorded
      as an adjustment to beginning retained earnings. The adoption of this statement
      is not expected to have a material impact on the Company's consolidated
      financial position or results of operations.





In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
      standard defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. This statement is effective for financial statements issued
      for fiscal years beginning after November 15, 2007. Earlier application is
      encouraged. The adoption of this accounting pronouncement is not expected to
      have a material effect on our consolidated financial statements.




In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* .
      SFAS
      No. 159 permits entities to choose to measure many financial instruments and
      certain other items at fair value. SFAS No. 159 will be effective at the
      beginning of fiscal year 2008. We are presently evaluating the impact of the
      adoption of SFAS No. 159 on our results of operations and financial
      position.




In
      September 2006, the Securities and Exchange Commission issued SAB No. 108
      "Considering the Effects of Prior Year Misstatements When Quantifying
      Misstatements in Current Year Financial Statements", which provides interpretive
      guidance on how the effects of the carryover or reversal of prior year
      misstatements should be considered in quantifying a current year misstatement.
      The guidance is applicable beginning fiscal 2008. The Company does not believe
      SAB No. 108 will have a material impact on the consolidated financial
      statements.





**Off
      Balance Sheet Arrangements**





None.





**Item
      3. Controls and Procedures**





(a)
      Evaluation of Disclosure Controls and Procedures





We
      maintain "disclosure controls and procedures," as such term is defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange
      Act"), that are designed to ensure that information required to be disclosed
      by
      us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized, and reported within the time periods specified in
      Securities and Exchange Commission rules and forms, and that such information
      is
      accumulated and communicated to our management, including our Chief Executive
      Officer and Chief Financial Officer, as appropriate, to allow timely decisions
      regarding required disclosure. In designing and evaluating our disclosure
      controls and procedures, management recognized that disclosure controls and
      procedures, no matter how well conceived and operated, can provide only
      reasonable, not absolute, assurance that the objectives of the disclosure
      controls and procedures are met. Additionally, in designing disclosure controls
      and procedures, our management necessarily was required to apply its judgment
      in
      evaluating the cost-benefit relationship of possible disclosure controls and
      procedures. The design of any disclosure controls and procedures also is based
      in part upon certain assumptions about the likelihood of future events, and
      there can be no assurance that any design will succeed in achieving its stated
      goals under all potential future conditions.





As
      of
      December 31, 2007, we carried out an evaluation, under the supervision and
      with
      the participation of our Chief Executive Officer and Chief Financial Officer,
      of
      the effectiveness of the design and operation of our disclosure controls and
      procedures. Based on this evaluation, our Chief Executive Officer and Chief
      Financial Officer concluded that our disclosure controls and procedures were
      effective in ensuring that information required to be disclosed by us in our
      periodic reports is recorded, processed, summarized and reported, within the
      time periods specified for each report and that such information is accumulated
      and communicated to our management, including our principal executive and
      principal financial officers, or persons performing similar functions, as
      appropriate to allow timely decisions regarding required
      disclosure.




(b)
      Changes in Internal Controls.




There
      was
      no change in our internal controls over financial reporting that has materially
      affected, or is reasonable likely to materially affect, our internal control
      over financial reporting during the quarter covered by this Report.




4





**PART
      II - OTHER INFORMATION**





**Item
      1. Legal Proceedings**





From
      time
      to time, we may become involved in various lawsuits and legal proceedings which
      arise in the ordinary course of business. However, litigation is subject to
      inherent uncertainties, and an adverse result in these or other matters may
      arise from time to time that may harm our business. We are currently not aware
      of any such legal proceedings or claims that we believe will have, individually
      or in the aggregate, a material adverse affect on our business, financial
      condition or operating results.





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





In
      December 2007, we issued 35,334 shares of common stock to Sichenzia Ross
      Friedman Ference LLP in consideration for legal services rendered. The
      shares were issued pursuant to an exemption under Section 4(2) of the Securities
      Act of 1933, as amended.





**Item
      3. Defaults Upon Senior Securities**





None.





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





None.





**Item
      5. Other Information**





None.





**Item
      6. Exhibits**





31
            Certification
                by Chief Executive Officer and Chief Financial Officer, required
                by Rule
                13a- 14(a) or Rule 15d-14(a) of the ExchangeAct,
                promulgated under the Securities and Exchange Act of 1934, as amended.





32
            Certification
                by Chief Executive Officer and Chief Financial Officer, pursuant
                to 18
                U.S.C. Section 1350, as adopted pursuant toSection
                906 of the Sarbanes-Oxley Act of 2002.





5





**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**OMNIRELIANT
                HOLDINGS, INC.**Date:
                February 14, 2008
            By:
            /s/
                Paul MorrisonPaul
                Morrison
              Chief
                  Executive Officer and President(Principal
                Executive Officer, Financial Officer and Principal
              Accounting
                Officer)




6