UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2009

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

For the transition period from _____________________ to ______________

Commission file number: 0-27565

Abazias, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-23532	65-0636277
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File No.)	Identification No.)

5214 SW 91st Terrace Suite A

Gainesville, FL 32608

(Address of principal executive offices) (Zip Code)

352-264-9940

(Registrant's telephone number)

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 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	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ Nox

Applicable only to corporate issuers:

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Common Stock, $.001 par value 3,165,522 shares outstanding as of August 14, 2009.

Transitional Small Business Disclosure Format: Yes ¨ No x

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TABLE OF CONTENTS

PART I.		3
Item 1.	Financial information	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	11
Item 4.	Controls and Procedures	11

PART II.	OTHER INFORMATION	12
Item 1.	Legal Proceedings	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Default Upon Senior Securities	12
Item 4.	Submission of Matters to a Vote of Security Holders	12
Item 5.	Other Information	12
Item 6.	Exhibits	12

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PART I.

Item 1. FINANCIAL INFORMATION

ABAZIAS, INC.

BALANCE SHEETS

(unaudited)

	June 30,			December 31,
	2009			2008
ASSETS
Current assets:
Cash	$	20,394		$	119,836
Accounts receivable		121,785			200,065
Inventory		435,803			355,353
Due from stockholder		-			35,000
Total current assets		577,982			710,254

Property & equipment, net of accumulated
depreciation of $6,087 and $6,087 respectively		2,027			1,409

Total Assets	$	580,009		$	711,663
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable and accrued expenses	$	555,132		$	556,003
Short term debt		700,000			-
Total Current Liabilities		1,255,132			556,003
Long Term Liabilities
Long term debt		-			500,000

Total Liabilities	$	1,255,132		$	1,056,003

Stockholders’ Equity (Deficit):
Preferred stock, $.001 par value, 1,000,000
authorized, no shares issued and outstanding		-			-
Common stock, $.001 par value, 150,000,000 shares
authorized, 3,165,522 and 3,165,522
issued and outstanding respectively		3,166			3,166
Additional paid-in capital		5,838,763			5,838,763
Accumulated deficit		(6,517,052	)		(6,186,269	)
Total Stockholders’ Equity (Deficit)		(675,123	)		(344,340	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)	$	580,009		$	711,663

See accompanying notes to unaudited financial statements.

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ABAZIAS, INC.

STATEMENTS OF OPERATIONS

Three and Six Months Ended June 30, 2009 and 2008

(Unaudited)

	Three months						Six months
	2009			2008			2009			2008
Sales	$	1,242,951		$	1,848,130		$	2,504,751		$	3,640,832
Cost of sales		1,044,728			1,587,238			2,131,164			3,139,118
Gross profit		198,223			260,892			373,587			501,714

General and administrative		368,901			331,306			675,411			728,404
Operating loss		(170,678	)		(70,414	)		(301,824	)		(226,690	)

Interest expense		(17,754	)		(1,237	)		(28,959	)		(2,681	)
Net Loss	$	(188,432	)	$	(71,651	)	$	(330,783	)	$	(229,371	)



Basic and diluted loss per share	$	(0.06	)	$	(0.02	)	$	(0.10	)	$	(0.07	)

Weighted average shares outstanding		3,165,522			3,165,522			3,165,522			3,141,251

See accompanying notes to unaudited financial statements.

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ABAZIAS, INC

STATEMENTS OF CASH FLOW

Six Months Ended June 30, 2009 and 2008

(Unaudited)

	2009			2008
Cash Flows from Operating Activities
Net loss	$	(330,783	)	$	(229,371	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Common stock issued for services		-			5,100
Imputed interest on stockholder loan		-			2,681
Depreciation and amortization		-			8,833
Changes in:
Accounts receivable		78,280			175,304
Inventory		(80,450	)		(85,559	)
Accounts payable and accrued expenses		(871	)		(34,748	)
Net Cash Used In Operating Activities		(333,824	)		(157,760	)

Cash Flows From Investing Activities
Cash paid for purchase of fixed asset		(618	)		-
Net Cash Provided by Investing Activities		(618	)		-

Cash Flows From Financing Activities
Proceeds from issuance of convertible debt		200,000			-
Net proceeds/(payment) on loans from stockholder		35,000			(146,000	)
Common stock issue for cash		-			50,000
Net Cash Provided by Financing Activities		235,000			(96,000	)
Net change in cash		(99,442	)		(253,760	)
Cash at beginning of period		119,836			337,773
Cash at end of period	$	20,394		$	84,013

Supplementary Disclosures:
Income tax paid	$	-		$	-
Interest paid		-			-

Non-cash operating and financing activities
Common stock issued as payment on stock payable	$	-		$	50,000

See accompanying notes to unaudited financial statements.

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ABAZIAS, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

The accompanying unaudited interim financial statements of Abazias, Inc., a Delaware corporation (“Abazias”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Abazias’ latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year, 2008, as reported in Form 10-K, have been omitted.

NOTE 2 – CONVERTIBLE NOTE PAYABLE

On February 17, 2009 and June 10, 2009, Abazias entered into a $100,000 secured convertible note payable with Omni. The two convertible notes bears interest at 10% per annum with interest to be paid quarterly, and the principal and all unpaid interest will be due on or before February 17, 2010 and June 10, 2010. The note is convertible into common stock of Abazias at a price which shall equal the greater of (i) $.50 or (ii) the closing bid price of Abazias’ shares of common stock on the date of conversion.

As of June 30, 2009 accrued interest on outstanding notes was $41,736.

Abazias has evaluated the application of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and EITF Issue 00-19, “Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Company’s Own Stock,” to its Embedded conversion feature within its convertible note payable and has determined that the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability.

NOTE 3 – SUBSEQUENT EVENTS

On July 17, 2009, Abazias entered into $300,000 secured convertible note with Omni. The convertible note bears interest at 10% per annum with interest to be paid quarterly, and the principal and all unpaid interest will be due on or before July 20, 2009. The note is convertible into common stock of Abazias at a price which shall equal the greater of (i) $.50 or (ii) the closing bid price of Abazias’ shares of common stock on the date of conversion.

The Company has evaluated subsequent events through August 14th, 2009 which is the date the financial statements were issued.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

Some of the statements contained in this Form 10-Q that are not historical facts are "forward-looking statements" which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 10-Q, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

· Our ability to maintain, attract and integrate internal management, technical information and management information systems;

· Our ability to generate customer demand for our services;

· The intensity of competition; and

· General economic conditions.

All written and oral forward-looking statements made in connection with this Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Overview

We are an online retailer of high quality loose diamonds and fine jewelry settings for our diamonds. Our web site at www.abazias.com showcases over 100,000 diamonds almost all of which are independently certified and around 600 styles of fine jewelry, including rings, wedding bands, earrings, necklaces, and bracelets.

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Results of Operations

Three and six months ended June 30, 2009 and 2008

	Three months						Six months
Sales	2009			2008			2009			2008
Cost of sales	$	1,242,951		$	1,848,130		$	2,504,751		$	3,640,832
Gross profit		1,044,728			1,587,238			2,131,164			3,139,118
		198,223			260,892			373,587			501,714

General and administrative		368,901			331,306			675,411			728,404
Operating loss		(170,678	)		(70,414	)		(301,824	)		(226,690	)

Interest expense		(17,754	)		(1,237	)		(28,959	)		(2,681	)
Net Loss	$	(188,432	)	$	(71,651	)	$	(330,783	)	$	(229,371	)



Basic and diluted loss per share	$	(0.06	)	$	(0.02	)	$	(0.10	)	$	(0.07	)

Weighted average shares outstanding		3,165,522			3,165,522			3,165,522			3,141,251

Three Months Ended June 30, 2009 and 2008

Our sales for the three months ended June 30, 2009 vs. three months ended June 30, 2008 decreased 33% to $1,242,951 from $1,848,130 primarily due to the general market condition.

Our cost of sales for the three months ended June 30, 2009 vs. three months ended June 30, 2008 decreased 34% to $1,044,728 from $1,587,238 primarily due to decrease in sales.

Our general and administrative expenses for the three months June 30, 2009 vs. three months ended June 30, 2008 increased 11% to $368,901 from $331,306 primarily due to increasein professional fees related to the currant merger.

Our interest expense for the three months ended June 30, 2009 vs. three months ended June 30, 2008 increased 1335% to $17,754 from 1,237. This was a result of a long term loan payable from OmniReliant.

Our net loss for the three months ended June 30, 2009 vs. three months ended June 30, 2008 increased 163% to $188,432 from $71,651 due primarily to a decrease in sales, and an increase in professional fees related to the current merger and in accrued for the note we took outfrom Omni.

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Six Months Ended June 30, 2009 and 2008

Our sales for the six months ended June 30, 2009 vs. six months ended June 30, 2008 decreased 31% to $2,504,751 from $3,640,832 primarily due to the general market condition.

Our cost of sales for the six months ended June 30, 2009 vs. six months ended June 30, 2008 decreased 32% to $2,131,164 from $3,139,118 primarily due to decrease in sales.

Our general and administrative expenses for the six months ended June 30, 2009 vs. six months ended June 30, 2008 decreased 7% to $675,411 from $728,404 due to decreased spending on internet related advertising including: search engine optimization, pay per click advertising, and portal advertising related cost and Yahoo.

Our interest expense for the six months ended June 30, 2009 vs. six months ended June 30, 2008 increased 980% to $28,958 from 2,681. This was a result of a long term loan payable from OmniReliant.

Our net loss for the three six months ended June 30, 2009 vs. six months ended June 30, 2008 increased 44% to $330,783 from $229,371 due primarily to the increase of interest expense from the OmniReliant Loan

Liquidity and Capital Resources

At June 30, 2009 we had current assets of:

Cash	$	20,394
Accounts receivable		121,785
Inventory		435,803
Total current assets		577,982

At June 30, 2009 we had current liabilities of:

Accounts payable and accrued expense	$	555,132
Short term debt		700,000
Total Current Liabilities	$	1,255,132

Our revenues may continue to be adversely impacted by the current economic downturn. However a decrease in advertising spending and other expenses may compensate for the current negative cash flow position, although because a significant portion of our expenses are fixed, this may not occur.

Abazias, Inc. (“Abazias-Delaware”) has entered into an Agreement and Plan of Merger with OmniReliant Acquisition Sub, Inc., a wholly owned subsidiary of OmniReliant, Inc.

Upon the terms and subject to the conditions set forth in the Agreement and Plan of Merger Abazias-Delaware and OmniReliant Acquisition Sub shall consummate a merger pursuant to which (i) the Abazias-Delaware shall be merged with and into OmniReliant Acquisition Sub and the separate corporate existence of Abazias-Delaware shall thereupon cease, (ii) OmniReliant Acquisition Sub shall be the successor or surviving corporation in the Merger and shall continue to be governed by the Laws of the State of Nevada, and (iii) the separate corporate existence of OmniReliant Acquisition Sub with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. The corporation surviving the Merger is sometimes hereinafter referred to below as the "Surviving Corporation." The Merger shall have the effects set forth under the Laws of the State of Nevada.

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The Merger consideration, consisting of the total purchase price payable to the shareholders of the Abazias-Delaware in connection with the acquisition by merger of Abazias-Delaware, shall be delivered and shall consist exclusively of 13,001,000 newly issued shares of Series E Zero Coupon Convertible Preferred Stock, of OmniReliant (the "Preferred Stock"). The Preferred Stock shall be convertible into shares of common stock of OmniReliant in accordance with the terms of, and the Preferred Stock shall have those rights, preferences and designations set forth in, that certain Certificate of Designation, Preferences and Rights of Preferred Stock (the "Certificate of Designation").

Under the terms of the Agreement, during the six months after the Closing Date, Omni will provide additional non-debt funding to Abazias of Five Hundred Thousand Dollars ($500,000.00) to be used by Abazias for general working capital or such other purposes in furtherance of the business of Abazias as Company and Omni shall mutually agree.

As of June 30, 2009, OmniReliant Holdings advanced Abazias $200,000 in the form of a convertible notes as described below. Subsequent to the end of the quarter Omni advanced Abazias the remaining $300,000, satisfying its obligation under the Agreement to provide Abazias with $500,000 in funding.

On February 18, 2009 and June 10, 2009, Abazias entered into two separate $100,000 secured convertible note payable with Omni. The two convertible notes bears interest at 10% per annum with interest to be paid quarterly, and the principal and all unpaid interest will be due on or before February 17, 2010 and June 10, 2010. The notes are convertible into common stock of Abazias at a price which shall equal the greater of (i) $.50 or (ii) the closing bid price of Abazias’ shares of common stock on the date of conversion. On July 20, 2009, Abazias entered into $300,000 secured convertible note with Omni. The convertible note bears interest at 10% per annum with interest to be paid quarterly, and the principal and all unpaid interest will be due on or before July 20, 2009. The notes are convertible into common stock of Abazias at a price which shall equal the greater of (i) $.50 or (ii) the closing bid price of Abazias’ shares of common stock on the date of conversion. If the Agreement is not consummated, the notes will be payable one year from the date of issuance.

Our financial condition could inhibit our ability to achieve our business plan, because we are currently operating at a loss on a non positive cash flow basis, and an investor cannot determine if or when we will ever become profitable.

Certain Accounting Policies

Revenue recognition

a) Return Policy- For most of our products, we offer an unconditional 10-day return policy, under which customers desiring to return a product receive a return authorization by calling our customer service center. We have, based on historical return figures, been able to determine that returns have never had any material impact on our financial statements, and historically been less then than 5% of total sales, based on analyzing historical return rates. We therefore expect no more than 5% of sales to be returned which can only occur within 10 days after the sale is made. Returned products are treated as merchandise credits and are subject to the same inventory accountability. Revenue is recognized when the diamonds are shipped, and returns immediately debited against current sales upon any return.

b) Since our inventory is purchased at the time of sale, we have reviewed EITF 99-19, to clarify if we might be deemed a diamond agent and have to report sales on a net basis. We clearly do not fit under the appropriate definition as an agent for several reasons. We purchase all of our diamonds under our credit facilities with our various wholesalers. This varies between many dealers and in some cases, requires us to wire funds before a diamond is shipped, to many dealers offering us credit terms of net 30 for payment. The customer that purchase a diamond or other product, does so with us solely, and is never even aware of our wholesaler relationships, and even at any time we’re aware, could not purchase from them. Consequently, regardless of whether we are paid or not for the diamond or other products we sell, we are obligated to pay our wholesaler for said product once shipped. We have purchased the diamond or product, and the responsibility of said product solely rests with us, including accepting a return from a customer, even when we in turn might not be able to return the same diamond to our wholesaler. Regardless of whether or not the company is deemed an agent, which we clearly are not, we would still fulfill all the indicators under EITF 99-19 for gross revenue reporting. We are the primary obligator in the arrangement, we maintain inventory risk in the event the product is returned, price establishment rests solely with us, we can and do modify the product frequently by mounting diamonds, as well as finishing them and other products, we can and do choose among many suppliers, all products sold are determined by us, we have physical loss risk, and additionally shoulder credit risk. Based on these reasons, we clearly are not an agent, and should report revenues on a gross basis.

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Trade up policy

We have a lifetime trade up policy which provides a guaranteed trade up of 80% of the price of the original diamond purchase. This provides our customers with the ability and incentive to become and remain our customers for many years to come. This affords our customers an option that many of our competitors will not extend to them. If the buyer exercised his/her trade-in right (functionally an option written by us), we would exchange a new diamond in for the original. Under normal circumstances, any trade up policy exercised would be even more profitable than a sale not including an exercised policy. This is because, on average we would make our normal markup, in addition to getting a discount that is greater than our cost on the diamond traded. It is conceivably possible, in a catastrophic event to the diamond markets which caused the value of diamonds to drop, customers would want to take advantage of this policy. Our policy is limited to the value of the diamond traded in, being close to the value when purchased. As such, we are protected from the functional price guarantee as mentioned in EITF 00-24 and FIN 45. Specifically our policy is only valid when, the diamond is at least 80% of the wholesale per carat price at time of purchase, based on published wholesale prices in the Rappaport industry publication, which is the de-facto standard for diamond pricing. To date, no customers have exercised this policy with us. After reviewing EITF 00-24 and FIN 45, we would not have any potential financial exposure to account for as a result of this policy, since our trade in value requirements based on current market conditions at the time of trade in, require the diamond to be worth 80% of the wholesale carat price, and if it does not, no trade up policy is valid.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of June 30, 2009, under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures as of June 30, 2009 and concluded that our disclosure controls and procedures were ineffective as of June 30, 2009 due to a material weakness which relates to the monitoring and review of work performed by our Chief Financial Officer and lack of segregation of duties. In the preparation of our financial statements, footnotes and financial data all of our financial reporting is carried out by our Chief Financial Officer, and we do not have an audit committee to monitor or review the work performed. The lack of segregation of duties results from lack of accounting staff with accounting technical expertise necessary for an effective system of internal control. In order to mitigate this material weakness to the fullest extent possible, all financial reports are reviewed by the Chief Executive Officer. All unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it is immediately implemented. As soon as our finances allow, we will hire sufficient accounting staff and implement appropriate procedures for monitoring and review of work performed by our Chief Financial Officer.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2009, that have materially affected, or are likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

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

None during the quarter ended June 30, 2009.

Item 3. Default Upon Senior Securities

Not applicable.

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

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

(a) Exhibits:

Exhibit No.	Document Description

31.1	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

31.2	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.

32.1	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

32.2	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.

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SIGNATURES

In accordance with Section 12 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Abazias, Inc.

Dated: August 13, 2009	By:	/s/ Oscar Rodriguez
		Oscar Rodriguez
		President, Chief Executive Officer and Director



	By:	/s/ Jesus Diaz
		Jesus Diaz
		Principal Financial Officer and Principal Accounting Officer

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ABAZIAS INC 10-Q