UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

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

For the quarterly period ended September 30, 2007

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from                      to                     

Commission File Number: 001-32862

AMERICAN MOLD GUARD, INC.

(Exact name of small business issuer as specified in its charter)

California	74-3077656
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

30270 Rancho Viejo Road, Suite E, San Juan Capistrano, California 92675

(Address of principal executive offices)

(949) 240-5144

(Issuer’s telephone number)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: as of November 2, 2007, 4,656,623 common stock, no par value, were outstanding.

Transitional Small Business Disclosure Format (check one): Yes  ¨    No  x

AMERICAN MOLD GUARD, INC.

FORM 10-QSB

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements:	3
	Condensed Consolidated Balance Sheets as of December 31, 2006 and September 30, 2007 (unaudited)	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2006 and 2007 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2006 and 2007 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis or Plan of Operation	15
Item 3.	Controls and Procedures	22
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Submission of Matters to a Vote of Security Holders	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signatures		32

2

PART I

FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

American Mold Guard, Inc.

Condensed Consolidated Balance Sheets

	December 31, 2006			September 30, 2007 (unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	4,554,890		$	2,286,798
Accounts receivable, less allowance for doubtful accounts of $85,486 and $57,474, as of December 31, 2006 and September 30, 2007, respectively		1,222,339			1,341,511
Inventories		125,347			67,759
Prepaid expenses and deposits		409,027			292,061
Other current assets		27,399			120,408
Total Current Assets		6,339,002			4,108,537
Restricted cash		752,653			75,720
Property and equipment, net (Note 4)		875,319			633,219
Intangible assets, net		2,368			236,114
Total Assets	$	7,969,342		$	5,053,590
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
Current Liabilities:
Accounts payable and accrued liabilities	$	1,151,861		$	1,038,326
Lease line of credit, current portion (Note 5)		146,326			—
Accrued payroll and related expenses		661,346			267,269
Convertible note payable, net of discount (Note 6)		—			148,347
Accrued interest payable		—			16,722
Total Current Liabilities		1,959,539			1,470,664
Long-Term Liabilities:
Lease line of credit, net of current portion (Note 5)		460,767			—
Long-term convertible notes payable, net of discount (Note 6)		—			296,694
Total Liabilities		2,420,306			1,767,358
Commitments and contingencies (Notes 5 through 9)
Stockholders’ Equity (Deficiency) (Notes 7 through 9)
Common stock, no par value, 50,000,000 shares authorized, 4,605,092 and 4,656,623 shares issued and outstanding on December 31, 2006 and September 30, 2007, respectively		16,606,734			16,561,048
Additional paid-in capital		6,920,413			8,835,467
Accumulated deficiency		(17,978,111	)		(22,110,283	)
Total Stockholders’ Equity (Deficiency)		5,549,036			3,286,232
Total Liabilities and Stockholders’ Equity (Deficiency)	$	7,969,342		$	5,053,590

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

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American Mold Guard, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30, 2006			Three months ended September 30, 2007			Nine months ended September 30, 2006			Nine months ended September 30, 2007
Revenue, net	$	2,240,985		$	1,758,302		$	7,594,607		$	5,736,900
Cost of revenue:
Direct costs		1,202,630			781,245			4,215,926			2,662,964
Depreciation expense		66,050			60,073			137,664			191,191
Total cost of revenue		1,268,680			841,318			4,353,590			2,854,155
Gross margin		972,305			916,984			3,241,017			2,882,745
Selling, general and administrative expenses		2,445,107			2,292,921			6,747,675			6,908,275
Loss from operations		(1,472,802	)		(1,375,937	)		(3,506,658	)		(4,025,530	)
Interest income (expense)		102,350			(153,670	)		(2,539,700	)		(97,110	)
Loss before income tax provision		(1,370,452	)		(1,529,607	)		(6,046,358	)		(4,122,640	)
Provision for income taxes		2,658			3,534			7,491			9,531
Net loss	$	(1,373,110	)	$	(1,533,141	)	$	(6,053,849	)	$	(4,132,171	)
Basic and diluted net loss per share	$	(0.30	)	$	(0.33	)	$	(2.32	)	$	(0.89	)
Weighted average number of common shares outstanding– basic and diluted		4,584,187			4,645,862			2,610,407			4,632,279

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

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American Mold Guard, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine months ended September 30, 2006			Nine months ended September 30, 2007
Cash flows from operating activities:
Net loss	$	(6,053,849	)	$	(4,132,171	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization expense		166,001			271,591
Bad debt recovery		—			(57,474	)
Compensation expense from stock options		95,416			116,898
Common stock issued in settlement		27,807			—
Fair value of warrant issued for services		38,543			36,608
Amortization of debt discount		2,415,837			116,041
Loss on disposal of fixed asset		—			1,564
Increase (decrease) in cash from changes in assets and liabilities:
Accounts receivable		(123,126	)		(61,698	)
Inventories		(68,128	)		57,588
Prepaid expenses, deposits and other current assets		(370,926	)		186,875
Accounts payable and accrued liabilities		(456,108	)		(113,541	)
Accrued payroll related expenses		(543,498	)		(394,077	)
Accrued interest payable		(372,236	)		16,722
Net cash used in operating activities		(5,244,267	)		(3,955,074	)
Cash flows from investing activities:
Release of Certificate of Deposit – restricted cash		—			676,933
Purchase of property and equipment		(170,963	)		(2,033	)
Net cash (used in) provided by investing activities		(170,963	)		674,900
Cash flows from financing activities:
Proceeds on issuance of common stock, net of $1.4 million of offering costs and underwriting discounts of $1.5 million		16,631,685			—
Borrowings from notes payable		750,000			2,000,000
Financing costs		—			(380,825	)
Payments on lease line of credit		(13,850	)		(607,093	)
Payments on short term notes payable		(5,460,000	)		—
Deferred offering costs		620,882			—
Net cash flows provided by financing activities		12,528,717			1,012,082
Increase (decrease) in cash and cash equivalents		7,113,487			(2,268,092	)
Cash and cash equivalents, beginning of period		67,782			4,554,890
Cash and cash equivalents, end of period	$	7,181,269		$	2,286,798
Supplemental disclosures for cash flow information:
Non-cash financing activities
Conversion of Series A and B preferred stock	$	1,484,000		$	—
Securities issued in repayment of bridge financing	$	1,500,000		$	—
Property and equipment acquired under lease line of credit	$	294,539		$	—
Warrants issued to Equity Source Partners	$	—		$	44,860
Beneficial conversion associated with the Calliope convertible note	$	—		$	727,392
Relative fair value of warrants issued in connection with Calliope convertible note	$	—		$	943,608
Cash paid for interest	$	550,275		$	60,282
Cash paid for income taxes	$	2,658		$	9,534

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

5

American Mold Guard, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2007

Note 1. Organization and Nature of Operations

Organization and Business

The business of American Mold Guard, Inc. (the “Company”) is providing mold prevention services to the new construction industry, focusing principally on multi-family and single family residential new construction. Through its wholly-owned subsidiary, AMG Scientific, LLC, the Company also plans to offer antimicrobial infection control surface treatment services to health care facilities and other institutions. The Company has sales representatives located in several states who sell its mold prevention services throughout the country. The Company also has service centers in three states – California, Florida and Texas and it has serviced projects throughout the country with its mobile crews. The Company’s wholly-owned subsidiary, Trust One Termite, Inc. (“Trust One”), which had provided termite control services, suspended operations in August 2007 due to the housing market slowdown.

Wholly Owned Subsidiary

On October 1, 2003, the Company created a wholly-owned subsidiary for the purpose of conducting planned franchising activities. The wholly-owned subsidiary is named “American Mold Guard Franchise, Inc.” The Company has never conducted any franchising activity and no financial transactions have occurred through American Mold Guard Franchise, Inc. American Mold Guard Franchise, Inc. has been dormant since its establishment in 2003.

Unaudited Interim Financial Statements

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America. The condensed consolidated financial statements as of September 30, 2007 and for the three and nine months ended September 30, 2007 and 2006 are unaudited and do not include all information or footnotes necessary for a complete presentation of financial condition, results of operations and cash flows. The unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring accruals, which in the opinion of management are necessary in order to make the condensed consolidated financial statements not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s December 31, 2006 audited financial statements, which are included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006. The results of operations for the three and nine months ended September 30, 2007 are not necessarily indicative of the results to be expected for the year ending December 31, 2007.

Management’s Plan

These financial 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. However, the Company’s historical financial performance, its current financial condition and the uncertainty as to whether the Company will be able to obtain additional financing, raise doubt about the Company’s ability to continue as a going concern. The Company incurred a net loss of $1.5 million during the three months ended September 30, 2007. As of September 30, 2007, the Company had working capital of $2.6 million, an accumulated deficit of $22.1 million and stockholders’ equity of $3.3 million. The Company realized revenue gains for the year ended December 31, 2006 and incurred a net loss of $7.4 million for the year ended December 31, 2006. On July 19, 2007 the Company entered into a Security Agreement (the “Security Agreement”) with Calliope Capital Corporation, a Delaware corporation (“Calliope”). Pursuant to the Security Agreement, the Company issued to Calliope a secured convertible note in the aggregate principal amount of $2,000,000 and obtained a maximum $2,000,000 revolving credit facility (Note 6).

In September of 2007, the Company closed its Gulf region restoration operation centers, consolidated the offices of Chief Executive Officer, President and Chief Operating Officer under one person, eliminated various discretionary services, and reorganized its sales and operations organization in an effort to improve the sales and operations effectiveness of the Company. These actions are expected to reduce selling, general and administrative expenses by approximately $400,000 per quarter starting in the fourth quarter of 2007. Management believes that execution of this plan, combined with the above referenced financing will provide sufficient operating cash throughout most of 2008. Development of the Company’s antimicrobial infection control surface treatment services will necessitate increased capital to fund Company growth, and the Company is prepared to seek additional capital as this business develops. There is no assurance that such additional funding will be available on terms acceptable to the Company, if at all.

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Note 2. Summary of Critical Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, AMG Scientific, LLC since its date of inception (October 12, 2006) and Trust One. All significant inter-company accounts and transactions are eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of highly liquid investments with an original maturity of less than three months when purchased.

Restricted Cash

As of September 30, 2007, the Company had one certificate of deposit totaling $75,720, including interest, which serves as collateral for the Company’s business travel credit cards.

Inventories

Inventories are stated at the lower of cost (as determined by the first-in, first-out method) or market and consist primarily of raw materials.

Property and Equipment

Property and equipment are recorded at cost. The Company provides for depreciation over estimated useful lives ranging from three to five years, using the straight-line method. Leasehold improvements and capitalized leased equipment are amortized over the life of the related non-cancelable lease. Repair and maintenance expenditures that do not significantly add to the value of the property, or prolong its life, are charged to expense as incurred. Gains and losses on dispositions of property and equipment are included in the related period’s statement of operations.

Impairment of Long-Lived Assets

The Company has adopted Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses significant issues relating to the implementation of SFAS No. 121 and develops a single accounting model, based on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale, whether or not such assets are deemed to be a business. SFAS No. 144 also modifies the accounting and disclosure rules for discontinued operations. Management did not note any indicators of impairment during the three and nine months ended September 30, 2007 and 2006.

Allowance for Doubtful Accounts

The Company makes judgments as to its ability to collect outstanding receivables and provide allowances for the applicable portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash, cash equivalents and accounts receivable. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management, however, believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Additionally, the Company has established guidelines regarding diversification of its investments and their maturities, which are designed to maintain safety and liquidity.

7

The Company’s trade receivables are derived from customer revenues from antimicrobial treatment services for mold prevention. The Company makes periodic evaluations of its customer’s credit worthiness and the risk with respect to trade receivables is mitigated by the diversification of its customer base. Collateral is not required for trade receivables. The Company maintains an allowance for estimated uncollectible accounts receivable and such losses have historically been within management’s expectation.

One customer accounted for 17.5% of revenue for the three months ended September 30, 2007 versus 16.6% during the same period last year. For the nine months ended September 30, 2007, one customer accounted for 18.1% of revenue versus 15.3% during the same period last year. As of September 30, 2007 and December 31, 2006, this customer accounted for approximately 8.7% and 18.5% of total receivables, respectively. Given the significant amount of revenues derived from this customer, the loss of this customer or the non-collection of related receivables could have a material adverse effect on the Company’s financial condition and results of operations.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” Deferred income taxes are recorded for the expected tax consequences in future years of temporary differences between the tax bases of assets and liabilities and their financial reporting amount at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

In July 2006, FASB issued FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109” (FIN 48). This Interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. FIN 48 requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. The Company is subject to the provisions of FIN 48 as of January 1, 2007, and has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal tax return and its state tax returns in California and Louisiana as “major” tax jurisdictions, as defined. The periods subject to examination for the Company’s federal return are the 2003 through 2006 tax years. The periods subject to examination for the Company’s state returns in California are years 2002 through 2006 and in Louisiana are years 2005 through 2006. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to FIN 48. In addition, the Company did not record a cumulative effect adjustment related to the adoption of FIN 48. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income taxes.

Comprehensive Income

The Company has adopted SFAS No. 130, “Reporting Comprehensive Income,” which establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustments, minimum pension liability adjustments, and unrealized gains and losses on available-for-sale securities. The Company did not have any items of other comprehensive income as of September 30, 2007 and December 31, 2006 or during the three and nine months ended September 30, 2007 and 2006.

Revenue Recognition

Revenue is based on contracts for agreed upon fees entered into with customers for the services to be completed and is recognized when the service is completed, the amount of the service and contract value is determinable and collection is reasonably assured. The resulting accounts receivable are reported at their principal amounts and adjusted for an estimated allowance for uncollectible amounts, if appropriate.

Service Warranties

The Company provides a general warranty on its mold prevention services that extends for the entire “statute of repose,” the period during which, under the various state laws, builders have continuing liability for construction defects. In general, the period of continuing liability is between 5 and 15 years depending upon the state in which the service has been provided. The warranty covers both property damage and personal injury arising from mold contamination on any surface treated by the Company. The personal injury portion of the warranty is supported by a $3.0 million pollution liability mold giveback provision under the Company’s general liability policy. The Company estimates its exposure to warranty claims

8

based upon historical warranty claim costs and expectations of future trends. Management reviews these estimates on a regular basis and adjusts the warranty provisions as actual experience differs from historical estimates or other information becomes available. However, the Company does not have, at this time, sufficient experience to determine if a reserve is required and/or if the coverage under the general liability policy is sufficient should claims be filed against the Company. To date, the Company has not been required to perform under the terms of its warranty provisions. As a result, the accompanying consolidated financial statements do not include any accruals or provisions associated with future warranty expenditures.

Stock-based Compensation under SFAS 123R

On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment,” or SFAS 123(R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options based on estimated fair values. SFAS 123(R) supersedes the Company’s previous accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” or APB 25, for periods beginning in fiscal 2006. In March 2006, the SEC issued Staff Accounting Bulletin No. 107, or SAB 107, relating to SFAS 123(R). The Company has applied the provisions of SAB 107 in its adoption of SFAS 123(R).

The Company adopted SFAS 123(R) using the modified prospective application transition method, which required the application of the accounting standard as of January 1, 2006, the first day of the Company’s 2006 fiscal year.

Upon adoption of SFAS No. 123(R) the Company has continued to use the Black-Scholes model which was previously used for the Company’s pro forma information required under SFAS No. 123. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because the Company’s stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options. Share-based compensation expense, included in selling, general and administrative expenses, recognized under SFAS 123(R) for the three and nine months ended September 30, 2007 was $35,868 and $116,898, respectively, and $34,902 and $95,416 for the three and nine months ended September 30, 2006, respectively. SFAS 123(R) requires companies to estimate the fair value of share-based payment awards on the grant-date using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statements of operations.

Share-based compensation expense recognized during the current period is based on the value of the portion of share-based payment awards that is ultimately expected to vest. SFAS 123(R) requires forfeitures to be estimated at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The forfeiture rate is based on historical rates. Share-based compensation expense recognized in the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2007 and 2006 includes (i) compensation expense for share-based payment awards granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the pro forma provisions of SFAS 123 and (ii) compensation expense for the share-based payment awards granted subsequent to December 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Share-based compensation expense recognized in the condensed consolidated statement of operations for the three and nine months ended September 30, 2007 and 2006 is based on awards ultimately expected to vest and it has been reduced for estimated forfeitures. SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate forfeitures.

Risk Management

The Company is not exposed to significant credit concentration risk, interest rate or hedging risks. The Company’s functional currency is the US dollar. The Company is not exposed to foreign exchange risk and the Company is not a party to any derivative transactions.

Fair Value of Financial Instruments

The carrying values of cash, accounts receivable, other current assets, accounts payable and accrued liabilities, accrued salary and wages, accrued interest payable and short term debt approximate their fair values because of the short maturity of these instruments. Long-term debt also approximates fair value due to management ability to borrow at approximately the same rate in the current market.

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Per Share Information

The Company presents basic earnings (loss) per share (“EPS”) and diluted EPS on the face of the statements of operations. Basic EPS is computed as net income (loss) divided by the weighted average number of shares of the Company’s common stock, no par value, outstanding for the period. Diluted EPS reflects the potential dilution that could occur from shares of common stock issuable through stock options, warrants, and other convertible securities which are exercisable during or after the reporting period. In the event of a net loss, such incremental shares are not included in EPS since their effects are anti-dilutive. Securities that could potentially dilute basic EPS in the future, that were not included in the calculation of diluted EPS because to do so would have been anti-dilutive, aggregate 7,841,582 and 6,418,801 as of September 30, 2007 and 2006, respectively.

The accompanying consolidated financial statements give retroactive effect to a reverse stock split pursuant to which each share of common stock outstanding before the reverse stock split was converted and exchanged for 0.340124209 new shares of common stock. The reverse stock split was effective as of April 7, 2006.

Recent Accounting Pronouncements

FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140,” to permit fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation in accordance with the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 155 is effective for fiscal years beginning after September 15, 2006. The adoption of SFAS 155 did not have a material impact on the Company’s consolidated financial statements.

The Emerging Issues Task Force (“EITF”) reached a tentative consensus on Issue No. 06-3, “How Sales Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross Versus Net Presentation)” (“EITF 06-3”). EITF 06-3 addresses income statement classification and disclosure requirements of externally-imposed taxes on revenue-producing transactions. EITF 06-3 is effective for periods beginning after December 15, 2006. The adoption of EITF 06-3 did not have a material impact on the consolidated financial statements.

In September 2006, FASB issued SFAS No. 157, “Fair Value Measurements,” which provides guidance on how to measure assets and liabilities that use fair value. SFAS 157 will apply whenever another US GAAP standard requires (or permits) assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This standard also will require additional disclosures in both annual and quarterly reports. SFAS 157 will be effective for financial statements issued for fiscal years beginning after November 15, 2007. Management is currently evaluating the potential impact this standard may have on the Company’s financial position and results of operations, but management does not believe the impact of the adoption will be material.

In December 2006, the FASB approved FASB Staff Position (FSP) No. EITF 00-19-2, “Accounting for Registration Payment Arrangements” (“FSP EITF 00-19-2”), which specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies”. FSP EITF 00-19-2 also requires additional disclosure regarding the nature of any registration payment arrangements, alternative settlement methods, and the maximum potential amount of consideration and the current carrying amount of the liability, if any. The guidance in FSP EITF 00-19-2 amends FASB Statements No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”, and FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure requirement for Guarantees, Including Indirect Guarantees of Indebtedness of Others”, to include scope exceptions for registration payment arrangements.

FSP EITF 00-19-2 is effective immediately for registration payment arrangements and the financial instruments subject to those arrangements that are entered into or modified subsequent to the issuance date of this FSP, or for financial statements issued for fiscal years beginning after December 15, 2006, and interim periods within those fiscal years, for registration payment arrangements entered into prior to the issuance date of this FSP. The adoption of this pronouncement has had an impact of $19,500 on the Company’s financial position, results of operations and cash flows in fiscal year 2007.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). The statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 will be effective for the Company on January 1, 2008. The Company is currently assessing the impact of SFAS 159.

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Note 4. Property and Equipment

Property and equipment consisted of the following as of:

	December 31, 2006			September 30, 2007 (Unaudited)
Field equipment and vehicles	$	1,106,204		$	1,094,603
Office furniture and fixtures		211,760			223,830
Accumulated depreciation		(442,645	)		(685,214	)
Property and equipment, net	$	875,319		$	633,219

Note 5. Lease Line of Credit

In the second quarter of 2006, the Company opened a secured lease line of credit with Bank of America having a 48-month term with a $1.00 buy-out for related leased assets at the end of the term (the “Line of Credit”). During the year ended December 31, 2006, the Company borrowed an aggregate of $650,908 against the Line of Credit. For the year ended December 31, 2006, the Company paid $43,815 towards the Line of Credit.

In June 2007, the Company made the decision to pay off the Line of Credit in full. During the quarter ended June 30, 2007 the Company paid $572,370 to pay off the Line of Credit.

Note 6. Convertible Notes Payable, net of discount and Revolving Credit Facility

On July 19, 2007 the Company entered into a Security Agreement (the “Security Agreement”) with Calliope Capital Corporation, a Delaware corporation (“Calliope”). Pursuant to the Security Agreement, the Company issued to Calliope a Secured Convertible Note in the aggregate principal amount of $2,000,000 and obtained a maximum $2,000,000 revolving credit facility. The term of the Secured Convertible Note is for three years at an interest rate per annum equal to the “prime rate” as published in the Wall Street Journal from time to time plus two percent (2.0%), subject to a floor of 9.0% and a ceiling of 11.0%

The Secured Convertible Note and any and all Revolving Loans are secured by all of the assets of the Company as more fully set forth in the Security Agreement. Calliope has the right, but not the obligation, at any time to convert all or any portion of the outstanding principal amount and accrued interest on the Secured Convertible Note into fully paid and non-assessable shares of common stock of the Company at a fixed conversion price equal to $1.85 per share. Amortizing payments are due pursuant to the Secured Convertible Note commencing on October 1, 2007, and the first business day of each month thereafter in an amount equal to $60,606.

Pursuant to the terms of the Revolving Credit Facility, Calliope may make revolving loans (the “Revolving Loans”) to the Company from time to time during the term of the Revolving Credit Facility in an aggregate amount not to exceed the lesser of (i) $2,000,000 minus $250,000 until the Company achieves operating profitability for any two consecutive fiscal quarters or (ii) an amount equal to ninety percent (90%) of eligible Company commercial account receivables plus seventy percent (70%) of eligible Company consumer account receivables minus $250,000. Any Revolving Loans made to the Company will be evidenced by one or more “Revolving Loan Notes”, and will bear interest at a rate per annum equal to the “prime rate” published in the Wall Street Journal from time to time plus two percent (2%). The Company has estimated that its available revolver balance as of September 30, 2007 is approximately $780,000. As of the date of this filing, the Company has not yet received any Revolving Loans under the Revolving Credit Facility.

Pursuant to the Security Agreement, the Company has provided a first lien on all assets of the Company. The Company will have the option of redeeming any outstanding principal of the Secured Convertible Note by paying to Calliope 130% of such outstanding principal, together with accrued but unpaid interest under the Secured Convertible Note. Calliope earned a commitment fee in the amount of $140,000 at the time of closing. Calliope also received a warrant to purchase up to 1,137,010 shares of the Company’s common stock at a purchase price of $1.93 per share. In addition, the Company paid due diligence, accounting and legal fees to Calliope of $70,965. The Company also paid cash of $125,000 and issued a warrant valued at $44,860 (see Note 7) to Equity Source Partners LLC for financial advisory fees and non-accountable expenses incurred in connection with the debt financing transaction with Calliope.

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Aggregate financing costs of $380,825 paid in connection with the financing described above have been capitalized as such in the accompanying condensed consolidated balance sheet and are amortized over the estimated life of the respective notes. Amortization of $26,655 for the three months ended September 30, 2007, is included in interest expense in the accompanying condensed consolidated statements of operations.

The Company determined that the Secured Convertible Note satisfied the definition of a conventional convertible instrument under the guidance provided in EITF 00-19 and EITF 05-02, as the conversion option’s value may only be realized by the holder by exercising the option and receiving a fixed number of shares. As such, the embedded conversion option in the Secured Convertible Note qualifies for equity classification under EITF 00-19, qualifies for the scope exception of paragraph 11(a) of SFAS 133, and is not bifurcated from the host contract. The Company also determined that the warrant issued to Calliope qualifies for equity classification under the provisions of SFAS 133 and EITF 00-19. In accordance with the provisions of Accounting Principles Board Opinion No. 14, the Company allocated the net proceeds received in this transaction to each of the Secured Convertible Note and common stock purchase warrant based on their relative estimated fair values. As a result, the Company allocated $1,056,392 to the Secured Convertible Note and $943,608 to the common stock purchase warrant, which was recorded in additional paid-in-capital. In accordance with the consensus of EITF issues 98-5 and 00-27, management determined that the Secured Convertible Note contained a beneficial conversion feature based on the effective conversion price after allocating proceeds of the Secured Convertible Note to the common stock purchase warrant, valued at $727,392. The amounts recorded for the common stock purchase warrant and beneficial conversion feature are recorded as debt discounts and are amortized as interest expense over the term of the Secured Convertible Note. Interest charges associated with the Secured Convertible Note and beneficial conversion, including amortization of the debt discount, totaled $116,041 for the three months ended September 30, 2007.

Note 7. Purchase Warrants

Common Stock Purchase Warrants

Listed below are the outstanding warrants of the Company as of September 30, 2007:

	Underlying Shares	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining
April 2005 Warrants	170,062	$	5.88	0.54 years
June 2006 Warrants	15,000		5.00	1.71 years
August 2006 Warrants	13,000		5.00	0.84 years
November 2006 Warrants	20,000		3.00	2.13 years
April 2007 Warrants	40,000		2.16	2.58 years
July 2007 Warrants	1,191,064		1.93	4.81 years
Balance, September 30, 2007	1,449,126	$	2.47	4.14 years

The April 2005 Warrants are fully vested and entitle the holder thereof to purchase up to 170,062 shares of common stock at any time until April 15, 2008 at a purchase price of $5.88 per share. In connection with the issuance of the April 2005 Warrants, the Company recorded $147,368 of debt discount, which it charged against the face value of the $600,000 convertible notes issued in April 2005 and has been amortized over the life of such convertible note which were paid in May 2006.

The June 2006 Warrants were issued in conjunction with payment for services to be received by the Company over a twelve month period. The Warrants entitle the holder thereof to purchase up to 15,000 shares of common stock at any time until June 2009 at a purchase price of $5.00 per share. In connection with the issuance of the June 2006 Warrants, the Company recorded a prepaid asset which will be amortized to expense as the related services are received. The Company estimated the fair value of such warrants to be $23,029 using the Black-Scholes valuation model.

In August 2006, the Company issued 13,000 warrants in conjunction with payment for services to be received by the Company over a six month period commencing March 2006. The warrants entitle the holder thereof to purchase up to 13,000 shares of common stock at any time until August 2009 at a purchase price of $5.00 per share. The Company estimated the fair value of such warrants to be $15,514 using the Black-Scholes valuation model.

In November 2006, the Company issued 20,000 warrants in conjunction with payment for services received by the Company over a three month period commencing October 2006. The warrants entitle the holder thereof to purchase up to 20,000 shares of Common stock at any time until November 2009 at a purchase price of $3.00 per share. The Company estimated the fair value of such warrants to be $20,652 using the Black-Scholes valuation model.

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In April 2007, the Company issued 40,000 warrants in conjunction with payment for services received by the Company commencing April 2007. The warrants entitle the holder thereof to purchase up to 40,000 shares of common stock at any time until April 2010 at a purchase price of $2.16 per share. The Company estimated the fair value of such warrants to be $36,608 using the Black-Scholes valuation model.

In July 2007, the Company issued 1,137,010 warrants in conjunction with the issuance of the Secured Convertible Note and Revolving Credit Facility discussed in Note 6. The warrants entitle the holder thereof to purchase up to 1,137,010 shares of common stock at any time until July 2012 at a purchase price of $1.93 per share. See Note 6 for the valuation of such warrants.

In July 2007, the Company issued 54,054 warrants payment for services received by the Company in conjunction with securing the issuance of the Secured Convertible Note and Revolving Credit Facility. The warrants entitle the holders thereof to purchase up to 54,054 shares of common stock at any time until July 2012 at a purchase price of $1.93 per share. The Company estimated the fair value of such warrants to be $44,860 using the Black-Scholes valuation model.

Class A and Class B Purchase Warrants

Listed below are the A and B warrants of the Company as of September 30, 2007:

	Underlying Shares	Weighted Average Exercise Price		Weighted Average Contractual Life Remaining
May 2006 IPO Class A Warrants	2,930,770	$	9.75	3.59 years
May 2006 IPO Class B Warrants	2,930,770		13.00	3.59 years
Balance, September 30, 2007	5,861,540	$	11.38	3.59 years

In May 2006, there were 2,930,770 Class A warrants issued and outstanding of which 2,700,000 were included in units sold by the Company during its initial public offering completed in May 2006 (the “IPO”) and 230,770 were included in units that were issued on April 26, 2006 to the holders of certain unsecured notes (the “Unsecured Notes”). The Class A warrants issued are exercisable beginning May 26, 2006 and expire on April 26, 2011. Each Class A warrant entitles the holder to purchase one share of common stock at an exercise price of $9.75 per share. The exercise price may be adjusted upon the occurrence of certain events.

In May 2006, there were 2,930,770 Class B warrants issued and outstanding of which 2,700,000 were included in the units sold in the IPO and 230,770 were included in the units that were issued to the holders of the Unsecured Notes. The Class B warrants are identical to the Class A warrants except that the Class B warrants have an exercise price of $13.00 per share and the Class B warrants may only be redeemable after gross revenues for any previous 12 month period, as confirmed by independent audit, equals or exceeds $20 million.

In connection with the April 26, 2006 issuance of shares of common stock, Class A Warrants and Class B Warrants to holders of the Unsecured Notes, the Company agreed to : (i) file, on or before May 26, 2007, a registration statement to register for resale the shares of common stock, Class A Warrants and Class B Warrants issued to the holders of the Unsecured Notes and (ii) have such registration statement declared effective by the Securities and Exchange Commission on or before July 29, 2007. If the Company failed to meet these requirements, the Company would be obligated to pay monthly liquidated damages in cash to the holders of the Unsecured Notes in an amount equal to one percent (1%) of the holders’ original outstanding principal amount of the Unsecured Notes purchased, per month. The Company filed the requisite registration statement on July 5, 2007, and the registration statement was declared effective by the Securities and Exchange Commission on August 7, 2007, and, accordingly, the Company accrued a liability of $19,500 which was charged to interest expense in the current quarter. Such amount remains unpaid at September 30, 2007.

Note 8. Stockholder’s Equity (Deficiency)

Equity Incentive Plan

The shareholders of the Company approved the Equity Incentive Plan (the “Plan”) on April 28, 2003, which reserved for issuance a total of 340,124 shares of common stock for incentive compensation grants of shares of common stock, stock options and restricted stock awards to the Company’s full-time key employees, consultants and directors. The Plan was

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amended in December 2005 to increase the number of shares reserved under the Plan to 425,155 shares of common stock. On June 1, 2007, at the Company’s annual stockholders meeting, stockholders approved an amendment to the Plan to increase the number of shares of common stock reserved for issuance under the plan to 1,500,000. Stock options granted under the Plan generally vest one-third after 12 months while the remainder vests ratably in quarterly installments over the next two years. All unexercised options expire after five years from the date of grant.

A summary of option activity under the Plan for the nine months ended September 30, 2007 is as follows:

Options	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding on December 31, 2006	272,808		$	4.52	8.07	$	—
Granted	213,000			1.10	—		—
Forfeited or expired	(14,962	)		4.32	—		—
Outstanding on September 30, 2007 (unaudited)	530,916		$	2.80	6.05		—
Exercisable on September 30, 2007 (unaudited)	178,297		$	4.34	7.43	$	—

As of September 30, 2007, there was $278,674 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.1 years.

Initial Public Offering

On May 2, 2006, the Company completed an initial public offering (IPO) of 1,350,000 units, at a price per unit of $13.00. Each unit consisted of two shares of Common stock, two Class A warrants and two Class B warrants. On May 23, 2006, the representative of several underwriters exercised an over-allotment option granted to the several underwriters in connection with the IPO and purchased an additional 100,000 units. On June 7, 2006, the representative of the several underwriters exercised the over-allotment option again and purchased 100,000 shares of Common stock, 100,000 Class A warrants and 100,000 Class B warrants. The total gross proceeds from the Company’s IPO were approximately $19.5 million, and the Company realized aggregate net proceeds of approximately $16.6 million.

Convertible Preferred Stock

In connection with the Company’s IPO, each share of Series A and Series B convertible preferred stock outstanding as of May 2, 2006 was automatically converted into common stock at a ratio of one share of common stock for each share of preferred stock. As of May 2, 2006, 170,062 Series A preferred and 154,591 Series B preferred shares were converted to 324,653 common shares. As a result of the conversion of these preferred shares into common stock, the Company’s obligation to pay cumulative preferred dividends terminated. In January 2007, the Company issued Series A preferred shareholders 1,531 additional shares of the Company’s common stock as an anti-dilution provision adjustment.

Note 9. Commitments and Contingencies

Litigation

The Company is currently involved in litigation in the State of Louisiana. The complainant in the litigation (the “Complainant”) has alleged that certain property owned by the Complainant did not receive certain agreed upon mold remediation services from the named defendant (the “Defendant”). The Defendant has in turn brought an action against the Company alleging that the Defendant subcontracted the Company to perform the mold remediation services that are the subject of Complainant’s complaint, and therefore if Defendant is found liable to Complainant, then the Company should be liable to Defendant. This lawsuit is currently in its discovery phase, and further, the Company believes that the lawsuit is without merit. The Company has filed a motion for summary judgment in the matter and a hearing on such motion has been scheduled by the court for December 7, 2007.

Purchase Agreement

On November 1, 2006 a supply agreement (the “Supply Agreement”) was entered into between the Company and Coating Systems Laboratories, Inc., an Arizona corporation (“CSLI”). Under the Supply Agreement, CSLI agreed to

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manufacture and provide the antimicrobial, AMG-X40, to the Company on an exclusive basis. The Company has exclusive rights to use, apply, market, sell, advertise and distribute the AMG-X40 product for a period of five years from the November 1, 2006 effective date. The Supply Agreement may be terminated only upon the occurrence of certain specific events. The Company has agreed to purchase 100% of its requirement for the AMG-X40 product from CSLI during the term of the Supply Agreement. Additionally, the Company has agreed to purchase from CSLI a minimum aggregate annual amount of AMG-X40 product having an aggregate annual invoice price of at least $240,000 for the first year of the Supply Agreement, $480,000 for the second year of the Supply Agreement, $810,000 for the third year of the Supply Agreement, $1,200,000 for the fourth year and the succeeding year of the term of the Supply Agreement. Should the Company not meet its annual minimum purchase obligations, the Company is required to pay CSLI the difference between the minimum purchase obligation for a particular year and the aggregate annual invoice price for all AMG-X40 product actually purchased by the Company during such year.

During the first year of the Supply Agreement, the Company purchased from CSLI AMG-X40 product having an aggregate invoice price of $94,120. On October 26, 2007 CSLI invoiced the Company $145,880, representing the balance due on the Supply Agreement’s first year minimum purchase obligation. The Company is currently in discussions with CSLI regarding termination of the Supply Agreement, the creation of a new agreement between the parties relating to the continued supply of the AMG-X40 product, and a reduction in the amount due to CSLI relating to the Company’s first year minimum purchase shortfall.

Note 10. Subsequent events

On October 5, 2007, the Company announced that Thomas Blakeley, Chairman of the Board and Chief Executive Officer, resigned from all officer and director positions with the Company. Mr. Blakeley has been Chairman and Chief Executive Officer of the Company since founding it in January 2003. Mark Davidson, the Company’s President and Chief Operating Officer, assumed the role of Chief Executive Officer and has been named to the Company’s Board of Directors.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS AND SAFE HARBOR

The following is a discussion of the financial condition and results of operations for our quarter ended September 30, 2007. As used herein, the “Company,” “we,” “us,” or “our” means American Mold Guard, Inc. and its wholly-owned subsidiaries.

This Form 10-QSB includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding our financial position, results of operations, market position, product and service development and market strategy. These statements may be identified by the fact that they use words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue,” “may,” “could” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, competitive product and service development, the ability to fully develop our surface infection control services, future broad market acceptance of mold and hospital acquired infection prevention services, difficulties in raising additional capital in the future, difficulties and delays in establishing the “Mold Guard” brand, the impact of the absence of significant proprietary technology underlying our services, a continued and long-term dependence on a limited number of customers, changes to the inventory levels of our raw materials suppliers, the impact of a continued absence of exclusive or long-term commitments from our customers, changes in the anticipated size or trends of the markets in which we compete, judicial decisions and governmental laws and regulations, and changes in general economic conditions in the markets in which we may compete. In addition, these statements constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties. Forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. The forward-looking statements in this Form 10-QSB should be evaluated together with the many uncertainties that affect our business, particularly those mentioned under the section entitled “Factors That May Affect Future Results” below and our periodic reporting on Form 8-K (if any), which we incorporate by reference.

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GENERAL OVERVIEW

We provide antimicrobial surface treatment services to builders of single and multi-family homes and to health care facilities and other large institutions. To date, we have provided our service to over 700 national and regional multi and single family home builders. Our clients include national home builders such as Lennar Corporation, DR Horton, Inc. and Centex Corporation, regional home builders such as Issa Homes, Inc., and Lenox Homes and multi-family home builders such as The Hanover Company, Bosa Development and Opus West Construction, Inc.

We continue to lose money on an operating and cash flow basis. One of the principal reasons that we have yet to be cash flow positive and profitable is because our sales have been significantly affected by the decline in the rate of growth of the new single-family home construction industry that commenced in 2006, as well as the slowdown in restoration in the Gulf Region that started in the second half of 2006.

Our strategy is to grow mold prevention sales by focusing on multi-family developers. To accomplish this goal we plan to continue to hire sales personnel in regions where multi-family development is more prevalent.

We are also expanding our service offerings to be more of a one-stop service provider to customers, offering new services such as structural inspection and prevention, finished interior protection, preventative maintenance and emergency response service. Through the formation of our wholly-owned subsidiary, AMG Scientific, LLC, we intend to broaden our available market into treating interior surfaces for the purpose of providing surface infection control. The challenge that we face in our infection control business is timely adoption of our infection control treatment application by large institutions and balancing our available cash needed to sustain our operations. We intend to utilize our existing service center capabilities to deploy our surface interior treatment services in an effort to optimize operating costs.

Where we establish a sales presence and where we open new service centers and how many we will open will depend on a number of factors, including existing customer demand, the strength of the new housing market in a particular region, the extent to which mold may or may not be a problem in a particular region, the demand for infection control interior surface treatment and the availability of capital and other opportunities. We believe that an overall prevailing challenge for us presently is balancing our cash availability with our revenue growth objective in mold prevention and successful trial results in our surface infection control studies.

Our future financial condition and operating performance may be affected by several industry trends. The major trends that we believe will have a positive impact on our business are the demand for services relating to mold prevention and infection control interior surface treatment. In addition, we believe public awareness of health risk associated with mold contamination, the growth in mold-related insurance claims and litigation and the high cost of mold remediation and public awareness of the dangers of hospital acquired infections will contribute to our growth. On the other hand, increasing levels of inventory in the housing construction industry, the general decline in the rate of growth of the new home construction industry, higher building costs and delays in health care facilities and other similar institutions adopting our infection control interior surface treatment services could retard our growth.

We measure our business using both financial and other operating metrics. The financial metrics include revenue, gross margin, operating expenses and income from continuing operations. The operating metrics include new sales order activity, service schedule, material usage and crew productivity.

New Sales Activity. With this metric we measure the level of new customer commitments in terms of new clients and dollar value of sales. We use this metric to gauge the effectiveness of our sales efforts. The data is gathered by sales representatives, by region and by month. We monitor new sales activity between project type: (single-family versus multi-family). We also analyze new sales based on regional builders’ and national builders’ activity.

Service Schedule. We utilize this data to evaluate the demand for services in each service center or region. This measurement allows us to identify unused service capacity and to shift capacity, when necessary, to service centers with greater demand.

Material Usage. We use this metric to gauge the relative usage of material in each service center and region. The material usage rate for blast media can vary depending on the amount of mold contamination on the wood surfaces required to be removed, the relative humidity of the region and the proficiency of the crews. We monitor the material usage rate in order to help identify service centers that may need operational improvements or training to decrease their relative cost of service.

Crew Productivity. This measure focuses on our cost of service. We have planning standards for each region that we use to plan crew labor requirements. Measuring productivity (how many square feet of space are treated in a day) allows us to analyze the effectiveness of our labor force and crew leaders. Anticipated productivity by project also is a determining factor

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in project pricing. Again, the productivity levels vary depending on the type of project (single-family versus multi-family versus type of health care facility and other institutions), the climate conditions, the training level and the experience of the crew and the amount of contamination to be removed from the project.

CRITICAL ACCOUNTING POLICIES

Revenue Recognition

Revenue is based on contracts for agreed upon fees entered into with customers for the services to be completed and is recognized when the service is completed. The amount of the service and contract value is determinable and collection is reasonably assured. The resulting accounts receivable are reported at their principal amounts and adjusted for an estimated allowance for uncollectible amounts, if appropriate. We do not require collateral on our accounts receivable.

Impairment of Long-Lived Assets

We have adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses significant issues relating to the implementation of SFAS No. 121 and develops a single accounting model, based on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale, whether or not such assets are deemed to be a business. SFAS No. 144 also modifies the accounting and disclosure rules for discontinued operations. We did not note any indicators of impairment during the quarter ended September 30, 2007.

Allowances for Doubtful Accounts

We make judgments as to our ability to collect outstanding receivables and provide allowances for the applicable portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. The allowance for doubtful accounts was $57,474 at September 30, 2007.

Income Taxes

We account for income taxes in accordance with SFAS Statement No. 109, “Accounting for Income Taxes.” Deferred income taxes are recorded for the expected tax consequences in future years of temporary differences between the tax bases of assets and liabilities and their financial reporting amount at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Stock-based Compensation

On January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment”, or SFAS 123(R), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options based on estimated fair values. SFAS 123(R) supersedes our previous accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, or APB 25, for periods beginning in fiscal 2006. In March 2006, the SEC issued Staff Accounting Bulletin No. 107, or SAB 107, relating to SFAS 123(R). We have applied the provisions of SAB 107 in our adoption of SFAS 123(R).

We adopted SFAS 123(R) using the modified prospective application transition method, which required the application of the accounting standard as of January 1, 2006, the first day of the 2006 year. Share-based compensation expense recognized under SFAS 123(R) for the nine months ended September 30, 2007 and 2006 was $116,898 and $95,416, respectively.

SFAS 123(R) requires companies to estimate the fair value of share-based payment awards on the grant-date using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. Prior to the adoption of SFAS 123(R), we accounted for share-based awards to employees and directors using the intrinsic value method in accordance with APB 25, as allowed under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”, or SFAS 123. Under the intrinsic value method, no share-based compensation expense related to stock options had been recognized in our consolidated statements of operations because the exercise price of our stock options granted to employees and directors equaled the fair market value of the underlying stock at the grant-date.

Share-based compensation expense recognized during the current period is based on the value of the portion of share-based payment awards that is ultimately expected to vest. SFAS 123(R) requires forfeitures to be estimated at the time of grant in order to estimate the amount of share-based awards that will ultimately vest. The forfeiture rate is based on historical

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rates. Share-based compensation expense recognized in our consolidated statement of operations includes (i) compensation expense for share-based payment awards granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the pro forma provisions of SFAS 123 and (ii) compensation expense for the share-based payment awards granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). As share-based compensation expense recognized in the condensed consolidated statement of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

RESULTS OF OPERATIONS (Unaudited)

The following table set forth the percentage relationship to total revenues of items included in our condensed consolidated statements of operations for the periods indicated:

	Three Months Ended September 30,						Increase (Decrease)			% Change
	2006			2007
Revenue, net	$	2,240,985		$	1,758,302		$	(482,683	)	21.5	%
Cost of revenue		1,268,680			841,318			(427,362	)	33.7	%
Gross margin		972,305			916,984			(55,321	)	5.7	%
Selling, general and administrative expenses		2,445,107			2,292,921			(152,186	)	6.2	%
Loss from operations		(1,472,802	)		(1,375,937	)		(96,865	)	6.6	%
Interest income (expense)		102,350			(153,670	)		256,020		250.1	%
Loss before provision for income taxes		(1,370,452	)		(1,529,607	)		159,020		11.6	%
Provision for income taxes		2,658			3,534			876		33.0	%
Net loss	$	(1,373,110	)	$	(1,533,141	)	$	160,031		11.7	%
	Nine months Ended September 30,						Increase (Decrease)			% Change
	2006			2007
Revenue, net	$	7,594,607		$	5,736,900		$	(1,857,707	)	24.5	%
Cost of revenue		4,353,590			2,854,155			(1,499,435	)	34.4	%
Gross margin		3,241,017			2,882,745			(358,272	)	11.1	%
Selling, general and administrative expenses		6,747,675			6,908,275			160,600		2.4	%
Loss from operations		(3,506,658	)		(4,025,530	)		518,872		14.8	%
Interest income (expense)		(2,539,700	)		(97,110	)		(2,442,590	)	96.2	%
Loss before provision for income taxes		(6,046,358	)		(4,122,640	)		(1,923,718	)	31.8	%
Provision for income taxes		7,491			9,531			2,040		27.2	%
Net loss	$	(6,053,849	)	$	(4,132,171	)	$	(1,921,678	)	31.7	%

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Revenues

Revenue for the three months ended September 30, 2007 decreased 21.5% to $1,758,302 compared to $2,240,985 during the same period last year. Year to date revenue decreased 24.5% or $1,857,707 compared to the same period last year. The overall decrease in revenue is attributable to a slowdown in the restoration business in the Gulf region and reduced levels of single-family mold prevention revenue due to the contraction in the new construction housing market. The decline was partially offset by significant increases in our Midwest region and multi-family mold prevention projects.

Revenue by region for the three months ended September 30, 2007 versus the three months ended September 30, 2006 is summarized below:

Region	Three Months Ended September 30, 2006		Percentage of Revenue		Three Months Ended September 30, 2007		Percentage of Revenue		Increase (Decrease)			Percentage Increase (Decrease)
California	$	1,057,870	47.2	%	$	841,542	47.9	%	$	(216,328	)	(20.4	%)
Florida		410,532	18.3	%		380,028	21.6	%		(30,504	)	(7.4	%)
Gulf		696,333	31.1	%		78,748	4.4	%		(617,585	)	(88.7	%)
Midwest		42,934	1.9	%		317,345	18.1	%		274,411		639.1	%
Other		33,316	1.5	%		140,639	8.0	%		107,323		322.1	%
Total	$	2,240,985	100.0	%	$	1,758,302	100.0	%	$	(482,683	)	(21.5	%)

Revenue by region for the nine months ended September 30, 2007 versus the nine months ended September 30, 2006 is summarized below:

Region	Nine Months Ended September 30, 2006		Percentage of Revenue		Nine Months Ended September 30, 2007		Percentage of Revenue		Increase (Decrease)			Percentage Increase (Decrease)
California	$	3,873,347	51.0	%	$	2,857,777	49.8	%	$	(1,015,570	)	(26.2	%)
Florida		1,168,962	15.4	%		1,283,308	22.4	%		114,346		9.8	%
Gulf		2,284,874	30.1	%		591,775	10.3	%		(1,693,099	)	(74.1	%)
Midwest		50,759	0.6	%		609,325	10.6	%		558,566		110.0	%
Other		216,665	2.9	%		394,715	6.9	%		178,050		82.2	%
Total	$	7,594,607	100.0	%	$	5,736,900	100.0	%	$	(1,857,707	)	(24.5	%)

Revenue in the California region decreased $216,328 or 20.4% in the third quarter of 2007 versus the same period for 2006. Year to date revenue decreased $1,015,570 or 26.2% compared to the same period last year. The overall decrease is due to the new construction slowdown in California as builders reduced new housing starts in an effort to lower their inventory.

Revenue in the Florida region decreased $30,504 or 7.4%, in the third quarter of 2007 versus the same period of 2006. Year to date revenue increased $114,346 or 9.8% compared to the same period last year. The year to date increase is attributable to the expansion of our services throughout the state as well as the addition of several new multi-family projects.

Revenue in the Gulf region decreased $617,585 or 88.7% in the third quarter of 2007 versus the same period of 2006. Year to date revenue decreased $1,693,099 or 74.1% compared to the same period last year. The decrease is primarily attributable to the lower level of consumer driven restoration projects due to money flow delays and homeowner indecisiveness. As a result, we have positioned our Gulf region sales force to focus on new multi-family construction projects. We have also closed our Gulf region service centers in an effort to reduce cost.

Revenue in the Midwest region increased $274,411 or 639.1% in the third quarter 2007 versus the same period of 2006. Year to date revenue increased $558,566 or 110% compared to the same period last year. The Midwest region was established in the third quarter of 2006 to capture the market opportunity associated with new housing starts in Houston, Dallas, San Antonio and Austin, Texas. This region has experienced strong growth since opening in 2006 selling our mold prevention services to both multi- and single-family builders.

Other region revenue comprises projects serviced outside of existing primary regions, where we have service centers. Other revenue increased $107,723 or 322.1%, in the third quarter of 2007 versus the same period for 2006. Year to date revenue increased $178,050 or 82.2% compared to the same period last year. Our national multi-family sales team also targets project opportunities throughout the United States. In the first nine months of 2007, projects were completed in Arizona, Colorado, Massachusetts and Virginia where we currently do not have service centers.

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We also analyze revenue based on type of construction treated. National builder projects decreased from $575,871 to $451,224 during the third quarter of 2007, a decrease of 22% compared to the same period in 2006. National builder year-to- date revenue decreased from $2,253,310 to $1,734,956, a decrease of 23% from a year ago. Single family construction decreased from $1,409,514 to $409,531 during the third quarter of 2007, a decrease of 71% from the same period in 2006. Year to date single family revenue decreased from $4,465,553 to $1,735,991, a decrease of 61% from a year ago. Service to multi-family construction increased from $255,600 to $897,547, an increase of 251% for the third quarter of 2007 versus the same period in 2006. Year-to-date multi-family revenue increased from $875,744 to $2,265,953 or an increase of 159% compared to the same period last year.

Cost of Revenue

Three Months Ended September 30, 2006	Percent of revenues		Three Months Ended September 30, 2007		Percent of Revenues		Increase (Decrease)
$1,268,680	56.6	%	$	841,318	47.8	%	$	(427,362	)
Nine Months Ended September 30, 2006	Percent of revenues		Nine Months Ended September 30, 2007		Percent of Revenues		Increase (Decrease)
$4,353,590	57.3	%	$	2,854,155	49.8	%	$	(1,499,434	)

Cost of revenue includes the material, labor and other costs directly related to providing our services, including the depreciation expense relating to equipment used to provide our services. Cost of revenue for the quarter ended September 30, 2007 totaled $841,318 a decrease of 33.7% versus the same period last year. The year-to-date cost of revenue is $2,854,155 a decrease of 34.4% compared to the same period last year. The decrease was a result of higher average pricing, improved labor productivity and an overall decrease in raw material costs due to improved pricing and optimized usage.

Raw material costs have decreased as a percentage of revenue from 10.8% in the third quarter of 2006 to 7.2% for the same time period in 2007. Year-to-date decreased from 8.2% compared to 11.6% in 2006. This decrease is attributable to an overall material cost price reduction which was implemented in the third quarter of 2006, a change in blast media that occurred in the third quarter of 2007, as well as optimized material usage.

Direct labor cost as a percentage of revenue decreased from 29.0% in the third quarter of 2006 to 26.0% in the same period in 2007. Year-to-date, direct labor decreased from 29.8% in 2006 to 26.9% in 2007. The year-to-date decrease is primarily a result of higher average pricing, increased labor utilization through improved job scheduling and the use of productivity tools such as new sprayers, box trucks and improved soda pot performance.

Other costs of revenue include costs associated with fuel, service vehicle rental, equipment rental, equipment depreciation, direct supplies and other costs directly associated with the services we provide. Other direct costs have decreased as a percentage of revenue from 16.9% in the third quarter of 2006 to 14.7% for the same time period in 2007. Year-to-date other direct costs decreased from 15.7% to 14.6% in 2007. The decrease is primarily a result of variable cost reductions enacted by us.

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Selling, General and Administrative Costs

Three Months Ended September 30, 2006	Percent of Revenues		Three Months Ended September 30, 2007		Percent of Revenues		Increase (Decrease)
$2,445,107	109.1	%	$	2,292,921	130.4	%	$	(152,186	)
Nine Months Ended September 30, 2006	Percent of Revenues		Nine Months Ended September 30, 2007		Percent of Revenues		Increase (Decrease)
$6,747,675	88.8	%	$	6,908,275	120.4	%	$	160,600

Selling, general and administrative costs include corporate and regional overhead such as compensation and benefits for sales, administrative and executive personnel, rent, insurance, professional fees, travel and office related expenses. The decrease from the third quarter of 2006 to the third quarter of 2007 was $152,186. The decrease is primarily attributable to cost reduction initiatives we undertook to reduce discretionary expenditures. As a percentage of revenue, selling, general and administrative costs increased from 109.1% in the third quarter of 2006 to 130.4% for the same period in 2007. Year-to-date selling, general and administrative costs increased from 88.8% to 120.4%, or $160,600 for the nine months ended September 30, 2007. The increase is attributable to the investment that we made in sales, marketing, corporate infrastructure and public entity costs starting in the second quarter of 2006 upon completing our IPO.

In September of 2007, we closed our Gulf region restoration operation centers, consolidated the offices of Chief Executive Officer, President and Chief Operating Officer under one person, eliminated various discretionary services, and reorganized our sales and operations organization in an effort to improve our sales and operations effectiveness. A charge of approximately $150,000 related to the closure of the Gulf region restoration operation and the resignation of our former Chief Executive Officer, Thomas Blakeley, is included in our third quarter selling, general and administrative expense. These actions are expected to reduce selling, general and administrative expenses by approximately $400,000 starting in the fourth quarter of 2007.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have funded our operations from internally generated funds, the proceeds from the sale of debt and equity securities and payment of obligations with our common stock. As of September 30, 2007, our working capital was $2.6 million, compared to $4.4 million as of December 31, 2006. The primary reason for this decrease is the operating loss for the first nine months of 2007.

Our net loss was $1,533,141 and $1,373,110 during the three months ended September 30, 2007 and 2006, respectively. Our net loss was $4,132,171 and $6,053,849 during the nine months ended September 30, 2007 and 2006, respectively. Net interest income in the three months ended September 30, 2006 was $102,350 as compared to net interest expense of $153,670 in the three months ended September 30, 2007. For the nine months ended September 30, 2006 net interest expense was $2,539,700 as compared to net interest expense of $97,110 in the nine months ended September 30, 2007. The primary reason for this change is due to the receipt of IPO proceeds which were used to retire our debt.

Changes in Working Capital between December 31, 2006 and September 30, 2007

During the nine months ended September 30, 2007, our working capital decreased from $4,379,463 as of December 31, 2006 to $2,637,873 or a decrease of $1,741,590. The principal reasons for the decrease in working capital were as follows:

• Cash decreased by $2,268,092 primarily as a result of our operating loss for the period, offset by $1,679,034 in net funds we received in connection with the issuance of the Secured Convertible Note.

• Accrued payroll related expenses decreased $394,077 as a result of payment of payroll related obligations.

• Short term notes payable increased by $148,347, net of underlying debt discount, due to the Security Agreement that we entered into with Calliope Capital Corporation on July 19, 2007.

• Accounts receivable increased by $119,172 primarily due to the increase in multi-family projects.

• Prepaid expenses and deposits increased by $116,966 as the result of renewing our annual General Liability and Workers Compensation policy in August 2007.

• Accounts payable and accrued liabilities decreased $113,541 as a result of cost reductions we enacted throughout the year.

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Plans for Additional Capital

On July 19, 2007, we entered into the Security Agreement with Calliope Capital Corporation. Pursuant to the Security Agreement, we issued to Calliope a secured convertible term note in the aggregate principal amount of $2,000,000 and obtained a maximum of $2,000,000 revolving credit facility. Our top financial priorities are to drive revenue growth and increase gross margins while reducing selling, general and administrative costs as compared to the first nine months of 2006. Execution of this plan, combined with the above referenced financing should provide sufficient operating cash through most of 2008. Development of our antimicrobial surface treatment infection control services will necessitate increased capital to fund our growth in this market. There is no assurance that such additional funding will be available on terms acceptable to us if at all.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our “disclosure controls and procedures” (as defined in Rules 13(a)-15(e) under the Securities Exchange Act of 1934, as amended) are effective to ensure that all information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, and allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

In connection with the above-referenced evaluation, no change in our internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1 – Legal Proceedings

On September 5, 2006, a third-party complaint was filed by Lazaro Rodriguez and SmartProperties.Org Construction, LLC (“SmartProperties”) against us in the primary action of Pitrina Messina vs. Lazaro Rodriguez and SmartProperties, which was filed in the Civil District Court for the Parish of Orleans, State of Louisiana. The primary complaint filed by Pitrina Messina (“Plaintiff Messina”) alleges that Mr. Rodriguez and SmartProperties failed to provide certain promised mold remediation services with respect to certain residential property owned by Pitrina Messina (the “Messina Property”). In their third party complaint, Mr. Rodriguez and SmartProperties allege that they contracted with us to perform the promised mold remediation services on the Messina Property and therefore to the extent that Mr. Rodriguez and/or SmartProperties is found liable for any damages to Plaintiff Messina under the primary complaint, we should be required to pay Mr. Rodriguez and/or SmartProperties such damages. Discovery has commenced in this matter. We believe that the third party complaint filed against us by Mr. Rodriguez and SmartProperties is without merit and we intend to defend the litigation vigorously. In thjs regard, we have filed a motion for summary judgment in this matter. A hearing on such motion has been scheduled by the court for December 7, 2007. Further, we do not believe the ultimate resolution of this matter will have a material effect on our financial statements.

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Item 1A – Risk Factors

We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control. A number of these risks are listed below. These risks could affect actual future results and could cause them to differ materially from any forward-looking statements we have made in this report. You should carefully consider the risks described below, as well as the other information set forth in this Form 10-QSB. The risks and uncertainties described below are not the only ones we face. Should they materialize, any of the risks described below could significantly and adversely affect our business, prospects, financial condition or results of operations. In that case, the trading price of our common stock could fall and you may lose all or part of the money you paid to buy our securities.

Risks Affecting Our Business

We have a history of losses and cash flow deficits, and we expect to continue to operate at a loss and to have negative cash flow for the foreseeable future, which could cause the price of our stock to decline.

Since our inception, we have incurred net losses in every quarter through September 30, 2007. At September 30, 2007, we had cumulative net losses of $22.1 million and working capital of $2.6 million. We also had negative cash flow from operating activities. Historically, we have funded our operations from internally generated funds, the proceeds from the sale of debt and equity securities and payment of obligations with our common stock. Our growth strategy is to increase our markets and our market share by adding new sales professionals in new and existing regions, to expand our service offerings to include infection control surface treatment services and to be more of a one-stop service provider to customers. This growth strategy is likely to result in additional losses and negative cash flow for the foreseeable future. We cannot give assurances that our growth strategy will be successful or that we will ever become profitable.

Our future success depends on broad market acceptance of mold prevention services, which may not happen, and therefore we may never achieve profitability.

The market for mold prevention services is relatively new. As is typical of a new and rapidly evolving industry, the demand for, and market acceptance of, mold prevention services is highly uncertain. Currently, mold prevention services are not required by local building codes or the insurance industry, making it even more difficult for us to market our services. In order to be successful, we must educate property owners, builders and the public about the importance of mold prevention. We believe that one of the major obstacles we face in marketing our mold prevention services is the lack of knowledge of the importance of maintaining indoor environments mold-free. We spend a considerable amount of time educating property owners, builders, contractors and the general public on the health risks associated with mold exposure and the value of our services. We can provide no assurances that these efforts will be successful or result in increased revenue. Our success also depends on builders allocating a portion of their construction budget for problem avoidance. In the event that builders do not have funds available for such purpose, the sales of our services will be adversely affected. We cannot give assurances that the demand for mold prevention service will become widespread. If the market for mold prevention services fails to develop or develops more slowly than we anticipate, our business could be adversely affected.

Our future success is materially dependent upon the development and introduction of our antimicrobial interior surface infection control services, which services are in their development stage.

A material aspect of our growth strategy is the development and commercialization of antimicrobial infection control services that can be marketed and sold to healthcare and other similar institutions. We believe that our future revenue and profitability will substantially depend on the development and sale of our antimicrobial interior surface infection control services. Our planned antimicrobial interior surface infection control services are still under development, and there can be no assurance that such services will be successfully developed or commercialized on a timely basis, if at all. We believe that our revenue growth and profitability will substantially depend upon our ability to complete the development of and successfully introduce our antimicrobial interior surface control services. We will be required to undertake time-consuming and costly development activities and we may be required to seek regulatory approval for our antimicrobial interior surface infection control services. There can be no assurance that we will not experience difficulties that could delay or prevent the successful development, introduction and marketing of our antimicrobial interior surface infection control services, that regulatory clearance or approval will be granted, if necessary, on a timely basis, if at all, or that our antimicrobial interior surface control services will be successfully commercialized. If we are unable, for technological or other reasons, to complete the development or introduction of our antimicrobial interior surface infection control services or if such services are not approved for marketing or do not achieve a significant level of market acceptance, our business, financial condition and results of operations would be materially and adversely affected.

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Our cash balance may not be sufficient to fully execute on our growth strategy, and therefore, we may seek to raise additional capital in the future.

As of September 30, 2007, we had approximately $2.3 million in cash and cash equivalents for use in expansion, sales and marketing, capital expenditures and working capital. On July 19, 2007, we entered into the Security Agreement with Calliope Capital Corporation. Pursuant to the Security Agreement, we issued to Calliope a secured convertible term note in the aggregate principal amount of $2,000,000 and obtained a maximum $2,000,000 revolving credit facility. This amount may not be sufficient to execute our growth strategy in full. Since our growth strategy contemplates the development and commercialization of our antimicrobial interior surface treatment services, we believe that we will need to raise additional capital in the future. We could also face unforeseen costs, such as an increase in the cost of raw materials and operating expenses, which would further strain our limited financial resources. Additionally, builders could discontinue ordering our mold prevention services for reasons unrelated to the efficacy or quality of our services, such as the occurrence of severe weather or natural disasters in a region of the country where we have projected significant sales or a further decline in the new construction segment of the residential housing construction industry, which would further increase our operating losses and negative cash flow.

A significant downturn in the national economy in general, and the new home construction industry specifically, could adversely affect our revenue, gross margin and earnings.

Our business could be unfavorably affected by changes in national economic conditions, including inflation, interest rates, and availability of capital markets, consumer spending rates and the effects of governmental plans to manage economic conditions. The demand for our mold prevention services, and hence our revenue and gross margin, is strongly correlated with the level of business activity within the new home construction industry. Economic weakness in the new home construction industry has resulted in the past, and may result in the future, in decreased revenue, gross margin, earnings and growth rates. In this environment, we may not be able to increase our revenues sufficiently to maintain our margins, which may affect our ability to achieve our growth strategy.

We have not been able to generate a sufficient amount of cash flow to fund operations and, as a result, if we need to raise additional capital in the future, we may not be able to do so on terms that are reasonable, which could cause our operating and financial performance to decline from previous levels or to be lower than expected.

New sources of capital may not be available to us when we need it or may be available only on terms we would not find acceptable. If capital is not available on satisfactory terms or is not available at all, we may be unable to continue to fully develop our business or take advantage of new business opportunities. In addition, our results of operations may decline from previous levels or may fail to meet expectations because of the higher cost of capital. As a result, the price of our publicly traded securities may decline, causing holders of our securities to lose all or part of their investment. Finally, equity financing, if obtained, could result in additional dilution to our existing stockholders.

We may not succeed in establishing the “Mold Guard” or “Protection Plus” brand, which could prevent us from acquiring customers and increasing our revenues.

A significant element of our business strategy is to build market share by continuing to promote and establish the “Mold Guard” and “Prevention Plus” brand. If we cannot establish our brand identity, we may fail to build the critical mass of customers required to substantially increase our revenues. Promoting and positioning our brand will depend largely on the success of our sales and marketing efforts and our ability to provide a consistent, high quality customer experience. To promote our brand, we expect that we will incur substantial expenses related to advertising and other marketing efforts. If our brand promotion activities fail, our ability to attract new customers and maintain customer relationships will be adversely affected, and, as a result, our financial condition and results of operations will suffer.

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There is very little, if anything, about our mold prevention service that is proprietary, and as such we are likely to face increasing competition, making it more difficult for us to capture market share.

We do not own any intellectual property or other proprietary rights. The raw materials that we use are not owned or produced by us and are available commercially. Although we believe that the methodology we use in delivering our services is proprietary, there is very little we can do to protect it. Except for our senior executive officers, none of our employees or contractors sign confidentiality, non-compete or non-disclosure agreements. With virtually no barriers to entry, any number of potential competitors could enter the market and provide the same services that we provide. Competitors may misappropriate our methodology or our methodology may otherwise become known or independently developed by competitors. This could materially and adversely affect our business and the value of an investment in our securities.

We rely on our suppliers to provide us with the raw materials we need to provide our services, and these third parties may fail to deliver us the material we need in a timely fashion, which could adversely affect our reputation and our ability to generate revenues.

We use three products for our mold prevention services: blast media, a disinfectant/deodorizer and an antimicrobial agent. Our ability to service our customers depends on us having a regular and reliable source for these materials. We rely on our suppliers to provide us with adequate quantities of these products in a timely manner. A failure by our suppliers to provide us with these key products in a timely manner or in sufficient quantities will have an adverse effect on our ability to satisfy customer demand and could damage our reputation and brand and substantially harm our financial condition and results of operations. Timely delivery of these products could be affected by a number of factors including labor issues at the supplier and shipper, inclement weather and product availability. We only have a supply agreement covering the antimicrobial agent. If shortages occur on a regular basis, we will loose revenue opportunities, which would have an adverse impact on our financial condition and could negatively impact our reputation, which could have longer term adverse consequences on our ability to grow our business.

We have a limited amount of general liability insurance coverage, and therefore a large damage award for personal injury or property damage could render us financially insolvent.

There is increasing litigation in the United States over personal injuries caused by mold contamination and jury awards relating to such litigation are significant. If our services fail to prevent mold growth on a surface we treated, a person suffering property damage or personal injury is likely to sue us. In such event, our insurance coverage – $3 million – may not be sufficient. Litigation that is launched against us and that results in a large jury award could render us financially insolvent.

Our success and growth strategy depends on our senior management and our ability to attract and retain qualified personnel.

Our future success to a significant extent depends upon the continued service of our senior executives. The loss of the services of our senior management could harm our business. In October 2007, our then Chairman of the Board and Chief Executive Officer, Thomas Blakeley, resigned as our Chairman of the Board and Chief Executive Officer. Mark Davidson, our President and Chief Operating Officer, has assumed the role of Chief Executive Officer. Even though we believe that Mr. Davidson is qualified and capable of assuming Mr. Blakeley’s responsibilities, and even though we have retained Mr. Blakeley as a consultant for a limited transition period, any disruption resulting from Mr. Blakeley’s departure may adversely impact our customer relationships, employee morale and our business.

We hire and retain at least one experienced and knowledgeable sales executive for each region in which we establish a service center. The competition for high-quality, skilled managers and sales personnel in the new home construction industry is intense, causing the search process to be time-consuming and expensive. Moreover, in certain parts of the country, it may also be difficult to find workers to staff the crews needed to perform our services at construction sites. In addition we may need to hire skilled sales and account management executives to develop our infection control business. We may not be able to hire enough qualified personnel to meet our needs as our business grows or to retain the employees we currently have. Our inability to hire and retain the individuals we need could hinder our ability to sell our existing services. If we are not able to attract and retain qualified employees, we will not be able to successfully implement our business plan and our business will be harmed.

We may not be able to manage our growth effectively, create operating efficiencies or achieve or sustain profitability.

The ability to manage and operate our business as we execute our growth strategy will require effective planning. Rapid growth could strain our internal resources, leading to a lower quality of customer service, reporting problems and delays in meeting important deadlines, resulting in loss of market share and other problems that could adversely affect our reputation and financial performance. Our efforts to grow have placed, and we expect will continue to place, a significant strain on our personnel, management systems, infrastructure and other resources. Our ability to manage future growth

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effectively will also require us to continue to update and improve our operational, financial and management controls and procedures. If we do not manage our growth effectively, we could be faced with slower growth and a failure to achieve or sustain profitability.

We may not be able to secure required governmental approval or licensing for products we use in the future.

Prior to our use of new mold removal, disinfectant / deodorizing, or antimicrobial products in the future, we may be required to obtain federal and/or state approval and licenses, including but not limited to the approval of the EPA. Our failure to obtain such approval or licenses may adversely affect our operations.

We may incur significant costs as a result of operating as a public company, and our management devotes substantial time to new compliance initiatives.

We may incur significant legal, accounting and other expenses as a public company, including costs resulting from regulations regarding corporate governance practices. For example, the listing standards of the Nasdaq Capital Market require that we satisfy certain corporate governance requirements relating to independent directors, audit committees, distribution of annual and interim reports, stockholder meetings, stockholder approvals, and solicitation of proxies, conflicts of interest, stockholder voting rights and codes of conduct. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, these rules and regulations could make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

In addition, the Sarbanes-Oxley Act of 2002 (“SOX”) requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, for the year ending December 31, 2007, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our testing, or the subsequent testing by our independent registered public accounting firm in the year ending December 31, 2008, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. Our compliance with Section 404 will require that we incur substantial expense and expend significant management time on compliance-related issues. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock would likely decline and we could be subject to sanctions or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities, which would require additional financial and management resources.

There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and may not be detected.

While we continue to take action to ensure compliance with the disclosure controls and other requirements of SOX and the related SEC and Nasdaq Stock Market rules, there are inherent limitations in our ability to control all circumstances. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that any company’s controls, including our own, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be evaluated in relation to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple errors or mistakes. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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Risks Related to Our Industry

As public awareness of the health risks and economic costs of mold contamination and hospital acquired infections grows, we expect competition to increase, which could make it more difficult for us to grow and achieve profitability.

We expect competition to increase as awareness of mold-related and infectious disease problems increase. As we demonstrate the success of our services we expect other companies to enter the market. A rapid increase in competition could negatively affect our ability to develop new and retain our existing clients and the prices that we can charge. Many of our competitors and potential competitors have substantially greater financial resources, customer support, technical and marketing resources, larger customer bases, longer operating histories, greater name recognition and more established relationships than we do. We cannot be sure that we will have the resources or expertise to compete successfully. Compared to us, our competitors may be able to:

• develop and expand their products and services more quickly;

• adapt faster to new or emerging technologies and changing customer needs and preferences;

• take advantage of acquisitions and other opportunities more readily;

• negotiate more favorable agreements with vendors and customers;

• devote greater resources to marketing and selling their products or services; and

• address customer service issues more effectively.

Some of our competitors also may be able to increase their market share by providing customers with additional benefits or by reducing their prices. We cannot be sure that we will be able to match price reductions by our competitors. In addition, our competitors may form strategic relationships to better compete with us. These relationships may take the form of strategic investments, joint-marketing agreements, licenses or other contractual arrangements that could increase our competitors’ ability to serve customers. If our competitors are successful in entering our market, our ability to grow or even sustain our current business could be adversely impacted.

If we fail to keep up with changes in our industry, we will become less competitive, limiting our ability to generate new business and increase our revenues.

In order to remain competitive, serve our customers effectively and increase our revenue, we must respond on a timely and cost-effective basis to changes in technology, industry standards and procedures and customer preferences. We need to continuously develop new procedures and technologies that address new developments in the industries that we serve or intend to serve. In the market segments we serve and the regions in which we operate, we need to stay current and compliant with laws, regulations, rules, standards, guidelines, releases and other pronouncements that are periodically issued by legislatures, government agencies, courts, professional associations and others. In some cases these changes may be significant and the cost to comply with these changes may be substantial. We cannot give assurances that we will be able to adapt to any changes in the future, that we will have the financial resources to keep up with changes in the marketplace or that we will be able to offset those costs with increases in the amounts we charge for our services. This could cause our net income to decline, which likely will lead to a decline in the price of our publicly traded securities, resulting in a loss of all or a part of an investment in our securities.

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We do not have “exclusive” or long-term commitments from builders for our services, negating any competitive advantage we get from these relationships.

Although we have ongoing relationships with a number of national and regional home builders, none of these relationships are “exclusive.” In addition, we do not have any long-term firm commitments from builders to use our services. Even “preferred provider” status, which we enjoy with one national home builder, does not guarantee that we will be hired for a particular job or any job with that customer. As a result, our revenues are unpredictable, and we are highly susceptible to competition. There is nothing preventing any of our customers from entering into identical or similar relationships with our competitors or from discontinuing their relationship with us at any time. If a number of builders were to terminate their relationship with us at the same time or direct business to our competitors, our business, operating and financial condition would suffer.

Risk Related to Our Securities

Our stock price is volatile and there is a limited market for our shares.

The stock markets generally have experienced, and will probably continue to experience, extreme price and volume fluctuations that have affected the market price of the shares of many small capital companies. These fluctuations have often been unrelated to the operating results of such companies. Factors that may affect the volatility of our stock price include the following:

• our success, or lack of success, in developing and marketing our products and services;

• the announcement of new products, services, or technological innovations by us or our competitors;

• changes in the executive leadership of the company;

• actual or perceived changes in the national economy and new home construction industry;

• quarterly fluctuations of our operating results;

• changes in revenue or earning estimates; and

• competition.

Based on the factors described above, recent trends should not be considered reliable indicators of our future stock prices or financial results. Additionally, there is a limited market for our common stock and warrants and we cannot give assurances that such a market will develop further or be maintained.

Investors should not expect the payment of dividends by us.

We do not expect to pay dividends on our common stock in the foreseeable future. Investors who require cash dividends from their investments should not purchase our common stock or warrants.

Holders of our securities may experience significant dilution.

We anticipate that we may need to raise additional capital to fund our business growth. In addition, we anticipate that we may issue a significant number of shares or the rights to acquire shares as a part of our strategy to raise capital. In either event, current stockholders may experience significant dilution and our earnings per share may decrease.

Fluctuations in our quarterly operating results may cause our stock price to decline and limit our stockholders’ ability to sell our common stock or warrants in the public markets.

Our operating results and the operating results of businesses that we may acquire in the future may fluctuate significantly due to a variety of factors, many of which are outside of our control. Our operating results may in some future quarter fall below the expectations of securities analysts and investors. In this event, the trading price of our common stock or warrants could decline significantly. In addition to the risks disclosed elsewhere in this report, factors outside of our control, which may cause our quarterly operating results to fluctuate may include:

• fluctuations in the national economy, and more specifically the new home construction industry;

• demand for our products;

• fluctuation in the capital budgets of our customers; and

• development of superior products and services by our competitors.

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In addition, factors within our control, such as our ability to deliver services in a timely fashion, may cause our operating results to fluctuate in the future.

The factors listed above may affect both our quarter-to-quarter operating results as well as our long-term success. Given the potential fluctuation in our operating results, you should not rely on quarter-to-quarter comparisons of our results of operations as an indication of our future performance or to determine any trend in our performance. Fluctuations in our quarterly operating results could cause the market price and demand for our common stock or warrants to fluctuate substantially, which may limit the ability of our stockholders to sell our securities in the public markets.

If persons engage in short sales of our common stock, including sales of shares to be issued upon exercise of warrants, the price of our common stock may decline.

Selling short is a technique used by a stockholder to take advantage of an anticipated decline in the price of a security. A significant number of short sales or a large volume of other sales within a relatively short period of time can create downward pressure on the market price of a security. Further sales of common stock issued upon exercise of our warrants could cause even greater declines in the price of our common stock due to the number of additional shares available in the market, which could encourage short sales that could further undermine the value of our common stock. Holders of our securities could, therefore, experience a decline in the value of their investment as a result of short sales of our common stock.

Future sales of our common stock may cause our stock price to decline.

Our current stockholders hold a substantial number of shares of our common stock that they are able to sell in the public market. Significant portions of these shares are held by a small number of stockholders. Sales by our current stockholders of a substantial number of shares or the expectation that such sale may occur, could significantly reduce the market price of our common stock. Additionally our officers, directors and pre-offering holders of approximately 1,579,413 shares of our stock were subject to a lock-up agreement that expired on April 26, 2007. If these stockholders sell a significant amount of these shares on or after that date, this could significantly reduce the market price of our common stock.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

On July 19, 2007, pursuant to the terms of a Security Agreement entered into by and between us and Calliope Capital Corporation, a Delaware corporation (“Calliope”), we issued to Calliope a secured convertible term note in the aggregate principal amount of $2,000,000 (the “Secured Convertible Note”). Calliope has the right not the obligation to convert all or any portion of the outstanding principal amount and accrued interest on the Secured Convertible Note into fully paid and non-assessable shares of common stock of the Company at a fixed conversion price equal to $1.85 per share. We also, issued to Calliope a common stock purchase warrant (the “Warrant”) entitling Calliope to purchase up to 1,137,010 shares of our common stock at any time until July 19, 2012 at a purchase price of $1.93 per share. The purchase price may be adjusted if specific events occur, as defined in the Warrant. The issuance of the Secured Convertible Note and the Warrant to Calliope was made in reliance on the exemption from registration found in Section 4(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving any public offering. The Security Agreement contains representations to support our reasonable belief that Calliope is an accredited investor as set forth in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended, and that Calliope has acquired the Secured Convertible Note and the Warrant for investment and not with a view to the distribution thereof.

On July 19, 2007, in connection with our entering into the Security Agreement, we issued to several employees of Equity Source Partners common stock purchase warrants (the “Warrants”). The Warrants entitle the holders thereof to purchase in aggregate up to 54,054 shares of our common stock at any time until July 19, 2012 at a purchase price of $1.93 per share. The purchase price may be adjusted if specific events occur, as defined in the Warrants.

On August 2, 2007, we issued an aggregate of 30,000 shares of our common stock to four of our directors pursuant to the terms of Director Restricted Stock Award Agreements. The Director Restricted Stock Award Agreements provide that the shares of common stock issued to each of the four directors are required to be forfeited back to us should the directors discontinue their services as directors prior to August 2, 2008.

On August 22, 2007, we issued options to Mark Davidson, our Chief Executive Officer, President and Chief Operating Officer and Paul Bowman, our Chief Financial Officer. Such options entitle the holders thereof to purchase an aggregate of 150,000 shares of our common stock at any time until August 22, 2012 at a purchase price of $1.09 per share.

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On September 19, 2007, we issued an option to John W. Martin, our Secretary and a member of our board of directors. Such option entitles the holder thereof to purchase an aggregate of 30,000 shares of our common stock at any time until September 19, 2012 at a purchase price of $1.14 per share.

On September 19, 2007, we issued options to five of our employees. Such options entitle the holders thereof to purchase an aggregate of 33,000 shares of our common stock at any time until September 19, 2012 at a purchase price of $1.14 per share.

Item 3 – Defaults upon Senior Securities

None

Item 4 – Submission of Matters to a Vote of Security Holders

None

Item 5 – Other Information

None

Item 6 – Exhibits

Exhibit No.	Description
3.1	Articles of Incorporation, as amended, previously filed as Exhibit 3.1 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 1), filed with the Commission on February 13, 2006 (File No. 333-130899), which is incorporated herein by reference.
3.2	Amended and Restated Bylaws, previously filed as Exhibit 3.1 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 1), filed with the Commission on February 13, 2006 (File No. 333-130899), which is incorporated herein by reference.
4.1	Form of Stock Certificate for Common Stock, previously filed as Exhibit 4.1 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 2), filed with the Commission on March 28, 2006 (File No. 333-130899), which is incorporated herein by reference.
4.2	Form of Warrant Agreement between American Mold Guard, Inc. and U.S. Stock Transfer Corporation, including form of Class A and Class B warrants, previously filed as Exhibit 4.2 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 3), filed with the Commission on April 10, 2006 (File No. 333-130899), which is incorporated herein by reference.
4.3	Form of Unit Certificate for Units, previously filed as Exhibit 4.3 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 2), filed with the Commission on March 28, 2006 (File No. 333-130899), which is incorporated herein by reference.
4.4	Revised Form of Purchase Warrant Issued to Paulson Investment Company, Inc., previously filed as Exhibit 4.2 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 4), filed with the Commission on April 10, 2006 (File No. 333-130899), which is incorporated herein by reference.
10.1	American Mold Guard, Inc. Amended and Restated Equity Incentive Plan, previously filed as Exhibit 10.1 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 2), filed with the Commission on March 28, 2006 (File No. 333-130899), which is incorporated herein by reference.
10.2	American Mold Guard, Inc. Annual Reward Plan, previously filed as Exhibit 10.2 to the Registration Statement of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 1), filed with the Commission on February 13, 2006 (File No. 333-130899), which is incorporated herein by reference.
10.3	Form of American Mold Guard, Inc. Indemnification Agreement for Directors and Officers. Previously filed as exhibit 10.8 to the registration statements of American Mold Guard, Inc. on Form SB-2/A (Amendment No. 3), filed with the Commissions on April 7, 2006 (File No. 333-130899), which is incorporated herein by reference.

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10.4	Form of American Mold Guard, Inc. Director Restricted Stock Award Agreement, previously filed as Exhibit 10.4 to the Form 10-QSB filed with the Commission on November 13, 2006, which is incorporated herein by reference.
10.5	Security Agreement dated as of July 19, 2007 by and among Calliope Capital Corporation and American Mold Guard, Inc., AMG Scientific, LLC and Trust One Termite, Inc. Previously filed as exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 25, 2007 (File No. 001-32862), which is incorporated herein by reference.
10.6	Secured Convertible Term Note dated July 19, 2007 issued by American Mold Guard, Inc. to Calliope Capital Corporation. Previously filed as exhibit 10.2 to the Company’s Current Report on Form 8-K filed July 25, 2007 (File No. 001-32861), which is incorporated herein by reference.
10.7	Common Stock Purchase Warrant dated July 19, 2007 issued by American Mold Guard, Inc. to Calliope Capital Corporation. Previously filed as exhibit 10.4 to the Company’s Current Report on Form 8-K filed July 25, 2007 (File No. 001-32861), which is incorporated herein by reference.
10.8	Registration Rights Agreement dated July 19, 2007 by and between American Mold Guard, Inc. and Calliope Capital Corporation. Previously filed as exhibit 10.6 to the Company’s Current Report on Form 8-K filed July 25, 2007 (File No. 001-32861), which is incorporated herein by reference.
10.9	Separation Agreement dated October 4, 2007 by and between American Mold Guard, Inc. and Thomas Blakeley. Previously filed as exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 5, 2007 (File No. 001-32861), which is incorporated herein by reference.
10.10	Settlement and Release Agreement of Thomas Blakeley dated October 4, 2007. Previously filed as exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 5, 2007 (File No. 001-32861), which is incorporated herein by reference.
31.1	Certification of Chief Executive Officer of American Mold Guard, Inc., pursuant to Rule 13a-14 of the Securities Exchange Act.
31.2	Certification of Chief Financial Officer of American Mold Guard, Inc., pursuant to Rule 13a-14 of the Securities Exchange Act.
32.1	Certification of Chief Executive Officer and Chief Financial Officer of American Mold Guard, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized, in the City of San Juan Capistrano, State of California, on the 13th day of November, 2007.

Date: November 13, 2007

AMERICAN MOLD GUARD, INC.

/s/ MARK DAVIDSON

Mark Davidson

Chief Executive Officer

/s/ PAUL BOWMAN

Paul Bowman

Chief Financial Officer

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