##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 333-148335
 Guardian Zone Technologies, Inc.
  Delaware
    
    26-1181998(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 17 Woodside Road, Chagrin Falls, Ohio
    
    44022(Address of principal executive offices)
    
    (Zip Code)
  
  
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 þ o
 
  o o
 Potential persons who are to respond to the collection of information contained in
this form are not required to respond unless the form displays a currently valid OMB control
number.




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##### 



INDEX
 Page No.PART I. FINANCIAL INFORMATIONItem 1 - Financial Statements
    
    
    1Balance Sheets at June 30, 2008 and December 31, 2007 (unaudited)
    
    
    1Statements of Operations for the three and six month periods ended June
30, 2008 and 2007 and from inception (September 25, 2002) to June 30,
2008 (unaudited)
    
    
    2Statements of Stockholders Deficit for the six months ended June 30, 2008 and 2007 (unaudited)
    
    
    3Statements of Cash Flows for the six months ended June 30,
2008 and 2007 (unaudited)
    
    
    5Notes to Financial Statements (unaudited)
    
    
    6Item 2 - Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    27Item 3.  Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4T.  Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1 - Legal Proceedings
    
    
    32Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 3 - Defaults Upon Senior Securities
    
    
    33Item 4 - Submission of Matters to a Vote of Security Holders
    
    
    33Item 5 - Other Information
    
    
    33Item 6 - Exhibits
    
    
    33Signatures
    
    
    34EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 GUARDIAN ZONE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 BALANCE SHEETS
 (Unaudited)
 As of
    
    
    As of6/30/2008
    
    
    12/31/2007ASSETSCURRENT ASSETSCash
    
    $
    33
    
    
    $
    227Total current assets
    
    
    33
    
    
    
    227FIXED ASSETSOffice equipment net of accumulated
depreciation of $635 and $474, respectively
    
    
    981
    
    
    
    1,142OTHER ASSETSPatent (Note 5)
    
    
    70,997
    
    
    
    58,408TOTAL ASSETS
    
    $
    72,011
    
    
    $
    59,777LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIESAccounts payable
    
    $
    450,989
    
    
    $
    454,465Accrued interest (Notes 9 and 11)
    
    
    36,209
    
    
    
    21,103Accrued expenses (Note 6)
    
    
    370,145
    
    
    
    123,644Line of credit  (Note 8)
    
    
    42,907
    
    
    
    45,185Notes payable  convertible (Note 9)
    
    
    226,250
    
    
    
    226,250Notes payable  related parties (Note 11)
    
    
    48,842
    
    
    
    29,748Notes payable (Note 10)
    
    
    2,500
    
    
    
    2,500Total current liabilities
    
    
    1,177,842
    
    
    
    902,895TOTAL LIABILITIES
    
    
    1,177,842
    
    
    
    902,895STOCKHOLDERS DEFICITCommon stock, $.0001 par value, 100,000,000 shares
authorized, 39,338,287 shares issued and
outstanding
    
    
    3,934
    
    
    
    3,934Additional paid-in-capital
    
    
    825,334
    
    
    
    825,334Common stock
payable
    
    
    15,000
    
    
    
    Deficit accumulated during the development stage
    
    
    (1,950,099
    )
    
    
    (1,672,386
    )Total stockholders deficit
    
    
    (1,105,831
    )
    
    
    (843,118
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    72,011
    
    
    $
    59,777
  -1-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
 
 STATEMENTS OF OPERATIONS
 (Unaudited)
 Three months
    
    
    Three months
    
    
    Six months
    
    
    Six months
    
    
    InceptionEnded
    
    
    Ended
    
    
    Ended
    
    
    Ended
    
    
    (Sept 25, 2002)June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    to June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008REVENUES
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    OPERATING EXPENSESResearch and development expenses
    
    
    8,190
    
    
    
    32,000
    
    
    
    8,190
    
    
    
    32,000
    
    
    
    625,186Selling, general and
administrative
    
    
    163,529
    
    
    
    80,685
    
    
    
    167,051
    
    
    
    106,091
    
    
    
    728,600Merger settlement costs
    
    
    
    
    
    
    32,000
    
    
    
    
    
    
    
    62,000
    
    
    
    62,000Consulting fees
    
    
    
    
    
    
    13,750
    
    
    
    52,000
    
    
    
    13,750
    
    
    
    115,875Consulting fees  related party
    
    
    
    
    
    
    25,000
    
    
    
    34,000
    
    
    
    40,000
    
    
    
    282,900Depreciation
    
    
    81
    
    
    
    65
    
    
    
    162
    
    
    
    84
    
    
    
    636OPERATING LOSS
    
    
    (171,800
    )
    
    
    (183,500
    )
    
    
    (261,403
    )
    
    
    (253,925
    )
    
    
    (1,815,197
    )OTHER INCOME (EXPENSE)Interest expense
    
    
    7,753
    
    
    
    4,550
    
    
    
    16,311
    
    
    
    7,085
    
    
    
    54,902Debt discount on convertible
notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,572
    
    
    
    20,000Litigation settlement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000TOTAL OTHER INCOME (EXPENSE)
    
    
    (7,753
    )
    
    
    (4,550
    )
    
    
    (16,311
    )
    
    
    (15,657
    )
    
    
    (134,902
    )NET LOSS
    
    $
    (179,553
    )
    
    $
    (188,050
    )
    
    $
    (277,714
    )
    
    $
    (269,582
    )
    
    $
    (1,950,099
    )Net loss per common share  basic
    
    $
    (0.00
    )
    
    $
    (0.00
    )
    
    $
    (0.00
    )
    
    $
    (0.01
    )Weighted average number of shares
outstanding
    
    
    39,338,287
    
    
    
    39,840,000
    
    
    
    39,338,287
    
    
    
    39,123,978
  -2-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  STATEMENT OF STOCKHOLDERS DEFICIT
Inception (September 25, 2002) to June 30, 2008
(Unaudited)
 AccumulatedStock
    
    DeficitCommon Stock
    
    Additional
    
    Subscription
    
    During
    
    Total$ .0001
    
    Paid In
    
    (Receivable)
    
    Development
    
    StockholdersShares
    
    Amount
    
    Capital
    
    Payable
    
    Stage
    
    DeficitBalance, September 25, 2002
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Issuance of common stock
    
    
    3,799,742
    
    
    
    380
    
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    500Common stock subscriptions
shares not issued until
2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    
    
    
    
    40,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66,063
    )
    
    
    (66,063
    )Balance, December 31, 2002
    
    
    3,799,742
    
    
    
    380
    
    
    
    120
    
    
    
    40,000
    
    
    
    (66,063
    )
    
    
    (25,563
    )Recapitalization -cancellation of common  stock
    
    
    (3,799,742
    )
    
    
    (380
    )
    
    
    380
    
    
    
    
    
    
    
    
    
    
    
    reissuance of common stock5 for 1stock split
    
    
    18,997,361
    
    
    
    1,900
    
    
    
    (1,900
    )
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock per
stock subscriptions from 2002
    
    
    506,596
    
    
    
    51
    
    
    
    39,949
    
    
    
    (40,000
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    4,052,770
    
    
    
    405
    
    
    
    179,595
    
    
    
    (10,000
    )
    
    
    
    
    
    
    170,000Issuance of common stock
in lieu of consulting
services
    
    
    1,266,491
    
    
    
    127
    
    
    
    49,873
    
    
    
    
    
    
    
    
    
    
    
    50,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (251,319
    )
    
    
    (251,319
    )Balance, December 31, 2003
    
    
    24,823,218
    
    
    
    2482
    
    
    
    268,018
    
    
    
    (10,000
    )
    
    
    (317,382
    )
    
    
    (56,882
    )Issuance of common stock
    
    
    2,634,301
    
    
    
    263
    
    
    
    114,737
    
    
    
    
    
    
    
    
    
    
    
    115,000Stock Subscription Receivable
from December 31, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,000
    
    
    
    
    
    
    
    7,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (131,180
    )
    
    
    (131,180
    )Balance, December 31, 2004
    
    
    27,457,519
    
    
    
    2,746
    
    
    
    384,274
    
    
    
    (3,000
    )
    
    
    (448,562
    )
    
    
    (66,062
    )Issuance of common stock
    
    
    10,030,608
    
    
    
    1,003
    
    
    
    328,997
    
    
    
    
    
    
    
    
    
    
    
    330,000Issuance of common stock
in lieu of consulting
services
    
    
    911,873
    
    
    
    91
    
    
    
    29,909
    
    
    
    
    
    
    
    
    
    
    
    30,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (464,886
    )
    
    
    (464,886
    )Balance, December 31, 2005
    
    
    38,400,000
    
    
    $
    3,840
    
    
    $
    741,660
    
    
    $
    (3,000
    )
    
    $
    (913,448
    )
    
    $
    (170,948
    )
  -3-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)
 
 STATEMENT OF STOCKHOLDERS DEFICIT  (continued)
Inception (September 25, 2002) to March 31, 2008
(Unaudited)
 AccumulatedStock
    
    DeficitCommon Stock
    
    Additional
    
    Subscription
    
    During
    
    Total$ .0001
    
    Paid In
    
    (Receivable)
    
    Development
    
    StockholdersShares
    
    Amount
    
    Capital
    
    Payable
    
    Stage
    
    DeficitPayment of Stock
Subscription
Receivable from
December 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    
    
    
    
    3,000Issuance of 6%
convertible notes
conversion feature of
debt
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    20,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (265,540
    )
    
    
    (265,540
    )Balance, December 31,
2006 (audited)
    
    
    38,400,000
    
    
    
    3,840
    
    
    
    761,660
    
    
    
    
    
    
    
    (1,178,988
    )
    
    
    (413,488
    )Conversion of 6%
convertible notes
conversion feature of debt
    
    
    80,000
    
    
    
    8
    
    
    
    19,992
    
    
    
    
    
    
    
    
    
    
    
    20,000Issuance of common stock
Corporate merger
    
    
    1,600,000
    
    
    
    160
    
    
    
    31,840
    
    
    
    
    
    
    
    
    
    
    
    32,000Retirement of shares held
for litigation settlement
    
    
    (769,490
    )
    
    
    (77
    )
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock
in settlement of loan
    
    
    27,777
    
    
    
    3
    
    
    
    11,765
    
    
    
    
    
    
    
    
    
    
    
    11,768Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (493,397
    )
    
    
    (493,397
    )Balance, December 31,
2007 (unaudited)
    
    
    39,338,287
    
    
    
    3,934
    
    
    
    825,334
    
    
    
    
    
    
    
    (1,672,385
    )
    
    
    (843,117
    )Common stock
payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    
    
    
    
    15,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (277,714
    )
    
    
    (277,714
    )Balance, June 30, 2008
(unaudited)
    
    
    39,338,287
    
    
    $
    3,934
    
    
    $
    825,334
    
    
    $
    15,000
    
    
    $
    (1,950,099
    )
    
    $
    (1,105,831
    )
  -4-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)
 
 STATEMENTS OF CASH FLOWS
 Six months
    
    
    Six months
    
    
    From InceptionEnded
    
    
    Ended
    
    
    (Sept 25, 2002)June 30, 2008
    
    
    June 30, 2007
    
    
    to June 30, 2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Cash flows from operating activitiesNet loss
    
    $
    (277,714
    )
    
    $
    (269,582
    )
    
    $
    (1,950,099
    )Adjustments to reconcile net loss from
operations to net cash used in
operating activities:Stock based compensation
    
    
    
    
    
    
    
    
    
    
    112,000Depreciation
    
    
    162
    
    
    
    84
    
    
    
    636Debt discount on convertible notes
    
    
    
    
    
    
    8,572
    
    
    
    20,000Changes in operating assets and
liabilities:Increase in prepaid expenses
    
    
    
    
    
    
    (5,000
    )
    
    
    Increase (decrease) in accounts payable
    
    
    (3,476
    )
    
    
    68,382
    
    
    
    450,989Increase in accrued interest
    
    
    15,106
    
    
    
    4,649
    
    
    
    36,209Increase (decrease) in accrued expense
    
    
    246,501
    
    
    
    31,900
    
    
    
    370,145Increase (decrease) in litigation
settlement
    
    
    
    
    
    
    (22,500
    )
    
    
    Net cash used in operating activities
    
    
    (19,421
    )
    
    
    (183,495
    )
    
    
    (960,120
    )Cash flows from investing activitiesPurchase of fixed assets
    
    
    
    
    
    
    (1,240
    )
    
    
    (1,616
    )Patent expenditures
    
    
    (12,589
    )
    
    
    (1,131
    )
    
    
    (70,997
    )Net cash used in investing activities
    
    
    (12,589
    )
    
    
    (2,371
    )
    
    
    (72,613
    )Cash flows from financing activitiesProceeds from bank credit line
    
    
    
    
    
    
    
    
    
    
    50,000Proceeds from notes payable
    
    
    
    
    
    
    
    
    
    
    60,000Proceeds from notes payable  related
parties
    
    
    19,094
    
    
    
    57
    
    
    
    109,051Repayment of bank line of credit
    
    
    (2,278
    )
    
    
    (1,883
    )
    
    
    (7,092
    )Repayment on notes payable
    
    
    
    
    
    
    
    
    
    
    (60,000
    )Repayment on notes payable  related
parties
    
    
    
    
    
    
    
    
    
    
    (57,710
    )Proceeds from notes payable 
convertible
    
    
    
    
    
    
    163,750
    
    
    
    246,250Proceeds
from stock subscriptions
    
    
    15,000
    
    
    
    
    
    
    
    15,000Proceeds from sale of common stock
    
    
    
    
    
    
    32,000
    
    
    
    677,267Net cash used in financing activities
    
    
    31,816
    
    
    
    193,924
    
    
    
    1,032,766Net change in cash
    
    
    (194
    )
    
    
    8,058
    
    
    
    33Cash  beginning
    
    
    227
    
    
    
    687
    
    
    
    Cash  ending
    
    $
    33
    
    
    $
    8,745
    
    
    $
    33Supplemental disclosuresInterest paid
    
    $
    1,703
    
    
    $
    2,436
    
    
    $
    12,265Conversion value on 6% convertible notes
    
    $
    
    
    
    $
    20,000
    
    
    $
    20,000Common stock issued for merger
    
    $
    
    
    
    $
    32,000
    
    
    $
    32,000
  -5-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)
 NOTES TO FINANCIAL STATEMENTS
 June 30, 2008
 (Unaudited)
 NOTE 1  ORGANIZATION AND PURPOSE
 Nature of operations:
    A Development Stage Company:
  -6-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)
 
 NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 1  ORGANIZATION AND PURPOSE  (continued)
  NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Definition of Fiscal Year
  Cash and Cash Equivalents :
 .
 Use of Estimates :
  Fair Value of Financial Instruments
  -7-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Earnings (Loss) Per Share Calculations
   Fixed assets
  Income taxes
   -8-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS
    -9-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS (continued)
   -10-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 4  GOING CONCERN
    NOTE 5  PATENT
   -11-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 5  PATENT (continued)
      As ofJune 30, 2008Costs in obtaining patent
    
    $
    70,997Research and development
    
    $
    625,186
 -12-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 5  PATENT (continued)
  NOTE 6  COMMITMENTS AND CONTINGENCIES
 EMPLOYMENT CONTRACTS
  LIABILITY FOR RESEARCH AND DEVELOPMENT CONTRACT
   -13-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  March 31, 2008
(Unaudited)
 NOTE 6  COMMITMENTS AND CONTINGENCIES (continued)
  LIABILITY FOR CONSULTING SERVICES
     -14-




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##### Table of Contents



GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 6  COMMITMENTS AND CONTINGENCIES  (continued)
     NOTE 7  LIABILITY FOR LITIGATION  SETTLEMENT AGREEMENTS
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 7  LIABILITY FOR LITIGATION  SETTLEMENT AGREEMENTS (continued)
  NOTE 8  LINE OF CREDIT  NATIONAL CITY BANK
   NOTE 9  CONVERTIBLE DEBENTURES
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 9  CONVERTIBLE DEBENTURES (continued)
   Date of
    
    Maturity
    
    Face Value
    
    AnnualIssuance
    
    Date
    
    of Note
    
    Interest RateMarch 15,
2007 (in default)
    
    March 15, 2008
    
    $
    100,000
    
    
    
    12.00
    %May 23, 2007
    
    May 23, 2008
    
    $
    50,000
    
    
    
    12.00
    %June 1, 2007
    
    June 1, 2008
    
    $
    13,750
    
    
    
    12.00
    %July 15, 2007
    
    July 15, 2008
    
    $
    12,500
    
    
    
    12.00
    %Sept.13, 2007
    
    Sept.13, 2008
    
    $
    50,000
    
    
    
    12.00
    %
    NOTE 10  NOTE PAYABLE
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 10  NOTE PAYABLE (continued)
    NOTE 11  RELATED PARTY TRANSACTIONS
  June 30, 2008
    
    
    December 31, 2007Ronald Kazdin
    
    $
    960
    
    
    $
    960Thomas J. Radu
    
    
    45,218
    
    
    
    26,288James W. Margulies
    
    
    2,500
    
    
    
    2,500Donald Klins
    
    
    164
    
    
    
    $
    48,842
    
    
    $
    29,748
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 11  RELATED PARTY TRANSACTIONS (continued)
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 12  COMPANY MERGER
    a.
    
    $30,000 to the shareholders of Heatherwood, Inc. within five (5) days of the
Effective Time of the Merger,b.
    
    $60,000 to the shareholder of the Surviving Corporation, within ninety (90)
days of the date of first trading as a publicly traded Company, secured by a
promissory note,c.
    
    1,600,000 shares of common stock to the shareholders of Heatherwood, Inc.d.
    
    38,400,000 shares of common stock to the shareholders of Guardian Zone
Technologies, Ohio.
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 12  COMPANY MERGER (continued)
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 12  COMPANY MERGER (continued)
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 13  STOCKHOLDERS DEFICIT
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 13  STOCKHOLDERS DEFICIT (continued)
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 13  STOCKHOLDERS DEFICIT (continued)
     NOTE 14  SUBSEQUENT EVENTS
 CONTRACTS AND AGREEMENTS
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GUARDIAN ZONE TECHNOLOGIES, INC.  (A DEVELOPMENT STAGE COMPANY)  NOTES TO FINANCIAL STATEMENTS  June 30, 2008
(Unaudited)
 NOTE 14  SUBSEQUENT EVENTS (continued)
 CONVERTIBLE DEBENTURES
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
     Summary of Our Business
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Our Products
 HUGS
  Fob" off
  §
    
    GPS receiver technology (to determine geographic location);§
    
    Cell towers (to determine secondary location and link to internet and call centers);§
    
    Internet links the communication with home owners, call center, and law enforcement agencies;§
    
    Call center (to monitor and coordinate search and rescue initiatives);§
    
    Police vehicle mobile unit (to track RF beacon signal from a police vehicle to aid in the
search and recovery process); and§
    
    Hand-held mobile unit (to track RF beacon signal on foot to aid in the search and recovery
process).
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Six Months Ended June 30, 2008 Compared to Six Months Ended June 30, 2007
 Net Revenues and Cost of Goods Sold
  Research and Development Expenses
  Selling, General and Administrative Expenses
  Consulting Fees
  Interest Expense
  Income Tax Expense
 
 Net Loss
 .
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Liquidity and Capital Resources
   CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Revenue Recognition  a Development Stage Company
  Income Taxes
  Cash and Cash Equivalents
 .
 Use of Estimates
  Earnings (Loss) Per Share Calculations
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Fixed assets
  RECENT ACCOUNTING PRONOUNCEMENTS
      -31-




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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4T. Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  Managements Report on Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
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Item 3. Defaults Upon Senior Securities.
  Date of
    
    Maturity
    
    
    Face Value
    
    
    AnnualIssuance
    
    Date
    
    
    of Note
    
    
    Interest RateMarch 15, 2007
    
    March 15, 2008
    
    $
    100,000
    
    
    
    12.00
    %May 23, 2007
    
    May 23, 2008
    
    $
    50,000
    
    
    
    12.00
    %June 1, 2007
    
    June 1, 2008
    
    $
    13,750
    
    
    
    12.00
    %July 15, 2007
    
    July 15, 2008
    
    $
    12,500
    
    
    
    12.00
    %Sept.13, 2007
    
    Sept.13, 2008
    
    $
    50,000
    
    
    
    12.00
    %
     
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 Exhibit Index
 31.1
    
    Certification of the Principal Executive Officer pursuant to Rule
13a-14(a).31.2
    
    Certification of the Principal Financial Officer pursuant to Rule
13a-14(a).32.1
    
    Section 1350 Certification of the Chief Executive Officer.32.2
    
    Section 1350 Certification of the Chief Financial Officer.
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Signatures
  Guardian Zone Technologies, Inc.
(Registrant)Date: August 14, 2008
    By:
    /s/ Thomas J. RaduThomas J. Radu, Director, Chief ExecutiveOfficer and PresidentDate: August 14, 2008
    By:
    /s/ Donald KlinsDonald Klins, Director, Chief FinancialOfficer and Secretary and
Treasurer -34-