----

| Colorado                                                                | 84-1434313                                          |
|-------------------------------------------------------------------------|-----------------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) | (I.R.S.      Employer Identification      No.) |

----

| PART      I.  | FINANCIAL      INFORMATION                                                                                                | PAGE   |
|---------------|---------------------------------------------------------------------------------------------------------------------------|--------|
| Item      1.  | Financial      statements                                                                                                 |   |
|          |                                                                                                                      |   |
|          | Consolidated Balance Sheets – December 31, 2007 (unaudited) and      June 30, 2007                                  | 3      |
|          |                                                                                                                      |   |
|          | Unaudited Consolidated Statements of Operations – Six Months      and Three Months Ended December 31, 2007 and 2006 | 4      |
|          |                                                                                                                      |   |
|          | Unaudited Consolidated Statements of Cash Flows –      Six Months Months Ended December 31, 2007 and 2006           | 5      |
|          |                                                                                                                      |   |
|          | Notes      to Unaudited Consolidated Financial Statements                                                                 | 6-13   |
|          |                                                                                                                      |   |
| Item      2.  | Management's Discussion and Analysis or Plan of      Operations                                                           | 14-18  |
|          |                                                                                                                      |   |
| Item      3.  | Controls and Procedures                                                                                                   | 18     |
|          |                                                                                                                      |   |
| PART      II. | OTHER      INFORMATION                                                                                                    |   |
|          |                                                                                                                      |   |
| Item      1.  | Legal Proceedings                                                                                                         | 18     |
|          |                                                                                                                      |   |
| Item      2.  | Unregistered Sales of Securities and Use of      Proceeds                                                                 | 18     |
|          |                                                                                                                      |   |
| Item      3.  | Defaults      upon Senior Securities                                                                                      | 19     |
|          |                                                                                                                      |   |
| Item      4.  | Submission      of Matters to a Vote of Security Holders                                                                  | 20     |
|          |                                                                                                                      |   |
| Item      5.  | Other      Information                                                                                                    | 20     |
|          |                                                                                                                      |   |
| Item      6.  | Exhibits      and Reports on Form 8-K                                                                                     | 20     |
|          |                                                                                                                      |   |

----

XFormity Technologies, Inc. and Subsidiary

|                                                                                                                                                                          | December      31,                                                                                                                                                                                                                                                             |   | June      30,                                                        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|
|                                                                                                                                                                          | 2007                                                                                                                                                                                                                                                                          |   | 2007                                                                 |
| ASSETS                                                                                                                                                                        |                                                                                                                                                                                                                                                                          |   |                                                                 |
| Current      Assets                                                                                                                                                           |                                                                                                                                                                                                                                                                          |   |                                                                 |
| Cash      and cash equivalents                                                                                                                                                |    $              87,830                                                                                                                                                                 |   | $          216,834 |
| Accounts      receivable                                                                                                                                                      | 18,102                                                                                                                                                                                                                                                                        |   | 14,157                                                               |
| Prepaid      expenses                                                                                                                                                         | 70,691                                                                                                                                                                                                                                                                        |   | 17,469                                                               |
| Total      current assets                                                                                                                                                     | 176,623                                                                                                                                                                                                                                                                       |   | 248,460                                                              |
| Property      and equipment, net                                                                                                                                              | 42,750                                                                                                                                                                                                                                                                        |   | 39,455                                                               |
| Other      assets                                                                                                                                                             |   91,905                                                                                                                                                                                                                                                            |   | 12,998                                                               |
| Total      Assets                                                                                                                                                             |    $            311,278                                                                                                                                                                            |   | $        300,913             |
|                                                                                                                                                                          |                                                                                                                                                                                                                                                                          |   |                                                                 |
| LIABILITIES      AND STOCKHOLDERS’ DEFICIT                                                                                                                              |                                                                                                                                                                                                                                                                          |   |                                                                 |
| Current      Liabilities                                                                                                                                                      |                                                                                                                                                                                                                                                                          |   |                                                                 |
| Accounts      payable                                                                                                                                                         | $        1,671,839                                                                                                                                                                                                                    |   | $     1,729,711                             |
| Loan      payable                                                                                                                                                             | 100,000                                                                                                                                                                                                                                                                       |   | 100,000                                                              |
| Accrued      expenses                                                                                                                                                         | 95,516                                                                                                                                                                                                                                                                        |   | 55,444                                                               |
| Deferred      revenue                                                                                                                                                         | 75,055                                                                                                                                                                                                                                                                        |   | 63,823                                                               |
| Current      portion – deferred credits                                                                                                                                 | 13,419                                                                                                                                                                                                                                                                        |   | 13,089                                                               |
| Convertible      debentures- net of unamortized discount of beneficial conversion      feature                                                                                |  709,749                                                                                                                                                                                                                                                                 |   |  671,625                                                        |
| Total      Current Liabilities                                                                                                                                                | 2,665,578                                                                                                                                                                                                                                                                     |   | 2,633,692                                                            |
| Deferred      revenues-net of current portion                                                                                                                                 | 66,000                                                                                                                                                                                                                                                                        |   | 35,000                                                               |
| Deferred      credits-net of current portion                                                                                                                                  | 183,290                                                                                                                                                                                                                                                                       |   | 190,084                                                              |
| Total      liabilities                                                                                                                                                        | 2,914,868                                                                                                                                                                                                                                                                     |   | 2,858,776                                                            |
|                                                                                                                                                                          |                                                                                                                                                                                                                                                                          |   |                                                                 |
| Stockholders'      Deficit                                                                                                                                                    |                                                                                                                                                                                                                                                                          |   |                                                                 |
| Preferred      stock, $0.01 par value, 100,000,000 shares authorized, none issued and      outstanding at December 31, 2007 and June 30, 2007                                 |  -                                                                                                                                                                                                                                                                  |   |  -                                                              |
| Common      stock, $0.0001 par value, 125,000,000 shares authorized, 50,931,533 and      49,817,130 shares issued and outstanding at December 31, 2007 and June 30,      2007 |       5,093                                                                                                                                                                                                                                     |   | 4,982                                                                |
| Additional      paid-in capital                                                                                                                                               | 6,163,099                                                                                                                                                                                                                                                                     |   | 5,695,440                                                            |
| Accumulated      deficit                                                                                                                                                      |                                                 (8,771,782) |   |      (8,258,285)                            |
| Total      Stockholders' Deficit                                                                                                                                              |                                                 (2,603,590) |   | (2,557,863)                                                          |
| Total      Liabilities and Stockholders' Deficit                                                                                                                              | $           311,278                                                                                                                                                                                                    |   | $         300,913       |

----

|                                           |   |    (Unaudited)Three      Months EndedDecember 31,                                                                                                                                    |    (Unaudited)Six      Months EndedDecember 31,                                                                                                              |
|------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                           |   | 2007                                                                                                                                                                                                | 2006                                                                                                                                                                        |  2007 | 2006 |
|  Revenue                                  |   | $      352,011                                                                                                                                                        | $      249,488                                                                                                                                |  $      676,958 |  $      515,931 |
|  Cost      of revenue                     |   |          138,354                                                                                                                                       |          136,145                                                                                                               |  264,677 |  273,808 |
| Research      and development                  |   | 212,587                                                                                                                                                                                             | 74,323                                                                                                                                                                      |                                       296,645 |                                       175,884 |
|  Marketing      and selling               |   | 139,126                                                                                                                                                                                             | 83,773                                                                                                                                                                      |                                     196,611 |                                     145,471 |
| General      and administrative                |   |      205,169                                                                                                                                                               |      136,038                                                                                                                                       | 356,897 | 509,122 |
| Total      operating expenses                  |   | 695,236                                                                                                                                                                                             |      430,279                                                                                                                                       | 1,114,830 | 1,104,285 |
|  Loss      from operations                |   |                                     (343,225) |                                 (180,791) |  (437,872) |   (588,354) |
|  Interest      expense, net               |   |      (38,513)                                                                                                                                                              |      (214,087)                                                                                                                                     |                                     (75,625) |                                (396,743) |
| Loss      before provision for income taxes    |   | (381,738)                                                                                                                                                                                           | (394,878)                                                                                                                                                                   |      (513497) |      (985,097) |
| Provision      for income taxes                |   |                  -                                                                                             |                  -                                                                     |                  - |                  - |
| Net      loss                                  |   | $  (381,738)                                                                                                                                                                              | $  (394,878)                                                                                                                                                      | $    (513,497) | $    (985,097) |
|                                           |   |                                                                                                                                                                                                |                                                                                                                                                                        |   |   |
| Net      loss per share - basic                |   | $        (0.01)                                                                                                                                             | $        (0.01)                                                                                                                     | $         (0.01) | $         (0.02) |
|                                           |   |                                                                                                                                                                                                |                                                                                                                                                                        |   |   |
| Weighted      average number of shares - basic |   | 50,931,553                                                                                                                                                                                          | 40,078,337                                                                                                                                                                  | 50,531,814 | 40,078,337 |
|                                           |   |                                                                                                                                                                                                |                                                                                                                                                                        |   |   |

----

|                                                                                                                             | (Unaudited)                                                                                                                                                                                                                                                                                                                                             |
|----------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                             | Six Months Ended December    31,                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                             | 2007                                                                                                                                                                                                                                                                                                                                                    | 2006 |
| Operating      activities:                                                                                                       |                                                                                                                                                                                                                                                                                                                                                    |   |
| Net      loss                                                                                                                    | $                                            (513,497)                                                                                                    | $                                            (985,097) |
| Depreciation                                                                                                                     | 10,537                                                                                                                                                                                                                                                                                                                                                  | 12,060 |
| Non-cash      transactions for:                                                                                                  |                                                                                                                                                                                                                                                                                                                                                    |   |
|  Interest      charge for beneficial conversion feature in convertible      debentures                                      |                                                      38,124                                                  |                       340,359 |
|             Issuance      of common stock in payment of license fees | 15,659                                                                                                                                                                                                                                                                                                                                                  | - |
| Compensation      from share-based payment arrangements                                                                          |                                                    305,064                                                             |                                 - |
| Changes      in:                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                    |   |
| Accounts      receivable                                                                                                         |                                                  (3,945)                                                                         |                                                    9,629 |
| Prepaid      expenses                                                                                                            |                                                     1,921                                                         |                                                (23,765) |
| Other      assets                                                                                                                |                                                  12,998                                                                          |   |
|  Accounts      payable                                                                                                      |             (57,875)                                                                                                                                                                                                                                                                        |                                                    242,597 |
| Accrued      expenses                                                                                                            |                                                     40,072                                                        |                                                      47,086 |
|             Severance      liability                                 |                                                               - |                     (72,883) |
| Deferred      revenue                                                                                                            |                                                     42,233                                                        |              (22,539) |
| Deferred      credits                                                                                                            | (6,463)                                                                                                                                                                                                                                                                                                                                                 | (6,594) |
|                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                    |   |
| Net      cash used in operating activities                                                                                       |         (115,172)                                                                                                                                                                                                                                                                                               |         (459,147) |
|                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                    |   |
| Investing      activities:                                                                                                       |                                                                                                                                                                                                                                                                                                                                                    |   |
| Purchases      of property and equipment                                                                                         |              (13,832)                                                                                                                                                                                                                                                                  |              (2,908) |
| Net      cash used in investing activities                                                                                       |            (13,832)                                                                                                                                                                                                                                                                              |            (2,908) |
|                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                    |   |
| Financing      activities:                                                                                                       |                                                                                                                                                                                                                                                                                                                                                    |   |
| Loan      proceeds                                                                                                               |                       -                                                                                                                                                                                                                   |                       50,000 |
| Proceeds      from issuance of  convertible debentures                                                                 | -                                                                                                                                                                                                                                                                                                                                                       | 377,000 |
| Net      cash provided by financing activities                                                                                   | -                                                                                                                                                                                                                                                                                                                                                       |            427,000 |
|   Decrease      in cash and cash equivalents                                                                           |                      (129,004)                                                                                                                                                                                                                 |                      (35,055) |
| Cash      and cash equivalents, beginning of period                                                                              |                                                   216,834                                                              |                                                     74,309  |
| Cash      and cash equivalents, end of period                                                                                    | $                                                  87,830                                                              | $                                                  39,254  |
|                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                    |   |
| Supplemental      disclosure of cash-flow information                                                                            |                                                                                                                                                                                                                                                                                                                                                    |   |
|  Interest      paid                                                                                                         |   $                                                      193                                  |   $                                                     445 |
| Supplemental      disclosure of non-cash financing and investing activities                                                      |                                                                                                                                                                                                                                                                                                                                                    |   |
|  Issuance      of common stock in payment of deferred commission                                                            |  $                                               147,048                                                                              | $                                                        - |
| Additional      paid-in capital from beneficial conversion feature in convertible      debentures                                |   $                                                          -            | $                 207,416 |

----

Notes to Consolidated FinancialStatements

----

----

| Total deferred commission                                                      |             $                                                                147,048                  |
|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Long term portion of deferred commission in other      assets                  |             $                                                                  91,905       |
| Current portion of deferred commission in prepaid      expenses                |             $                                                                  36,762       |
| Amount of commission expensed in the three months      ended December 31, 2007 |              $                                                                  18,381 |

----

| Total other assets:                                           |                                                                                                                                                                                              |
|---------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Long term portion of deferred commission in other      assets |             $                   91,905 |

----

|                                                             | December 31,                                                                                                                                                                                                                                                                                                                          | June 30,                                                                                                                                                                                                                                                                                                                  |
|------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                             | 2007                                                                                                                                                                                                                                                                                                                                  | 2007                                                                                                                                                                                                                                                                                                                      |
| 401      (K) obligation                                          | $                                                          33,106 | $                                                        22,456 |
| Accrued      interest on convertible debentures and note payable |            54,819                                                                                                                                                                                                                                                              |           18,489                                                                                                                                                                                                                                                        |
| Other                                                            |              7,591                                                                                                                                                                                                                                                   |           14,499                                                                                                                                                                                                                                                        |
|      Totals                             | $                                                          95,516 | $                                                       55,444       |

----

----

|   Statement      of Operations        |                  |            |                  | Three      Months EndedDecember 31,                                                                                             | Six      Months EndedDecember 31,                                                            |
|-------------------------------------------------|-----------------------|-----------------|-----------------------|---------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
|                                            |                  | 2007            | 2006                  | 2007                                                                                                                            | 2006                                                                                         |
|                                            |                  |            |                  |                                                                                                                            |                                                                                         |   |   |
| Federal      income tax provision (benefit)     | $  (16,000) | $ (82,000) | $  (66,000) | $  (236,000)                                                                                                          |
|                                            |                  |            |                  |                                                                                                                            |                                                                                         |   |   |
| Total      provision (benefit) for income taxes | (117,000)             | (82,000)        | (167,000)             | (236,000)                                                                                                                       |
|                                            |                  |            |                  |                                                                                                                            |                                                                                         |   |   |
| Valuation      allowance                        |                  |            |                  |                          117,000 | 82,000                                                                                  |                               167,000 |      236,000 |
|                                            |                  |            |                  |                                                                                                                            |                                                                                         |   |   |
| Provision      for income tax                   |                  |            |                  | $              -                                     | $              -  | $              -  | $              -  |
|                                            |                  |            |                  |                                                                                                                            |                                                                                         |   |   |

| Balance      Sheet                                                     | December      31, 2007                                                                                                                                                                                     | June      30, 2007                                                                                                                                                         |
|------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Deferred      tax asset arising from net operating loss carry-forwards | $                                    1,956,000  | $                            1,890,000                       |
| Deferred      tax asset arising from share based compensation          |                 101,000                                                                                                    |                       -                                      |
|                                                                   |              2,057,000                                                                                                                    |         1,890,000                                                                                                                  |
| Valuation      allowance                                               |              (2,057,000)                                                                                                                  |         (1,890,000)                                                                                                                |
| Net      deferred tax asset                                            | $                                -                                  | $                                -  |

----

| For      the Six Months Ended December 31, | 2007 | 2006 |
|--------------------------------------------|------|------|

|                                                      |   Number      of Options                                                                                                                                                                           | Weighted      Average Exercise Price                                                                                                                                                                              |   Number      of Options                                                                                                                                                                     | Weighted      Average Exercise Price                                                                                                                                                                  |
|-----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Options      outstanding at beginning of period           |                                       25,000 |                                        $0.26 |                                      25,000 |                                    $0.26             |
|     Granted                           |                                  6,775,000                            |                                        $0.16 |           -                                                                                                                                          |           -                                                                                                                                         |
|     Exercised                         |           -                                                                                                                                                |           -                                                                                                                                                     |           -                                                                                                                                          |           -                                                                                                                                         |
|     Cancelled                         |  (25,000)                                                                                                                                                                                               |                                        $0.26 |           -                                                                                                                                          |           -                                                                                                                                         |
|     Forfeited                         |           -                                                                                                                                                |           -                                                                                                                                                     |           -                                                                                                                                          |           -                                                                                                                                         |
| Options      outstanding at end of  period      |  6,775,000                                                                                                                                                                                              | $0.16                                                                                                                                                                                                             |           25,000                                                                                                                                     |                                      $0.26 |
|                                                      |                                                                                                                                                                                                         |                                                                                                                                                                                                              |                                                                                                                                                                                                   |                                                                                                                                                                                                  |
| Non-Vested      shares outstanding at beginning of period |         -                                                                                                                                                            |             -                                                                                                                                         |        -                                                                                                                                                            |     -                                                                                                                                                                             |
|     Granted                           |                                  6,775,000                            |                                      $0.16             | -                                                                                                                                                                                                      | -                                                                                                                                                                                                     |
|     Vested                            |                                (2,258,334)                                      |                                   $0.16 |                                                                                                                                                                                                   |                                                                                                                                                                                                  |
|                                                      |                                                                                                                                                                                                         |                                                                                                                                                                                                              |                                                                                                                                                                                                   |                                                                                                                                                                                                  |
| Non-Vested      shares outstanding at end of period       |                                  3,516,666                            |                                        $0.16 |  -                                                                                                                                                                                                |  -                                                                                                                                                                                               |

----

----

| ITEM 2. | MANAGEMENT'S      DISCUSSION AND ANALYSIS OR PLAN OFOPERATIONS |
|---------|----------------------------------------------------------------|

----

----

|   Interest      expense                                                                         |                                                                                                                                            |                                        |                                                                                                                                                                          | Three      Months EndedDecember 31,                                                                                                                               | Six      Months EndedDecember 31,                                                                              |
|-----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                                                      |                                                                                                                                            | 2007                                        | 2006                                                                                                                                                                          | 2007                                                                                                                                                              | 2006                                                                                                           |
|                                                                                                      |                                                                                                                                            |                                        |                                                                                                                                                                          |                                                                                                                                                              |                                                                                                           |   |   |
| Accrued      interest on convertible debentures                                                           |                         $   16,415     | $           27,928 |                             $   32,831           |               $       52,071                                                           |
| Amortization      of the discount of the beneficial conversion feature in the convertible      debentures |                                                                                                                                            |                                        |                                                                                                                                                                          |                         19,062            |   182,999                                                                                            |                                   38,124 |                      340,359 |
| Accrued      interest on loan payable                                                                     |                             1,750 | 1,167                                       |                                  3,500 |                        1,167                                                 |
| Interest      incurred from the deferred credits issued to consortium      members                        |                                                                                                                                            |                                        |                                                                                                                                                                          |                           2,486 |   2,494                                                                                              |                                    4,987 |                          4,668 |
| Interest      income earned on cash and cash equivalents                                                  |                                                                                                                                            |                                        |                                                                                                                                                                          |                               (1,200)     |  (501)                                                                                                    |                                  (3,817) |  (1,522) |
| Net      interest expense                                                                                 |                                                                                                                                            |                                        |                                                                                                                                                                          |                        $    38,513                       |                     $  214,087 |                            $    75,625 |        $      396,743 |

----

| Net      loss                                  |   | $              (381,738)                                                                                                                                                | $            (394,878)                                                                                                                                                                                                                      |  $              (513,497)                                                                                                                            | $    (985,097)                                                                      |
|------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
| Add      back-share based compensation         |   |                                  305,064   |                                                  - |                                     305,064 |                  - |
| Net      loss                                  |   |                             $               (76,674) | $            (394,878)                                                                                                                                                                                                                      |                     $             (208,433)                | $    (985,097)                                                                      |
|                                           |   |                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                      |                                                                                                                                                                                              |                                                                                                    |
| Net      loss per share - basic                |   | $                    (0.00)                                                                                                               | $                  (0.01)                                                                                                                                                                                     | $                   (0.00)                                                                                                       | $         (0.02)                                           |
|                                           |   |                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                      |                                                                                                                                                                                              |                                                                                                    |
| Weighted      average number of shares - basic |   | 50,931,553                                                                                                                                                                                                      | 40,078,337                                                                                                                                                                                                                                                                | 50,531,814                                                                                                                                                                                        | 40,078,337                                                                                              |

The Company has incurred operating losses and negative cash flows fromoperations in each quarter since it commenced operations.  As ofDecember 31, 2007, there was an accumulated deficit of $8,771,782 and theCompany’s cash position is $87,830.  The Company does not expect togenerate operating earnings until it achieves a substantial customer base andrelated revenues necessary to cover its operational costs. The Company has beenreviewing capitalization alternatives, including various debt and equityinstruments and hopes to raise not less than $1,000,000 and not more than$5,000,000 in new capital over the next 12 months.  The use of fundsincludes operating capital for general corporate purposes, expansion of thesales, marketing and software development staff, and a strengthened balancesheet.  A reasonable resolution of the legal fees resulting from thepatent litigation lawsuit will have a direct significant effect on the Company'soperating results and the ability to raise capital as investors have stated thatthis is a significant impediment in their decision to invest in theCompany.  The Company will need additional financing and there is noassurance that such financing will be available, if at all, at terms acceptableto the Company.  If additional funds are raised by the issuance ofequity securities, existing stockholders may experience dilution of theirownership interests and these securities may have rights senior to those ofholders of the common stock.  If adequate funds are not available ornot available on acceptable terms, it could have a material adverse effect onthe Company's financial condition and results of operations.

----

LEGALPROCEEDINGS

UNREGISTERED SALES OFSECURITIES AND USE OF PROCEEDS

----

|           | Exhibits                                                                                                                                 |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------|
| 31.            | Certification                                                                                                                            |
|           |                                                                                                                                     |
| 32.            | Certification      pursuant to USC Section 1350                                                                                          |
|           |                                                                                                                                     |
|           | Reports on 8-K                                                                                                                           |
|   1. | Current      Report on Form 8-K, Item 3.02 and Item 5.02, dated December 12, 2007, as      filed with the Commission of December 18,2007 |

|                                                | XFormity      Technologies, Inc.                                                                                                                                           |
|-----------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |                                                                                                                                                                       |
| Date:  February 13 2008    | /s/ Christopher      Ball           Christopher      BallChief      Executive Officer                               |
| Date:  February      13, 2008   | /s/ Jack      Rabin                  Jack      RabinChief      Financial Officer |

----