UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



(Mark One)



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

For the quarterly period ended June 30, 2009



OR



oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________



COMMISSION FILE NUMBER 333-142076



ARIA INTERNATIONAL HOLDINGS, INC.

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

Nevada26-1650042(State or other jurisdiction of(I.R.S. Employerincorporation or organization)Identification No.)




4821 29TH Street, Arlington, VA 22207

(Address of principal executive offices) (Zip Code)



Issuer's telephone Number: (703) 835-9693



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x   No  o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer ”, “accelerated filer ” and “smaller reporting company  ” in Rule 12b-2 of the Exchange Act. (Check one):



|                         |                    |                                                                    |                           
|------------------------ | ------------------ | ------------------------------------------------------------------ | --------------------------
|                         |                    |                                                                    |                           
|Large accelerated filero | Accelerated filero | Non-accelerated filero
(do not check if smaller reporting company) | Smaller reporting
companyx



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso  Nox



As of August 10, 2009, the issuer had 148,829,360 outstanding shares of Common Stock.



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ARIA INTERNATIONAL HOLDINGS, INC.



FORM 10-Q for June 30, 2009



INDEX





|         |                                                                                                              |        
|-------- | ------------------------------------------------------------------------------------------------------------ | -------
|         |                                                                                                              |        
|         |                                                                                                              | Page   
|         | Cautionary Statement Concerning Forward-Looking Statements                                                   | 3      
|PART I   | FINANCIAL INFORMATION                                                                                        | 4      
|Item 1   | Condensed Consolidated Balance Sheets at June 30, 2009 (unaudited) and
December 31, 2008                     | 4      
|         | Condensed Consolidated Statements of Losses for The Three and Six Months Ended
June 30, 2009 (unaudited)     | 5      
|         | Condensed Consolidated Statement of Stockholders Deficit for the Six Months Ended June 30, 2009 (unaudited) | 6      
|         | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 (unaudited)           | 7      
|         | Notes to Unaudited Condensed Consolidated Financial Statements                                               | 8 to 15
|Item 2   | Managements Discussion and Analysis of Financial Condition and Results of Operations                        | 16     
|Item 3   | Quantitative and Qualitative Disclosures About Market Risk                                                   | 20     
|Item 4T  | Controls and Procedures                                                                                      | 20     
|         |                                                                                                              |        
|PART  II | OTHER INFORMATION                                                                                            | 21     
|Item 1   | Legal Proceedings                                                                                            | 21     
|Item 1A  | Risk Factors                                                                                                 | 21     
|Item 2   | Unregistered Sales of Equity Securities and Use of Proceeds                                                  | 21     
|Item 3   | Defaults on Senior Securities                                                                                | 21     
|Item 4   | Submission of Matters to a Vote of Security Holders                                                          | 21     
|Item 5   | Other Information                                                                                            | 21     
|Item 6   | Exhibits                                                                                                     | 21     
|         | Signature page                                                                                               | 22     











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ARIA INTERNATIONAL HOLDINGS, INC.

SEC FORM 10-Q FOR JUNE 30, 2009



Cautionary Statement Concerning Forward Looking Statements:



The information in this
report contains forward-looking statements. All statements other than statements
of historical fact made in this report are forward looking. In particular, the
statements herein regarding industry prospects and future results of operations
or financial position are forward-looking statements. These forward-looking
statements can be identified by the use of words such as believes,
estimates, could, possibly,
probably, anticipates, projects,
expects, may, will, or should or
other variations or similar words. No assurances can be given that the future
results anticipated by the forward-looking statements will be achieved.
Forward-looking statements reflect managements current expectations and
are inherently uncertain. Our actual results may differ significantly from
managements expectations.



The following discussion
and analysis should be read in conjunction with our financial statements,
included herewith. This discussion should not be construed to imply that the
results discussed herein will necessarily continue into the future, or that any
conclusion reached herein will necessarily be indicative of actual operating
results in the future. Such discussion represents only the best present
assessment of our management.



The registrant completed
a reverse merger and recapitalization agreement in March 2009. The accounting
acquirer and successor entity, Aria International Incorporated, was formed in
July 2008 (see Note 1 to the accompanying financial statements). Accordingly
comparative statements of losses and cash flows for the three and six months
ended June 30, 2008 are not presented.





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PART I. FINANCIAL INFORMATION



Item 1.

Financial Statements



ARIA INTERNATIONAL HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                                                                                                    |                         |  |                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- |  | -------------------------
|                                                                                                                                                                                                                                                                    | (Unaudited)             |  |                          
|ASSETS                                                                                                                                                                                                                                                              | June 30, 2009           |  | December 31, 2008        
|CURRENT ASSETS:                                                                                                                                                                                                                                                     |                         |  |                          
|Cash                                                                                                                                                                                                                                                                | $               598,796 |  | $                   4,343
|Capitalized contract costs (Note 1)                                                                                                                                                                                                                                 | 9,495,475               |  | -                        
|Total current assets                                                                                                                                                                                                                                                | 10,094,271              |  | 4,343                    
|                                                                                                                                                                                                                                                                    |                         |  |                          
|Property and equipment, at cost:                                                                                                                                                                                                                                    |                         |  |                          
|Furniture and equipment                                                                                                                                                                                                                                             | 8,044                   |  | -                        
|Less: accumulated depreciation                                                                                                                                                                                                                                      | 2,679                   |  | -                        
|Total property and equipment, net                                                                                                                                                                                                                                   | 5,365                   |  | -                        
|                                                                                                                                                                                                                                                                    |                         |  |                          
|Other assets (Note 1)                                                                                                                                                                                                                                               | 485,000                 |  | -                        
|                                                                                                                                                                                                                                                                    |                         |  |                          
|Total assets                                                                                                                                                                                                                                                        | $          10,584,636   |  | $                   4,343
|                                                                                                                                                                                                                                                                    |                         |  |                          
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                |                         |  |                          
|CURRENT LIABILITIES:                                                                                                                                                                                                                                                |                         |  |                          
|Accounts payable and accrued liabilities                                                                                                                                                                                                                            | $            5,807,358  |  | $               235,238  
|Deferred revenue (Note 1)                                                                                                                                                                                                                                           | 6,790,000               |  | -                        
|Notes payable to related party (Note 4)                                                                                                                                                                                                                             | 1,868,900               |  | 660,000                  
|Other current liabilities                                                                                                                                                                                                                                           | 6,000                   |  | -                        
|Total current liabilities                                                                                                                                                                                                                                           | 14,472,258              |  | 895,238                  
|                                                                                                                                                                                                                                                                    |                         |  |                          
|Award repayable (Note 3)                                                                                                                                                                                                                                            | 140,000                 |  | -                        
|Total long-term liabilities                                                                                                                                                                                                                                         | 140,000                 |  | -                        
|                                                                                                                                                                                                                                                                    |                         |  |                          
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                       | -                       |  | -                        
|                                                                                                                                                                                                                                                                    |                         |  |                          
|DEFICIENCY IN STOCKHOLDERS' EQUITY  (restated for effect of reverse merger with Aria International Incorporated)                                                                                                                                                    |                         |  |                          
|                                                                                                                                                                                                                                                                    |                         |  |                          
|Preferred stock, par value $.0001 per share; 10,000,000 and 1,200,000 shares authorized at June 30, 2009 and December 31, 2008, respectively; none issued and outstanding at June 30, 2009 and December 31, 2008 (Note 6)                                           | -                       |  | -                        
|Common stock, par value $.0001 per share; 300,000,000 and 100,000,000 shares authorized at June 30, 2009 and December 31, 2008, respectively; 148,829,360 and 59,003,192 shares issued and outstanding at June30, 2009 and December 31, 2008, respectively (Note 6) | 14,883                  |  | 5,901                    
|Subscription payable (Note 6)                                                                                                                                                                                                                                       | 58,000                  |  | -                        
|Additional paid-in capital                                                                                                                                                                                                                                          | 112,620                 |  | 182,795                  
|Accumulated deficit                                                                                                                                                                                                                                                 | (4,147,125)             |  | (908,591)                
|                                                                                                                                                                                                                                                                    | (3,961,622)             |  | (719,895)                
|Deferred compensation (Note 6)                                                                                                                                                                                                                                      | (66,000)                |  | (171,000)                
|Stockholders' deficiency                                                                                                                                                                                                                                            | (4,027,622)             |  | (890,895)                
|                                                                                                                                                                                                                                                                    |                         |  |                          
|Total liabilities and deficiency in stockholders' equity                                                                                                                                                                                                            | $          10,584,636   |  | $                   4,343







The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.





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ARIA INTERNATIONAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF LOSSES

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009

(Unaudited)



|                                                    |                                          |  |                                       
|--------------------------------------------------- | ---------------------------------------- |  | --------------------------------------
|                                                    | For the three months ended June 30, 2009 |  | For the six months ended June 30, 2009
|Operating Expenses:                                 |                                          |  |                                       
|Selling, General and Administrative                 | $             2,077,533                  |  | $        2,959,095                    
|Depreciation                                        | 372                                      |  | 497                                   
|Total Operating Expense                             | 2,077,905                                |  | 2,959,592                             
|                                                    |                                          |  |                                       
|Loss from Operations                                | (2,077,905)                              |  | (2,959,592)                           
|                                                    |                                          |  |                                       
|Other Income (Expenses):                            |                                          |  |                                       
|Loss on settlement of debt (Note 5 and 6)           | (28,714)                                 |  | (28,714)                              
|Interest Expense, net                               | (219,425)                                |  | (250,228)                             
|Total Other Income (Expenses)                       | (248,139)                                |  | (278,942)                             
|                                                    |                                          |  |                                       
|Provision for Income Tax                            | -                                        |  | -                                     
|                                                    |                                          |  |                                       
|Net Loss                                            | $           (2,326,044)                  |  | $          (3,238,534)                
|                                                    |                                          |  |                                       
|Loss per common share (basic and assuming dilution) |                                          |  |                                       
|                                                    | $                    (0.02)              |  | $                    (0.03)           
|Weighted average common shares outstanding          | 148,480,173                              |  | 117,745,623                           





The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



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ARIA INTERNATIONAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2009

(Unaudited)



|                                                                                                          |               |  |                      |  |                            |  |                            |  |                       |  |                     |  |             
|--------------------------------------------------------------------------------------------------------- | ------------- |  | -------------------- |  | -------------------------- |  | -------------------------- |  | --------------------- |  | ------------------- |  | ------------
|                                                                                                          | Common Shares |  | Common Share Amount  |  | Additional Paid in Capital |  | Stock Subscription Payable |  | Deferred Compensation |  | Accumulated Deficit |  | Total       
|Balance at December 31, 2008 (restated for effect of reverse merger with Aria International Incorporated) | 59,003,192    |  | $             5,901  |  | $     182,795              |  | $               -          |  | $      (171,000)      |  | $        (908,591)  |  | $  (890,895)
|Issuance of common stock in exchange for accounts payable and services                                    | 71,700        |  | 7                    |  | 5,729                      |  | -                          |  | -                     |  | -                   |  | 5,736       
|Amortization of deferred compensation                                                                     | -             |  | -                    |  | -                          |  | -                          |  | 46,667                |  | -                   |  | 46,667      
|Recapitalization pursuant to reverse merger                                                               | 88,815,000    |  | 8,882                |  | (188,524)                  |  | -                          |  | -                     |  | -                   |  | (179,642)   
|Issuance of common stock in connection with short-term loan                                               | 750,000       |  | 75                   |  | 59,925                     |  | -                          |  | -                     |  | -                   |  | 60,000      
|Common stock contributed by shareholders in connection with settlement of debt (Note 5)                   | (281,961)     |  | (28)                 |  | 28                         |  | -                          |  | -                     |  | -                   |  | -           
|Issuance of common stock in exchange for settlement of debt (Note 5)                                      | 471,429       |  | 47                   |  | 37,667                     |  | -                          |  | -                     |  | -                   |  | 37,714      
|Stock subscription payable                                                                                | -             |  | -                    |  | -                          |  | 58,000                     |  | -                     |  | -                   |  | 58,000      
|Operating expenses contributed by officers (Note 10)                                                      | -             |  | -                    |  | 15,000                     |  | -                          |  | -                     |  | -                   |  | 15,000      
|Amortization of deferred compensation                                                                     | -             |  | -                    |  | -                          |  | -                          |  | 58,333                |  | -                   |  | 58,333      
|Net loss                                                                                                  | -             |  | -                    |  | -                          |  | -                          |  | -                     |  | (3,238,534)         |  | (3,238,534) 
|Balance at June 30, 2009                                                                                  | 148,829,360   |  | $             14,883 |  | $       112,620            |  | $        58,000            |  | $      (66,000)       |  | $     (4,147,125)   |  | $(4,027,622)





The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



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ARIA INTERNATIONAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2009

(Unaudited)



|                                                                           |                           
|-------------------------------------------------------------------------- | --------------------------
|INCREASE (DECREASE) IN CASH AND EQUIVALENTS                                |                           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                      |                           
|Net loss                                                                   | $             (3,238,534) 
|Depreciation                                                               | 497                       
|Operating expenses contributed by shareholders                             | 15,000                    
|Recapitalization costs                                                     | 27,864                    
|Loss on settlement of debt                                                 | 28,714                    
|Amortization of deferred compensation                                      | 58,333                    
|Amortization and write-off of debt discount                                | 5,719                     
|Common stock issued in exchange for interest expenses                      | 60,000                    
|Adjustments to reconcile net loss to cash used for operating activities:   |                           
|Changes in assets and liabilities:                                         |                           
|Capitalized costs and refundable deposits                                  | (9,980,475)               
|Accounts payable and accrued expenses                                      | 5,547,517                 
|Deferred revenue                                                           | 6,790,000                 
|NET CASH USED IN OPERATING ACTIVITIES                                      | (685,365)                 
|                                                                           |                           
|NET CASH USED IN INVESTING ACTIVITIES                                      | -                         
|                                                                           |                           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                      |                           
|Proceeds from sale of common stock and subscription, net of costs and fees | 58,000                    
|Proceeds from subsidiary common stock subscription                         | 98                        
|Proceeds from related party and third party loans, net of repayments       | 1,212,900                 
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                  | 1,270,998                 
|                                                                           |                           
|NET INCREASE IN CASH AND EQUIVALENTS                                       | 585,633                   
|                                                                           |                           
|Cash at the beginning of the period                                        | 4,343                     
|Cash acquired in merger                                                    | 8,820                     
|Cash at the end of the period                                              | $                598,796  
|                                                                           |                           
|Supplemental Disclosures of Cash Flow Information                          |                           
|Cash paid during the period for interest                                   | $                        -
|Income taxes paid                                                          | -                         
|Subsidiary subscription receivable netted against related party loans      | 4,000                     









The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



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ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 1-SUMMARY OF ACCOUNTING POLICIES



A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.



General



The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements.



In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Accordingly, the results from operations
for the three and six-month period ended June 30, 2009, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2009. The unaudited condensed consolidated financial statements should be read
in conjunction with the consolidated December 31, 2008 financial statements and
footnotes thereto included in the Company's Form 10-K.



The consolidated financial statements as December 31, 2008
have been derived from the audited consolidated financial statements at that
date but do not include all disclosures required by the accounting principles
generally accepted in the United States of America.



Business and Basis of Presentation



Aria International Holdings, Inc. (the
Company) was incorporated pursuant to the laws of the State of
Nevada on November 21, 2007 under the name TriCord Hurricane Holdings, Inc. On
November 30, 2007, pursuant to the terms of the terms of a share exchange
agreement, it acquired control of its now wholly-owned subsidiary, TriCord
Hurricane Products, Inc.

TriCord
Hurricane Products, Inc. was originally organized under the laws of the State of
Oklahoma on January 3, 2006. On July 1, 2007, it merged with TriCord Hurricane
Products, LLC, a Florida limited liability company. On November 19, 2007,
TriCord Hurricane Products LLC filed a Certificate of Conversion with the
Secretary of State of Florida whereby it was converted to a Florida corporation
and renamed TriCord Hurricane Products, Inc.

On March 3, 2009, TriCord Hurricane
Holdings, Inc. entered into an Agreement and Plan of Merger (the Merger
Agreement) with Aria Acquisition, Inc., a Nevada corporation and
wholly-owned subsidiary of the Company (the Aria Acquisition) and
Aria International Incorporated, a Delaware corporation (Aria
International) formed in July 2008. Pursuant to the Merger Agreement, Aria
Acquisition merged into Aria International, such that Aria International became
a wholly owned subsidiary of TriCord Hurricane Holdings, Inc. (the
Merger). On March 9, 2009, TriCord Hurricane Holdings, Inc. changed
its name to Aria International Holdings, Inc. The primary new business and
market focus will be on providing specialized surveillance and communications
solutions to a broad range of customers. The corporate offices of the new
organization are in Arlington, Virginia.



Merger and Recapitalization:



The acquisition of Aria International
Incorporated by the Company (formerly TriCord Hurricane Holdings, Inc.)
(TriCord) effected a change in control of the Company and is accounted for as a
reverse merger whereby Aria International Incorporated (Aria) is the
accounting acquirer for financial statement purposes. Accordingly, for all
periods subsequent to the reverse merger transaction, the financial statements
of the Company will reflect the historical financial statements of Aria
International Incorporated from its inception (July 2008) and the operations of
Aria International Holdings, Inc. (formerly TriCord Hurricane Holdings, Inc.)
subsequent to the March 3, 2009 transaction date. A reverse-merger transaction
is considered, and accounted for as a capital transaction in substance; it is
equivalent to the issuance of Aria securities for TriCords net monetary
assets, which are deminimus, accompanied by a recapitalization; TriCords
liabilities exceeded its assets on the day of the transaction and additional
paid capital was adjusted. Accordingly, the Company did not recognize any
goodwill or other intangible assets in connection with this reverse merger
transaction. Aria is the surviving entity.



Following the Merger, the Company intends to
focus on the development of business of Aria International Incorporated, the
provision of specialized surveillance and communications solutions. The Company
no longer intends to actively pursue the TriCord Hurricane Products business and
will likely divest the TriCord Hurricane Products business once an acquirer is
identified and terms acceptable to the Company are agreed upon.



The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries, Aria
International Incorporated, Aria Acquisition, Inc., and TriCord Hurricane
Products, Inc. All significant intercompany balances and transactions have been
eliminated in consolidation.







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ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 1-SUMMARY OF ACCOUNTING POLICIES (Continued)



The accompanying financial statements
present the historical financial condition, results of operations and cash flows
of Aria International prior to the Merger. Since Aria was formed in July 2008,
comparative statements of losses and cash flows for the three and six months
ended June 30, 2008 are not presented. All reference to Common Stock shares and
per share amounts have been retroactively restated to effect the reverse merger
as if the transaction had taken place as of the beginning of the earliest period
presented.



Fair Value of Financial Instruments



SFAS No. 107, "Disclosures About Fair
Value of Financial Instruments," requires disclosure of the fair value of
certain financial instruments. The carrying value of cash and cash equivalents,
accounts payable and accrued liabilities, and short-term borrowings, as
reflected in the consolidated balance sheets, approximate fair value because of
the short-term maturity of these instruments. All other significant financial
assets, financial liabilities and equity instruments of the Company are either
recognized or disclosed in the consolidated financial statements together with
other information relevant for making a reasonable assessment of future cash
flows, interest rate risk and credit risk. Where practicable the fair values of
financial assets and financial liabilities have been determined and disclosed;
otherwise only available information pertinent to fair value has been
disclosed.



Effective January 1, 2008, the Company
adopted SFAS No. 157, "Fair Value Measurements" ("SFAS No.
157") and SFAS No. 159, "The Fair Value Option for Financial Assets
and Financial Liabilities - Including an Amendment of FASB Statement No.
115" ("SFAS No. 159"), which permits entities to choose to
measure many financial instruments and certain other items at fair value.
Neither of these statements had an impact on the Companys consolidated
financial position, results of operations or cash flows.



Revenue Recognition



For revenue from product sales, the Company
recognizes revenue in accordance with Staff Accounting Bulletin No. 104,
Revenue Recognition (SAB104), which superseded Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements (SAB101). SAB 101 requires that four basic
criteria must be met before revenue can be recognized: (1) persuasive evidence
of an arrangement exists; (2) delivery has occurred; (3) the selling price is
fixed and determinable; and (4) collectibility is reasonably assured.
Determination of criteria (3) and (4) are based on managements judgments
regarding the fixed nature of the selling prices of the products delivered and
the collectibility of those amounts. Provisions for discounts and rebates
to customers, estimated returns and allowances, and other adjustments are
provided for in the same period the related sales are recorded. The Company
defers any revenue for which the product has not been delivered or is subject to
refund until such time that the Company and the customer jointly determine that
the product has been delivered or no refund will be required. SAB 104
incorporates Emerging Issues Task Force 00-21 (EITF 00-21),
Multiple-Deliverable Revenue Arrangements.EITF 00-21 addresses
accounting for arrangements that may involve the delivery or performance of
multiple products, services and/or rights to use assets.





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ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 1-SUMMARY OF ACCOUNTING POLICIES (Continued)



Revenue Recognition (Continued)



In April 2009, the Company entered into a
sales contract with the Royal Thai Army, pursuant to which the Company sells
surveillance and communications equipment to the Royal Thai Army. The total
contract amount was $9,700,000, which includes delivery and installation of the
equipment, as well as providing training to the buyer. The Company
recognizes revenues from the equipment portion upon shipment and installation,
and the service portion upon completion of the training
programs.  Revenues from this type of multiple deliverable
arrangements are accounted for in accordance with EITF 00-21 separate units of
accounting based on the relative fair value of the delivered units. As of June
30, 2009, the Company had received payments from the Royal Thai Army in the
amount of $6,790,000 and the payments received were accounted for as deferred
revenues. In connection with this contract, the Company also had incurred costs
and expenses in an aggregate amount of $9,495,475. These costs and expenses were
capitalized as of June 30, 2009, and will be charged to costs of sales upon the
delivery of the equipment and services. The Company was also required to lodge
with the buyer cash in the amount of $485,000 to guaranty the performance of
this contract and warrant against the defects and malfunctions of the equipment.
 The buyer shall return the cash to the Company after a period of 365 days
from the acceptance of the equipment. The Company had accounted for the
refundable amount of $485, 000 as a non-current asset as of June 30, 2009.



New Accounting Pronouncements Effective January 1, 2009



SFAS No.161



In March 2008, the FASB issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133 (SFAS
No. 161). The new standard is intended to improve financial
reporting about derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on
an entitys financial position, results of operations and cash flows. The
new standard also improves transparency about how and why a company uses
derivative instruments and how derivative instruments and related hedged items
are accounted for under Statement No. 133. It is effective for financial
statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company adopted
SFAS No. 161 effective January 1, 2009 and the adoption had no material
impact on the companys consolidated financial statements and
disclosures.



SFAS No. 160



In December 2007, the FASB issued SFAS
No. 160, Non-controlling Interests in Consolidated Financial
Statementsan amendment of ARB No. 51 (SFAS No.
160). In SFAS No. 160, the FASB established accounting and reporting
standards that require non-controlling interests to be reported as a component
of equity, changes in a parents ownership interest while the parent
retains its controlling interest to be accounted for as equity transactions, and
any retained non-controlling equity investment upon the deconsolidation of a
subsidiary to be initially measured at fair value. SFAS No. 160 is effective for
annual periods beginning on or after December 15, 2008. Retroactive
application of SFAS No. 160 is prohibited. The Company adopted SFAS No. 160
effective January 1, 2009 and the adoption had no material impact on the
companys consolidated financial statements and disclosures.



EITF No. 07-1



In December 2007, the FASB issued EITF
No. 07-1, Accounting for Collaborative Arrangements (EITF
No. 07-1). EITF No. 07-1 prescribes the accounting for parties of a
collaborative arrangement to present the results of activities for the party
acting as the principal on a gross basis and report any payments received from
(made to) other collaborators based on other applicable GAAP or, in the absence
of other applicable GAAP, based on analogy to authoritative accounting
literature or a reasonable, rational, and consistently applied accounting policy
election. Further, EITF No. 07-1 clarified the determination of whether
transactions within a collaborative arrangement are part of a vendor-customer
(or analogous) relationship subject to Issue No. 01-9, Accounting for
Consideration Given by a Vendor to a Customer. EITF No. 07-1 is effective
for collaborative arrangements that exist on January 1, 2009 and
application is retrospective. The Company adopted EITF No. 07-1 effective
January 1, 2009 and the adoption had no material effect on the
Companys financial position or results of operations.



EITF No. 07-5



In June 2008, the FASB ratified EITF
No. 07-5, Determining Whether an Instrument (or Embedded Feature) Is
Indexed to an Entitys Own Stock (EITF No. 07-5). EITF
No. 07-5 provides that an entity should use a two-step approach to evaluate
whether an equity-linked financial instrument (or embedded feature) is indexed
to its own stock, including evaluating the instruments contingent exercise
and settlement provisions. It also clarifies the impact of foreign currency
denominated strike prices and market-based employee stock option valuation
instruments on the evaluation. EITF No. 07-5 is effective for fiscal years
beginning after December 15, 2008. The Company adopted EITF No. 07-5
effective January 1, 2009 and the adoption had no material effect on the
Companys financial position or results of operations.



---

ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 1-SUMMARY OF ACCOUNTING POLICIES (Continued)



Recently Issued Accounting Standards



In April 2009, the Financial Accounting Standards Board (FASB) issued the following new accounting standards:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | · | FASB Staff Position FAS No. 157-4,Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, (FSP FAS No. 157-4) provides guidelines for making fair value measurements more consistent with the principles presented in SFAS No. 157.  FSP FAS No. 157-4 provides additional authoritative guidance in determining whether a market is active or inactive and whether a transaction is distressed. It is applicable to all assets and liabilities (i.e., financial and non-financial) and will require enhanced disclosures.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | FASB Staff Positions FAS No. 115-2, FAS 124-2, and EITF No. 99-20-2,Recognition and Presentation of Other-Than-Temporary Impairments , (FSP FAS No. 115-2, FAS No. 124-2, and EITF No. 99-20-2) provides additional guidance to provide greater clarity about the credit and noncredit component of an other-than-temporary impairment event and to more effectively communicate when an other-than-temporary impairment event has occurred. This FSP applies to debt securities.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | · | FASB Staff Position FAS No. 107-1 and APB No. 28-1,Interim Disclosures about Fair Value of Financial Instruments , (FSP FAS No. 107-1 and APB No. 28-1) amends FASB Statement No. 107,Disclosures about Fair Value of Financial Instruments , to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. This FSP also amends APB Opinion No. 28,Interim Financial Reporting, to require those disclosures in all interim financial statements.



These standards are effective for periods ending after June 15, 2009. The adoption of these accounting standards had no material effect on our financial position or results of operations.

SFAS No. 165

In May 2009, the FASB
issued SFAS 165, Subsequent Events. We adopted SFAS No. 165
for the Quarterly Report for the period ending June 30, 2009.  SFAS
165 establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are
issued, which are referred to as subsequent events. The statement clarifies
existing guidance on subsequent events, including a requirement that a public
entity should evaluate subsequent events through the issue date of the financial
statements, the determination of when the effects of subsequent events should be
recognized in the financial statement and disclosures regarding all subsequent
events. SFAS 165 also requires a public entity to disclose the date
through which an entity has evaluated subsequent events. We have
evaluated subsequent events through August 14, 2009 as disclosed in Note 11.



SFAS No. 166

In June 2009, the
FASB issued SFAS 166, Accounting for Transfers of Financial Assets, an
Amendment of FASB Statement No. 140, which eliminates the concept of
a qualifying special purpose entity, changes the requirements for derecognizing
financial assets and requires additional disclosures. SFAS 166 is effective for
periods beginning after November 15, 2009. The Company is evaluating the
impact of SFAS 166 on its consolidated financial statements.



SFAS No. 167

In June 2009, the FASB issued SFAS 167,
Amendments to FASB Interpretation No. 46(R), which changes how
a reporting entity determines when an entity that is insufficiently capitalized
or is not controlled through voting (or similar rights) should be consolidated
and requires additional disclosures. SFAS 167 is effective for periods beginning
after November 15, 2009. The Company is evaluating the impact of SFAS 167
on its consolidated financial statements.







---

ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 1-SUMMARY OF ACCOUNTING POLICIES (Continued)



Recently Issued Accounting Standards (Continued)

SFAS No. 168



In June 2009, the
FASB issued SFAS 168, The FASB Accounting Standards
CodificationTM and the Hierarchy of Generally Accepted Accounting
Principles,” which establishes the FASB Accounting Standards
CodificationTM (Codification) as the source of authoritative
US GAAP recognized by the FASB to be applied to nongovernmental entities.
Rules and interpretive releases of the SEC under authority of federal securities
laws are also included in the Codification as sources of authoritative
US GAAP for SEC registrants. SFAS 168 and the Codification are effective
for financial statements issued for interim and annual periods ending after
September 15, 2009. The adoption of this rule will not affect reported
results of operations, financial condition or cash flows. The Company will
implement SFAS 168 in its third quarter Form 10-Q by updating the previous FASB
references to the Codification.



Other recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force), the AICPA, and the SEC did not, or
are not believed by management to, have a material impact on the Companys
present or future consolidated financial statements.



NOTE 2  GOING CONCERN MATTERS



The accompanying consolidated financial
statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. As shown in the unaudited condensed consolidated financial
statements for the six-month period ended June 30, 2009, the Company incurred
net losses of $3,238,534. The Companys current liabilities exceeded its
current assets by $4,377,987 as of June 30, 2009. These
factors among others may indicate that the Company may be unable to continue as
a going concern for a reasonable period of time.



The Company's existence is dependent upon
management's ability to develop revenues and profitable operations and resolve
its liquidity problems. Management anticipates the Company will attain
profitable status and improve its liquidity through continued growth,
distribution and sale of its products and services, and additional equity
investment in the Company. The accompanying consolidated financial statements do
not include any adjustments that might result should the Company be unable to
continue as a going concern.



In order to improve the Company's liquidity,
the Company is actively pursuing additional debt or equity financing through
discussions with investment bankers and private investors. Management
expects to continue this practice and believes that the merger with Aria
International Incorporated further increases the potential for private placement
of its convertible securities and/or equity. Outside investment banking services
have been arranged to assist and support the future financing requirements of
the Company. However, there can be no assurance the Company will be successful
in its effort to secure additional financing.



By adjusting the Companys operations
and development to the level of capitalization, management believes it has
sufficient capital resources to meet projected cash flow deficits for the next
twelve months. However, if during that period or thereafter, the Company is not
successful in generating sufficient liquidity from operations or in raising
sufficient capital resources, on terms acceptable to them, this could have a
material adverse effect on the Companys business, results of operations
liquidity and financial condition. If operations and cash flows continue to
improve through these efforts, management believes that the Company can continue
to operate. However, no assurance can be given that managements actions
will result in profitable operations or the resolution of its liquidity
problems.



NOTE 3 - AWARD REPAYABLE



In July 2007, TriCord Hurricane Holdings,
Inc. entered into an award agreement under the Oklahoma Center for the
Advancement of Science and Technology (OCAST) Technology Business Finance
Program funded by the Oklahoma legislature. By the terms of the agreement,
TriCord Hurricane Holdings, Inc. was advanced $100,000 of matching funds for
sales and marketing activities and short-term working capital requirements.



The award is to be repaid based on TriCord
Hurricane Holdings, Inc. reaching certain milestones, but in no case later than
five years from the date of the award, July 2007.  In addition,
repayment may be made anytime by TriCord Hurricane Holdings, Inc. prior to the
full repayment date in July 2012 in the amount of the award receipt plus
one-fifth (1/5) of the award for each of the year the award is outstanding, as
illustrated in the following schedule:











---

ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 3 - AWARD REPAYABLE (Continued)



|                                |                        |          
|------------------------------- | ---------------------- | ---------
|                                |                        |          
|First year from award receipt:  | $ 100,000 +   20,000 = | $ 120,000
|Second year from award receipt: | $ 100,000 +   40,000 = | $ 140,000
|Third year from award receipt:  | $ 100,000 +   60,000 = | $ 160,000
|Fourth year from award receipt: | $ 100,000 +   80,000 = | $ 180,000
|Fifth year from award receipt:  | $ 100,000 + 100,000 =  | $ 200,000



TriCord Hurricane Holdings, Inc. has not
pledged any assets as security under the agreement. TriCord Hurricane Holdings,
Inc. accounted for the amount to be repaid in addition to the original award
receipt as accrued interest. Subsequent to the reverse merger, the original
award of $100,000 was accounted for as long-term liabilities on a consolidated
basis and accrued interest in connection with this award was $40,000 as of June
30, 2009.



NOTE 4 - ADVANCES FROM RELATED AND THIRD PARTIES



Notes payable to related parties as of June 30, 2009 and December 31, 2008 are as follows:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                        |  |                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | June 30, 2009          |  | December 31, 2008          
|Note
payable to Company significant  shareholder in monthly  installments of interest
only at 12% per annum;  maturity date is on December 31, 2009. Maximum borrowing
capacity is up to  $1,000,000.  The Company  granted the  noteholder  a security
interest in all accounts, chattel paper, documents, equipment, fixtures, general
intangibles,  instrument,  and inventories,  whether now owned by the Company or
hereafter acquired, and all proceeds thereof, of the Company                                  |  | $    1,580,000         |  | $    660,000               
|Note payable to the
Companys Chief Executive Officer in monthly installments of interest only
at 12% per annum; maturity date is on December 31, 2009. Original maximum
borrowing capacity is $500,000 on a note executed on April 1, 2009. The
Company granted the note holder a security interest in all accounts, chattel
paper, documents, equipment, fixtures, general intangibles, instrument, and
inventories, whether now owned by the Company or hereafter acquired, and all
proceeds thereof, of the Company |  | 288,900                |  | -                          
|Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 1,868,900              |  | 660,000                    
|Less: current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | (1,361,000)            |  | (660,000)                  
|Long-term portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | $                    - |  | $                         -



On April 30, 2009, the Company also entered
into a short-term loan agreement with a third party. The loan amount was
$2,000,000, and the Company granted the lender a security interest equals to the
first $2 million in contract proceeds from the Royal Thai Army (Note 1), The
loan matures no later than 60 days from execution, and the Company was required
to pay the lender a fee of $100,000 and issuance of 750,000 shares of its common
stock. The loan was repaid in full as of June 30, 2009, and the Company had
accounted for the $100,000 of fees and the fair value of the 750,000 shares of
common stock issued (Note 6), or $60,000, as interest expenses during the three
and six months ended June 30, 2009.



NOTE 5 - SUBORDINATED CONVERTIBLE DEBENTURES



In June 2008, TriCord Hurricane Holdings,
Inc. issued an aggregate of $9,000 of convertible subordinated debentures.
The debentures bear interest at 10% per annum and mature two years after
issuance. The debentures are convertible at the note holders option to
common stock at $0.0525 per share and are subordinated to the Award Repayable to
the Oklahoma Center for the Advancement of Science and Technology.
Additionally, the debenture holders received warrants to purchase the
Companys common stock at three times the number of common shares into
which the debenture is convertible at an exercise price of $0.0525. The
warrants expire five years from date of issuance.













---

ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 5 - SUBORDINATED CONVERTIBLE DEBENTURES (Continued)



In accordance withEmerging Issues Task
Force Issue 98-5, Accounting for Convertible Securities with a Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios ("EITF
98-5"), TriCord Hurricane Holdings, Inc. recognized an imbedded beneficial
conversion feature present in the convertible debenture. TriCord Hurricane
Holdings, Inc. allocated a portion of the proceeds equal to the intrinsic value
of that feature to additional paid in capital. TriCord Hurricane Holdings, Inc.
recognized and measured an aggregate of $1,893 of the proceeds, which is equal
to the intrinsic value of the imbedded beneficial conversion feature, to
additional paid in capital and a discount against the convertible debenture at
the time the debentures were issued. The debt discount attributed to the
beneficial conversion feature is amortized over the convertible debenture's
maturity period (two years) as interest expense.



In connection with the placement of the
convertible debenture, TriCord Hurricane Holdings, Inc. issued warrants granting
the holders the right to acquire 514,286 shares of the Company's common stock at
$0.0525 per share. In accordance withEmerging Issues Task Force Issue
00-27, Application of Issue No. 98-5 to Certain Convertible Instruments
 ("EITF - 0027"), TriCord Hurricane Holdings, Inc. recognized the
value attributable to the warrants in the amount of $7,107 to additional paid in
capital and a discount against the convertible debenture at the time the
debentures were issued. TriCord Hurricane Holdings, Inc. valued the warrants in
accordance with EITF 00-27 using the Black-Scholes pricing model and the
following assumptions: contractual terms of 5 years, an average risk free
interest rate of .875%, a dividend yield of 0%, and volatility of 160%. The debt
discount attributed to the value of the warrants issued is amortized over the
convertible debenture's maturity period (two years) as interest expense.



Subsequent to the reverse merger, the
subordinated convertible debentures were accounted for as long-term liabilities
on a consolidated basis. In May 2009, the Company entered into a Stock
Adjustment Agreement with the noteholders, pursuant to which the Company agreed
to issue an aggregate of 471,429 shares of its common stock to the noteholders
in exchange for settlement of the $9,000 of convertible notes and 514,286
outstanding warrants. Upon the execution of the Stock Adjustment Agreement, the
Company issued an aggregate of 471,429 shares of its common stock to the
noteholders, of which 281,961 shares were contributed by three significant
shareholders of the Company, and the remaining 189,468 shares of common stock
were new issuances (Note 6).



The Company amortized the convertible
debenture debt discount attributed to the beneficial conversion feature and the
value of the attached warrants over the term of the debentures. Upon the
settlement of debentures and warrants in May 2009, all unamortized debt discount
was charged to interest expense for the period ended June 30, 2009. The Company
recorded non-cash interest expense in the amount of $5,386 and $5,719 during the
three and six months ended June 30, 2009 in connection with its convertible
debentures.



NOTE 6  CAPITAL STOCK



Recapitalization pursuant to merger



The merger between the Company and Aria
International Incorporated was consummated on March 3, 2009, by exchanging
88,815,000 shares of the Companys common stock for 100% of the outstanding
common stock of Aria International Incorporated. As a result of the exchange,
the stockholders of Aria International Incorporated became the controlling
stockholders of the Company. The acquisition has been accounted for as a capital
transaction as a result of the reverse merger. Under this method, Aria
International Incorporated (the accounting acquirer) is considered to have
acquired the Company (the accounting acquiree) on the date of the transaction
and continued as the reporting entity thereafter.  The net assets of
the Company were recorded at carrying value with no recognition of goodwill.



Preferred Stock



In January 2009, the company increased its
authorized preferred stock from 1,200,000 shares to 10,000,000 shares, with a
par value of $0.0001 per share. At June 30, 2009 and December 31, 2008, there
were no preferred shares issued and outstanding.



Common Stock



In January 2009, the company increased its
authorized common stock from 100,000,000 shares to 300,000,000 shares, with a
par value of $0.0001 per share. At June 30, 2009 and December 31, 2008, the
Company had 148,829,360 and 59,003,192 shares of common stock issued and
outstanding.



Prior to the merger, the Company issued an
aggregate of 71,700 shares of common stock to a consultant in exchange for
$4,800 of accrued services fees and $936 of services rendered, which
approximated the fair value of the shares issued during the period services were
completed and rendered.











---

ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 6  CAPITAL STOCK (Continued)



Common Stock (Continued)



Upon the merger between the Company and Aria
International Incorporated on March 3, 2009, the Company issued an aggregate of
88,815,000 shares of the Companys common stock in exchange for 100% of the
outstanding common stock of Aria International Incorporated.



In prior year, the Company issued common
stock to consultants in exchange for services to be rendered in fiscal 2009. The
value of the common shares issued was approximately $171,000 and was accounted
for as deferred compensation. The Company had amortized $46,667 of the deferred
compensation prior to the reverse merger and additional $58,333 was amortized
post merger. The deferred compensation is amortized over the period that the
services will be provided.



During the second quarter of 2009, the
Company issued an aggregate of 750,000 shares of its common stock in connection
with a short-term loan agreement with a third party (Note 4). The Company
had accounted for the fair value of the 750,000 shares of common stock issued,
or $60,000, as interest expenses during the three and six months ended June 30,
2009. In addition, upon the execution of a Stock Adjustment Agreement the
Company entered into with its convertible debenture holders in May 2009 (Note
5), the Company agreed to issue an aggregate of 471,429 shares of its common
stock to the noteholders, of which 281,961 shares were contributed by three
significant shareholders of the Company, and the remaining 189,468 shares of
common stock were new issuances. The fair value of the 471,429 shares of common
stock was $37,714 at that time of issuance, the Company accounted for the
conversion of $9,000 debenture and the remaining $28,714 was charged to
operations as loss on settlement of debt during the period ended June 30,
2009.



Subsequent to the merger, the Company
received an aggregate of $58,000 for approximately 232,000 shares of common
stock subscribed. The shares have not been issued as of June 30, 2009, and the
Company had accounted for the proceeds received as stock subscription
payable.



NOTE 7 - STOCK OPTIONS AND WARRANTS



Stock Options



Transactions involving stock options issued to employees and consultants are summarized as follows:



|                                 |                  |  |                                 
|-------------------------------- | ---------------- |  | --------------------------------
|                                 | Number of Shares |  | Weighted Average Price Per Share
|Outstanding at January 1, 2007   | -                |  | -                               
|Granted                          | 19,500           |  | 0.05                            
|Exercised                        | -                |  | -                               
|Cancelled or expired             | -                |  | -                               
|Outstanding at December 31, 2007 | 19,500           |  | $                      0.05     
|Granted                          | 17,500           |  | 0.20                            
|Exercised                        | (19,500)         |  | 0.05                            
|Cancelled or expired             | (7,500)          |  | 0.20                            
|Outstanding at December 31, 2008 | 10,000           |  | $                      0.20     
|Granted                          | -                |  | -                               
|Exercised                        | -                |  | -                               
|Cancelled or expired             | (10,000)         |  | 0.20                            
|Outstanding at June 30, 2009     | -                |  | $                           -   



There was no stock based compensation charged to
operations during the three and six months ended June 30, 2009. All previously
granted stock options have been exercised or expired as of June 30, 2009.



Warrants



In connection with the placement of the
convertible debenture (Note 5), the Company issued warrants granting the holders
the right to acquire 514,286 shares of the Company's common stock. In May 2009,
the Company entered into a Stock Adjustment Agreement with the noteholders,
pursuant to which the Company agreed to issue an aggregate of 471,429 shares of
its common stock to the noteholders in exchange for settlement of the $9,000 of
convertible notes and 514,286 outstanding warrants (Note 5). Upon the execution
of the Stock Adjustment Agreement, all outstanding warrants of the Company were
terminated.



---



ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 7 - STOCK OPTIONS AND WARRANTS (Continued)



Warrants (Continued)



Transactions involving warrants issued to note holders are summarized as follows:



|                                 |                  |  |                                        
|-------------------------------- | ---------------- |  | ---------------------------------------
|                                 | Number of Shares |  | Weighted AveragePrice Per Share        
|Outstanding at January 1, 2007   | -                |  | -                                      
|Granted                          | -                |  | -                                      
|Exercised                        | -                |  | -                                      
|Cancelled or expired             | -                |  | -                                      
|Outstanding at December 31, 2007 | -                |  | $                                     -
|Granted                          | 514,286          |  | 0.0525                                 
|Exercised                        | -                |  | -                                      
|Cancelled or expired             | -                |  | -                                      
|Outstanding at December 31, 2008 | 514,286          |  | $                           0.0525     
|Granted                          | -                |  | -                                      
|Exercised                        | -                |  | -                                      
|Cancelled or expired             | (514,286)        |  | 0.0525                                 
|Outstanding at June 30, 2009     | -                |  | $                                     -
|                                 |                  |  |                                        



The warrants granted in June 2008 was
accounted for as debt discount in accordance withEmerging Issues Task Force
Issue 00-27, Application of Issue No. 98-5 to Certain Convertible
Instruments ("EITF - 0027"). The Company had no warrants
granted during the six months ended June 30, 2009.



NOTE 8 - FAIR VALUE MEASUREMENT



Effective January 1, 2008, the Company
adopted Statement of Financial Accounting Standards No. 157,Fair Value
Measurements (SFAS 157), which provides a framework for measuring fair
value under GAAP. SFAS 157 defines fair value as the exchange price that would
be received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date. SFAS 157
requires that valuation techniques maximize the use of observable inputs and
minimize the use of unobservable inputs. SFAS 157 also establishes a fair value
hierarchy, which prioritizes the valuation inputs into three broad levels.



There are three general valuation techniques that may be used to measure fair value, as described below:



a)  Market
approach  Uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities. Prices may
be indicated by pricing guides, sale transactions, market trades, or other
sources;



b)  Cost
approach  Based on the amount that currently would be required to replace
the service capacity of an asset (replacement cost); and



c) Income approach
 Uses valuation techniques to convert future amounts to a single present
amount based on current market expectations about the future amounts (includes
present value techniques and option-pricing models). Net present value is an
income approach where a stream of expected cash flows is discounted at an
appropriate market interest rate.



Financial assets and liabilities are valued
using either level 1 inputs based on unadjusted quoted market prices within
active markets or using level 2 inputs based primarily on quoted prices for
similar assets or liabilities in active or inactive markets. For certain
long-term debt, fair value is based on present value techniques using inputs
derived principally or corroborated from market data. Using level 3 inputs using
managements assumptions about the assumptions market participants would
utilize in pricing the asset or liability. In the Companys case this
entailed assumptions used in pricing models for attached warrant calculations.
Valuation techniques utilized to determine fair value are consistently
applied.



The Companys long-term debt is the only item that is subject to SFAS 157 as of June 30, 2009 as follows:



|                                           |            
|------------------------------------------ | -----------
|                                           |            
|Notes payable to related parties (level 1) | $ 1,868,900
|Award repayable (level 1)                  | 140,000    





---

ARIA INTERNATIONAL HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2009



NOTE 9 - COMMITMENTS AND CONTINGENCIES

Securities Act Violations



On April 3, 2009, the Company terminated
Hogan Taylor LLP f/k/a Hogan & Slovacek, A Professional Corporation,
CPAs (Hogan) as the Companys independent registered
public accounting firm effective immediately. The Company terminated Hogan after
it was informed by Hogan that Hogan was not independent with respect to the
Companys financial statements issued during the period January 3, 2006
(date of inception) through September 30, 2008 included in an initial
registration statement.



In the event that
any of the exemptions from registration with respect to the issuance of the
Companys common stock under federal and applicable state securities laws
were not available, the Company may be subject to claims by federal and state
regulators for any such violations. In addition, if any purchaser of the
Companys common stock were to prevail in a suit resulting from a violation
of federal or applicable state securities laws, the Company could be liable to
return the amount paid for such securities with interest thereon, less the
amount of any income received thereon, upon tender of such securities, or for
damages if the purchaser no longer owns the securities. As of the date of these
financial statements, the Company is not aware of any alleged specific violation
or the likelihood of any claim. There can be no assurance that litigation
asserting such claims will not be initiated, or that the Company would prevail
in any such litigation.

The Company is
unable to predict the extent of its ultimate liability with respect to any and
all future securities matters. The costs and other effects of any future
litigation, government investigations, legal and administrative cases and
proceedings, settlements, judgments and investigations, claims and changes in
this matter could have a material adverse effect on the Companys financial
condition and operating results

Litigation



The Company is subject to legal proceedings
and claims, which arise in the ordinary course of its business. Although
occasional adverse decisions or settlements may occur, the Company believes that
the final disposition of such matters should not have a material adverse effect
on its financial position, results of operations or liquidity.



Employment Agreement



On March 3, 2009 the Company entered into
executive employment agreements with two of its senior officers, Michael A.
Crosby, CEO and Richard A. Smith, COO. The agreements provide for base salaries
as well as milestone equity incentives. The term of the agreement is 2 years,
with automatic renewal of one additional year unless terminated by either
parties with written notices.



NOTE 10 - RELATED PARTY TRANSACTIONS



As described in Note 4, significant shareholders of the
Company have advanced funds to the Company for working capital purposes. Amount
due to the shareholder was $1,868,900 and $660,000 as of June 30, 2009 and
December 31, 2008, respectively. Accrued interest during the six months ended
June 30, 2009 in connection with these loans was $81,301.



As described in Note 5, in May 2009 the
Company entered into a Stock Adjustment Agreement with its convertible
debentures holders, pursuant to which the Company agreed to issue an aggregate
of 471,429 shares of its common stock to the noteholders in exchange for
settlement of the $9,000 of convertible notes and 514,286 outstanding warrants.
Upon the execution of the Stock Adjustment Agreement, the Company issued an
aggregate of 471,429 shares of its common stock to the noteholders, of which
281,961 shares were contributed by three significant shareholders of the
Company, and the remaining 189,468 shares of common stock were new issuances
(Note 6).



The Company leases from its officer and
significant shareholder a 50-foot Mikelson Persistence slipped at
Marina Village B-23, for purposes of providing support for personnel, office and
meeting space, as well as sleeping quarters for employees. The monthly rent is
$2,500, effective December 1. 2008 through December 31, 2009. Rental
expense charged to operations in connection with this lease was $7,500 and
$15,000, respectively, for the three and six months ended June 30, 2009.



The Company also uses office space in the
residence of the Companys officer and significant shareholder on a
month-to-month basis in Arlington, Virginia. In accordance with Staff Accounting
Bulletin Topic 5-T, the company accounted for the occupancy expenses as a
current expenses and a corresponding capital contribution. Rental expenses
charged to operations in connection with this arrangement was $7,500 and
$15,000, respectively, for the three and six months ended June 30, 2009, with a
corresponding capital contribution of $15,000 as of June 30, 2009.



The Company has service agreements with
certain consultants, certain of whom are also Companys significant
shareholders.





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NOTE 11  SUBSEQUENT EVENTS



Management has performed an evaluation of subsequent events through August 14, 2009 and no significant subsequent events were identified.





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF MARCH 31, 2009.



The following discussion of the financial
condition and results of operations of Aria International Holdings, Inc. should
be read in conjunction with the Managements Discussion and Analysis of
Financial Condition and Results of Operations, and the Consolidated Financial
Statements and the Notes thereto included in the Companys Annual Report on
Form 10-K for the year ended December 31, 2008.



Forward-Looking Statements



Certain statements contained in this Form
10-Q concerning expectations, beliefs, plans, objectives, goals, strategies,
future events or performance and underlying assumptions and other statements
which are other than statements of historical facts are "forward-looking
statements" within the meaning of the federal securities
laws. Although the Company believes that the expectations and
assumptions reflected in these statements are reasonable, there can be no
assurance that these expectations will prove to be correct. These
forward-looking statements involve a number of risks and uncertainties, and
actual results may differ materially from the results discussed in the
forward-looking statements. Any such forward-looking statements
should be considered in light of such important factors and in conjunction with
other documents of the Company on file with the SEC.



New factors that could cause actual results
to differ materially from those described in forward-looking statements emerge
from time to time, and it is not possible for the Company to predict all of such
factors, or the extent to which any such factor or combination of factors may
cause actual results to differ from those contained in any forward-looking
statement. Any forward-looking statement speaks only as of the date
on which such statement is made, and the Company undertakes no obligations to
update the information contained in such statement to reflect subsequent
developments or information.



Overview and Organizational History



Aria International Holdings, Inc. (the
Company) was incorporated pursuant to the laws of the State of
Nevada on November 21, 2007 under the name TriCord Hurricane Holdings, Inc. On
November 30, 2007, pursuant to the terms of the terms of a share exchange
agreement, it acquired control of its now wholly-owned subsidiary, TriCord
Hurricane Products, Inc.



TriCord Hurricane
Products, Inc. was originally organized under the laws of the State of Oklahoma
on January 3, 2006. On July 1, 2007, it merged with TriCord Hurricane
Products, LLC, a Florida limited liability company. On November 19, 2007,
TriCord Hurricane Products LLC filed a Certificate of Conversion with the
Secretary of State of Florida whereby it was converted to a Florida corporation
and renamed TriCord Hurricane Products, Inc.



On March 3, 2009, the
Company entered into an Agreement and Plan of Merger (the Merger
Agreement) with Aria Acquisition, Inc., a Nevada corporation and
wholly-owned subsidiary of the Company (the Subsidiary) and Aria
International Incorporated, a Delaware corporation (Aria
International). Pursuant to the Merger Agreement, the Subsidiary
merged into Aria International, such that Aria International became a wholly
owned subsidiary of the Company (the Merger). Pursuant to the Merger
Agreement, the Company agreed to issue an aggregate of 88,815,000 shares of the
Companys common stock to the shareholders of Aria International. On
March 9, 2009, the Company changed its name to Aria International Holdings,
Inc.



The acquisition of Aria International
Incorporated by the Company effected a change in control of the Company and is
accounted for as a reverse merger whereby Aria International
Incorporated is the accounting acquirer for financial statement
purposes. Accordingly, for all periods subsequent to the
reverse merger transaction, the financial statements of the Company
will reflect the historical financial statements of Aria International
Incorporated from its inception and the operations of Aria International
Holdings, Inc. (formerly TriCord Hurricane Holdings, Inc.) subsequent to the
March 3, 2009 transaction date.



Following the Merger, the Company intends to
focus on the development of business of Aria International Incorporated, the
provision of specialized surveillance and communications solutions. The Company
no longer intends to actively pursue the TriCord Hurricane Products business and
will likely divest the TriCord Hurricane Products business once an acquirer is
identified and terms acceptable to the Company are agreed upon.



Aria International Incorporated Business



Aria International
Incorporated (Aria International) is a wholly-owned subsidiary of
Aria International Holdings, Inc. and was formed in Delaware in July 2008.
 Aria International is focused on providing specialized surveillance and
communications solutions to its customers. Aria operates as a solutions
provider, a systems integrator, and as an operator of such surveillance and
communications systems. Working closely with clients in a flexible and
responsive fashion, Aria International has been able to constantly adapt as
demanded by the customers environment to changing requirements and provide
effective solutions. The founders of Aria International previously worked
on projects with the United Stated Marine Corps, the United Arab Emirates Air
Force, Kuwait Ministry of Interior, Royal Thai Army, Air Force and Marines and
the Indian Ministry of Interior. In addition, the founders of Aria
International have firsthand experience and explicit operational expertise in
surveillance and communications solutions. Aria International intends to
apply that experience and operational expertise to provide engineering, data
collection and fusion, data-virtualization, and provide support for the tactical
response to threats and to specific acts of terrorism against ports, borders and
high-value infrastructure.

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Liquidity and Capital Resources



As of June 30, 2009,
we had working capital deficit of $4,377,987. For the six-month period ended
June 30, 2009, we used cash flow in operating activities of $685,365, consisting
primarily of the net loss of $3,238,534, net with $497 of depreciation, $5,719
of amortization and write-off of debt discount, $27,864 of recapitalization
costs, $15,000 of operating expenses contributed by subsidiary shareholders,
$58,333 of amortization of deferred compensation charged to operations post
merger, $28,714 of loss on settlement debt, $60,000 of common stock issued for
interest expenses, and the changes in the balances of assets and liabilities.
Assets increased $9,980,475, net with an increase in liabilities of
$12,337,517.



There were no cash
used in investing activities for the six months ended June 30, 2009.



We met our cash
requirements during the six months ended June 30, 2009 through $58,098 of
proceeds from subscription of the Companys common stock and $1,212,900 of
proceeds (net of repayments) from related and third party loans.



Exploitation of
potential revenue sources will be financed primarily through the sale of
securities and convertible debt, issuance of notes payable and other debt or a
combination thereof, depending upon the transaction size, market conditions and
other factors.



While we have raised
capital to meet our working capital and financing needs in the past, additional
financing is required in order to meet our current and projected cash flow
deficits from operations and development. There can be no assurance that
financing will be available in amounts or on terms acceptable to us, if at
all.



By adjusting our
operations and development to the level of capitalization, we believe we have
sufficient capital resources to meet projected cash flow deficits. However, if
during that period or thereafter, we are not successful in generating sufficient
liquidity from operations or in raising sufficient capital resources, on terms
acceptable to us, this could have a material adverse effect on our business,
results of operations liquidity and financial condition.



Our registered
independent certified public accountants have stated in their report that we
have incurred significant operating losses and that we are dependent upon
managements ability to develop profitable operations. These factors, among
others, may raise substantial doubt about our ability to continue as a going
concern. As a result this may impede our ability to raise additional
capital.



Critical Accounting Policies



The discussion and
analysis of financial condition and results of operations is based upon our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. We continuously
evaluate, our estimates and judgments, including those related to revenue
recognition, sales returns, bad debts, excess inventory, impairment of goodwill
and intangible assets, income taxes, contingencies and litigation. Our estimates
are based on historical experience and assumptions that we believe to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.





We believe the
following critical accounting policies, among others, affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.



Revenue recognition



For revenue from product sales, the Company
recognizes revenue in accordance with Staff Accounting Bulletin No. 104,
Revenue Recognition (SAB104), which superseded Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements (SAB101). SAB 101 requires that four basic
criteria must be met before revenue can be recognized: (1) persuasive evidence
of an arrangement exists; (2) delivery has occurred; (3) the selling price is
fixed and determinable; and (4) collectibility is reasonably assured.
Determination of criteria (3) and (4) are based on managements judgments
regarding the fixed nature of the selling prices of the products delivered and
the collectibility of those amounts. Provisions for discounts and rebates
to customers, estimated returns and allowances, and other adjustments are
provided for in the same period the related sales are recorded. The Company
defers any revenue for which the product has not been delivered or is subject to
refund until such time that the Company and the customer jointly determine that
the product has been delivered or no refund will be required. SAB 104
incorporates Emerging Issues Task Force 00-21 (EITF 00-21),
Multiple-Deliverable Revenue Arrangements.EITF 00-21 addresses
accounting for arrangements that may involve the delivery or performance of
multiple products, services and/or rights to use assets.



In April 2009, the Company entered into a
sales contract with the Royal Thai Army, pursuant to which the Company sells
surveillance and communications equipment to the Royal Thai Army. The total
contract amount was $9,700,000, which includes delivery and installation of the
equipment, as well as providing training to the buyer. The Company
recognizes revenues from the equipment portion upon shipment and installation,
and the service portion upon completion of the training
programs. Revenues from this type of multiple deliverable
arrangements are accounted for in accordance with EITF 00-21 separate units of
accounting based on the relative fair value of the delivered units.



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Stock-Based Compensation



On January 1, 2006,
we adopted Statement of Financial Accounting Standards No. 123 (revised
2004), Share-Based Payment, (SFAS 123(R)) which requires
the measurement and recognition of compensation expense for all share-based
payment awards made to employees and directors including employee stock options
based on estimated fair values. SFAS 123(R) supersedes our previous accounting
under Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees (APB 25) for periods beginning in
fiscal 2006. In March 2005, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 107 (SAB 107) relating to SFAS 123(R).
The Company has applied the provisions of SAB 107 in its adoption of SFAS
123(R). There were no stock based awards issued and outstanding at June
30, 2009.



Computation of Net Income (Loss) per Share



Basic earnings (loss)
per common share is computed using the weighted-average number of common shares
outstanding during the period. Diluted earnings per common share is computed
using the combination of dilutive common share equivalents, which include
convertible preferred shares, options and warrants and the weighted-average
number of common shares outstanding during the period. During the three and six
months ended June 30, 2009 common stock equivalents are not considered in the
calculation of the weighted average number of common shares outstanding because
they would be anti-dilutive, thereby decreasing the net loss per common
share.



Fair Value Measurement



We adopted the provisions of SFAS No. 157, Fair Value Measurements on January 1, 2008. SFAS No. 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. SFAS No. 157, as originally issued, was effective for fiscal years beginning after November 15, 2007, with early adoption permitted. SFAS No. 157 does not require any new fair value measurements. It only applies to accounting pronouncements that already require or permit fair value measures, except for standards that relate to share-based payments (SFAS No. 123R Share Based Payment.)



Recently Issued Accounting Standards



In April 2009, the Financial Accounting Standards Board (FASB) issued the following new accounting standards:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | FASB Staff Position FAS No. 157-4,Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, (FSP FAS No. 157-4) provides guidelines for making fair value measurements more consistent with the principles presented in SFAS No. 157.  FSP FAS No. 157-4 provides additional authoritative guidance in determining whether a market is active or inactive and whether a transaction is distressed. It is applicable to all assets and liabilities (i.e., financial and non-financial) and will require enhanced disclosures.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | · | FASB Staff Positions FAS No. 115-2, FAS 124-2, and EITF No. 99-20-2,Recognition and Presentation of Other-Than-Temporary Impairments , (FSP FAS No. 115-2, FAS No. 124-2, and EITF No. 99-20-2) provides additional guidance to provide greater clarity about the credit and noncredit component of an other-than-temporary impairment event and to more effectively communicate when an other-than-temporary impairment event has occurred. This FSP applies to debt securities.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | · | FASB Staff Position FAS No. 107-1 and APB No. 28-1,Interim Disclosures about Fair Value of Financial Instruments , (FSP FAS No. 107-1 and APB No. 28-1) amends FASB Statement No. 107,Disclosures about Fair Value of Financial Instruments , to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. This FSP also amends APB Opinion No. 28,Interim Financial Reporting , to require those disclosures in all interim financial statements.



These standards are effective for periods ending after June 15, 2009. The adoption of these accounting standards had no material effect on our financial position or results of operations.

SFAS No. 165

In May 2009, the FASB
issued SFAS 165, Subsequent Events. We adopted SFAS No. 165
for the Quarterly Report for the period ending June 30, 2009. SFAS
165 establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are
issued, which are referred to as subsequent events. The statement clarifies
existing guidance on subsequent events, including a requirement that a public
entity should evaluate subsequent events through the



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issue date of the financial
statements, the determination of when the effects of subsequent events should be
recognized in the financial statement and disclosures regarding all subsequent
events.  SFAS 165 also requires a public entity to disclose the date
through which an entity has evaluated subsequent events. We have
evaluated subsequent events through August 14, 2009.

SFAS No. 166

In June 2009, the FASB issued SFAS 166, Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140, which eliminates the concept of a qualifying special purpose entity, changes the requirements for derecognizing financial assets and requires additional disclosures. SFAS 166 is effective for periods beginning after November 15, 2009. The Company is evaluating the impact of SFAS 166 on its consolidated financial statements.

SFAS No. 167

In June 2009, the FASB issued SFAS 167, Amendments to FASB Interpretation No. 46(R), which changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated and requires additional disclosures. SFAS 167 is effective for periods beginning after November 15, 2009. The Company is evaluating the impact of SFAS 167 on its consolidated financial statements.

SFAS No. 168

In June 2009, the FASB issued SFAS 168, “The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles,” which establishes the FASB Accounting Standards CodificationTM (Codification) as the source of authoritative US GAAP recognized by the FASB to be applied to nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also included in the Codification as sources of authoritative US GAAP for SEC registrants. SFAS 168 and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this rule will not affect reported results of operations, financial condition or cash flows. The Company will implement SFAS 168 in its third quarter Form 10-Q by updating the previous FASB references to the Codification.



Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Companys present or future consolidated financial statements.



Results of Operations



Aria International (the accounting acquirer) was formed in July 2008 and accordingly, discussion of comparative periods of operations are not presented.



Revenues



Subsequent to the reverse merger, Aria
International Incorporated is the reporting entity. Aria International
Incorporated was incorporated in July 2008 and had generated no revenues during
the three and six months ended June 30, 2009. In April 2009, the Company
entered into a contract with the Royal Thai Army, pursuant to which the Company
sells surveillance and communications equipment to the Royal Thai Army. The
total contract amount was $9,700,000, which includes delivery and installation
of the equipment, as well as providing training to the buyer. The Company
recognizes revenues from the equipment portion upon shipment and installation,
and the service portion upon completion of the training
programs. Revenues from this type of multiple deliverable
arrangements are accounted for in accordance with EITF 00-21 separate units of
accounting based on the relative fair value of the delivered units. As of June
30, 2009, the Company had received payments from the Royal Thai Army in the
amount of $6,790,000 and the payments received were accounted for as deferred
revenues. The equipment is scheduled to be delivered, installed, and
accepted by the buyer in late August 2009, at that time that the revenues
related to the equipment portion will be recognized.



Costs of Sales

The Company recorded no costs of sales
during the three and six months ended June 30, 2009. In connection with the
sales contract with the Royal Thai Army, the Company had incurred costs and
expenses in an aggregate amount of $9,495,475. These costs and expenses were
capitalized as of June 30, 2009, and will be charged to costs of sales upon the
delivery of the equipment and services.



Operating Expenses



Operating expenses for the three and six
months ended June 30, 2009 were $2,077,905 and $2,959,592, respectively. The
operating expenses for the three months ended June 30, 2009 consist primarily of
$551,000 in personnel costs, $1,072,000 in professional fees, $192,000 for
promotional, travel and entertainment. The operating expenses for
the six months ended June 30, 2009 consist primarily of $943,000 in personnel
costs, $1,393,000 in professional fees, $351,000 for promotional, travel and
entertainment.





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Other Expenses



Interest expense was $219,425 and $250,228,
respectively, for the three and six months ended June 30, 2009. This includes
mainly accrued interest for the OCAST award and notes payable to related
parties, as well as $100,000 cash and issuance of 750,000 shares of the
Companys common stock, valued at $60,000, to a third party in connection
with a short-term loan the Company entered into in April 2009.



Inflation



In the opinion of management, inflation will not have an impact on our financial condition and results of its operations.



Off-Balance Sheet Arrangements



The Company does not
have any off balance sheet arrangements that are reasonably likely to have a
current or future effect on our financial condition, revenues, and results of
operations, liquidity or capital expenditures.



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.



The Company does not own or trade any financial
instruments about which disclosure of quantitative and qualitative market risks
are required to be disclosed.



ITEM 4. CONTROLS AND PROCEDURES.



Evaluation of Disclosure Controls and Procedures



We maintain disclosure controls and
procedures that are designed to ensure that material information required to be
disclosed in our periodic reports filed under the Securities Exchange Act of
1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported
within the time periods specified in the SECs rules and forms and to
ensure that such information is accumulated and communicated to our management,
including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required
disclosure. During the quarter ended June 30, 2009 we carried out an
evaluation, under the supervision and with the participation of our management,
including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation
of our disclosure controls and procedures, as defined in Rule 13(a)-15(e)
under the 1934 Act. Based on this evaluation, because of the Companys
limited resources and limited number of employees, management concluded that our
disclosure controls and procedures were ineffective as of June 30, 2009.



Limitations on Effectiveness of Controls and Procedures



Our management, including our Principal
Executive Officer and Principal Accounting Officer, does not expect that our
disclosure controls and procedures or our internal controls will prevent all
errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include,
but are not limited to, the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.



Changes in Internal Control Over Financial Reporting.



During the most recent quarter ended June
30, 2009, there has been no change in our internal control over financial
reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) )
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.









PART II:  OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS.



We are not a party to any pending legal
proceeding, nor is our property the subject of a pending legal proceeding, that
is not in the ordinary course of business or otherwise material to the financial
condition of our business. None of our directors, officers or affiliates is
involved in a proceeding adverse to our business or has a material interest
adverse to our business.





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ITEM  1A.  RISK FACTORS.



In addition to the other information set
forth in this report, you should carefully consider the factors discussed in
Item 7 (Management's Discussion and Analysis of Financial Condition) of our
Annual Report on Form 10-K for the year ended December 31, 2008 (the
"Annual Report"), which could materially affect our business,
financial condition or future results. There have been no material changes to
the risk factors disclosed in the Annual Report.



ITEM  2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.



During the second
quarter of 2009, the Company issued an aggregate of 750,000 shares of its common
stock in connection with a short-term loan agreement with a third party.
 In addition, upon the execution of a Stock Adjustment Agreement the
Company entered into with its convertible debenture holders in May 2009, the
Company agreed to issue an aggregate of 471,429 shares of its common stock to
the noteholders, of which 281,961 shares were contributed by three significant
shareholders of the Company, and the remaining 189,468 shares of common stock
were new issuances. The Company also received an aggregate of $31,000 for
approximately 124,000 shares of common stock subscribed.



All of the above offerings and sales were
deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the
Securities Act of 1933,



ITEM  3.  DEFAULTS UPON SENIOR SECURITIES.



None



ITEM  4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.



None



ITEM  5.  OTHER INFORMATION.



None



ITEM  6.  EXHIBITS.

|               |  |                                                                                                                                             
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                             
|Exhibit
Number |  | Description of Exhibits                                                                                                                     
|31.1           |  | Certifications of Principal Executive Officer required by Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|31.2           |  | Certification pursuant to 18 U.S.C.§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                            





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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|                |                                   | 
|--------------- | --------------------------------- | 
|                |                                   | 
|                | ARIA INTERNATIONAL HOLDINGS, INC.
|                |                                  
|                | /s/ Michael A. Crosby            
|August 14, 2009 | Michael A. Crosby                
|                | Principal Executive Officer      









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