|   |   X |   | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31,  2009. |
|--------|---------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   | 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; March 31, 2009 (unaudited) and September 30,      2008                        | 3                                                                    |
|                           |                              |                                                                                                                 |                                                                 |
|                           |                              | Consolidated      Statements of Operations; Three and Six Months Ended March 31, 2009      and 2008 (unaudited) | 5                                                                    |
|                           |                              |                                                                                                                 |                                                                 |
|                           |                              | Consolidated      Statements of Cash Flows; Six Months Ended March 31, 2009 and      2008 (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                                                      |                 17 |
|                           |                              |                                                                                                                 |                                                                 |
|                           | Item      4.                      | Controls      and Procedures                                                                                         | 17                                                                   |
|                           |                              |                                                                                                                 |
| PART      II.                  | OTHER      INFORMATION            |                                                                                                                 |
|                           |                              |                                                                                                                 |                                                                 |
|                           | Item      2.                      | Unregistered      Sales of Equity Securities and Use Of Proceeds                                                     | 18                                                                   |
|                           |                              |                                                                                                                 |                                                                 |
|                           | Item      6.                      | Exhibits                                                                                                             | 18                                                                   |
|                           |                              |                                                                                                                 |                                                                 |
|        SIGNATURES         | 19                                |
|                           |                              |
|        CERTIFICATIONS     |                              |

----

|                                                                                                                                                                                         |   | March      31, 2009(unaudited) |      |   | September      30,2008  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|--------|------------------------------|--------|
| ASSETS                                                                                                                                                                                       |   |                           |      |   |                         |   |
|                                                                                                                                                                                         |   |                           |      |   |                         |   |
| CURRENT      ASSETS:                                                                                                                                                                         |   |                           |      |   |                         |   |
| Cash                                                                                                                                                                                         |   | $                              | 90,438    |   |                         | $      | 98,799 |   |
| Accounts      receivable, less allowance for doubtful accounts of $64,800 and $62,485      at March 31, 2009 and September 30, 2008,      respectively                                  |   |                           | 678,432   |   |                         |   | 866,306 |   |
| Inventories,      net                                                                                                                                                                        |   |                           | 1,877,876 |   |                         |   | 2,037,049 |   |
| Current      portion of note receivable                                                                                                                                                      |   |                           | 210,000   |   |                         |   | 210,000 |   |
| Prepaid      expenses and other current assets                                                                                                                                               |   |                           | 135,001   |   |                         |   | 304,038 |   |
|              Total      current assets                                                                                      |   |                           | 2,991,747 |   |                         |   | 3,516,192 |   |
|                                                                                                                                                                                         |   |                           |      |   |                         |   |   |   |
|                                                                                                                                                                                         |   |                           |      |   |                         |   |   |   |
|                                                                                                                                                 |   |                           |      |   |                         |   |   |   |
| PROPERTY AND EQUIPMENT;      net of accumulated depreciation and amortization of        $5,967,580 and      $5,970,504 at March 31, 2009 and September 30, 2008,      respectively |   |                           | 583,839   |   |                         |   | 697,071 |   |
|                                                                                                                                                                                         |   |                           |      |   |                         |   |   |   |
| OTHER      ASSETS:                                                                                                                                                                           |   |                           |      |   |                         |   |   |   |
|                                                                                                                                                                                         |   |                           |      |   |                         |   |   |   |
| Long      term portion of note receivable                                                                                                                                                    |   |                           | 350,000   |   |                         |   | 455,000 |   |
| Other      assets                                                                                                                                                                            |   |                           | 59,825    |   |                         |   | 98,057 |   |
|              Total      other assets                                                                                        |   |                           | 409,825   |   |                         |   | 553,057 |   |
|                                                                                                                                                                                         |   |                           |      |   |                         |   |   |   |
| Total      Assets                                                                                                                                                                            |   | $                              | 3,985,411 |   |                         | $      | 4,766,320 |   |

----

|        LIABILITIES      AND STOCKHOLDERS’ DEFICIT                                                                                                                                                            |   | March      31,2009(unaudited) |        |   | September      30,2008 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-------------|--------|------------------------|--------|
| CURRENT      LIABILITIES:                                                                                                                                                                                                    |   |                          |        |   |                   |   |
|   Accounts payable and      accrued liabilities                                                                                                                                                                    |   | $                             | 927,588     |   |                   | $      | 1,127,599 |   |
|   Revolving line of      credit                                                                                                                                                                                    |   |                          | 475,000     |   |                   |   | 500,000 |   |
|   Deferred      revenue                                                                                                                                                                                            |   |                          | 120,023     |   |                   |   | 102,680 |   |
|   Note Payable – Itau      Bank                                                                                                                                                                              |   |                          | 64,277      |   |                   |   | 32,257 |   |
|   Senior subordinated      secured convertible notes, net of unamortized discount    of $31,868      and $70,587 as of March 31, 2009 and September 30, 2008,      respectively                     |   |                          | 4,017,982   |   |                   |   | 3,979,263 |   |
|        Total Current      Liabilities                                                                                                                                                     |   |                          | 5,604,870   |   |                   |   | 5,741,799 |   |
|                                                                                                                                                                                                                         |   |                          |        |   |                   |   |   |   |
| LONG      TERM LIABILITIES:                                                                                                                                                                                                  |   |                          |        |   |                   |   |   |   |
|   Note Payable – Itau      Bank, net of current portion                                                                                                                                                      |   |                          | 6,912       |   |                   |   | 119,466 |   |
|                   Total Long Term      Liabilities                                                                                 |   |                          | 6,912       |   |                   |   | 119,466 |   |
|                 Total      liabilities                                                                                                       |   |                          | 5,611,782   |   |                   |   | 5,861,265 |   |
|                                                                                                                                                                                                                         |   |                          |        |   |                   |   |   |   |
| STOCKHOLDERS’      DEFICIT                                                                                                                                                                                             |   |                          |        |   |                   |   |   |   |
|                                                                                                                                                                                                                         |   |                          |        |   |                   |   |   |   |
| Preferred      stock, $0.01 par value - 1,000,000 shares authorized; none      issued                                                                                                                                        |   |                          | --          |   |                   |   | -- |   |
| Common      stock, $.01 par value - 30,000,000 shares authorized;      15,340,281  and 15,325,281      issued and outstanding  as of March 31, 2009 and  September 30, 2008,      respectively |   |                          | 153,402     |   |                   |   | 153,252 |   |
| Additional      paid-in capital                                                                                                                                                                                              |   |                          | 22,874,047  |   |                   |   | 22,867,507 |   |
| Accumulated      deficit                                                                                                                                                                                                     |   |                          | (24,297,348 | )      |                   |   | (23,925,977 | ) |
| Accumulated      other comprehensive loss-currency translation loss                                                                                                                                                          |   |                          | (266,835    | )      |                   |   | (100,090 | ) |
| Less      treasury stock at cost; 100,000 shares at March 31, 2009   and September 30,      2008, respectively.                                                                                                    |   |                          | (89,637     | )      |                   |   | (89,637 | ) |
| Total      Stockholders’ Deficit                                                                                                                                                                                       |   |                          | (1,626,371  | )      |                   |   | (1,094,945 | ) |
| Total      Liabilities and Stockholders’ Deficit                                                                                                                                                                       |   | $                             | 3,985,411   |   |                   | $      | 4,766,320 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                    |   | Three Months Ended |       |   | Six Months Ended   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|--------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                    |   | March      31,2009 |       |   | March      31,2008 |   |   | March      31,2009 |   |   | March      31,2008 |   |
| Net      Sales                                                                                                                                                                                                                                                                                                                                                                                          |   | $                  | 1,300,624  |   |               | $      | 1,793,465 |   |   | $ | 2,686,974 |   |   | $ | 3,333,311 |   |
| Cost      of Sales                                                                                                                                                                                                                                                                                                                                                                                      |   |               | 775,903    |   |               |   | 1,015,305 |   |   |   | 1,653,549 |   |   |   | 1,903,941 |   |
| Gross      Profit                                                                                                                                                                                                                                                                                                                                                                                       |   |               | 524,721    |   |               |   | 778,160 |   |   |   | 1,033,425 |   |   |   | 1,429,370 |   |
| Operating      Expenses:                                                                                                                                                                                                                                                                                                                                                                                |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|        Selling,      general and administrative                                                                                                                                                                                                                                                                                                                      |   |               | 572,963    |   |               |   | 590,882 |   |   |   | 1,194,184 |   |   |   | 1,167,246 |   |
|        Research      and development                                                                                                                                                                                                                                                                                                                                 |   |               | 16,437     |   |               |   | 50,515 |   |   |   | 39,394 |   |   |   | 91,593 |   |
|                 Total      operating expenses                                                                                                                                                                                                                                                                           |   |               | 589,400    |   |               |   | 641,397 |   |   |   | 1,233,578 |   |   |   | 1,258,839 |   |
|                 Total      operating income (loss) from continuing operations                                                                                                                                                                                                                                           |   |               | (64,679    | )      |               |   | 136,763 |   |   |   | (200,153 | ) |   |   | 170,531 |   |
| Other      income (expenses):                                                                                                                                                                                                                                                                                                                                                                           |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|        Interest      expense (net), including $19,517 and $17,626 for the   three months      ended March 31 2009 and 2008, respectively   and $38,719      and $36,197      for the six months ended    March 31,      2009 and 2008, respectively of      debt discount   amortization. |   |               | (98,418    | )      |               |   | (87,659 | ) |   |   | (198,264 | ) |   |   | (176,069 | ) |
|        Other      income                                                                                                                                                                                                                                                                                                                                             |   |               | 449        |   |               |   | 5,995 |   |   |   | 400 |   |   |   | 6,347 |   |
|        Gain      on sale of assets                                                                                                                                                                                                                                                                                                                                   |   |               | --         |   |               |   | -- |   |   |   | 43,117 |   |   |   | -- |   |
|                 Total      other expense                                                                                                                                                                                                                                                                                |   |               | (97,969    | )      |               |   | (81,664 | ) |   |   | (154,747 | ) |   |   | (169,722 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|       Net      income (loss), before income taxes, from continuing    operations                                                                                                                                                                                                                                                                                          |   |               | (162,648   | )      |               |   | 55,099 |   |   |   | (354,900 | ) |   |   | 809 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|       Income      Tax expense                                                                                                                                                                                                                                                                                                                                             |   |               | 223        |   |               |   | 27,030 |   |   |   | 16,471 |   |   |   | 56,578 |   |
|       Net      income (loss), from continuing operations                                                                                                                                                                                                                                                                                                                  |   |               | (162,871   | )      |               |   | 28,069 |   |   |   | (371,371 | ) |   |   | (55,769 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|       Income      from Discontinued Operations (includes a gain on sale of    assets      in the amount of $1,094,817 for the six months ended    March      31, 2008)                                                                                                                                                       |   |               | --         |   |               |   | -- |   |   |   | -- |   |   |   | 856,446 |   |
| Net      income (loss):                                                                                                                                                                                                                                                                                                                                                                                 |   | $                  | (162,871   | )      |               | $      | 28,069 |   |   | $ | (371,371 | ) |   | $ | 800,677 |   |
| Other      comprehensive loss, net of tax:                                                                                                                                                                                                                                                                                                                                                              |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustments                                                                                                                                                                                                                                                                                                                                                           |   |               | 19,849     |   |               |   | 13,393 |   |   |   | (166,745 | ) |   |   | 36,814 |   |
| Comprehensive      income (loss):                                                                                                                                                                                                                                                                                                                                                                       |   | $                  | (143,022   | )      |               | $      | 41,462 |   |   | $ | (538,116 | ) |   | $ | 837,491 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   |               |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (loss) per share, from continuing operations - Basic                                                                                                                                                                                                                                                                                                                                      |   | $                  | (0.01      | )      |               | $      | 0.00 |   |   | $ | (0.02 | ) |   | $ | 0.00 |   |
| Earnings      (loss) per share, from continuing operations - Diluted                                                                                                                                                                                                                                                                                                                                    |   | $                  | (0.01      | )      |               | $      | 0.00 |   |   | $ | (0.02 | ) |   | $ | 0.00 |   |
| Earnings      (loss) per share, from discontinued operations - Basic                                                                                                                                                                                                                                                                                                                                    |   | $                  | 0.00       |   |               | $      | 0.00 |   |   | $ | 0.00 |   |   | $ | 0.05 |   |
| Earnings      (loss) per share, from discontinued operations - Diluted                                                                                                                                                                                                                                                                                                                                  |   | $                  | 0.00       |   |               | $      | 0.00 |   |   | $ | 0.00 |   |   | $ | 0.05 |   |
| Earnings      (loss) per share - Basic                                                                                                                                                                                                                                                                                                                                                                  |   | $                  | (0.01      | )      |               | $      | 0.00 |   |   | $ | (0.02 | ) |   | $ | 0.05 |   |
| Earnings      (loss) per share - Diluted                                                                                                                                                                                                                                                                                                                                                                |   | $                  | (0.01      | )      |               | $      | 0.00 |   |   | $ | (0.02 | ) |   | $ | 0.05 |   |
| Weighed      average common shares used in calculation of   earnings (loss) per      share - Basic                                                                                                                                                                                                                                                                                       |   |               | 15,234,039 |   |               |   | 15,225,281 |   |   |   | 15,233,344 |   |   |   | 15,225,281 |   |
| Weighed      average common shares used in calculation of  earnings (loss) per      share – Diluted                                                                                                                                                                                                                                                                                     |   |               | 15,234,039 |   |               |   | 15,225,281 |   |   |   | 15,233,344 |   |   |   | 15,225,281 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Six      Months EndedMarch      31, |     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|----------|
| Cash      flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                              |   | 2009                                |     |   | 2008 |   |
| Net      Income      (Loss)                                                                   |   | $                                   | (371,370 | ) |   | $ | 800,677 |   |
| Adjustments      to reconcile net loss to net cash provided by operating      activities:                                                                                                                                                                                                                                                                                                                                               |   |                                |     |   |   |   |   |   |
|   Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                | 74,066   |   |   |   | 28,842 |   |
|   Amortization of      debt discount                                                                                                                                                                                                                                                                                                                                                                                          |   |                                | 38,719   |   |   |   | 36,198 |   |
|   (Gain) on sale      of assets                                                                                                                                                                                                                                                                                                                                                                                          |   |                                | (43,117  | ) |   |   | (838,907 | ) |
|   Provision for Bad      Debts                                                                                                                                                                                                                                                                                                                                                                                                |   |                                | 30,841   |   |   |   | (21,028 | ) |
|   Stock Based      Compensation                                                                                                                                                                                                                                                                                                                                                                                               |   |                                | 6,690    |   |   |   | 3,225 |   |
| Changes      in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                       |   |                                |     |   |   |   |   |   |
|   Accounts      receivable                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                | 157,033  |   |   |   | (116,444 | ) |
|   Prepaid expenses      and other current assets                                                                                                                                                                                                                                                                                                                                                                              |   |                                | 169,036  |   |   |   | 50,123 |   |
|   Inventories                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                | 159,173  |   |   |   | 540,275 |   |
|   Accounts payable      and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                  |   |                                | (200,011 | ) |   |   | (183,011 | ) |
|   Other      assets                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                | 38,232   |   |   |   | (3,680 | ) |
|   Deferred      revenue                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                | 17,342   |   |   |   | 8,592 |   |
|            Net      cash provided by operating activities                                                                                                                                                                                                                                                                                                                        |   |                                | 76,634   |   |   |   | 304,862 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |     |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                                                                                                                                                                                                                                                                                                                              |   |                                |     |   |   |   |   |   |
| Purchase      of property and equipment                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                | (111,848 | ) |   |   | (322,843 | ) |
| Proceeds      from sale of assets                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                | 51,805   |   |   |   | 4,090 |   |
| Payments      Received on Notes Receivable                                                                                                                                                                                                                                                                                                                                                                                              |   |                                | 105,000  |   |   |   | 70,000 |   |
|           Net      cash provided by (used in) investing activities                                                                                                                                                                                                                                                                                                                    |   |                                | 44,957   |   |   |   | (248,753 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |     |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                              |   |                                |     |   |   |   |   |   |
| Net      (payments) borrowings on Line of Credit                                                                                                                                                                                                                                                                                                                                                                                        |   |                                | (25,000  | ) |   |   | (56,769 | ) |
| Borrowings      on Notes – Itau Bank                                                                                                                                                                                                                                                                                                                                                                                              |   |                                | (80,534  | ) |   |   | 181,964 |   |
|           Net      cash provided by (used in) financing activities                                                                                                                                                                                                                                                                                                                    |   |                                | (105,534 | ) |   |   | 125,195 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |     |   |   |   |   |   |
| Effects      of foreign exchange rate                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                | (24,418  | ) |   |   | 27,110 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |     |   |   |   |   |   |
|                 Net      increase (decrease) in cash and cash equivalents                                                                                                                                                                                                                                                                               |   |                                | (8,361   | ) |   |   | 208,414 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |     |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                                                                                                                                                                                                                                                                                                                                                                                   |   |                                | 98,799   |   |   |   | 6,592 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                |     |   |   |   |   |   |
| Cash      and cash equivalents at end of      period                                                                                                                                                                                                               |   | $                                   | 90,438   |   |   | $ | 215,006 |   |
| Supplemental      disclosure of cash flow information:                                                                                                                                                                                                                                                                                                                                                                                  |   |                                |     |   |   |   |   |   |
|  Cash      paid during the period for      interest                                                                                                                                                                        |   | $                                   | 185,805  |   |   | $ | 164,211 |   |

----

----

----

|                                                                                            |   | Three      Months EndedMarch      31, |       |   | Six      Months EndedMarch      31, |   |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|--------|-------------------------------------|--------|
|                                                                                            |   | 2009                                  |       |   | 2008                                |   |   | 2009 |   |   | 2008 |   |
|                                                                                            |   |                                  |       |   |                                |   |   |   |   |   |   |   |
| Numerator:                                                                                      |   |                                  |       |   |                                |   |   |   |   |   |   |   |
|         Net      (loss) income                          |   | $                                     | (162,871   | )      |                                | $      | 28,069 |   |   | $ | (371,371 | ) |   | $ | 800,677 |   |
|                                                                                            |   |                                  |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                    |   |                                  |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|         Weighted      –average shares outstanding |   |                                  | 15,234,039 |   |                                |   | 15,225,281 |   |   |   | 15,233,344 |   |   |   | 15,225,280 |   |
|         Effect      of dilutive shares                  |   |                                  | --         |   |                                |   | -- |   |   |   | -- |   |   |   | -- |   |
|         Denominator      for diluted earnings per share |   |                                  | 15,234,039 |   |                                |   | 15,225,281 |   |   |   | 15,233,344 |   |   |   | 15,225,280 |   |
|                                                                                            |   |                                  |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Basic      Earnings per share                                                                   |   | $                                     | (0.01      | )      |                                | $      | 0.00 |   |   | $ | (0.02 | ) |   | $ | 0.05 |   |
| Diluted      Earnings per share                                                                 |   | $                                     | (0.01      | )      |                                | $      | 0.00 |   |   | $ | (0.02 | ) |   | $ | 0.05 |   |

|                                  |   | Three      Months EndedMarch      31, |      |   | Six      Months EndedMarch      31, |   |
|---------------------------------------|--------|---------------------------------------|-----------|--------|-------------------------------------|--------|
|                                  |   | 2009                                  |      |   | 2008                                |   |   | 2009 |   |   | 2008 |   |
|                                  |   |                                  |      |   |                                |   |   |   |   |   |   |   |
| Convertible      notes                |   |                                  | 5,399,800 |   |                                |   | 5,399,800 |   |   |   | 5,399,800 |   |   |   | 5,399,800 |   |
| Options      to purchase common stock |   |                                  | 2,465,903 |   |                                |   | 2,314,014 |   |   |   | 2,465,294 |   |   |   | 2,314,014 |   |
| Total      antidilutive instruments   |   |                                  | 7,865,703 |   |                                |   | 7,713,814 |   |   |   | 7,865,094 |   |   |   | 7,713,814 |   |

|                                                                           |   |  Shares |      |   | Weighted      average exercise price |   |   | Weighted      averagelife |   |
|--------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------------------------------|--------|--------|---------------------------|--------|
|                                                                           |   |         |      |   |                                 |   |   |                      |   |
| Options      outstanding – October 1, 2008                               |   |         | 2,464,014 |   |                                 | $      | 1.05   |                      |   |   | 2.36 |   |
|        Granted                              |   |         | 15,000    |   |                                 |   | 0.16   |                      |   |   | 4.69 |   |
|        Exercised                            |   |         | --        |   |                                 |   | --     |                      |   |   | -- |   |
|        Forfeited,      cancelled or expired |   |         | (16,000   | )      |                                 |   | 0.19   |                      |   |   | 3.78 |   |
| Options      outstanding – March 31, 2009                                |   |         | 2,463,014 |   |                                 | $      | 1.05   |                      |   |   | 1.87 |   |
| Options      exercisable – March 31, 2009                                |   |         | 2,304,347 |   |                                 | $      | 1.10   |                      |   |   | 1.77 |   |

----

|                         | Three      Months EndedMarch      31, | Six      Months EndedMarch      31, |
|------------------------------|---------------------------------------|-------------------------------------|
|                         |
|                         | 2009                                  | 2008                                | 2009 | 2008 |
| Dividend      yield          | --                                    | --                                  | -- | -- |
| Expected      volatility     | 105.2%                                | 95.10%                              | 95.1%      - 105.25% | 95.10% |
| Risk-free      interest rate | 1.67%                                 | 2.46%      - 3.16%                  | 1.67%      - 2.45% | 2.46%      - 3.16% |
| Expected      life in years  | 1.5                                   | 5                                   | 1.5 | 5 |

|                  |   | March      31,2009 |      |   | September      30,2008 |   |
|-----------------------|--------|--------------------|-----------|--------|------------------------|--------|
|                  |   |               |      |   |                   |   |
| Raw      Materials    |   | $                  | 1,315,085 |   |                   | $      | 1,385,253 |   |
| Work-in-process       |   |               | 211,690   |   |                   |   | 159,903 |   |
| Finished      goods   |   |               | 961,336   |   |                   |   | 1,018,609 |   |
|                  |   |               | 2,488,111 |   |                   |   | 2,563,765 |   |
| Less      reserves    |   |               | (610,235  | )      |                   |   | (526,716 | ) |
| Inventories,      net |   | $                  | 1,877,876 |   |                   | $      | 2,037,049 |   |

----

|                                                 |   | United*States |      |   | Brazil |   |      | Consolidated |   |
|------------------------------------------------------|--------|---------------|-----------|--------|--------|--------|-----------|--------------|--------|
| March      31, 2009:                                 |   |          |      |   |   |   |      |         |   |
|      Revenues               |   |          | 1,634,437 |   |   |   | 1,052,537 |         |   |   | 2,686,974 |   |
|      Long-lived      assets |   |          | 590,458   |   |   |   | 403,206   |         |   |   | 993,664 |   |
|                                                 |   |          |      |   |   |   |      |         |   |   |   |   |
| March      31, 2008:                                 |   |          |      |   |   |   |      |         |   |   |   |   |
|      Revenues               |   |          | 2,254,242 |   |   |   | 1,079,069 |         |   |   | 3,333,311 |   |
|      Long-lived      assets |   |          | 734,044   |   |   |   | 435,491   |         |   |   | 1,169,535 |   |

----

|                                                                                                |   | Three Months Ended |   |   | Six Months Ended   |   |
|-----------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                                                |   | March      31,2009 |   |   | March      31,2008 |   |   | March      31,2009 |   |   | March      31,2008 |   |
| Net      sales                                                                                      |   | $                  | 17,863 |   |               | $      | 154,079 |   |   | $ | 37,783 |   |   | $ | 371,240 |   |
| Costs      of sales                                                                                 |   |               | 17,863 |   |               |   | 154,079 |   |   |   | 37,783 |   |   |   | 410,967 |   |
| 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):                                                                       |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|       Other      Income (expense)                                     |   |               | --     |   |               |   | -- |   |   |   | -- |   |   |   | -- |   |
|       Gain      on Sale of Assets                                     |   |               | --     |   |               |   | -- |   |   |   | -- |   |   |   | 1,094,817 |   |
|            Total      other income (expense) |   |               | --     |   |               |   | -- |   |   |   | -- |   |   |   | 1,094,817 |   |
|                                                                                                |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|       Net      income (loss) before income taxes                      |   |               | --     |   |               |   | -- |   |   |   | -- |   |   |   | 856,446 |   |
|                                                                                                |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                 Income Tax                        |   |               | --     |   |               |   | -- |   |   |   | -- |   |   |   | -- |   |
| Net      income (loss) from discontinued operations                                                 |   |               | --     |   |               |   | -- |   |   |   | -- |   |   | $ | 856,446 |   |

|                  |   | March      31,2009 |            |
|-----------------------|--------|--------------------|-----------------|
| Raw      Materials    |   | $                  | 123,933         |   |
| Work-in-process       |   |               |        392 |   |
| Finished      goods   |   |               |  45,653    |   |
|                  |   |               | 169,978         |   |
| Less      reserves    |   |               | (40,226         | ) |
| Inventories,      net |   | $                  | 129,752         |   |

----

----

| · | 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 Analysts’ rotortechnology; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| · | Developing      and enhancing IFA kits. |
|--------|-----------------------------------------|

----

----

----

----

| Item      2.  | Unregistered Sales of Equity      Securities and Use ofProceeds. |
|--------------------|------------------------------------------------------------------|

| 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) |   |
|--------------------------|--------|------------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------|--------|
| January      1-31, 2009  |   |                                     | 11,227 |   |                                | $      | 0.15   |                                                                                                   |   |   | 11,227                                                                                                                        |   |   |   | - |   |
| February      1-28, 2009 |   |                                     | --     |   |                                |   | --     |                                                                                                   |   |   | --                                                                                                                            |   |   |   | - |   |
| March      1-31, 2009    |   |                                     | --     |   |                                |   | --     |                                                                                                   |   |   | --                                                                                                                            |   |   |   | - |   |
| Total                    |   |                                     | 11,227 |   |                                | $      | 0.15   |                                                                                                   |   |   | 11,227                                                                                                                        |   |   |   | - |   |

|   | (1) | Represents      shares of 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 States Code  |

----

|              |   |  Hemagen Diagnostics,      Inc.(Registrant)   |   |
|-------------------|--------|--------------------------------------------------------------|--------|
| May      14, 2009 |   | /s/ William      P.  Hales                         |   |
|              |   | William      P. Hales                                        |   |
|              |   | President      and Chief Executive Officer                   |   |
|              |   |                                                         |   |
|              |   |                                                         |   |
| May      14, 2009 |   | /s/Catherine      M. Davidson                                |   |
|              |   | Catherine      M. Davidson                                   |   |
|              |   | Principal      Financial Officer                             |   |