U.
S. SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q








[X]
            
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended March 31, 2009[  ]
            
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the transition period from ___________ to _____________





AVT,
INC.





Nevada
            
            000-53372
            
            11-3828743(State
      or other jurisdiction
            
            (Commission
      File Number)
            
            (IRS
      Employerof
      Incorporation)
            
            
            
            Identification
      Number)341
      Bonnie Circle, Suite 102Corona,
      CA 92880(Address
      of principal executive offices)(951)
      737-1057(Issuer’s
      Telephone Number)





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 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
___





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 the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange
Act.





Large
      accelerated filer  [   ]
            
            Accelerated
      filer    [    ]Non-accelerated
      filer    [   ] (Do not check if smaller
      reporting company)
            
            Smaller
      reporting company    [X]





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


Yes
[  ] No [ X
]













APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Check
whether the registrant filed all documents and reports required to be filed by
Section 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution of
securities under a plan confirmed by a court. Yes ___ No ____





APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date:  As of May 22, 2009, there were
22,902,882 shares of our common stock were issued and outstanding.





PART
I





ITEM 1. FINANCIAL
STATEMENTS





AVT, INC.PageCondensed
      Balance Sheet for the three months ended March 31, 2009 and the audited
      year ended December 31, 2008
              
              F-2Consensed
      Statements of Operations for the three months ended March 31, 2009 and the
      audited comparable three months ended March 31, 2008
              
              F-3Condensed
      Statement of Changes in Shareholders' Equity for the three months ended
      March 31, 2009 and the audited comparable three months
              
              F-4ended
      March 31, 2008Condensed
      Statements of Cash Flows for the three months ended March 31, 2009 and the
      comparable three months ended March 31, 2008
              
              F-5Notes
      to Financial Statements
              
              F-6F-1
  
 
 AVT,
      INC.BALANCE
      SHEETUNAUDITEDAuditedFor
      the
                
                For
      theASSETS
                
                three
      months ended
                
                Year
      EndedMarch,
      31 2009
                
                December
      31, 2008Current
      assets:Cash
                $
                91,135
                $
                56,547Accounts
      receivable
                
                502,355
                
                451,930Inventory
                
                643,241
                
                507,710Prepaid
      expenses
                
                77,767
                
                77,767Total
      current assets
                
                1,314,498
                
                1,093,954Property
      and equipment, net of accumulated depreciation.
                
                4,262,658
                
                4,054,024Other
      assets  (Note F)
                
                10,192,835
                
                10,014,647TOTAL
      ASSETS
                $
                15,769,990
                $
                15,162,625LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
                
                87,900
                
                85,819Other
      current liabilities
                
                25,767
                
                33,088Total
      current liabilities
                $
                113,667
                $
                118,907Long-term
      Liabilities:Notes
      payable
                
                1,310,395
                
                874,731TOTAL
      LIABILITIES
                
                1,424,062
                
                993,638STOCKHOLDERS'
      EQUITYCommon
      stock, 100,000,000 shares authorized, $.001 par value,21,935,973
      shares issued and outstanding
                
                45,614
                
                45,434Preferred
      Stock, 3,000,000 authorized, $.001 par value2,033,333
      shares of Series A Convertible Preferred Stockissued
      and outstanding
                
                2,200
                
                2,200Notes
      issued that can be converted to common stock
                
                2,123
                
                1,901Dividends
      Paid
                
                (493,487)
                
                (412,796)Additional
      paid in capital
                
                29,028,882
                
                28,811,653Retained
      deficit
                
                (14,279,404)
                
                (14,398,882)Net
      Income (Loss)
                
                39,999
                
                119,478TOTAL
      STOCKHOLDERS' EQUITY
                
                14,345,927
                
                14,168,988TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                $
                15,769,989
                $
                15,162,625See
      notes to the financial statementsF-2
 
  AVT, INC.STATEMENTS
      OF OPERATIONSUNAUDITEDFor
      The
              
              For
      Thethree
      months ended
              
              three
      months endedMarch
      31, 2009
              
              March
      31, 2008Revenues:Sales
              $
              675,780
              $
              394,365Total
      revenues
              
              675,780
              
              394,365Expenses:Cost
      of Goods Sold
              
              219,359
              
              191,499General
      and administrative
              
              401,612
              
              364,125Total
      operating expenses
              
              620,971
              
              555,624Operating
      Income (Loss)
              
              54,808
              
              (161,260)Provision
      for Income Taxes
              
              19,610
              
              24,987Other
      income & expensesGarnishments
              
              4,801
              
              (346)Interest
      expense
              
              0
              
              0Loss
      on disposal of assets
              
              0
              
              04,801
              
              (346)NET
      INCOME (LOSS)
              $
              39,999
              $
              (186,593)Basic
      profit per common share
              $
              0.00
              $
              (0.01)Diluted
      profit per common share
              $
              0.00
              $
              (0.01)Weighted
      average common shares outstanding - Basic
              
              21,935,973
              
              15,197,712Weighted
      average common shares outstanding - Diluted
              
              37,496,693
              
              29,075,833See
      notes to the financial statementsF-3


AVT,
      INC.STATEMENT
      OF CHANGES IN STOCKHOLDERS' EQUITYTotalPreferred
      Stock
              
              Common
      Stock
              
              Additional
              
              Retained
              
              Contract
              
              Stockholders'Shares
              
              Amount
              
              Shares
              
              Amount
              
              Paid
      In Capital
              
              Deficit
              
              Equity
              
              EquityBalance
      at December 31, 2004
              *
              $
              
              $
              1,667,726
              $
              500
              $
              6,606,803
              $
              (5,373,022)
              $
              
              $
              1,234,281Common
      shares issued upon conversion of notes
              *
              
              
              
              6,610,192
              
              1,983
              
              3,795,736
              
              —
              
              
              
              3,797,719Net
      loss for the year ended December 31, 2005
              
              
              
              
              
              —
              
              —
              
              
              
              (1,807,705)
              
              
              
              (1,807,705)Balance
      at December  31, 2005
              *
              
              
              
              
              8,277,918
              
              2,483
              
              10,402,539
              
              (7,180,727)
              
              
              
              3,224,297Common
      shares issued as payment
              
              
              
              
              
              1,319,322
              
              26,309
              
              6,107,838
              
              (7,054,502)
              
              625,000
              
              (295,355)for
      notesNet
      loss for the year ended December 31, 2006
              
              
              
              
              
              
              
              
              
              
              
              833,234
              
              
              
              833,234Balance
      at December  31, 2006
              *
              
              $
              
              $
              9,597,240
              $
              28,792
              $
              16,510,377
              $
              (13,401,995)
              $
              
              $
              3,762,176Common
      shares issued
              
              
              
              
              
              3,291,191
              
              9,873
              
              4,034,964
              
              17,121
              
              (625,000)
              
              3,436,974Preferred
      shares issued
              
              1,200,000
              
              1,200
              
              
              
              
              
              
              
              
              
              
              
              1,200Common
      shares issued upon conversion of notes
              
              
              
              
              
              454,707
              
              1,364
              
              
              
              
              
              
              
              1,364Net
      income for the year ended December 31, 2007
              
              
              
              
              
              
              
              
              
              
              
              240,296
              
              
              
              240,296Balance
      at December  31, 2007
              *
              1,200,000
              $
              1,200
              $
              13,343,138
              $
              40,029
              $
              20,545,341
              $
              (13,144,458)
              $
              
              $
              7,442,010Common
      shares issued
              *
              
              
              
              1,807,908
              
              160
              
              5,434,738
              
              0
              
              
              
              5,434,880Preferred
      shares issued
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Dividends
      Paid
              
              
              
              
              
              
              
              
              
              
              
              (90,146)
              
              
              
              (90,146)Common
      shares issued upon conversion of notes
              *
              
              
              
              46,667
              
              140
              
              
              
              
              
              
              
              140Net
      income for the period ended  March 31, 2008
              
              
              
              
              
              
              
              
              
              
              
              (186,593)
              
              
              
              (186,593)Balance
      at March  31, 2008
              *
              1,200,000
              $
              1,200
              $
              15,197,713
              $
              40,329
              $
              25,980,079
              $
              (13,421,197)
              $
              
              $
              12,600,291Common
      shares issued
              *
              
              
              
              1,424,414
              
              1,423
              
              1,671,075
              
              
              
              
              
              1,674,698Preferred
      shares converted
              
              (166,667)
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Perferred
      shares issues
              
              1,000,000
              
              1,000
              
              
              
              
              
              
              
              
              
              
              
              1,000Dividends
      Paid
              
              
              
              
              
              
              
              
              
              
              
              (169,963)
              
              
              
              (169,963)Common
      shares issued upon conversion of notes
              *
              
              
              
              175,400
              
              214
              
              
              
              
              
              
              
              214Net
      income for the period ended June 30, 2008
              
              
              
              
              
              
              
              
              
              
              
              (362,299)
              
              
              
              (362,299)Balance
      at June 30, 2008
              *
              2,033,333
              $
              2,200
              $
              16,797,527
              $
              41,966
              $
              27,651,154
              $
              (13,953,459)
              $
              
              $
              $
      13,743,941Common
      shares issued
              *
              
              
              
              712,329
              
              3,189
              
              344,375
              
              
              
              
              
              345,3640Preferred
      shares converted
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Preferred
      shares issued
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Dividends
      Paid
              
              
              
              
              
              
              
              
              
              
              
              (345,085)
              
              
              
              (345,085)Common
      shares issued upon conversion of notes
              *
              
              
              
              866,212
              
              866
              
              
              
              
              
              
              
              866Net
      income for the period ended Sept 30, 2008
              
              
              
              
              
              
              
              
              
              
              
              (100,338)
              
              
              
              (100,338)Balance
      at September 30, 2008
              *
              2,033,333
              $
              2,200
              $
              18,376,067
              $
              46,021
              $
              27,995,529
              $
              (14,398,882)
              $
              
              $
              13,644,748Common
      shares issued
              *
              
              
              
              150,021
              
              546
              
              816,124
              
              
              
              
              
              816,790Preferred
      shares converted
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Preferred
      shares issued
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Dividends
      Paid
              
              
              
              
              
              
              
              
              
              
              
              (412,796)
              
              
              
              (412,796)Common
      shares issued upon conversion of notes
              *
              
              
              
              2,623,532
              
              768
              
              
              
              
              
              
              
              648Net
      income for the period ended December 31, 2008
              
              
              
              
              
              
              
              
              
              
              
              119,479
              
              
              
              119,479Balance
      at December 31, 2008
              *
              2,033,333
              $
              2,200
              $
              21,149,619
              $
              47,335
              $
              28,811,653
              $
              (14,692,199)
              $
              
              $
              14,168,987Common
      shares issued
              *
              
              
              
              771,914
              
              180
              
              217,230
              
              
              
              
              
              217,410Preferred
      shares converted
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Preferred
      shares issued
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              0Dividends
      Paid
              
              
              
              
              
              
              
              
              
              
              
              (80,690)
              
              
              
              (80,690)Common
      shares issued upon conversion of notes
              *
              
              
              
              14,440
              
              222
              
              
              
              
              
              
              
              222Net
      income for the period ended March 31, 2009
              
              
              
              
              
              
              
              
              
              
              
              39,999
              
              
              
              39,999Balance
      at March 31, 2009
              *
              2,033,333
              $
              2,200
              $
              21,935,973
              $
              47,737
              $
              29,028,883
              $
              (14,732,892)
              $
              
              $
              14,345,927*
      Shares restated to reflect 1 for 3 common stock splitSee
      notes to the financial statementsF-4
 
  
  AVT, INC.STATEMENTS
      OF CASH FLOWSUNAUDITEDFor
      The
              
              For
      Thethree
      months ended
              
              three
      months endedMarch
      31, 2009
              
              March
      31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income  (loss)
              $
              39,999
              $
              (186,593)Adjustments
      to reconcile net income tonet
      cash provided by operating activities:Changes
      in operating assets and liabilities:Accounts
      Receivable
              
              (50,425)
              
              355,048Inventory
              
              (135,531)
              
              103,853Deposits
              
              0
              
              0Accounts
      payable and accrued expenses
              
              (5,240)
              
              35,880NET
      CASH PROVIDED BY OPERATING ACTIVITIES
              
              (151,197)
              
              308,187CASH
      FLOWS FROM INVESTING ACTIVITIES
              
              (386,821)
              
              (340,058)NET
      CASH USED IN FINANCING ACTIVITIES
              
              572,607
              
              (64,705)NET
      CHANGE IN CASH
              
              34,588
              
              (96,575)CASH
      BALANCESBeginning
      of period
              
              56,547
              
              145,012End
      of period
              $
              91,135
              $
              48,437SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
              $
              -
              $
              -Income
      taxes
              $
              -
              $
              -NON-CASH
      INVESTING AND FINANCING TRANSACTIONS:Debt
      converted to common stock
              $
              -
              $
              -Inventory
      acquired for debt
              $
              -
              $
              -See
      notes to the financial statementsF-5


AVT,
INC.
 Notes
to Financial Statements
 
 NOTE
1.                      SUMMARY
OF ACCOUNTING POLICIES
 
 a.           Organization
 
 The
Company was originally organized under the laws of the State of Delaware on
February 26, 1969, as Infodex, Inc. At that time, the Company was engaged in the
development, manufacturing and selling of various electronic devices, especially
in the preparation various types of oscilloscopes known as “CRT” display
modules.  In March 2005, the Company was renamed to Midwest Venture
Group, Inc. and In September 2005, the Company again changed its name to
Automated Vending Technologies, Inc. to better reflect the Company’s current
operations as a vending machine manufacturer and vending route
operator.  In January, 2008, the Company changed its state of domicile
to Nevada, changed its name to AVT, Inc. and completed a 1 for 3 reverse split
of its common stock.
 
 The
Company has not paid significant dividends and any dividends that may be paid in
the future will depend upon the financial requirements of the Company and other
relevant factors.
 
 b.  Accounting
Method
 
 The
Company’s policy is to use the accrual method of accounting to prepare and
present financial statements, which conform to generally accepted accounting
principles (“GAAP”). The company has elected a December 31,
year-end.
 
 c.  Cash
and Cash Equivalents
 
 The
Company considers all highly liquid investments with maturities of three months
or less when purchased, to be cash equivalents.
 
 d.  Use
of Estimates in Financial Statement Preparation
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the use of estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. The Company's financial statements include amounts that are
based on management's best estimates and judgments. Actual results could differ
from those estimates.
 
 e.  Fixed
Assets
 
 In
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-
Lived Assets, the Company evaluates the carrying value of long-lived assets for
impairment whenever events or change in circumstances indicate that such
carrying values may be recoverable. The Company estimates the future cash flows
derived from an asset to assess whether or not a potential impairment exists
when events or circumstances indicate the carrying value of a long- lived asset
may be recoverable. An impairment loss is recognized when the undiscounted
future cash flows are less than its carrying amount. If assets are considered to
be impaired the impairment to be recognized is measured by the amount by which
the carrying amount exceeds the fair value of assets. There can be no assurance,
however, that market conditions will not change or demand for the Company’s
products or services will continue, which could result in additional future
impairment of long-lived assets.  The financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the classification of liabilities
that might result from the outcome of these uncertainties.
 
 f.  Other
Assets
 
 Contract
Equity
 
 Pursuant
to contracts with Coca-Cola Company and Pepsi-Cola North America, we utilize
approximately 141 vending machines in our operations.  We are not
required to pay lease or rent payments for the use of the vending
machines.  We have valued the use of these machines at an average
value of $4,500 per machine for a total of $625,000, including our vending
contracts.  The vending machines are owned by Coca-Cola Company and
Pepsi-Cola North America.
 
 Restaurant
Purchase
 
 In April
2008, we purchased the assets of AC Mexican Food, Inc. dba Jalapenos Mexican
Food, for a purchase price of 1,000,000 restricted shares of our Series A
Convertible Preferred stock.  The asset was valued at $1,000,000
pursuant to the value of fixtures in the restaurant.
 
 Engineering Research and
Development and Copyrights and Patents
 
 Our
technology and intellectual property assets are valued and expensed at fair
market prices in accordance FSAB Statement No.2 (FAS-2) Accounting for Research and
Development Costs.  These assets include engineering research
and development valued at $2,396,831 and copyright and patents valued at
$6,492,815.  Our AVT developed proprietary software, product
dispensing systems and multiple designed or developed products are currently in
the state of “patent pending.”   Our developed products include
inventory control software, progress monitors, service logs, purchase order,
data base management, generators, touch screen vending, cashless payment
systems, and digital signage.  Hardware assets include our 24 hour
Vend Mart, Tech Store, Automated Express Market, Ivend and Vend Sensor
System.
 
 g.  Other
Current Liabilities
 
 Our other
current liabilities consist of accrued liabilities, payroll liabilities, sales
tax payables, automobile liabilities, and equipment rental liabilities totaling
$118,907.
 
 h.  Long
Term Liabilities
 
 Long term
liabilities include a loan payable to SWI Trading, Inc. in the amount of
$247,511, Natalie Bishop in the amount of $37,410 and investor notes in the
amount of $1,473,843.  We have long term equipment leases totaling
$96,480 and long term automobile leases totaling $19,239.  We have a
long term lease liability relating to the AC Mexican Food, Inc. in the amount of
$17,237.
 
 i.   Inventory
 
 The year
ended December 31, 2007 referenced a change in inventory which contributed
$946,901 to positive operating cash flows. The revenues reported for the three
months ended March 31, 2008 were $394,365. On January 1, 2008 notes payable from
SWI matured and became payable. In the three months ended March 31, 2008, a
reclassification to Inventory was made. SWI notes were offset by inventory
contributed to SWI. Pursuant to FSAB Technical Bulletin No. 88-2, Definition of a Right of Offset, Inventories
are stated at fair market value. Inventories are stated at the lower cost or
market with cost determined using the first-in, first-out method. Inventories
consist of primarily of the food products that are sold in the vending
machines.  The current value of machine inventory has been adjusted to
reflect market value.
 
  Beginning
      Inventory as of January 1, 2009
              $
              507,710Purchases
              $
              135,531Ending
      Inventory as of March 31, 2009
              $
              643,241Total
      COG Sold
              $
              219,359
 
 j.  Property
and Equipment
 
 Property
and equipment are stated at cost, net of accumulated depreciation and
amortization.  Depreciation and amortization are provided using the
straight-line method over the estimated useful lives or the term of the lease of
the related assets, whichever is shorter. Estimated useful lives generally range
from 5 to 7 years.
 
 Maintenance
      and repairs are charged to expense as incurred.  Renewals and
      improvements of a major nature are capitalized. At the time of the
      retirement or other disposition of property and equipment, the cost and
      accumulated depreciation and amortization are removed from the accounts
      and any resulting gains or losses are reflected in
  income.
 
 k.
      Expenses
 
 The
Company expenses the cost of advertising as incurred.  Costs incurred
for research and development activities are expensed as incurred.
 
 l.  Earnings
per share
 
 Basic
earnings per share is computed by dividing income available to common
shareholders (the numerator) by the weighted-average number of common shares
(the denominator) for the period. The computation of diluted earnings per share
is similar to basic earnings per share, except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if potentially dilutive common shares had been issued.
 
 m.  Income
Taxes
 
 The
Company accounts for income taxes under the provisions of SFAS No. 109,
“Accounting for Income Taxes”.  SFAS 109 requires recognition of
deferred tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax
returns.  Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.
 
 n.  Recent
Accounting Pronouncements
  In December 2004, the FASB issued SFAS
No. 123 (R), “Share-Based Payment”. SFAS No. 123 (R) revises SFAS No. 123,
“Accounting for Stock-Based Compensation” and supersedes  APB Opinion
No. 25, “Accounting for Stock Issued to Employees”. SFAS No. 123 (R) focuses
primarily on the accounting for transactions in which an entity obtains employee
services in share-based payment transactions. SFAS No. 123 (R) requires
companies to recognize in the statement of operations the cost of employee
services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards (with limited exceptions). SFAS No. 123
(R) is effective as of the first interim or annual reporting period that begins
after June 15, 2005 for non-small business issuers and after December 15, 2005
for small business issuers.  Accordingly, the Company has adopted SFAS
No. 123 (R) effective January 1, 2006. The Company has determined that the
provisions of SFAS No. 123 (R) did not have any significant impact on its
financial statement presentation or disclosures.
 
 
 
 In May
2005, the FASB issued SFAS No. 154 that establishes new standards on accounting
for changes in accounting principals.  Pursuant to the new rules, all
such changes must be accounted for by retrospective application to the financial
statements of prior periods unless it is impracticable to do so.  SFAS
No. 154 completely replaces Accounting Principles Bulletin (APB) Opinion 20 and
SFAS 3, though it carries forward the guidance in those pronouncements with
respect to accounting for changes in estimates, changes in the reporting entity,
and the correction of errors.  This statement is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 31, 2005.
 
 The
adoption of these pronouncements has not made a material effect on the Company’s
financial position or results of operations.  The Company has not
recorded any Compensations expense, as there have been no options issued to
employees as of September 30, 2008.
 
 o.  Investing
and Financing Activities
 
 For the
three months ended March 31, 2009, the Company received $217,229 in additional
paid in capital, $355,000 through the sale of convertible notes and $160,000
through the sales of our common stock. Financing expenditures include payments
relating to principal and interest payments on outstanding notes, equipment
lease payments and dividend payments. The Company had ($386,821) in net
investing activities relating primarily to expenditures for design, fabrication,
and research and development.
 
 p.  Revenue
Recognition
 
 The
Company recognizes revenue at time of sale upon receipt of payment.
 
 NOTE
2.                      GOING
CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company’s success is dependent upon
numerous items, among which are the Company’s successful growth of revenues from
its products and services, its ability to obtain new customers in order to
achieve levels of revenues adequate to support the Company’s current and future
cost structure, and its success in obtaining financing for equipment and
operations, for which there is no assurance. Unanticipated problems, expenses,
and delays are frequently encountered in establishing and maintaining profitable
operations. These include, but are not limited to, competition, the need to
develop customer support capabilities and market expertise, setbacks in product
development, technical difficulties, market acceptance and sales and marketing.
The failure of the Company to meet any of these conditions could have a
materially adverse effect on the Company and may force the Company to reduce or
curtail operations.  No assurance can be given that the Company can
achieve or maintain profitable operations.
 
 The
Company believes it will have adequate cash to sustain operations until it
achieves sustained profitability. However, until the Company has a history of
maintaining revenue levels sufficient to support its operations and repay its
working capital deficit, the Company may require additional
financing.
 
 Sources
of financing could include additional equity financing or debt
offerings.  Debt offerings are limited to the Company’s convertible
promissory notes are offered with 36 month maturity dates at 10% paid
quarterly.  The Company could also borrow additional funds from SWI
Trading, Inc.
 
 Prior to
January 1, 2008, SWI Trading, Inc. had loaned the Company a total of $897,318,
through direct loans and a convertible promissory note in the amount of $761,168
dated November 1, 2006.   The convertible promissory note was a
zero interest note maturing on January 1, 2007, and replacing all preexisting
debt obligations to SWI Trading, Inc.  At the option of the
noteholder, the note converted into restricted shares of the Company’s common
stock at $.50 per share.  On January 1, 2008, we entered into an
agreement with SWI Trading, Inc. whereby SWI agreed to waive repayment of
$500,250 of the $897,318 total owed to SWI Trading, Inc. in exchange for the
issuance of $1,724,133 restricted shares of our common stock.  In
addition, SWI agreed to waive any claim it may have against us for interest due
upon the loan, and/or unpaid compensation due for:  services rendered;
research and development fees; technology development fees; loan acquisition
services and any other claims.
 
 NOTE
3.       COMMITMENTS AND
CONTINGENCIES
 
 a.  Indemnities
and Guarantees:
 
 During
the normal course of business, the Company may make certain indemnities and
guarantees under which it may be required to make payments in relation to
certain transactions. These indemnities may include certain agreements with the
Company’s officers, under which the Company may be required to indemnify such
person for liabilities arising out of their employment relationship, agreements
with financial institutions in connections with certain of the Company’s notes
payable, and agreements with leasing of office space for certain actions arising
during the Company tenancy.  The duration of these indemnities and
guarantees do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has
not been obligated to make payments for these obligations and no liabilities
have been recorded for these indemnities and guarantees in the accompanying
balance sheet.
 
 b.  Leases:
 
 The
      Company has various operating lease commitments in connection with its
      office space and certain equipment.
 
 c.  Legal:
 
 The
      Company may be involved from time to time in claims, lawsuits, and
      disputes with third parties, actions involving allegations or
      discrimination or breach of contract actions incidental in the normal
      operations of the business. The Company is currently not involved in any
      such litigation or disputes which management believes could have a
      material adverse effect on its financial position or results of
      operations.
 
 
 NOTE
      4.
              STOCKHOLDERS’
      EQUITY
 
 The
Company has the following classes of capital stock as of March 31,
2009:
 
 Common
stock, $.001 par value:  100,000,000 shares authorized: 21,935,973
shares issued and outstanding.
 
 Preferred
Stock, $.001 par value: 3,000,000 shares authorized as Series A Convertible
Preferred.  2,033,333 shares of Series A Convertible Preferred stock
issued and outstanding.
 
 Common
Stock
 
 On or
about January, 2008, a majority of the Company’s shareholders approved the
resolution of the Company’s board of directors to amend the Company’s articles
of incorporation to reverse split the Company’s common stock on a 1 for 3
basis.  All fractional shares were rounded up.  Shares
issued prior to January, 2008, have been retroactively restated to reflect the
impact of the stock split.
 
 As at
December 31, 2006, the Company had 9,597,240 shares of its common stock issued
and outstanding.
 
 As at
December 31, 2007, the Company had 13,343,138 shares of its common stock issued
and outstanding.
 
 As at
December 31, 2008, the Company had 21,149,620 shares of its common stock issued
and outstanding.
 
 For the
quarter ended March 31, 2009, the Company issued 786,353 shares of its common
stock.
 
 As at
March 31, 2009, the Company had 21,935,973 shares of its common stock issued and
outstanding.
 
 Preferred
Stock
 
 For the
quarter ended March 31, 2008, the Company’s Board of Directors cancelled all
issued and outstanding shares of its Series C Convertible Preferred stock and
designated 3,000,000 preferred shares as Series A Convertible Preferred Stock,
$.001 par value, of which 2,033,333 shares are issued and outstanding as at
March 31, 2009.
 
 For the
quarter ended June 30, 2008, 166,667 shares of our issued and outstanding Series
A Convertible Preferred stock were converted into 1,000,000 shares of our common
stock.  The Company issued SWI Trading, Inc. a total of 1,000,000
shares of our Series A Convertible Preferred stock as payment for the purchase
of certain assets and liabilities of AC Mexican Food, Inc., a California
corporation.
 
 The
Series A Convertible Preferred Stock has the following rights and
preferences:
 
 Conversion
Rights
 
 Each
share of the Series A Preferred Stock may be convertible, at the option of the
holder thereof and subject to notice requirements described herein, at any time,
into six (6) shares of our common stock.
 
 Liquidation Preference
 
 The
holders of Series A Convertible Preferred Stock are entitled to receive, prior
to the holders of the other series of the Company’s Preferred Stock and prior
and in preference to any distribution of our assets or surplus funds to the
holders of any other shares of stock of the Company by reason of their ownership
of such stock, an amount equal to $0.37 per share with respect to each share of
Series A Convertible Preferred Stock, plus all declared but unpaid dividends
with respect to such share.
 
 Voting Rights
 
 Except as
otherwise required by law, the holders of the Company’s Series A Convertible
Preferred Stock vote; (i) as a single class and shall have such number of votes
as is determined by multiplying (a) the number of shares of Series A Convertible
Preferred Stock held by such holder, (b) the number of issued and outstanding
shares of our Series A Convertible Preferred Stock and Common Stock as of the
record date for the vote, or, if no such record date is established, as of the
date such vote is taken or any written consent of stockholders is solicited, and
(c) 0.00000025; and (ii) the holders of our Common Stock shall have one vote per
share of Common Stock held as of such date.


ITEM
2.                      MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ORPLAN OF OPERATIONS





The
following discussion and analysis should be read in conjunction with our
unaudited consolidated financial statements and related notes included in this
report. The statements contained in this report that are not historic in nature,
particularly those that utilize terminology such as “may,” “will,” “should,”
“expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable
terminology are forward-looking statements based on current expectations and
assumptions.





Various
risks and uncertainties could cause actual results to differ materially from
those expressed in forward-looking statements.





The
forward-looking events discussed in this report, the documents to which we refer
you and other statements made from time to time by us or our representatives,
may not occur, and actual events and results may differ materially and are
subject to risks, uncertainties and assumptions about us. For these statements,
we claim the protection of the “bespeaks caution” doctrine. All forward-looking
statements in this document are based on information currently available to us
as of the date of this report, and we assume no obligation to update any
forward-looking statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results to
differ materially from any future results, performance or achievements expressed
or implied by such forward-looking statements.





The
Company





AVT, Inc., is a public
company.  Our common stock is quoted on the Pink Sheets in the
over-the-counter market.  Our primary focus is on the manufacture of
vending and product dispensing systems which utilize an innovative approach of
development, integration of technology and advertising media.  Our
products define the cutting edge of the vending industry and position us as an
industry innovator.  We are also a vending operator having
approximately 1,000 vending systems throughout the Los Angeles, Orange and
Riverside, California counties.  It is our vending operation
experience over the past years that adds to the distinctive advantage and
overall success as a manufacture and leader of technology based vending
products. Ourexecutive offices, engineering and manufacturing facility and warehouse
are located at 341 Bonnie Circle, Suite 102, Corona, CA 92880.  Our
telephone number is (951) 737-1057.





We were originally incorporated under
the laws of the State of Delaware on February 25, 1969 as Infodex,
Incorporated.  In October, 2005, we acquired Automated Vending
Technologies, Inc., a Nevada corporation and began focusing our business on
vending operations. In December, 2006 we merged our operating wholly owned
subsidiary into the parent company and in January of 2008, we changed our state
of domicile to the State of Nevada and renamed the company to “AVT,
Inc.”  We operate in the State of California as “AVT Vending,
Inc.”





We have received a going concern
opinion from our auditors.





The
Business





AVT, Inc. is an innovative vending
operator and manufacturer of technology based vending solutions and
equipment.  We currently employ a workforce of approximately 25 people
and services approximately 300 commercial and government vending accounts in
Southern California.  We use ourpatent
pending  technologies to drive our vending innovations which are in
various stages of development.  AVT’s technology staff ranges from
electrical and mechanical engineers to software programmers and IT specialists
thereby enabling us to design and control all of our unique products while
keeping the “edge” on all of our developed products





Our
business currently focuses on the following:





·
            Manufacturing
      of the RAM 4000 vending machine, a refrigerated beverage/snack combination
      vending machine containing more sophisticated technology then our
      competitors and offered at competitive
pricing.





·
            Manufacturing
      of the RAM 5000 vending machine, a high capacity non-refrigerated
      snack/chip/pastry combination vending machine containing more
      sophisticated technology then our competitors and offered at competitive
      pricing.





·
            Manufacturing
      an attractive, built-in, secure access vending cabinet for hotels that do
      not have on-site food service. Our AEMTM cabinet incorporates patent
      pending touch-screen to vend or TSVTM which replaces both stand-alone
      machines and in-room locked mini-fridges while providing controlled access
      and a range of direct customer billing
options.





·
            AVT
      has developed a variety of ‘high end” PC based product dispensing
      systems.  These systems are derivatives of the AVT RAM 4000 or
      5000 base housing having front panels which are unique or customized to
      end customer’s needs for digital signage or large color touch
      screens.  These systems allow a variety of AVT designed
      technologies to be integrated into the system to meet specific customer
      needs for a custom dispensing system.  Our current high end
      product dispensing includes the Ivend, 24Hr. Vend Mart, and Tech-Store. We
      manufacture Patent-Pending, affordable, wireless VMSTM technology enabling
      vending machine owners/operators to remotely manage their vending systems
      and receive real time information via the Internet.  This system
      also utilizes a cashless payment system enabling patrons to use credit
      card or membership card for completing vending
    transactions.





·
            We
      offer advertising via our highly visible, remotely-programmable, AVTI
      MediaTM Network video panels which are integrated into vending machine
      signage that creates a new opportunity for advertisers to reach consumers
      in a captive setting.





Our goal is to be the leader in
technology based vending and product dispensing solutions that are reflective of
today’s “got to have it now” consumers. Serving international vending owners and
operators whose desire is to have a better experience with vending equipment. We
strive to grow our business by developing superior customer solutions, adapting
new technologies, and pursuing appropriate mergers and
acquisitions.  Our growth is dependant upon the development of new
technology, the incorporation of advertisement on the vending machines, the
sales of our RAM 4000 and RAM 5000 systems, the introduction of the next
generation Product Dispensing Centers, and the development
of   revolutionary vending technologies.





Vending
History





Vending machines had been introduced to
Americans over 70 years earlier by Thomas Adams, who installed them on New York
City's elevated train platforms to sell his Chicklets gum. After World War II
the vending industry grew twice as fast as the gross national product, driven by
three primary factors: rising labor costs made machines an attractive
alternative to human laborers; technological advances in food preservation and
dispensing equipment permitted service of hot meals, sandwiches, coffee, and
soft drinks; and technological advances were made in money-changing equipment.
Vendors targeted "captive" markets in factories, offices, schools, and other
institutions--a huge market with plenty of potential for growth and competition.
The vending industry had achieved $2.5 billion in annual sales by 1960, and with
statistics showing that Americans ate one in four meals away from home, vendors
and stockbrokers foresaw a fine future for vending.





Market
Information





The vending industry is a $42 billion
domestic market as reported by The Vending Times Census of the Industry
2004.  This figure represents the revenues generated by vending
owners/operators and excludes office coffee and manual food
service.  Manual food service represents an additional $10 billion in
annual demand for convenience food.  Vended Food Products, which
include refrigerated, frozen, can/bowl pack, and other meal items represents a
$3.1 billion segment. While data on vended frozen foods is not stated
specifically, industry sources including Vending Times and The Automatic
Merchandiser Magazine concur that frozen food is a growth category while fresh
foods are declining. Frozen food machines include ice cream machines as well as
frozen entree machines that require an adjacent microwave oven to heat the
item.





According to the Vending Times, there
are an estimated 1.4 million vending locations throughout the
United  States situated in manufacturing plants, factories, offices,
government buildings, schools, colleges, hospitals and other public locations.
These are served by approximately 9,000 vending operators.  In
addition, there are approximately 52,000 hotels in the United States and 300,000
worldwide according to the American Hotel & Lodging Association
(www.ahma.com). There are approximately 6,000 business-oriented hotels with more
than 150 rooms, and approximately 14,000 hotels with 75 to 150 rooms. The growth
rate for the overall vending market is 5% annually.




Products and Services





We have a
family of products which are geared towards improving the experience of
consumers, establishments, and operators in the convenience food, digital
signage and product dispensing industry.   Our current line of
products and services are described below.





Automated Express Market





We have developed and created our
Automated Express Market (AEMTM) system which is Controlled Access Cabinet
system. These custom built wood and steel based cabinets are PC based and
designated for use in specialized locations such as hotels, Inns, c-stores,
malls and retail stores that are limited in the ability to effectively sell and
market food, convenience items or higher priced items which are subject to
pilfering. The cabinets can be merchandised to dispense more than seventy-two
selections including snacks, hot meals, ice cream, alcoholic and non-alcoholic
beverages as well as personal amenities such as sunscreen, toothpaste, and
brushes.  They can also be configured for high ticket items such as
cell phones, digital cameras mp3 players personal electronic devise and more.
The AEMTM system gives the hotel’s customers the convenience of billing directly
to their room through touch screen pin technology so they do not have to carry
cash or coin to make purchases. The system automatically posts the charge to the
guest’s account by utilizing touch screen vending (TSVTM) and multi-payment
capabilities. AEMTM cabinets have multiple payment options built in that include
touch screen payment technology, credit/debit acceptors and smart card
readers.   We are currently exploring opportunities with many
limited service hotel chains in the U.S., a market that totals more than 50,000
establishments as well as c-stores and retail stores and shopping
malls.





Media Advertising





We have developed AVTi MediaTM which
allows for an advertising medium to be added to virtually any of AVT designed
systems including AEMTM cabinets and all ofour next generation vending
machines.  By incorporating AVTI Media, we allow the consumer to view
the media, advertising or hotel messaging while they make their
selections.  AVTi Media can generate advertising revenue for owners
and operators in many settings such as conference rooms, hotel lobbies, airport
terminals, restaurants, car rental outlets and surgery center waiting
rooms.  By having vending machines in prominent locations within major
companies, the vending operator “owns” the valuable space that can be used to
generate advertising revenue through the Digital TV Message Board or (DTVMB)
technology.  Our Vending Management System software allows for the
management of machine inventory, repairs, collections and advertising through
remote access. VMSTM enables owner/operators to reduce costs and increase profits
by enabling real time access to inventory levels, system status, machine service
and daily receivables with little to no machine down time.





Vending Management SystemTM
(VMS)





Our VMS systems allow us to view item
information for each machine to help plan for daily replenishment, sales
statistics and alerts us of defects to operators as well as defect history for
each machine. This technology increases operational efficiency of vending
operations and helps to prevent inventory shrinkage and skimming, both major
control issues in the vending industry. A key differentiator relative to the
offerings of other established players in the vending machine management space
is that our VMS solution works via a DSL line cellular modem or Internet Wi-Fi
and be substantially less expensive to own and operate than competing systems
who do not use the internet for bi-directional transmission of vending system
data..





Vend Sensing System (VSS)





We have developed and have a patent
pending on our VSS product to provide a surefire solution for detecting all
vended items.  The VSS was developed specifically to detect that a
vending type of product has dropped from one of the dispensing columns directly
above the sensing system and has fallen into the customer delivery bin at the
base of the vending system.





The VSS is coupled directly with the
vending system control electronics in such that the VSS circuitry is disabled
until the vending system control electronics has received
payment.  Once payment has been received and the vending system starts
the dispensing process, the control electronics enables the VSS circuitry to
detect product which has been dispensed and has dropped into the delivery bin
below.  During this sensing period, the VSS circuitry is only enabled
for the empirical time period it takes to detect any one of the vendible
products to fall into the delivery bin.





During the sensing period of time, the
VSS circuitry uses an auto-calibrated ultrasonic beam to detect if an object of
just about any size, form or shape (designed for detection of any object that
can be vended) has fallen into the detectable space of the customer product
delivery bin.  If an object (vended product) enters the detectable
vending space, the VSS circuitry detects the object and in turn sends a
“detected” signal to the Control Electronics.  If the VSS circuitry
does not detect an object has entered the customer delivery bin space within the
allotted empirical time frame, the VSS circuitry returns a command signal to the
control electronics that a “no vend object detected”.  It is the
control electronics responsibility to determine the next appropriate action to
take.





This invention for product detection
provides many distinct and exciting advantages over conventional
detection.  First and foremost, the VSS is calibrated to “look” across
the entire cross-sectional area of the delivery bin.  This is a
primary advantage over the conventional light beam detection
method.  The detection system is compatible in cost to that of
traditional vending detection systems.  The “self calibration mode
allows the system to be able to retrofit into other vending systems with minimal
modification needed.





Vending Machine Manufacturing, Sales
and Placements





We currently manufacture next
generation refrigerated and high capacity snack machines as well as standard and
customized product dispensing systems. These machines have been designed to meet
or exceed our specific performance specifications and give us the ability to
minimize costs traditionally associated with purchasing new
equipment.  The manufacturing of our own equipment also allows us to
incorporate our technology into the systems during at the time of production
reducing the costs associated with retrofitting units. We sell these systems
directly to distributors, vending operators and end users located primarily
throughout the United States, Canada and Mexico. We believe that we are
currently the only manufacturing entity with this capability in the vending
industry, giving us a tremendous lead and advantage over our
competition.





The major competitive advantages of
AVT’s next generation machines is they all have the capability of being
configured with an integrated PC.  The integrated PC allows for a
variety of additional functions which include but are not limited to, cashless
vending, remote sales management and media advertising for creating additional
revenue through the sale and display of advertising play loops.  The
feature of playing multiple looping advertisements yields the possibility of
adding additional stream of revenue which may exceed that of the sales of vended
product.  Another significant advantage is the  ability to
plug into a standard 120 VAC household power outlet. As an operator, AVT’s
experience is that the unit price of a machine and sometimes the required 220VAC
circuits for the units represent major constraints to growth of a vending
company.  Our next generation machines will cut machine acquisition
cost by greater than 50% and eliminate expensive power outlet upgrades for
establishments and operators increasing placement and sales
opportunities.  Through the design and manufacturing of vending and
product dispensing systems using new technologies, we have become a vendor of
equipment for the entire gamete of food and high priced consumer electronics and
dispensed items. With capabilities to produce machines that are far less
expensive, less power demanding and having multi-pay options other than the
traditional market standard, we have the opportunity to grow the mainstream as
well as specialty segment of vending machine manufacturing and operations to
become a major equipment provider to other distributors, all without a heavy
capital investment.





Business
Strategy





Manufacturing Capabilities





Our goal is to become a full service
developer and manufacture of highly integrated vending systems.  Over
the past several years, AVT has assembled an integral team of experienced
engineers and qualified technicians to develop vending solutions comprised of
original and inventive technology and integrating this technology into a line of
sophisticated self service products.





Our engineers use creative tools such
as “Solid Works” to develop and generate CAD drawings used by our local
manufacturing partners as well as our OEM manufacture in China to produce our
state of the art vending systems components which are shipped to our 30 thousand
square foot facility in Corona, California for integration, assembly, final
testing and deployment.  A multitude of electrical and software tools
are also used to create AVT’s proprietary control boards, sensors, and firmware
used by all AVT branded product.





Fabrication / Assembly





We fabricate the housing for our
vending machines utilizing offshore contract manufacturers.  Our final
fabrication and assembly is based in Corona, California at our main
facility.  Local manufacturing includes approximately 10,000 sq/ft of
sheet metal fabrication and 15,000 sq/ft of assembly.  In-house
Fabrication Capabilities include; Sheet Metal Forming, Welding, NC Punching, pot
Welding, Machining and Fab Win (Fabrication Programming
Software).  In-House Assembly Capabilities include; Line Assembly,
System Integration, QC Testing, Silk Screening, Operational Testing





Our Current Products





The RAM4000 Vending
Machine





Our RAM4000 is a refrigerated vending
system..  This is a refrigerated snack/beverage combo machine that
uses all of our current technology to vend 4 rows of food, beverage, snack and
candy or any combination thereof .  The RAM4000 is ideal for smaller
populated vending accounts, OCS locations and the school segment.  The
RAM400 uses our optional Multi-Pay system allows the machine to accept Cash,
ATM, and Credit Cards.  The system also accepts AVT’s optional AVTi
Media product and VSS product drop detection system.





The RAM5000 Vending
Machine





Our RAM5000 machine is our answer to
the industry’s need for a higher capacity non refrigerated snack machine which
utilizes all of our current technology.  The RAM5000 vends 5 rows of
non-refrigerated snack and candy or any combination thereof. RAM5000 is ideal
for smaller populated vending accounts needing a high capacity vending machine,
OCS locations and the school segment. Like the RAM4000, the RAM5000 uses our
optional Multi-Pay system allows the machine to accept Cash, ATM, and Credit
Cards.  The system also accepts AVT’s optional AVTi Media product and
VSS product drop detection system.





Kiosk Systems





In addition to our vending machines, we
have incorporated a line of computer and technology based kiosk
systems.  These kiosks will be deployed in conjunction with our line
of RAM vending systems as well as being sold as self service or control center
kiosks systems.  All kiosks have the ability to be fitted with digital
signage which runs our media software products to be come a part of AVTi Media
Network.





AVTi Media





AVTi Media is an advertising medium
option available basically all AVT products including our next generation
vending RAM 4000/5000 vending systems.  AVTi Media displays media,
advertising, or hotel messaging on video screens located on the vending machine
or product dispensing systems..  Consumers may view the media while
they make their selections at the vending machine.  AVTi Media can
generate advertising revenue for owners and operators in many settings. Our
target market are surgery centers, health clubs, dentist offices, retail sites,
and any organization that has a high-traffic, captive audience that is striving
to enhance the experience of their customers.





Competition





There are several vending companies in
Southern California and the United States.  These competitors offer
machine sales and vending route operations much the same as we do.





Route Competition





Our  route and vending
operations serve as our core business structure.  Our route and
vending operations utilize approximately 10 service trucks to service
approximately 650 placed systems in 250 locations.  Our service
operation is based in Corona California and covers the primarily the areas of
Riverside, Orange and Los Angeles counties.   We currently
compete in these counties with several other competitors.  Although
these are our competitors from the sense that they have offer similar route and
vending services, they do not manufacture machines as we
do.   These competitors are as follows.





•  Take a
Break:                                       Primary
operations in Corona having about 20 trucks to service their
routes.





•  Continental:                             Primarily
operations in Orange County having have about 30 to 35 trucksservicing their
routes.





•  Complete:                                       Primarily
operations in Riverside and San Bernardino Counties havingapproximately about 19
trucks.





Manufacturing Competition





We primarily manufacture two vending
systems; a refrigerated low capacity machine, the RAM 4000, and a
non-refrigerated high capacity vending machine, the RAM 5000.  Both of
these base models systems can house a variety of AVT designed and integrated
technology making either the RAM 4000 or RAM 5000 or any one of the several
derivative systems unique with the vending industry.  Several of our
pending patents may present a potential monopoly within the vending industry
thereby forcing other manufacturing competitors to pay us for royalties or
licenses fees for use of our patented technologies.





Many of our manufacturing competitors
have been in business for many years building base line types of traditional
vending systems. We believe that these companies are competitors for our RAM
4000 and RAM 5000 base line systems.  Several of these competitors are
described below.





•  Crane:                  Which
also owns Dixie Narco, AP (Auto Products) and National Vendors is the
largestmanufacture of traditional baseline vending systems.





•  USI:                  A
seasoned vending manufacture having many years in the manufacturing of
traditionalbaseline vending systems.





•  AMS:                  A
large manufacture which designs its own traditional baseline systems and has
been nthe vending business for many years.





•  Zoom
      Systems:
            A
      manufacture which does design vending systems which integrate high levels
      of technology.    Because Zoom Systems integrates high
      levels of technology into its systems, it would be considered one of AVT’s
      primary competitors.





Although we have competition with
vending routes and vending machine sales, we believe that as a technology based
company, we are unique to the vending and kiosk industries in that we have the
ability to design, develop then integrate our technology into our premium line
of vending systems.  Due to this specialized approach, we believe that
other than Zoom Systems,  we currently do not have any significant
competition which is capable of integrating current technologies in the form of
PC based operation, RF wireless control or similar technologies seamlessly into
vending systems or products.





Patents,
trademarks, licenses, franchises, concessions, royalty agreements or labor
contracts, including duration.





We currently have four pending patents
for our technology.  These pending patents are summarized
below.





Multimedia System, Method
for Controlling Vending Machines


Serial Number 11-588,422


(Filed:  October 27,
2006)





Conventional control of vending systems
is typically done by using a system control board consisting of a PWB (printed
circuit board) and a microcontroller supported by a group of discrete electronic
components.  These system components are used to control the various
system functions of a vending machine i.e. spinning of auger motors, control of
bill and coin acceptors, LED display feed back etc.





Our invention of Touch Screen Vending
or TSV has redefined the conventional method of vending machine
control.  TSV empowers the use of a multimedia PC and a color touch
LCD display to virtually control the complete operation of the vending
machine.  The PC stores a data base software program of all desired
products to vend with an associated color digital image of each
item.  A second application program displays the color image of the
intended items to vend in the exact format as seen through the glass front of
the vending machine.  The PC also controls the collection of currency
(i.e. bill acceptor, coin acceptor, credit card reader) in place of the vending
machines control board.  I/O (input/output) ports from the PC are used
to interface to the vending machine control board and all aspects of operation
of the vending machine is under complete control by a multimedia PC coupled with
the touch screen LCD.





This invention for the control of
vending machines provides many distinct and exciting advantages over
conventional control such as the universal language of using a touch display to
select desired products to vend in place of an alphanumeric
keypad.  The system can generate virtually any type of report to
combat money or product shrinkage while providing exact control of
inventory.  The LCD provides a means of generating additional revenue
through advertising displayed products or other services while the system in
idle mode.





Vend Operating
System


Claims to be amended to the Multimedia
System, Method forControlling Vending Machines – Serial Number
11-588,420


(Filed:  October 27,
2006)





Our Vend Operating System (Vend OS) is
a next generation vending and product dispensing system utilizing a personal
computer (PC) to drive the system components and utility
software.  The uniqueness in the system lies in that the vending
system uses a PC to control the vending system as compared to the prior art in
the vending industry which typically uses discrete component controllers for
overall system operation and control.





Our Vend OS is broken up into two
sections hardware and software. The hardware consists of the following devices:
Virtual Sensing System (VSS), a USB Omni-pattern scanner, a USB Magtek Card
Reader, a USB Pyramid Bill Acceptor, a MDB Coinco coin machine, a 7 inch LCD
screen built-in with the Nano-ITX PC, and a portable mpeg player (allowing
static media files to play in a continuous loop).   The software
consists of the following applications: Vending Management System (VMS), Touch
Screen Vending (TSV) and AVTI Digital Signage Media.





Our Vend OS is extremely flexible in
its capabilities because the product is installed in our RAM bases systems
without any peripheral devices and a Nano-ITX computer that includes a freeware
developed by our engineering department running as a Windows’ service allowing
vending by conventional ways. This freeware allows sales data and records to be
stored in a secure database and has the capability of manipulating a machine’s
state remotely through internet connectivity, memory stick, cell modem or phone
line.





With our Vend OS we
can:  manipulate product prices; turn the machine off and on, turn the
compressor off and an, manipulate the change returned, manipulate the system
clock, and read the machine’s state from the MDB interface and motor/auger
control.  Our Nano-ITX computer includes an optional 7” touch wide
screen LCD, a flash ROM that runs Microsoft Embedded System, a MDB to RS-232
interface board that connects from a VMC board to the PC serial port, motor
driver printed circuit board and a PCMCIA modem that allows wireless internet
connection as a typical system but control for any variety of input or out put
devices are part of the scalable system.





Wireless Management of
Remote Vending


Serial Number
60-730,369


(Filed:  October 27,
2005)





Conventional methods for managing the
inventory of vending machine product, price selection and for checking the daily
sales numbers are typically performed by a route driver who manual checks the
vending machine on a frequent basis by driving to the vending machine/s location
and performing a variety of manual operations which include interrogation of the
vending machine’s control board.





The invention of “Wireless Management
of Remote Vending” defined as VMS (Vending Management System) is a method for
performing the management on many of the above listed vending machine
functions.  Information on vending activity is stored in the vending
machine’s electronic control board which is then wirelessly transmitted out
through the VMS module to a wireless cell phone network.  The
information received on wireless network is downloaded then transmitted over the
internet to one central PC server/s located at AVT.  The information
stored on AVT’s server/s can be accessed via a secure log-in function (user’s
account) to review and manage any specific vending machine in the network (which
has been equipped with a VMS module).  The flow of VMS information and
data is a bi-directional operation.  Users can also upload data,
changes and control function out from their secure account to any of the vending
machines in their specific network.





VMS was designed to be a low cost
solution with high tech performance.  Vending route operators with as
little as one or and many as one hundred (or more) vending systems in the field
and equipped with VMS can now remotely and effectively control and managed their
vending operations from a single PC located at the home
office.  Remote VMS management controls money and product shrinkage,
manages inventory by letting the vending operator know exactly what has sold and
what needs to be replaced and monitors and transmits systems critical
information such as machine temperature, system errors and failure modes and
alerting the vending operator instantly for expeditious disposition on any
vending system in the field equipped with a VMS telemetry module.





Vend Sensing
System


Serial Number 11-976,311


(Filed:  October 23,
2007)





Historically, the vending industry has
typically used the conventional method of breaking or impeding a light beam for
detecting when a product which has vended (dropped from a column above delivery
bin).  In most cases, the light beam consists of an infrared
transmitter and infrared detector which are mounted in a direct “line of site”
of each other.  When a product has dropped across the light beam, the
product will momentarily break the path of the light beam which sends an
interruption signal to the vending system’s control board for
processing.  Because a focused light beam is inherently narrow, this
often causes the light beam to miss narrow items such as a thin candy
bar.  Our Vend Sensing System (VSS) has redefined this conventional
method for detecting a vended product utilizing ultrasonic sound.





During the sensing period of time, the
VSS circuitry uses an auto-calibrated ultrasonic beam to detect if an object of
just about any size, form or shape (designed for detection of any object that
can be vended) has fallen into the detectable space of the customer product
delivery bin.  If a vended product enters the detectable vending
space, the VSS circuitry detects the object and in turn sends a “detected”
signal to the control electronics. If the VSS circuitry does not detect an
object has entered the customer delivery bin space within the allotted empirical
time frame, the VSS circuitry returns a command signal to the control
electronics that a “no vend object detected.”  It is the control
electronics responsibility to determine the next appropriate action to
take.





The VSS is coupled directly with the
vending system control electronics so that the VSS circuitry is disabled until
the vending system control electronics has received payment.  Once
payment has been received and the vending system starts the dispensing process,
the control electronics enables the VSS circuitry to detect product which has
been dispensed and has dropped into the delivery bin below.  During
this sensing period, the VSS circuitry is only enabled for the empirical time
period it takes to detect any one of the vendible products to fall into the
delivery bin.





This invention for product detection
provides many distinct and exciting advantages over conventional
detection.  First, the VSS is calibrated to “look” across the entire
cross-sectional area of the delivery bin.  This is a primary advantage
over the conventional narrow light beam detection method.  The
detection system is compatible in cost to that of traditional vending detection
systems and because it is self calibrating, it can readily retrofited into other
vending systems with minimal modifications.





System and Method for
Interactive Advertising


Serial Number 60-935,045


(Filed:  July 24,
2007)





Our System and Method for Interactive
Advertising is a unique solution for potential clients or users to interact to a
specific network of supplied information such as advertising and branding via a
secure or unsecured network.  The system is designed to allow for
direct customer interaction through existing telephone switch based
infrastructure such as pay phones.





The new system essentially takes our
base advertising hardware/software products and adapts them for the telephone
industry.  This adds a level of customer interaction based upon touch
or other interactive means such as a keyboard or a display
message.  Customers using the system may be rewarded either with
discounts and/or promotional deals depending upon the touched advertisement
after responding to simple instructions displayed on the screen.





In addition, the smart technology
integrated into each system telephone may also be fitted with the appropriate
hardware to make that specific location a “Hot-Spot.”  Each Hot-Spot
provides customers with another means  of interacting with the ATV
network through free of fee-based connectivity using the customer’s portable
device such as a smart phone or laptop computer, or any other portable
electronic device capable of linking to the Hot-Spot by means of cable,
wireless, or infrared radio frequency.  Each Hot-Spot location allows
customers to use wireless internet within the location’s range to aid them in
acquiring their discounts and/or rewards more quickly and specific
advertisements may be downloaded and displayed on the phone touch
screen.  Ideally, customers may form a dependency for the Hot-Spot’s
use and become a habitual user of the AVT technology and services.





Effect
of existing or probable governmental regulations on the business





The effects of existing or probable
government regulations are minimal.





Research
and Development





AVT is dedicated to the development of
technology enriched vending and product dispensing systems.  Our
research and development team is staffed with software, electromechanical and
firmware engineers, and information technology specialists with the primary
responsibility of developing and integrating new technology into our vending
systems.





Our Primary Research and Development
Efforts





Our research and development team uses
creative tools such as “Solid Works” to develop and generate CAD drawings which
are used by our local manufacturing partners and OEM manufacture in China to
produce our state of the art vending systems, components and retrofit
designs.  These machines are shipped to our facility in Corona,
California for integration, assembly, final testing and deployment.





One of our primary R&D concerns is
the continuous development of our RAM 4000 and RAM 5000 vending
machines.  Our team continuously develops a variety of software
application programs, administrative and database programs and embedded firmware
for these systems.





Another ongoing R&D effort is the
design and enhancement of our AVTi Media products.  The AVTi Media
products are integrated into our base systems and also sold to other vending
manufactures.  The following is a summary of our current AVTi
products:





•  AVTi Media
Administer:  This is a program designed to manage and
administer all aspects and features of our digital signage
program.  The Media Administrator allows a remote operator to create,
manage, update and scheduled ads that will play on LCD displays which have been
integrated into vending systems.





•  AVTi Media Client: This is a
program designed be located on the vending system’s integrated PC and has the
priority of playing the ad “play list.”  This client software also
uses prescheduled times to monitor the server to “update” the playlist as
required.





•  AVTI Media
Server:  This is a server based program which coordinates the
efforts, changes and directives from the administrator program with the schedule
efforts of all the multiple clients located in the field and connected via the
internet.





Our Secondary Research and Development
Efforts:





Our secondary R&D efforts run
concurrently with our primary R&D efforts to support ongoing systems and to
develop new products.  These products are summarized as
follows:





•  TSV:  Touch Screen
Vending is an ongoing software development effort which is our primary flagship
software product.  This is a modular program designed to evolve with
the changing technologies supporting our vending and dispensing
products.





•  IVend:This is an
ongoing development design that features a high-end dispensing center which
combines our base RAM 4000 cabinet with a creative front door design which
includes interactive touch screens and a variety of other supported
hardware.  The IVend also has its own software application program
which is designed to provide a high degree of interactive and intuitive
application to the user.





•  Tech Store: This system is
similar to our IVend system designed for middle priced systems.





•  Vend Mart: This system is
similar to our IVend system designed for entry level priced
systems.  The Vend Mart also has its own software application program
which is design to provide  a high degree of interactive and intuitive
application to a base line vending systems equipped with TSV.





In additional, we have a variety of
ongoing hardware and software R&D projects which are at various stages of
development.  The following is a brief list of some of our
non-confidential R&D efforts:





MDB – PC
Software
Interface                                                                VMSII
– Hardware/Server/Software Project


DEX to PC
software
Interface                                                                VMS
– Drop Sensing efforts


MDB to
USB Hardware
Device                                                                AEM
Cabinet Design and


DEX to
Radio Controller
PCB                                                                Multiple
All-In-One PC/LCD Displays designs


X – Y
Dispensing Center
Design                                                                           Multiple
Custom Dispensing Projects





Costs
and effects of compliance with environmental laws





The expense of complying with
environmental regulations is of minimal consequence.





Number
of total employees and number of full time employees.





We currently have approximately 20 full
time employees and 5 part-time employees.  We allow utilize the
services of independent contractors.




Results
of Operations





We have historically financed
operations through a combination of cash on hand, cash provided from operations
and the sale of our securities.





For the three months ended March 31,
2009, we had revenues of $675,780, and total cost of goods of $219,359, general
and administrative expenses of $401,612 for net income of
$54,808.   This compares to March 31, 2008, where we had $394,365
in total revenues and $555,624 in operating expenses for a net income of
($161,260).





Our
revenues increased by $281,415 for the three months ended March 31, 2009 over
the same period last year.  This produced approximately $65,000 in
increased revenue for the quarter.  Increased general and
administrative expenses was primarily responsible for reducing gross
profit.





Approximately
75% of our increased revenues for the three months ended March 31, 2009, was due
to restaurant revenues.   The remaining 25% was due to increased
manufacturing product and vending sales.





Our
increased cost of goods sold for the three months ended March 31, 2009, was
attributable to increased sales of our vending machines and restaurant
costs.  Increased operating costs was due to increased restaurant
costs and spending on research and development. Approximately 10% of this
increased spending is due to the operations of the AC Mexican Food
restaurant.





We
believe that the increased spending on research and development is necessary for
the company to move away from vending operations and work towards increased
machine sales and the development of technology which allows for the sales of
our electronic payment, back end inventory control and advertising
products.  We have experienced unexpected expenses related to the
restaurant operations relating to unpaid back taxes and vendor
costs.  To address this issue we have hired new management to address
these issues and we expect the restaurant related expenses to be reduced during
the next year.





Our
general and administrative expenses increased for the three months ended March
31, 2009, primarily due to increased costs of goods and operating expenses
relating to increased vehicle expenses, rent for our facility, advertising,
payroll expenses and taxes.





We expect to increase sales over the
next 12 months due primarily to sales of our RAM4000 vending
machine.  Increased sales of the RAM4000 along with increased
advertising sales should increase our overall revenues for the next 12
months.





We believe that we sufficient available
cash and cash flow from operations to satisfy our working capital and capital
expenditure requirements during the next 12 months.  There can be no
assurance, however, that cash and cash flow from operations will be sufficient
to satisfy our working capital and capital requirements for the next 12 months
or beyond.





We expect our manufacturing costs to
increase approximately 15% due to the devaluation of the U.S. Dollar and the
exchange rates with our foreign manufactures.  Depending on the
strength of the U.S. Dollar, this trend may or may not continue.





Inflation and changing prices have
affected our business as related primarily to fuel and increased vehicle
expenses.  We anticipate that fuel costs will continue, thus
increasing our operating costs.  Our cost of goods and prices for our
products remain relatively stable and we expect this trend to continue through
the end of 2009.





Liquidity and Capital
Resources





As of June 3, 2009, we have $56,642
cash on hand.





At March
31, 2009, we had cash of $91,135 compared to cash of $56,547 at December 31,
2008.  We consider this slight increase in cash as insignificant for
the current quarter.





For
the three months ended March 31, 2009, our inventory increased from the year
end.  At March 31, 2009, we had inventory of $643,241 compared to
$507,710 at December 31, 2008.  This  increase in inventory
is due to  approximately vending machine inventory and vending
goods.





The Company’s assets increased from
$15,769,990 at March 31, 2009 compared to $15,162,625 December 31,
2008.  This $607,365 increase in assets is primarily due to increased
furniture and equipment, restaurant vehicles, design and
fabrication.





We have
committed to purchase 2,500 production units of our RAM5000 machine from our
manufacturer.  These units will be used for inventory.  We
intend to borrow funds from SWI Trading, Inc. to fulfill the purchase
commitment.  This transaction will be in form of three year
convertible promissory note with 10% interest annually.  The note may
be converted at the sole option of the noteholder into shares of our common
stock at a price of $.50 per share.





SWI
Trading, Inc. has obtained a $250,000 line of credit with Union Bank of
California bank to assist with the transaction.  We do not anticipate
that the Company will have difficulty repaying SWI Trading, Inc. for the
purchase funds borrowed primarily because we will receive deposits with the
purchase orders for the vending machines purchased .





All
receivable accounts are due within 45 days of delivery.  Upon special
approval, we allow 90 days to receive payment.  Collections for past
due accounts are handled internally.





Future
Goals





In the next 12 month, we will continue
our research, development and marketing efforts. We have entered into multiple
manufacturing agreements with offshore manufacturers to produce the housings for
our technology based RAM4000 and RAM5000 vending systems and have established a
line of credit to ensure payment and production of the systems.





Our goal
is to manufacture and sell as many systems as possible in the next 12 to 24
months through established distributors and direct sales to meet the anticipated
industry demand for a competitively priced vending system that is an energy
efficient, technology based,  “Green” system..





A
critical focus for sales over the next 12 months will be our Product Dispensing
Centers (PDCs).  Our PDCs are based on our RAM4000 or RAM5000 system
and integrates more sophisticated technology features and options such as full
face large touch screen displays, receipt printers, cashless payment options and
advertising displays.  In addition, our PDCs systems can dispense a
variety of  snack items and non-food items such as cell phones, MP3
players, digital cameras, DVDs, consumer electronics and
accessories.  We will also focus on “Themed” systems to dispense
products such as tee-shirts, promotional items, perfumes, contact lenses and
just about any product our customers have a location and market
for.  Our “Themed” systems are of exceptional interest to our direct
end customers as the products these systems dispense result in higher profit
margins.





All of
our vending systems are capable of the inclusion of PC hardware and LCD
displays.  A future goal of AVT is to complete and continue to refine
application software that runs digital signage for the primary purpose of
displaying paid advertisements.  As we sell systems that are equipped
with a PC and LCD display, each system becomes a “node” on a digital
network.  As the network expands, many thousands of vending systems
and PDCs can be part of nationwide advertising network which we believe will be
of interest for national advertisers.  Our goal is to “own” the
network but not the systems.  All vending system owners will have the
option to join the AVT nationwide network with our AVT based advertising vending
system to get an equitable share of revenue for allowing advertisements from
AVT’s server to be pushed-out onto their vending system.





Future
goals and system refinements will include continued software and hardware
development and refinements to include even more efficient operating systems to
integrate more seamlessly with the internet, becoming Wi-Fi standard and
including SMS and email features. Our goal is that the AVT vending systems will
become the standard for intelligent self-service vending systems deployed
throughout the US and world markets.





In
addition, within the next 12 months, we will continue to work to become a fully
company and have our common stock trading on the OTC Bulletin
Board.





Off-balance
Sheet Arrangements





We maintain no significant off-balance
sheet arrangements





Foreign
Currency Transactions





None.





ITEM
3.                      QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





We currently do not utilize sensitive
instruments subject market risk in our operations.  In the event that
we borrow money for our operations, our principal exposure to financial market
risks is the impact that interest rate changes could have on our
loans.





ITEM
4.                      CONTROLS
AND PROCEDURES





In accordance with Rule 13a-15(b) of
the Securities Exchange Act of 1934,as of the end of the period covered by this
Report on Form 10-K, our  management evaluated, with the participation
of our principal executive and financial officer, the effectiveness of the
design and operation of the Company's disclosure controls and procedures (as
defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act). Disclosure
controls and procedures are defined as those controls and other procedures of an
issuer that are designed to ensure that the information required to be disclosed
by the issuer in the reports it files or submits under the Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management,
including its principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure. Based on their evaluation of these disclosure
controls and procedures, our chairman of the board and chief executive and
financial officer has concluded that the disclosure controls and procedures were
effective as of the date of such evaluation to ensure that material information
relating to the company, was made known to them by others within those entities,
particularly during the period in which this Quarterly Report on Form 10-Q was
being prepared.








Item
4T. Controls and Procedures.





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. The Company's internal control over financial
reporting has been designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles generally accepted in the United States of America. The Company's
internal control over financial reporting includes policies and procedures that
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect transactions and dispositions of assets of the Company; provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America, and that receipts and
expenditures are being made only in accordance with authorization of management
and directors of the Company; and provide reasonable assurance regarding
prevention or timely detection of  unauthorized acquisition, use or
disposition of the Company's assets that could have a material effect on the
Company's financial statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
assessed the effectiveness of the Company's internal control over financial
reporting at March 31, 2009.  In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO") in Internal Control--Integrated Framework. Based on
that assessment under those criteria, management has determined that, at March
31, 2009, the Company's internal control over financial reporting was
effective.





This
Quarterly Report on Form 10-Q does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management's report in this annual
report.




PART
II – OTHER INFORMATION





ITEM 1. LEGAL PROCEEDINGS





We are not a party to any litigation
which management believes is other than ordinary routine litigation incidental
to our business.





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





We have sold the following unregistered
securities:





From
January 1, 2007 to December 31, 2007, we issued to accredited investors, 10%
convertible debentures with an aggregate principal value of $425,833,
convertible into 141,945 shares of our common stock.





From January 1, 2007 to December 31,
2007, we issued to accredited investors, 10% convertible notes with an aggregate
principal value of $1,062,500, convertible into: (i) 472,223 shares of our
common stock if converted within 12 months from issuance date; (ii) 416,667
shares of our common stock if converted within 24 months from issuance date; or
(iii) 393,519 shares of our common stock if converted at any time up to the
maturity date.





From
January 1, 2008 to December 31, 2008, we issued to accredited investors, 10%
convertible notes with an aggregate principal value of
$845,800.  Based upon a stock price of $1.00, these notes are
convertible into: (i) 1,212,313 shares of our common stock if converted within
12 months from issuance date; (ii) 995,058 shares of our common stock if
converted within 24 months from issuance date; or (iii) 939,777 shares of our
common stock if converted at any time up to the maturity date.





From
December 31, 2008 to March 31, 2009, we issued to accredited investors, 10%
convertible notes with an aggregate principal value of
$355,000.  Based upon a stock price of $1.00, these notes are
convertible into: (i) 473,333 shares of our common stock if converted within 12
months from issuance date; (ii) 417,647 shares of our common stock if converted
within 24 months from issuance date; or (iii) 394,444 shares of our common stock
if converted at any time up to the maturity date.




From
December 31, 2008 to March 31, 2009, we issued to accredited investors, 316,368
shares of our common stock for an aggregate offering price of $
160,000.





From
December 31, 2008 to March 31, 2009, we issued to accredited investor purchasers
of our 10% convertible notes and common stock, warrants to purchase 238,534
shares of our common stock.  The warrants have a one year term and an
exercise price of $.50 per share.





From
December 31, 2008 to March 31, 2009, we issued to accredited investor purchasers
of our 10% convertible notes and common stock, warrants to purchase 80,000
shares of our common stock.  The warrants have a one year term and an
exercise price of $.50 per share.





There
were no underwritten offerings employed in connection with any of the
transactions set forth above.





The
issuance of securities described above were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act of 1933 and Regulation D as transactions by an issuer not
involving any public offering.  The recipients of securities in each
such transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to the share
certificates and other instruments issued in such transactions. The sales of
these securities were made without general solicitation or
advertising.





We intend to use the proceeds from sale
of our securities to purchase equipment for vending operations, vending
machines, supplies and payroll for operations, professional fees, and working
capital.





ITEM 3. DEFAULT 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
            Form
            Filing
            Filed
      withExhibits
            #
            Type
            Date
            This
      ReportCertificate
      of Incorporation filed with the Secretary of State of Delaware on February
      25, 1969.
            3.1
            10
            8/14/2008Certificate
      of Amendment filed with the Secretary of State of Delaware on December 16,
      1985.
            3.2
            10
            8/14/2008Certificate
      of Amendment filed with the Secretary of State of Delaware on March 5,
      1987.
            3.3
            10
            8/14/2008Certificate
      of Amendment filed with the Secretary of State of Delaware on February 11,
      1991.
            3.4
            10
            8/14/2008Certificate
      of Renewal filed with the Secretary of State of Delaware on January 14,
      2005.
            3.5
            10
            8/14/2008Certificate
      of Amendment filed with the Secretary of State of Delaware on September
      22, 2005.
            3.6
            10
            8/14/2008Amended
      and Restated Certificate of Amendment of Incorporation filed with the
      Secretary of State of Delaware on April 28, 2006.
            3.7
            10
            8/14/2008Articles
      of Incorporation filed with the Nevada Secretary of State on September 24,
      2007.
            3.8
            10
            8/14/2008Certificate
      of Amendment filed with the Nevada Secretary of State  on
      November 30, 2007.
            3.9
            10
            8/14/2008Certificate
      of Merger filed with the Secretary of State of Delaware on December 11,
      2007.
            3.10
            10
            8/14/2008Certificate
      of Designation of Rights, Preferences, Privileges and Restrictions of
      Series A Convertible Preferred Stock filed with the Nevada Secretary of
      State on March 5, 2008.
            3.11
            10
            8/14/2008Amended
      and Restated Bylaws dated March 12, 2008.
            3.12
            10
            8/14/2008Consulting
      Agreement effective October 1, 2006 between Automated Vending
      Technologies, Inc. and Star Capital.
            10.1
            10
            8/14/2008Consulting
      Agreement effective January 1, 2006, Between Automated Vending
      Technologies, Inc. and SWI Trading, Inc.
            10.2
            10
            8/14/2008Employment
      Agreement effective May 1, 2006, by and between Automated Vending
      Technologies, Inc. and James Winsor.
            10.3
            10
            8/14/2008Employment
      Agreement effective as of January 1, 2006 by and between Automated Vending
      Technologies, Inc., and Natalie Bishop.
            10.4
            10
            8/14/2008Lease
      Agreement effective January 1, 2007 by and between AVT, Inc. and SWI
      Trading, Inc.
            10.5
            10
            8/14/2008Employment
      Agreement effective as of January 1, 2008 by and between AVT, Inc. and
      Natalie Russell.
            10.6
            10
            8/14/2008Employment
      Agreement effective January 1, 2008, by and between AVT, Inc. and James
      Winsor.
            10.7
            10
            8/14/2008Consulting
      Agreement effective January 1, 2008, by and between AVT, Inc. and Star
      Capital IR Corp.
            10.8
            10
            8/14/2008Consulting
      Agreement effective January 1, 2008, by and between AVT, Inc. and SWI
      Trading, Inc. (Attached as an exhibit to our Registration Statement on
      Form 10-SB filed with the Commission on August 14, 2008)
            10.9
            10
            8/14/2008Consulting
      Agreement effective March 1, 2008, by and between AVT, Inc. and SNI
      Innovations, Inc.
            10.10
            10
            8/14/2008Consulting
      Agreement effective September 1, 2008, by and between AVT, Inc. and Star
      Capital IR Corp.
            10.11
            10/A-1
            2/24/2009Agreement
      and Plan of Merger dated December 3, 2007 by and between Automated Vending
      Technologies, Inc. and AVT, Inc.
            10.12
            10/A-1
            2/24/2009Consulting
      Agreement effective January 1, 2008, by and between AVT, Inc. and SWI
      Trading, Inc.
            10.13
            10/A-1
            2/24/2009Employment
      Agreement effective as of January 1, 2009 by and between AVT, Inc. and
      Natalie Russell.
            10.14
            10/A-1
            2/24/2009Employment
      Agreement effective January 1, 2009, by and between AVT, Inc. and James
      Winsor.
            10.15
            10/A-1
            2/24/2009Code
      of Ethics
            14.1
            10
            8/14/2008Certification
      of Natalie Russell pursuant to Rule 13a-14(a)
            31.1
            
            
            XCertification
      of James Winsor pursuant to Rule 13a-14(a)
            31.2
            
            
            XCertification
      of Natalie Russell and James Winsor pursuant to 18 U.S.C Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002
            32.1
            
            
            X











SignaturesPursuant
      to the requirements of the Securities Exchange Act 1934, the registrant
      has duly caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.Signatures
            Title
            Date/s/
      Natalie Russell
              Natalie
      Russell
            Secretary,
      Chief Financial Officer, Director
            June
      3, 2009