Airtrax, Inc. - Balance Sheets: September...

Airtrax, Inc. - Recent Material Event

Item 1. Financial Statements
Balance Sheets:
September 30, 2007 (Unaudited) and December 31, 2006 (Audited and Restated)
Statements of Operations:
Three Months and Nine Months Ended September 30, 2007 (Unaudited) and 2006 (Unaudited and Restated)
Statements of Cash Flows:
Nine Months Ended September 30, 2007 (Unaudited) and 2006 (Unaudited and Restated)
Notes to Unaudited Financial Statements
September 30, 2007 and 2006
Item 2. Management Discussion and Analysis
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
Signatures

PART 1--FINANCIALS INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AIRTRAX, INC.

BALANCE SHEETS

(In dollars, except share data)

ASSETS	September 30, 2007 (Unaudited)			December 31,2006 (Audited and Restated)

Current Assets
Cash and cash equivalents	$	466,129		$	327,737
Accounts receivable		53,079			50,704
Inventory		1,040,100			1,049,457
Prepaid expenses		22,793			-
Vendor advance		163,268			103,628
Deferred tax asset		1,212,741			919,889
Total current assets		2,958,110			2,451,415

Fixed Assets		645,512			623,136
Revaluation income		(394,566	)		(339,216	)
Net fixed assets		250,946			283,920
Other Assets
Deferred financing costs		2,642,050			424,455
Prepaid interest & other		368,562
Patents – net		136,476			148,151
Total other assets		3,147,088			572,671
TOTAL ASSETS	$	6,356,144		$	3,308,006


LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Accounts payable	$	373,173		$	1,097,361
Accrued liabilities		1,077,788			461,973
Shareholder loans payable		40,713			75,713
Current portion-Convertible debt		2,183,297			2,129,797
Derivative liability-Warrants and conversion privileges		1,047,814			705,587
Net loss allocable to common shareholders, after dividends
Total current liabilities		4,722,785			4,470,431

Long Term Convertible Debt		3,734,039			557,797
TOTAL LIABILITIES		8,456,824			5,028,228

Stockholders’ Deficiency
Preferred stock – authorized; 5,000,000 shares, no par value, 275,000 issued and outstanding		12,950			12,950
Common stock – authorized, 100,000,000 shares; no par value, issued and outstanding – 25,884,072 and 24,260,352, respectively		22,372,759			21,663,890
Paid in capital – warrants		4,729,407			2,147,771
Paid in capital – Options		1,417,660			1,407,299
Retained deficit		(30,633,456	)		(26,952,132	)
Total stockholders’ deficiency		(2,100,680	)		(1,720,222	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	6,356,144		$	3,308,006

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

AIRTRAX, INC.

STATEMENTS OF OPERATIONS

(In dollars, except per share data)

	FOR THE THREE MONTHS ENDED				FOR THE NINE MONTHS ENDED
	September 30,				September 30,
	2007		2006		2007		2006
	(Unaudited)		(Unaudited/Restated)		(Unaudited)		(Unaudited/Restated)

Revenues	$	269,022	$	-	$	523,082	$	1,271,277
Cost of sales		204,496		-		488,999		1,193,815
Gross profit		64,526		-		34,083		77,462

Operating and administrative expenses