UNITED STATES
 SECURITIES
AND EXCHANGE COMMISSION


Washington
D.C. 20549




FORM
10-Q


(Mark
One)




x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the quarterly period ended March
31, 2009





 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the transition period from
_________________ to _________________




Commission
      File No.: 333-137210


ZEVOTEK,
INC.


(Exact
name of registrant as specified in its charter)





Delaware
            05-0630427(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer
              Identification
      No.)





134
Cedar Street


Nutley,
NJ 07110


(Address of principal
executive offices)





Issuer’s
telephone number:  (973) 667-4026


___________________




Check
whether the registrant filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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   ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).  Yes  ̈  No  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filter
               ̈
              
              Accelerated
      filter  ̈Non-accelerated
      filter
               ̈ (Do not check if
      a smaller reporting company)
              
              Smaller
      reporting company x




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




APPLICABLE
ONLY TO CORPORATE ISSUERS




As of
May  14, 2009, 114,092,373 shares of our common stock were
outstanding.




Transitional
Small Business Disclosure Format:    Yes   ̈
No   x







__________________


Quarterly
Report on Form 10-Q for the


Quarterly
Period Ended March 31, 2009





Table of
Contents





PagePART
      I. FINANCIAL INFORMATIONItem
      1. Financial StatementsCondensed
      Consolidated Balance Sheets as of March 31, 2009 (unaudited) and June 30,
      2007
                          3Condensed
      Consolidated Statements of Losses for the Three and Nine Months Ended
      March 31, 2009 and 2008 (unaudited):
                          4Condensed
      Consolidated Statement of Changes in Deficiency in Stockholders’ Equity
      for Period June 30, 2007 to March 31, 2009 (unaudited):
                          5Condensed
      Consolidated Statements of Cash Flows for the Nine Months Ended March 31,
      2009  and 2008 (unaudited):
                          6Notes
      to Condensed Consolidated Financial Statements March 31, 2009:
      (unaudited)
                          7Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
                          20Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
                          26Item
      4  Controls and Procedures
                          26PART
      II. OTHER INFORMATIONItem
      1. Legal Proceedings
                          27Item
      1A Risk Factor
                          27Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                          27Item
      3. Defaults upon Senior Securities
                          27Item
      4. Submission of matters to a vote of security holders
                          27Item
      5. Other information
                          27Item
      6. Exhibits
                          28CERTIFICATION
      PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002CERTIFICATION
      PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002CERTIFICATION
      PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002CERTIFICATION
      PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


2





PART
1:                 FINANCIAL
INFORMATION





ITEM
1 – FINANCIAL STATEMENTS





ZEVOTEK,
INC.


CONDENSED
CONSOLIDATED BALANCE SHEETS





March
      31,
                
                
                June
      30,2009
                
                
                2008(unaudited)ASSETSCurrent
      assets:Cash
                
                $
                494
                
                
                $
                6,755Other
      receivables
                
                
                30,345
                
                
                
                30,345Total
      current assets
                
                
                30,839
                
                
                
                37,100Other
      assets:Licensing
      agreement
                
                
                40,000
                
                
                
                -Total
      assets
                
                $
                70,839
                
                
                $
                37,100LIABILITIES
      AND DEFICIENCY IN STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
                
                $
                1,464,723
                
                
                $
                1,277,385Convertible
      notes payable and demand notes (net of debt discount of $362,826 and
      $300,964 as of March 31, 2009 and June 30, 2008,
    respectively
                
                
                9,176
                
                
                
                46,159Customer
      deposits
                
                
                24,351
                
                
                
                24,351Total
      current liabilities
                
                
                1,498,250
                
                
                
                1,347,895Long
      term debtConvertible
      notes payable
                
                
                139,626
                
                
                
                -Deficiency
      in stockholders' equity:Series
      A Preferred stock, $0.00001 par value; 10,000,000 shares authorized;
      50,000 shares issued and outstanding as of March 31, 2009 and June 30,
      2008
                
                
                1
                
                
                
                1Series
      B Preferred stock, $0.00001 par value; 1,000,000 shares authorized;
      1,000,000 shares issued and outstanding as of March 31, 2009 and June 30,
      2008
                
                
                10
                
                
                
                10Common
      stock, $0.00001 par value, 1,000,000,000 shares authorized; 75,418,193 and
      3,784,920 shares issued and outstanding as of March 31, 2009 and June 30,
      2008, respectively
                
                
                754
                
                
                
                38Additional
      paid in capital
                
                
                2,653,262
                
                
                
                2,013,381Accumulated
      deficit
                
                
                (4,221,064
                )
                
                
                (3,324,225
                )Total
      deficiency in stockholders' equity
                
                
                (1,567,037
                )
                
                
                (1,310,795
                )Total
      liabilities and deficiency in stockholders' equity
                
                $
                70,839
                
                
                $
                37,100





The
accompanying notes are an integral part of the unaudited condensed consolidated
financial statements





3





ZEVOTEK,
INC


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)





Three
      months ended March 31,
                
                
                Nine
      months ended March 31,2009
                
                
                2008
                
                
                2009
                
                
                2008REVENUES:Sales
                
                $
                -
                
                
                $
                348,114
                
                
                $
                -
                
                
                $
                349,926Cost
      of sales
                
                
                -
                
                
                
                197,977
                
                
                
                -
                
                
                
                198,577Gross
      profit
                
                
                -
                
                
                
                150,137
                
                
                
                -
                
                
                
                151,349OPERATING
      EXPENSES:Selling,
      general and administrative
                
                
                98,611
                
                
                
                269,272
                
                
                
                418,677
                
                
                
                1,760,634Loss
      from operations
                
                
                (98,611
                )
                
                
                (119,135
                )
                
                
                (418,677
                )
                
                
                (1,609,285
                )OTHER
      INCOME (EXPENSE):Interest,
      net
                
                
                (14,448
                )
                
                
                (27,072
                )
                
                
                (37,572
                )
                
                
                (27,072
                )Amortization
                
                
                (354,447
                )
                
                
                -
                
                
                
                (440,590
                )
                
                
                -Net
      loss before provision for income taxes
                
                
                (467,506
                )
                
                
                (146,207
                )
                
                
                (896,839
                )
                
                
                (1,636,357
                )Income
      taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -NET
      LOSS
                
                $
                (467,506
                )
                
                $
                (146,207
                )
                
                $
                (896,839
                )
                
                $
                (1,636,357
                )Net
      loss per common share, basic and fully diluted
                
                $
                (0.01
                )
                
                $
                (0.06
                )
                
                $
                (0.04
                )
                
                $
                (0.81
                )Weighted
      average number of common shares outstanding, basic and fully
      diluted
                
                
                36,543,621
                
                
                
                2,322,157
                
                
                
                20,414,783
                
                
                
                2,025,322





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements





4





ZEVOTEK,
INC.


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)


For
the period from June 30, 2007 to March 31, 2009


(Unaudited)





Preferred stock
                    
                    
                    
                    
                    
                    AdditionalSeries A
                    
                    
                    Series B
                    
                    
                    Common stock
                    
                    
                    Paid
      in
                    
                    
                    AccumulatedShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    TotalBALANCE,
      June 30, 2007
                    
                    
                    50,000
                    
                    
                    $
                    1
                    
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    
                    1,430,260
                    
                    
                    $
                    14
                    
                    
                    $
                    814,834
                    
                    
                    $
                    (1,298,416
                    )
                    
                    $
                    (483,567
                    )Common
      stock issued for services rendered
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,994,780
                    
                    
                    
                    20
                    
                    
                    
                    845,540
                    
                    
                    
                    -
                    
                    
                    
                    845,560Fair
      value of Beneficial conversion feature
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    314,049
                    
                    
                    
                    
                    
                    
                    
                    314,049Conversion
      of debt for Series B Preferred stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,000,000
                    
                    
                    
                    10
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    21,018
                    
                    
                    
                    
                    
                    
                    
                    21,028Conversion
      of debt for common stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    359,880
                    
                    
                    
                    4
                    
                    
                    
                    17,940
                    
                    
                    
                    
                    
                    
                    
                    17,944Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (2,025,809
                    )
                    
                    
                    (2,025,809
                    )Balance,
      June 30, 2008
                    
                    
                    50,000
                    
                    
                    
                    1
                    
                    
                    
                    1,000,000
                    
                    
                    
                    10
                    
                    
                    
                    3,784,920
                    
                    
                    
                    38
                    
                    
                    
                    2,013,381
                    
                    
                    
                    (3,324,225
                    )
                    
                    
                    (1,310,795
                    )Common
      stock issued for services rendered
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    883,334
                    
                    
                    
                    9
                    
                    
                    
                    79,991
                    
                    
                    
                    -
                    
                    
                    
                    80,000Common
      stock issued for previously incurred debt
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,553,939
                    
                    
                    
                    15
                    
                    
                    
                    6,135
                    
                    
                    
                    -
                    
                    
                    
                    6,150Common
      stock issued for licensing agreement
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    50,000,000
                    
                    
                    
                    500
                    
                    
                    
                    39,500
                    
                    
                    
                    -
                    
                    
                    
                    40,000Conversion
      of debt for common stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    19,196,000
                    
                    
                    
                    192
                    
                    
                    
                    11,803
                    
                    
                    
                    -
                    
                    
                    
                    11,995Fair
      value of Beneficial conversion feature
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    502,452
                    
                    
                    
                    -
                    
                    
                    
                    502,452Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (896,839
                    )
                    
                    
                    (896,839
                    )BALANCE,
      March 31, 2009
                    
                    
                    50,000
                    
                    
                    $
                    1
                    
                    
                    
                    1,000,000
                    
                    
                    $
                    10
                    
                    
                    
                    75,418,193
                    
                    
                    $
                    754
                    
                    
                    $
                    2,653,262
                    
                    
                    $
                    (4,221,064
                    )
                    
                    $
                    (1,567,037
                    )





The
accompanying notes are an integral part of the unaudited condensed consolidated
financial statements





5





ZEVOTEK,
INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)





Nine
      months ended March 31,2009
                
                
                2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                
                $
                (896,839
                )
                
                $
                (1,636,357
                )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Common
      stock issued in exchange for services rendered
                
                
                80,000
                
                
                
                748,508Amortization
      of debt discount
                
                
                440,590
                
                
                
                -Other
      receivable allowances
                
                
                
                
                
                
                (27,761
                )Decrease
      in:Accounts
      receivable
                
                
                -
                
                
                
                822Other
      assets
                
                
                -
                
                
                
                10,789Increase
      in:Accounts
      payable and accrued expenses
                
                
                205,988
                
                
                
                599,034Customer
      deposits
                
                
                -
                
                
                
                10,456Net
      cash used in operating activities:
                
                
                (170,261
                )
                
                
                (294,509
                )CASH
      FLOWS FROM INVESTING ACTIVITIES:
                
                
                -
                
                
                
                -CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from related party loans
                
                
                164,000
                
                
                
                299,000Net
      cash provided by financing activities
                
                
                164,000
                
                
                
                299,000Net
      (decreases) increase in cash and cash equivalents
                
                
                (6,261
                )
                
                
                4,491Cash
      and cash equivalents, beginning of period
                
                
                6,755
                
                
                
                89Cash
      and cash equivalents, end of period
                
                $
                494
                
                
                $
                4,580SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW:Interest
      paid
                
                $
                -
                
                
                $
                -Taxes
      paid
                
                $
                -
                
                
                $
                -Common
      stock issued for services rendered
                
                $
                80,000
                
                
                $
                748,508Common
      stock issued in exchange for debt
                
                $
                6,150
                
                
                $
                -Common
      stock issued for licensing agreement
                
                $
                40,000
                
                
                $
                -





The
accompanying notes are an integral part of the unaudited condensed consolidated
financial statements





6





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES





A summary
of the significant accounting policies applied in the preparation of the
accompanying unaudited condensed consolidated financial statements
follows.





Business and Basis of
Presentation





ZEVOTEK,
INC. (“Company” or “Registrant”) was organized on December 19, 2005 under the
state laws of Delaware with an original name of “The Diet Coffee Company.” On
March 1, 2006, the Company changed its name Diet Coffee Inc, and on June 25,
2008 to the current existing name.





The
Company’s wholly-owned subsidiary is Ionic Bulb.com, Inc (Ionic Bulb) which was
formerly named Zevotek, Inc. Through its subsidiary, it markets and sells a
range of home care and household products. In May 2007, the Company entered into
a license agreement to sell an energy saving compact fluorescent light bulb
named the Ionic Bulb. In July 2008, this license agreement was terminated
although Mr. Ryu allowed the license to continue on non-exclusive basis. In
February 2009, a new exclusive license and sales agreement was executed to sell
the same Ionic Bulb product. Please see Note D for details. The Company plans to
market the Ionic Bulb through TV infomercials, catalogs, magazines and major
U.S. retail and specialty stores and our websites www.ionic-bulb.com and www.zevo-tek.com.





General





The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.





In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The unaudited
condensed consolidated financial statements include the accounts of the
Registrant and its wholly-owned subsidiary, Ionic Bulb.com, Inc. The Registrant
formed its Ionic Bulb.com, Inc. subsidiary on August 21, 2007 and started its
operations during the fiscal year ending June 30, 2008. All significant
inter-company transactions and balances have been eliminated in
consolidation.





The
company has adopted the fiscal year end of June 30.





Interim
Statements





The
unaudited condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information.  As such, the unaudited condensed consolidated financial
statements do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.  In the opinion of management, all adjustments considered
necessary for a fair presentation have been included and these adjustments are
of a normal recurring nature.  These unaudited condensed consolidated
financial statements should be read in conjunction with the financial statements
for the year ended on June 30, 2008 on Form 10-KSB of the Company, as filed with
the Securities and Exchange Commission.  The results of operations for
the nine months ended March 31, 2009 are not necessarily indicative of the
results for the full fiscal year ending June 30, 2009.





Reverse Stock
Split





Effective
June 25, 2008, the Company authorized for its common stock a 50:1 reverse stock
split. Also, par value for the Preferred Stock and Common stock was changed to
$.00001 per share. All preferred and common stock and related information have
been retroactively restated.





7





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





Revenue
Recognition





The
Company recognizes revenue from product sales in accordance with Staff
Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"), which superseded
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
("SAB101"). SAB 104 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgment regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product was not delivered
or is subject to refund until such time that the Company and the customer
jointly determine that the product has been delivered or no refund will be
required.





Consideration Paid to
Customers





The
Company offers our customers certain incentives in the form of cooperative
advertising arrangements, product markdown allowances, trade discounts, cash
discounts, and slotting fees. We account for these incentives in accordance with
Emerging Issues Task Force Issue No. 0 1-9, Accounting for Consideration Given
by a Vendor to a Customer, ("EITF 0 1-9"). Markdown allowances, trade discounts,
cooperative advertising program participation and cash discounts are all
recorded as reductions of net sales. No customer incentives are included in
sales for the nine months ended March 31, 2009 and 2008.





Use of
Estimates





The
preparation of the financial statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.





Foreign Currency
Translation





The
Company translates the foreign currency financial statements in accordance with
the requirements of Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation." Assets and liabilities are translated at current exchange
rates, and related revenue and expenses are translated at average exchange rates
in effect during the period. Resulting translation adjustments are recorded as a
separate component in stockholders' equity. Foreign currency translation gains
and losses are included in the statement of operations.





Cash and Cash
Equivalents





For the
purpose of the accompanying financial statements, all highly liquid investments
with a maturity of three months or less are considered to be cash
equivalents.





Inventories / Cost of Goods
Sold





The
Company has adopted a policy to record inventory at the lower of cost or market
determined by the first-in-first-out method. The elements of cost that comprise
inventory and cost good sold are FOB shipping point costs, freight and
destination charges, customs and importation fees and taxes, customer broker
fees (if any) and other related costs. Warehousing costs are charged to cost of
goods in the period the costs are incurred. The Company provides inventory
allowances based on estimates of obsolete inventories.





8





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2008


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





Inventories
consist of finished products available for sale to distributors and customers.
At March 31, 2009 and June 30, 2008 Finished Goods inventory was
$0.





Allowance for doubtful
accounts





The
Company maintains an allowance for doubtful accounts to reduce amounts to their
estimated realizable value, including reserves for customer and other receivable
allowances and incentives. In estimating the provision for doubtful accounts,
the company considers a number of factors including age of the accounts
receivable, trends and ratios involving the age of the accounts receivable and
the customer mix of each aging categories. As of March 31, 2009 and June 30,
2008 the allowance for doubtful accounts was $0.





Property and
Equipment





Property
and equipment are stated at cost. When retired or otherwise disposed, the
related carrying value and accumulated depreciation are removed from the
respective accounts and the net difference less any amount realized from
disposition, is reflected in earnings. For financial statement purposes,
property and equipment would be recorded at cost and depreciated using the
straight-line method over their estimated useful lives.





Impairment of Long-Lived
Assets





The
Company has adopted Statement of Financial Accounting Standards No. 144 (SFAS
144). The Statement requires that long-lived assets and certain identifiable
intangibles held and used by the Company be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted discounted cash flows. Should impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less disposal
costs.





Advertising





The
Company follows SOP 93-7 whereby charging the costs of advertising to expenses
as incurred. The Company charged to operations $0, for the three and nine months
ended March 31, 2009, and $0 and $1,738 for the three and nine months ended
March 31, 2008, respectively.





Comprehensive
Income





Statement
of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive
Income," establishes standards for reporting and displaying of comprehensive
income, its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments by
owners and distributions to owners. Among other disclosures, SFAS 130 requires
that all items that are required to be recognized under current accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as financial statements.
The Company does not have any items of comprehensive income in the period
presented.





9





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





Income
Taxes





The
Company has adopted Financial Accounting Standards No. 109 ("SFAS 109") which
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statement or tax returns. Under this method, deferred tax liabilities and assets
are determined based on the difference between financial statements and the tax
basis of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. Temporary differences between
taxable income reported for financial reporting purposes and income tax purposes
are insignificant.





In June
2006, the FASB issued FASB Interpretation No. 48,Accounting for Uncertainty in
Income Taxes-an interpretation of FASB Statement No. 109("FIN 48"). FIN
48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guidance on
derecognition, classification, treatment of interest and penalties, and
disclosure of such positions. Effective August 1, 2007, the Company adopted the
provisions of FIN 48, as required. As a result of implementing FIN 48, there has
been no adjustment to the Company’s financial statements and the adoption of FIN
48 did not have a material effect on the Company’s consolidated financial
statements for the nine months ended March 31, 2009.





Research and
Development





The
Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs."
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and development costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. The Company had no
expenditures on research and product development for nine months ended March 31,
2009 and 2008, respectively.





Segment
Information





The
Company has adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS 131")
in the years ended December 31, 2001 and subsequent years. SFAS 131 establishes
standards for reporting information regarding operating segments in annual
financial statements and requires selected information for those segments to be
presented in interim financial reports issued to stockholders. SFAS 131 also
establishes standards for related disclosures about products and services and
geographic areas. Operating segments are identified as components of an
enterprise about which separate discrete financial information is available for
evaluation by the chief operating decision maker, or decision making group, in
making decisions on how to allocate resources and assess
performance.





Stock Based
Compensation





In
December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123.” This statement
amended SFAS 123, “Accounting for Stock-Based Compensation,” to provide
alternative methods of transition for a voluntary charge to the fair value based
method of accounting for stock-based employee compensation. In addition, this
statement amended the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. Effective for the period ended June 30, 2006
the Company has adopted SFAS 123 (R) which supersedes APB Opinion No. 25,
“Accounting for Stock Issued to Employees” and eliminates the intrinsic value
method that was provided in SFAS 123 for accounting of stock- based compensation
to employees. The Company made no employee stock-based compensation grants
before June 30, 2007 and during the nine months ended March 31, 2009 and 2008;
therefore has no unrecognized stock compensation related liabilities or expense
unvested or vested.





10





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





Loss per
Share





The
Company follows Statement of Financial Accounting Standards No. 128 (“SFAS No.
128”) “Earnings per Share”. Basic and diluted earnings (loss) per share amounts
are computed based on net income (loss) divided by the weighted average number
of common shares outstanding. The assumed exercise of 5,700 of stock options was
not included in the computation of diluted loss per share because the assumed
exercises would be anti-dilutive for the periods presented.





Concentration of Credit
Risk





Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash, cash equivalents and
trade receivables. The Company places its cash and temporary cash investments
with high credit quality institutions. At times, such investments may be in
excess of the FDIC insurance limit.





Reclassifications





Certain
reclassifications have been made in prior year's financial statements to conform
to classifications used in the current year.





Recent accounting
pronouncements





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities.”  SFAS 159 permits
entities to choose to measure many financial instruments, and certain other
items, at fair value.  SFAS 159 applies to reporting periods beginning
after November 15, 2007. The adoption of SFAS 159 is not expected to have a
material impact on the Company’s financial condition or results of
operations.





In
December 2007, the FASB issued SFAS No. 141(R), "Business Combinations"
("SFAS No. 141(R)"), which establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in an
acquiree, including the recognition and measurement of goodwill acquired in a
business combination. SFAS No. 141R is effective as of the beginning of the
first fiscal year beginning on or after December 15, 2008. Earlier adoption
is prohibited and the Company is currently evaluating the effect, if any that
the adoption will have on its consolidated financial position results of
operations or cash flows.





In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interest in
Consolidated Financial Statements, an amendment of ARB No. 51”
(“SFAS No. 160”), which will change the accounting and reporting for
minority interests, which will be recharacterized as noncontrolling interests
and classified as a component of equity within the consolidated balance sheets.
SFAS No. 160 is effective as of the beginning of the first fiscal year beginning
on or after December 15, 2008. Earlier adoption is prohibited and the
Company is currently evaluating the effect, if any that the adoption will have
on its consolidated financial position results of operations or cash
flows.





In
December 2007, the FASB ratified the consensus in Emerging Issues Task Force
(EITF) Issue No. 07-1, “Accounting for Collaborative Arrangements”
(EITF 07-1). EITF 07-1 defines collaborative arrangements and requires
collaborators to present the result of activities for which they act as the
principal on a gross basis and report any payments received from (made to) the
other collaborators based on other applicable authoritative accounting
literature, and in the absence of other applicable authoritative literature, on
a reasonable, rational and consistent accounting policy is to be elected.
EITF 07-1 also provides for disclosures regarding the nature and purpose of
the arrangement, the entity’s rights and obligations, the accounting policy for
the arrangement and the income statement classification and amounts arising from
the agreement.





EITF 07-1
will be effective for fiscal years beginning after December 15, 2008, which
will be the Company’s fiscal year 2009, and will be applied as a change in
accounting principle retrospectively for all collaborative arrangements existing
as of the effective date. The Company is currently evaluating the impact, if any
on the adoption of EITF 07-1 on its consolidated financial position,
results of operations or cash flows.





11





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





Recent accounting
pronouncements (continued)





In March
2008, the FASB” issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities - an amendment to FASB Statement No.
133” (“SFAS No. 161”).  SFAS No. 161 is
intended to improve financial standards for derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity's financial position, financial
performance, and cash flows.  Entities are required to provide
enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under SFAS No. 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance and cash flows.  It is effective for
financial statements issued for fiscal years beginning after November 15, 2008,
with early adoption encouraged.  The Company is currently evaluating
the impact of SFAS No. 161, if any, will have on its consolidated financial
position, results of operations or cash flows.





In April
2008, the FASB issued FSP No. FAS 142-3,“Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under SFAS No. 142,“Goodwill and Other Intangible
Assets”.  The Company is required to adopt FSP 142-3 on
September 1, 2009, earlier adoption is prohibited.  The guidance in
FSP 142-3 for determining the useful life of a recognized intangible asset shall
be applied prospectively to intangible assets acquired after adoption, and the
disclosure requirements shall be applied prospectively to all intangible assets
recognized as of, and subsequent to, adoption.  The Company is
currently evaluating the impact of FSP 142-3 on its consolidated financial
position, results of operations or cash flows.





In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles" ("SFAS No. 162").  SFAS No.
162 identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally
accepted accounting principles (the GAAP hierarchy).  SFAS No.
162 will become effective 60 days following the SEC's approval of the
Public Company Accounting Oversight Board amendments to
AU Section 411, "The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles."  The Company does not
expect the adoption of SFAS No. 162 to have a material effect on its
consolidated financial position, results of operations or cash
flows.





In May
2008, the FASB issued FSP Accounting Principles Board ("APB") 14-1 "Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement) " ("FSP APB 14-1").  FSP APB 14-1
requires the issuer of certain convertible debt instruments that may be settled
in cash (or other assets) on conversion to separately account for the liability
(debt) and equity (conversion option) components of the instrument in a manner
that reflects the issuer's non-convertible debt borrowing rate.  FSP
APB 14-1 is effective for fiscal years beginning after December 15,
2008 on a retroactive basis.  The Company is currently evaluating the
potential impact, if any, of the adoption of FSP APB 14-1 on its
consolidated financial position, results of operations or cash
flows.





In
June 2008, the FASB issued FSP Emerging Issues Task Force
(EITF) No. 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities.” Under the FSP, unvested share-based payment awards that
contain rights to receive non-forfeitable dividends (whether paid or unpaid) are
participating securities, and should be included in the two-class method of
computing EPS. The FSP is effective for fiscal years beginning after
December 15, 2008, and interim periods within those years. The Company does
not expect the adoption of FSP EITF No. 03-6-1 to have a material effect on
its consolidated financial position, results of operations or cash
flows.





In
June 2008, the FASB ratified the consensus on Emerging Issues Task Force
(EITF) Issue 07-5, “Determining whether an Instrument (or Embedded Feature)
is indexed to an Entity’s Own Stock.” This issue addresses whether an instrument
(or an embedded feature) is indexed to an entity’s own stock, which is the first
part of the scope exception in paragraph 11(a) of SFAS No. 133, for
purposes of determining whether the instrument should be classified as an equity
instrument or accounted for as a derivative instrument. The provisions of EITF
Issue No. 07-5 are effective for financial statements issued for fiscal
years beginning after December 15, 2008 and will be applied retrospectively
through a cumulative effect adjustment to retained earnings for outstanding
instruments as of that date. The Company is currently evaluating the impact, if
any, adopting EITF Issue No. 07-5 will have on its financial condition or
results of operations.





12





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
A - SUMMARY OF ACCOUNTING POLICIES (continued)





Recent accounting
pronouncements (continued)





In
June 2008, the FASB ratified the consensus on EITF Issue No. 08-4,
“Transition Guidance for Conforming Changes to Issue No. 98-5.” The
objective of EITF Issue No.08-4 is to provide transition guidance for conforming
changes made to EITF Issue No. 98-5, “Accounting for Convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion
Ratios,” that result from EITF Issue No. 00-27 “Application of Issue
No. 98-5 to Certain Convertible Instruments,” and SFAS No. 150,
“Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity.” The guidance provided by EITF Issue No. 08-4 is
effective for financial statements issued for fiscal years ending after
December 15, 2008. The Company’s adoption of EITF Issue No. 08-4 is
not anticipated to have a material effect on its financial condition or results
of operations.





Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the SEC did not, or are not believed by
management to, have a material impact on the Company’s present or future
consolidated financial statements.





NOTE
B - GOING CONCERN MATTERS





The
accompanying statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the accompanying financial
statements, for the nine months ended March 31, 2009 and 2008, the Company
had incurred losses of $896,839 and $1,636,357, respectively. At March 31, 2009
the Company had a working capital deficit of $1,467,411 and accumulated losses
of $4,221,064. These factors among others may indicate that the Company will be
unable to continue as a going concern for a reasonable period of
time.





The
Company is actively pursuing additional equity financing through discussions
with investment bankers and private investors. There can be no assurance the
Company will be successful in its effort to secure additional equity financing.
If operations and cash flows improve through these efforts, management believes
that the Company can continue to operate. However, no assurance can be given
that management's actions will result in profitable operations or the resolution
of its liquidity problems.





The
Company's existence is dependent upon management's ability to develop profitable
operations and resolve its liquidity problems. Management anticipates the
Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its services and additional
equity investment in the Company. The accompanying financial statements do not
include any adjustments that might result should the Company be unable to
continue as a going concern.





NOTE
C- OTHER RECEIVABLES





Other
receivables at March 31, 2009 and June 30, 2008 consisted of $30,345 of credit
card holdbacks by a merchant bank that processes payment due for product sales.
The merchant bank holdback account is based on the dollar amount of sales and is
designed to allow the Company to receive the credit card holdback cash,
including interest for the Company, after customer refunds and charge-backs are
cleared. The credit card holdback is carried net of a $ 0 allowance for doubtful
accounts as of March 31, 2009 and June 30, 2008.





NOTE
D – LICENSING AGREEMENT





On
February 24, 2009, the Company entered into an Exclusive License and Sales
Agreement whereby the Company has worldwide exclusive rights to manufacture,
market use, sell, distribute and advertise certain licensed products. The
license is on a year to year basis with automatic renewal subject to the Company
re-acquire listing on the OTC BB exchange by February 14, 2010 and files all
quarterly and annual reports by due dates, inclusive of allowable
extensions.





In
exchange for the exclusive license, the Company issued 50,000,000 shares of its
common stock. The license was valued at the market price of the underlying
security.





13





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
E- ACCOUNTS PAYABLE AND LIABILITIES





Accounts
payable and accrued liabilities are as follows:




March
      31,
                        2009
                      
                      
                      June 30,
                        2008Accounts
      payable
                      
                      $
                      275,252
                      
                      
                      $
                      168,926Accrued
      professional fees
                      
                      
                      345,117
                      
                      
                      
                      373,186Accrued
      payroll and payroll taxes
                      
                      
                      710,340
                      
                      
                      
                      630,340Other
      accrued liabilities
                      
                      
                      134,014
                      
                      
                      
                      104,933Total
                      
                      $
                      1,464,723
                      
                      
                      $
                      1,277,385





NOTE
F - CONVERTIBLE NOTES PAYABLE AND DEMAND NOTES




March
      31,
                      2009
                    
                    
                    June 30,
                      2008Notes
      Payable to Interstellar Holdings, LLC.Demand
      promissory note (a)
                    
                    $
                    
                    
                    
                    $
                    24,569Convertible
      term note (b)
                    
                    
                    104,770
                    
                    
                    
                    116,765Convertible
      term note ( c )
                    
                    
                    155,789
                    
                    
                    
                    155,789Convertible
      term note (d)
                    
                    
                    50,000
                    
                    
                    
                    50,000Convertible
      term note (e)
                    
                    
                    89,569
                    
                    
                    
                    -Convertible
      term note (f)
                    
                    
                    111,500
                    
                    
                    
                    -Subtotal
                    
                    
                    511,628
                    
                    
                    
                    347,123Discount
      on Debt
                    
                    
                    ( 362,826
                    )
                    
                    
                    (300,964
                    )148,802
                    
                    
                    
                    46,159current
      portion
                    
                    
                    (9,176
                    )
                    
                    
                    (46,159
                    )Long term debt
                    
                    $
                    139,626
                    
                    
                    $
                    -





a)
            On
      November 10, 2008, the Company entered into a demand promissory note for
      the principal amount of $24,569 bearing interest at 10% per
      annum.b)
            On
      May 14, 2008, the Company entered into a convertible term note for the
      principal amount of $134, 759 bearing interest at 10% per annum with a
      maturity date of May 14, 2010.   At any time at the option
      of the note holder, principal and interest payments may be paid in common
      stock at a conversion price of $0.0001 per share (see
    below).c)
            On
      May 27, 2008, the Company entered into a convertible term note for the
      principal amount of $155,789 bearing interest at 10% per annum with a
      maturity date of May 27, 2010.   At any time at the option
      of the note holder, principal and interest payments may be paid in common
      stock at a conversion price of $0.0001 per share (see
    below).d)
            On
      January 1, 2008, Company entered into a convertible term note for the
      principal amount of $50,000 bearing interest at 7% per annum with a
      maturity date of June 30, 2008.  This note was to be converted
      into common stock at 90% of the common stock closing price at June 30,
      2008, or approximately 370,000 shares of common stock.  As of
      March 31, 2009, the holder of the note elected not to be paid in common
      stock.e)
            On
      January 8, 2009, the Company entered into a convertible term note for the
      principal amount of $89,569 bearing interest at 10% per annum with a
      maturity date of January 8, 2011.   At any time at the
      option of the note holder, principal and interest payments may be paid in
      common stock at a conversion price of $0.0001 per share (see
      below).f)
            On
      March 9, 2009, the Company entered into a convertible term note for the
      principal amount of $111,500 bearing interest at 10% per annum with a
      maturity date of March 9, 2011.   At any time at the option
      of the note holder, principal and interest payments may be paid in common
      stock at a conversion price of $0.0001 per share (see
    below).





14





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED





NOTE
F - CONVERTIBLE NOTES PAYABLE AND DEMAND NOTES
(continued)





In
accordance with Emerging Issues Task Force Issue 98-5, Accounting for
Convertible Securities with a Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios ("EITF 98-5"), the Company recognized an imbedded
beneficial conversion feature present in the notes. The Company allocated a
portion of the proceeds equal to the intrinsic value of that feature to
additional paid in capital. The Company recognized and measured an aggregate of
$314,049 of the proceeds, which is equal to the intrinsic value of the imbedded
beneficial conversion feature, to additional paid in capital and a discount
against the Notes issued during the year ended June 30, 2008. The debt discount
attributed to the beneficial conversion feature was originally amortized over
the Notes maturity period (two years) as interest expense, adjusted for
conversion of debt to common stock. In January 2009, the Company restructured
the Notes and accordingly fully amortized the remaining debt
discount.  During the three and nine months ended March 31, 2009,
amortization related to the beneficial conversion feature was $354,447 and
$440,590, respectively (see below).





In
January 2009 through March 2009, the Company restructured the $502,452 of the
Notes to a conversion rate of $0.0001 per share with a two year term. In
accordance with Emerging Issues Task Force Issue 98-5, Accounting for
Convertible Securities with a Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios ("EITF 98-5"), the Company recognized an imbedded
beneficial conversion feature present in the notes. The Company allocated a
portion of the proceeds equal to the intrinsic value of that feature to
additional paid in capital. The Company recognized and measured an aggregate of
$502,452 of the proceeds, which is equal to the intrinsic value of the imbedded
beneficial conversion feature, to additional paid in capital and a discount
against the Notes issued during the nine months ended March 31, 2009. The debt
discount attributed to the beneficial conversion feature was amortized over the
Notes maturity period.  During the three and nine months ended March
31, 2009, amortization related to the beneficial conversion feature was
$139,626.





NOTE
G - FINANCING AGREEMENT





On
October 23, 2007, Ionicbulb.com (f/k/a Zevotek, Inc.) our wholly-owned
subsidiary entered into a Supply Agreement with Star Funding, Inc. pursuant to
which Star Funding will provide, on a discretionary basis, purchase order
financing up to $2.5 million to facilitate Ionicbulb.com Inc.’s sale of its
Ionic Bulb product. This purchase order financing may be made via direct payment
to Ionicbulb.com’s suppliers, issue or cause the issuance of letters of credit,
and/or advances to Ionicbulb.com. Ionicbulb.com will be required to pay Star
Funding an amount equal to 2.5% of all “Expenses” (as defined) associated with
the purchase of any Goods under the Agreement, including letter of credit fees,
if any, which will equal 0.25% of the face amount of any letter of credit. As
collateral security for all of Ionicbulb.com’s obligations under the Supply
Agreement, Ionicbulb.com granted Star Funding a security interest in all of
Ionicbulb.com’s personal property and fixtures. The Supply Agreement is for an
initial term of two years, and will be automatically extended for additional 1
year terms unless terminated by either party with 60 days’ prior written notice
before the end of the initial or any renewal period.





On
October 23, 2007, Ionicbulb.com also entered into a Factoring Agreement with
Star Funding pursuant to which Star Funding has agreed to purchase certain
accounts receivables of Ionicbulb.com under the Supply Agreement. Ionicbulb.com
has agreed to pay Star Funding a factoring commission of 1.5% of the gross
amount of each receivable under the Factoring Agreement provided, however, that
Ionicbulb.com has agreed that Star Funding will receive $15,000 in fees under
the Supply Agreement and the Factoring Agreement in the first 12 months and
Ionicbulb.com has agreed to pay Star Funding the shortfall by which all fees and
commissions are less than $15,000. As collateral security for all of
Ionicbulb.com’s obligations under the Supply Agreement, Ionicbulb.com granted
Star Funding a security interest in all of Ionicbulb.com’s personal property and
fixtures. The Supply Agreement is for an initial term of two years, and will be
automatically extended for additional 1 year terms unless terminated by
Ionicbulb.com upon 60 days’ prior written notice before the end of the initial
or any renewal period or by Star Funding upon 30 days prior written
notice.





To
further secure Ionicbulb.com’s obligations under the Supply Agreement and the
Factoring Agreement (as discussed below), Diet Coffee has executed (i) a
guarantee and (ii) an assignment of that certain License and Supply Agreement
under which is obtained its distribution rights for the Ionic Bulb. In addition,
Mr. Engel, President of Ionicbulb.com and Zevotek, Inc., executed an Anti Fraud
and Performance Agreement under which Mr. Engel guaranteed Ionicbulb.com’s
representations and warranties under the Supply and Factoring Agreements. Mr.
Engel explicitly agrees that if any receivable purchased by Star Funding is not
paid when due (subject to certain exceptions), such non-payment shall be
presumed to be the result of a breach of Ionicbulb.com’s representations and
warranties under the Supply Agreement and/or the Factoring Agreement at which
time Star Funding may be able to execute on the (i) collateral pledged under the
Supply and Factoring Agreements and (ii) license for distribution of the Ionic
bulb product





15





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)


NOTE
H – STOCKHOLDERS EQUITY





Preferred
Stock





The
Company has authorized 10,000,000 shares of Preferred Stock of which 50,000
shares have been designated as Series A Preferred stock, par value $0.00001, and
1,000,000 shares have been designated as Series B Preferred Stock, par
value $.00001 within the limitations and restrictions stated in the Certificate
of Incorporation of the Company.





The
Company issued of 50,000 shares of Series A - Preferred stock; non convertible.
Each share of the Series A- Preferred stock is entitled to 10,000 votes on all
matters submitted to the stockholders of the Company. The holders of the Series
A-Preferred stock are not granted any preference upon the liquidation,
dissolution or winding up of the business of the Company.





The
Company designated and issued 1,000,000 shares of Series B Preferred
Stock.  0n May 14, 2008 the Company and an unrelated third party
entered into an exchange agreement under which the third party noteholder
exchanged a $21,026 promissory note for 1,000,000 shares of Series B Preferred
Stock.   Each share of Series B Preferred Stock is entitled to
5,000 votes on all matters submitted to the stockholders of the
Company.





Common
stock





The
Company effectuated a 1 for 50 reverse stock split on June 26, 2008. All common
stock and related information has been retroactively restated. In addition,
contemporaneously with the stock split the Company increased its authorized
Common stock, par value $0.00001 to 1,000,000,000 shares. Prior to this date,
the authorized shares were 200,000,000 shares.





At March
31, 2009 and June 30, 2008, common shares issued and outstanding were 75,418,193
and 3,784,920, respectively.





On
September 11, 2007, the Company adopted its 2007 Stock Incentive Plan (the “2007
Plan”). The Company is permitted to issue up to 21,450,000 shares of common
stock under the Plan in the form of stock options, restricted stock awards, and
stock awards to employees, non-employee directors, and outside
consultants.  As of March 31, 2009, 429,000 shares have been issued
under this 2007 Plan





On
December 13, 2007, the Company adopted its 2007 Stock Incentive Plan No. 2. (the
“2007 Plan #2”). The Company is permitted to issue up to 17,994,000 shares of
common stock under the Plan in the form of stock options, restricted stock
awards, and stock awards to employees, non-employee directors, and outside
consultants.  As of March 31, 2009, 359,880 shares have been issued
under this 2007 Plan #2





On
February 21, 2008 the Company adopted its 2008 California Stock Incentive Plan.
The Company is permitted to issue up to 33,000,000 shares of common stock under
the Plan in the form of stock options, restricted stock awards, and stock awards
to employees, non-employee directors, and outside consultants. As of March 31,
2009, 8,425,191 shares have been issued under this Plan.





On
February 21, 2008 the Company adopted its 2008 Stock Incentive Plan. The Company
is permitted to issue up to 33,000,000 shares of common stock under the Plan in
the form of stock options, restricted stock awards, and stock awards to
employees, non-employee directors, and outside consultants.  As of
March 31, 2009, 673,334 shares have been issued under this Plan





During
the year ending June 30, 2008, the Company issued 1,994,780 shares of common
stock, valued at $845,560 for services and expenses. The Company converted debt
and accrued interest of $17,944 into 359,880 shares of common stock in May and
June 2008.





In the
nine months ended March 31, 2009 the company issued 883,334 shares of
common stock for services valued at $80,000, converted $11,995
of debt into 19,196,000 shares of common stock, issued 1,553,939
shares of common stock for $6,150 in accounts payable and 50,000,000 shares for
an exclusive licensing agreement (see note D above).








16





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
I- INCOME TAXES





The
Company has adopted Financial Accounting Standards No. 109, which requires the
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statement or tax
returns.





Under
this method, deferred tax liabilities and assets are determined based on the
difference between financial statements and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are
expected to reverse. Temporary differences between taxable income reported for
financial reporting purposes and income tax purposes are insignificant. A
management estimate that at March 31, 2009, the Company has available for
federal income tax purposes a net operating loss carry forward of approximately
$2.5 million expiring by the year 2028, that may be used to offset future
taxable income. Due to significant changes in the Company's ownership, the
future use of its existing net operating losses may be limited.





The
Company has provided a valuation reserve against the full amount of the net
operating loss benefit, since in the opinion of management based upon the
earnings history of the Company; it is more likely than not that the benefits
will not be realized. Components of deferred tax assets as of March 31, 2009 are
as follows:




Net
      operating loss carry forward
                      
                      $
                      1,600,000Valuation
      allowance
                      
                      
                      (1,600,000
                      )Net
                      
                      $
                      0





The
Company has not filed their federal or state income tax returns for fiscal years
ended June 30, 2006, 2007 and 2008.





NOTE
J - STOCK OPTIONS AND WARRANTS





During
the nine months ending March 31, 2009 and 2008, the company did not issue any
stock warrants. At March 31, 2009, the Company has 5,700 outstanding common
stock warrants exercisable at $25.00 per share.





In July
2006, the Company sold 5,700 shares of its Common stock at a net average of
$0.925 per share. As part of the sale of Common stock the Company issued 5,700
warrants to purchase its Common stock at a price of $25.00 per share expiring 2
years from the date of issuance.





On
December 13, 2007, the Company agreed to grant Mr. Engel options to purchase
72,000 shares of common stock, which options would vest at a rate of 2,000
shares per month. These options have not yet been deemed granted.





NOTE
K - COMMITMENTS AND CONTINGENCIES





Employment
Agreement





On
December 13, 2007, the Company entered into an employment agreement with Adam
Engel pursuant to which the Company employs Mr. Engel as President, Chief
Executive Officer, Chief Financial Officer, Treasurer and Secretary. The
agreement is for an initial term of three years and provides for an annual base
salary during the term of the agreement of $120,000, payable either in cash or
stock. The Company also agreed to grant Mr. Engel options to purchase 72,000
shares of Company common stock with an exercise price of $0.25per share (which
price shall not be less than 85% of the “fair market value” of the Company’s
common stock on the date of grant), which options would vest at a rate of 2,000
shares per month. These options have not yet been granted. In addition to salary
and benefit provisions, the agreements include defined commitments should we
terminate his employment without cause and 24 month non-compete/non solicitation
terms.





17





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
K - COMMITMENTS AND CONTINGENCIES (continued)





U.S. Federal Trade
Commission Settlement





On March
26, 2007, ZEVOTEK, INC. (the “Company”) received a letter from the U.S. Federal
Trade Commission (“FTC”) whereby the Company was informed that the FTC is
conducting an investigation into advertising claims made for the Company’s
weight loss product known as “Slim Coffee”. The purpose of the investigation was
to determine whether the Company, in connection with its sales of Slim Coffee,
engaged in unfair or deceptive acts or practices and false advertising. The FTC
threatened to file a complaint in the United States District Court, Southern
District of New York, alleging False Advertising, unless the Company and the FTC
could reach a satisfactory resolution to the matter. A negotiated settlement has
been reached with the FTC under which the Company, its officers and directors
did not admit any wrongdoing. On October 5, 2007, the Company executed a
stipulation to a final order and judgment in the amount of $923,910. The full
amount of the judgment, and payment of any portion of it is suspended and cannot
be reinstated so long as the Company abides by the reporting and monitoring
requirements of the judgment; does not make false advertising claims in
connection with any of its products in the future; and its past financial
disclosures to the FTC were materially accurate. The Company expects stipulation
will be executed by the FTC and filed with the United States District Court,
Southern District of New York. The Company expects to comply with terms of the
stipulation and does not anticipate incurring a liability for the
judgment.





Royalty commitment and
Agreement Termination





On May
18, 2007, ZEVOTEK, INC. (the "Company") entered into a Consulting, License and
Supply Agreement with Jason Ryu, pursuant to which the Company licensed the
right to market and sell a fluorescent light bulb that contains an air purifying
microchip ion emitter from Mr. Ryu. In exchange for this license the Company
agrees to pay Mr. Ryu a royalty of $0.20 per unit for the first 1.5 million
units sold by the Company and the lesser of $0.15 per unit or 5% of
manufacturing costs for all additional units. The initial term of this agreement
shall be two years and shall automatically be renewed for subsequent two year
periods if at lease 5 million units are old by the Company during each period.
Within ninety days from the date of this Agreement, the Company was required to
place an order not less than 100,000 units and at least 600,000 units each
quarter thereafter. Currently, the Company has placed an order for units and the
Company has issued 143,636 shares of its common stock as prepayment of royalties
under the agreement. Mr. Ryu has sent notice to the Company that license
agreement shall continue on a non-exclusive basis.





On July
7, 2008, the company issued 83,334 shares of common stock to Mr. Ryu, valued at
$10,000, in full consideration for all amounts due under the Consulting, License
and Supply Agreement.  The Company continues to employ Mr. Ryu as a
consultant on an informal basis for which it pays him fees from time to time and
the license permitting us to market our Ionic bulb product continues on a
non-exclusive basis.





Payroll
Taxes





At March
31, 2009, the Company is delinquent with filing and remitting payroll taxes of
approximately $102,000 including estimated penalties and interest related to
payroll taxes withheld since April 2007. The Company has recorded the delinquent
payroll taxes, which are included in accrued expenses on the balance sheet.
Although the Company has not entered into any formal repayment agreements with
the respective tax authorities, management plans to make payment as funds become
available. Penalties and interest amounts are subject to increase based on a
number of factors that can cause the estimated liability to increase further.
Interest and penalties were accrued in an amount estimated to cover the ultimate
liability.





18





ZEVOTEK,
INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH
31, 2009


(UNAUDITED)





NOTE
K - COMMITMENTS AND CONTINGENCIES (continued)





Sales
Taxes





At March
31, 2009, the Company is delinquent with remitting sales taxes of approximately
$13,400, including related estimated penalties and interest related to sales
taxes withheld since 2006 in the state of New York. The Company has recorded the
delinquent sales taxes, which are included in accrued expenses on the balance
sheet. Although the Company has not entered into any formal repayment agreements
with the respective tax authorities, management plans to make payment as funds
become available. Penalties and interest amounts are subject to increase based
on a number of factors that can cause the estimated liability to increase
further. Interest and penalties were accrued in an amount estimated to cover the
ultimate liability.




NOTE
L - SUBSEQUENT EVENTS
 
 During
the months of April and May 2009, the Company issued a aggregate of 8,674,180
shares of common stock to officers and consultants for services
rendered.
 
 During
the months of April and May 2009, The Company issued a aggregate of 30,000,000
shares of common stock upon conversion of convertible promissory
notes.







19





ITEM
2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.





The
following discussion and analysis should be read in conjunction with our
unaudited consolidated financial statements and related notes included in this
report.  This report contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.  The
statements contained in this report that are not historic in nature,
particularly those that utilize terminology such as “may,” “will,” “should,”
“expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable
terminology are forward-looking statements based on current expectations and
assumptions.





Various
risks and uncertainties could cause actual results to differ materially from
those expressed in forward-looking statements.  Factors that could
cause actual results to differ from expectations include, but are not limited
to, those set forth under the section “Risk Factors” set forth in this
report.





The
forward-looking events discussed in this annual report, the documents to which
we refer you and other statements made from time to time by us or our
representatives, may not occur, and actual events and results may differ
materially and are subject to risks, uncertainties and assumptions about
us.  For these statements, we claim the protection of the “bespeaks
caution” doctrine.  All forward-looking statements in this document
are based on information currently available to us as of the date of this
report, and we assume no obligation to update any forward-looking
statements.  Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results to
differ materially from any future results, performance or achievements expressed
or implied by such forward-looking statements.





General





The following discussion and analysis
is provided to increase the understanding of, and should be read in conjunction
with, our unaudited financial statements and related notes included elsewhere in
this Report.  Historical results and percentage relationships among
any amounts in these financial statements are not necessarily indicative of
trends in operating results for any future period. This report contains “forward
looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995.  The statements, which are not historical facts
contained in this Report, including this Management’s discussion and analysis of
financial condition and results of operation, and notes to our unaudited
financial statements, particularly those that utilize terminology such as “may”
“will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans”
or comparable terminology are forward-looking statements. Such statements are
based on currently available operating, financial and competitive information,
and are subject to various risks and uncertainties. Future events and our actual
results may differ materially from the results reflected in these
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, dependence on existing and future key strategic and
strategic end-user customers, limited ability to establish new strategic
relationships, ability to sustain and manage growth, variability of operating
results, our expansion and development of new service lines, marketing and other
business development initiatives, the commencement of new engagements,
competition in the industry, general economic conditions, dependence on key
personnel, the ability to attract, hire and retain personnel who possess the
technical skills and experience necessary to meet the service requirements of
our clients, the potential liability with respect to actions taken by our
existing and past employees, risks associated with international sales, and
other risks described herein and in our other filings with the Securities and
Exchange Commission.





The safe harbor for forward-looking
statements provided by Section 21E of the Securities Exchange Act of 1934
excludes issuers of “penny stock” (as defined under Rule 3a51-1 of the
Securities Exchange Act of 1934). Our common stock currently falls within that
definition


20





All
forward-looking statements in this document are based on information currently
available to us as of the date of this report, and we assume no obligation to
update any forward-looking statements.  Forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual results to differ materially from any future results, performance or
achievements expressed or implied by such forward looking
statements.





The
following discussion of our financial condition and results of operations should
be read in conjunction with our unaudited financial statements and related notes
appearing elsewhere in this report.





Company
History





We were
incorporated in the State of Delaware on December 19, 2005 and amended our
Certificate of Incorporation on March 1, 2006. On March 1, 2006, we changed our
name from The Diet Coffee Company, Inc. to Diet Coffee, Inc. and on June 26,
2008, we changed our name to Zevotek, Inc.   Our principal
executive offices are located at 134 Cedar Street, Nutley, NJ 07110. Our
telephone number is (973) 667-4026.




We are
engaged in the direct marketing and distribution of consumer
products.  Our first offering was the Slim Coffee product line, which
featured coffee beverages. We ceased selling and marketing or market Slim Coffee
products in 2007.  In May 2007, we entered into a license agreement to
sell anenergy
saving compact fluorescent light bulb named the Ionic Bulb.   In
July 2008, this license agreement was terminated although the owner of the
product (Jason Ryu) allowed the license to continue on non-exclusive
basis.  In February 2009, a new exclusive license and sales agreement
was executed to sell the same Ionic Bulb product.  In April, 2009 we
entered into a Distribution Agreement with a German distributor pursuant to
which we granted such distributor the exclusive right (subject to minimum sales
in the first year) to advertise, market and sell our ionic bulb product in
Germany, Austria, Switzerland, Liechtenstein, Czech Republic, Slovakia, Hungary,
Romania and Poland.  We plan to market the
Ionic Bulb through TV infomercials, catalogs, magazines and major U.S. retail
and specialty stores and our websites www.zevo-tek.com
and  www.ionicbulb.com.




Comparison
of Three Months Ended March 31, 2009 to March 31, 2008




Results
of Operations




Revenue




Our sales
were $0 for the three months ended March 31, 2009 and $348,114 for the
three months ended March 31, 2008. We recently signed a distribution agreement
with a European distributor and expect our sales to increase in subsequent
quarters as a result.





Cost
of Sales





Our cost of sales were $0 for the three
months ended March 31, 2009 as compared to $197,977 for the three months ended
March 31, 2008.  The decrease in cost of sales is attributable to the
fact that we had no sales of products in the three months ended March 31,
2009.





Gross
Profit




Our gross
profit was $0 for the three months ended March 31, 2009 and $150,137 for the
three months ended March 31, 2008.  The decrease is attributable to
the fact that we no sales in the period ended March 31, 2009  We
expect our gross profit to increase in connection with our expected sales
increases in future periods.





Our gross
profit percentage was 0% for nine months ended March 31, 2009 as compared to
43.1%, for the three months ended March 31, 2008.  Our gross profit
percentage was higher in the three months ended March 31, 2008 in contrast to
the three months ended March 31, 2009 since we did not make any sales in the
nine months ended March 31, 2009.  We expect our gross
profit  and gross profit percentage to increase in future periods as
our sales of the Ionic Bulb increase.


21





Operating
expenses




Operating
expenses for the three months ended March 31, 2009 were $98,611 and consisted
primarily of personnel costs and stock based compensation
costs.  Operating expenses for the three months ended March 31, 2008
were $269,272 and consisted primarily of primarily of personnel costs, stock
based compensation costs and licensing royalties in accordance with the Ionic
Bulb Licensing and Consulting Agreement.





Operating expenses decreased to $98,611
in the three months ended March 31, 2009, or approximately 64%, from $269,272
for the comparable period in 2008. This decrease in primarily attributable to
the decreased payments to consultants in the quarter as compared the same period
in 2008.





Net
Income and Loss




Our net
loss was $467,506 for the quarter ended March 31, 2009 and our net loss was
$146,207 for the quarter ended March 31, 2008. We recently began operating our
business in a new market, including efforts to market and sell our products, and
revenues generated were not sufficient to cover our operating costs. We are
continuing our efforts to market and sell our products in order to generate a
higher sales volume and unless and until such time as we generate substantially
higher sales volume, we will continue realize net losses.





Our
net loss per common share was $0.01 (basic and diluted) for three months
ended March 31, 2009 as compared to our net loss per common share of $0.06 for
the three months ended March 31, 2008.




The weighted average number of
outstanding shares was 36,543,621 (basic and diluted) for three months
ended March 31, 2009 as compared to 2,322,157 (basic and diluted) for the three
months ended March 31, 2008.





Comparison
of Nine Months Ended March 31, 2009 To March 31, 2008




Results
of Operations





Revenues





Our sales
were $0 for the nine months ended March 31, 2009 and $349,926 for the nine
months ended March 31, 2008.  We recently signed a distribution
agreement with a European distributor and expect our sales to increase in
subsequent quarters as a result.





Cost
of Sales





Our cost of sales were $0 for the three
months ended March 31, 2009 as compared to $198,577 for the three months ended
March 31, 2008.  The decrease in cost of sales is attributable to the
fact that we had no sales of products in the nine months ended March 31,
2009.





Gross
Profit




Our gross
profit was $0 for the nine months ended March 31, 2009 versus our gross profit
of $151,349 for the nine months ended March 31, 2008.  The decrease is
attributable to the fact that we sold no products in the nine months ended March
31, 2009.




Our gross
profit percentage was 0% for nine months ended March 31, 2009 as compared to
43.3%, for the nine months ended March 31, 2008.  Our gross profit
percentage was higher in the nine months ended March 31, 2008 in contrast to the
nine months ended March 31, 2009 since we did not make any sales in the nine
months ended March 31, 2009.  We expect our gross
profit  and gross profit percentage to increase in future periods as
our sales of the Ionic Bulb increase.


22





Operating
expenses




Operating
expenses for the nine months ended March 31, 2009 were $418,677 and consisted
primarily of personnel costs and stock based compensation
costs.  Operating expenses for the nine months ended March 31, 2008
were $1,760,634 and consisted primarily of primarily of personnel costs, stock
based compensation costs and licensing royalties in accordance with the Ionic
Bulb Licensing and Consulting Agreement.





Operating expenses decreased to
$418,677 in the nine months ended March 31, 2009, or approximately 76.2%, from
$1,760,634 for the comparable period in 2008. This decrease in primarily
attributable to the closing of our New York office and decreased payments to
consultants in the quarter as compared the same period in
2008.





Net
Income and Loss





Our net
loss for the nine months ended March 31, 2009 was $896,839 as compared to a net
loss of $1,636,357 for the nine months ended March 31, 2008. We recently began
operating our business in a new market, including efforts to market and sell our
products, and revenues generated were not sufficient to cover our operating
costs. We are continuing our efforts to market and sell our products in order to
generate a higher sales volume and unless and until such time as we generate
substantially higher sales volume, we will continue realize net
losses.





Our net
loss per common share was $0.04 (basic and diluted) for the nine months ended
March 31, 2009 as compared to our net loss per common share of $0.81 (basic and
diluted) for the nine months ended March 31, 2008.




The
weighted average number of outstanding shares was 20,414,783 for the nine
months ended March 31, 2009 as compared to 2,025,322 (basic and diluted) for the
nine-month period ended March 31, 2008.





Liquidity
and Capital Resources




Overview




As of
March 31, 2009, we had a working capital deficit of $1,467,411.  As of
June 30, 2008, we had a working capital deficit of $1,310,795.  Our
cash position at March 31, 2009 was $494 as compared to $6,755 at June 30,
2008.





For nine
months ended March 31, 2009, net cash used in operating activities was $170,261,
consisting primarily of a net loss of $896,839, adjusted primarily for common
stock issued for services of $80,000, amortization of debt discount of $440,950
and an increase in accounts payable and accrued expenses of
$205,988.





Cash
provided by financing activities totaled $164,000 for the nine months ended
March 31, 2009 consisting of proceeds from third party loans.





We expect
capital expenditures to be nominal for the year ending June 30, 2009. These
anticipated expenditures are for continued investments in property and equipment
used in our business and software for our accounting and information
systems.




Financing




As of
March 31, 2009, we have raised an aggregate of $1,301,439 in financing through
the issuance debt and equity securities.


23





Star
Funding Financing Facility





On
October 23, 2007, Ionicbulb.com, Inc. (f/k/a Zevotek, Inc.), our wholly owned
subsidiary, entered into a Supply Agreement with Star Funding, Inc. pursuant to
which Star Funding will provide, on a discretionary basis, purchase order
financing up to $2.5 million to facilitate Ionbulb.com Inc’s sale of its Ionic
Bulb product. This purchase order financing may be made via direct payment to
Ionbulb.com Inc’s suppliers, issue or cause the issuance of letters of credit,
and/or advances to Ionicbulb.com. Ionicbulb.com will be required to pay Star
Funding an amount equal to 2.5% of all “Expenses” (as defined) associated with
the purchase of any Goods under the Agreement, including letter of credit fees,
if any, which will equal 0.25% of the face amount of any letter of credit. As
collateral security for all of Ionicbulb.com Inc.’s obligations under the Supply
Agreement, Ionicbulb.com granted Star Funding a security interest in all of
Ionicbulb.com’s personal property and fixtures. The Supply Agreement is for an
initial term of two years, and will be automatically extended for additional 1
year terms unless terminated by either party with 60 days’ prior written notice
before the end of the initial or any renewal period.





On
October 23, 2007, Ionicbulb.com also entered into a Factoring Agreement with
Star Funding pursuant to which Star Funding has agreed to purchase certain
accounts receivables of Ionicbulb.com under the Supply Agreement. Ionicbulb.com
has agreed to pay Star Funding a factoring commission of 1.5% of the gross
amount of each receivable under the Factoring Agreement provided, however, that
Ionicbulb.com has agreed that Star Funding will receive $15,000 in fees under
the Supply Agreement and the Factoring Agreement in the first 12 months and
Ionicbulb.com has agreed to pay Star Funding the shortfall by which all fees and
commissions are less than $15,000. As collateral security for all of
Ioncibulb.com’s obligations under the Supply Agreement, Ioncibulb.com granted
Star Funding a security interest in all of Ionicbulb.com’s personal property and
fixtures. The Supply Agreement is for an initial term of two years, and will be
automatically extended for additional 1 year terms unless terminated by
Ionicbulb.com upon 60 days’ prior written notice before the end of the initial
or any renewal period, or by Star Funding upon 30 days prior written
notice.





To
further secure Ionicbulb.com’s obligations under the Supply Agreement and the
Factoring Agreement (as discussed below), we have executed (i) a guarantee and
(ii) an assignment of that certain License and Supply Agreement under which is
obtained its distribution rights for the Ionic Bulb. In addition, Adam Engel,
President of Zevotek and Ionicbulb.com, executed an Anti Fraud and Performance
Agreement under which Mr. Engel guaranteed Ionicbulb.com’s representations and
warranties under the Supply and Factoring Agreements. Mr. Engel explicitly
agrees that if any receivable purchased by Star Funding is not paid when due
(subject to certain exceptions), such non-payment shall be presumed to be the
result of a breach of Ionicbulb.com’s representations and warranties under the
Supply Agreement and/or the Factoring Agreement at which time Star Funding may
be able to execute on the (i) collateral pledged under the Supply and Factoring
Agreements and (ii) license for distribution of the Ionic bulb
product.





Financing
Needs




Since our
inception on December 19, 2005 to March 31, 2009, we have generated revenues of
$1,205,342 and have incurred a net loss of $3,102,648.  It is hoped
that we will begin to achieve sustainable revenues within the next 12 months, of
which there can be no guarantee.  Our ability to achieve profitability
is dependent on several factors, including but not limited to, our ability to:
generate liquidity from operations and satisfy our ongoing operating costs on a
timely basis. We still need additional investments in order to continue
operations to cash flow break even. Additional investments are being sought, but
we cannot guarantee that we will be able to obtain such investments. Financing
transactions may include the issuance of equity or debt securities, obtaining
credit facilities, or other financing mechanisms. However, the trading price of
our common stock and conditions in the U.S. stock and debt markets make it more
difficult to obtain financing through the issuance of equity or debt securities.
Even if we are able to raise the funds required, it is possible that we could
incur unexpected costs and expenses, fail to collect significant amounts owed to
us, or experience unexpected cash requirements that would force us to seek
alternative financing. Further, if we issue additional equity or debt
securities, stockholders may experience additional dilution or the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of our common stock. If additional financing is not available
or is not available on acceptable terms, we will have to curtail our operations
again, attempt to further restructure financial obligations and/or seek a
strategic merger, acquisition or a sale of assets.





The
independent auditor's report on our June 30, 2008 financial statements states
that our recurring losses raise substantial doubts about our ability to continue
as a going concern.





The
effect of inflation on our revenue and operating results was not significant.
Our operations are located in North America and there are no seasonal aspects
that would have a material effect on our financial condition or results of
operations.


24





We do not
maintain off-balance sheet arrangements nor do we participate in non-exchange
traded contracts requiring fair value accounting treatment.





CRITICAL
ACCOUNTING POLICIES AND USE OF ESTIMATES





Financial
Reporting Release No. 60, recently released by the Securities and Exchange
Commission, requires all companies to include a discussion of critical
accounting policies or methods used in the preparation of financial statements.
The notes to the consolidated financial statements include a summary of
significant accounting policies and methods used in the preparation of our
Consolidated Financial Statements. In addition, Financial Reporting Release No.
61 was recently released by the SEC requires all companies to include a
discussion which addresses, among other things, liquidity, off-balance sheet
arrangements, contractual obligations and commercial commitments. The following
is a brief discussion of the more significant accounting policies and methods
used by us.





The
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of financial statements in accordance with generally accepted
accounting principles in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
including the recoverability of tangible and intangible assets, disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reported
period.





On an
on-going basis, we evaluate our estimates. The most significant estimates relate
to our recognition of revenue, the allowance for doubtful accounts receivable
and inventory valuation reserves.





We
believe the following critical accounting policies affect our more significant
judgments and estimates used in the preparation of our consolidated financial
statements:





Reverse
Stock Split





The
Company effectuated a 1 for 50 reverse stock split on June 26,
2008.  In addition, contemporaneously with the reverse stock split,
the par value for the Preferred Stock and Common stock was changed to $.00001
per share   All preferred and common stock and related
information have been retroactively restated.





Revenue
Recognition





The
Company recognizes revenue from product sales in accordance with Staff
Accounting Bulletin No. 104, Revenue Recognition ("SAB104"), which superseded
Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements
("SAB101"). SAB 104 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgment regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product was not delivered
or is subject to refund until such time that the Company and the customer
jointly determine that the product has been delivered or no refund will be
required.





Valuation
of Accounts Receivable





Our
allowance for doubtful accounts reflects our best estimate of probable losses,
determined principally on the basis of historical experience and specific
allowances for known troubled accounts.


25





Inventories
/ Cost of Goods Sold





The
Company has adopted a policy to record inventory at the lower of cost or market
determined by the first-in-first-out method. The elements of cost that comprise
inventory and cost good sold are FOB shipping point costs, freight and
destination charges, customs and importation fees and taxes, customer broker
fees (if any) and other related costs. Warehousing costs are charged to cost of
goods in the period the costs are incurred. The Company provides inventory
allowances based on estimates of obsolete inventories.





Allowance
for doubtful accounts





The
Company maintains an allowance for doubtful accounts to reduce amounts to their
estimated realizable value, including reserves for customer and other receivable
allowances and incentives. In estimating the provision for doubtful accounts,
the company considers a number of factors including age of the accounts
receivable, trends and ratios involving the age of the accounts receivable and
the customer mix of each aging categories.





Advertising





The
Company follows SOP 93-7 whereby charging the costs of advertising to expenses
as incurred.





Off Balance Sheet
Arrangements





None





ITEM
3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, we are not required to provide the
information required by this item.





ITEM
4 – CONTROLS AND PROCEDURES





Evaluation of Disclosure
Controls and Procedures





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by us in
the reports that we file under the Exchange Act is accumulated and communicated
to our management, including our principal executive and financial officers, as
appropriate to allow timely decisions regarding required
disclosure.




The
Company’s management, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer, carried out an evaluation
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the
Exchange Act) as of March 31, 2009.  Based upon that evaluation and
the identification of the material weakness in the Company’s internal control
over financial reporting as previously disclosed in our annual report for the
period ended June 30, 2008, the Chief Executive Officer and Chief Financial
Officer concluded that the Company’s disclosure controls and procedures were
ineffective as of the end of the period covered by this report.





Changes
in Internal Control over Financial Reporting





There
were no changes in our internal control over financial reporting identified in
connection with the evaluation required by paragraph (d) of Rule 13a-15 or
15d-15 under the Exchange Act that occurred during the quarter ended March 31,
2009 that have materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.


26


PART
II:  OTHER INFORMATION




ITEM
1 – LEGAL PROCEEDINGS





On March
26, 2007, Diet Coffee, Inc. (the “Company”) received a letter from the U.S.
Federal Trade Commission (“FTC”) whereby the Company was informed that the FTC
is conducting an investigation into advertising claims made for the Company’s
weight loss product known as “Slim Coffee”. The purpose of the investigation was
to determine whether the Company, in connection with its sales of Slim Coffee,
engaged in unfair or deceptive acts or practices and false advertising. The FTC
threatened to file a complaint in the United States District Court, Southern
District of New York, alleging False Advertising, unless the Company and the FTC
could reach a satisfactory resolution to the matter. A negotiated settlement has
been reached with the FTC under which the Company, its officers and directors
did not admit any wrongdoing. On October 5, 2007, the Company executed a
stipulation to a final order and judgment in the amount of $923,910. The full
amount of the judgment, and payment of any portion of it is suspended and cannot
be reinstated so long as the Company abides by the reporting and monitoring
requirements of the judgment; does not make false advertising claims in
connection with any of its products in the future; and its past financial
disclosures to the FTC were materially accurate. The Company expects stipulation
will be executed by the FTC and filed with the United States District Court,
Southern District of New York. The Company expects to comply with terms of the
stipulation and does not anticipate incurring a liability for the
judgment.




ITEM
1A – RISK FACTORS





As a
“small reporting company” as defined by Item 10 of Regulation S-K, we are not
required to provide information required by this item.





ITEM
2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





1.
            During
      the quarter ended March 31, 2009, we issued an aggregate of 8,000,000
      shares of common stock upon conversions of 10% convertible promissory
      notes. The aggregate principal and interest amount of these notes that
      were converted was $800. The issuances were exempt pursuant to Section
      3(a)(9) of the Securities Act as well as Section 4(2) of the Securities
      Act.


2.
            Please
      see our Current Report on Form 8-K dated February 24, 2009 and filed with
      the Commission on February 27,
2009.





ITEM
3 – DEFAULT UPON SENIOR SECURITIES





None.





ITEM
4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM
5 – OTHER INFORMATION





Please
see our Current Reports in Form 8-K February 27, 2009 and May 5, 2009 for a
description of our exclusive sales and license agreement and our distribution
agreement, respectively.





27


ITEM
6 - EXHIBITS





Item
                No.
              
              Description10.1
              
              Distribution
      Agreement (Portions of this Agreement have been redacted pursuant to a
      request for confidential treatment submitted to the
SEC)31.1
              
              Certification
      of Adam J. Engel, Chief Executive Officer and Chief Financial Officer of
      Zevotek, Inc. pursuant to Rule 13a-14(a)32.1
              
              Certification
      of Adam J. Engel, Chief Executive Officer and Chief Financial Officer of
      Zevotek, Inc. pursuant to 18 U.S.C. § 1350 adopted pursuant to Section 906
      of the Sarbanes Oxley Act of
2002





SIGNATURES





Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.





ZEVOTEK,
      INC.May
      15, 2009
                /s/ Adam J. EngelAdam
      J. EngelPresident,
      Chief Executive Officer and Chief Financial Officer(Principal
      Executive and Financial and Accounting
Officer)


28