**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D. C. 20549**





**FORM
      10-KSB/A**




x
            Annual
                report under Section 13 or 15 (d) of the Securities Exchange Act
                of 1934
                for the fiscal year ended December 31,
                2004





o
            Transition
                report under Section 13 or 15 (d) of the Securities Exchange Act
                of 1934
                for the transition period from _____________to
                _____________





**Commission
      File Number: 000-50813**





**SAND
      HILL IT SECURITY ACQUISITION CORP.**


(Name
      of
      Small Business Issuer in Its Charter)




Delaware
              (State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            
            **20-0996152**
              (I.R.S.
                Employer
              Identification
                No.)**3000
                Sand Hill Road**
              **Building
                1, Suite 240**
              **Menlo
                Park, California**
              (Address
                of Principal Executive Offices)
            
            **94025**
              (Zip
                code)




**(650)
      926-7022**


(Issuer’s
      Telephone Number, Including Area Code)





Securities
      registered under Section 12(b) of the Exchange Act:


None


(Title
      of
      class)





S ecurities
      registered under Section 12(g) of the Exchange Act:


Units
      consisting of one share of Common Stock,


par
      value
      $.01 per share, and two Warrants


Common
      Stock, $.01 par value per share


Warrants
      to purchase shares of Common Stock


(Title
      of
      class)





Check
      whether the issuer: (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days. Yes
x   No
o





Indicate
      by checkmark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-B is not contained in this form, and will not be contained, to
      the
      best of registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. x








Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes x   No
o





State
      issuer’s revenues for its most recent fiscal year: None





The
      aggregate market value of the voting and non-voting stock held by non-affiliates
      of the registrant as of March 24, 2005, was approximately $20,632,200.
      For
      purposes of this computation, all executive officers, directors and 10%
      stockholders were deemed affiliates. Such a determination should not be
      construed as an admission that such executive officers, directors or 10%
      stockholders are affiliates.





As
      of
      March 24, 2005, 5,110,000 shares of common stock, par value $.01 per
      share,
      were issued and outstanding.





Transitional
      Small Business Disclosure Format: Yes o  No
x





















Sand
      Hill
      IT Security Acquisition Corp., a Delaware corporation (the “Company”), hereby
      amends, as set forth herein, the Company’s Annual Report on Form 10-KSB filed
      with the Securities and Exchange Commission on March 31, 2005 (the “Form
      10-KSB”). The item numbers and responses thereto are in accordance with the
      requirements of Form 10-KSB. All capitalized terms used and not otherwise
      defined herein shall have the meaning specified in the Form 10-KSB.

















PART
      II





ITEM
      7.
      FINANCIAL STATEMENTS


Report
      of
      Independent Registered Public Accounting Firm




















REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







To
      the
      Board of Directors and Shareholders of


Sand
      Hill
      IT Security Acquisition Corp.


Houston,
      Texas





We
      have
      audited the accompanying balance sheet of Sand Hill IT Security Acquisition
      Corp. (a corporation in the development stage) as of December 31, 2004, and
      the
      related statement of operations, stockholders’ equity and cash flows for the
      period from April 15, 2004 (inception) to December 31, 2004. These financial
      statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audit.





We
      conducted our audit in accordance with auditing standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company has determined that
      it
      is not required to have, nor were we engaged to perform, an audit of its
      internal control over financial reporting. An audit includes examining, on
      a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audit provides a
      reasonable basis for our opinion.


In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Sand Hill IT Security Acquisition
      Corp. at December 31, 2004, and the results of their operations and their cash
      flows for the period from April 15, 2004 (inception) to December 31, 2004 in
      conformity with accounting principles generally accepted in the United States
      of
      America.





As
      explained in Note 9 to the financial statements, the Company has restated the
      accompanying balance sheet to reflect the possible conversion of 821,589 shares
      of common stock.








/s/
      HEIN
& ASSOCIATES LLP


March
      15,
      2005


Houston,
      Texas








SAND
      HILL
      IT SECURITY ACQUISITION CORP.


(A
      Corporation in the Development Stage)


BALANCE
      SHEET




December
                31, 2004(Restated)ASSETSCurrent
                assets:Cash
            
            $
            783,133Treasury
                bill held in trust
            
            
            21,100,510Prepaid
                expenses
            
            
            132,131Total
                current assets
            
            
            22,015,774Total
                Assets
            
            $
            22,015,774LIABILITIES
                AND STOCKHOLDERS EQUITYCurrent
                Liabilities:Accounts
                payable and accrued expenses
            
            $
            15,772Total
                Liabilities
            
            
            15,772Common
                stock subject to possible conversion(821,589
                shares at conversion value)
            
            
            4,217,992Stockholders’
                Equity:Preferred
                stock, $0.01 par valueAuthorized
                5,000,000 shares; none issued
            
            
            —Common
                stock, $0.01 par valueAuthorized
                50,000,000 sharesIssued
                and outstanding, 5,110,000 shares
            
            
            51,100Additional
                paid-in capital
            
            
            17,780,817Deficit
                accumulated during the development stage
            
            
            (49,907
            )Total
                Stockholders’ Equity
            
            
            17,782,010Total
                Liabilities and Stockholders’ Equity
            
            $
            22,015,774




See
      accompanying notes to financial statements.








SAND
      HILL
      IT SECURITY ACQUISITION CORP.


(A
      Corporation in the Development Stage)


STATEMENT
      OF OPERATIONS




Period
                from
              April
                15, 2004
              (inception)
                to
              December
                31, 2004Formation
                and operating costs
            
            $
            (191,946
            )Operating
                loss
            
            $
            (191,946
            )Interest
                income
            
            
            142,039Net
                loss
            
            $
            (49,907
            )Weighted
                Average Shares Outstanding
            
            
            3,468,784Net
                Loss Per Share (Basic and Diluted)
            
            $
            (0.01
            )












See
      accompanying notes to financial statements.













SAND
      HILL
      IT SECURITY ACQUISITION CORP.


(A
      Corporation in the Development Stage)


STATEMENT
      OF CASH FLOWS




Period
                from
              April
                15, 2004
              (inception)
                to
              December
                31, 2004CASH
                FLOW FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (49,907
            )Accretion
                of treasury bill
            
            
            (75,510
            )Increase
                in prepaid expenses
            
            
            (132,131
            )Increase
                in accounts payable and accrued expenses
            
            
            15,772Compensation
                expense related to issuance of Advisory Board options
            
            
            2,447Net
                cash provided by (used in) operating activities
            
            
            (239,329
            )CASH
                FLOW FROM INVESTING ACTIVITIESPurchase
                of treasury bill in trust account
            
            
            (21,025,000
            )Net
                cash used in investing activities
            
            
            (21,025,000
            )CASH
                FLOW FROM FINANCING ACTIVITIESProceeds
                from sale of common stock to initial stockholders
            
            
            25,000Gross
                proceeds from public offering
            
            
            24,660,000Costs
                of public offering
            
            
            (2,637,538
            )Proceeds
                from stockholder loan
            
            
            40,000Repayment
                of stockholder loan
            
            
            (40,000
            )Net
                cash provided by financing activities
            
            
            22,047,462NET
                INCREASE IN CASH
            
            
            783,133CASH
                AT BEGINNING OF PERIOD
            
            
            —CASH
                AT END OF PERIOD
            
            $
            783,133







See
      accompanying notes to financial statements.










SAND
      HILL
      IT SECURITY ACQUISITION CORP.


(A
      Corporation in the Development Stage)


STATEMENT
      OF STOCKHOLDERS' EQUITY


Period
      from April 15, 2004 (inception) to December 31, 2004


(Restated)





Shares
            
            Amount
            
            Additional
              Paid-In
              Capital
            
            Deficit
              Accumulated
              During
              Development
              Stage
            
            TotalBalance,
                April 15, 2004 (inception)
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —Sale
                of 1,000,000 shares of common stock to initial stockholders at $0.025
                per
                share
            
            
            1,000,000
            
            $
            10,000
            
            $
            15,000
            
            
            
            
            $
            25,000Sale
                of 3,600,000 shares of common stock to public stockholders at $6.00
                per
                share, net of offering expenses of $2,637,5538
            
            
            3,600,000
            
            $
            36,000
            
            $
            18,926,462
            
            
            
            
            $
            18,962,462Sale
                pf 510,000 shares of common stock to underwriters at $6.00 per
                share
            
            
            510,00
            
            $
            5,100
            
            $
            3,054,900
            
            
            
            
            $
            3,060,00Amortization
                of Advisory Board Compensation
            
            
            
            
            
            
            
            $
            2,447
            
            
            
            
            $
            2,447Reduction
                of capital related to the common stock subject to possible conversion
              (821,589
                shares at conversion value)
            
            $
            —
            
            $
            —
            
            $
            (4,202,898
            )
            $
            —
            
            $
            (4,202,898
            )Increase
                in value of shares of common stock subject to possible
                conversion
              (821,589
                shares at conversion value)
            
            $
            —
            
            $
            —
            
            $
            (15,094
            )
            $
            —
            
            $
            (15,094
            )Net
                loss for the period April 15, 2004 (inception) to December 31,
                2004
            
            
            
            
            
            
            
            
            
            
            $
            (49,907
            )
            $
            (49,907
            )Balance,
                December 31, 2004
            
            $
            5,100,000
            
            $
            51,100
            
            $
            17,780,817
            
            $
            (49,907
            )
            $
            17,782,010





See
      accompanying notes to financial statements.










SAND
      HILL
      IT SECURITY ACQUISITION CORP.


(A
      Corporation in the Development Stage)


NOTES
      TO
      FINANCIAL STATEMENTS




1. ORGANIZATION,
      BUSINESS OPERATIONS




Sand
      Hill
      IT Security Acquisition Corp. was incorporated in Delaware on April 15, 2004
      as
      a blank check company whose objective is to merge with or acquire an operating
      business in the IT Security industry. The Company's initial stockholders'
      purchased 1,000,000 shares of common stock, $0.01 par value, for $25,000 on
      April 20, 2004.




The
      registration statement for the Company's initial public offering (the
      "Offering") was declared effective on July 26, 2004. The Company consummated
      the
      Offering on July 30, 2004 and received proceeds, net of the underwriters'
      discount, of $22,022,462. Subsequently, the underwriters exercised their over
      allotment option and the Company received an additional $2,861,100 in proceeds,
      net of the underwriters' discount. The Company's management has broad discretion
      with respect to the specific application of the net proceeds of the Offering,
      although substantially all of the net proceeds of the Offering are intended
      to
      be generally applied toward consummating a merger with or acquisition of an
      operating business in the IT security industry ("Business Combination"). There
      is no assurance that the Company will be able to successfully affect a Business
      Combination. An amount equal to $21,025,000 was deposited in an interest bearing
      trust account ("Trust Fund") until the earlier of (i) the consummation of its
      first Business Combination or (ii) liquidation of the Company. Under the
      agreement governing the Trust Fund, funds may only be invested in United States
      government securities with a maturity of 180 days or less. The trust fund
      balance has been invested in a United States Treasury Bill, which is accounted
      for as a trading security and is recorded at its market value of approximately
      $21,100,510 at December 31, 2004. The excess of market value over cost is
      included in interest income in the accompanying Statement of Operations. The
      remaining proceeds of the Offering may be used to pay for business, legal and
      accounting due diligence on prospective mergers or acquisitions and continuing
      general and administrative expenses.




The
      Company, after signing a definitive agreement for the merger with or acquisition
      of a target business, will submit such transaction for stockholder approval.
      In
      the event that stockholders owning 20% or more of the outstanding stock
      excluding, for this purpose, those persons who were stockholders immediately
      prior to the Offering, vote against the Business Combination, the Business
      Combination will not be consummated. All of the Company's stockholders prior
      to
      the Offering, including all of the officers and directors of the Company
      ("Initial Stockholders"), have agreed to vote their founding shares of common
      stock in accordance with the vote of the majority in interest of all other
      stockholders of the Company ("Public Stockholders") with respect to a Business
      Combination. After consummation of the Company's first Business Combination,
      these voting safeguards no longer apply.







With
      respect to the first Business Combination which is approved and consummated,
      any
      Public Stockholder who voted against the Business Combination may demand that
      the Company redeem his or her shares. The per share redemption price will equal
      the amount in the Trust Fund as of the record date for determination of
      stockholders entitled to vote on the Business Combination divided by the number
      of shares of common stock held by Public Stockholders at the consummation of
      the
      Offering. Accordingly, Public Stockholders holding 19.99% of the aggregate
      number of shares owned by all Public Stockholders may seek redemption of their
      shares in the event of a Business Combination. Such Public Stockholders are
      entitled to receive their per share interest in the Trust Fund computed without
      regard to the shares held by Initial Stockholders.




The
      Company's Certificate of Incorporation provides for the mandatory liquidation
      of
      the Company, without stockholder approval, in the event that the Company does
      not consummate a Business Combination within 18 months from the date of the
      consummation of the Offering (January 30, 2006), or 24 months from the
      consummation of the Offering (July 30, 2006) if certain extension criteria
      have
      been satisfied. In the event of liquidation, it is likely that the per share
      value of the residual assets remaining available for distribution (including
      Trust Fund assets) will be less than the initial public offering price per
      share
      in the Offering (assuming no value is attributed to the Warrants contained
      in
      the Units to be offered in the Offering as described in Note 3).




2. SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES




Basis
      of
      Presentation




The
      financial statements include the accounts of the Company. The Company commenced
      operations effective July 31, 2004. All activity through July 30, 2004, is
      related to the Company's formation and preparation of the Offering. The Company
      has selected December 31 as its fiscal year end.




Use
      of
      Estimates




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingencies at the date of the financial
      statements and the reported amounts of expenses during the reporting period.
      Actual amounts could differ from those estimates.




Cash
      Equivalents




The
      Company considers all highly liquid investments with original maturities of
      three months or less to be cash equivalents.







Concentration
      of Credit Risk




Financial
      instruments that potentially subject the Company to credit risk consist of
      cash
      and cash equivalents. The Company's policy is to limit the amount of credit
      exposure to any one financial institution and place investments with financial
      institutions evaluated as being creditworthy, or in short-term money market
      funds which are exposed to minimal interest rate and credit risk.




Income
      Taxes




The
      Company recognizes deferred tax assets and liabilities for the expected future
      tax consequences of events that have been recognized in the Company's financial
      statements or tax returns. Under this method, deferred tax assets and
      liabilities are determined based on the difference between the financial
      statement carrying amounts and the tax bases of assets and liabilities using
      enacted tax rates in effect in the years in which the differences are expected
      to reverse. At December 31, 2004, a deferred income tax asset relating to the
      Company's net operating loss is offset by a full valuation allowance based
      upon
      a lack of earnings history for the Company.




Earnings
      per Common Share




Basic
      earnings per share ("EPS") is computed by dividing net income applicable to
      common stock by the weighted average common shares outstanding during the
      period. Diluted EPS reflects the additional dilution for all potentially
      dilutive securities such as stock warrants.




Recently
      Issued Accounting Standards




In
      November 2002, the Financial Accounting Standards Board ("FASB") issued
      Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements
      for
      Guarantees, including Indirect Guarantees of Indebtedness of Others"
      (Interpretation No. 45"). Interpretation No. 45 elaborates on the existing
      disclosure requirements for most guarantees, including loan guarantees such
      as
      standby letters of credit. It also clarifies that at the time a company issues
      a
      guarantee, the company must recognize an initial liability for the fair market
      value of the obligations it assumes under that guarantee and must disclose
      that
      information in its interim and annual financial statements. The initial
      recognition and measurement provisions of Interpretation No. 45 apply on a
      prospective basis to guarantees issued or modified after December 31, 2002.
      Interpretation No. 45 did not have an effect on the financial statements.




In
      January 2003, the Financial Accounting Standard Board ("FASB") issued
      Interpretation No. 46 (FIN 46"), "Consolidation of Variable Interest Entities."
      FIN 46 clarifies the application of Accounting Research Bulletin No. 51,
      "Consolidated Financial Statements," and addresses consolidation by business
      enterprises of variable interest entities (more commonly known as Special
      Purpose Entities or SPE's). In December 2003, FASB issued FIN No. 46R which
      replaced FIN 46 and clarified ARB 51. This interpretation provides guidance
      on
      how to identify a variable interest entity and determine when the assets,
      liabilities, non-controlling interests and results of operations of a variable
      interest entity should be consolidated by the primary beneficiary. The primary
      beneficiary is the enterprise that will absorb a majority of the variable
      interest entity's expected losses or receive a majority of the expected residual
      returns as a result of holding variable interests. This FIN requires the
      consolidation of results of variable interest entities in which the Company
      is
      the primary beneficiary of the variable interest entity. The Company has not
      owned an interest in a variable interest entity that met the consolidation
      requirements and as such the adoption of FIN No. 46R did not have any effect
      on
      the financial condition, results of operations, or liquidity of the Company.
      Interests in entities acquired or created after December 31, 2003 will be
      evaluated based on FIN No. 46R criteria and consolidated, if required.







In
      December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based
      Compensation-Transition and Disclosure", an amendment of FASB Statement No.
      123
      ("SFAS 148"). SFAS 148 amends FASB Statement No. 123, "Accounting for
      Stock-Based Compensation", to provide alternative methods of transition for
      an
      entity that voluntarily changes to the fair value based method of accounting
      for
      stock-based employee compensation. It also amends the disclosure provisions
      of
      that Statement to require prominent disclosure about the effects on reported
      net
      income of an entity's accounting policy decisions with respect to stock-based
      employee compensation. Finally, this Statement amends Accounting Principles
      Board ("APB") Opinion No. 28, "Interim No. 28, "Interim Financial Reporting",
      to
      require disclosure about those effects in interim financial information. SFAS
      148 is effective for financial statements for fiscal years ending after December
      15, 2002. SFAS 148 did not have an effect on the financial
      statements.




Stock-Based
      Compensation. On December 16, 2004, the FASB issued Statement of Financial
      Accounting Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment"
      ("SFAS No. 123(R)"). SFAS No. 123(R) will require companies to measure all
      employee stock-based compensation awards using a fair value method and record
      such expense in the financial statements. In addition, the adoption of SFAS
      No.
      123(R) requires additional accounting and disclosure related to the income
      tax
      and cash flow effects resulting from share-based payment arrangements. For
      public entities that file as small business filers, SFAS No. 123(R) is effective
      beginning as of the first interim or annual reporting period that begins after
      December 15, 2005. There was no impact on the Company's basic financial
      statements resulting from the issuance of SFAS No. 123(R).




3. PUBLIC
      OFFERING




On
      July
      30, 2004, the Company sold 3,600,000 units ("Units") in a public offering,
      which
      included granting the underwriters' an over-allotment option to purchase up
      to
      an additional 540,000 Units. Subsequently, the underwriters exercised their
      over-allotment option and purchased an additional 510,000 shares. Each Unit
      consists of one share of the Company's common stock, $0.01 par value, and two
      Redeemable common stock Purchase Warrants ("Warrants"). Each Warrant will
      entitle the holder to purchase from the Company one share of common stock at
      an
      exercise price of $5.00 commencing on the later of the completion of a Business
      Combination or July 25, 2005 and expiring July 25, 2009. The Warrants will
      be
      redeemable by the Company at a price of $0.01 per Warrant upon 30 days' notice
      after the Warrants become exercisable, only in the event that the last sale
      price of the common stock is at least $8.50 per share for any 20 trading days
      within a 30 trading day period ending on the third day prior to the date on
      which notice of the redemption is given. In connection with the Offering, the
      Company issued an option for $100 to the underwriters' to purchase 270,000
      Units
      at an exercise price of $7.50 per Unit. The Units issuable upon exercise of
      this
      option are identical to those included in the Offering except that exercise
      price of the Warrants included in the Units is $6.65 per share.







4. COMMITMENT




The
      Company presently occupies office space provided by an Initial Stockholder.
      Such
      affiliate has agreed that, until the acquisition of a target business by the
      Company, it will make such office space, as well as certain office and
      secretarial services, available to the Company, as may be required by the
      Company from time to time. The Company has agreed to pay such affiliate $7,500
      per month for such services commencing on July 31, 2004.




5. NOTE
      PAYABLE




Sand
      Hill
      Security, LLC, an Initial Stockholder and affiliate of the officers and
      directors of the Company, entered into a revolving credit agreement with the
      Company in the amount of $60,000. Advances under the credit facility amounted
      to
      $40,000 during 2004. The loan was repaid out of the net proceeds of the
      Offering.




6. PREFERRED
      STOCK




The
      Company is authorized to issue 5,000,000 shares of preferred stock, par value
      $.01, with such designations, voting and other rights and preferences as may
      be
      determined from time to time by the Board of Directors as of December 31, 2004,
      no shares of preferred stock have been issued.




7. INVESTMENTS
      HELD IN TRUST




Investments
      held in trust as of December 31, 2004 is comprised of a zero coupon United
      States treasury bill with a face value of $21,124,800 purchased at a discount
      of
      99.53% due January 27, 2005. The investment is carried on the Company's
      financial statements at $20,100,510, which includes accreted interest of
      $75,510.




8. EARNINGS
      PER SHARE




The
      following table sets forth the computation of basic and diluted earnings per
      share as of December 31, 2004.









Shares
            
            Weighted
                Average
              Exercise
                Prices
            
            Weighted
              Average
              Fair
                ValueStock
                options outstanding at April 15, 2004
            
            
            —
            
            $
            —
            
            $
            —Options
                granted
            
            
            60,000
            
            
            4.75
            
            
            .98Options
                cancelled
            
            
            —
            
            
            —
            
            
            —Stock
                options outstanding at December 31, 2004
            
            
            60,000
            
            $
            4.75
            
            $
            .98Common
                shares authorized under the 2004 Stock Plan
            
            
            100,000Outstanding
                options
            
            
            (60,000
            )Outstanding
                grants
            
            
            —Options
                available for grant at December 31, 2004
            
            
            40,000Shares
                exercisable at December 31, 2004
            
            
            60,000
            
            $
            4.75




The
      weighted average remaining contractual life of options is 5 years.




9. RESTATEMENT




The
      balance sheet for December 31, 2004 has been restated to reclassify out of
      equity 821,519 shares of common stock subject to conversion in the amount of
      $4,217,992 to common stock subject to possible conversion in the accompanying
      balance sheet.







ITEM
        8A.
        CONTROLS AND PROCEDURES
 
 Under
        the
        supervision and with the participation of our management, including
        our chief executive officer and chief financial officer, we have evaluated
        the effectiveness of the design and operation of our disclosure controls
        and procedures as of December 31, 2004 (the "Evaluation Date"), and, based
        on
        their evaluation, our chief executive officer and chief financial officer
        have concluded that these controls and procedures were effective as of the
        Evaluation Date . However,
        in connection with the preparation of the Registration Statement on Form
        S-4
        related to the Agreement and Plan of Merger, dated as of October 26, 2005,
        by
        and among our company, St. Bernard Software, Inc. and Sand Hill Merger Corp.,
        we
        were advised by our independent registered accounting firm, Hein &
        Associates LLP (“Hein”) on December 13, 2005, that we may need to reclassify
        certain amounts in our financial statements from our stockholders’ equity to
        common stock subject to possible conversion. Hein based its conclusions upon
        a
        review of recently filed registration statements and periodic filings for
        other
        targeted acquisition companies similar to ourselves and their review of
        applicable accounting literature, and recommended that we make such
        reclassifications to reflect current practice in this area. We addressed
        this
        concern by determining to restate our financial statements to reflect this
        reclassification . There were no
        significant changes in our internal controls or in
        other factors that could significantly affect these controls subsequent to the
        Evaluation Date.







SIGNATURES
  In
        accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
        the
        registrant has duly caused this annual report on Form 10-KSB/A to be signed
        on
        its behalf by the undersigned thereto duly authorized.
  Sand
        Hill
        IT Security Acquisition Corp.
 (Registrant)
 
  Date:
        December 15, 2005    By:  /s/
        Humphrey P.
        Polanen
 Humphrey P. Polanen
 Chief Executive Officer