- Amended Quarterly Report (10-Q/A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q/A

x	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
	For the quarter ended March 31, 2009
o	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number 000-12493

NATURAL BLUE RESOURCES, INC.

(Exact name of registrant as specified in its charter)

(formerly known as Datameg Corporation)

Delaware		13-3134389
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2150 South 1300 East, Suite 500, Salt Lake City, UT		84106
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number: (866) 739-3945

Indicate by check whether issuer (1) filed all reports 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. x Yes o No

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

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

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. o Yes o No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. There were 415,636,087 and 415,146,087 shares of common stock issued and outstanding, respectively, as of May 20, 2009. Of the issued shares, 490,000 were repurchased by the Company and are being held in treasury for reissuance in the future.

PART I - FINANCIAL INFORMATION

ITEM1. FINANCIAL STATEMENTS

The accompanying interim unaudited financial statements of Natural Blue Resources, Inc., formerly known as Datameg Corporation (the “Company”), are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's most recent audited financial statements for the year ended December 31, 2008 included in a Form 10-K/A filed with the U.S. Securities and Exchange Commission (“SEC”) on or about December 28, 2009, as amended. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed consolidated financial statements for the quarter ended March 31, 2009 are not necessarily indicative of the operating results that may be expected for the full year ending December 31, 2009.

INDEX

Natural Blue Resources, Inc.

(formerly Datameg Corporation)

Consolidated Financial Statements (unaudited)

For the Three Months Ended March 31, 2009 and 2008

CONTENTS
Consolidated Balance Sheets (unaudited)		2
Consolidated Statements of Operations (unaudited)		3
Consolidated Statements of Cash Flows (unaudited)		4
Notes to Consolidated Financial Statements (unaudited)		6

NATU RAL BLUE RESOURCES, INC.
Consolidated Balance Sheets
	March 31,			December 31,
	2009			2008
ASSETS	(unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	828,261		$	398,978
Stock subscriptions receivable, current (Note I)		98,500			3,000
Accounts receivable, net		1,005,734			1,250,973
Inventory (Note C)		265,367			310,186
Prepaid expenses		10,800			9,540
Total Current Assets		2,208,662			1,972,677
PROPERTY AND EQUIPMENT - NET (Note M)		2,375,929			2,319,341
OTHER ASSETS (Note L)
Certificates of deposit – noncurrent		200,000			-
Investment in available-for-sale securities		26,000			-
Total Other Assets		226,000			-
TOTAL ASSETS	$	4,810,591		$	4,292,018
LIABILITIES AND DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	3,125,755		$	2,362,979
Due to related parties (Note D)		12,314			12,200
Judgments payable (Note H)		435,000			455,000
Notes payable, current portion (Note E)		4,343,333			364,329
Total Current Liabilities		7,916,402			3,194,508
NOTES PAYABLE - LONG-TERM PORTION (Note E)		209,497			4,209,497
TOTAL LIABILITIES		8,125,899			7,404,005
DEFICIT
STOCKHOLDERS' DEFICIT (Note I)
Common stock, $0.0001 par value; 493,000,000 shares authorized, 415,636,087 and 415,146,087 shares issued and outstanding, resp., Mar. 31, 2009; 409,696,087 and 409,206,087 shares issued and outstanding, resp., Dec. 31, 2008		41,564			40,970
Additional paid-in capital		33,508,687			33,360,781
Stock subscriptions receivable, long-term (Note F)		(105,000	)		(105,000	)
Services prepaid with stock (Note I)		-			(36,750	)
Accumulated deficit		(36,684,780	)		(36,296,209	)
Total Stockholders' Deficit (before treasury stock)		(3,239,529	)		(3,036,208	)
Less: Treasury stock, cost of 490,000 shares, $.016 per share		(7,840	)		(7,840	)
Total Stockholders' Deficit		(3,247,369	)		(3,044,048	)
NONCONTROLLING INTEREST IN SUBSIDIARY		(67,939	)		(67,939	)
TOTAL DEFICIT		(3,315,308	)		(3,111,987	)
TOTAL LIABILITIES AND DEFICIT	$	4,810,591		$	4,292,018

See accompanying notes to the financial statements (unaudited).

NAT URAL BLUE RESOURCES, INC.
Consolidated Statements of Operations
(unaudited)

	For the Three Months
	Ended March 31,
	2009			2008

NET SALES	$	2,179,085		$	1,926,142
COST OF SALES		(2,009,301	)		(1,460,468	)
GROSS MARGIN		169,784			465,674

OPERATING EXPENSES
General and administrative		437,287			660,865
Selling and marketing		53,133			55,933
Research and development		-			68,393
Total Operating Expenses		490,420			785,191

LOSS FROM OPERATIONS		(320,636	)		(319,517	)

OTHER INCOME (EXPENSES)
Interest expense		(69,018	)		(100,166	)
Settlement income		512			10,000
Write off of debt		-			4,000
Other income		571			810
Total Other Income (Expenses)		(67,935	)		(85,356	)


LOSS BEFORE INCOME TAXES AND NONCONTROLLING INTEREST		(388,571	)		(404,873	)

PROVISION FOR INCOME TAXES		-			-
LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST		-			-

NET LOSS	$	(388,571	)	$	(404,873	)

BASIC AND DILUTED:
Net loss per common share	$	(0.00	)	$	(0.00	)

Weighted average shares outstanding		409,866,309			393,336,351

See accompanying notes to the financial statements (unaudited).

NATU RAL BLUE RESOURCES, INC.
Consolidated Statements of Cash Flows
(unaudited)

	For the Three Months
	Ended March 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(388,571	)	$	(404,873	)
Adjustments to reconcile net loss to net cash provided by operations:
Depreciation		175,361			142,751
Settlement income		-			(10,000	)
Stock issued for consulting services		-			3,500
Debt write-off		-			(4,000	)
Amortization of services prepaid with stock		36,750			-
Changes in operating assets and liabilities:
Decrease in accounts receivable, net		245,239			477,182
Decrease in inventory		44,819			3,538
(Increase) in prepaid expenses		(1,260	)		-
Decrease in deposits		-			7,218
Increase in accounts payable and accrued expenses		762,776			767,976
Increase in due to related parties		114			-
Net cash provided by operating activities		875,228			983,292

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of certificates of deposit		(200,000	)		-
Investment in available-for-sale securities		(26,000	)		-
Purchases of fixed assets		(231,949	)		(54,000	)
Net Cash Used in Investing Activities		(457,949	)		(54,000	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock issuances		50,000			50,000
Principal payments on notes payable		(20,996	)		(28,025	)
Proceeds from stock subscriptions receivable		3,000			-
Principal payments on judgments payable		(20,000	)		-
Payment of dividends		-			(373,548	)
Net Cash Provided by (Used in) Financing Activities		12,004			(351,573	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		429,283			577,719

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		398,978			49,086

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	828,261		$	626,805

NATURAL BLUE RESOURCES, INC.
Consolidated Statements of Cash Flows (CONT’D)
(unaudited)

	For the Three Months
	Ended March 31,
	2009		2008
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Cash paid for interest	$	1,833	$	6,623
Cash paid for income taxes	$	-	$	-

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for stock subscriptions receivable	$	98,500	$	-
Stock issued for satisfaction of debt	$	-	$	41,625

See accompanying notes to the financial statements (unaudited).

NAT URAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2009

(unaudited)

A. BASIS OF PRESENTATION AND ORGANIZATION

Natural Blue Resources, Inc. (the “Company”) has four subsidiaries: American Marketing and Sales, Inc., a Massachusetts corporation that the Company wholly owns; NetSymphony Corporation and QoVox Corporation, North Carolina corporations that the Company wholly owns; and CASCommunications, Inc., a Florida corporation, of which the Company owns 40%. The primary business of American Marketing and Sales, Inc. (doing business as Innovative Designs) is marketing and selling food service products and caterware. NetSymphony Corporation was incorporated on March 29, 2007 to take advantage of software-driven network assurance products and services, and its planning and staffing are in the formative stage. CASCommunications, Inc. is an inactive company. CASCommunications, Inc. did not generate any revenue in 2008 and is not expected to generate any revenue in 2009.

NetSymphony focuses on becoming a provider of network assurance products and services. NetSymphony’s network assurance products are designed to enable communications network operators and service providers to quickly and automatically determine if their network is meeting its quality and service expectations, while lowering network operating costs. NetSymphony has developed their Maestro System that covers the existing traditional telephone networks, networks that use the same communication technology as the Internet, and converged networks comprised of both of these network types. NetSymphony announced its first product sales in the first quarter of 2008, resulting in $3,520 gross revenues during 2008. NetSymphony did not generate any revenues during the quarter ended March 31, 2009.

QoVox provides consulting service to NetSymphony on a work for hire basis. Any revenues generated by QoVox or expenses incurred by NetSymphony as a result of this arrangement will be eliminated in consolidation. On August 1, 2008, QoVox licensed the use of certain residual software it developed to NetSymphony. During the quarters ended March 31, 2009 and 2008, QoVox did not generate any revenues.

CASCommunications had no recorded assets as of March 31, 2009 or December 31, 2008, and had a loss before minority interest of zero for the periods then ended due to the lack of activity. No consolidated assets are collateral for liabilities of CASCommunications. The Company has provided $270,000 of the total capital of $388,000 provided to CASCommunications as of March 31, 2009.

These consolidated financial statements reflect those of Natural Blue Resources, Inc., American Marketing & Sales, Inc., NetSymphony Corporation, QoVox Corporation, and CASCommunications, Inc. In accordance with the Financial Accounting Standards Board (FASB) interpretation (FIN) 46R, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51,” the Company continues to consolidate CASCommunications, Inc. as it expects to continue to absorb a majority of CASCommunications, Inc.’s losses.

Until July 24, 2009, the Company operated under the name of Datameg Corporation and traded under the symbol DTMG on the OTCBB. As of July 24, 2009, the Company operates under the name Natural Blue Resources, Inc. and trades under the symbol NTUR on the OTCBB. The Company’s active subsidiaries are American Marketing & Sales, Inc., NetSymphony Corporation, and QoVox Corporation, each of which the Company wholly owns.

As of March 31, 2009, the Company had a total of five full time employees, one part-time employee, and two part time independent contractors or consultants. Of these, two individuals serve in administrative and senior management capacities.

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:

The accompanying consolidated financial statements present the consolidation of the financial statements of Natural Blue Resources, Inc., its partially owned subsidiary, CASCommunications, Inc., and its wholly owned subsidiaries, American Sales and Marketing, Inc., QoVox Corporation, and NetSymphony Corporation. All intercompany transactions and balances have been eliminated in the consolidation.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Consolidation of Variable Interest Entities:

In January 2003 and revised December 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities.” This interpretation of Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” requires consolidation by business enterprises of variable interest entities, as defined, when certain conditions are met. Pursuant to FIN No. 46, the Company continues to consolidate CASCommunications, Inc.

Basis of Accounting:

The accounts of the Company are maintained on the accrual basis of accounting whereby revenue is recognized when earned, and costs and expenses are recognized when incurred.

Use of Estimates:

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from those estimates.

Inventory:

The Company’s inventory is stated at the lower of cost or market value. Cost is determined using the first in, first out method. Unusual losses resulting from lower of cost or market adjustments or losses on firm purchase commitments, if any, are disclosed, and if material, separately stated from cost of goods sold in the statement of operations.

Cash and Cash Equivalents:

Cash and cash equivalents consists principally of currency on hand, demand deposits at commercial banks, and liquid investment funds having a maturity of three months or less at the time of purchase.

Property and Equipment:

Property and equipment are stated at cost. Depreciation and amortization are determined using the straight-line method over estimated useful lives ranging from three to eight years.

Fair Value of Financial Instruments:

The carrying value of cash, notes receivable, accounts payable and accrued expenses, and notes payable are assumed to approximate fair value because of the relatively short maturity of these instruments. However, since the Company has been unable to pay its liabilities as they became due, significant discounts that cannot be estimated, may be appropriate for liabilities.

Concentrations of Credit Risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company maintains its cash accounts with several commercial banks. Cash balances are insured by the Federal Deposit Insurance Corporation, up to $250,000 per financial institution. At March 31, 2009 and December 31, 2008, the Company had no uninsured cash balances.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Capital Structure:

SFAS No. 129, “Disclosure of Information about Capital Structure,” requires a summary presentation of the pertinent rights and privileges of the various securities outstanding. The Company’s voting common stock is comprised of 415,636,087 and 409,696,087 shares issued and outstanding, respectively, at March 31, 2009 and December 31, 2008, respectively, of which 490,000 shares were repurchased by the Company and are being held in treasury. In April 2003, the Company amended its certificate of incorporation with the state of New York to increase the number of authorized shares of stock to 340,000,000 shares of common stock. In April 2005, the Company entered into an Agreement and Plan of Merger with Datameg Corp. NY setting forth the terms of our reincorporation from New York to Delaware. As part of the reincorporation the Company increased its authorized number of shares to 503,000,000, of which 10,000,000 are preferred shares and 493,000,000 are common shares. The Company also changed its par value from $0.01 to $0.0001 per share.

Revenue Recognition:

American Market & Sales, Inc.

The Company recognizes revenue from product sales in accordance with Staff Accounting Bulletin No. 104, which requires recognition when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred, and payment is reasonably assured. The Company has determined that these criteria have been met upon shipment, and recognizes revenue at that point. Pursuant to SFAS No. 5, “Accounting for Contingencies,” the Company has examined collection history, financial conditions of clients, and general economic conditions and determined that it is not necessary to set an allowance for doubtful accounts, which have historically not been significant.

NetSymphony Corporation and QoVox Corporation

The Company derives revenue from three primary sources: (1) system hardware component sales revenue, (2) software license revenue, and (3) services and maintenance and right to use revenue, which include support, maintenance, right to use fees and consulting. Revenue on system hardware component sales is recognized upon delivery to and acceptance by the customer. Software license revenue recognition is substantially governed by the provisions of Statement of Position No. 97-2 , “Software Revenue Recognition,” (SOP 97-2) issued by the American Institute of Certified Public Accountants. The Company exercises judgment and uses estimates in connection with the determination of the amount of software license and services revenue to be recognized in each accounting period. For software license arrangements that do not require significant modification or customization of the underlying software, the Company recognizes revenue when: (1) it enters into a legally binding arrangement with a customer for the license of software; (2) it delivers the products or performs the services; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; (4) collection is probable, and (5) vendor specific objective evidence (VSOE) of fair value exists to allocate the total fee among all delivered and undelivered elements in the arrangement.

Multiple Element Arrangements:

The Company typically enters into arrangements with customers that include perpetual software licenses, system hardware, maintenance, and right to use fees. Software licenses are sold on a per copy basis. Per copy licenses give customers the right to use a single copy of licensed software for exclusive use on the Company’s system hardware. Assuming all other revenue recognition criteria are met, license revenue is recognized upon delivery using the residual method in accordance with SOP No. 98-9, “Modification of SOP 97-2: Software Revenue Recognition.” Under the residual method, the Company allocates and defers revenue for the undelivered elements, based on VSOE of fair value, and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of each undelivered element in multiple element arrangements is based on the price charged when the same element is sold separately. If sufficient evidence of fair value cannot be determined for any undelivered item, all revenue from the arrangement is deferred until VSOE of fair value can be established or until all elements of the arrangement have been delivered. If the only undelivered element is maintenance and technical support for which the Company cannot establish VSOE, the Company will recognize the entire arrangement fees ratably over the maintenance and support term.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Revenue Recognition ( cont’d ):

System hardware is hardware that is installed at a customer site for the purpose of utilizing the licensed software and as such, does not qualify as a separately deliverable element. The timing of revenue recognition from the sale of system hardware is therefore dependent upon the recognition of revenue for the related software licenses.

Maintenance and right to use fees includes updates (unspecified product upgrades and enhancements) on a when and if available basis, telephone support and bug fixes or patches and maintenance of the systems hardware, which would include repairs or replacement as necessary. VSOE of fair value for maintenance and right to use fees is based upon stated annual renewal rates. Maintenance and right to use fees revenue is recognized ratably over the maintenance and right to use term.

Revenue Recognition Criteria:

The Company defines revenue recognition criteria as follows:

Persuasive Evidence of an Arrangement Exists. It is the Company’s customary practice to have a purchase order prior to recognizing revenue on an arrangement.

Delivery has Occurred. The Company’s software and systems hardware are physically delivered and installed at its customer’s site. The Company considers delivery complete when the software and system hardware products have been installed and the testing phase completed. The Company defers all the revenue until the testing phase has been completed and the Company receives customer acceptance.

The Vendor’s Fee is Fixed or Determinable. The Company’s prices and services are indicated in invoices and service agreements. Customary payment terms are generally within 30 days after the invoice date.

Collection is Reasonably Assured. Due to a lack of customer history upon which a judgment could be made as to the collectibility of a particular receivable, revenue is currently recognized upon shipment assuming all other conditions of the sale have been met.

Reclassifications:

Some of the prior period balances have been reclassified to conform to current period presentation.

Cost of Revenue:

Cost of revenue includes costs related to user license, systems hardware and maintenance and right to use fees revenue. Cost of user license revenue includes material, packaging, shipping and other production costs and third party royalties. Cost of systems hardware includes the cost of goods sold and installation costs. Cost of maintenance and right to use fees and consulting fees include related personnel costs, and hardware repair costs. Third party consultant fees are also included in cost of services.

Advertising:

Advertising costs are charged to operations as incurred. For the quarters ended March 31, 2009 and 2008, there were only minimal advertising costs charged to operations.

Research and Development:

The Company expenses research and development costs as incurred.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Software Development Costs:

Income Taxes:

The Company, a C-Corporation, accounts for income taxes under SFAS No. 109, “Accounting for Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The principal differences are net operating losses, startup costs and the use of accelerated depreciation methods to calculate depreciation expense for income tax purposes.

Stock-Based Compensation:

The Company follows guidance provided in SFAS No. 123R , “Accounting for Stock-Based Compensation,” which requires companies to recognize expense for stock-based awards granted to employees or outside consultants based on their estimated fair value on the grant date.

Comprehensive Income:

SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for reporting comprehensive income and its components. Comprehensive income is defined as the change in equity during a period from transactions and other events from non-owner sources. Entities that do not have items of other comprehensive income in any period presented are not required to report comprehensive income. Accordingly the Company has not made any such disclosure in the statements presented herein.

Earnings Per Common Share:

The Company reports basic and diluted earnings per share (EPS) according to the provisions of SFAS No. 128, “Earnings Per Share.” SFAS No. 128 requires the presentation of basic EPS and, for companies with complex capital structures, diluted EPS. Basic EPS excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) available to common stockholders, adjusted by any convertible preferred dividends; the after-tax amount of interest recognized in the period associated with any convertible debt; and any other changes in income or loss that would result from the assumed conversion of those potential common shares, by the weighted number of common shares and common share equivalents (unless their effect is antidilutive) outstanding. The Company also considers the potential effects of the exercise of options and warrants outstanding during the reporting period. Due to the Company’s continuing net losses, potentially dilutive securities have historically had an antidilutive effect on EPS. Accordingly, basic and diluted EPS are the same.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Segment Information:

SFAS No. 131, “Disclosure about Segments of an Enterprise and Related Information,” requires public enterprises to report certain information about operating segments, including products and services, geographic areas of operations, and major customers. American Marketing and Sales, Inc. (AMS), is considered a separately reportable business segment that meets the ‘Single Industry Dominance’ test, which eliminates the segment disclosure requirements if the segment accounts for 90% or more of the combined revenue, reported profit, and assets. Thus, the revenues, profits, and assets reported in the consolidated financial statements are primarily those of AMS.

C. INVENTORY

AMS produces caterware for the food service industry via an intense heat injection molding process using Polystyrene/Polypropylene recycled resins. The raw materials and finished goods are produced and held by two third-party manufacturing plants, from where they are shipped to customers across the nation. AMS does not enter into long-term contracts and generally experiences a high inventory turnover ratio while maintaining minimal quantities on-hand in the warehouses. QoVox’s and NetSymphony’s inventory consists of various components of its network assurance telecommunications system held for specific sale-on-approval contracts. Inventory at March 31, 2009 and December 31, 2008 was as follows:

	March 31,		December 31,
	2009		2008
AMS
Raw Materials	$	4,560	$	88,635
Work in Progress		176,309		178,423
Finished Goods		57,033		17,163
QoVox
Raw Materials		927		927
Finished Goods		25,684		25,038
NetSymphony
Finished Goods		854		-
Total	$	265,367	$	310,186

D. RELATED PARTY TRANSACTIONS

At December 31, 2008, the Company was indebted to officers and stockholders in the amount of $12,200 for advances received and expenses incurred on behalf of the Company. During 2009, the Company received another $114 advance, resulting in a balance of $12,314 at March 31, 2009. This is exclusive of amounts included in accrued compensation. Interest was not imputed on these advances due to immaterial impact on the financials, and the amounts will be repaid as cash flows allow.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

E. NOTES PAYABLE

	Principal balance
	March 31, 2009	December 31, 2008
On July 21, 2006, the Company signed a settlement and mutual release and promissory note with former counsel, whereby the Company was required to pay the principal sum of $155,000 in past-due fees and other costs, plus 6% interest. The Company was current on its payments through November 2008, but did not make the full December 15, 2008 payment pursuant to the payment schedule, and is currently in default. The Company has made $87,500 in principal payments, and the remaining $67,500 principal is payable as follows: · $10,000 on or before December 15, 2008, ($7,500 unpaid) · $10,000 on or before March 15, 2009, and ($10,000 unpaid) · $50,000 plus all accrued and unpaid interest on or before June 15, 2009. Accrued interest on the note totaled $17,506 and $16,881 at March 31, 2009 and December 31, 2008, respectively, and is included in accounts payable and accrued liabilities.	67,500	67,500

On July 1, 2008, the Company’s QoVox subsidiary entered into a promissory note with one of its consultants for $230,605, which represents past-due fees previously included in accounts payable. Payment terms stated therein require monthly installments of $1,000 paid to the consultant the last day of each month commencing July 31, 2008 through December 31, 2008; $2,000 per month January through September 2009; and $3,000 per month thereafter until the remaining balance is paid. The Company made $3,000 in principal payments during 2008, and $1,000 during the quarter ended March 31, 2008, resulting in payable balances of $226,605 and $227,605 at March 31, 2009 and 2008, respectively. The Company is currently in default, so the principal balance has been reflected as a current liability in accordance with the promissory note terms. Interest at 8% resulted in accrued interest of $13,703 and $9,171 at March 31, 2009 and December 31, 2008, respectively, which is included in accounts payable and accrued expenses. Interest expense of $4,532 and $0 was recorded during the three months ended March 31, 2009 and 2008.	226,605	227,605

As part of the purchase of American Marketing and Sales, Inc., (AMS), the Company entered into a $4 million note secured by the assets and stock of AMS and payable to the former stockholders of AMS. The note provides for increases to principal for loans made by AMS to the company or its subsidiaries up to $500,000. To raise the cap on additional loans up to $1 million from AMS, the Company entered into a stock pledge agreement with the former stockholders, pledging its stock in NetSymphony. At the time of the pledge agreement, NetSymphony assets were valued at $0. The note accrues interest at 6% and the entire note balance, including accrued interest, is due and payable on December 7, 2009. Accrued interest totaled $300,000 and $240,000 at March 31, 2009 and December 31, 2008, respectively, and is included in accounts payable and accrued expenses. Interest expense of $60,000 was recorded for each of the three months ended March 31, 2009 and 2008.	4,000,000	4,000,000

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

E. NOTES PAYABLE (CONT’D)

	Principal balance
	March 31, 2009	December 31, 2008
In May 2007, American Marketing and Sales, Inc. entered into a note payable with Flagship Bank of Leominster, MA for $400,000. The note accrues interest at prime less .75% (approximately 6.5%), carries monthly payments that annually total of $93,918, and matures in May 2012. The Company is current on its payments, so there was no accrued interest at March 31, 2009 or December 31, 2008. Interest expense of $1,833 and $6,623 was recorded during the three months ended March 31, 2009 and 2008, respectively. Future maturities are payable during the fiscal years ended December 31 st as follows:	258,725	278,721

Dec. 31,	Payments		Principal		Interest
2009		64,263		49,228		15,035
2010		93,918		83,183		10,735
2011		93,918		88,754		5,164
2012		37,979		37,560		419
Totals		290,078		258,725		31,353

Total notes payable		4,552,830			4,573,826
Less current portion (A)		(4,343,333	)		(364,329	)
Total notes payable – long-term (A)	$	209,497		$	4,209,497

(A) At December 31, 2008, all debt is current except for the long-term portion of the Flagship Bank note and the note payable to former AMS shareholders. At March 31, 2009, the Flagship note is the only note with a long-term portion, as the note payable to former AMS shareholders is due on December 7, 2009 and is therefore reported as current.

F. STOCK SUBSCRIPTION RECEIVABLE, LONG-TERM

On March 5, 2004, the Company entered into a stock subscription agreement with a foreign investor to purchase 2,941,176 shares of the Company’s common stock at a purchase price of $0.17 per share. On April 1, 2004, the investor made an initial subscription payment of $80,000 and the Company issued and delivered the full 2,941,176 shares of restricted Common Stock to the investor with the understanding that the investor was sending the Company the $420,000 balance and a stock subscription receivable was duly recorded on the Company’s books in the amount of $420,000. On April 14, 2004, the investor notified the Company of the investor’s intent not to invest further in the Company. The Company offered to issue a new stock certificate in the amount of 470,588 shares to accommodate the $80,000 initial subscription payment in exchange for the investor’s return of the stock certificate issued and delivered to the investor on April 1, 2004 for the full share amount of 2,941,176 shares . The investor refused the Company’s exchange offer and has continued to refuse to return the stock certificate for 2,941,176 shares.

The Company is convinced of the merits of its claim against the investor and intends to institute a legal action to vindicate that claim in 2009. The Company has retained Massachusetts litigation counsel. Given the uncertainties inherent in litigation, the Company took a charge of $105,000 (25%) against the receivable in the fourth quarter of 2006, another charge of $105,056 in the fourth quarter of 2007, and a third charge of $105,000 during the fourth quarter of 2008, resulting in a $105,000 balance at March 31, 2008 and December 31, 2008.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

G. NET LOSS PER COMMON SHARE

As required by SFAS No. 128, the following is a reconciliation of the basic and diluted loss per share calculations for the periods presented:

	Three Months Ended March 31,
	2009			2008
Net Loss (numerator)	$	(388,571	)	$	(404,873	)
Weighted Average Shares (denominator)		409,866,309			393,336,351
Basic and diluted net loss per common share	$	(0.00	)	$	(0.00	)

As required by the Securities and Exchange Commission Staff Accounting Bulletin No. 98, the above calculation of loss per share is based on SFAS No. 128, “Earnings Per Share.” At March 31, 2009, the Company had 35,400,000 options and warrants outstanding, and 10,000,000 contingent shares held in escrow (Note H). Exercising the warrants and options and issuing the contingent shares would have an antidilutive effect for existing shareholders. These shares are not included in the calculation of diluted loss per share, resulting in basic and diluted loss per share being equal.

H. JUDGMENTS PAYABLE

In July 2003, the Company signed a promissory note with a professional for fees and the interest on unpaid fees due that professional through September 30, 2003 in the amount of $247,007. The note was due on August 15, 2003 and had a stated an interest rate of 18% per annum, which had been accrued since the note’s inception. No significant payments had been made on the note, and on September 25, 2007, the note holder filed suit, seeking to have a judgment rendered against the Company for all amounts claimed due. On June 23, 2008, the court entered judgment for the full principal and interest on the promissory note. On August 15, 2008, the parties entered into a settlement agreement requiring the Company to pay the plaintiff in full settlement of this case, the sum of $555,000 pursuant to the following schedule:

Number		Amount			Due
	1	$	100,000		9/18/2008
	2		65,000		1/6/2009
	3		65,000		4/6/2009
	4		65,000		7/7/2009
	5		65,000		10/6/2009
	6		65,000		1/7/2010
	7		65,000		4/6/2010
	8		65,000		7/7/2010
			555,000
Payment			(100,000	)
Bal, 12/31/08		$	455,000
Payment			(20,000	)
Bal, 3/31/09		$	435,000

The principal and interest on the settlement date totaling $469,449 were reclassified from accounts and notes payable to judgments payable, and an additional $85,551 was accrued to record the full settlement amount. After making an initial payment of $100,000, the Company defaulted on the January 2009 payment. Although the Company made an additional $20,000 payment in February 2009, negotiations ensued and the Company and plaintiff entered into a second settlement agreement wherein plaintiff will accept 10 million Company common shares as payment of the judgment if certain events are concluded on or before June 1, 2009 (Note K). The shares were issued to an escrow account on March 25, 2009. If the aforementioned events fail to occur, the second settlement is void and the 10 million shares in escrow will be returned to the Company for cancellation.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

I. STOCKHOLDERS’ EQUITY

In March 2008, the Company issued 5,940,000 shares of common stock at $.025 per share for total cash of $148,500. Of this amount, $50,000 was received upon issuance and $98,500 was received in April 2009, resulting in a current asset stock subscription receivable at March 31, 2009. Stock subscriptions receivable of $3,000 at December 31, 2008 were also collected in March 2009.

In November 2008, the Company issues 3,750,000 shares to a consultant representing $36,750 in services to be rendered during the three months ended March 31, 2009. This amount was amortized during the quarter, resulting in a $0 balance at March 31, 2009.

J. GOING CONCERN, OPERATING LOSS

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has sustained substantial costs in implementing its action plan. In addition, the Company used substantial amounts of working capital in funding these costs. At March 31, 2009 and December 31, 2008, current liabilities exceeded current assets by $5,481,740 and $1,221,831, respectively. The Company is seeking to raise additional capital and develop partnerships and cooperative agreements. In view of these matters, the ability of the Company to continue as a going concern is dependent upon the Company’s ability to achieve its business objectives and the success of its future operations.

K. SUBSEQUENT EVENTS

Material Definitive Agreements:

Blue Earth Solutions, Inc.:

On March 18, 2009, the Company entered into a Stock Purchase Agreement and an Assignment and Assumption Agreement (related to a purchase money promissory note) incident to its proposed sale of its wholly owned subsidiary American Marketing & Sales, Inc. (AMS), to Blue Earth Solutions, Inc., a Nevada corporation ("Buyer"). The sale is subject to the consent of a majority of the Company’s shareholders and is expected to conclude in mid-June 2009.

Several principal shareholders, who are the former owners of all American Marketing shares, currently hold 15 million Company common shares in escrow from their sale of AMS to the Company in December 2007. These principal shareholders also hold a purchase money note ("Note") secured by all of the assets of AMS concerning an election to return the 15 million Company common shares in favor of full payment of the purchase money note. As of December 31, 2008, the principal and interest due on the Note was approximately $5.4 Million consisting of a Note face amount of $4 Million and additional loans and accrued interest of approximately $1,418,000.

Among other terms, the Company (or its shareholders of record) shall receive 1 million (restricted with piggy-back registration rights) common shares of the Buyer’s shares in exchange for the transfer of AMS shares to the Buyer. The Company shall deliver to the principal shareholders from escrow 15 million Company common shares in exchange for (1) a complete release of the Company and its directors and officers from further liability upon the Note and otherwise, (2) the principal shareholders’ written consent to the assumption of the Note by Blue Earth, (3) Blue Earths’ written assumption of the Note, and (4) the principal shareholders’ and the Buyer’s agreement to extend the term of the Note for one year.

During the term of the extended Note, certain principal shareholders shall have the right to convert the principal and interest then due into the Buyer’s (restricted with piggy-back registration rights) common shares at the price of $6 per share. For their assumption of the additional loans from AMS on the Note, the Buyer shall be issued 50 Million unregistered Company common shares at the closing. The principal shareholders shall release their security interest in NetSymphony Corporation stock and return the stock certificate to the Company. In consideration of their aforementioned acts and consents, the Buyer shall deliver to the principal shareholders 400,000 (restricted with piggy-back registration rights) shares of the Buyer’s common stock.

NATURAL BLUE RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

March 31, 2009

(unaudited)

K. SUBSEQUENT EVENTS (CONT’D)

Natural Blue Resources, Inc.:

On April 14, 2009, the Company entered into a Share Exchange Agreement to acquire Natural Blue Resources, Inc. (“NBR”), a Nevada corporation. The acquisition is subject to the consent of a majority of the Company’s shareholders and to the consent of NBR’s shareholders and is expected to conclude in mid-June 2009. The purchase of NBR will be made pursuant to a Share Exchange Agreement resulting in a change of control. The Share Exchange Agreement contains, among other things, representations and warranties of the aforementioned parties and covenants of the Company and NBR. Among other terms, shareholders of NBR shall transfer all of NBR's issued and outstanding shares of capital stock ("Shares") to the Company and such Shares shall be converted into and exchanged for shares of the Company's common stock, equaling upon completion of this share exchange ninety percent (90%) of the issued and outstanding capital stock of the Company. To effect this Agreement, the Company’s current shareholders must consent to a 100 to 1 reverse stock split reducing the Company’s outstanding shares to approximately 4.9 million common shares pre-closing and to approximately 49 million shares after the share exchange.

L. OTHER ASSETS

During the quarter, the Company purchased $26,000 in municipal bonds that yield 5.5% interest and mature on July 1, 2010. The Company has not determined yet whether it will hold the bonds to maturity, and has therefore classified them as available-for-sale securities. No material fluctuation in fair market value was noted on the bonds, so no unrealized holding gains or losses have been recorded in other accumulated comprehensive income.

During the quarter, the Company also purchased $200,000 in long-term certificates of deposits (CD’s). One $100,000 CD yields interest of 1.85% and matures on July 27, 2010, while the other CD yields interest of 2.1% and matures on October 25, 2010.

M. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	March 31,			December 31,
	2009			2008
Equipment	$	81,220		$	81,220
Furniture		13,806			13,806
Automobiles		78,424			66,682
Capital Leases		35,100			35,100
Tooling Molds		3,239,819			3,019,612
Total property and equipment		3,448,369			3,216,420
Less: accumulated depreciation		(1,072,440	)		(897,079	)
Property and equipment, net	$	2,375,929		$	2,319,341

Depreciation expense totaled $175,361 and $142,751 for the three months ended March 31, 2009 and 2008, respectively, of which $170,054 and $138,430, respectively, is attributable to the tooling molds used in production and has therefore been reported with cost of goods sold on the statement of operations.

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

Results of Operations

Overview

PLAN OF OPERATION

THE GREEN LINE

American Marketing and Sales, Inc., located in Leominster, Massachusetts, has successfully developed and introduced an extensive line of environment-friendly, injection-molded Green Line food-packaging/caterware products and has received orders or commitments to purchase the new Green Line of products from U.S. Foodservice, Madison Square Garden, Whole Foods, Le Pain Quotidien restaurants, Finagle A Bagel, the U.S. House of Representatives purchasing office in Washington, D.C., and several schools and colleges including the University of Massachusetts. The new Green Line products consist of 25 items including various sizes of trays, party platters, and serving bowls with lids. These non-toxic products qualify for the Green label inasmuch as they are manufactured from FDA-approved polypropylene and polystyrene resins that contain up to 40 percent recycled plastic content. American Marketing and Sales, Inc. is one of the first manufacturers in the industry to introduce injection-molded caterware and food service products worthy of the prestigious “Recycled” logo mark. On March 11, 2008, American Marketing and Sales, Inc. entered into a binding term sheet to acquire one-third of the outstanding shares and 50% of the voting rights in one of American Marketing and Sales, Inc.’s primary manufacturers, JAM Plastics, also located in Leominster. As of April 16, 2009, the agreement had not yet closed and no stock had been exchanged.

During the first quarter of 2008, American Marketing and Sales introduced additional new products manufactured with 40% recycled resins. The new product line consists of fifteen items of office products including desk top organizers, letter trays, legal letter trays, pencil holders, paper clip and card holders, magazine holders, and telephone and draw organizers. Current and targeted customers include Walmart, Target, BJ’S, Sam’s Club, Staples, Office Max, Office Depot, W.B. Mason, and numerous mail order catalogs.

Green Line food caterware and office products are marketed through a dedicated web site entitled Green Planet Plastics (greenplanetplastic.com). Green Line products are made with recycled material as part of American Marketing’s efforts to take earth-friendly steps toward product awareness.

SERVICE ASSURANCE SYSTEMS PRODUCTS AND SERVICES FOR NETWORK OPERATORS IN THE TELECOMMUNICATIONS INDUSTRY

The Company is a holding company, but through its subsidiary, NetSymphony Corporation, is a technology company focused on providing service assurance systems products and services for network operators in the telecommunications industry. Our target customers are telecom operators and cable operators worldwide. We focus specifically on voice services over traditional circuit switched and managed IP networks.

Through our wholly owned subsidiary, NetSymphony Corporation subcontracting with QoVox Corporation and 3 rd party consultants, we design, develop and sell an active voice quality test system, capable of monitoring and providing analytical/statistical data that characterizes the connectivity and measurement of voice quality across communications networks. QoVox will continue its focus on PSTN testing interfaces and NetSymphony will be developing Internet Protocol (IP) based testing interfaces that are software based. We are working on tools and techniques for network wide fault identification, isolation and troubleshooting.

Communication service providers, such as telecom operators and cable operators, are challenged to deliver high quality voice services, at the lowest cost, over managed IP infrastructures and inter-working with traditional circuit switched networks. To do this effectively, service providers must monitor and measure their voice service offering, proactively detect problems and resolve them quickly and cost effectively, ideally before their customers experience any problem or service degradation. Additionally, if customers do report service problems, operators must be able to effectively identify the cause and fix the problem. QoVox provides the systems (products) and services to address these challenges.

VoIP Market

VoIP is one of the fastest growing segments in the telecommunications sector. Yankee Group and IDC, leading market research firms, estimate the growth of VoIP subscribers. Yankee Group estimated VoIP subscribers would grow from one million at the end of 2004 to 18 million by 2008. IDC reported the number of VoIP subscribers in the U.S. will jump from three million in 2005 to 27 million in 2009.

VoIP service providers include local and long distance telephone companies, such as, AT&T, Verizon, Qwest, Sprint, MCI and others; cable multi service operators (MSO's) such as Cablevision, Comcast, Cox, Rogers, Time Warner Cable and others; and emerging service providers, such as Vonage and others.

Business Challenge Driving Demand for New Tools and Services

Enterprise and residential customers expect and demand that their voice services are high quality and are offered at the lowest possible cost. To meet these expectations, communication service providers must save significant capital costs and operating expenses through deploying and operating next generation networks. These next generation networks utilize packet switching technology that is different from the traditional circuit switched networks. Some service operators expect to save between 40% to 50% of their capital and operating expenditures.

Service providers are deploying and operating these next generation networks today, often inter-working with traditional circuit switched networks. Service providers need tools and services, like those QoVox offers, to report statistically and analytically the performance of their service and to isolate, diagnose and fix problems. Many service providers who have limited experience in managing these emerging networking technologies are focused today on deployment and need help to report on the service performance and to identify and troubleshoot problems. To deploy and operate these networks and services, service providers must buy tools and develop new expertise to deploy, operate and manage these new networks and services. This is the business opportunity that NetSymphony targets.

We believe the NetSymphony systems and services enable service providers to proactively depict their voice services and to detect and pinpoint network problems. These problems may be repaired effectively; thus, minimizing the number and extent of incidences of customers experiencing loss of service or poor voice quality.

Business Objectives

We strive to be among the global leaders in developing and selling systems and services for service assurance of next generation networks and services.

Our goal is to be the leading supplier of active voice quality test systems. Thus, we have an immediate business focus on expanding our relationships with our customer base through value-added services while developing a new platform to increase revenue through systems sales. There are three important elements to achieve this:

·	Develop a new platform with extensive correlation and analytic capabilities to detect and isolate problems in our customer’s networks,

·	Invest heavily in Internet Protocol (IP) measurement technology, and

·	Convert our current trials into service engagements.

We plan to leverage our existing Time-division multiplexing (TDM) and Analog solutions and combine them with new IP based solutions to provide the market with the most complete service assurance platform for converged / next-generation networks. TDM is a method of putting multiple data streams in a single signal by separating the signal into many segments, each having a very short duration. While investing heavily in our new platform, we will continue to grow customer relationships and accelerate revenue generation through offering professional services. Services overcome the obstacles of lengthy sales cycles while more rapidly solving customer problems.

Current Situation

NetSymphony’s Maestro System , consisting of hardware and software, actively makes calls between various points across communication networks and correlates and reports the results of these call campaigns on a centralized server. We can operate the system on behalf of our customers, or our customer can operate the system.

Although we commenced sales of the Maestro System in the first quarter of 2008, only $3,520 of revenues were recognized during 2008, and $0 thus far during 2009.

NetSymphony and QoVox have their offices in Raleigh, North Carolina.

Business Strategy and Direction

NetSymphony intends to:

·	Develop and sell systems products and services;

·	Continue to target telecom operators and cable operators;

·	Develop its business first in the U.S. and Canada. Africa, Mid-East and European markets will also be addressed in 2009.

Continue providing solutions for the challenges related to deploying and operating voice services, especially in the areas of quality and security. NetSymphony plans to extend its capability into fault isolation and troubleshooting. Additionally, NetSymphony plans to make contributions for other emerging technologies, such as video over IP.

NetSymphony will pursue the following strategy to achieve our business objectives:

·	Develop the industry’s premier service assurance system that enables customers to assess, monitor and troubleshoot IP based services;

·	Develop and offer the services to characterize network and service health and to isolate and diagnose performance and security problems;

·	Create a consultative sales and support organization in both our direct and channel sales initiatives; and

·	Partner with selected system integrators to facilitate the easy installation and customization of NetSymphony systems into the customers’ operating environment and workflow. In addition, system integrators are expected to be a source of leads, referrals and support for our sales efforts.

Product Development

NetSymphony has products and services that help service providers deploy and manage voice services. To date, the majority of product development activity has been centered on analog and TDM probe hardware. This investment was necessary to establish the company in the test and measurement market.

NetSymphony will add the IP networking technology to the Company’s solution portfolio and become the premier service assurance provider. To achieve this goal, additional investment will be in the following areas:

·	Server Software: In complex networks the most pressing need is to be able to correlate and analyze measurement information along with network elements statistics to pinpoint where problems are occurring. We will be developing this capability in 2009.

·	IP Measurement Technology: NetSymphony now has as employees IP measurement experts that have developed products that should be very successful commercially. This team will introduce IP measurement solutions in 2009 that will be the most advanced in the industry.

·	Leverage Existing Products: The value of the current NetSymphony system will be integrated into the new server platform and operate in conjunction with the new IP probes and software agents. This will greatly enhance the value of existing technology.

Our products are deployed throughout the service provider’s network. Our products check that calls can be connected properly across these networks and measure the voice quality between various points in the network.

Services Offering

At present, NetSymphony operates a Network Operations Center in Raleigh, NC, for a small number of network operators.

NetSymphony plans to aggressively convert our existing sales opportunities to services offerings in 2009. Customers are still wary of large capital budget outlays causing an extended sales cycle that can extend over 18 months. Our customers have immediate problems and the current NetSymphony solutions can solve many of their issues. Therefore, we are working with our trial partners to move to a services engagement that is based on their expense budget and can be done quickly. We will offer Assessment Testing, Service Assurance Monitoring and Consulting as professional services.

Marketing and Sales

NetSymphony plans to develop a joint global sales and support channel, comprised of:

·	Direct sales representatives, sales engineers and support specialists;

·	High end distributors that offer system integration in this market; and

·	A small number of operational support system vendors, equipment manufacturers and system integrators who will provide referrals or resell the NetSymphony products and services.

In the next three years, NetSymphony expects to fully develop sales and support channels in:

·	The U.S. and Canada, covering Tier 1 and Tier 2 wireline and mobile telecom operators and the Top 25 cable operators;

·	Western and eastern Europe; and

·	Japan, China, Korea and India.

NetSymphony plans to actively participate in international and regional industry forums and standardization bodies to build and earn a reputation as an innovative industry leader.

NetSymphony plans to organize and host regional Industry Leadership Forums, bringing together industry leaders

Competition

There are a number of competitors in the VoIP Monitoring business. These companies can be segmented into Enterprise and Service Provider markets.

Enterprise focused competitors feature lower cost solutions that are not designed to scale to requirements of service providers. Vendors such as Attachmate (formerly NetIQ),Viola Networks and Packet Island fall into the Enterprise segment.

The Service Provider segment is comprised of traditional Service Assurance vendors such as Spirent, JDSU and Agilent. These companies come from a physical layer test background and are attempting to gain market share in the IP services market that involves significant investment.

There are 3 key areas of competitive differentiation for QoVox:

1.	Software-Based Approach. Competitors are very hardware-based in their solutions, which limits the flexibility of instrumenting networks for service assurance and causes their price points to be very high. NetSymphony’s solutions will be software-based to overcome these challenges.

Active & Passive Analysis. Most competitors rely on providing measurements through active testing (generating real calls on a network) or passive monitoring (analyzing customers’ calls as they occur). Customers realize there are merits to both methods and NetSymphony will provide passive analysis in addition to its existing active capabilities.

Media & Signaling. Competitors such as Agilent rely on Signaling analysis to verify user status in VoIP. Other vendors such as JDSU and Sprint focus on analyzing the media streams (actual calls) to verify the quality. In reality, to measure the user experience and to isolate problems when they occur both media and signaling need to be measured. NetSymphony is currently adding signaling capabilities to its media stream technology.

CasCommunications

We own 40% of CasCommunications, an inactive development stage entity. We do not expect CasCommunications to generate any revenue in 2009. The Company is exploring options.

Liquidity and Capital Resources

Absent the sale of American Marketing and the change of control with Natural Blue Resources, Inc., current cash on hand and projected cash on hand is not adequate to execute our plan of operation for NetSymphony’s or QoVox's operations. American Marketing is unlikely to make additional loans to support their operation. Given the losses incurred to date and the lack of substantial revenue generated, we have little or no access to conventional debt markets. Funding to support both short and midterm requirements for product development and launch may be done through additional sale of shares and potentially, to a lesser extent, from working capital that might be generated from customer revenue in the future. Until the Company’s products generate significant revenue from a customer, future cash flows cannot be meaningfully projected.

There can be no assurance that we will be able to raise additional capital on acceptable terms or at all. If we are unable to raise additional capital, we would need to curtail or reduce some or all of our operations, and some or all of NetSymphony’s or QoVox's operations.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates have a material impact on our financial statements.

Revenue Recognition

American Marketing & Sales, Inc.

American Marketing and Sales, Inc. recognizes revenue from product sales in accordance with Staff Accounting Bulletin No. 104, which requires recognition when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred, and payment is reasonably assured. The Company has determined that these criteria have been met upon shipment, and recognizes revenue at that point.

Pursuant to SFAS No. 5, “Accounting for Contingencies,” American Marketing and Sales, Inc. has examined collection history, financial conditions of clients, and general economic conditions and determined that it is not necessary to set an allowance for doubtful accounts, which have historically not been significant.

NetSymphony Corporation & QoVox Corporation

NetSymphony Corporation and QoVox Corporation derive revenue from three primary sources: (1) system hardware component sales revenue, (2) software license revenue and (3) services and maintenance and right to use revenue, which include support, maintenance, right to use fees and consulting. Revenue on system hardware component sales is recognized upon delivery to, and acceptance by, the customer. Software license revenue recognition is substantially governed by the provisions of Statement of Position No. 97-2 , “Software Revenue Recognition,” (SOP 97-2) issued by the American Institute of Certified Public Accountants. The Company exercises judgment and uses estimates in connection with the determination of the amount of software license and services revenue to be recognized in each accounting period. For software license arrangements that do not require significant modification or customization of the underlying software, the Company recognizes revenue when: (1) it enters into a legally binding arrangement with a customer for the license of software; (2) it delivers the products or perform the services; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties (4) collection is probable and (5) vendor specific objective evidence (VSOE) of fair value exists to allocate the total fee among all delivered and undelivered elements in the arrangement.

Multiple Element Arrangements

The Company typically enters into arrangements with customers that include perpetual software licenses, system hardware, maintenance and right to use fees. Software licenses are sold on a per copy basis. Per copy licenses give customers the right to use a single copy of licensed software for exclusive use on the Company’s system hardware. Assuming all other revenue recognition criteria are met, license revenue is recognized upon delivery using the residual method in accordance with SOP No. 98-9, “Modification of SOP 97-2: Software Revenue Recognition.” Under the residual method, the Company allocates and defers revenue for the undelivered elements, based on VSOE of fair value, and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of each undelivered element in multiple element arrangements is based on the price charged when the same element is sold separately. If sufficient evidence of fair value cannot be determined for any undelivered item, all revenue from the arrangement is deferred until VSOE of fair value can be established or until all elements of the arrangement have been delivered. If the only undelivered element is maintenance and technical support for which the Company cannot establish VSOE, the Company will recognize the entire arrangement fees ratably over the maintenance and support term.

Maintenance and right to use fees include updates (unspecified product upgrades and enhancements) on a when and if available basis, telephone support and bug fixes or patches and maintenance of the systems hardware, which would include repairs or replacement as necessary. VSOE of fair value for maintenance and right to use fees is based upon stated annual renewal rates. Maintenance and right to use fees revenue is recognized ratably over the maintenance and right to use term.

Revenue Recognition Criteria

The Company defines revenue recognition criteria as follows:

·	Persuasive Evidence of an Arrangement Exists. It is the Company’s customary practice to have a purchase order prior to recognizing revenue on an arrangement.

·	The Vendor’s Fee is Fixed or Determinable. The Company’s invoices or service agreements identify the price for services to be rendered, and customary payment terms are generally within 30 days after the invoice date.

·	Collection is Reasonably Assured. Due to a lack of customer history upon which a judgment could be made as to the collectability of a particular receivable, revenue is currently recognized upon receipt of payment assuming all other conditions of the sale have been met.

Cost of Revenue

Inventory

Commitments and Contingencies

Commitments and contingencies are evaluated on an individual basis to determine the impact on current and future liabilities and assets. We make a determination as to whether such a liability or loss is reasonably possible, and we either estimate the amount of possible loss or liability or range of loss or liability. In rare cases, we are not able to determine the amount of such loss or liability or even a range of amounts in a way that would not be misleading. We may be unable to calculate a liability or loss if substantiated information is unavailable or the amount of the loss or liability depends significantly on future events.

In addition to evaluating estimates relating to the items discussed above, we also consider other estimates, including but not limited to, those related to software development costs, goodwill and identifiable intangible assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities and equity that are not readily apparent from other sources. Actual results and outcomes could differ from these estimates and assumptions.

Software Development Costs

Statement of Financial Accounting Standards (SFAS) No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed,” requires capitalization of certain software development costs subsequent to the establishment of technological feasibility and readiness of general release. In 2004, certain costs were incurred subsequent to the establishment of technological feasibility and prior to the readiness of general release. These expenses were immaterial in nature and in total and therefore not capitalized. We also license from a third party the use of certain software that we utilize in our products. These computer software license fees are expensed as incurred.

Fair Value of Financial Instruments

The carrying value of cash, notes receivable, accounts payable and accrued expenses and notes payable approximate fair value because of the relatively short maturity of these instruments.

Stock Based Compensation

The Company follows guidance provided in SFAS No. 123(R), “Accounting for Stock Based Compensation,” which requires companies to recognize expense for stock based awards issued to employees or outside consultants based on their estimated fair value on the grant date. We have elected to use the Black-Scholes Pricing Model to value these awards.

Income Taxes

The Company, a “C” corporation, accounts for income taxes under SFAS No. 109, “Accounting for Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The principal differences are net operating losses, startup costs and the use of accelerated depreciation methods to calculate depreciation expense for income tax purposes.

Consolidation of Variable Interest Entities

In January 2003 and revised December 2003, the FASB issued FIN No. 46 , “Consolidation of Variable Interest Entities.” This interpretation of Accounting Research Bulletin No. 51 , “Consolidated Financial Statements,” requires consolidation by business enterprises of variable interest entities, as defined, when certain conditions are met. Pursuant to FIN No. 46, the Company continues to consolidate CASCommunications, Inc.

RESULTS OF OPERATIONS

For the quarter ended March 31 2009, the Company incurred a net loss from operations of $320,636 compared with a loss from operation of $319,517 for the quarter ended March 31, 2008. We recognized an overall net income of $388,571 for the quarter ended March 31, 2009, as compared to an overall net loss of $404,873 for the quarter ended March 31, 2008. Cash on hand was $1,054,261 as of March 31, 2009 compared with $398,978 as of December 31, 2008. Our gross revenues increased from $1,926,142 for the quarter ended March 31, 2008 to $2,179,085, which is attributable to continued and growing profitability of American Marketing and Sales on an entity level, which continues to expand its customer base as to its Green Line caterware and office products. Gross margin decreased from $465,674 for the quarter ended March 31, 2008 to $169,784 for the quarter ended March 31, 2009. This is due primarily to a current quarter increase in cost of goods sold attributable to the higher cost of manufacturing GreenLine products from recycled materials. On the expense side, the Company has diligently pruned its expenses and settled many outstanding liabilities. NetSymphony and QoVox continue to struggle with product development, particularly in the current financial climate. All potential customers have delayed trials of the NetSymphony’s Maestro VoIP testing system and it is not expected that serious trials by any potential customer will begin earlier than the third quarter of 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4T. CONTROLS AND PROCEDURES

The Company’s management, consisting of James Murphy, our Chief Executive Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2009. Based upon this evaluation, our Chief Executive Officer concluded that, as of March 31, 2009, our disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

As a result of our December 31, 2008 audit, we have learned that our disclosure controls and procedures have failed to properly account for the provisions of SFAS 5 “Contingencies.” These issues were not detected to allow timely decisions regarding their accounting and disclosure. Corrective action will be taken in the future to properly evaluate and disclose Company’s liabilities as required by SFAS 5. The Company will ensure that each liability is reviewed under SFAS 5, which will be accomplished by hiring a CFO and implementing further training of current personnel. Additional written policy guidance will also be adopted.

Management’s Annual Report on Internal Control Over Financial Reporting

Our Chief Executive Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2009 based on criteria established in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, the Company’s management concluded that, as of March 31, 2009, the Company’s internal control over financial reporting was not effective.

As a result of our December 31, 2008 audit, we learned that our internal controls over financial reporting failed to properly account for the provisions of SFAS 5, “Contingencies.” Corrective action will be taken in the future to properly evaluate and disclose Company’s liabilities as required by SFAS 5. The Company will ensure that each liability is reviewed under SFAS 5, which will be accomplished by hiring a CFO and implementing further training of current personnel. Additional written policy guidance will also be adopted.

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Securities Exchange Act of 1934, as amended) during our last fiscal quarter ended March 31, 2009 and our year ended December 31, 2008 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On March 14, 2007, QoVox was sued in the General District Court of Justice for $7,200 by Joseph L. Turgeon, a past consultant, concerning consulting fees alleged to be owed from March 2004. On March 26, 2009, Mr. Turgeon obtained a writ of execution in the amount of $9,224.

In July 2003, the Company signed a promissory note with a professional for fees and the interest on unpaid fees due that professional through September 30, 2003 in the amount of $247,007. The note was due on August 15, 2003 and was guaranteed personally by the Company’s Chairman. The note stated an interest rate of 18% per annum, which had been accrued since the note’s inception. No significant payments had been made on the note, and on September 25, 2007, the note holder filed suit, seeking to have a judgment rendered against the Company for all amounts claimed due. On June 23, 2008, the court entered an order for judgment for the full principal and interest on the promissory note. On August 15, 2008, the parties entered into a settlement agreement before entry of a final judgment requiring the Company to pay the plaintiff in full settlement of this case, the sum of $555,000. After making an initial payment of $100,000 under the settlement, the Company defaulted and on February 18, 2009, the court entered final judgment for plaintiff in the amount of $457,927. Additional negotiations ensued and the Company and plaintiff entered into a second settlement agreement wherein plaintiff will accept (in escrow) 10 million Company common shares as payment of the judgment if the sale of American Marketing and the change of control of the Company are concluded on or before June 1, 2009. If not, the second settlement is void and the 10 million shares in escrow are to be returned.

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

The Company’s unregistered sale of equity securities during the reporting period was as follows:

Purchased	Investor	Amount		Share Price		Number of Shares

3/18/2009	John Boniface	$	50,000		0.025		2,000,000
3/20/2009	John Boniface	$	62,500		0.025		2,500,000
3/20/2009	Cathy Pavlas	$	20,000		0.025		800,000
3/23/2009	Constantine Theodoropulos	$	16,000		0.025		640,000

Each of the foregoing sales transactions was exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof. Each investor was a shareholder of the Company at the time of the applicable transaction and purchased the shares in a transaction not involving a public offering.

The proceeds from these sales were used to fund Company operations and reporting obligations and to make additional loans to Company subsidiaries to support their operations.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

On May 19, 2009, the Company filed a definitive proxy statement with the SEC. The proxy statement includes a cover letter reproduced here.

DATAMEG CORPORATION

2150 South 1300 East, Suite 500

Salt Lake City, UT 84106

May 18, 2009

Dear Shareholder:

The Board of Directors of Datameg Corporation (the "Company") has approved entry into two material transactions and the Company has entered into those transactions. First, the Company, as the seller, entered into a Stock Purchase Agreement and purchase money promissory note Assignment and Assumption Agreement incident to its proposed sale of its wholly owned subsidiary American Marketing & Sales, Inc. (“American Marketing”), a Massachusetts corporation to Blue Earth Solutions, Inc. (“Blue Earth”), a Nevada corporation. Second, the Company entered into a Share Exchange Agreement to acquire Natural Blue Resources, Inc. (“NBR”), a Nevada corporation.

The Board's action to sell American Marketing is subject to the consent by a majority of the Company's shares because American Marketing represents a majority of the Company’s assets.

The Board’s action to acquire NBR is subject to the consent by a majority interest of the Company’s shareholders because the transaction calls for a 1 for 100 reverse stock split and a change of control. The shareholders of NBR are to transfer all of NBR's issued and outstanding shares of capital stock ("Shares") to the Company and such Shares are to be converted into and exchanged for shares of the Company's common stock, equaling upon completion of this share exchange ninety percent (90%) of the issued and outstanding capital stock of the Company. A majority in interest of the Company current shareholders must consent to the 1 for 100 reverse stock split reducing the Company’s outstanding shares to approximately 4.9 million common shares pre-closing and to approximately 49 million shares after the closing of the Share Exchange. Subject to the closing of the acquisition of NBR, the Board is also seeking the consent by a majority of the Company’s shares to amend the Certificate of Incorporation to change the name of the Company to Natural Blue Resources, Inc.

The Board of Directors considers the sale of American Marketing and acquisition of NBR to be necessary for the Company to adequately pursue shareholder value. We urge you to read the accompanying written consent solicitation carefully, as it contains a detailed explanation of the proposed transactions and amendments and the reasons for the proposed transactions and amendments. The Board of Directors believes the proposed sale of American Marketing and acquisition of NBR to be in the best interest of the Company and its shareholders.

Please complete, date and sign the enclosed written consent solicitation and return it promptly in the enclosed envelope on or before June 18, 2009 to ensure that your vote is counted with respect to the proposed amendments to the Company's Articles of Incorporation and Bylaws.

Sincerely,

/s/ James Murphy

James Murphy, Chief Executive Officer

and Chairman of the Board

ITEM 6. EXHIBITS

EXHIBIT INDEX

Exhibit No.		Description

10.1		Stock Purchase Agreement among Blue Earth Solutions, Inc., Datameg Corporation and American Marketing & Sales, Inc. dated as of March 17, 2009 (1)

10.2		Assignment and Assumption Agreement among Blue Earth Solutions, Inc., Datameg Corporation, American Marketing & Sales, Inc., Leonard J. Tocci, Lynel J. Tocci, Leanne J. Whitney, and Linnea J. Clary. Leonard J. Tocci dated March 17, 2009 (1)

10.3		Secured Promissory Note of American Marketing and Sales, Inc. and Datameg Corporation in favor of Leonard Tocci (1)

31.1		Rule 13a-14(a) Certificate of Principal Executive Officer

31.2		Rule 13a-14(a) Certificate of Chief Financial Officer

32.1		Certificate of Principal Executive Officer pursuant to 18 U.S.C. 1350

32.2		Certificate of Principal Financial Officer pursuant to 18 U.S.C. 1350

(1) Filed as an Exhibit to the Current Report on Form 8-K by the Registrant on April 2, 2009

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 24th day of December, 2009.


Natural Blue Resources, Inc. (formerly known as Datameg Corporation)

B Y :		/s/ Toney Anaya
		Toney Anaya,
		Chairman, Chief Executive Officer (Principal Executive Officer)

Natural Blue Resources (CE) (USOTC:NTUR)
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