----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**___________________________________**

**FORM      10-QSB**

**For      the quarterly period ended September 30, 2007**

**Commission      file number: 0-23391**

**XFORMITY      TECHNOLOGIES, INC.**

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

**                                4141      Blue Lake Circle, Dallas, Texas      75244**

**(972)      661-1200**

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| **PART                I.**  | **FINANCIAL                INFORMATION**                                                                                                      | PAGE      |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|-----------|
| **Item                1.**  | **Financial                statements**                                                                                                       |      |
|                        |                                                                                                                                          |      |
|                        | Consolidated                Balance Sheets – September 30, 2007 (Unaudited) and June 30,                2007                            | **3**     |
|                        |                                                                                                                                          |      |
|                        | Unaudited                Consolidated Statements of Operations - Three Months Ended September                30,                2007 and 2006 | **4**     |
|                        |                                                                                                                                          |      |
|                        | Unaudited                Consolidated Statements of Cash Flows - Three Months                Ended September 30, 2007 and 2006                | **5**     |
|                        |                                                                                                                                          |      |
|                        | Notes                to Unaudited Consolidated Financial Statements                                                                           | **6-10**  |
|                        |                                                                                                                                          |      |
| **Item                2.**  | **Management's                Discussion and Analysis or Plan of Operations**                                                                 | **10-12** |
|                        |                                                                                                                                          |      |
| **Item                3.**  | **Controls                and Procedures**                                                                                                    | **12**    |
|                        |                                                                                                                                          |      |
| **PART                II.** | **OTHER                INFORMATION**                                                                                                          |      |
|                        |                                                                                                                                          |      |
| **Item                1.**  | **Legal                Proceedings**                                                                                                          | **12**    |
|                        |                                                                                                                                          |      |
| **Item                2.**  | **Unregistered                Sales of Securities and Use of Proceeds**                                                                       | **12**    |
|                        |                                                                                                                                          |      |
| **Item                3.**  | **Defaults                upon Senior Securities**                                                                                            | **13**    |
|                        |                                                                                                                                          |      |
| **Item                4.**  | **Submission                of Matters to a Vote of Security Holders**                                                                        | **13**    |
|                        |                                                                                                                                          |      |
| **Item                5.**  | **Other                Information**                                                                                                          | **13**    |
|                        |                                                                                                                                          |      |
| **Item                6.**  | **Exhibits                and Reports on Form 8-K**                                                                                           | **13**    |
|                        |                                                                                                                                          |      |

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**XFormity      Technologies, Inc. and      Subsidiary**

**Consolidated      Balance Sheets**

**                                                                    **
**(**

|                                                                                                                                                                                                                                                             | September                30,                                                                                                                                                                                                                                                                                                            |   | June                30,                                              |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|
|                                                                                                                                                                                                                                                             | 2007                                                                                                                                                                                                                                                                                                                                    |   | 2007                                                                 |
| **ASSETS**                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| Current                Assets                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| Cash                and cash equivalents                                                                                                                                                                                                                         |    $        148,473                                                                                                                                                                                                                                                              |   | $          216,834 |
| Accounts                receivable                                                                                                                                                                                                                               |         11,115                                                                                                                                                                                                                                                                                  |   | 14,157                                                               |
| Prepaid                expenses                                                                                                                                                                                                                                  | 70,141                                                                                                                                                                                                                                                                                                                                  |   | 17,469                                                               |
| Total                current assets                                                                                                                                                                                                                              | 229,729                                                                                                                                                                                                                                                                                                                                 |   | 248,460                                                              |
| Property                and equipment, net                                                                                                                                                                                                                       | 43,264                                                                                                                                                                                                                                                                                                                                  |   | 39,455                                                               |
| Other                assets                                                                                                                                                                                                                                      |   114,093                                                                                                                                                                                                                                                                                                                     |   | 12,998                                                               |
| Total                Assets                                                                                                                                                                                                                                      |    $        387,086                                                                                                                                                                                                                                                              |   | $        300,913             |
|                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| **LIABILITIES                AND STOCKHOLDERS’ DEFICIT**                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| Current                Liabilities                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| Accounts                payable                                                                                                                                                                                                                                  | $        1,712,166                                                                                                                                                                                                                                                                              |   | $     1,729,711                             |
| Loan                payable                                                                                                                                                                                                                                      | 100,000                                                                                                                                                                                                                                                                                                                                 |   | 100,000                                                              |
| Accrued                expenses                                                                                                                                                                                                                                  | 75,678                                                                                                                                                                                                                                                                                                                                  |   | 55,444                                                               |
| Current                portion - deferred revenues                                                                                                                                                                                                               | 60,510                                                                                                                                                                                                                                                                                                                                  |   | 63,823                                                               |
| Current                portion – deferred credits                                                                                                                                                                                                          | 13,253                                                                                                                                                                                                                                                                                                                                  |   | 13,089                                                               |
| Convertible                debentures- net of unamortized discount of beneficial conversion                feature                                                                                                                                               |  690,687                                                                                                                                                                                                                                                                                                                           |   |  671,625                                                        |
| Total                Current Liabilities                                                                                                                                                                                                                         | 2,652,294                                                                                                                                                                                                                                                                                                                               |   | 2,633,692                                                            |
| Deferred                revenues – net of current portion                                                                                                                                                                                                  | 75,000                                                                                                                                                                                                                                                                                                                                  |   | 35,000                                                               |
| Deferred                credits - net of current portion                                                                                                                                                                                                         | 186,708                                                                                                                                                                                                                                                                                                                                 |   | 190,084                                                              |
| Total                liabilities                                                                                                                                                                                                                                 | 2,914,002                                                                                                                                                                                                                                                                                                                               |   | 2,858,776                                                            |
|                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| Stockholders'                Deficit                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                    |   |                                                                 |
| Preferred                stock, $0.01 par value, 100,000,000 shares authorized, none issued                and                outstanding at September 30, 2007 and June 30, 2007                                                                                |  -                                                                                                                                                                                                                                                                                                                            |   |  -                                                              |
| Common                stock, $0.0001 par value, 125,000,000 shares authorized, 50,931,553                shares                issued and outstanding at September 30, 2007 and 49,817,130 issued                and                outstanding at June 30, 2007 |                                                                    5,093 |   | 4,982                                                                |
| Additional                paid-in capital                                                                                                                                                                                                                        | 5,858,035                                                                                                                                                                                                                                                                                                                               |   | 5,695,440                                                            |
| Accumulated                deficit                                                                                                                                                                                                                               | (8,390,044)                                                                                                                                                                                                                                                                                                                             |   |      (8,258,285)                            |
| Total                Stockholders' Deficit                                                                                                                                                                                                                       | (2,526,916)                                                                                                                                                                                                                                                                                                                             |   | (2,557,863)                                                          |
| Total                Liabilities and Stockholders' Deficit                                                                                                                                                                                                       | $           387,086                                                                                                                                                                                                                                                              |   | $         300,913       |

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**   XFormity      Technologies, Inc. and Subsidiary**

**Consolidated      Statements of Operations**

|                                                                       | (Unaudited)                                                                                                                                                                                                                                                                                                                                                            |
|----------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                       | Three                  Months Ended September 30,                                                                                                                                                                                                                                                                                                                      |
|                                                                       | 2007                                                                                                                                                                                                                                                                                                                                                                   |   | 2006 |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                   |   |   |
| Revenue                                                                    | $                       324,947                                                                                                                                                                                                                                                                                                          |   | $                       266,443  |
| Cost                of revenue                                             |                                                                      126,322                  |   |                                                                          137,663 |
| Research                and development                                    |                                                                         84,058 |   |                                                                           101,561 |
| Marketing                and selling                                       |                                                                        57,485       |   |                                                                           61,698 |
| General                and administrative                                  |                                                                        151,728                     |   |                                                                           373,084 |
| Total                operating expenses                                    |                                                                        419,593                |   |                                                           674,006 |
| Loss                from operations                                        | (94,646)                                                                                                                                                                                                                                                                                                                                                               |   | (407,563) |
| Interest                expense, net                                       |                       (37,113)                                                                                                                                                                                                                                                                                                                     |   |                       (182,656) |
| Loss                before provision for income taxes                      | (131,759)                                                                                                                                                                                                                                                                                                                                                              |   | (590,219) |
| Provision                for income taxes                                  |                    -                                                                                                                                                                                                                                               |   |                    -  |
| Net                loss                                                    | $ (131,759)                                                                                                                                                                                                                                                                                                                                                       |   | $ (590,219) |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                   |   |   |
| Net                loss per share – basic and diluted                | $          (0.00)                                                                                                                                                                                                                                                                                                    |   | $          (0.01) |
|                                                                       |                                                                                                                                                                                                                                                                                                                                                                   |   |   |
| Weighted                average number of shares – basic and diluted |    50,132,076                                                                                                                                                                                                                                                                                                                                           |   |    40,078,337 |

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**        XFormity      Technologies, Inc. and Subsidiary**

**Consolidated      Statements of Cash Flows**

|                                                                                                                                       | (Unaudited)                                                                                                                                                                                                                                                                                                           |
|--------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                       | Three                Months Ended September 30,                                                                                                                                                                                                                                                                       |
|                                                                                                                                       | 2007                                                                                                                                                                                                                                                                                                                  | 2006 |
| Operating                activities:                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| Net                loss                                                                                                                    | $                                                         (131,759)                                      | $                                                         (590,219) |
| Depreciation                                                                                                                               | 5,084                                                                                                                                                                                                                                                                                                                 | 6,030 |
| Non-cash                transactions for:                                                                                                  |                                                                                                                                                                                                                                                                                                                  |   |
|  Interest                charge for beneficial conversion feature in convertible                debentures                            |                                                                19,062      |                       157,360 |
|             Issuance                of common stock in payment of license fees | 15,659                                                                                                                                                                                                                                                                                                                | - |
| Changes                in:                                                                                                                 |                                                                                                                                                                                                                                                                                                                  |   |
| Accounts                receivable                                                                                                         |                                                                 3,042 |                                                             (17,594) |
| Prepaid                expenses and other assets                                                                                           |                                                               (6,720)           |                                                                   (125) |
|  Accounts                payable                                                                                                      |             (17,546)                                                                                                                                                                                                                                      |                                                              219,569 |
| Accrued                expenses                                                                                                            | 20,234                                                                                                                                                                                                                                                                                                                |                        3,236 |
|             Severance                liability                                 |                                 -                                                                                                                     |                     (34,036) |
| Deferred                revenue                                                                                                            | 36,688                                                                                                                                                                                                                                                                                                                |              (9,470) |
| Deferred                credits                                                                                                            | (3,212)                                                                                                                                                                                                                                                                                                               | (3,501) |
|                                                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| Net                cash used in operating activities                                                                                       |         (59,468)                                                                                                                                                                                                                                                              |         (268,750) |
|                                                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| Investing                activities:                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| Purchases                of property and equipment                                                                                         |              (8,893)                                                                                                                                                                                                                                 |              (2,908) |
| Net                cash used in investing activities                                                                                       |            (8,893)                                                                                                                                                                                                                                             |            (2,908) |
|                                                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| Financing                activities:                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| Loan                proceeds                                                                                                               |                       -                                                                                                                                                                                 |                       50,000 |
| Proceeds                from issuance of  convertible debentures                                                                 | -                                                                                                                                                                                                                                                                                                                     | 352,000 |
| Net                cash provided by financing activities                                                                                   |            -                                                                                                                                                                                                                                                   |            402,000 |
|  (Decrease)                increase in cash and cash equivalents                                                                      |                      (68,361)                                                                                                                                                                                |                      130,342 |
| Cash                and cash equivalents, beginning of period                                                                              |                                                               216,834                |                                                                 74,309  |
| Cash                and cash equivalents, end of period                                                                                    | $                                                            148,473                           | $                                                            204,651  |
|                                                                                                                                       |                                                                                                                                                                                                                                                                                                                  |   |
| 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                      |   $                             -                                                                                                                          | $                   205,333 |

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**XFormity      Technologies, Inc. and Subsidiary**

**Notes      to Consolidated Financial Statements**

**September      30, 2007**

**(Unaudited)**

**Note      1 – Organization and Nature of Business.**

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**Note      2.    Basis of Financial Statement      Presentation.**

**Note      3.  Significant Accounting Policies.**

**Principles      of Consolidation**

**Use      of Estimates**

**Cash      and Cash Equivalents **

**Credit      Risk**

**Fair      Value of Financial Instruments**

**Revenue      Recognition**

*Software Revenue      Recognition*

**Deferred      Commission**

*Share-Based Payment*
*Accounting for Equity Instruments That Are Issued*
*To Other Than      Employees for Acquiring, or in Conjunction with Selling, Goods or Services      *

| **Total                deferred commission**                                                                 | **            $                   147,048**                             |
|--------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Long                term portion of deferred commission in other                assets**                   | **            $                   101,094**                             |
| **Current                portion of deferred commission in prepaid                expenses**                 | **            $                     36,762**                  |
| **Amount                of commission expensed in the three months ended September 30,                2007** |  **            $                       9,192** |

----

**Property      and Equipment**

**Software      Development Costs**

*Accounting for the Costs of Computer Software to be Sold, Leased or      Otherwise Marketed*

**Beneficial      Conversion Feature in Convertible Debentures**

*"Accounting for Convertible Securities with      Beneficial Conversion Features or Contingently Adjustable Conversion Ratios"      *
*"Application of Issue No. 98-5 to Certain      Convertible Instruments*

**Deferred      Credits**

**Note      4   Other Assets**

*Share-Based Payment*
*Accounting for Equity Instruments That Are Issued*
*To Other Than      Employees for Acquiring, or in Conjunction with Selling, Goods or Services      *

| **Security                deposit**                                                        | **            $                     12,998** |
|--------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Long                term portion of deferred commission in other                assets** | **            $                   101,096**            |
| **Total                other assets**                                                      | **            $                   114,094**            |

**Note      5   Accounts Payable**

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**Note      6    Other Current Liabilities**

**Loan      Payable**

**Accrued      Expenses**

|                                                      | **September                30,**                                                                                                                                                                                                                                                                                                         | **June                30,**                                                                                                                                                                                                                                                                                            |
|-----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                      | **2007**                                                                                                                                                                                                                                                                                                                                 | **2007**                                                                                                                                                                                                                                                                                                               |
| 401                (K) obligation                         | $                                                                 27,766            | $                                                              22,456            |
| Accrued                interest on convertible debentures |                                                                    36,654 |                                                  18,489           |
| Other                                                     |                                                                    11,258 |                                                                 14,499 |
| **     **Totals                  | $                                                                 75,678            | $                                                              55,444            |

**Note      7   Convertible Debentures**

*Debtor Accounting For a Modification or Exchange of Debt      Instrument.*

*"Accounting for Convertible Securities with Beneficial      Conversion Features or Contingently Adjustable Conversion      Ratios"*

----

**Note      8    Income Taxes**

*Accounting for Uncertainty in Income      Taxes, an interpretation of FASB Statement No. 109*

| **Statement                of Operations**                                        |                                                                                                                                                         |                                                                                                                                                                                      |
|-----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **For                the Three Months Ended September 30,**                       | **2007**                                                                                                                                                     | **2006**                                                                                                                                                                                  |
|     Federal                Income tax provision (benefit)     |       $(50,000)                                                                                                                |       $(154,000)                                                                                                                                            |
|     Total                provision (benefit) for income taxes |                                       (50,000) |                                          (154,000)           |
|     Valuation                allowance                        |                         50,000       |                                            154,000 |
|     Provision                for income tax                   |         $     -                                                                             |           $     -                                                                                              |

| **Balance                Sheet**                                                                          | **September                30,**                                                             | **June                30,**                                                                  |
|-----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
|                                                                                                      | **2007**                                                                                     | **2007**                                                                                     |
| Deferred                tax asset primarily arising from Net Operating Loss                Carry-forwards |  $  1,940,000                                                            |  $  1,890,000                                                            |
| Valuation                allowance                                                                        |    (1,940,000)                                                                |    (1,890,000)                                                                |
| Net                deferred tax asset                                                                     | $              -  | $              -  |

**Note      9    Loss per Share **

**Note      10   Stock Compensation**

*Share-Based Payment*

**Note      11     1999 Equity Incentive      Plan**

| **For                the Quarter Ended September 30,** | **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                                                |           - |           - |           - |           - |
|     Exercised                                              |           - |           - |           - |           - |
|     Forfeited                                              |           - |           - |           - |           - |
| Options                outstanding and exercisable at end of  period |        25,000              |       $0.26                     |        25,000              |     $0.26                                 |

----

**Note      12       Related Party      Transactions**

**Note      13    Commitments**

*Accounting for      Leases*

| **ITEM                2.** | **MANAGEMENT'S                DISCUSSION AND ANALYSIS OR PLAN OF                OPERATIONS** |
|----------------------------|----------------------------------------------------------------------------------------------|

**Safe      Harbour - Forward Looking Statements**

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**RESULTS      OF OPERATIONS**

**REVENUE**
*Software Revenue      Recognition,*
** **

**COST      OF REVENUE**

**RESEARCH      AND DEVELOPMENT**

**MARKETING      AND SELLING**

**GENERAL      AND ADMINISTRATIVE**

**INTEREST      EXPENSE**

| **Three                months ended September 30,**                                                                           | **2007**                                                                                                                                                                                                                                                                                            | **2006**                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Accrued                interest on convertible debentures                                                                     | $                                                         16,414                       | $                                                      24,143                                                 |
| Amortization                of the discount of the beneficial conversion feature in the convertible                debentures |                                                            19,062            |                                                       157,360                                                 |
| Accrued                interest on loan payable                                                                               |                                                              1,750 |                                                                - |
| Interest                incurred from the deferred credits issued to consortium                members                        |                                               2,501           |                                                           2,174                           |
| Interest                income earned on cash and cash equivalents                                                            |                                                             (2,614)     |                                                          (1,021)                               |
| Net                interest expense                                                                                           | $                                                          37,113                 | $                                                     182,656                                                      |

**NET      LOSS.  **

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**LIQUIDITY      AND CAPITAL RESOURCES**

A reasonable resolution of the legal fees resulting from      the patent      litigation lawsuit will have a direct significant effect on the Company's      operating results and the ability to raise capital as investors have

**Item  3.   Controls      and Procedures**

**PART      II - OTHER INFORMATION**

**ITEM      1.       LEGAL      PROCEEDINGS**

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

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**ITEM      3.      DEFAULT UPON SENIOR      SECURITIES**

**ITEM      4.      SUBMISSION OF MATTERS TO A VOTE OF      SECURITY HOLDERS**

**ITEM      5.     OTHER INFORMATION**

**ITEM      6.      EXHIBITS AND REPORTS ON Form      8-K**

|   | Exhibits                                                  |
|--------|-----------------------------------------------------------|
|   |                                                      |
| 31.    | Certification                                             |
|   |                                                      |
| 32.    | Certification                pursuant to USC Section 1350 |
|   |                                                      |

**SIGNATURES**

|                                                                         | **XFormity                Technologies, Inc.**                                                                                                                                                                          |
|------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                         |                                                                                                                                                                                                                    |
| Date:  November                14,                2007   | /s/                Christopher                Ball           Christopher                BallChief                Executive Officer                               |
| Date:  November                14, 2007                  | /s/                Jack                Rabin                  Jack                RabinChief                Financial Officer |

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