**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

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**FORM      10-QSB/A**

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**Commission      File Number 000-50813**

**Sand      Hill IT Security Acquisition Corp.**

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** **

| **Delaware**                                                    | **20-0996152**                                        |
|-----------------------------------------------------------------|-------------------------------------------------------|
| (State                  or other Jurisdiction of incorporation) | (I.R.S.                  Employer Identification No.) |

**3000      Sand Hill Road**

**Building      1, Suite 240**

**Menlo      Park, California**

**(650)      926-7022**

** **

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**Item 1. Condensed Financial      Statements**

**SAND      HILL IT SECURITY ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**CONDENSED      BALANCE SHEET**

| **ASSETS**                                                                                                            |   | **September                30, 2005****(Unaudited)** |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|------------|
|                                                                                                                  |   | **(Restated)**                                       |       |
| **Current                assets:**                                                                                    |   |                                                 |            |   |
| Cash                                                                                                                  |   | $                                                    | 331,343    |   |
| Treasury                securities held in trust, at market                                                           |   |                                                 | 21,530,847 |   |
| Prepaid                expenses                                                                                       |   |                                                 | 42,624     |   |
| **Total                Assets**                                                                                       |   | $                                                    | 21,904,815 |   |
|                                                                                                                  |   |                                                 |            |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                         |   |                                                 |            |   |
| **Current                Liabilities:**                                                                               |   |                                                 |            |   |
| Accounts                payable and accrued expenses                                                                  |   | $                                                    | 145,910    |   |
| **Total                Liabilities**                                                                                  |   |                                                 | 145,910    |   |
| **Common                stock subject to possible conversion****(821,589                shares at conversion value)** |   |                                                 | 4,304,016  |   |
| **Stockholders’                Equity:**                                                                        |   |                                                 |            |   |
| Preferred                stock, $0.01 par valueAuthorized                5,000,000 shares; none issued                |   | $                                                    | -          |   |
| Common                stock, $0.01 par value                                                                          |   |                                                 |            |   |
| Authorized                50,000,000 shares                                                                           |   |                                                 |            |   |
| Issued                and outstanding 5,110,000 shares                                                                |   |                                                 | 51,100     |   |
| Additional                paid-in capital                                                                             |   |                                                 | 17,716,816 |   |
| Deficit                accumulated during the development stage                                                       |   |                                                 | (313,027   | ) |
| **Total                Stockholders’ Equity**                                                                   |   |                                                 | 17,454,889 |   |
| **Total                Liabilities and Stockholders’ Equity**                                                   |   | $                                                    | 21,904,815 |   |

*See      accompanying notes to condensed financial statements*

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**SAND      HILL IT SECURITY ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**CONDENSED      STATEMENTS OF OPERATIONS**

|                                                   |   | **Nine                months ended****September                30, 2005****(Unaudited)** |      | **Three                months ended****September                30, 2005****(Unaudited)** |   | **Period                from April 15, 2004 (inception) to September 30,                2004****(Unaudited)** |   | **Three                months ended****September                30, 2004****(Unaudited)** |      | **Period                from April 15, 2004 (inception) to September 30,                2005****(Unaudited)** |   |
|--------------------------------------------------------|--------|------------------------------------------------------------------------------------------|-----------|-------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------------------------------------|--------|
|                                                   |   |                                                                                     |      |                                                                                      |   |                                                                                                          |   |                                                                                      |      |                                                                                                          |   |
| Formation                and operating costs           |   | $                                                                                        | (701,284  | )                                                                                         | $      | (285,567                                                                                                      | )      | $                                                                                         | (63,125   | )                                                                                                             | $      | (50,432 | ) | $ | (893,230 | ) |
|                                                   |   |                                                                                     |           |                                                                                      |   |                                                                                                               |   |                                                                                      |           |                                                                                                          |   |  |   |   |  |   |
| Operating                loss                          |   |                                                                                     | (701,284  | )                                                                                         |   | (285,567                                                                                                      | )      |                                                                                      | (63,125   | )                                                                                                             |   | (50,432 | ) |   | (893,230 | ) |
|                                                   |   |                                                                                     |           |                                                                                      |   |                                                                                                               |   |                                                                                      |           |                                                                                                          |   |  |   |   |  |   |
| Interest                income and mark to market gain |   |                                                                                     | 438,163   |                                                                                      |   | 178,109                                                                                                       |   |                                                                                      | 46,752    |                                                                                                          |   | 46,752 |   |   | 580,202 |   |
|                                                   |   |                                                                                     |           |                                                                                      |   |                                                                                                               |   |                                                                                      |           |                                                                                                          |   |  |   |   |  |   |
| Net                loss                                |   | $                                                                                        | (263,121  | )                                                                                         | $      | (107,458                                                                                                      | )      | $                                                                                         | (16,373   | )                                                                                                             | $      | (3,680 | ) | $ | (313,028 | ) |
|                                                   |   |                                                                                     |           |                                                                                      |   |                                                                                                               |   |                                                                                      |           |                                                                                                          |   |  |   |   |  |   |
| Weighted                Average Shares Outstanding     |   |                                                                                     | 5,110,000 |                                                                                      |   | 5,110,000                                                                                                     |   |                                                                                      | 2,542,454 |                                                                                                          |   | 3,732,826 |   |   | 4,317,367 |   |
|                                                   |   |                                                                                     |           |                                                                                      |   |                                                                                                               |   |                                                                                      |           |                                                                                                          |   |  |   |   |  |   |
| Net                loss Per Share (Basic and Diluted)  |   | $                                                                                        | (0.05     | )                                                                                         | $      | (0.02                                                                                                         | )      | $                                                                                         | (0.01     | )                                                                                                             | $      | (0.00 | ) | $ | (0.07 | ) |

*See      accompanying notes to condensed financial statements*

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**SAND      HILL IT SECURITY ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**CONDENSED      STATEMENTS OF CASH FLOWS**

|                                                                              |   | **Nine                months ended****September                30, 2005****(Unaudited)** |     | **Period                from****April                15, 2004 (inception) to****September                30, 2004****(Unaudited)** |   | **Period                from****April                15, 2004 (inception) to****September                30, 2005****(Unaudited)** |   |
|-----------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|----------|------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------|--------|
| CASH                FLOW FROM OPERATING ACTIVITIES                                |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| Net                loss                                                           |   | $                                                                                        | (263,121 | )                                                                                                                                  | $      | (16,373                                                                                                                            | )      | $ | (313,028 | ) |
| Compensation                expense related to issuance of Advisory Board options |   |                                                                                     | 22,023   |                                                                                                                               |   | -                                                                                                                                  |   |   | 24,470 |   |
| Changes                in assets & liabilities:                               |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| Accretion                of treasury bill and mark to market gain                 |   |                                                                                     | (430,337 | )                                                                                                                                  |   | (46,464                                                                                                                            | )      |   | (569,847 | ) |
| Prepaid                expenses                                                   |   |                                                                                     | 89,508   |                                                                                                                               |   | (170,476                                                                                                                           | )      |   | (42,624 | ) |
| Accounts                payable and accrued expenses                              |   |                                                                                     | 130,138  |                                                                                                                               |   | 13,772                                                                                                                             |   |   | 145,910 |   |
|                                                                              |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| Net                cash used in operating activities                              |   |                                                                                     | (451,789 | )                                                                                                                                  |   | (219,541                                                                                                                           | )      |   | (691,119 | ) |
|                                                                              |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| CASH                FLOW FROM INVESTING ACTIVITIES                                |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| Purchase                of treasury bill in trust account                         |   |                                                                                     | -        |                                                                                                                               |   | (20,961,000                                                                                                                        | )      |   | (20,961,000 | ) |
| Net                cash used in investing activities                              |   |                                                                                     | -        |                                                                                                                               |   | (20,961,000                                                                                                                        | )      |   | (20,961,000 | ) |
|                                                                              |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| CASH                FLOW FROM FINANCING ACTIVITIES                                |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| Proceeds                from sale of common stock to initial stockholders         |   |                                                                                     | -        |                                                                                                                               |   | 25,000                                                                                                                             |   |   | 25,000 |   |
| Gross                proceeds from public offering                                |   |                                                                                     | -        |                                                                                                                               |   | 24,660,000                                                                                                                         |   |   | 24,660,000 |   |
| Costs                of public offering                                           |   |                                                                                     | -        |                                                                                                                               |   | (2,636,773                                                                                                                         | )      |   | (2,637,538 | ) |
| Proceeds                from stockholder loan                                     |   |                                                                                     | -        |                                                                                                                               |   | 40,000                                                                                                                             |   |   | 40,000 |   |
| Repayment                of stockholder loan                                      |   |                                                                                     | -        |                                                                                                                               |   | (40,000                                                                                                                            | )      |   | (40,000 | ) |
| Net                cash provided by financing activities                          |   |                                                                                     | -        |                                                                                                                               |   | 22,047,462                                                                                                                         |   |   | 22,047,462 |   |
|                                                                              |   |                                                                                     |          |                                                                                                                               |   |                                                                                                                                    |   |   |  |   |
| NET                INCREASE (DECREASE) IN CASH                                    |   |                                                                                     | (451,789 | )                                                                                                                                  |   | 867,686                                                                                                                            |   |   | 331,343 |   |
| CASH                AT BEGINNING OF PERIOD                                        |   |                                                                                     | 783,133  |                                                                                                                               |   | -                                                                                                                                  |   |   | - |   |
| CASH                AT END OF PERIOD                                              |   |                                                                                     | 331,343  |                                                                                                                               |   | 867,686                                                                                                                            |   |   | 331,343 |   |

*See      accompanying notes to condensed financial statements*

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**SAND      HILL IT SECURITY ACQUISITION CORP.**

**(A      Corporation in the Development Stage)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

| **1.** | **BASIS                OF PRESENTATION** |
|--------|------------------------------------------|

| **2.** | **ORGANIZATION,                BUSINESS OPERATIONS** |
|--------|------------------------------------------------------|

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| **3.** | **PUBLIC                OFFERING** |
|--------|------------------------------------|

| **4.** | **TREASURY                SECURITIES** |
|--------|----------------------------------------|

| **5.** | **SUBSEQUENT                EVENT** |
|--------|-------------------------------------|

| **6.** | **COMMITMENT** |
|--------|----------------|

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|  **7.** | **NOTE                PAYABLE** |
|--------------|---------------------------------|

| 8. | **COMMON                STOCK** |
|----|---------------------------------|

| 9. | **PREFERRED                STOCK** |
|----|------------------------------------|

| 10. | **RESTATEMENT** |
|-----|-----------------|

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**Item          3. Controls and Procedures**

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|   | Dated:                December 15, 2005SAND                HILL IT SECURITY ACQUISITION CORP./s/                Humphrey P. PolanenHumphrey                P. PolanenChief                Executive Officer/s/                Keith WalzKeith                WalzChief                Financial Officer and Secretary |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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