Financial Highlights

Results for the period ended December 31, 2008 will be available shortly – Please check back soon.

Results for the period ended December 31, 2007

Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this document. This discussion contains forward-looking statements that are based on our current expectations and involve risks and uncertainties. Skye’s actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-KSB for the period ended December 31, 2007.

Comparison of the Years Ended December 31, 2007 and 2006 Revenues

Revenues for the year ended December 31, 2007 were $NIL, compared to revenues of $196,341 in the year ended December 31, 2006. The decreases in revenue is attributable to the cessation all sales of ESI-2000 products and parts pending the launch of the Company’s FORTIS™ product line in addition to the non-recurring Other Income charge of  $194,269 in the prior year.

General and Administrative expenses

General and administrative expenses decreased by 42% reflecting the fact that the Company continued to operate at minimal staffing levels as it completed the balance of development work on its pending FORTIS™ product line. Commencing May 1, 2007, the Company’s operations were conducted from 2,189 square foot leased premises in Scottsdale, Arizona. During the year ended December 31, 2007, we submitted the product for Nationally Recognized Testing Laboratory (“NRTL”) for certification/approval by Intertek Testing Laboratories, Inc. (“Intertek”). We anticipate an increase in the general and administrative expenses by the Company in 2008 as we add more operational and administrative personnel, and continued professional assistance with our continued efforts to execute our business plan and market our products.

Total Operating Expenses

Overall operating expenses decreased by approximately 25% as a result of reduced occupancy and general and administrative costs., Minimal non-research and development expenses were incurred during  2007 as the Company focused its efforts on completing the FORTIS™ product line and readying it for NRTL investigation for certification/approval and subsequent production. Legal and professional fees declined $810,272 or 46% from the prior year, whereas research and development expenses increased $602,421 or 2241% from the prior year ended December 31, 2006.

Net Loss

The net loss for the year ended December 31, 2007 improved (reduced) by $454,617 or 18%. The prior year included a $194,269 non-recurring Other Income benefit and which was offset by a reduction (downsizing) in Rent of $177,631.  The most dramatic improvements have been made in shifting away from general and administrative and legal spending and investing in research and development.  The $600,000 increase in research and development was more than offset by these reductions resulting in the $450,000 improvement.