|   |   X |   | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31,  2008. |
|--------|---------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 FOR THE TRANSITION PERIOD FROM ________________ TO      ________________. |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Delaware                   | 04-2869857             |
|----------------------------|------------------------|
| State      of Organization | IRS      Employer I.D. |

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

----

|                           |                              |                                                                                                                  |        PageNumber                                               |
|--------------------------------|-----------------------------------|-----------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|
|   PART      I.  |   FINANCIAL      INFORMATION |                                                                                                                  |
|                           |                              |                                                                                                                  |
|                           | Item      1.                      | Financial      Statements                                                                                             |                                                                 |
|                           |                              |                                                                                                                  |                                                                 |
|                           |                              | Consolidated      Balance Sheets; December 31, 2008 (unaudited) and September 30,      2008                           | 3                                                                    |
|                           |                              |                                                                                                                  |                                                                 |
|                           |                              | Consolidated      Statements of Operations; Three Months Ended December 31, 2008  and      2007 (unaudited)      | 5                                                                    |
|                           |                              |                                                                                                                  |                                                                 |
|                           |                              | Consolidated      Statements of Cash Flows; Three Months Ended December 31, 2008       and 2007 (unaudited) | 6                                                                    |
|                           |                              |                                                                                                                  |                                                                 |
|                           |                              | Notes      to Consolidated Financial Statements                                                                       | 7                                                                    |
|                           |                              |                                                                                                                  |                                                                 |
|                           | Item      2.                      | Management’s      Discussion and Analysis of Financial Condition and Results of      Operation             | 13                                                                   |
|                           |                              |                                                                                                                  |                                                                 |
|                           | Item      3.                      | Quantitative      and Qualitative Disclosures About Market Risk                                                       |                 16 |
|                           |                              |                                                                                                                  |                                                                 |
|                           | Item      4.                      | Controls      and Procedures                                                                                          | 16                                                                   |
|                           |                              |                                                                                                                  |
| PART      II.                  | OTHER      INFORMATION            |                                                                                                                  |
|                           |                              |                                                                                                                  |                                                                 |
|                           | Item      2.                      | Unregistered      Sales of Equity Securities and Use Of Proceeds                                                      | 17                                                                   |
|                           |                              |                                                                                                                  |                                                                 |
|                           | Item      5.                      | Other      Information                                                                                                | 17                                                                   |
|                           |                              |                                                                                                                  |                                                                 |
|                           | Item      6.                      | Exhibits                                                                                                              | 18                                                                   |
|                           |                              |                                                                                                                  |                                                                 |
|        SIGNATURES         | 19                                |
|                           |                              |
|        CERTIFICATIONS     |                              |

----

|                                                                                                                                                                                                                                                                         |   | December      31,2008(unaudited) |      |   |        September      30,2008 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-----------|--------|------------------------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                       |   |                             |      |   |                               |   |
|                                                                                                                                                                                                                                                                         |   |                             |      |   |                               |   |
| CURRENT      ASSETS:                                                                                                                                                                                                                                                         |   |                             |      |   |                               |   |
|          Cash                                                                                                                                                                                                                                                 |   | $                                | 147,766   |   |                               | $      | 98,799 |   |
| Accounts      receivable, less allowance for   doubtful      accounts of $71,074 and $62,485 at   December 31,      2008 and September 30, 2008, respectively                                                                                  |   |                             | 753,808   |   |                               |   | 866,306 |   |
|     Inventories,      net                                                                                                                                                                                                                                     |   |                             | 1,873,669 |   |                               |   | 2,037,049 |   |
|     Current      portion of Note Receivable                                                                                                                                                                                                                   |   |                             | 210,000   |   |                               |   | 210,000 |   |
|     Prepaid      expenses and other current assets                                                                                                                                                                                                            |   |                             | 139,928   |   |                               |   | 304,038 |   |
|       Total current      assets                                                                                                                                                                                                                |   |                             | 3,125,171 |   |                               |   | 3,516,192 |   |
|                                                                                                                                                                                                                                                                         |   |                             |      |   |                               |   |   |   |
| PROPERTY AND EQUIPMENT;      net of accumulated depreciation     and      amortization of $5,925,507 and $5,970,504 at           December      31, 2008 and September 30, 2008, respectively |   |                             | 598,251   |   |                               |   | 697,071 |   |
|                                                                                                                                                                                                                                                                         |   |                             |      |   |                               |   |   |   |
| OTHER      ASSETS:                                                                                                                                                                                                                                                           |   |                             |      |   |                               |   |   |   |
|                                                                                                                                                                                                                                                                         |   |                             |      |   |                               |   |   |   |
|   Long Term portion      of Note Receivable                                                                                                                                                                                                                        |   |                             | 402,500   |   |                               |   | 455,000 |   |
|   Other      Assets                                                                                                                                                                                                                                                |   |                             | 63,354    |   |                               |   | 98,057 |   |
|      Total other      assets                                                                                                                                                                                                                        |   |                             | 465,854   |   |                               |   | 553,057 |   |
|                                                                                                                                                                                                                                                                         |   |                             |      |   |                               |   |   |   |
| Total      Assets                                                                                                                                                                                                                                                            |   | $                                | 4,189,276 |   |                               | $      | 4,766,320 |   |
| The      accompanying notes are an integral part of the financial      statements.                                                                                                                                                                                           |   |

----

| LIABILITIES      AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                                                   |   |   December      31,2008(unaudited) |        |   | September      30,2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|--------|------------------------|--------|
| CURRENT      LIABILITIES:                                                                                                                                                                                                                          |   |                                         |        |   |                   |   |
| Accounts      payable and accrued liabilities                                                                                                                                                                                                      |   | $                                            | 957,794     |   |                   | $      | 1,127,599 |   |
| Revolving      line of credit                                                                                                                                                                                                                      |   |                                         | 500,000     |   |                   |   | 500,000 |   |
| Deferred      revenue                                                                                                                                                                                                                              |   |                                         | 124,169     |   |                   |   | 102,680 |   |
| Note      Payable – Itau Bank                                                                                                                                                                                                                |   |                                         | 44,797      |   |                   |   | 32,257 |   |
| Senior      subordinated secured convertible notes, net of unamortized            discount of $51,384 and $70,587 at December 31, 2008 and            September 30, 2008, respectively |   |                                         | 3,998,466   |   |                   |   | 3,979,263 |   |
|                 Total      Current Liabilities                                                                                                                     |   |                                         | 5,625,226   |   |                   |   | 5,741,799 |   |
| LONG      TERM LIABILITIES:                                                                                                                                                                                                                        |   |                                         |        |   |                   |   |   |   |
| Note      Payable – Itau Bank                                                                                                                                                                                                                |   |                                         | 51,358      |   |                   |   | 119,466 |   |
|                 Total      Long Term Liabilities                                                                                                                   |   |                                         | 51,358      |   |                   |   | 119,466 |   |
|         Total      liabilities                                                                                                                                                                             |   |                                         | 5,676,584   |   |                   |   | 5,861,265 |   |
|                                                                                                                                                                                                                                          |   |                                         |        |   |                   |   |   |   |
| STOCKHOLDERS’      DEFICIT:                                                                                                                                                                                                                  |   |                                         |        |   |                   |   |   |   |
|                                                                                                                                                                                                                                               |   |                                         |        |   |                   |   |   |   |
| Preferred      stock, $.01 par value - 1,000,000 shares authorized; none      issued                                                                                                                                                               |   |                                         | --          |   |                   |   | -- |   |
| Common      stock, $.01 par value - 30,000,000 shares authorized;  issued      and outstanding:  15,325,281 at December 31, 2008       and      September 30, 2008                               |   |                                         | 153,252     |   |                   |   | 153,252 |   |
| Additional      paid-in capital                                                                                                                                                                                                                    |   |                                         | 22,870,238  |   |                   |   | 22,867,507 |   |
| Accumulated      deficit                                                                                                                                                                                                                           |   |                                         | (24,134,477 | )      |                   |   | (23,925,977 | ) |
| Accumulated      other comprehensive (loss)-            currency translation (loss)                                                                                                                                  |   |                                         | (286,684    | )      |                   |   | (100,090 | ) |
| Treasury      stock at cost; 100,000 shares at December 31, 2008            and September 30, 2008, respectively                                                                                                     |   |                                         | (89,637     | )      |                   |   | (89,637 | ) |
|  Total      Stockholders’ Deficit                                                                                                                                                                                                       |   |                                         | (1,487,308  | )      |                   |   | (1,094,945 | ) |
| Total      Liabilities and Stockholders’ Deficit                                                                                                                                                                                             |   | $                                            | 4,189,276   |   |                   | $      | 4,766,320 |   |
|                                                                                                                                                                                                                                               |   |                                         |        |   |                   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                |   | Three      Months Ended |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                |   | December      312008    |       |   | December      31,2007 |   |
| Net      Sales:                                                                                                                                                                                                                                                                                                                                     |   | $                       | 1,386,350  |   |   | $ | 1,539,845 |   |
| Cost      of Sales                                                                                                                                                                                                                                                                                                                                  |   |                    | 877,646    |   |   |   | 888,636 |   |
| Gross      Profit:                                                                                                                                                                                                                                                                                                                                  |   |                    | 508,704    |   |   |   | 651,209 |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                            |   |                    |       |   |   |   |   |   |
|        Selling,      general and administrative                                                                                                                                                                                                                                                                  |   |                    | 621,221    |   |   |   | 576,363 |   |
|        Research      and development                                                                                                                                                                                                                                                                             |   |                    | 22,957     |   |   |   | 41,078 |   |
|                 Total      operating expenses                                                                                                                                                                                                                       |   |                    | 644,178    |   |   |   | 617,441 |   |
|                 Total      operating (loss) income from continuing operations                                                                                                                                                                                       |   |                    | (135,474   | ) |   |   | 33,768 |   |
| Other      income (expenses):                                                                                                                                                                                                                                                                                                                       |   |                    |       |   |   |   |   |   |
|        Interest      expense (net), including $18,062 and $16,223 for the three           months      ending December 31, 2008 and 2007, respectively           of      debt discount amortization |   |                    | (99,846    | ) |   |   | (88,410 | ) |
|        Other      (expense)                                                                                                                                                                                                                                                                                      |   |                    | (49        | ) |   |   | (352 | ) |
|        Gain      on sale of assets                                                                                                                                                                                                                                                                               |   |                    | 43,117     |   |   |   | -- |   |
|                 Total      other expense, net                                                                                                                                                                                                                       |   |                    | (56,778    | ) |   |   | (88,058 | ) |
|                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |   |   |   |   |
|       Net      loss, before income taxes, from continuing operations                                                                                                                                                                                                                                                  |   |                    | (192,252   | ) |   |   | (54,290 | ) |
|                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |   |   |   |   |
|       Income      Tax expense                                                                                                                                                                                                                                                                                         |   |                    | 16,248     |   |   |   | 29,548 |   |
|       Net      (loss) from continuing operations                                                                                                                                                                                                                                                                      |   |                    | (208,500   | ) |   |   | (83,838 | ) |
|                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |   |   |   |   |
|       Income      from Discontinued Operations (includes a gain   on sale of      assets in the amount of $1,094,817 for the three months   ending      December 31, 2007)                                                                                                              |   |                    | --         |   |   |   | 856,446 |   |
| Net      (loss) income:                                                                                                                                                                                                                                                                                                                             |   | $                       | (208,500   | ) |   | $ | 772,608 |   |
|                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |   |   |   |   |
| Other      comprehensive (loss) income, net of tax:                                                                                                                                                                                                                                                                                                 |   |                    |       |   |   |   |   |   |
|        Foreign      currency translation adjustments                                                                                                                                                                                                                                                             |   |                    | (186,594   | ) |   |   | 23,422 |   |
| Comprehensive      (loss) income:                                                                                                                                                                                                                                                                                                                   |   | $                       | (395,094   | ) |   | $ | 796,030 |   |
|                                                                                                                                                                                                                                                                                                                                                |   |                    |       |   |   |   |   |   |
| (Loss)      per share, from continuing operations – Basic                                                                                                                                                                                                                                                                                     |   | $                       | (0.01      | ) |   | $ | (0.01 | ) |
| (Loss)      per share, from continuing operations - Diluted                                                                                                                                                                                                                                                                                         |   | $                       | (0.01      | ) |   | $ | (0.01 | ) |
| Earnings      per share, from discontinued operations - Basic                                                                                                                                                                                                                                                                                       |   | $                       | 0.00       |   |   | $ | 0.06 |   |
| Earnings      per share, from discontinued operations - Diluted                                                                                                                                                                                                                                                                                     |   | $                       | 0.00       |   |   | $ | 0.06 |   |
| (Loss)      Earnings per share - Basic                                                                                                                                                                                                                                                                                                              |   | $                       | (0.01      | ) |   | $ | 0.05 |   |
| (Loss)      Earnings per share - Diluted                                                                                                                                                                                                                                                                                                            |   | $                       | (0.01      | ) |   | $ | 0.05 |   |
| Weighed      average common shares used in calculation of earnings (loss) per share -      Basic                                                                                                                                                                                                                                                    |   |                    | 15,225,281 |   |   |   | 15,225,281 |   |
| Weighed      average common shares used in calculation of earnings (loss) per share –      Diluted                                                                                                                                                                                                                                            |   |                    | 15,225,281 |   |   |   | 15,225,281 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Three      Months EndedDecember      31 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2008                                    |   |   | 2007 |
| Cash      flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |   |   |
| Net      (Loss) Income                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                       | (208,500 | ) |   | $ | 772,608 |   |
|   Adjustments to      reconcile net loss to net cash      provided by operating activities:                                                                                                                                                                                                                                                                                                                                                   |   |                                    |   |   |   |   |   |   |
|       Depreciation                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 37,038 |   |   |   | 10,770 |   |
|       Amortization of      debt discount                                                                                                                                                                                                                                                                                                                                                                                  |   |                                    | 19,203 |   |   |   | 17,627 |   |
|       (Gain) on sale of      assets                                                                                                                                                                                                                                                                                                                                                                                       |   |                                    | (43,118 | ) |   |   | (834,817 | ) |
|       Provision for Bad      Debts                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 21,340 |   |   |   | 33,000 |   |
|       Stock Based      Compensation                                                                                                                                                                                                                                                                                                                                                                                       |   |                                    | 2,731 |   |   |   | 1,524 |   |
|   Changes in      operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    |   |   |   |   |   |   |
|       Accounts      receivable                                                                                                                                                                                                                                                                                                                                                                                            |   |                                    | 91,158 |   |   |   | 69,714 |   |
|       Prepaid expenses      and other current assets                                                                                                                                                                                                                                                                                                                                                                      |   |                                    | 164,111 |   |   |   | (21,485 | ) |
|       Inventories                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                    | 163,380 |   |   |   | 380,259 |   |
|       Accounts payable      and accrued expenses                                                                                                                                                                                                                                                                                                                                                                          |   |                                    | (169,805 | ) |   |   | (217,132 | ) |
|       Other      assets                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                    | 34,703 |   |   |   | (6,190 | ) |
|     Deferred      revenue                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    | 21,489 |   |   |   | (351 | ) |
|            Net      cash provided by operating activities                                                                                                                                                                                                                                                                                                                                        |   |                                    | 133,730 |   |   |   | 205,527 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |   |   |   |   |   |
|   Purchase of      property and equipment                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                    | (95,259 | ) |   |   | (160,036 | ) |
|   Proceeds from sale      of assets                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                    | 51,805 |   |   |   | -- |   |
|   Payments Received      on Notes Receivable                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                    | 52,500 |   |   |   | 17,500 |   |
|           Net      cash provided by (used in) investing activities                                                                                                                                                                                                                                                                                                                                    |   |                                    | 9,046 |   |   |   | (142,536 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    |   |   |   |   |   |   |
|   Net borrowings on      Line of Credit                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                    | -- |   |   |   | (6,769 | ) |
|   Net borrowings on      Notes – Itau Bank                                                                                                                                                                                                                                                                                                                                                                                              |   |                                    | -- |   |   |   | 210,536 |   |
|   Payments on Itau      Bank Note                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                    | (55,568 | ) |   |   | -- |   |
|           Net      cash (used in) provided by financing activities                                                                                                                                                                                                                                                                                                                                    |   |                                    | (55,568 | ) |   |   | 203,767 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |
| Effects      of foreign exchange rate                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                    | (38,241 | ) |   |   | (9,169 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |
|                 Net      increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                          |   |                                    | 48,967 |   |   |   | 257,589 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |
| Cash      at beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                    | 98,799 |   |   |   | 6,593 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                    |   |   |   |   |   |   |
| Cash      at end of      period                                                                     |   |  $                                 | 147,766 |   |   | $ | 264,182 |   |
| Supplemental      disclosure of cash flow information:                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                    |   |   |   |   |   |   |
|  Cash      paid during the period for      interest                                                                                                                                                                                        |   |  $                                 | 95,164 |   |   | $ | 81,528 |   |
| The      accompanying notes are an integral part of the financial      statements.                                                                                                                                                                                                                                                                                                                                                                      |

----

----

----

|                                  |   | Three      Months EndedDecember      31, |      |
|---------------------------------------|--------|------------------------------------------|-----------|
|                                  |   | 2008                                     |      |   | 2007 |   |
| Convertible      notes                |   |                                     | 5,399,800 |   |   |   | 5,399,800 |   |
| Options      to purchase common stock |   |                                     | 2,464,014 |   |   |   | 2,267,014 |   |
| Total      antidilutive instruments   |   |                                     | 7,863,814 |   |   |   | 7,666,814 |   |

|                                                                           |   |  Shares |      |   | Weighted      average exercise price |   |   | Weighted      averagelife |   |
|--------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------------------------------|--------|--------|---------------------------|--------|
|                                                                           |   |         |      |   |                                 |   |   | $                         |   |   |
| Options      outstanding – October 1, 2008                               |   |         | 2,464,014 |   |                                 |   | 1.05   |                      |   |   | 2.36 |   |
|        Granted                              |   |         | --        |   |                                 |   | --     |                      |   |   | -- |   |
|        Exercised                            |   |         | --        |   |                                 |   | --     |                      |   |   | -- |   |
|        Forfeited,      cancelled or expired |   |         | --        |   |                                 |   | --     |                      |   |   | -- |   |
| Options      outstanding – December 31, 2008                             |   |         | 2,464,014 |   |                                 | $      | 1.05   |                      |   |   | 2.11 |   |
| Options      exercisable – December 31, 2008                             |   |         | 2,279,014 |   |                                 | $      | 1.11   |                      |   |   | 2.00 |   |

----

|                         |   | Three      Months EndedDecember      31, |   |
|------------------------------|--------|------------------------------------------|--------|
|                         |   | 2008                                     |   |   | 2007 |   |
| Dividend      yield          |   |                                     | --     |   |   |   | -- |   |
| Expected      volatility     |   |                                     | --     |   |   |   | 85% |   |
| Risk-free      interest rate |   |                                     | --     |   |   |   | 4% |   |
| Expected      life in years  |   |                                     | --     |   |   |   | 5-10 |   |

|                  |   | December      31,2008 |      |   | September      30,2008 |   |
|-----------------------|--------|-----------------------|-----------|--------|------------------------|--------|
|                  |   |                  |      |   |                   |   |
| Raw      Materials    |   | $                     | 1,374,602 |   |                   | $      | 1,385,253 |   |
| Work-in-process       |   |                  | 134,570   |   |                   |   | 159,903 |   |
| Finished      goods   |   |                  | 960,933   |   |                   |   | 1,018,609 |   |
|                  |   |                  | 2,470,105 |   |                   |   | 2,563,765 |   |
| Less      reserves    |   |                  | (596,436  | )      |                   |   | (526,716 | ) |
| Inventories,      net |   | $                     | 1,873,669 |   |                   | $      | 2,037,049 |   |

----

|                                                 |   | United*States |      |   | Brazil |   |    | Consolidated |   |
|------------------------------------------------------|--------|---------------|-----------|--------|--------|--------|---------|--------------|--------|
| Three      Months Ended December      31, 2008:      |   |          |      |   |   |   |    |         |   |
|      Revenues               |   | $             | 793,236   |   |   | $      | 593,114 |         |   | $ | 1,386,350 |   |
|      Long-lived      assets |   |          | 655,257   |   |   |   | 408,848 |         |   |   | 1,064,105 |   |
|                                                 |   |          |      |   |   |   |    |         |   |   |   |   |
| Three      Months Ended December      31, 2007:      |   |          |      |   |   |   |    |         |   |   |   |   |
|      Revenues               |   | $             | 1,011,822 |   |   | $      | 528,023 |         |   | $ | 1,539,845 |   |
|      Long-lived      assets |   |          | 794,985   |   |   |   | 307,709 |         |   |   | 1,102,694 |   |

----

|                                                                                                |   | Three      Months Ended |   |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                |   | December      31,2008   |   |   | December      31,2007 |   |
|                                                                                                |   |                    |   |   |   |   |
| Net      sales                                                                                      |   | $                       | 68,898 |   |   | $ | 217,161 |   |
| Costs      of sales                                                                                 |   |                    | 68,898 |   |   |   | 256,888 |   |
| Gross      Profit                                                                                   |   |                    | --     |   |   |   | (39,727 | ) |
|                                                                                                |   |                    |   |   |   |   |   |   |
|                                                                                                |   |                    |   |   |   |   |   |   |
| Operating      expenses:                                                                            |   |                    |   |   |   |   |   |   |
|     Selling,      general and administrative                                    |   |                    | --     |   |   |   | 196,936 |   |
|     Research      and development                                               |   |                    | --     |   |   |   | 1,708 |   |
|           Total      operating costs and expenses |   |                    | --     |   |   |   | 198,644 |   |
|                                                                                                |   |                    |   |   |   |   |   |   |
|   Operating      loss                                                                     |   |                    | --     |   |   |   | (238,371 | ) |
|                                                                                                |   |                    |   |   |   |   |   |   |
| Other      income (expenses):                                                                       |   |                    |   |   |   |   |   |   |
|       Gain      on Sale of Assets                                     |   |                    | --     |   |   |   | 1,094,817 |   |
|            Total      other income           |   |                    | --     |   |   |   | 1,094,817 |   |
|                                                                                                |   |                    |   |   |   |   |   |   |
|       Net      income before income taxes                             |   |                    | --     |   |   |   | 856,446 |   |
|                                                                                                |   |                    |   |   |   |   |   |   |
|       Income      Tax                                                 |   |                    | --     |   |   |   | -- |   |
|                                                                                                |   |                    |   |   |   |   |   |   |
| Net      income from discontinued operations                                                        |   | $                       | --     |   |   | $ | 856,446 |   |

----

|                  |   | December      31,2008 |    |
|-----------------------|--------|-----------------------|---------|
| Raw      Materials    |   | $                     | 132,976 |   |
| Work-in-process       |   |                  | 392     |   |
| Finished      goods   |   |                  | 55,144  |   |
|                  |   |                  | 188,512 |   |
| Less      reserves    |   |                  | (35,468 | ) |
| Inventories,      net |   | $                     | 153,044 |   |

----

| · | Activities      related to upgrading the Analyst instrument and product offerings such as      evaluating and developing complimentary products for Hemagen’s Analyst      product line to distribute to the veterinary market and alternative tests      utilizing the Analyst’s rotortechnology; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | Developing      new ELISA kits and enhancing existing ELISA kits;  and |
|--------|------------------------------------------------------------------------|

| · | Developing      new IFA kits and enhancing existing IFAkits. |
|--------|--------------------------------------------------------------|

----

----

| Period                   |   | (a)Total      Number of Shares Purchased |   |   | (b)AveragePrice      Paid per Share |   |   | (c) Total      Number of Shares Purchased as Part of Publicly Announced Plans or      Programs(1) |   |   | (d)Maximum      Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased      Under the Plans or Programs (2) |   |
|--------------------------|--------|-----------------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|--------|
| October      1-31, 2008  |   |                                          | 9,750  |   |                                | $      | 0.11   |                                                                                                   |   |   | 9,750                                                                                                                         |   |   |   | - |   |
| November      1-30, 2008 |   |                                          | 10,400 |   |                                | $      | 0.07   |                                                                                                   |   |   | 10,400                                                                                                                        |   |   |   | - |   |
| December      1-31, 2008 |   |                                          | 8,250  |   |                                | $      | 0.08   |                                                                                                   |   |   | 8,250                                                                                                                         |   |   |   | - |   |
| Total                    |   |                                          | 28,400 |   |                                | $      | 0.09   |                                                                                                   |   |   | 28,400                                                                                                                        |   |   |   | - |   |

|   | (1) | Represents      shares of the Company’s Common Stock purchased pursuant to the Company’s      Employee Stock Ownership Plan (ESOP) that was established October 1, 2003,      with no expiration.  The purpose of the plan is not to      repurchase, but rather it is an employee benefit  plan. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | There      is no maximum number of shares that may be purchased under the Company’s      Employee Stock Ownership Plan. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------|

----

| Exhibit      31.1 | Certification      of Chief Executive Officer pursuant to Rules 13a-14(a) and      15d-14(a)                                       |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------|
|              |                                                                                                                               |
| Exhibit      31.2 | Certification      of Principal Financial Officer pursuant to Rules 13a-14(a) and      15d-14(a)                                   |
|              |                                                                                                                               |
| Exhibit      32.1 | Certification      of Chief Executive Officer pursuant to Section 1350 of Chapter 63 of Title      18 of the United States Code    |
|              |                                                                                                                               |
| Exhibit      32.2 | Certification      of Principal Financial Officer pursuant to Section 1350 of Chapter 63 of      Title 18 of the United StatesCode |

----

|                   | Hemagen      Diagnostics, Inc.(Registrant)   |
|------------------------|--------------------------------------------------------|
|                   |                                                   |   |   |
| February      13, 2009 | By:                                                    | /s/ William      P. Hales |   |
|                   |                                                   | William      P. Hales |   |
|                   |                                                   | President      and Chief Executive Officer |   |
|                   |                                                   |   |   |
|                   |                                                   |   |   |
| February      13, 2009 |  By:                                              | /s/Catherine      M. Davidson |   |
|                   |                                                   | Catherine      M. Davidson |   |
|                   |                                                   | Principal      Financial Officer |   |