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

| Large accelerated      filer o | Accelerated filer      o         |
|--------------------------------|----------------------------------|
| Non-accelerated      filer o   | Smaller reporting      company x |

----

OMNIRELIANT HOLDINGS, INC. ANDSUBSIDIARIES

| Part         |   | Item      and Description                                                                                               |   | Page   |
|--------------|--------|-------------------------------------------------------------------------------------------------------------------------|--------|--------|
| Part      I  |   | Financial      Information                                                                                              |   |   |
|         |   | Forward-Looking      Statements                                                                                         |   | 3      |
|         |   | Item      1. Financial Statements                                                                                       |   | 4      |
|         |   | Item      2. Management’s Discussion and Analysis of Financial      Condition and      Results of Operations |   | 39     |
|         |   | Item      3. Quantitative and Qualitative Disclosures about Market    Risks                                             |   | 58     |
|         |   | Item      4T. Controls and Procedures                                                                                   |   | 58     |
|         |   |                                                                                                                    |   |   |
| Part      II |   | Other      Information                                                                                                  |   |   |
|         |   | Item      1. Legal Proceedings                                                                                          |   | 60     |
|         |   | Item      1A. Risk Factors                                                                                              |   | 61     |
|         |   | Item      2. Unregistered Sales of Equity Securities and Use of    Proceeds                                             |   | 61     |
|         |   | Item      3. Defaults Upon Senior Securities                                                                            |   | 61     |
|         |   | Item      4. Removed and Reserved                                                                                       |   | 61     |
|         |   | Item      5. Other Information                                                                                          |   | 61     |
|         |   | Item      6. Exhibit Index                                                                                              |   | 61     |
|         |   |                                                                                                                    |   |   |
| Signatures   |   | 62                                                                                                                      |

----

This Form 10-Q contains “forward-looking statements” relating toOmniReliant Holdings, Inc. (referred to as the “Company” or “we”, “us” or “our”in this Form 10-Q), which represent the Company’s current expectations orbeliefs including, but not limited to, statements concerning the Company’soperations, performance, financial condition and growth. For this purpose, anystatements contained in this Form 10-Q that are not statements of historicalfact are forward-looking statements. Without limiting the generality of theforegoing, words such as “may”, “anticipation”, “intend”, “could”, “estimate”,or “continue” or the negative or other comparable terminology are intended toidentify forward-looking statements. These statements by their nature involvesubstantial risks and uncertainties, such as credit losses, dependence onmanagement and key personnel, variability of quarterly results, and the abilityof the Company to continue its growth strategy and competition, certain of whichare beyond the Company’s control. Should one or more of these risks oruncertainties materialize or should the underlying assumptions prove incorrect,actual outcomes and results could differ materially from those indicated in theforward-looking statements.

----

| Assets                                                                                                                    |   | March      31, 2010 |        |   | June      30, 2009 |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|---------------------|-------------|--------|--------------------|--------|
|                                                                                                                      |   | (Unaudited)         |        |   |               |   |
| Current      assets:                                                                                                      |   |                |        |   |               |   |
| Cash      and cash equivalents                                                                                            |   | $                   | 3,222,248   |   |               | $      | 2,005,702 |   |
| Accounts      receivable, net of $1,162,763 and $187,763                                                                  |   |                | 1,986,212   |   |               |   | 1,864,465 |   |
| Inventories                                                                                                               |   |                | 3,053,970   |   |               |   | 1,294,250 |   |
| Investments,      available for sale                                                                                      |   |                | 340,000     |   |               |   | 1,729,448 |   |
| Prepaid      expenses and other current assets                                                                            |   |                | 203,353     |   |               |   | 632,200 |   |
| Total      current assets                                                                                                 |   |                | 8,805,783   |   |               |   | 7,526,065 |   |
|                                                                                                                      |   |                |        |   |               |   |   |   |
| Intangible      assets, net                                                                                               |   |                | 23,516,043  |   |               |   | 1,123,335 |   |
| Investments                                                                                                               |   |                | 2,987,811   |   |               |   | 2,215,309 |   |
| Property      and equipment, net                                                                                          |   |                | 2,497,617   |   |               |   | 2,579,548 |   |
| Investments,      available-for-sale                                                                                      |   |                | —     |   |               |   | 732,227 |   |
| Other      assets                                                                                                         |   |                | 21,991      |   |               |   | 909,714 |   |
| Total      assets                                                                                                         |   | $                   | 37,829,245  |   |               | $      | 15,086,198 |   |
|                                                                                                                      |   |                |        |   |               |   |   |   |
| Liabilities      and Equity (Deficit)                                                                                     |   |                |        |   |               |   |   |   |
|                                                                                                                      |   |                |        |   |               |   |   |   |
| Current      liabilities:                                                                                                 |   |                |        |   |               |   |   |   |
| Accounts      payable and accrued expenses                                                                                |   | $                   | 1,268,069   |   |               | $      | 556,747 |   |
| Deferred      revenue                                                                                                     |   |                | 2,214,153   |   |               |   | — |   |
| Notes      payable and maturities of long-term debt                                                                       |   |                | 284,506     |   |               |   | 33,230 |   |
| Derivative      liabilities                                                                                               |   |                | 5,905,629   |   |               |   | 6,481,839 |   |
| Total      current liabilities                                                                                            |   |                | 9,672,357   |   |               |   | 7,071,816 |   |
|                                                                                                                      |   |                |        |   |               |   |   |   |
| Long-term      debt                                                                                                       |   |                | 1,919,259   |   |               |   | 1,945,647 |   |
| Security      deposits on leases                                                                                          |   |                | 9,193       |   |               |   | 11,734 |   |
| Total      liabilities                                                                                                    |   |                | 11,600,809  |   |               |   | 9,029,197 |   |
| Commitments      and contingencies (Note 12)                                                                              |   |                | —     |   |               |   | — |   |
| Redeemable      preferred stock                                                                                           |   |                | 4,946,910   |   |               |   | 45,969,634 |   |
|                                                                                                                      |   |                |        |   |               |   |   |   |
| Equity      (deficit):                                                                                                    |   |                |        |   |               |   |   |   |
| OmniReliant      shareholders’ equity:                                                                              |   |                |        |   |               |   |   |   |
| Series      E Preferred Stock, $0.00001 par, 13,000,000 shares authorized      and issued, and 2,884,601 outstanding |   |                | 2,937,004   |   |               |   | — |   |
| Common      Stock, $0.00001 par, 400,000,000 shares authorized;      159,073,323 and 14,509,225 outstanding          |   |                | 1,591       |   |               |   | 145 |   |
| Paid-in      capital                                                                                                      |   |                | 47,020,810  |   |               |   | 6,532,238 |   |
| Accumulated      deficit                                                                                                  |   |                | (29,010,338 | )      |               |   | (46,570,028 | ) |
| Other      comprehensive items                                                                                            |   |                | 190,000     |   |               |   | (72,102 | ) |
| Total      OmniReliant shareholders’ equity (deficit)                                                               |   |                | 21,139,067  |   |               |   | (40,109,747 | ) |
| Non-controlling      interests                                                                                            |   |                | 142,459     |   |               |   | 197,114 |   |
| Total      equity (deficit)                                                                                               |   |                | 21,281,526  |   |               |   | (39,912,633 | ) |
| Total      liabilities and equity (deficit)                                                                               |   | $                   | 37,829,245  |   |               | $      | 15,086,198 |   |

----

|                                                                                                        |   | Three      Months EndedMarch      31, |       |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                                                                        |   | 2010                                  |       |   | 2009 |   |
|                                                                                                        |   | (Unaudited)                           |       |   | (Unaudited) |   |
|                                                                                                        |   |                                  |       |   |   |   |
| Product      sales                                                                                          |   | $                                     | 4,854,911  |   |   | $ | 2,585,582 |   |
| Cost      of product sales (excluding depreciation expense reflected      in other operating expenses) |   |                                  | 3,405,975  |   |   |   | 1,473,776 |   |
| Gross      profit                                                                                           |   |                                  | 1,448,936  |   |   |   | 1,111,806 |   |
|                                                                                                        |   |                                  |       |   |   |   |   |   |
| Real      estate income                                                                                     |   |                                  | 95,738     |   |   |   | 58,314 |   |
|                                                                                                        |   |                                  |       |   |   |   |   |   |
| Other      operating expenses:                                                                              |   |                                  |       |   |   |   |   |   |
| Advertising      and promotional                                                                            |   |                                  | 373,507    |   |   |   | 1,212,525 |   |
| Other      general and administrative                                                                       |   |                                  | 826,873    |   |   |   | 247,691 |   |
| Depreciation      and amortization                                                                          |   |                                  | 628,180    |   |   |   | 181,833 |   |
| Accounting      and professional                                                                            |   |                                  | 684,745    |   |   |   | 374,178 |   |
| Employment      costs                                                                                       |   |                                  | 1,047,603  |   |   |   | 408,433 |   |
|                                                                                                        |   |                                  | 3,560,908  |   |   |   | 2,424,660 |   |
| Loss      from operations                                                                                   |   |                                  | (2,016,234 | ) |   |   | (1,254,540 | ) |
|                                                                                                        |   |                                  |       |   |   |   |   |   |
| Other      income (expense):                                                                                |   |                                  |       |   |   |   |   |   |
| Impairment      of investments                                                                              |   |                                  | (371,362   | ) |   |   | — |   |
| Equity      in losses of investees                                                                          |   |                                  | (445,047   | ) |   |   | — |   |
| Derivative      (expense) income                                                                            |   |                                  | 16,484,885 |   |   |   | (2,071,646 | ) |
| Interest      expense                                                                                       |   |                                  | (35,871    | ) |   |   | (55,280 | ) |
| Interest      and other income                                                                              |   |                                  | 2,742      |   |   |   | 7,729 |   |
| Total      other income (expense)                                                                           |   |                                  | 15,635,347 |   |   |   | (2,119,197 | ) |
|                                                                                                        |   |                                  |       |   |   |   |   |   |
| Net      income (loss)                                                                                      |   |                                  | 13,619,113 |   |   |   | (3,373,737 | ) |
| Net      income (loss) attributable to non-controlling interests                                            |   |                                  | 13,200     |   |   |   | 20,623 |   |
|                                                                                                        |   |                                  |       |   |   |   |   |   |
| Net      income (loss) attributable to OmniReliant                                                          |   | $                                     | 13,632,313 |   |   | $ | (3,353,114 | ) |

----

|                                                                                                                             |   | Three      Months EndedMarch      31, |        |
|----------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-------------|
|                                                                                                                             |   | 2010                                  |        |   | 2009 |   |
| Reconciliation      of net income (loss) attributable to OmniReliant to      loss applicable to OmniReliant common shareholders: |   | (Unaudited)                           |        |   | (Unaudited) |   |
| Net      income (loss) attributable to OmniReliant                                                                               |   | $                                     | 13,632,313  |   |   | $ | (3,353,114 | ) |
| Preferred      dividends and accretion                                                                                           |   |                                  | —     |   |   |   | (2,958,350 | ) |
| Income      (loss) applicable to OmniReliant common shareholders                                                                 |   | $                                     | 13,632,313  |   |   | $ | (6,311,464 | ) |
|                                                                                                                             |   |                                  |        |   |   |   |   |   |
| Income      (loss) per common share:                                                                                             |   |                                  |        |   |   |   |   |   |
| Basic                                                                                                                            |   | $                                     | 0.09        |   |   | $ | (0.43 | ) |
| Diluted                                                                                                                          |   | $                                     | 0.08        |   |   | $ | (0.43 | ) |
| Weighted      average common shares—basic                                                                                  |   |                                  | 159,023,171 |   |   |   | 14,509,225 |   |
| Weighted      average common shares—diluted                                                                                |   |                                  | 167,978,159 |   |   |   | 14,509,225 |   |

----

|                                                                                                   |   | Nine      Months EndedMarch      31, |        |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------|-------------|
|                                                                                                   |   | 2010                                 |        |   | 2009 |   |
|                                                                                                   |   | (Unaudited)                          |        |   | (Unaudited) |   |
|                                                                                                   |   |                                 |        |   |   |   |
| Product      sales                                                                                     |   | $                                    | 22,276,408  |   |   | $ | 3,756,840 |   |
| Cost      of product sales (excluding depreciation expense reflected      in other operating expenses) |   |                                 | 14,176,417  |   |   |   | 2,086,495 |   |
| Gross      profit                                                                                      |   |                                 | 8,099,991   |   |   |   | 1,670,345 |   |
|                                                                                                   |   |                                 |        |   |   |   |   |   |
| Real      estate income                                                                                |   |                                 | 243,686     |   |   |   | 190,420 |   |
|                                                                                                   |   |                                 |        |   |   |   |   |   |
| Other      operating expenses:                                                                         |   |                                 |        |   |   |   |   |   |
| Advertising      and promotional                                                                       |   |                                 | 5,833,427   |   |   |   | 2,442,119 |   |
| Other      general and administrative                                                                  |   |                                 | 2,456,372   |   |   |   | 502,282 |   |
| Employment      costs                                                                                  |   |                                 | 2,207,068   |   |   |   | 473,157 |   |
| Accounting      and professional                                                                       |   |                                 | 1,829,931   |   |   |   | 1,088,601 |   |
| Depreciation      and amortization                                                                     |   |                                 | 1,367,572   |   |   |   | 430,218 |   |
|                                                                                                   |   |                                 | 13,694,370  |   |   |   | 4,936,377 |   |
| Loss      from operations                                                                              |   |                                 | (5,350,693  | ) |   |   | (3,075,612 | ) |
|                                                                                                   |   |                                 |        |   |   |   |   |   |
| Other      income (expense):                                                                           |   |                                 |        |   |   |   |   |   |
| Extinguishment                                                                                         |   |                                 | (22,328,516 | ) |   |   | -- |   |
| Derivative      income                                                                                 |   |                                 | 25,757,299  |   |   |   | 2,703,891 |   |
| Equity      in (losses) of investees                                                                   |   |                                 | (2,079,289  | ) |   |   |   |   |
| Impairment      of investments                                                                         |   |                                 | (1,963,066  | ) |   |   |   |   |
| Inducement      expense                                                                                |   |                                 | (1,473,855  | ) |   |   |   |   |
| Interest      and other income                                                                         |   |                                 | 299,784     |   |   |   | 65,568 |   |
| Interest      expense                                                                                  |   |                                 | (194,047    | ) |   |   | (180,918 | ) |
| Total      other income (expense)                                                                      |   |                                 | (1,981,690  | ) |   |   | 2,588,541 |   |
|                                                                                                   |   |                                 |        |   |   |   |   |   |
| Net      (loss) income                                                                                 |   |                                 | (7,332,383  | ) |   |   | (487,071 | ) |
| Net      income (loss) attributable to non-controlling interests                                       |   |                                 | 218,104     |   |   |   | 81,533 |   |
|                                                                                                   |   |                                 |        |   |   |   |   |   |
| Net      (loss) income attributable to OmniReliant                                                     |   | $                                    | (7,114,279  | ) |   | $ | (405,538 | ) |

----

|                                                                                                                             |   | Nine      Months EndedMarch      31, |        |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|-------------|
|                                                                                                                             |   | 2010                                 |        |   | 2009 |   |
| Reconciliation      of net (loss) income attributable to OmniReliant to      loss applicable to OmniReliant common shareholders: |   | (Unaudited)                          |        |   | (Unaudited) |   |
| Net      (loss) income attributable to OmniReliant                                                                               |   | $                                    | (7,114,279  | ) |   | $ | (405,538 | ) |
| Deemed      dividend to preferred stockholders                                                                                   |   |                                 | (66,948,653 | ) |   |   | (2,958,350 | ) |
| Loss      applicable to OmniReliant common shareholders                                                                          |   | $                                    | (74,062,932 | ) |   | $ | (3,363,888 | ) |
|                                                                                                                             |   |                                 |        |   |   |   |   |   |
| Loss      per common share:                                                                                                      |   |                                 |        |   |   |   |   |   |
| Basic                                                                                                                            |   | $                                    | (0.57       | ) |   | $ | (0.23 | ) |
| Diluted                                                                                                                          |   | $                                    | (0.57       | ) |   | $ | (0.23 | ) |
| Weighted      average common shares—basic                                                                                  |   |                                 | 130,834,476 |   |   |   | 14,497,568 |   |
| Weighted      average common shares—diluted                                                                                |   |                                 | 130,834,476 |   |   |   | 14,497,568 |   |

----

|                                                                               |   | Nine      Months EndedMarch      31, |        |
|------------------------------------------------------------------------------------|--------|--------------------------------------|-------------|
|                                                                               |   | 2010                                 |        |   | 2009 |   |
|                                                                               |   | (Unaudited)                          |        |   | (Unaudited) |   |
| Cash      flows from operating activities:                                         |   |                                 |        |   |   |   |
| Net      loss                                                                      |   | $                                    | (7,114,279  | ) |   | $ | (405,538 | ) |
| Adjustments      to reconcile net loss to net cash      from operating activities: |   |                                 |        |   |   |   |   |   |
| Derivative      income                                                             |   |                                 | (25,757,299 | ) |   |   | (2,703,891 | ) |
| Extinguishment                                                                     |   |                                 | 22,328,516  |   |   |   | — |   |
| Equity      in losses of investees                                                 |   |                                 | 2,079,289   |   |   |   | — |   |
| Impairment      of investments                                                     |   |                                 | 1,963,066   |   |   |   | — |   |
| Inducement      expense                                                            |   |                                 | 1,473,855   |   |   |   | — |   |
| Amortization      of intangible assets                                             |   |                                 | 1,260,592   |   |   |   | 300,534 |   |
| Bad      debts expense                                                             |   |                                 | 975,000     |   |   |   | — |   |
| Amortization      of deferred revenue                                              |   |                                 | (581,847    | ) |   |   | — |   |
| Share-based      payment                                                           |   |                                 | 410,285     |   |   |   | 344,339 |   |
| Non-controlling      interests                                                     |   |                                 | (218,105    | ) |   |   | (81,533 | ) |
| Depreciation      expense                                                          |   |                                 | 111,398     |   |   |   | 142,402 |   |
| Non-cash      severance costs                                                      |   |                                 | 76,009      |   |   |   | — |   |
| Amortization      of deferred finance costs                                        |   |                                 | 15,623      |   |   |   | 168,200 |   |
| Changes      in operating assets and liabilities:                                  |   |                                 |        |   |   |   |   |   |
| Accounts      receivable                                                           |   |                                 | (885,700    | ) |   |   | (190,563 | ) |
| Inventories                                                                        |   |                                 | (513,033    | ) |   |   | (445,972 | ) |
| Prepaid      expenses and other assets                                             |   |                                 | 575,620     |   |   |   | (49,805 | ) |
| Accounts      payable and accrued expenses                                         |   |                                 | 235,094     |   |   |   | 198,151 |   |
| Net      cash used in operating activities                                         |   |                                 | (3,565,916  | ) |   |   | (2,723,676 | ) |
|                                                                               |   |                                 |        |   |   |   |   |   |
| Cash      flows from investing activities:                                         |   |                                 |        |   |   |   |   |   |
| Purchases      of investments                                                      |   |                                 | (6,491,709  | ) |   |   | (1,139,944 | ) |
| Acquisition      of Designer Liquidators                                           |   |                                 | 612,702     |   |   |   | — |   |
| Acquisition      of Abazias                                                        |   |                                 | 127,530     |   |   |   | — |   |
| Purchases      of property and equipment                                           |   |                                 | (40,949     | ) |   |   | (2,811,901 | ) |
| Investment      by non-controlling interest holders                                |   |                                 | —     |   |   |   | 320,000 |   |
| Payments      for licenses and patents                                             |   |                                 | —     |   |   |   | (300,000 | ) |
| Net      cash flow from investing activities                                       |   |                                 | (5,792,426  | ) |   |   | (3,931,845 | ) |
|                                                                               |   |                                 |        |   |   |   |   |   |
| Cash      flows from financing activities:                                         |   |                                 |        |   |   |   |   |   |
| Proceeds      from sale of preferred stock and warrants                            |   |                                 | 5,600,000   |   |   |   | 9,136,994 |   |
| Proceeds      from exchange of warrants                                            |   |                                 | 5,000,000   |   |   |   | — |   |
| Principal      payments on long-term debt                                          |   |                                 | (25,112     | ) |   |   | (7,844 | ) |
| Proceeds      from long-term debt, net                                             |   |                                 | —     |   |   |   | 1,994,694 |   |
| Net      cash flow from financing activities                                       |   |                                 | 10,574,888  |   |   |   | 11,123,844 |   |
|                                                                               |   |                                 |        |   |   |   |   |   |
| Net      change in cash and cash equivalents                                       |   |                                 | 1,216,546   |   |   |   | 4,468,323 |   |
| Cash      and cash equivalents at beginning of period                              |   |                                 | 2,005,702   |   |   |   | 4,435,814 |   |
| Cash      and cash equivalents at end of period                                    |   | $                                    | 3,222,248   |   |   | $ | 8,904,137 |   |

----

|                                                                                                                                                                |   | Nine      Months EndedMarch      31, |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                                                                                                                |   | 2010                                 |       |   | 2009 |   |
|                                                                                                                                                                |   | (Unaudited)                          |       |   | (Unaudited) |   |
|                                                                                                                                                                |   |                                 |       |   |   |   |
| Cash      paid for interest                                                                                                                                         |   | $                                    | 102,715    |   |   | $ | 54,387 |   |
| Cash      paid for income taxes                                                                                                                                     |   | $                                    | —    |   |   | $ | — |   |
|                                                                                                                                                                |   |                                 |       |   |   |   |   |   |
| Non-cash      investing and financing activities:                                                                                                                   |   |                                 |       |   |   |   |   |   |
|                                                                                                                                                                |   |                                 |       |   |   |   |   |   |
| Issuance      of 100,000 shares of common stock for partial consideration      transferred in acquiring Designer Liquidators                                        |   | $                                    | 101,000    |   |   | $ | — |   |
|                                                                                                                                                                |   |                                 |       |   |   |   |   |   |
| Issuance      of 13,000,000 shares of Series E Preferred Stock for      consideration transferred in acquiring Abazias:                                             |   |                                 |       |   |   |   |   |   |
| Classified      as preferred stock                                                                                                                                  |   | $                                    | 13,236,165 |   |   | $ | — |   |
| Classified      in paid-in capital, representing beneficial conversion                                                                                              |   |                                 | 2,605,159  |   |   |   | — |   |
| Total      fair value of Series E Preferred Stock                                                                                                                   |   | $                                    | 15,841,323 |   |   | $ | — |   |
| Exchange      of available for sale investments for intangible asset                                                                                                |   | $                                    | 3,782,717  |   |   | $ | — |   |
| Consideration      for marketing agreements in the form of common      stock and notes receivable, carried as investments:                                          |   |                                 |       |   |   |   |   |   |
| Zurvita,      15,200,000 common shares (fair value of $646,000), plus      face value $2,000,000, 6% per annum note receivable due      October 2012, at fair value |   | $                                    | 2,646,000  |   |   | $ | — |   |
| Net      Talk.com, 1,000,000 common shares at fair value                                                                                                            |   |                                 | 150,000    |   |   |   | — |   |
|                                                                                                                                                                |   | $                                    | 2,796,000  |   |   | $ | — |   |
| Common      stock issued for loan                                                                                                                                   |   | $                                    | —    |   |   | $ | 43,333 |   |

----

|                                           |   | Series      E        |        |   | Common      Stock |   |        | Paid-in |   |   | Comprehensive |   |   | Accumulated       |        |   | OmniReliant |   |    | Non-Controlling       |   |   | Total       |   |
|------------------------------------------------|--------|----------------------|-------------|--------|-------------------|--------|-------------|---------|--------|--------|---------------|--------|--------|-------------------|-------------|--------|-------------|--------|---------|-----------------------|--------|--------|-------------|--------|
|                                           |   | Preferred      Stock |        |   | Shares            |   |        | Amount  |   |   | Capital       |   |   | Income      Items |        |   | Deficit     |   |    | Equity      (deficit) |   |   | Interests   |   |   | Equity      (deficit) |   |
| Balances,      July 1, 2009                    |   | $                    | —     |   |              |   | 14,509,225  |    |   | $      | 145           |   |   | $                 | 6,532,238   |   |        | $      | (72,102 | )                     |   | $      | (46,570,028 | )      |   | $ | (40,109,747 | ) |   | $ | 197,114 |   |   | $ | (39,912,633 | ) |
|                                           |   |                 |        |   |              |   |        |    |   |   |          |   |   |              |        |   |        |   |    |                  |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change      in accounting for derivatives |   |                 | —     |   |              |   | —     |    |   |   | —       |   |   |              | (28,719,115 | )      |        |   | — |                  |   |   | 24,673,969  |   |   |   | (4,045,146 | ) |   |   | — |   |   |   | (4,045,146 | ) |
| Warrant      exchange                          |   |                 | —     |   |              |   | —     |    |   |   | —       |   |   |              | (66,948,653 | )      |        |   | — |                  |   |   | —     |   |   |   | (66,948,653 | ) |   |   | — |   |   |   | (66,948,653 | ) |
| Conversions      of preferred                  |   |                 | —     |   |              |   | 105,141,416 |    |   |   | 1,051         |   |   |              | 107,587,408 |   |        |   | — |                  |   |   | —     |   |   |   | 107,588,459 |   |   |   | — |   |   |   | 107,588,459 |   |
| Acquisition:      Designer Liquidator          |   |                 | —     |   |              |   | 100,000     |    |   |   | 1             |   |   |              | 161,966     |   |        |   | — |                  |   |   | —     |   |   |   | 161,967 |   |   |   | 163,450 |   |   |   | 325,417 |   |
| Acquisition:      Abazias                      |   |                 | 13,236,165  |   |              |   | —     |    |   |   | —       |   |   |              | 4,886,188   |   |        |   | — |                  |   |   | —     |   |   |   | 18,122,353 |   |   |   | — |   |   |   | 18,122,353 |   |
| Warrant      exercises                         |   |                 | —     |   |              |   | 27,606,276  |    |   |   | 276           |   |   |              | 12,811,450  |   |        |   | — |                  |   |   | —     |   |   |   | 12,811,726 |   |   |   | — |   |   |   | 12,811,726 |   |
| Cashless      option exercises                 |   |                 | —     |   |              |   | 4,167       |    |   |   | —       |   |   |              | —     |   |        |   | — |                  |   |   | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Conversions      of Series E                   |   |                 | (10,299,161 | )      |              |   | 12,012,239  |    |   |   | 121           |   |   |              | 10,299,040  |   |        |   | — |                  |   |   | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Redemption                                     |   |                 |        |   |              |   | (300,000    | )       |   |   | (3            | )      |   |              | 3           |   |        |   | — |                  |   |   | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Share-based      payment                       |   |                 | —     |   |              |   | —     |    |   |   | —       |   |   |              | 410,285     |   |        |   | — |                  |   |   | —     |   |   |   | 410,285 |   |   |   | — |   |   |   | 410,285 |   |
| Unrealized      gains (losses)                 |   |                 | —     |   |              |   | —     |    |   |   | —       |   |   |              | —     |   |        |   | 262,102 |                  |   |   | —     |   |   |   | 262,102 |   |   |   | — |   |   |   | 262,102 |   |
| Net      loss                                  |   |                 | —     |   |              |   | —     |    |   |   | —       |   |   |              | —     |   |        |   | — |                  |   |   | (7,114,279  | )      |   |   | (7,114,279 | ) |   |   | (218,105 | ) |   |   | (7,332,384 | ) |
|                                           |   |                 |        |   |              |   |        |    |   |   |          |   |   |              |        |   |        |   |    |                  |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      March 31, 2010                  |   | $                    | 2,937,004   |   |              |   | 159,073,323 |    |   | $      | 1,591         |   |   | $                 | 47,020,810  |   |        | $      | 190,000 |                  |   | $      | (29,010,338 | )      |   | $ | 21,139,067 |   |   | $ | 142,459 |   |   | $ | 21,281,526 |   |

----

----

OmniReliant Holdings, Inc. and Subsidiaries

Abazias is an online retailer of high quality loose diamonds andfine jewelry settings for diamonds. We acquired Abazias for the purpose ofbuilding brand recognition and increasing retail marketpenetration.

|                                                                                                      |   | Abazias |       |   | Designer |   |      | Total  |   |
|-----------------------------------------------------------------------------------------------------------|--------|---------|------------|--------|----------|--------|-----------|--------|--------|
| Current      assets, including cash of $127,530 and $612,702 from      Abazias and Designer, respectively |   | $       | 523,307    |   |     | $      | 1,824,660 |   |   | $ | 2,347,966 |   |
| Property      and equipment                                                                               |   |    | 2,027      |   |     |   | —   |   |   |   | 2,027 |   |
| Intangible      assets:                                                                                   |   |    |       |   |     |   |      |   |   |   |   |   |
|    Customer      lists and customer related                                                |   |    | 2,545,930  |   |     |   | 484,353   |   |   |   | 3,030,283 |   |
|    Dealer      network intangibles                                                         |   |    | 2,133,679  |   |     |   | —   |   |   |   | 2,133,679 |   |
|    Registered      trademarks, trade names and dress                                       |   |    | 1,642,420  |   |     |   | —   |   |   |   | 1,642,420 |   |
|    Executive      employment contracts                                                     |   |    | 210,928    |   |     |   | —   |   |   |   | 210,928 |   |
|    Software      and operational processes                                                 |   |    | 35,000     |   |     |   | —   |   |   |   | 35,000 |   |
| Trade      liabilities assumed                                                                            |   |    | (347,905   | )      |     |   | (124,728  | )      |   |   | (472,633 | ) |
| Notes      payable                                                                                        |   |    | —    |   |     |   | (250,000  | )      |   |   | (250,000 | ) |
| Deferred      income taxes                                                                                |   |    | (2,281,029 | )      |     |   | (60,967   | )      |   |   | (2,341,966 | ) |
|                                                                                                      |   |    | 4,464,357  |   |     |   | 1,873,318 |   |   |   | 6,337,674 |   |
| Consideration      transferred (excluding direct expenses):                                               |   |    |       |   |     |   |      |   |   |   |   |   |
|    Cash      consideration                                                                 |   |    | —    |   |     |   | 150,000   |   |   |   | 150,000 |   |
|    Fair      value of OmniReliant Securities                                               |   |    | 15,841,323 |   |     |   | 101,000   |   |   |   | 15,942,323 |   |
|    Investments      (see Note 4)                                                           |   |    | 1,042,789  |   |     |   | 1,857,383 |   |   |   | 2,900,172 |   |
| Non-controlling      interest in RPS Traders LLC                                                          |   |    | —    |   |     |   | 163,450   |   |   |   | 163,450 |   |
| Consideration      transferred, plus non-controlling interests                                            |   |    | 16,884,112 |   |     |   | 2,271,833 |   |   |   | 19,155,945 |   |
| Goodwill      arising from the acquisitions under ASC 805                                                 |   | $       | 12,419,756 |   |     | $      | 398,515   |   |   | $ | 12,818,271 |   |

----

|                                               |   | Nine      months endedMarch      31, |       |
|----------------------------------------------------|--------|--------------------------------------|------------|
|                                               |   | 2010                                 |       |   | 2009 |   |
|                                               |   |                                 |       |   |   |   |
| Sales                                              |   | $                                    | 23,622,320 |   |   | $ | 8,072,370 |   |
| Net      (loss) income attributable to OmniReliant |   |                                 | (7,561,144 | ) |   |   | (1,488,310 | )  |
| (Loss)      income per common share—basic    |   |                                 | (0.57      | ) |   |   | (0.30 | ) |
| (Loss)      income per common share—diluted  |   |                                 | (0.57      | ) |   |   | (0.30 | ) |

----

|                                                                                                                                                               |   | 2010   |      |   | 2009   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Available-for-sale      investments:                                                                                                                               |   |   |      |   |   |   |
| Beyond      Commerce, 10%, face value $1,270,000 notes receivable,      due July through September 2011; cost basis $1,249,021      (1)                  |   | $      |  --  |   |   | $      |  976,083 |   |
| NetTalk.com,      Inc., 1,000,000 shares of common stock; cost basis $150,000                                                                                 |   |   | 340,000   |   |   |   | -- |   |
| Valcom,      10% face value $100,000 convertible note receivable,      plus accrued      interest of 2,336, due January 6, 2010; cost basis $100,000      (2) |   |   | --        |   |   |   | 103,365 |   |
| Abazias,      Inc., face value $700,000, 10.0% convertible note receivable,      originally due December 31, 2009 (3)                                         |   |   | --        |   |   |   | 732,227 |   |
| Held-to-maturity      investments:                                                                                                                                 |   |   |      |   |   |   |   |   |
| RPS      Trading, LLC, variable rate (currently 4.75%), face value      $650,000 notes receivable, due in November and      December 2009 (2)            |   |   |   -- |   |   |   |   650,000 |   |
|                                                                                                                                                               |   |   | 340,000   |   |   |   | 2,461,675 |   |
| Current      portion of investments                                                                                                                                |   |   | (340,000  | )      |   |   | (1,729,448 | ) |
|    Total      non-current investments                                                                                                               |   | $      | --        |   |   | $      | 732,227 |   |

| (1)    | During      the quarterly period ended December 31, 2009, our management evaluated the      continuing carrying value of the Beyond Commerce investment. As a result      of the review, and after extensive negotiations, we exchanged notes with a      principal amount of $3,428,574 and accrued interest of $135,355,      and a fair value of $3,782,717, for certain of Beyond Commerce’s software      and provided a reserve on the balance. However, we will continue to pursue      collection of this amount from the debtor. We recorded the software at the      fair value of the available for sale securities exchanged, which was      viewed as a reasonable basis for the software. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

| (2)    | During      the quarterly period ended March 31, 2010, our management evaluated the      continuing carrying value of Valcom and concluded that recoverability was      improbable and wrote off the balance of $102,336. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                      |

| (3) | As      discussed in Note 3, on July 31, 2009 and August 24, 2009, we acquired the      common stock of Abazias and the assets of Designer Liquidator (parent to      RPS Trading LLC) in transactions accounted for by applying the acquisition      method of accounting. As a result, our pre-acquisition investments, which      amounted to $1,042,789 and $1,857,383, respectively, were included in the      consideration transferred. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                  |   | March      31, |    |   | June      30, |   |
|---------------------------------------|--------|----------------|---------|--------|---------------|--------|
|                                  |   | 2010           |    |   | 2009          |   |
| Beyond      Commerce Notes Receivable |   | $              | --      |   |          | $      | (23,917 | )  |
| NetTalk.com      Common Stock         |   |           | 190,000 |   |          |   | -- |   |
| Valcom      Notes Receivable          |   |           | --      |   |          |   | (1,430 | )  |
| Abazias                               |   |           | --      |   |          |   | (17,960 | )  |
| Other      investments                |   |           | --      |   |          |   | (28,795 | )  |
|                                  |   | $              | 190,000 |   |          | $      | (72,102 | )  |

----

|                                                             |   | VotingOwnership |   |   | InvestmentCost |   |      | Equity      inEarnings      (1) |   |   | March      31, 2010 |   |   | June      30,2009 |      |
|------------------------------------------------------------------|--------|-----------------|--------|--------|----------------|--------|-----------|---------------------------------|--------|--------|---------------------|--------|--------|-------------------|-----------|
| Equity      method investees:                                    |   |            |   |   |           |   |      |                            |   |   |                |   |   |              |      |
|    Cellular      Blowout                          |   |            | 50.0   | %      |           | $      | 1,530,000 |                            |   | $      | (87,269             | )      |   | $                 | 1,442,731 |   |   | $ | 1,030,000 |   |
|    Zurvita      Holdings                          |   |            | 23.0   | %      |           |   | 2,646,000 |                            |   |   | (1,725,034          | )      |   |              | 920,966   |   |   |   | -- |   |
|    A      Perfect Pear (2)                        |   |            | 49.5   | %      |           |   | 494,084   |                            |   |   | (84,405             | )      |   |              | --        |   |   |   | 244,088 |   |
|    Webcarnation                                   |   |            | 40.0   | %      |           |   | 315,000   |                            |   |   | (79,804             | )      |   |              | 216,174   |   |   |   | 230,978 |   |
|    Wineharvest                                    |   |            | 30.0   | %      |           |   | 300,050   |                            |   |   | (61,803             | )      |   |              | 220,440   |   |   |   | 260,243 |   |
|    For      Your Imagination (2)                  |   |            | 20.0   | %      |           |   | 300,000   |                            |   |   | (40,974             | )      |   |              | --        |   |   |   | 200,000 |   |
|                                                             |   |            |   |   |           |   | 5,585,134 |                            |   |   | (2,079,289          | )      |   |              | 2,800,311 |   |   |   | 1,965,309 |   |
| Cost      method investees:                                      |   |            |   |   |           |   |      |                            |   |   |                |   |   |              |      |   |   |   |   |   |
|    Nested      Media (3)                          |   |            | --     |   |           |   | 187,500   |                            |   |   | --                  |   |   |              | 187,500   |   |   |   | 250,000 |   |
| Total      non-marketable and other      equity investments |   |            |   |   |           | $      | 5,772,634 |                            |   | $      | (2,079,289          | )      |   | $                 | 2,987,811 |   |   | $ | 2,215,309 |   |

----

|                               |   |             |   |   | March      31, |   |       | June      30, |   |
|------------------------------------|--------|------------------|--------|--------|----------------|--------|------------|---------------|--------|
|                               |   | EUL      (Years) |   |   | 2010           |   |       | 2009          |   |
| Customer      lists and related    |   |             | 3-7    |   |           | $      | 3,030,283  |          |   | $ | -- |   |
| Dealer      network                |   |             | 7      |   |           |   | 2,133,679  |          |   |   | -- |   |
| Patent      costs                  |   |             | 5      |   |           |   | 1,169,412  |          |   |   | 1,169,412 |   |
| Employment      contracts          |   |             | 2      |   |           |   | 210,928    |          |   |   | -- |   |
| Software      and processes        |   |             | 2      |   |           |   | 3,817,717  |          |   |   | -- |   |
| Other                              |   |             | 3      |   |           |   | 79,899     |          |   |   | 79,402 |   |
|                               |   |             |   |   |           |   | 10,441,918 |          |   |   | 1,248,814 |   |
| Less      accumulated amortization |   |             |   |   |           |   | (1,386,568 | )             |   |   | (125,479 | ) |
| Total                              |   |             |   |   |           |   | 9,055,350  |          |   | $ | 1,123,335 |   |
| Trademarks      and trade dress    |   |             | --     |   |           |   | 1,642,420  |          |   |   | -- |   |
| Goodwill                           |   |             | --     |   |           |   | 12,818,273 |          |   |   | -- |   |
|                               |   |             |   |   |           | $      | 23,516,043 |          |   | $ | 1,123,335 |   |

----

| Amortization      expense recorded at March 31 |   | 2010 |      |   | 2009   |   |
|------------------------------------------------|--------|------|-----------|--------|--------|--------|
|    Three      months            |   | $    | 575,479   |   |   | $      | 118,932 |   |
|    Nine      months             |   | $    | 1,260,592 |   |   | $      | 257,293 |   |

| Estimated      Amortization Expense:                    |   |   |      |
|---------------------------------------------------------|--------|--------|-----------|
|    Three      months ended June 30, 2010 |   | $      | 575,480   |   |
|    Year      ending June 30:             |   |   |      |   |
|       2011                |   |   | 2,301,914 |   |
|       2012                |   |   | 2,212,899 |   |
|       2013                |   |   | 1,071,821 |   |
|       2014                |   |   | 756,595   |   |
|       2015                |   |   | 756,595   |   |
|       Thereafter          |   |   | 1,380,046 |   |
|                                                    |   | $      | 9,055,350 |   |

----

|  Financing—Financial      Instrument                   |   | March      31,2010 |      |   | June      30,2009 |   |
|-------------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
| New      Vicis Warrant                                            |   | $                  | 5,236,000 |   |              | $      | -- |   |
| Series      A Preferred Financing—Investor warrants         |   |               | --        |   |              |   | 716,700 |   |
| Series      B Preferred Financing—Investor warrants         |   |               | 34,896    |   |              |   | 75,312 |   |
| Series      C Preferred Financing—Investor warrants         |   |               | 201,155   |   |              |   | -- |   |
| Series      C Preferred Financing—Put derivative            |   |               | 16,307    |   |              |   | 199,993 |   |
| Series      D Preferred Financing—Investor warrants         |   |               | --        |   |              |   | 1,752,800 |   |
| Series      D Preferred Financing—Placement agent warrants  |   |               | --        |   |              |   | 166,950 |   |
| Series      D Preferred Financing—Put derivative            |   |               | --        |   |              |   | 253,417 |   |
| Series      F Preferred Financing—Investor warrants         |   |               | --        |   |              |   | 2,946,667 |   |
| Series      F Preferred Financing—Placement agent warrants  |   |               | 313,334   |   |              |   | 370,000 |   |
| Warrant      Financing Transaction—Placement agent warrants |   |               | 103,938   |   |              |   |   |   |
| Derivative      liabilities                                       |   | $                  | 5,905,630 |   |              | $      | 6,481,839 |   |

|  Financing—Financial      Instrument                   |   | March      31,2010 |       |   | June      30,2009 |   |
|-------------------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
| New      Vicis Warrant                                            |   |               | 70,000,000 |   |              |   | -- |   |
| Series      A Preferred Financing—Investor warrants         |   |               | --         |   |              |   | 6,000,000 |   |
| Series      B Preferred Financing—Investor warrants         |   |               | 960,000    |   |              |   | 960,000 |   |
| Series      C Preferred Financing—Investor warrants         |   |               | 2,731,228  |   |              |   | -- |   |
| Series      D Preferred Financing—Investor warrants         |   |               | --         |   |              |   | 28,000,000 |   |
| Series      D Preferred Financing—Placement agent warrants  |   |               | --         |   |              |   | 2,100,000 |   |
| Series      F Preferred Financing—Investor warrants         |   |               | --         |   |              |   | 33,333,333 |   |
| Series      F Preferred Financing—Placement agent warrants  |   |               | 4,166,666  |   |              |   | 4,166,666 |   |
| Warrant      Financing Transaction—Placement agent warrants |   |               | 1,380,314  |   |              |   | -- |   |
|                                                              |   |               | 79,238,208 |   |              |   | 74,559,999 |   |

----

|  Financing—Financial      Instrument  |   | Embedded      Derivatives |   |   | Warrant      Derivatives |   |       | Total  |   |
|--------------------------------------------------|--------|---------------------------|--------|--------|--------------------------|--------|------------|--------|--------|
| New      Vicis Warrant                           |   | $                         | --     |   |                     | $      | 14,665,000 |   |   | $ | 14,665,000 |   |
| Series      A Preferred Financing                |   |                      | --     |   |                     |   | --         |   |   |   | -- |   |
| Series      B Preferred Financing                |   |                      | --     |   |                     |   | 176,592    |   |   |   | 176,592 |   |
| Series      C Preferred Financing                |   |                      | (1,001 | )      |                     |   | 522,484    |   |   |   | 521,483 |   |
| Series      D Preferred Financing                |   |                      | --     |   |                     |   | --         |   |   |   | -- |   |
| Series      F Preferred Financing—Warrants |   |                      | --     |   |                     |   | --         |   |   |   | -- |   |
| Warrant      Financing                           |   |                      | --     |   |                     |   | 1,121,810  |   |   |   | 1,121,810 |   |
| Derivative      income (expense)                 |   | $                         | (1,001 | )      |                     | $      | 16,485,886 |   |   | $ | 16,484,885 |   |

|  Financing—Financial      Instrument  |   | Embedded      Derivatives |       |    | Warrant      Derivatives |   |     | Total  |   |
|--------------------------------------------------|--------|---------------------------|------------|---------|--------------------------|--------|----------|--------|--------|
| New      Vicis Warrant                           |   | $                         | --         |    |                     | $      | --       |   |   | $ | -- |   |
| Series      A Preferred Financing                |   |                      | --         |    |                     |   | (438,016 | )      |   |   | (438,016 | ) |
| Series      B Preferred Financing                |   |                      | --         |    |                     |   | (74,305  | )      |   |   | (74,305 | ) |
| Series      C Preferred Financing                |   |                      | (1,604,159 | )  |                     |   | 8,167    |   |   |   | (1,595,992 | ) |
| Series      D Preferred Financing                |   |                      | (188,406   | )       |                     |   | 8,907    |   |   |   | (179,499 | ) |
| Series      F Preferred Financing—Warrants |   |                      | --         |    |                     |   | 216,166  |   |   |   | 216,166 |   |
| Warrant      Financing                           |   |                      |       |    |                     |   |     |   |   |   |   |   |
| Derivative      income (expense)                 |   | $                         | (1,792,565 | )       |                     | $      | (279,081 | )      |   | $ | (2,071,646 | ) |

----

|  Financing—Financial      Instrument  |   | Embedded      Derivatives |    |   | Warrant      Derivatives |   |       | Total  |   |
|--------------------------------------------------|--------|---------------------------|---------|--------|--------------------------|--------|------------|--------|--------|
| New      Vicis Warrant                           |   | $                         | --      |   |                     | $      | 25,733,753 |   |   | $ | 25,733,753 |   |
| Series      A Preferred Financing                |   |                      | --      |   |                     |   | (833       | )      |   |   | (833 | ) |
| Series      B Preferred Financing                |   |                      | --      |   |                     |   | 23,830     |   |   |   | 23,830 |   |
| Series      C Preferred Financing                |   |                      | (6,566  | )      |                     |   | (260,676   | )      |   |   | (267,242 | ) |
| Series      D Preferred Financing                |   |                      | (11,032 | )      |                     |   | (56,666    | )      |   |   | (67,698 | ) |
| Series      F Preferred Financing—Warrants |   |                      | --      |   |                     |   | (775,416   | )      |   |   | (775,416 | ) |
| Warrant      Financing                           |   |                      |    |   |                     |   | 1,110,905  |   |   |   | 1,110,905 |   |
| Derivative      income (expense)                 |   | $                         | (17,598 | )      |                     | $      | 25,774,897 |   |   | $ | 25,757,299 |   |

|  Financing—Financial      Instrument  |   | Embedded      Derivatives |       |    | Warrant      Derivatives |   |      | Total  |   |
|--------------------------------------------------|--------|---------------------------|------------|---------|--------------------------|--------|-----------|--------|--------|
| New      Vicis Warrant                           |   | $                         | --         |    |                     | $      | --        |   |   | $ | -- |   |
| Series      A Preferred Financing                |   |                      | --         |    |                     |   | 338,400   |   |   |   | 338,400 |   |
| Series      B Preferred Financing                |   |                      | --         |    |                     |   | (45,120   | )      |   |   | (45,120 | ) |
| Series      C Preferred Financing                |   |                      | (1,068,026 | )       |                     |   | 780,096   |   |   |   | (287,930 | ) |
| Series      D Preferred Financing                |   |                      | 573,738    |    |                     |   | 1,908,637 |   |   |   | 2,482,375 |   |
| Series      F Preferred Financing—Warrants |   |                      | --         |    |                     |   | 216,166   |   |   |   | 216,166 |   |
| Derivative      income (expense)                 |   | $                         | (494,288   | )  |                     | $      | 3,198,179 |   |   | $ | 2,703,891 |   |

----

|                                                                                           |   | 2010   |        |   | 2009   |   |
|------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                           |   |   |        |   |   |   |
| Balances      at June 30                                                                       |   | $      | 6,481,839   |   |   | $      | 6,361,100 |   |
|      Change      in accounting, described above                       |   |   | 4,045,146   |   |   |   | -- |   |
| Balances      at July 1                                                                        |   |   | 10,526,985  |   |   |   | 6,361,100 |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|      Issuances      (Note 8):                                         |   |   |        |   |   |   |   |   |
|           Exchange      transaction          |   |   | 37,090,385  |   |   |   | -- |   |
|           Warrant      financing transaction |   |   | 382,761     |   |   |   | -- |   |
| Total                                                                                          |   |   | 37,473,146  |   |   |   | -- |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|      Conversions      and cancellations (Note 8):                     |   |   |        |   |   |   |   |   |
|           Exchange      transaction          |   |   | (9,761,869  | )      |   |   | -- |   |
|           Conversion      transaction        |   |   | (454,702    | )      |   |   | -- |   |
|           Exercises                          |   |   | (7,594,487  | )      |   |   | -- |   |
| Total                                                                                          |   |   | (17,811,058 | )      |   |   | -- |   |
|                                                                                           |   |   |        |   |   |   |   |   |
|      Fair      value adjustments:                                     |   |   |        |   |   |   |   |   |
|         Anti-dilution      re-pricing events (1)       |   |   | 1,436,735   |   |   |   | -- |   |
|         Inducement      adjustment (Note 8)            |   |   | 1,473,855   |   |   |   | -- |   |
|         Other      assumption changes (1)              |   |   | (27,194,033 | )      |   |   | (608,547 | ) |
| Total                                                                                          |   |   | (24,283,443 | )      |   |   | (608,547 | ) |
|                                                                                           |   |   |        |   |   |   |   |   |
| Balances      at March 31                                                                      |   | $      | 5,905,630   |   |   | $      | 5,752,553 |   |

----

|                                                              |   | IndexedShares |       |   | ExercisePrice |   |   | RemainingTerm |   |   | ExpectedVolatility |   |   | Risk-FreeRate |   |
|-------------------------------------------------------------------|--------|---------------|------------|--------|---------------|--------|--------|---------------|--------|--------|--------------------|--------|--------|---------------|--------|
| New      Vicis Warrant                                            |   |          | 70,000,000 |   |          | $      | 0.2029 |          |   |   | 9.30               |   |   |          | 81.53  | % |   |   | 3.84 | % |
| Series      B Preferred Financing:                                |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |   |   |   |   |   |
|    B-1      Investor Warrants                      |   |          | 480,000    |   |          | $      | 0.25   |          |   |   | 0.15               |   |   |          | 147.61 | % |   |   | 0.16 | % |
|    B-2      Investor Warrants                      |   |          | 480,000    |   |          | $      | 0.25   |          |   |   | 2.15               |   |   |          | 168.58 | % |   |   | 1.02 | % |
| Series      C Preferred Financing:                                |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |   |   |   |   |   |
|    C-1      Investor Warrants                      |   |          | 1,365,614  |   |          | $      | 0.25   |          |   |   | 2.55               |   |   |          | 162.95 | % |   |   | 1.60 | % |
|    C-2      Investor Warrants                      |   |          | 1,365,614  |   |          | $      | 0.25   |          |   |   | 7.56               |   |   |          | 88.89  | % |   |   | 3.28 | % |
| Series      F Preferred Financing:                                |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |   |   |   |   |   |
|    BD-12      Placement agent warrants             |   |          | 833,333    |   |          | $      | 0.25   |          |   |   | 8.88               |   |   |          | 83.20  | % |   |   | 3.56 | % |
|    BD-13      Placement agent warrants             |   |          | 3,333,333  |   |          | $      | 0.25   |          |   |   | 8.88               |   |   |          | 83.20  | % |   |   | 3.56 | % |
| Warrant      Financing Transaction—Placement agent warrants |   |          | 1,380,314  |   |          | $      | 0.2029 |          |   |   | 9.51               |   |   |          | 81.05  | % |   |   | 3.84 | % |

|                                                  |   | IndexedShares |       |   | ExercisePrice |   |   | RemainingTerm |   |   | ExpectedVolatility |   |   | Risk-FreeRate |   |
|-------------------------------------------------------|--------|---------------|------------|--------|---------------|--------|--------|---------------|--------|--------|--------------------|--------|--------|---------------|--------|
| Series      A Preferred Financing:                    |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |
|    A-1      Investor Warrants          |   |          | 3,000,000  |   |          | $      | 0.50   |          |   |   | 2.64               |   |   |          | 112.53 | % |   |   | 1.15 | % |
|    A-2      Investor Warrants          |   |          | 3,000,000  |   |          | $      | 0.50   |          |   |   | 7.64               |   |   |          | 69.21  | % |   |   | 2.28 | % |
| Series      B Preferred Financing:                    |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |   |   |   |   |   |
|    B-1      Investor Warrants          |   |          | 480,000    |   |          | $      | 0.50   |          |   |   | 1.15               |   |   |          | 72.23  | % |   |   | 0.57 | % |
|    B-2      Investor Warrants          |   |          | 480,000    |   |          | $      | 0.50   |          |   |   | 3.15               |   |   |          | 52.87  | % |   |   | 1.15 | % |
| Series      D Preferred Financing:                    |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |   |   |   |   |   |
|    D-1      Investor Warrants          |   |          | 28,000,000 |   |          | $      | 0.75   |          |   |   | 6.08               |   |   |          | 74.06  | % |   |   | 2.28 | % |
|    BD-10      Placement agent warrants |   |          | 700,000    |   |          | $      | 0.50   |          |   |   | 4.08               |   |   |          | 89.39  | % |   |   | 1.67 | % |
|    BD-11      Placement agent warrants |   |          | 1,400,000  |   |          | $      | 0.75   |          |   |   | 4.08               |   |   |          | 89.39  | % |   |   | 1.67 | % |
| Series      E Preferred Financing:                    |   |          |       |   |          |   |   |          |   |   |               |   |   |          |   |   |   |   |   |   |
|    E      Investor Warrants            |   |          | 33,333,333 |   |          | $      | 1.50   |          |   |   | 9.87               |   |   |          | 65.19  | % |   |   | 2.71 | % |
|    BD-12      Placement agent warrants |   |          | 833,333    |   |          | $      | 1.20   |          |   |   | 9.87               |   |   |          | 65.19  | % |   |   | 2.71 | % |
|    BD-13      Placement agent warrants |   |          | 3,333,333  |   |          | $      | 1.50   |          |   |   | 9.87               |   |   |          | 65.19  | % |   |   | 2.71 | % |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 2010   |                                        |   | 2009   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|--------|
| Initial      $2,000,000 six-year, variable rate mortgage note, with interest at the      Wall Street Prime Rate, plus 1.5%, with a floor of 6.5% and a cap 7.75%      during the first three years and a floor of 6.75% and a cap of 8.75%      during the second three years; principal and interest payments of $13,507      are payable over the six year term based upon a twenty-five year      amortization schedule, with $1,766,016 payable at maturity; secured by      real estate; guaranteed by related parties. |   | $      |          1,954,160 |   |   | $      |         1,978,877 |   |
| Bank      lending rate (3.8% at March 31, 2010) demand bank note                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 249,605                                     |   |   |   | -- |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 2,203,765                                   |   |   |   | 1,978,877 |   |
| Less      current maturities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | (284,506                                    | )      |   |   | (33,230 | ) |
| Long-term      debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $      | 1,919,259                                   |   |   | $      | 1,945,647 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |                                        |   |   |   |   |   |
| Maturities      of long-term debt at March 31, 2010 are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |                                        |   |   |   |   |   |
|    Three      months ending June 30, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |                                        |   |   | $      | 258,117 |   |
|    Years      ending June 30:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |                                        |   |   |   |   |   |
|       2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |                                        |   |   |   | 35,477 |   |
|       2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |                                        |   |   |   | 37,876 |   |
|       2013                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |                                        |   |   |   | 40,437 |   |
|       2014                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |                                        |   |   |   | 43,172 |   |
|       2015                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |                                        |   |   |   | 1,788,686 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |                                        |   |   | $      | 2,203,765 |   |

----

----

| Fair      value of New Warrant          |   | $      | 37,090,385 |   |
|-----------------------------------------|--------|--------|------------|--------|
| Fair      value of surrendered warrants |   |   | (9,761,869 | )      |
| Consideration                           |   |   | (5,000,000 | )      |
| Extinguishment      loss                |   | $      | 22,328,516 |   |

----

| Incremental      value of derivative warrants linked to 7,857,894 shares of common      stock, recorded in derivative expense                                                                       |   | $ | 1,436,735        |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---|------------------|--------|
| Incremental      value of redeemable preferred stock linked to 42,952,461 shares      of common stock before the anti-dilution trigger and 109,238,256      after,      recorded in paid-in capital |   | $ |  66,948,653 |   |

|                                                  |   | Pre-ExchangeandConversion |        |   |  Exchange      (1) |   |        |  Conversion |   |        | Post-ExchangeandConversion |   |
|-------------------------------------------------------|--------|---------------------------|-------------|--------|-------------------------|--------|-------------|------------------|--------|-------------|----------------------------|--------|
|                                                  |   |                      |        |   |                    |   |        |             |   |        |                       |   |
| Common      shares outstanding                        |   |                      | 14,509,225  |   |                    |   |        |             |   | 105,141,416 |                       |   |   | 119,650,641 |   |
|                                                  |   |                      |        |   |                    |   |        |             |   |        |                       |   |   |   |   |
| Preferred      Stock:                                 |   |                      |        |   |                    |   |        |             |   |        |                       |   |   |   |   |
|    Series      C Convertible Preferred |   |                      | 20,619,128  |   |                    |   | 20,619,128  |             |   |        | (37,141,416                | )      |   |   | 4,096,840 |   |
|    Series      D Convertible Preferred |   |                      | 14,000,000  |   |                    |   | 14,000,000  |             |   |        | (28,000,000                | )      |   |   | -- |   |
|    Series      F Convertible Preferred |   |                      | 8,333,333   |   |                    |   | 31,666,667  |             |   |        | (40,000,000                | )      |   |   | -- |   |
|                                                  |   |                      | 42,952,461  |   |                    |   | 66,285,795  |             |   |        | (105,141,416               | )      |   |   | 4,096,840 |   |
| Warrants      and Stock Options:                      |   |                      |        |   |                    |   |        |             |   |        |                       |   |   |   |   |   |
|    Exchange      Warrant               |   |                      | --          |   |                    |   | 97,606,276  |             |   |        |                       |   |   |   | 97,606,276 |   |
|    Class      A Warrants               |   |                      | 6,900,000   |   |                    |   | (6,900,000  | )                |   |        |                       |   |   |   | -- |   |
|    Class      B-1 and B-2              |   |                      | 1,008,000   |   |                    |   | (48,000     | )                |   |        |                       |   |   |   | 960,000 |   |
|    Class      C-1 and C-2              |   |                      | 29,956,171  |   |                    |   | (27,224,943 | )                |   |        |                       |   |   |   | 2,731,428 |   |
|    Class      D-1                      |   |                      | 30,100,000  |   |                    |   | (30,100,000 | )                |   |        |                       |   |   |   | -- |   |
|    Class      E                        |   |                      | 37,499,999  |   |                    |   | (33,333,333 | )                |   |        |                       |   |   |   | 4,166,666 |   |
|    Other      Warrants                 |   |                      | 1,000,000   |   |                    |   | --          |             |   |        |                       |   |   |   | 1,000,000 |   |
|    Employee      stock options         |   |                      | 2,145,000   |   |                    |   | --          |             |   |        |                       |   |   |   | 2,145,000 |   |
|                                                  |   |                      | 108,609,170 |   |                    |   | --          |             |   |        |                       |   |   |   | 108,609,170 |   |
|                                                  |   |                      |        |   |                    |   |        |             |   |        |                       |   |   |   |   |   |
| Common      and common equivalent shares              |   |                      | 166,070,856 |   |                    |   | 66,285,795  |             |   |        | --                         |   |   |   | 232,356,561 |   |

----

| Fair      value of warrants following inducement |   | $      | 26,851,487 |   |
|--------------------------------------------------|--------|--------|------------|--------|
| Fair      value of warrants preceding inducement |   |   | 25,377,632 |   |
| Extinguishment      loss                         |   | $      | 1,473,855  |   |

|                                                           |   |     |        |   |    |   |       |                |   |   |                |   |   | Weighted      Average |      |
|----------------------------------------------------------------|--------|----------|-------------|--------|---------|--------|------------|---------------------|--------|--------|---------------------|--------|--------|-----------------------|-----------|
|                                                           |   |     |        |   |    |   |       | Exercise      Price |   |   | Exercise      Price |   |
|                                                           |   |     |        |   |    |   |       | Per      Share      |   |   | Per      Share      |   |
|                                                           |   | Warrants |        |   | Options |   |       | Warrants            |   |   | Options             |   |   | Warrants              |      |   | Options |   |
| July      1, 2009                                              |   |     | 106,464,170 |   |    |   | 2,145,000  |                |   |   | 0.50-3.75           |   |   |                  | .50-1.00  |   |   |   | 0.92 |   |   |   | 0.57 |   |
|   Granted                                            |   |     | 98,986,590  |   |    |   | --         |                |   |   | 0.25                |   |   |                  | --        |   |   |   | 0.25 |   |   |   | -- |   |
|   Exercised                                          |   |     | (27,606,276 | )      |    |   | --         |                |   |   | 0.20                |   |   |                  | --        |   |   |   | 0.20 |   |   |   | -- |   |
|   Expired                                            |   |     | (97,606,276 | )      |    |   | --         |                |   |   | 0.50-3.75           |   |   |                  | --        |   |   |   | 0.92 |   |   |   | -- |   |
| September      30, 2009                                        |   |     | 80,238,208  |   |    |   | 2,145,000  |                |   |   | 0.20-1.00           |   |   |                  | .50-1.00  |   |   |   | 0.20 |   |   |   | 0.57 |   |
|   Granted                                            |   |     | --          |   |    |   | 7,225,000  |                |   |   | --                  |   |   |                  | .19-1.00  |   |   |   | -- |   |   |   | 0.29 |   |
|   Exercised                                          |   |     | --          |   |    |   | (8,334     | )                   |   |   | --                  |   |   |                  | 0.50      |   |   |   | -- |   |   |   | 0.50 |   |
|   Expired                                            |   |     | --          |   |    |   | (1,825,000 | )                   |   |   | --                  |   |   |                  | -.50-1.00 |   |   |   | -- |   |   |   | 0.58 |   |
| March      31, 2010                                            |   |     | 80,238,208  |   |    |   | 7,536,666  |                |   |   | 0.20-1.00           |   |   |                  | 0.19-1.00 |   |   |   | 0.20 |   |   |   | 0.38 |   |
| Exercisable      at    March      31, 2010 |   |     | 80,238,208  |   |    |   | 4,311,666  |                |   |   |                |   |   |                  |      |   |   |   | 0.20 |   |   |   | 0.22 |   |

|                               |   |   |      |   | Grant      Date |   |      | Unamortized  |   |   | Share-Based      Payment ExpenseNine      Months Ended March 31, |   |
|------------------------------------|--------|--------|-----------|--------|-----------------|--------|-----------|--------------|--------|--------|------------------------------------------------------------------|--------|
| Grant      Dates                   |   | Number |      |   | Fair      Value |   |      | Compensation |   |   | 2010                                                             |   |   | 2009 |   |
|   March      31, 2010    |   |   | 4,825,000 |   |            | $      | 435,025   |         |   | $      | 80,025                                                           |   |   | $ | 355,000 |   |   | $ | -- |   |
|   December      31, 2009 |   |   | 2,400,000 |   |            |   | 783,500   |         |   |   | 728,215                                                          |   |   |   | 55,285 |   |   |   | -- |   |
|   January      15, 2009  |   |   | 2,145,000 |   |            |   | 344,339   |         |   |   | --                                                               |   |   |   | -- |   |   |   | 344,339 |   |
|                               |   |   | 9,370,000 |   |            | $      | 1,562,864 |         |   | $      | 808,240                                                          |   |   | $ | 410,285 |   |   | $ | 344,339 |   |

----

| Three      months ended March 31                                     |   | 2010   |        |   | 2009   |   |
|----------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Net      (loss) income                                               |   | $      | 13,632,313  |   |   | $      | (3,353,114 | ) |
| Deemed      dividend on preferred stock                              |   |   | --          |   |   |   | (2,958,350 | ) |
| Numerator      for basic                                             |   | $      | 13,632,313  |   |   | $      | (6,311,494 | ) |
|                                                                 |   |   |        |   |   |   |   |   |
| Denominator:                                                         |   |   |        |   |   |   |   |   |
|    Weighted      averages shares                      |   |   | 159,023,171 |   |   |   | 14,509,225 |   |
|    Potentially      dilutive equity-linked contracts: |   |   |        |   |   |   |   |   |
|       Warrants      and options        |   |   | 1,424,101   |   |   |   | -- |   |
|       Convertible      preferred stock |   |   | 7,530,887   |   |   |   | - |   |
|                                                                 |   |   | 167,978,159 |   |   |   | 14,509,225 |   |
| (Loss)      income per common share:                                 |   |   |        |   |   |   |   |   |
|    Basic                                              |   | $      | 0.09        |   |   | $      | (0.43 | ) |
|    Diluted                                            |   | $      | 0.08        |   |   | $      | (0.43 | ) |

| Nine      months ended March 31                                      |   | 2010   |        |   | 2009   |   |
|----------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Net      (loss) income                                               |   | $      | (7,114,279  | )      |   |   | (405,538 | ) |
| Deemed      dividend on preferred stock                              |   |   | (66,948,653 | )      |   |   | (2,958,350 | ) |
| Numerator      for basic                                             |   | $      | (74,062,932 | )      |   |   | (3,363,888 | ) |
|                                                                 |   |   |        |   |   |   |   |   |
| Denominator:                                                         |   |   |        |   |   |   |   |   |
|    Weighted      averages shares                      |   |   | 130,834,476 |   |   |   | 14,497,568 |   |
|    Potentially      dilutive equity-linked contracts: |   |   |        |   |   |   |   |   |
|       Warrants      and options        |   |   | --          |   |   |   | -- |   |
|       Convertible      preferred stock |   |   | --          |   |   |   | -- |   |
|                                                                 |   |   | 130,834,476 |   |   |   | 14,497,568 |   |
| (Loss)      income per common share:                                 |   |   |        |   |   |   |   |   |
|    Basic                                              |   | $      | (0.57       | )      |   | $      | (0.23 | ) |
|    Diluted                                            |   | $      | (0.57       | )      |   | $      | (0.23 | ) |

----

|                                                                                                                                                                                                                                                                                    |   | 2010   |                   |   | 2009   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------|--------|--------|--------|
| Series      C Convertible Preferred Stock, 1,024,210 and 10,620,000   shares      issued and outstanding at December 31, 2009 (liquidation   value      $1,024,210) and June 30, 2009 (liquidation value   $10,620,000),      respectively |   | $      |    4,946,910 |   |   | $      |    28,969,634 |   |
| Series      D Convertible Preferred Stock, -0- and 7,000,000 shares   issued      and outstanding at December 31, 2009 and June 30, 2009   (liquidation      value $7,000,000), respectively                                                              |   |   |   --              |   |   |   |   7,000,000 |   |
| Series      F Convertible Preferred Stock, -0- and 10,000,000 shares   issued      and outstanding at December 31, 2009 and June 30, 2009   (liquidation      value $10,000,000), respectively                                                            |   |   |   --              |   |   |   |   10,000,000 |   |
|                                                                                                                                                                                                                                                                                    |   | $      | 4,946,910              |   |   | $      | 45,969,634 |   |

| Series |   | Date      ofDesignation |       | Number      of Shares |   |       | ParValue |   |   | StatedValue |   |   | LiquidationValue |   |   | DividendRate |   |   | InitialConversion |   |   | CurrentConversion |   |
|--------|--------|-------------------------|------------|-----------------------|--------|------------|----------|--------|--------|-------------|--------|--------|------------------|--------|--------|--------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|   | C      |                    | 10/18/2007 |                  |   | 10,620,000 |     |   | $      | 0.00001     |   |   | $                | 1.00   |   |         | $      | 1.00   |              |   |   | --                |   |   | $ | 0.75 |   |   | $ | 0.25 |   |

|   | · | The      Corporation shall fail to have available a sufficient number of authorized      and unreserved shares of Common Stock to issue to such Holder upon a      conversion hereunder; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Unless      specifically addressed elsewhere in the Certificate of Designation as a      Triggering Event, the Corporation shall fail to observe or perform any      other covenant, agreement or warranty contained in the Certificate of      Designation, and such failure or breach shall not, if subject to the      possibility of a cure by the Corporation, have been cured within 20      calendar days after the date on which written notice of such failure or      breach shall have been delivered; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Corporation shall be party to a Change of Control    Transaction; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | There      shall have occurred a Bankruptcy Event or Material Monetary      Judgment; |
|--------|--------|---------------------------------------------------------------------------------------|

----

|                                                  |   | OmniReliant      and wholly-owned subsidiaries |       |   |  OmniComm |   |   |  RPS |   |   |  Consolidated |   |
|-------------------------------------------------------|--------|------------------------------------------------|------------|--------|----------------|--------|--------|-----------|--------|--------|--------------------|--------|
| Three      months ended March      31, 2010:     |   |                                           |       |   |           |   |   |      |   |   |               |   |
| Sales      or other revenues                          |   | $                                              | 3,556,595  |   |           | $      | 95,738 |      |   | $      | 1,298,316          |   |   | $ | 4,950,649 |   |
| Loss      from operations                             |   |                                           | (1,864,176 | )      |           |   | 1,059  |      |   |   | (153,117           | )      |   |   | (2,016,234 | ) |
| Net      (loss) income                                |   |                                           | 13,771,171 |   |           |   | 1,059  |      |   |   | (153,117           | )      |   |   | 13,619,113 |   |
| Non-controlling      interests                        |   |                                           | --         |   |           |   | 13,200 |      |   |   | --                 |   |   |   | 13,200 |   |
| Net      (loss) income applicable to OmniReliant |   |                                           | 13,771,171 |   |           |   | 14,259 |      |   |   | (153,117           | )      |   |   | 13,632,313 |   |

----

|                                                         |   | OmniReliant      and wholly-owned subsidiaries |       |   |  OmniComm |   |    |  RPS |   |   |  Consolidated |   |
|--------------------------------------------------------------|--------|------------------------------------------------|------------|--------|----------------|--------|---------|-----------|--------|--------|--------------------|--------|
| Nine      months ended   March      31, 2010: |   |                                           |       |   |           |   |    |      |   |   |               |   |
| Sales      or other revenues                                 |   | $                                              | 18,846,442 |   |           | $      | 247,015 |      |   | $      | 3,182,951          |   |   | $ | 22,276,408 |   |
| Loss      from operations                                    |   |                                           | (4,581,845 | )      |           |   | (81,109 | )         |   |   | (687,739           | )      |   |   | (5,350,693 | ) |
| Net      (loss) income                                       |   |                                           | (6,562,817 | )      |           |   | (75,962 | )         |   |   | (693,604           | )      |   |   | (7,332,383 | ) |
| Non-controlling      interests                               |   |                                           | --         |   |           |   | 54,655  |      |   |   | 163,450            |   |   |   | 218,105 |   |
| Net      (loss) income applicable to OmniReliant             |   |                                           | (6,562,817 | )      |           |   | (21,307 | )         |   |   | (530,154           | )      |   |   | (7,114,279 | ) |

| Balance      Sheet Information          |   |   |       |   |   |   |       |   |   |   |       |   |
|-----------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|
| Total      assets                       |   | $      | 32,250,531 |   |   | $      | 2,493,285  |   |   | $      | 3,085,429  |   |   | $ | 37,829,245 |   |
| Total      liabilities                  |   |   | (6,174,174 | )      |   |   | (1,998,177 | )      |   |   | (3,428,458 | )      |   |   | (11,600,809 | ) |
| Redeemable      preferred stock         |   |   | (4,946,910 | )      |   |   | --         |   |   |   | --         |   |   |   | (4,946,910 | ) |
| Total      equity                       |   |   | 21,129,447 |   |   |   | 495,108    |   |   |   | (343,029   | )      |   |   | 21,281,526 |   |
| Non-controlling      interests          |   |   | --         |   |   |   | (142,459   | )      |   |   | --         |   |   |   | (142,459 | ) |
| Equity      of OmniReliant shareholders |   | $      | 21,129,447 |   |   | $      | 352,649    |   |   | $      | (343,029   | )      |   | $ | 21,139,067 |   |

----

|                                            |   | June      30, 2009(with      acquisitions) |       |   | June      30, 2009(as      reported) |   |
|-------------------------------------------------|--------|--------------------------------------------|------------|--------|--------------------------------------|--------|
| Investments                                     |   | $                                          | 3,087,292  |   |                                 | $      | 3,087,929 |   |
| Net      operating losses                       |   |                                       | 3,066,879  |   |                                 |   | 2,898,060 |   |
| Share-based      payment                        |   |                                       | 1,490,114  |   |                                 |   | 1,490,114 |   |
| Impairment      charges                         |   |                                       | 74,024     |   |                                 |   | 74,024 |   |
| Bad      debts                                  |   |                                       | 51,790     |   |                                 |   | 51,790 |   |
| Inventory      reserves                         |   |                                       | 35,972     |   |                                 |   | 35,972 |   |
| Unconsolidated      investee                    |   |                                       | 34,592     |   |                                 |   | 34,592 |   |
| Intangible      assets                          |   |                                       | (2,879,101 | )      |                                 |   | (368,286 | ) |
| Net      deferred tax assets, before allowances |   |                                       | 4,962,199  |   |                                 |   | 7,304,195 |   |
| Less:      Valuation allowances                 |   |                                       | (4,962,199 | )      |                                 |   | (7,304,195 | ) |
|                                            |   | $                                          | --         |   |                                 | $      | -- |   |

| Acquisition:      Abazias  |   | $      | 2,281,029 |   |
|----------------------------|--------|--------|-----------|--------|
| Acquisition:      Designer |   |   | 60,967    |   |
|                       |   | $      | 2,341,996 |   |

----

----

----

----

|   | 1.     | Cash      severance of $225,000, payable $75,000 within 10 days of the agreement and      $12,500 monthly for a period of twelve months. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                     |

|   | 2.     | Cash      of $50,000 to redeem 1,500,000 stock options and 300,000 shares of the      Company’s common stock. Our stock options do not provide for such      redemption; rather, this provision was negotiated between the parties in      the settlement. The payment was recorded in employment    costs. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                              |

|   | 3.     | Cash      of $49,000 for the former officer’s expenses. |
|--------|--------|---------------------------------------------------------------|
|   |   |                                                          |

|   | 4.     | A      company-owned automobile with a carrying and estimated fair value of      $13,509. |
|--------|--------|-------------------------------------------------------------------------------------------|
|   |   |                                                                                      |

|   | 5. | An      exchange of investments, wherein we will deliver 50 common shares in      Strathmore Investments and 625,000 preferred shares in Nested Media      (collectively, our Cellular Blowout investment) for 1,000,000 shares in      Wineharvest owned by the separated officer. The aggregate carrying value      and fair value of investments transferred to the former officer amounted      to $62,500. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 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. |

----

|                                                                                                                       |   | Abazias |       |   | Designer |   |      | Total  |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|---------|------------|--------|----------|--------|-----------|--------|--------|
| Current      assets, including cash of $127,530 and $762,702   from      Abazias and Designer, respectively |   | $       | 523,307    |   |     | $      | 1,824,660 |   |   | $ | 2,347,966 |   |
| Property      and equipment                                                                                                |   |    | 2,027      |   |     |   | —   |   |   |   | 2,027 |   |
| Intangible      assets:                                                                                                    |   |    |       |   |     |   |      |   |   |   |   |   |
|    Customer      lists and customer related                                                                 |   |    | 2,545,930  |   |     |   | 484,353   |   |   |   | 3,030,283 |   |
|    Dealer      network intangibles                                                                          |   |    | 2,133,679  |   |     |   | —   |   |   |   | 2,133,679 |   |
|    Registered      trademarks, trade names and dress                                                        |   |    | 1,642,420  |   |     |   | —   |   |   |   | 1,642,420 |   |
|    Executive      employment contracts                                                                      |   |    | 210,928    |   |     |   | —   |   |   |   | 210,928 |   |
|    Software      and operational processes                                                                  |   |    | 35,000     |   |     |   | —   |   |   |   | 35,000 |   |
| Trade      liabilities assumed                                                                                             |   |    | (347,905   | )      |     |   | (124,728  | )      |   |   | (472,633 | ) |
| Notes      payable                                                                                                         |   |    | —    |   |     |   | (250,000  | )      |   |   | (250,000 | ) |
| Deferred      income taxes                                                                                                 |   |    | (2,281,029 | )      |     |   | (60,967   | )      |   |   | (2,341,966 | ) |
|                                                                                                                       |   |    | 4,464,357  |   |     |   | 1,873,318 |   |   |   | 6,337,674 |   |
| Consideration      transferred (excluding direct expenses):                                                                |   |    |       |   |     |   |      |   |   |   |   |   |
|    Cash      consideration                                                                                  |   |    | —    |   |     |   | 150,000   |   |   |   | 150,000 |   |
|    Fair      value of OmniReliant Securities                                                                |   |    | 15,841,323 |   |     |   | 101,000   |   |   |   | 15,942,323 |   |
|    Investments                                                                                              |   |    | 1,042,789  |   |     |   | 1,857,383 |   |   |   | 2,900,172 |   |
| Non-controlling      interest in RPS Traders LLC                                                                           |   |    | —    |   |     |   | 163,450   |   |   |   | 163,450 |   |
| Consideration      transferred, plus non-controlling interests                                                             |   |    | 16,884,112 |   |     |   | 2,271,833 |   |   |   | 19,155,945 |   |
| Goodwill      arising from the acquisitions under ASC 805                                                                  |   | $       | 12,419,756 |   |     | $      | 398,515   |   |   | $ | 12,818,271 |   |

----

| · | Product      sales: Our product sales increased $2,269,329 to $4,854,911 for the three      months ended March 31, 2010 compared to $2,585,582 for the three months      ended March 31, 2009. Abazias and Designer contributed $1,014,696 and      $1,308,855, respectively, of this increase. Our product sales for the      three months ended March 31, 2010 are net of estimated returns and      allowances of $8,744, which amounts are normal in retail sales and within      the expectations of our management. Due to the nature of the retail      business sector, our revenues may be concentrated from time-to-time in the      sale of certain specific products or a single product. These      concentrations generally arise from the timing and intensity of our      marketing and infomercial campaigns related to those specific products.      Due to the nature of the retail business sector, our revenues may be      concentrated from time-to-time in the sale of certain specific products or      a single product. These concentrations generally arise from the timing and      intensity of our marketing and infomercial campaigns related to those      specific products. During the three months ended March 31, 2010, two      products comprised 22% and 29%, respectively, of our consolidated product      sales. In the aggregate, these two products comprised 51% of our      consolidated revenue for the three months ended March 31, 2010. During the      same periods, our Abazias product line, consisting of precious gems and      jewelry comprised 20% of our consolidated product sales and our RPS      product line, consisting of manufactured apparel comprised 26%.      Significant declines in the sales volumes associated with these products      or product lines, should that occur, could have a material adverse effect      on our operations and financial position, should are management be unable      to timely replace the lines with alternative retail    products. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Included      in product sales for the three months ended March 31, 2010 is $189,000 of      amortization of deferred revenue. The revenue is associated with marketing      services and royalties. See liquidity section below. Deferred revenue      subject to future amortization amounts to $2,214,153 at March 31, 2010. We      will reflect these amounts separately from product sales when and if they      become material to our total revenues.                                                                                                                                                                                                                                                                                    |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| · | Cost      of product sales:      Our cost of product sales increased $1,932,199 to $3,405,975 for the three      months ended March 31, 2010 compared to $1,473,776 for the three months      ended March 31, 2009. This increase reflects cost of sales associated with      the Abazias and RPS product lines added during the current year. Our      margin during the current quarter amounted to 30% compared to 43% during      the quarter ended March 31, 2009. Margins on retail products are largely      dependent upon the types and demands for retail products. Accordingly, our      ongoing margins will likely be volatile until we establish the types of      products that will serve as our long-term base of    offerings. |

| · | Rental      revenue: Rental revenue of commercial real estate amounted to $95,738, an      increase of $37,424 when compare to $58,314 of commercial real estate      revenue that we reported for the three months ended March 31, 2009.      Increases are associated with increased occupancy of our building. We      anticipate rental revenues to be consistent with levels experienced in the      current quarterly period. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Advertising      expense: Advertising and marketing expense decreased $839,018 (or 69%) for      the three months ended March 31, 2010 to $373,507 as compared to      $1,212,525 for the three months ended March 31, 2009. We began incurring      substantial advertising media expense during the prior fiscal year which      is necessary to promote our Retail Products. We generally expense      advertising when it is incurred in accordance with Financial the      Accounting Standards Boards’ Accounting Standards Codification (“ASC”)      720-35, Accounting for      Advertising Costs. Commencing in the prior fiscal year the Company      began engaging for the production of infomercials related to its Retail      Products Business, which is expected to be an increasing activity and      cost. The Company’s accounting policy provides that the costs of      infomercials are deferred in prepaid assets until the first airing, at      which time the cost is expensed. The decrease in expense over the prior      fiscal year relates to the curtailment of advertising activities      associated with certain products that management believe are close to      market saturation. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | Employment      Costs: Employment related costs consist of employee insurance, salaries      and payroll. These costs increased by $639,170 (or 159%) to $1,047,603 for      the three months ended March 31, 2010. During the three months ended March      31, 2009, employment expenses amounted to $408,433. Our employment costs      in the current period include $132,272 related Abazias and Designer. Also,      our employment costs included non-cash share-based payment expense of      $410,285 and $344,339 during the three months ended March 31, 2010 and      2009, respectively. Unamortized share-based payment expense amounts to      $808,240 as of March 31, 2010. This amount will be amortized into expense      as the stock options vest, generally over the next five years. Employment      costs for the three months ended March 31, 2010 also include severance      expense in the amount of $400,009 related to the separation of our Chief      Executive Officer. Otherwise, the increase in our employment cost is due      to higher employment levels. Further, we hired a Chief Operating Officer      in July of 2009 and a Chief Financial Officer in September of 2009.      Employment costs of these newly hired officers and other will increase our      total employment costs in futureperiods. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Other      general and administrative: These costs and expenses include bad debts,      occupancy costs and general office expenses. Our general and      administrative costs increased $579,182 (or 234%) to $826,873 for the      three months ended March 31, 2010 compared to $247,691 for the three      months ended March 31, 2009. Abazias and Designer contributed $122,427 to      this increase. Overall, we believe that our reserves are reasonable and      appropriate for our current levels of operations. In the quarter ended      March 31, 2010 we increased our provision for bad debts by $300,000. Also      included in other general and administrative expenses for the current      fiscal quarter is $217,100 in royalty expenses that we incurred to sell      licensed products. The expense for royalties was $65,000 in the prior      year. Engaging in licensing agreements to sell products is an industry      practice and, accordingly, we will likely incur higher levels of royalty      charges as our operations mature and we add additional products to our      retail offerings. Finally, included within general and administrative      expenses are real estate operation expenses of approximately $50,326 and      $86,747 during the three months ended March 31, 2010 and 2009,      respectively. Our real estate operation expenses include property taxes,      utilities, repairs and maintenance and insurance costs. These expenses are      expected to remain consistent with levels experienced in the current      period. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Accounting      and professional expense: Accounting and consulting professional expenses      increased $310,567 (or 83%) to $684,745 for the three months ended March      31, 2010. During the three months ended March 31, 2009 these expenses      amounted to $374,178. These costs include fees relating to audit and other      consulting related expenses. Our audit fees have increased due to our      increased operating activities. We continue to utilize third-party      consultants to assist in the application of complex accounting principles      and valuation of our derivative financial instruments. We believe that our      professional fees will continue at current levels until we can further      develop our operating and financial  infrastructure. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Depreciation      and amortization: Our amortization of intangible assets and depreciation      of property and equipment amounted to $628,180 and $181,833 respectively      for the three months ended March 31, 2010. Our amortization of intangible      assets and depreciation of property and equipment amounted to $575,480 and      $52,703, respectively for the three months ended March 31, 2009. Increases      in depreciation and amortization are largely due to the higher levels of      intangible assets arising from our acquisitions of Abazias and Designer,      which contributed $4,925,537 and $484,353 in intangible assets that are      subject to amortization. In addition, during the current fiscal quarter,      we exchanged certain investments for software having an estimated value of      $3,782,717. The addition of the Abazias and Designer intangible assets,      coupled with the new software acquired in the current quarter will result      in higher amortization expense in future periods. The following table      reflects our estimated future amortization of intangible      assets: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Estimated      Amortization Expense:                    |   |   |      |
|---------------------------------------------------------|--------|--------|-----------|
|                                                    |   |   |      |
|    Three      months ended June 30, 2010 |   | $      | 575,480   |   |
|    Year      ending June 30:             |   |   |      |   |
|       2011                |   |   | 2,301,914 |   |
|       2012                |   |   | 2,212,899 |   |
|       2013                |   |   | 1,071,821 |   |
|       2014                |   |   | 756,595   |   |
|       2015                |   |   | 756,595   |   |
|       Thereafter          |   |   | 1,380,046 |   |
|                                                    |   | $      | 9,055,350 |   |

| · | Impairment      of investments: During the three months ended March 31, 2010, we recorded      impairment charges aggregating $371,362 associated with one investment      carried as an available for sale investment and one investment carried as      an equity investment. The continuing recoverability of our investments is      under the continuous review by our management. Additional impairment      charges may arise in future periods if, as a result of these reviews,      management concludes that the impairments are permanently      impaired. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Derivative      income (expense): Derivative income (expense) decreased $18,556,531(or      896%) to $16,484,885 during the three months ended March 31, 2010 compared      to $(2,071,646) for the three months ended March 31, 2009. Derivative      income (expense) results from certain financial instruments (principally      warrants, but also including embedded derivative financial instruments)      that are required to be measured at fair value. The changes in the fair      value of these derivatives are significantly influenced by changes in our      trading stock price and changes in interest rates in the public markets.      Further, certain elements of the fair value techniques require us to make      estimates about the outcome of certain events, such as defaults. The      reduction in the fair value of our derivatives, and the resulting income,      is largely a result of a decline in our trading market price. We will      continue to record income or expense related to derivatives until they are      settled or reclassified to equity. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | Interest and other      income: Income generated from interest on notes receivable from      investees and other sources of income decreased $4,987 to $2,742 during      the three months ended March 31, 2010 compared to $7,729 for the three      months ended March 31, 2009. The decrease is attributable to recent      write-offs of certain interest bearing available for sale      investments. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Equity in losses of      investees: We hold investments accounted for under the equity      method. Our pro rata share of net loss and related book adjustments in      these investments equaled $445,047 for the three months ended March 31,      2010. We reported no similar balances during the quarter ended March 31,      2009. We will continue to report our interests in the earnings or losses      of these equity investees so long as our investments remain at levels      required for accounting treatment under this method. Our equity investment      balance as of March 31, 2010 amounts to $2,800,311; we are not obligated      to recognize losses above our investment balances computed discretely as      to each individual investment. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Interest expense:      Interest expense includes amortization of deferred finance costs and      interest on our mortgage loan. Interest expense decreased $19,409 (or 35%)      to $35,871 during the three months ended March 31, 2010 compared to      $55,280 for the three months ended March 31, 2009. The decrease is      attributable to fully amortizing deferred finance costs prior to the      quarter. Further, our interest expense will continue to decrease as more      of our monthly mortgage payments are allocated to principal rather than      interest. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | Product      sales: Our product sales increased $18,519,568 to $22,276,408 for the nine      months ended March 31, 2010 compared to $3,756,840 for the nine months      ended March 31, 2009. Abazias and Designer contributed $2,905,297 and      $3,211,591 (aggregate $6,116,888), respectively, of this increase. Our      product sales for the nine months ended March 31, 2010 are net of      estimated returns and allowances of $245,261, which amounts are normal in      retail sales and within the expectations of our management. Due to the      nature of the retail business sector, our revenues may be concentrated      from time-to-time in the sale of certain specific products or a single      product. These concentrations generally arise from the timing and      intensity of our marketing and infomercial campaigns related to those      specific products. Due to the nature of the retail business sector, our      revenues may be concentrated from time-to-time in the sale of certain      specific products or a single product. These concentrations generally      arise from the timing and intensity of our marketing and infomercial      campaigns related to those specific products. During the nine months ended      March 31, 2010, two products comprised 16% and 56%, respectively, of our      consolidated product sales. In the aggregate, these two products comprised      72% of our consolidated revenue for the nine months ended March 31, 2010.      During the same periods, our Abazias product line, consisting of precious      gems and jewelry comprised 13% of our consolidated product sales and our      RPS product line, consisting of manufactured apparel comprised 14%.      Significant declines in the sales volumes associated with these products      or product lines, should that occur, could have a material adverse effect      on our operations and financial position, should are management be unable      to timely replace the lines with alternative retail    products. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Included      in product sales for the nine months ended March 31, 2010 is $581,847 of      amortization of deferred revenue. The revenue is associated with marketing      services and royalties. See liquidity section below. Deferred revenue      subject to future amortization amounts to $2,214,153 at March 31, 2010. We      will reflect these amounts separately from product sales when and if they      become material to our totalrevenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

| · | Cost      of product sales:      Our cost of product sales increased $12,089,922 to $14,176,417 for the      nine months ended March 31, 2010 compared to $2,086,495 for the nine      months ended March 31, 2009. This increase reflects cost of sales      associated with the Abazias and RPS product lines added during the current      year. Our margin during the current quarter amounted to 36% compared to      44% during the nine months ended March 31, 2009. Margins on retail      products are largely dependent upon the types and demands for retail      products. Accordingly, our ongoing margins will likely be volatile until      we establish the types of products that will serve as our long-term base      of offerings. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | Rental      revenue: Rental revenue of commercial real estate amounted to $243,686, an      increase of $53,266 when compare to $190,420 of commercial real estate      revenue that we reported for the nine months ended March 31, 2009.      Increases are associated with increased occupancy of our building. We      anticipate rental revenues to be consistent with levels experienced in the      current quarterly period. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Advertising      expense: Advertising and marketing expense increased $3,391,308 (or 139%)      for the nine months ended March 31, 2010 to $5,833,427 as compared to      $2,442,119 for the nine months ended March 31, 2009. We began incurring      substantial advertising media expense during the prior fiscal year which      is necessary to promote our Retail Products. We generally expense      advertising when it is incurred in accordance with Financial the      Accounting Standards Boards’ Accounting Standards Codification (“ASC”)      720-35, Accounting for      Advertising Costs. Commencing in the prior fiscal year the Company      began engaging for the production of infomercials related to its Retail      Products Business, which is expected to be an increasing activity and      cost. The Company’s accounting policy provides that the costs of      infomercials are deferred in prepaid assets until the first airing, at      which time the cost is expensed. The decrease in expense over the prior      fiscal year relates to the curtailment of advertising activities      associated with certain products that management believe are close to      market saturation. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Employment      Costs: Employment related costs consist of employee insurance, salaries      and payroll. These costs increased by $1,733,911 (or 266%) to $2,207,068      for the nine months ended March 31, 2010. During the nine months ended      March 31, 2009, employment expenses amounted to $473,157. Our employment      costs in the current period include $922,875 related Abazias and Designer.      Also, our employment costs included non-cash share-based payment expense      of $410,285 and $344,339 during the nine months ended March 31, 2010 and      2009, respectively. Unamortized share-based payment expense amounts to      $808,240 as of March 31, 2010. This amount will be amortized into expense      as the stock options vest, generally over the next five years. Employment      costs for the nine months ended March 31, 2010 also include severance      expense in the amount of $400,009 related to the separation of our Chief      Executive Officer. Otherwise, the increase in our employment cost is due      to higher employment levels. Further, we hired a Chief Operating Officer      in July of 2009 and a Chief Financial Officer in September of 2009.      Employment costs of these newly hired officers and other will increase our      total employment costs in futureperiods. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Other      general and administrative: These costs and expenses include bad debts,      occupancy costs and general office expenses. Our general and      administrative costs increased $1,954,150 (or 389%) to $2,456,372 for the      nine months ended March 31, 2010 compared to $502,222 for the nine months      ended March 31, 2009. Abazias and Designer contributed $326,338 to this      increase. Overall, we believe that our reserves are reasonable and      appropriate for our current levels of operations. Also included in other      general and administrative expenses for the current fiscal quarter is      $606,114 in royalty expenses that we incurred to sell licensed products.      Engaging in licensing agreements to sell products is an industry practice      and, accordingly, we will likely incur higher levels of royalty charges as      our operations mature and we add additional products to our retail      offerings. Finally, included within general and administrative expenses      are real estate operation expenses of approximately $85,977 and $260,621      during the nine months ended March 31, 2010 and 2009, respectively. Our      real estate operation expenses include property taxes, utilities, repairs      and maintenance and insurance costs. These expenses are expected to remain      consistent with levels experienced in the current  period. |
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| · | Accounting      and professional expense: Accounting and consulting professional expenses      increased $741,330 (or 68%) to $1,829,931 for the nine months ended March      31, 2010. During the nine months ended March 31, 2009 these expenses      amounted to $1,088,601. These costs include fees relating to legal, audit      and other consulting related expenses. During the current year to date our      acquisitions of Abazias and Designer gave rise to significant increases      because direct acquisition expenses are required to be expensed. Our audit      fees have increased due to our increased operating activities. We continue      to utilize third-party consultants to assist in the application of complex      accounting principles and valuation of our derivative financial      instruments. We believe that our professional fees will continue at      current levels until we can further develop our operating and financial      infrastructure. |
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| · | Depreciation      and amortization: Our amortization of intangible assets and depreciation      of property and equipment amounted to $1,367,572 and $430,218 respectively      for the nine months ended March 31, 2010. Our amortization of intangible      assets and depreciation of property and equipment amounted to $1,262,260      and $105,503 respectively for the nine months ended March 31, 2009.      Increases in depreciation and amortization are largely due to the higher      levels of intangible assets arising from our acquisitions of Abazias and      Designer, which contributed $4,925,537 and $484,353 in intangible assets      that are subject to amortization. In addition, during the current fiscal      quarter, we exchanged certain investments for software having an estimated      value of $3,782,717. The addition of the Abazias and Designer intangible      assets, coupled with the new software acquired in the current quarter will      result in higher amortization expense in future periods. The following      table reflects our estimated future amortization of intangible      assets: |
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| Estimated      Amortization Expense:                    |   |   |      |
|---------------------------------------------------------|--------|--------|-----------|
|                                                    |   |   |      |
|    Three      months ended June 30, 2010 |   | $      | 575,480   |   |
|    Year      ending June 30:             |   |   |      |   |
|       2011                |   |   | 2,301,914 |   |
|       2012                |   |   | 2,212,899 |   |
|       2013                |   |   | 1,071,821 |   |
|       2014                |   |   | 756,595   |   |
|       2015                |   |   | 756,595   |   |
|       Thereafter          |   |   | 1,380,046 |   |
|                                                    |   | $      | 9,055,350 |   |

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| · | Extinguishment expense:      On July 20, 2009, we entered into a securities purchase agreement (the      “Purchase Agreement”) with Vicis Capital Master Fund (“Vicis”), a      sub-trust of the Vicis Capital Series Master Trust, a unit trust organized      under the laws of the Cayman Islands, whereby Vicis purchased from the      Company a warrant to purchase 97,606,276 shares of the Company’s Common      Stock (the “New Warrant”) for a purchase price of five million dollars      ($5,000,000). The Warrant has an exercise price of $0.25 per share and is      exercisable for ten years from the date of issuance. The Warrant is      exercisable on a cashless basis at any time after nine months from the      date of issuance if there is no effective registration statement      registering the resale of the shares underlying the    Warrant. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | As      further consideration for the sale of the Warrant, Vicis surrendered for      cancellation all existing warrants that it currently holds that are      indexed to 97,606,276 shares of common stock. These transactions are      collectively referred to as the Exchange Transaction. The Exchange      Transaction triggered certain down-round anti-dilution protection in an      aggregate of 102,732,942 of our outstanding warrants, resulting in      revisions of the exercise prices from a range of $0.50 – $2.00 to      $0.25.                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Prior      to the exchange transaction, we carried the surrendered warrants as      derivative liabilities and at fair value. The new warrant did not achieve      equity classification because it did not meet the definition of “indexed      to a company’s own stock.” Accordingly, we accounted for the exchange      analogously to an exchange of debt instruments; that is as an      extinguishment. The following table summarizes the components of the      extinguishment calculation:                                                                                                                                                                                                                                                                                                                                                                                                   |

| Fair      value of New Warrant          |   | $      | 37,090,385 |   |
|-----------------------------------------|--------|--------|------------|--------|
| Fair      value of surrendered warrants |   |   | (9,761,869 | )      |
| Consideration                           |   |   | (5,000,000 | )      |
| Extinguishment      loss                |   | $      | 22,328,516 |   |

| · | Derivative      income (expense): Derivative income (expense) increased $23,053,408 (or      853%) to $25,757,299 during the nine months ended March 31, 2010 compared      to $2,703,891 for the nine months ended March 31, 2009. Derivative income      (expense) results from certain financial instruments (principally      warrants, but also including embedded derivative financial instruments)      that are required to be measured at fair value. The changes in the fair      value of these derivatives are significantly influenced by changes in our      trading stock price and changes in interest rates in the public markets.      Further, certain elements of the fair value techniques require us to make      estimates about the outcome of certain events, such as defaults. We will      continue to record income or expense related to derivatives until they are      settled or reclassified to equity. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Inducement expense: On      March 31, 2010, pursuant to an inducement offer wherein we reduced the      strike price on the Vicis warrants from $0.25 to $0.2029 on 97,606,276      warrants, Vicis exercised 27,606,276 warrants for an adjusted aggregate      exercise price of $5,600,000. We accounted for the warrant exercise      analogously to an inducement offer to convert debt instruments; that is      the inducement value is recorded as a charge to income. The following      table summarizes the components of the inducement    calculation: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Fair      value of warrants following inducement |   | $      | 26,851,487 |   |
|--------------------------------------------------|--------|--------|------------|--------|
| Fair      value of warrants preceding inducement |   |   | 25,377,632 |   |
| Extinguishment      loss                         |   | $      | 1,473,855  |   |

| · | Interest and other      income: Income generated from interest on notes receivable from      investees increased $234,227 to $299,795 during the nine months ended      March 31, 2010 compared to $65,568 for the nine months ended March 31,      2009. The increase is attributable to higher balances of notes receivable.      However, during the quarter ended March 31, 2010, we exchanged $3,429,000      face value of notes receivable for an intangible asset and wrote off      certain receivable investments. As a result, interest income is expected      to decline in the ensuing quarterlyperiods. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Equity in losses of      investees: We hold investments accounted for under the equity      method. Our pro rata share of net loss and related book adjustments in      these investments equaled $2,079,289 for the nine months ended March 31,      2010. We reported no similar balances during the quarter ended March 31,      2009. We will continue to report our interests in the earnings or losses      of these equity investees so long as our investments remain at levels      required for accounting treatment under this method. Our equity investment      balance as of March 31, 2010 amounts to $2,800,311; we are not obligate to      recognize losses above our investment balances computed discretely as to      each individual investment. |
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| · | Impairment      of investments: During the nine months ended March 31, 2010, we recorded      impairment charges aggregating $1,963,066 associated with one investment      carried as an available for sale investment and one investment carried as      an equity investment. As to the former, during the quarterly period ended      March 31, 2010, our management evaluated the continuing carrying value of      the Beyond Commerce investment. As a result of the review, and after      extensive negotiations, we exchanged notes with a principal amount of      $3,428,574, plus accrued interest of $135,355, and a fair value of      $3,782,717, for certain of Beyond Commerce’s software and provided a      reserve on the balance. However, we will continue to pursue collection of      this amount from the debtor. We recorded the software at the fair value of      the available for sale securities exchanged, which was viewed as a      reasonable basis for the software. As to the later, management reviewed      the carrying value of equity investments and determined that the Company’s      investment in A Perfect Pear was permanently impaired and, accordingly,      charged the investment to impairments expense. Although management      concluded that no further impairments were required, the investments will      continue to be monitored and evaluated for recoverability and further      impairments may become necessary should conditions so    warrant. |
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| · | Interest expense:      Interest expense includes amortization of deferred finance costs and      interest on our mortgage loan. Interest expense increased $13,129 (or 7%)      to $194,047 during the nine months ended March 31, 2010 compared to      $180,918 for the nine months ended March 31, 2009. Our interest expense      will continue to decrease as more of our monthly mortgage payments are      allocated to principal rather thaninterest. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Extinguishment:      Non-cash charges included an extinguishment of $22,328,516 triggered by a      July 20, 2009 exchange transaction, whereby Vicis purchased from the      Company a warrant to purchase 97,606,276 shares of the Company’s Common      Stock for a purchase price of five million dollars ($5,000,000). For      further information over the extinguishment expense, refer to Note 8 of      the accompanying consolidated financial statements in this Form      10-Q. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Derivative      income: Non-cash charges and (credits) include changes in the fair value      of derivative financial instruments and other activity associated with our      financial instruments, amounting to ($25,757,299) and ($2,703,891) during      the nine months ended March 31, 2010 and 2009, respectively. We estimate      fair values of derivative financial instruments using various techniques      (and combinations thereof) that are considered to be consistent with the      objective measuring fair values. In selecting the appropriate technique,      we consider, among other factors, the nature of the instrument, the market      risks that it embodies and the expected means of settlement. For less      complex derivative instruments, such as free-standing warrants, we      generally use the Black-Scholes Merton (“BSM”) option valuation technique,      adjusted for the effect of dilution, because it embodies all of the      requisite assumptions (including trading volatility, estimated terms,      dilution and risk free rates) necessary to fair value these instruments.      For compound derivative instruments, comprising certain redemption and put      features embodied in our convertible preferred stock, we use discounted      cash flow models involving multiple, probability-weighted outcomes and      risk-adjusted rates. Estimating fair values of derivative financial      instruments requires the development of significant and subjective      estimates that may, and are likely to, change over the duration of the      instrument with related changes in internal and external market factors.      In addition, option-based techniques (such as BSM) are highly volatile and      sensitive to changes in the trading market price of our common stock,      which has a high-historical volatility. Since derivative financial      instruments are initially and subsequently carried at fair values, our      income (loss) will reflect the volatility in these estimate and assumption      changes. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Inducement      expense: Non-cash charges also included an extinguishment loss of      $1,473,855, pursuant to an inducement offer wherein we reduced the strike      price on the Vicis warrants from $0.25 to $0.2029 on 97,606,276 warrants      and Vicis exercised 27,606,276 warrants for an adjusted aggregate exercise      price of $5,600,000. We accounted for the warrant exercise analogously to      an inducement offer to convert debt instruments; that is the inducement      value is recorded as a charge toincome. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Impairment      of investments: Non-cash charges recorded included impairment charges      aggregating $1,963,066 associated with one investment carried as an      available for sale investment and one investment carried as an equity      investment. As to the former, during the quarterly period ended March 31,      2010, our management evaluated the continuing carrying value of the Beyond      Commerce investment. As a result of the review, and after extensive      negotiations, we exchanged notes with a principal amount of $3,428,574,      plus accrued interest of $135,355, and a fair value of $3,782,717, for      certain of Beyond Commerce’s software and provided a reserve on the      balance. However, we will continue to pursue collection of this amount      from the debtor. We recorded the software at the fair value of the      available for sale securities exchanged, which was viewed as a reasonable      basis for the software. As to the later, management reviewed the carrying      value of equity investments and determined that the Company’s investment      in A Perfect Pear was permanently impaired and, accordingly, charged the      investment to impairments expense. Although management concluded that no      further impairments were required, the investments will continue to be      monitored and evaluated for recoverability and further impairments may      become necessary should conditions sowarrant. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Equity in losses of      investees: We hold investments accounted for under the equity      method. Our pro rata share of net loss and related book adjustments in      these investments equaled $2,079,289 for the nine months ended March 31,      2010. We reported no similar balances during the quarter ended March 31,      2009. We will continue to report our interests in the earnings or losses      of these equity investees so long as our investments remain at levels      required for accounting treatment under this method. Our equity investment      balance as of March 31, 2010 amounts to $2,800,311 we are not obligated to      recognize losses above our investment balances computed discretely as to      each individual investment. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Bad      debts expense: Bad debt expense was comprised of $975,000 and $-0- during      the nine months ended March 31, 2010 and 2009,    respectively. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Amortization      of intangible assets: Amortization costs consisted of $1,260,592 and      $300,534 during the nine months ended March 31, 2010 and 2008,      respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Other      material components of change in our non-cash charges and (credits) were      related to non-controlling interests of ($218,105) and ($81,533);      depreciation expense of $111,398 and $142,402; amortization of deferred      revenue of $581,847 and $-0-; share based payment of $410,285 and      $344,339; and, amortization of finance costs of $15,623 and $168,200      during the nine months ended March 31, 2010 and 2008,      respectively. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Accounts      receivable: Accounts receivable represents normal trade obligations from      customers that are subject to normal trade collection terms, without      discounts or rebates. Notwithstanding these collections, we periodically      evaluate the collectability of our accounts receivable and consider the      need to establish an allowance for doubtful accounts based upon our      historical collection experience and specifically identifiable information      about our customers. We experienced an increase of $885,700, (net of      $975,000 in doubtful accounts) in our accounts receivable (a use of cash)      for the nine months ended March 31, 2010 as compared to an increase of      $190,563 in our accounts receivable (a use of cash) for the nine months      ended March 31, 2009. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Inventories:      Inventories consist of retail merchandise that is in its finished form and      ready for sale to end-user customers. 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. Our inventories are acquired and carried for retail sale and,      accordingly, the carrying value is susceptible to, among other things,      market trends and conditions and overall customer demand. We use our best      estimates of all available information to establish reasonable inventory      quantities. However, these conditions may cause our inventories to become      obsolete and/or excessive. We review our inventories periodically for      indications that reserves are necessary to reduce the carrying values to      the lower of cost or market values. Inventories increased (a use of cash)      $513,033 during the nine months ended March 31, 2010 as compared to an      increase (a use of cash) of $445,972 during the nine months ended March      31, 2009. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | As      discussed in above, during the current fiscal quarter we purchased      Designer. The acquisition of Designer resulted in our consolidation of      RPS, in which we have separately invested $1,857,383, based upon our 50%      voting interest and the fact that we are the primary beneficiary of this      variable interest entity. RPS is largely engaged in the manufacture of      apparel and relies on outsourced manufacturing facilities in foreign      countries that provide low-cost labor. As of March 31, 2010, RPS carries      approximately $1,946,000 of inventories that are located in a foreign      country. While we and RPS take precautions against loss, there is a higher      risk associated with these assets due to their physical location. Risks      include theft and nationalization events that could result in a total loss      of the assets.                                                                                                                                                                                                                                                                                                                                                                                                            |

| · | Prepaid      expenses and other assets: We experienced a decrease in our prepaid      expenses and other assets (a source of cash) of $575,620 and an increase      in our prepaid expenses and other assets (a use of cash) of $49,805 during      the nine months ended March 31, 2010 and 2009,    respectively. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Accounts      payable and accrued expenses: Our accounts payable and accrued liabilities      increased (a source of cash) 19%, an aggregate of $235,094 and $198,151      during the nine months ended March 31, 2010 and 2009, respectively.      T |
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| · | Deferred      revenue: On October 9, 2009, we entered into a license agreement (the      “License Agreement”) with Zurvita Holdings, Inc. (“Zurvita”) whereby we      granted a perpetual right and license, under all intellectual property      rights applicable to the Software, to access, use, execute, display,      market, and sell the Software to Zurvita in consideration for a royalty      fee of $2.00 per user for a period of twenty four (24) months, commencing      ninety (90) days from the date Zurvita runs its first advertisement.      Compensation for the license represented 15,200,000 shares of Zurvita      common stock, which had a fair value of $646,000. Additionally, pursuant      to the terms of the License Agreement, we granted Zurvita the right to      market and sell the Software through its independent sales representatives      in consideration for a 6% promissory note in the principal amount of Two      Million Dollars ($2,000,000), payable three (3) years from the date of      issuance and convertible at any time at our option at a conversion price      of $0.25 per share. The aggregate consideration has been recorded as      deferred revenue and is subject to amortization into income over the term      using the straight-line method. Similarly, we entered into a similar      arrangement with Net Talk.com, receiving 1,000,000 shares of common stock,      which had a value of $150,000. The fair value of the consideration      received has been recorded as deferred compensation and is subject to      amortization over the contractual terms. During the nine months ended      March 31, 2010, $581,847 of deferred revenue was amortized into income.      The remaining balance that will be amortized into income in future periods      amounts to $2,414,153. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | We      invested $6,491,709 and $1,139,944 during the nine months ended March 31,      2010 and 2009, respectively. This increase in investments from June 30,      2009 to the nine months ended March 31, 2010 was as a result of our      increased commitment to further invest in meaningful ventures in support      of our Retail Products business. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | We      were also a party to two acquisitions for the nine months ended March 31,      2010. On July 31, 2009 we acquired Designer Liquidators in which we      received cash proceeds of $612,702 (net of $150,000 in cash payments). On      August 27, 2009 we completed our acquisition of the outstanding common      stock of Abazias in which we received cash proceeds of $127,530. We      acquired Abazias for the purpose of building brand recognition and      increasing retail market penetration. Refer to Note 3 of the accompanying      condensed consolidated financial statements for further analysis on the      acquisitions. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Other      material components of change in our investing activities were related to      purchase of property and equipment of $40.949 and $2,811.901, during the      nine months ended March 31, 2010 and 2009, respectively. During 2009, we      acquired our real estate. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | $5,600,000      in cash was received during the nine months ended March 31, 2010 from the      proceeds on the exercise of warrants, pursuant to an inducement offer      wherein we reduced the strike price on the Vicis warrants on 97,606,276      warrants, Vicis exercised 27,606,276warrants. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | In      addition, cash was received from the proceeds from exchange of warrants      related to the July 20, 2009 Purchase Agreement, in the amount of      $5,000,000. Refer to Note 8 of the accompanying condensed consolidated      financial statements for further analysis on the July 20, 2009 Purchase      Agreement. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Other      material components of change in our financing activities were related to      principal payments on long-term debt of $25,112 during the nine months      ended March 31, 2010 and $7,844 during the same period in the prior      year. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Our      evaluation related to goodwill provides for a two step process. The first      step is to compare the carrying value of the company to the enterprise      value, generally determined using the market in which our common stock      trades. If the carrying value, including goodwill, exceeds the enterprise      value, the implied goodwill is determined by reevaluating the carrying      values of all assets. The excess of the carrying value of goodwill over      its implied value requires recognition as an operating      expense. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Our      evaluation related to tangible and intangible long-lived assets provides a      two step process. The first step is to compare our undiscounted cash      flows, as projected over the remaining useful lives of the assets, to      their respective carrying values. In the event that the carrying values      are not recovered by future undiscounted cash flows, as a second step, we      compare the carrying values to the related fair values and, if lower,      record an impairment adjustment. For purposes of fair value, we generally      use replacement costs for tangible fixed assets and discounted cash flows,      using risk-adjusted discount rates, for intangible  assets. |

|   |   | Equity method      investments when we have the ability to exercise significant      influence, but not control, over the investee. We record equity method      adjustments in gains (losses) on equity investments, net. Equity method      adjustments include: our proportionate share of investee income or loss,      gains or losses resulting from investee capital transactions, amortization      of certain differences between our carrying value and our equity in the      net assets of the investee at the date of investment, and other      adjustments required by the equity method. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   | Non-marketable cost method      investments when we do not have the ability to exercise significant      influence over the investee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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|   |   | the      investee's revenue and earnings trends relative to predefined milestones      and overall business prospects; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                   |
|   |   | the      technological feasibility of the investee's products and      technologies;                                   |

|   |   | the      general market conditions in the investee's industry or geographic area,      including regulatory or economic changes;                                                         |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                     |
|   |   | factors      related to the investee's ability to remain in business, such as the      investee's liquidity, debt ratios, and the rate at which the investee is      using its cash; and |

|   |   | the      investee's receipt of additional funding at a lower valuation. If an      investee obtains additional funding at a valuation lower than our carrying      amount or a new round of equity funding is required for the investee to      remain in business, and the new round of equity does not appear imminent,      it is presumed that the investment is other than temporarily impaired,      unless specific facts and circumstances indicate  otherwise. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Hiring      of an outside consultant to evaluate the derivative and fair value      accounting rules, which are material to our financial      statements. |
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|   |   |                                                                                                                                                                                      |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Hiring      of more qualified and experienced accounting personnel to perform      month-end reviews and closing processes as well as to allow additional      oversight and supervision. |

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| 31.1  | Certification      of Periodic Financial Reports by Robert John DeCecco III in satisfaction      of Section 302 of the Sarbanes-Oxley Act of2002 |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1  | Certification      of Periodic Financial Reports by Robert John DeCecco III in satisfaction      of Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. Section      1350 |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                    | OmniReliant      Holdings, Inc. |
|-------------------------|---------------------------------|
|                    |                            |   |
| Date:      May 17, 2010 | By:                             | /s/      Robert John DeCecco III |
|                    |                            | Robert      John DeCecco III |
|                    |                            | President,      Chief Executive Officer and Chief      Financial Officer(Principal      Executive Officer and Principal      Accounting Officer) |
|                    |                            |   |

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