| Minnesota                                                      | 41-0831186                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| Large accelerated filero | Accelerated filero | Non-accelerated filero | Smaller reporting companyþ |
|--------------------------|--------------------|------------------------|---------------------------------|

----

| PART I  |   |     |   | FINANCIAL INFORMATION                                                                                                            | Page Number |
|---------|--------|----------|--------|----------------------------------------------------------------------------------------------------------------------------------|-------------|
|    |   |     |   |                                                                                                                             |        |
|    |   | Item 1:  |   | Condensed Financial Statements                                                                                                   |        |
|    |   |     |   |                                                                                                                             |        |
|    |   |     |   | Condensed Consolidated Balance Sheets – September 30, 2010 (Unaudited) and December 31, 2009                               | 1           |
|    |   |     |   |                                                                                                                             |        |
|    |   |     |   | Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2010  and 2009 (Unaudited) | 2           |
|    |   |     |   |                                                                                                                             |        |
|    |   |     |   | Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2010 and 2009 (Unaudited)           | 3           |
|    |   |     |   |                                                                                                                             |        |
|    |   |     |   | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                            | 4           |
|    |   |     |   |                                                                                                                             |        |
|    |   | Item 2:  |   | Management's Discussion and Analysis of Financial Condition and Results of Operations                                            | 14          |
|    |   |     |   |                                                                                                                             |        |
|    |   | Item 3:  |   | Quantitative and Qualitative Disclosures About Market Risk                                                                       | 16          |
|    |   |     |   |                                                                                                                             |        |
|    |   | Item 4T: |   | Controls and Procedures                                                                                                          | 16          |
|    |   |     |   |                                                                                                                             |        |
| PART II |   |     |   | OTHER INFORMATION                                                                                                                |        |
|    |   |     |   |                                                                                                                             |        |
|    |   | Item 1:  |   | Legal Proceedings                                                                                                                | 17          |
|    |   | Item 1A: |   | Risk Factors                                                                                                                     | 18          |
|    |   | Item 2:  |   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                      | 18          |
|    |   | Item 3:  |   | Defaults Upon Senior Securities                                                                                                  | 18          |
|    |   | Item 4:  |   | Submission of Matters to a Vote of Security Holders                                                                              | 18          |
|    |   | Item 5:  |   | Other Information                                                                                                                | 18          |
|    |   |     |   |                                                                                                                             |        |
|    |   | Item 6:  |   | Exhibits                                                                                                                         | 18          |
|    |   |     |   |                                                                                                                             |        |
|    |   |     |   | Signatures                                                                                                                       | 18          |

----

|                                                                                                                                                                                                                                                                                                                                                                                             |   | Unaudited     |                         |   |         |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                             |   | September 30, |                         |   | December 31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   | 2010          |                         |   | 2009         |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                           |   |          |                         |   |         |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |
| CURRENT ASSETS                                                                                                                                                                                                                                                                                                                                                                                   |   |          |                         |   |         |   |
| Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                        |   | $             | 22,081                       |   |         | $      | 69,991 |   |
| Accounts Receivable, net                                                                                                                                                                                                                                                                                                                                                                         |   |          | -                            |   |         |   | 67,717 |   |
| Note Receivable – Related Party                                                                                                                                                                                                                                                                                                                                                            |   |          | 3,500,000                    |   |         |   | 3,500,000 |   |
| Accrued Interest Receivable – Related Party                                                                                                                                                                                                                                                                                                                                                |   |          | 196,875                      |   |         |   | 65,625 |   |
| Other Receivables                                                                                                                                                                                                                                                                                                                                                                                |   |          | -                            |   |         |   | 75,875 |   |
| Total Current Assets                                                                                                                                                                                                                                                                                                                                                                             |   |          | 3,718,956                    |   |         |   | 3,779,208 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| PROPERTY AND EQUIPMENT, NET                                                                                                                                                                                                                                                                                                                                                                      |   |          | 944                          |   |         |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                                                                                                                                                                                                                     |   | $             | 3,719,900                    |   |         | $      | 3,779,208 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                       |   |          |                         |   |         |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| CURRENT LIABILITIES                                                                                                                                                                                                                                                                                                                                                                              |   |          |                         |   |         |   |   |   |
| Current Portion of Long-Term Debt                                                                                                                                                                                                                                                                                                                                                                |   |  $       | 687,345                      |   |         | $      | 444,346 |   |
| Note Payable – Related Party                                                                                                                                                                                                                                                                                                                                                               |   |          | 1,654,029                    |   |         |   | 1,604,029 |   |
| Current Portion of Deferred Retirement Benefits                                                                                                                                                                                                                                                                                                                                                  |   |          | 51,306                       |   |         |   | 51,306 |   |
| Accounts Payable                                                                                                                                                                                                                                                                                                                                                                                 |   |          | 1,110,068                    |   |         |   | 1,115,528 |   |
| Accrued Sales and Warranty Reserve                                                                                                                                                                                                                                                                                                                                                               |   |          | 200,000                      |   |         |   | 200,000 |   |
| Accrued Expenses                                                                                                                                                                                                                                                                                                                                                                                 |   |          | 1,235,788                    |   |         |   | 718,714 |   |
| Total Current Liabilities                                                                                                                                                                                                                                                                                                                                                                        |   |          | 4,938,536                    |   |         |   | 4,133,923 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| LONG-TERM LIABILITIES                                                                                                                                                                                                                                                                                                                                                                            |   |          |                         |   |         |   |   |   |
| Long-term Debt, Net of Current Portion                                                                                                                                                                                                                                                                                                                                                           |   |          | 0                            |   |         |   | 242,999 |   |
| Deferred Retirement Benefits, Net of Current Portion                                                                                                                                                                                                                                                                                                                                             |   |          | 387,476                      |   |         |   | 387,476 |   |
| Total Non-Current Liabilities                                                                                                                                                                                                                                                                                                                                                                    |   |          | 387,476                      |   |         |   | 630,475 |   |
| Total Liabilities                                                                                                                                                                                                                                                                                                                                                                                |   |          | 5,326,012                    |   |         |   | 4,764,398 |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                    |   |          |                         |   |         |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                       |   |          |                         |   |         |   |   |   |
| Preferred Stock, $.0001 Par Value per Share, 50,000,000 Shares Authorized,    No Preferred Share issued at September 30, 2010 and December 31, 2009Common Stock, $.16 Par Value per Share 500,000,000 Shares Authorized Common Shares Issued and Outstanding at September 30, 2010 and December 31, 2009    were 14,494,000 and 13,400,000, respectively |   |          |  0  2,319,042 |   |         |   |  0  2,144,002 |   |
| Additional Paid-In Capital                                                                                                                                                                                                                                                                                                                                                                       |   |          | 1,756,011                    |   |         |   | 1,756,011 |   |
| Accumulated Deficit                                                                                                                                                                                                                                                                                                                                                                              |   |          | (5,681,165)                  |   |         |   | (4,885,203) |   |
| Total Stockholders’ Equity                                                                                                                                                                                                                                                                                                                                                                 |   |          | (1,606,112)                  |   |         |   | (985,190) |   |
|                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                         |   |         |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                 |   | $             | 3,719,900                    |   |         | $      | 3,779,208 |   |

----

|                                                  |   | Three Months Ended |       |   | Nine Months Ended |   |
|-------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                                  |   | September 30,      |       |   | September 30,     |   |   | September 30, |   |   | September 30, |   |
|                                                  |   | 2010               |       |   | 2009              |   |   | 2010 |   |   | 2009 |   |
|                                                  |   |               |       |   | Restated          |   |   |   |   |   | Restated |   |
|                                             |   |               |       |   |              |   |   |   |   |   |   |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |
| OPERATING EXPENSES:                                   |   |               |       |   |              |   |   |   |   |   |   |   |
|   General and                               |   |               |       |   |              |   |   |   |   |   |   |   |
|    administrative                      |   |               | 307,041    |   |              |   | 153,819 |   |   |   | 711,162 |   |   |   | 153,819 |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Total Operating Expenses                  |   |               | 307,041    |   |              |   | 153,819 |   |   |   | 711,162 |   |   |   | 153,819 |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM OPERATIONS                                  |   |               | (307,041   | )      |              |   | (153,819 | ) |   |   | (711,162 | ) |   |   | (153,819 | ) |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                               |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Interest expense                          |   |               | (76,701    | )      |              |   | (64,209 | ) |   |   | (228,336 | ) |   |   | (64,209 | ) |
|   Interest income                           |   |               | 43,750     |   |              |   | 21,875 |   |   |   | 131,250 |   |   |   | 21,875 |   |
|   Other income                              |   |               | 10,761     |   |              |   | 2,480 |   |   |   | 12,286 |   |   |   | 2,480 |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Total Other Expense                       |   |               | (22,190    | )      |              |   | (39,854 | ) |   |   | ( 84,800 | ) |   |   | (39,854 | ) |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM CONTINUING OPERATIONS                       |   |               | (329,231   | )      |              |   | (193,673 | ) |   |   | (795,962 | ) |   |   | (193,673 | ) |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| LOSS FROM DISCONTINUED OPERATONS                      |   |               | 0          |   |              |   | (1,782,550 | ) |   |   | 0 |   |   |   | (1,782,550 | ) |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| NET LOSS                                              |   | $                  | (329,231   | )      |              | $      | (1,976,223 | ) |   | $ | (795,962 | ) |   | $ | (1,976,223 | ) |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per share:                                   |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Basic and diluted net                     |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Income (loss) per share                   |   | $                  | (0.02      | )      |              | $      | (0.85 | ) |   | $ | (0.06 | ) |   | $ | (0.85 | ) |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares                               |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| outstanding:                                          |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|       Basic and diluted |   |               | 13,940,889 |   |              |   | 2,312,583 |   |   |   | 13,940,889 |   |   |   | 2,312,583 |   |

----

|                                                                          |   | 2010   |     |   | 2009     |   |
|-------------------------------------------------------------------------------|--------|--------|----------|--------|----------|--------|
|                                                                          |   |   |     |   | Restated |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                          |   |   |     |   |     |   |
| Net loss                                                                      |   | $      | (795,962 | )      |     | $      | (1,976,223) |   |
| Adjustments to reconcile net loss to net cash flows from operating activities |   |   |     |   |     |   |   |   |
| Stock based compensation                                                      |   |   | 175,040  |   |     |   | 0 |   |
| Changes in operating assets and liabilities                                   |   |   |     |   |     |   |   |   |
| Accounts receivable                                                           |   |   | 143,592  |   |     |   | (45,281) |   |
| Accrued interest receivable                                                   |   |   | (131,250 | )      |     |   | 0 |   |
| Accounts payable                                                              |   |   | (5,460   | )      |     |   | 948,984 |   |
| Accrued expenses                                                              |   |   | 517,074  |   |     |   | 1,231,196 |   |
|                                                                          |   |   |     |   |     |   |   |   |
| Net Cash Flows from Operating Activities                                      |   |   | (96,966  | )      |     |   | 158,593 |   |
|                                                                          |   |   |     |   |     |   |   |   |
|                                                                          |   |   |     |   |     |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                          |   |   |     |   |     |   |   |   |
| Purchases of property and equipment                                           |   |   | (944     | )      |     |   | (7,000) |   |
|                                                                          |   |   |     |   |     |   |   |   |
| Net Cash Flows from (used in) Investing Activities                            |   |   | (944     | )      |     |   | (7,000) |   |
|                                                                          |   |   |     |   |     |   |   |   |
|                                                                          |   |   |     |   |     |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                          |   |   |     |   |     |   |   |   |
|     Proceeds from loan                                    |   |   | 50,000   |   |     |   |  0  |   |
| Net Cash Flows from (used in) Financing Activities                            |   |   | 50,000   |   |     |   | 0 |   |
|                                                                          |   |   |     |   |     |   |   |   |
|                                                                          |   |   |     |   |     |   |   |   |
| Net Change in Cash and Cash Equivalents                                       |   |   | (47,910  | )      |     |   | 151,676 |   |
|                                                                          |   |   |     |   |     |   |   |   |
| CASH AND CASH EQUIVALENTS - January 1, 2010 and 2009                          |   |   | 69,991   |   |     |   | 0 |   |
|                                                                          |   |   |     |   |     |   |   |   |
|                                                                          |   |   |     |   |     |   |   |   |
| CASH AND CASH EQUIVALENTS – September 30,  2010 and 2009      |   | $      | 22,081   |   |     | $      | 151,676 |   |

----

----

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|                                       |   |   |    |
|--------------------------------------------|--------|--------|---------|
|                                       |   | 2010   |    |
|                                       |   |   |    |
| Accrued balance –December 31, 2009   |   | $      | 200,000 |   |
| Provision                                  |   |   | 0       |   |
| Claims incurred                            |   |   | 0       |   |
| Accrued balance – September 30, 2010 |   | $      | 200,000 |   |

----

----

----

| Nine months ended September 30, 2009           |   |   |           |   |   |   |          |   |   |
|------------------------------------------------|--------|--------|----------------|--------|--------|--------|---------------|--------|--------|
| Sales, net                                     |   | $      | 4,640,309      |   |   | $      | 0             |   |   | $ | (4,640,309 | ) |   |   | 1 |   |
| Cost of goods sold                             |   | $      | 4,229,949      |   |   | $      | 0             |   |   | $ | (4,229,949 | ) |   |   | 1 |   |
| Gross Profit                                   |   | $      | 410,360        |   |   | $      | 0             |   |   | $ | ( 410,360 | ) |   |   | 1 |   |
| Selling, general and administrative            |   | $      | 2,251,631      |   |   | $      | 153,819       |   |   | $ | (2,097,812 | ) |   |   | 1 |   |
| Impairment allowance                           |   | $      | 598,434        |   |   | $      | 0             |   |   | $ | ( 598,434 | ) |   |   | 1 |   |
| Loss from operations                           |   | $      | (2,439,705     | )      |   | $      | (153,819      | )      |   | $ | 2,285,886 |   |   |   | 1 |   |
| Other income (expenses)                        |   | $      | (5,220,895     | )      |   | $      | ( 39,854      | )      |   | $ | 5,181,041 |   |   |   | 1 |   |
| Loss from continuing operations before taxes   |   | $      | (7,660,600     | )      |   | $      | (193,673      | )      |   | $ | 7,466,927 |   |   |   | 1 |   |
| Loss from continuing operations                |   | $      | (7,660,600     | )      |   | $      | (193,673      | )      |   | $ | 7,466,927 |   |   |   | 1 |   |
| Gain (loss) from discontinued operations       |   |   | 59,332         |   |   | $      | (1,782,550    | )      |   | $ | (1,841,882 | ) |   |   | 1 |   |
| Net loss                                       |   | $      | (7,601,268     | )      |   | $      | (1,976,223    | )      |   | $ | 5,625,045 |   |   |   | 1 |   |
|                                           |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
|                                           |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| Three months ended September 30, 2008          |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| Sales, net                                     |   | $      | 2,199,853      |   |   | $      | 0             |   |   | $ | (2,199,853 | ) |   |   | 1 |   |
| Cost of goods sold                             |   | $      | 1,882,706      |   |   | $      | 0             |   |   | $ | (1,882,706 | ) |   |   | 1 |   |
| Gross Profit                                   |   | $      | 317,147        |   |   | $      | 0             |   |   | $ | ( 317,147 | ) |   |   | 1 |   |
| Selling, general and administrative            |   | $      | 1,040,954      |   |   | $      | 0             |   |   | $ | (1,040,954 | ) |   |   | 1 |   |
| Loss from operations                           |   | $      | (723,807       | )      |   | $      | 0             |   |   | $ | 723,807 |   |   |   | 1 |   |
| Other income (expenses)                        |   | $      | ( 132,195 | )      |   | $      | 0             |   |   | $ | 132,195 |   |   |   | 1 |   |
| Loss from continuing operations before taxes   |   | $      | ( 856,002 | )      |   | $      | 0             |   |   | $ | 856,002 |   |   |   | 1 |   |
| Provision for income tax expense               |   | $      | 428,274        |   |   | $      | 0             |   |   | $ | ( 428,274 | ) |   |   | 1 |   |
| Loss from continuing operations                |   | $      | (1,284,276     | )      |   | $      | 0             |   |   | $ | 1,284,276 |   |   |   | 1 |   |
| Gain (loss) from discontinued operations       |   | $      | 303,804        |   |   | $      | 0             |   |   | $ | 303,804 |   |   |   | 1 |   |
| Net loss                                       |   | $      | ( 980,472 | )      |   | $      | 0             |   |   | $ | 980,472 |   |   |   | 1 |   |
|                                           |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| STATEMENT OF CASH FLOWS                        |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| Nine months ended September 30, 2009           |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| Net loss                                       |   | $      | (7,601,268     | )      |   | $      | (1,976,223    | )      |   | $ | 5,625,045 |   |   |   | 2 |   |
| Depreciation and amortization                  |   | $      | 495,734        |   |   | $      | 0             |   |   | $ | ( 495,734 | ) |   |   | 2 |   |
| Loss on bank default                           |   | $      | 4,904,565      |   |   | $      | 0             |   |   | $ | (4,904,565 | ) |   |   | 2 |   |
| Loss on impairment of leasehold                |   | $      | 273,666        |   |   | $      | 0             |   |   | $ | ( 273,666 | ) |   |   | 2 |   |
| Loss on impairment of prepaid expenses         |   | $      | 324,768        |   |   | $      | 0             |   |   | $ | ( 324,768 | ) |   |   | 2 |   |
| Stock based compensation                       |   | $      | 6,095          |   |   | $      | 0             |   |   | $ | ( 6,095 | ) |   |   | 2 |   |
| Accounts receivable                            |   | $      | 2,391,415      |   |   | $      | ( 45,281 | )      |   | $ | (2,436,696 | ) |   |   | 2 |   |
| Inventories                                    |   | $      | 1,246,455      |   |   | $      | 0             |   |   | $ | (1,246,455 | ) |   |   | 2 |   |
| Prepaid expenses                               |   | $      | ( 70,903  | )      |   | $      | 0             |   |   | $ | 70,903 |   |   |   | 2 |   |
| Accounts payable                               |   | $      | 269,311        |   |   | $      | 948,984       |   |   | $ | 679,673 |   |   |   | 2 |   |
| Accrued payroll and taxes                      |   | $      | ( 105,255 | )      |   | $      | 2,603         |   |   | $ | 107,858 |   |   |   | 2 |   |
| Accrued expenses                               |   | $      | 349,297        |   |   | $      | 1,228,593     |   |   | $ | 879,296 |   |   |   | 2 |   |
| Payments on deferred retirement                |   | $      | ( 9,888   | )      |   | $      | 0             |   |   | $ | 9,888 |   |   |   | 2 |   |
| Cash flows from (used) in operating activities |   | $      | 2,473,992      |   |   | $      | 158,676       |   |   | $ | (2,315,316 | ) |   |   | 2 |   |
|                                           |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| Purchase of property and equipment             |   | $      | 0              |   |   | $      | ( 7,000  | )      |   | $ | ( 7,000 | ) |   |   | 2 |   |
| Proceeds from sale of property and equipment   |   | $      | 24,534         |   |   | $      | 0             |   |   | $ | ( 24,534 | ) |   |   | 2 |   |
| Proceeds from sale of discontinued operations  |   | $      | 236,927        |   |   | $      | 0             |   |   | $ | ( 236,927 | ) |   |   | 2 |   |
| Cash flows from investing activities           |   | $      | 261,461        |   |   | $      | ( 7,000  | )      |   | $ | ( 268,461 | ) |   |   | 2 |   |
|                                           |   |   |           |   |   |   |          |   |   |   |   |   |   |   |   |   |
| Bank overdraft                                 |   | $      | ( 22,236  | )      |   | $      | 0             |   |   | $ | 22,236 |   |   |   | 2 |   |
| Receipts (payments) on line of credit          |   | $      | (2,325,639     | )      |   | $      | 0             |   |   | $ | 2,325,639 |   |   |   | 2 |   |
| Proceeds from current note payable             |   | $      | 14,098         |   |   | $      | 0             |   |   | $ | ( 14,098 | ) |   |   | 2 |   |
| Payments on long-term debit                    |   | $      | ( 250,000 | )      |   | $      | 0             |   |   | $ | 250,000 |   |   |   | 2 |   |
| Cash flows used in financing activities        |   | $      | (2,583,777     | )      |   | $      | 0             |   |   | $ | 2,583,777 |   |   |   | 2 |   |

----

|                           |   | September 30,2010 |   |   | December 31,2009 |   |
|--------------------------------|--------|-------------------|--------|--------|------------------|--------|
|                           |   |              |   |   |             |   |
| Office furniture and equipment |   | $                 | 944    |   |             | $      | 0 |   |
| Less: Accumulated depreciation |   |              | (0     | )      |             |   | (0 | ) |
| Net                            |   | $                 | 944    |   |             | $      | 0 |   |

----

|                                                                                                                                                                                                                                                                                                                                         |   | September 30,2010 |    |   | December 31,2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|------------------|--------|
| Unsecured Promissory Note – Cass Creek – monthly installments of approximately $11,000  from September 2008 through March 2010, then annual installments ranging from $108,000 to $124,000 beginning September 2010 through September 2012, all payments include interest at 8%, guaranteed by the CEO of the Company. |   | $                 | 469,257 |   |             | $      | 469,257 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |              |    |   |             |   |   |   |
| Unsecured Note Payable – Fish Hawk -  annual installments of $33,333 plus interest at 8% from July 2008 through July 2010                                                                                                                                                                                                    |   |              | 66,667  |   |             |   | 66,667 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |              |    |   |             |   |   |   |
| Unsecured Note Payable – Castaic -  annual installments of $17,171, including interest at 8%, from January 2009 through January 2011                                                                                                                                                                                         |   |              | 44,250  |   |             |   | 44,250 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |              |    |   |             |   |   |   |
| Unsecured Note Payable – Castaic -  monthly installments of $1,175, including interest at 8%, from February 2008 through January 2011                                                                                                                                                                                        |   |              | 26,978  |   |             |   | 26,978 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |              |    |   |             |   |   |   |
| Unsecured Note Payable – monthly installments of $1,458, including interest at 7%, from August 2008 through July 2010                                                                                                                                                                                                                  |   |              | 24,850  |   |             |   | 24,850 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |              |    |   |             |   |   |   |
| Unsecured Note Payable – Innovative Outdoors – monthly installments of $4,632, includinginterest at 7% from August 2008 through July 2011                                                                                                                                                                                        |   |              | 127,129 |   |             |   | 127,129 |   |
|                                                                                                                                                                                                                                                                                                                                         |   |              |    |   |             |   |   |   |
| Totals                                                                                                                                                                                                                                                                                                                                       |   |              | 687,345 |   |             |   | 687,345 |   |
| Less: Current portion                                                                                                                                                                                                                                                                                                                        |   |              | 687,345 |   |             |   | 444,346 |   |
| Net Long-Term Debt                                                                                                                                                                                                                                                                                                                           |   | $                 | 0       |   |             | $      | 242,999 |   |

|                            | 2010   |   | 2009   |   |
|---------------------------------|--------|--------|--------|--------|
|                            |   |   |   |   |
| Current                         |   | $      | 0      |   |   | $ | 0 |   |
| Deferred                        |   |   | 0      |   |   |   | 0 |   |
|                            |   |   |   |   |   |   |   |   |
| Total Benefit from Income Taxes |   | $      | 0      |   |   | $ | 0 |   |

|                                                       |   | 2010   |   |   | 2009   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                       |   |   |   |   |   |   |
| Federal statutory rate                                     |   |   | (34.0  | ) %    |   |   | (34.0 | ) % |
| State tax, net of federal benefit                          |   |   | (3.3   | )      |   |   | (3.3 | ) |
| Permanent differences and other including surtax exemption |   |   | 0.1    |   |   |   | 0.1 |   |
| Valuation allowance                                        |   |   | 37.2   |   |   |   | 37.2 |   |
|                                                       |   |   |   |   |   |   |   |   |
| Effective Tax Rate                                         |   |   | 0      | %      |   |   | 0 | % |

----

| Sales, Net                                                              |   | $      | 739,556                 |   |
|-------------------------------------------------------------------------|--------|--------|-------------------------|--------|
| Cost of goods sold                                                      |   |   | 781,804                 |   |
| Gross profit                                                            |   |   | (42,248)                |   |
|                                                                    |   |   |                    |   |
| Operating Expenses                                                 |   |   |                    |   |
| Sales and marketing                                                     |   |   | 83,985                  |   |
| Research and development and engineering                                |   |   | 117,045                 |   |
|                                                                    |   |   |                    |   |
| Intangible impairment and loss on assets liquidated by bank foreclosure |   |   | 1,539,272               |   |
|    Total Operating Expenses                              |   |   | 1,740,302               |   |
|  Loss from Discontinued Operations                                 |   | $      |   (1,782,550) |   |

----

|                                                             |   | 2010    |    |   | 2009   |    |
|------------------------------------------------------------------|--------|---------|---------|--------|--------|---------|
| Supplemental Cash Flow Disclosures                               |   |    |    |   |   |    |
| Cash paid for interest                                           |   | $       | 0       |   |   | $       | 0 |   |
| Cash paid for income taxes                                       |   | $  | 0       |   |   | $  | 0 |   |
|     Common stock issued for note receivable  |   | $  |  0 |   |   | $  | 3,500,000 |   |

----

----

|                                 |   | Three Months Ended  |    |   | Nine Months Ended  |   |
|--------------------------------------|--------|--------------------------|---------|--------|-------------------------|--------|
|                                 |   | September 30,            |    |   | September 30,           |   |   |  September 30, |   |   | September 30,  |   |
|                                 |   | 2010                     |    |   | 2009                    |   |   | 2010 |   |   | 2009 |   |
|                                 |   |                     |    |   |                    |   |   |   |   |   |   |   |
|                                 |   |                     |    |   |                    |   |   |   |   |   |   |   |
| Consulting fees                      |   | $                        | 96,246  |   |                    | $      | 96,246 |   |   | $ | 295,738 |   |   | $ | 96,246 |   |
| Stock based compensation             |   |                     | 89,280  |   |                    |   | 0 |   |   |   | 175,040 |   |   |   | 0 |   |
| Management fees                      |   |                     | 30,000  |   |                    |   | 20,000 |   |   |   | 80,000 |   |   |   | 20,000 |   |
| Audit fees                           |   |                     | 3,500   |   |                    |   | 0 |   |   |   | 11,500 |   |   |   | 0 |   |
| Legal fees                           |   |                     | 28,165  |   |                    |   | 25,000 |   |   |   | 28,165 |   |   |   | 25,000 |   |
| Recovery project expenses            |   |                     | 33,640  |   |                    |   | 0 |   |   |   | 33,640 |   |   |   | 0 |   |
| Rent expense                         |   |                     | 4,500   |   |                    |   | 3,000 |   |   |   | 12,000 |   |   |   | 3,000 |   |
| Travel expense                       |   |                     | 1,743   |   |                    |   | 1,061 |   |   |   | 13,640 |   |   |   | 1,061 |   |
| Office supplies                      |   |                     | 9,725   |   |                    |   | 2,754 |   |   |   | 18,395 |   |   |   | 2,754 |   |
| Professional fees                    |   |                     | 729     |   |                    |   | 1,430 |   |   |   | 12,150 |   |   |   | 1,430 |   |
| Computer and internet expenses       |   |                     | 4,349   |   |                    |   | 1,434 |   |   |   | 12,218 |   |   |   | 1,434 |   |
| Telephone expense                    |   |                     | 2,913   |   |                    |   | 1,660 |   |   |   | 8,718 |   |   |   | 1,660 |   |
| Other                                |   |                     | 2,251   |   |                    |   | 1,234 |   |   |   | 9,958 |   |   |   | 1,234 |   |
|                                 |   |                     |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Total Operating Expenses |   | $                        | 307,041 |   |                    |   | 153,819 |   |   | $ | 711,162 |   |   | $ | 153,819 |   |

----

|  (thousands)                                |   | 2010   |    |    | 2009   |   |
|--------------------------------------------------|--------|--------|---------|---------|--------|--------|
| Cash provided by (used for):                     |   |   |    |    |   |   |
| Operating activities                             |   | $      | (96,966 | )  |   | $      | 158,593 |   |
| Investing activities                             |   |   | (944    | )  |   |   | (7,000) |   |
| Financing activities                             |   |   | 50,000  |    |   |   | 0 |   |
| Increase (decrease) in cash and cash equivalents |   | $      | (47,910 | )  |   | $      | 151,676 |   |

| ● | pertain to the  maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ● |  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting  principles, and that receipts and expenditures  of the company are being made only in accordance with authorizations 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 financial statements.                                                                                                                                     |

----

|   | 31.1   |   | Certification of Chief Executive Officer.                                                                               |
|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                    |
|   | 31.2   |   | Certification of Chief Financial Officer.                                                                               |
|   |   |   |                                                                                                                    |
|   | 32.1   |   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

|                               | SWORDFISH  FINANCIAL,  INC. |                                                  |
|------------------------------------|-------------------------------------------------|-------------------------------------------------------|
|                               |                                            |                                                  |   |
|                               |                                            |                                                  |   |
| Date:  November 29, 2010 | By:                                             |  /s/ Michael Alexander                           |   |
|                               |                                            | Its:  Chief Executive Officer and President |   |
|                               |                                            |                                                  |   |
| Date:  November 29, 2010 | By:                                             |  /s/ Randy Moseley                               |   |
|                               |                                            | Its:  Chief Financial Officer               |   |

----