U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB



(Mark One)



[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2007



OR



[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______



| |                                                    | 
| | -------------------------------------------------- | 
| | INZON CORPORATION                                  | 
| | (Exact name of registrant as specified in charter) | 



|                                               |  |                          |  |                                  
|---------------------------------------------- |  | ------------------------ |  | ---------------------------------
|Nevada                                         |  | 0-17345                  |  | 41-1578316                       
|(State or other jurisdiction
of incorporation) |  | (Commission File Number) |  | (IRS Employer
Identification No.)



| |                                                       | 
| | ----------------------------------------------------- | 
| | 238 Northeast 1st Avenue, Delray Beach, Florida 33444 | 
| | (Address of principal executive offices)              | 



| |                                                      | 
| | ---------------------------------------------------- | 
| | (561) 279-8200                                       | 
| | (Registrants Telephone Number, including Area Code) | 



Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) been subject to such filing requirements for the past 90 days.  Yes [  ]  No  [ X ].



Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [ X ]



As of August 14, 2007, the Company had 50,713,705 shares of common stock issued and outstanding.



Transitional Small Business Disclosure Format (check one): Yes [   ] No  [ X ].







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TABLE OF CONTENTS







|        |                                                                                                                      |     
|------- | -------------------------------------------------------------------------------------------------------------------- | ----
|        |                                                                                                                      | Page
|        | PART I  FINANCIAL INFORMATION                                                                                       |     
|Item 1. | Financial Statements                                                                                                 |     
|        | Condensed Balance Sheet as of June 30, 2007                                                                          | 3   
|        | Condensed Statements of Operations for the Three Months aned Nine Month Period Ended June 30, 2007 and June 30, 2006 | 4   
|        | Condensed Statement of Cash Flows for Three and Nine Month Period ended June 30, 2007 and June 30, 2006              | 5   
|        | Notes to Condensed Financial Statements                                                                              | 6   
|Item 2. | Management Discussion and Analysis of Financial Condition and Results of Operations                                  | 9   
|Item 3. | Controls and Procedures                                                                                              | 16  
|        | PART II  OTHER INFORMATION                                                                                          |     
|Item 1. | Legal Proceedings                                                                                                    | 18  
|Item 2. | Unregistered sales of equity securities and use of proceeds                                                          | 18  
|Item 3. | Defaults upon senior securities                                                                                      | 18  
|Item 4  | Submission of matters to a vote of security holders                                                                  | 18  
|Item 5. | Other information                                                                                                    | 18  
|Item 6. | Exhibits                                                                                                             | 18  
|        | Signatures                                                                                                           | 19  
|        |                                                                                                                      |     









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PART I  FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS



INZON CORPORATION

CONDENSED BALANCE SHEET

(Unaudited)



|                                                               |                |            
|-------------------------------------------------------------- | -------------- | -----------
|                                                               | JUNE 30,  2007
|ASSETS                                                         |                |            
|Current Assets                                                 |                |            
|Cash in bank                                                   | $              | 28,675     
|Accounts receivable, net of doubtful accounts of  $96,187      |                | 14,351     
|Total Current Assets                                           |                | 43,026     
|Fixed Assets                                                   |                |            
|Furniture, fixtures & equipment, net                           |                |            
|of  accumulative depreciation  of $140,781                     |                | 110,810    
|Total Fixed Assets                                             |                | 110,810    
|Trademarks                                                     |                | 20,000     
|Software,  net of amortization of $ 499,369                    |                | 596,941    
|Deferred expenses, net of amortization of $ 174,923            |                | 58,037     
|Total Assets                                                   | $              | 828,814    
|LIABILITIES AND STOCKHOLDERS DEFICIT                          |                |            
|Current Liabilities                                            |                |            
|Note payable, equipment                                        |                | 112,912    
|Notes payable                                                  |                | 380,292    
|Accounts payable                                               |                | 1,575,933  
|Accrued payroll and payroll taxes                              |                | 253,237    
|Compensation payable, related parties                          |                | 1,107,816  
|Deposits                                                       |                | 15,000     
|Accrued interest                                               |                | 39,677     
|Total Liabilities                                              |                | 3,484,867  
|Stockholders Deficit                                          |                |            
|Common stock, $0.001 par value; authorized 500,000,000 shares; |                |            
|issued and outstanding 37,846,150 shares                       |                | 37,846     
|Paid-in capital                                                |                | 2,403,728  
|Accumulated deficit                                            |                | (5,097,627)
|Total Stockholders Deficit                                    |                | (2,656,053)
|Total Liabilities and Stockholder Deficit                      | $              | 828,814    



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



3



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INZON CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)



|                                            |                             |            |                            |         |            |  |           |             |  |           |            
|------------------------------------------- | --------------------------- | ---------- | -------------------------- | ------- | ---------- |  | --------- | ----------- |  | --------- | -----------
|                                            | Three Months Ended June 30, |            | Nine Months Ended June 30,
|                                            |                             | 2007       |                            |         | 2006       |  |           | 2007        |  |           | 2006       
|Sales                                       | $                           | 21,600     |                            | $       | 753,625    |  | $         | 148,000     |  | $         | 5,175,450  
|Cost of sales                               |                             | -          |                            |         | 675,631    |  |           | -           |  |           | 5,220,115  
|Gross Profit (Loss)                         |                             | 21,600     |                            |         | $77,994    |  |           | 148,000     |  |           | (44,665)   
|Selling, General and Administrative Expense | 366,037                     |            |                            | 503,998 |            |  | 1,061,036 |             |  | 1,319,636
|Depreciation and Amortization               |                             | 97,851     |                            |         | 126,068    |  |           | 293,553     |  |           | 322,316    
|Bad debt expense                            |                             | 64,400     |                            |         | -          |  |           | 64,400      |  |           | -          
|Total operating expense                     |                             | 528,288    |                            |         | 630,066    |  |           | 1,418,989   |  |           | 1,641,952  
|Income (Loss) from operations               |                             | (506,688)  |                            |         | (552,072)  |  |           | (1,270,989) |  |           | (1,686,617)
|Other Income (Expense)                      |                             |            |                            |         |            |  |           |             |  |           |            
|Interest expense                            |                             | (6,086)    |                            |         | (7,499)    |  |           | (13,835)    |  |           | (43,153)   
|Other expense                               |                             | (30,855)   |                            |         |            |  |           | (30,855)    |  |           | -          
|Total Other Income (Expense)                |                             | (36,941)   |                            |         | (7,499)    |  |           | (44,690)    |  |           | (43,153)   
|Net Income (Loss)                           | $                           | (543,629)  |                            | $       | (559,571)  |  | $         | (1,315,679) |  | $         | (1,729,770)
|Net Income (Loss) per share                 | $                           | (0.0145)   |                            | $       | (0.0161)   |  | $         | (0.0357)    |  | $         | (0.0508)   
|Weighted Average Number of Common Shares    |                             |            |                            |         |            |  |           |             |  |          
|Used to Compute Net Income (Loss) per       |                             |            |                            |         |            |  |           |             |  |           |            
|Weighted Average Share                      | $                           | 37,582,414 |                            | $       | 34,846,623 |  | $         | 36,803,778  |  | $         | 34,024,974 



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





4



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INZON CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                    |                            |              |      |   |            
|--------------------------------------------------- | -------------------------- | ------------ | ---- | - | -----------
|                                                    | Nine Months Ended June 30,
|                                                    | 2007                       |              | 2006
|Cash Flows From Operating Activities                | $                          | (1,315,679 ) |      | $ | (1,729,770)
|Net income (loss)                                   |                            |              |      |   |            
|Adjustments to reconcile net income (loss)          |                            |              |      |   |            
|to net cash used in operating activities:           |                            |              |      |   |            
|Depreciation and amortization                       |                            | 293,553      |      |   | 322,316    
|Bad debt expense                                    |                            | 64,400       |      |   | -          
|Stock for services                                  |                            | 249,200      |      |   | 116,500    
|Changes in operating assets and liabilities         |                            |              |      |   |            
|Accounts receivable                                 |                            | (61,700)     |      |   | 61,171     
|Deposits                                            |                            | 1,655        |      |   | (36,655)   
|Accounts payable                                    |                            | 49,728       |      |   | 1,101,361  
|Accrued employment expense-related parties          |                            | 465,550      |      |   | 31,800     
|Accrued payroll and payroll tax                     |                            | 98,479       |      |   | -          
|Accrued interest                                    |                            | 39,677       |      |   | 7,918      
|Net Cash Used In Operating Activities               |                            | (115,137)    |      |   | (125,359)  
|Cash Flows From Investing Activities                |                            |              |      |   |            
|Cost of captial acquired                            |                            | -            |      |   | (25,500)   
|Net Cash Provided By (Used In) Investing Activities |                            | -            |      |   | (25,500)   
|Cash Flows From Financing Activities                |                            |              |      |   |            
|Loan payments                                       |                            | (18,000)     |      |   | (86,334)   
|Proceeds from notes payable                         |                            | 156,595      |      |   | 50,000     
|Net Cash Provided By (Used In) Financing Activities |                            | 138,595      |      |   | (36,334)   
|Net Increase (Decrease) In Cash                     |                            | 23,458       |      |   | (187,193)  
|Cash, Beginning of Period                           |                            | 5,217        |      |   | 208,192    
|Cash, End of Period                                 | $                          | 28,675       |      | $ | 20,999     
|Supplemental Disclosures of Cash Flow Information   | $                          | -            |      | $ | -          
|Cash paid during the period for:                    | $                          | -            |      | $ | -          
|Interest                                            |                            |              |      |   |            
|Income taxes                                        |                            |              |      |   |            
|Supplemental Disclosures of Cash Flow Information   |                            |              |      |   |            
|Supplemental Information, Nonmonetary transactions  |                            |              |      |   |            
|Noncash Investing and Financing Activities          |                            |              |      |   |            
|1,750,000 shares@ $0.2875 for debt                  | $                          | -            |      | $ | 500,000    
|350,000 shares @ 0.75 for accounts payable          | $                          | -            |      | $ | 262,500    



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





5



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INZON CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)





NOTE 1. BASIS OF PRESENTATION



The interim financial statements included herein have been prepared by the Company, without audit pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  The interim financial statements reflect, in the opinion of management, all adjustments necessary (consisting only of normal recurring adjustments) to present a fair statement of results for the interim periods presented.  The operating results for any interim period are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2007  The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes included in the Companys Annual Report on Form 10-KSB for the fiscal year ended September 30, 2006.



NOTE 2. CRITICAL ACCOUNTING POLICIES



Use of Estimates.



The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period.  Such estimates include, but are not limited to, revenue recognition and allowances, accrued liabilities, deferred revenue, loss contingencies and accounting for income taxes.  Actual results could differ from these estimates.



Revenue Recognition



The Company recognizes revenue from services provided once all of the following criteria for revenue recognition have been met: 1) pervasive evidence of an agreement exists, 2) the services have been delivered, 3) the price is fixed and determinable and not subject to refund or adjustment and 4) collection of the amounts due is reasonably.  Overhead and administrative costs are recognized when incurred and direct event costs and expenses are recognized during the period in which the event they are associated with occurs. The Companys revenues consist primarily of revenue maintenance contracts which are recognized on a monthly basis and treated as revenue under SOP-97-2 and SOP 98-4 as revised.





Earnings (Loss) per Share.



In February 1997, the FASB issued SFAS No. 128, Earnings per Share.  SFAS No. 128 simplifies the standards for computing earnings per share (EPS) and was effective for financial statements issued for periods ending after December 15, 1997, with earlier application not permitted.  Effective January 1, 1998, the Company adopted SFAS No. 128.  Basic EPS is determined using net income divided by the weighted average shares outstanding during the period.  Diluted EPS is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued.  Since the fully diluted losses per share for the three quarters of fiscal years 2007 and 2006 were antidilutive, basic and diluted losses per share are the same. Accordingly, rights to purchase common issuable upon conversion of convertible debentures were not included in the calculation of diluted earnings per common share.





6



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Property and Equipment



Property and equipment consisting of improvements, equipment and furniture and fixtures are recorded at cost and are depreciated using the straight-line method over the useful estimated life.  Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals, and betterments are capitalized.  When property  and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations.  A summary of estimated useful lives is as follows:



|                               |  |            
|------------------------------ |  | -----------
|Description                    |  | Useful life
|Furniture Fixtures & Equipment |  | 5 years    
|Software                       |  | 5 years    
|Transmission Equipment         |  | 5 years    



The  Company accounts for the assets in accordance with SFAS No. 144, Accounting for the Impairment or  Disposal of Long-Lived Assets.  The Company reviews its long-lived assets for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used in measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceeds the fair value of the asset.  Assets to be disposed of are reported at the lower of the carrying amount or fair market valueless costs to sell.



Intangible Assets



The Company reviews  goodwill and indefinite lived intangible assets for impairment annually,  or whenever events or circumstances indicate carrying value may not be recoverable or warrant a revision to the estimated remaining useful life in accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets .



NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS



In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109" (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that we recognize in our financial statements the benefit of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 become effective as of the beginning of our 2008 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. We are currently evaluating the impact that FIN 48 will have on our financial statements.



In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements.  SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair values.  This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  Management believes that the adoption of SFAS No. 157 will not have a material impact on the consolidated financial results of the Company.



In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108), which addresses how to quantify the effect of financial statement errors. The provisions of SAB 108 become effective as of the end of our 2007 fiscal year. We do not expect the adoption of SAB 108 to have a significant impact on our financial statements.





7



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In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The provisions of FAS 159 become effective as of the beginning of our 2009 fiscal year. We are currently evaluating the impact that FAS 159 will have on our financial statements.





NOTE 4.  GOING CONCERN CONSIDERATIONS



As of June 30, 2007, the Company reported an accumulated deficit of $5,097,627.  The Companys ability to generate net income and positive cash flows is dependent on the ability to generate positive cash flow from operations, as well as the ability to raise additional capital.  Management is aggressively following strategic plans to accomplish both objectives, but the success of these plans is not guaranteed.  As of June 30, 2007, these factors raise substantial doubt about the Companys ability to continue as a going concern.



NOTE 5  RELATED PARTY TRANSACTIONS



The Company rent the office space from a related party of one of the officers and directors of the Company.  The rental agreement is month to month at $ 2,500 per month. Rent incurred from October 1, 2006 through June 30, 2007 totaling $22,500 has been accrued but not paid.



As of June 30, 2007 officers of the Company were owed a total of $1,107,816 of Employee payables per their employment contracts. This amount has been accrued but not paid. (See NOTE 8. Subsequent Events)



NOTE 6: - CHANGES IN EQUITY



During the period ending June 30, 2006 the Company issued 1,992,000 shares of common stock for service with a total value of $249,200. The net effect of this transaction increased common stock by $ 1,992 and paid in capital by $ 247,208. Subsequent to the period ending June 30, 2007 the Company issued 12,867,555 shares of common stock to 10 different individuals and entities with an aggregate value of $ 2,187,484. (See NOTE 8. Subsequent Events)



NOTE 7 LEGAL PROCEEDINGS



On April 20, 2006 IPEX, Inc (Plaintiff) filed a lawsuit in the Superior Court of California, in the County of San Diego against the Company. The plaintiff through the complaint it filed alleges breach of contract by the Company. The amount the plaintiff is claiming is included in the accounts payable. There has been no activity by the plaintiff concerning this proceeding for over one year.  The Company has been unable to contact anyone pertaining to this proceeding during the same time period.



NOTE 8  SUBSEQUENT EVENT



On August 3, 2007 the Company through its newly formed subsidiary InZon Holdco, Inc acquired all the outstanding shares of Vericash, Inc. Under the terms of the agreement the company will issue up to 5,000,000 shares of restricted InZon common stock with 1,500,000 being issued on date of the agreement, 1,000,000 on delivery of  equipment by Vericash and 500,000 shares commencing on February 4, 2008 and each six months thereafter through February 3, 2010.



On July 16, 2007 the Company issued 11, 367,555 Share of common stock to various individuals as follows:



- 2 ,990,000 shares with a total value of $ 358,800 were issued to six individuals for services ($0.12 per share).

- 8,377,555 shares with a total value of $ 1,005,307 were issued to three individuals including two officers of the Company for debt ($0.12 per share).





8



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On August 3, 2007 the Company issued 1,500,000 shares of common stock to one individual with a value of $ 255,000 for acquisition ($.017 per share)





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



The following discussion and analysis of financial condition and results of operations is based upon, and should be read in conjunction with, its audited financial statements and related notes included elsewhere in this Form 10-QSB, which have been prepared in accordance with accounting principles generally accepted in the United States.



The Company is a Global Communications Company that utilizes its own modern hybrid worldwide VoIP/TDM network for both voice and data traffic.  In addition, InZons VeriCash division is developing systems for Stored Value/Mobile Wallet payment technologies designed to allow users to send money from their cell phone to any other cell phone and acts as a Virtual Point of Sale device via secure modes in most countries in the world. This means that any cell phone could be used as a secure debit card to pay bills, charge at restaurants and to instantly send money to be withdrawn from ATMs all over the worlds.



InZons proprietary switches and systems controls both traditional legacy TDM (Traditional Time Division Multiplexing Voice Circuits) and IP Telephony technology (or Transitional Telecom technology).  This provides the Company with a hybrid system that is the best of both worlds.  The Company uses its own proprietary, leading edge monitoring and management software to thoroughly evaluate profitability in real-time and employ dynamic routing that will allow its systems to immediately react to changing network conditions and reroute based on key predefined criteria.   For the majority of its traffic, the Company now utilizes Voice over Internet Protocol ("VoIP") technology to provide complete voice, fax, data and conference call services on an ASP platform,   This gives the Company the ability to provide rapid time to market on new services and provide the most economical and flexible operations possible.



The Company operates from executive offices in Delray Beach, Florida, and maintains redundant telecom equipment installations at its executive offices as well as at facilities at 60 Hudson Street, in New York, with fully redundant switching systems at a hardened satellite earth station in North Miami, Florida and switching equipment for international operations in London.

On August 23, 2005, the Companys Media division acquired the digital distribution and media broadcast software applications, existing revenue contracts and all associated intellectual property assets of SAE Group, a private digital media company. The acquired assets include SAE Group's software distribution rights, revenue streams from existing license and maintenance contracts, and all intellectual property, trademark and capital equipment.

SAE Group, Inc. (Software Application Engineering) was established in 1985, to provide computer software development and related consulting services for a variety of commercial and governmental service organizations. In 1986, SAE received its first opportunity in the satellite broadcast industry when it was contracted to develop a traffic scheduling and billing computer application for Hughes Television Network(r) (HTN), then a leading sports backhaul provider. The HTN application became the seed from which SATCON and later SatConCS applications were developed and, as word spread of SAE's successful development and implementation of the HTN system, other broadcast companies came to SAE for customized solutions.

On June 29, 2007 the Company formed three subsidiaries; InZon Communications, Inc, InZon Wireless, Inc and InZon Holdco, Inc. The subsidiaries were formed to support the planned future growth of the Company.





9



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Results of Operations.



a)

Revenues and Gross Margin Loss.



The Company reported revenues of $21,600 for three months period and $ 148,000 for the nine months period ended June 30, 2007. This compares to $753,625 and $ 5,175,450  for the comparable periods ending June 30, 2006. The decrease in sales was due to the drop in VoIP business caused by the Companys inability to finance the required deposits to carry traffic on the vendors routes.  The Companys revenue source in now from the licenses agreements for supporting customer upgrades to their software platforms.



The Company reported gross margin of $ 21,600 for the three months period and $148,000 for the nine months period ending in June 30, 2007.  During the same periods ending June 30, 2006 the gross margin was $ 77,994 and $ (44,665) respectively.  The gross margin during the period ending June 30, 2007 is from licenses agreements using the SAE software to maintain customer platforms.



(b)

Selling, General, and Administrative Expenses.



Selling, general and administrative expenses of $366,037 were incurred in the three months period and $ 1,061,036 for the nine months period ending June 30, 2007 compared to $503,998 for the three months and $1,319,636 for the nine months ending June 30, 2006. These decreases were due to reduced staffing of the Company and the dramatically reduced business in the VoIP traffic business.



(c)

Depreciation and Amortization.



Depreciation and amortization for the three months period was $ 97,851 and for the nine months period was $ 293,553 ending June 30, 2007. This compares to $ 126,068 in the three months period and $ 322,316 for the nine months period ending June 30, 2006  Depreciation is attributable to the capital equipment and software acquired for the Company to support its customers.



(d)

Interest Expense.



The Company incurred interest charges (net of interest income) of $6,086 in the three months period and $ 13,835 for the nine months period ending June 30, 2007, compared with $ 7,499 and $ 43,153 for the same periods ending June 30, 2006 respectively. The interest expense was lower during the same period ending in 2007 due to the reduction for the period ending in 2006 resulting from the conversion of debt during the 2006 period.



(e)

Income Tax Benefit.



At June 30, 2007, the Company had available net operating loss carryforwards of approximately $4.9 million that may provide future tax benefits expiring beginning in September 2026. Because of the uncertainty of future income, the net loss carryforward  has been reserved.





(f)

Net Profit (Loss).



The Company reported a net loss of $543,629 for the three months period and a net loss of $1,315,679 for the nine months period ending June 30, 2007 as compared to a net loss of $559,571 for the respective three months period and $ 1,729,770 for the nine months period ending June 30, 2006.  The decreased loss for the nine months period ending June 30, 2007 was due primarily to the elimination of negative gross margin from the VoIP traffic and reduction of expenses during the periods ended June 30, 2007 over the same periods in 2006.





10



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(g)        Liquidity



As of June 30, 2007 the Companys had current assets of $ 43,026 and current liabilities of $ 3,484,866 for a negative working capital of $ 3,441,840.  This compare to current assets of $ 110,983 and current liabilities of $ 2,249,841 with negative working capital of $ 2,138,858 for the same period ending  June 30, 2006. The increased working capital deficit for 2007 over 2006 is due to continued expenses during the period ending June 30, 2007. Consequently, the Company does not have sufficient capital resources for the next twelve months and will seek to raise additional capital through the sale of  equity and or debt securities.



Capital Expenditures.



There were no capital expenditures during the period ended June 30, 2007.



Risk Factors Connected with Plan of Operation.



(a)

Need for Additional Financing May Affect Operations and Plan of Business.



The Company anticipates based on currently proposed assumptions relating to its operations (including with respect to costs and expenditures and projected cash flow from operations), that it must seek financing to continue its operations.  Such financing, when needed, may not be available, or may not be available on terms acceptable to management.  In the event that the Companys plans change or its assumptions change (due to unanticipated expenses, technical difficulties, or otherwise), the Company would be required to seek additional financing.



If funding is insufficient at any time in the future, the Company may not be able to take advantage of business opportunities or respond to competitive pressures, or may be required to reduce the scope of its planned product development and marketing efforts, any of which could have a negative impact on its business and operating results.  In addition, insufficient funding may have a material adverse effect on the Companys financial condition, which could require the Company to:



·

curtail operations significantly;



·

sell significant assets;



·

seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights to products, technologies or markets; or



·

explore other strategic alternatives including a merger or sale of the Company.



To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders.  If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on the Companys operations.  Regardless of whether the Companys access to financing proves to be inadequate to meet the Companys operational needs, the Company may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders.



(b)

Independent Auditors Have Expressed Substantial Doubt Ability to Continue as a Going Concern.



In their report dated February 14, 2007, the Companys independent auditor stated that the financial statements for the year ended September 30, 2006 were prepared assuming that the Company would continue as a going concern.  The Companys ability to continue as a going concern is an issue raised as a result of cash flow constraint, an accumulated deficit, and recurring losses from operations.  The Company continues to experience net losses.  The Companys ability to continue as a going concern is subject to the ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of the



11



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Companys securities, increasing sales or obtaining loans from various financial institutions where possible.  The continued net losses and stockholders deficit increases the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.





(c)

Competition May Affect Operation of Company.



The market in the VoIP industry is intensely competitive and the Company expects competition to continue to increase.  In addition some competitors in the Companys market have longer operating histories, significantly greater financial, technical, marketing and other resources, and greater brand recognition than the Company does.  The Company also expects to face additional competition as other established and emerging companies enter the VoIP market.  To be competitive, the Company believes that it must, among other things, invest significant resources in developing new products, improve its current products and maintain customer satisfaction.  Such investment will increase the Companys expenses and affect its profitability. In addition, if it fails to make this investment, the Company may not be able to compete successfully with its competitors, which could have a material adverse effect on its revenue and future profitability



(d)

Technological and Market Changes May Affect Operation of Company.



The markets in which the Company competes are characterized by rapid technological change, frequent new product introductions, evolving industry standards and changing needs of customers.  There can be no assurance that the Companys existing products will continue to be properly positioned in the market or that the Company will be able to introduce new or enhanced products into the market on a timely basis, or at all.  Currently, the Company is focusing on upgrading and introducing new products.  There can be no assurance that enhancements to existing products or new products will receive customer acceptance.  As competition in the VoIP industry increases, it may become increasingly difficult for the Company to be competitive.



Risks associated with the development and introduction of new products include delays in development and changes in VoIP technology, and operating system technologies that could require the Company to modify existing products.  There is also the risk to the Company that there may be delays in initial shipments of new products.  Further risks inherent in new product introductions include the uncertainty of price-performance relative to products of competitors, competitors responses to the introductions and the desire by customers to evaluate new products for longer periods of time.



(e)

New Versions of Companys Products May Contain Errors or Defects.



The Companys VoIP technology is complex and, accordingly, may contain undetected errors or failures when first introduced or as new versions are released.  This may result in the loss of, or delay in, market acceptance of the Companys services.  The Company may in the future discover errors in new services after their commencement or be required to compensate customers for such limitations or errors, as a result of which the Companys business, cash flow, financial condition and results of operations could be materially adversely affected.



(f)

No Assurance of Successful and Timely Product Development.



The Companys services and proposed enhancements are at various stages of development and additional development and testing will be required in order to determine the technical feasibility and commercial viability of the products.



There can be no assurance that the Companys development efforts will be successfully completed.  The Companys proposed development schedule may be affected by a variety of factors, many of which will not be within the control of the Company, including technological difficulties, access to proprietary technology of others, delays in regulatory approvals, international operating licenses, and the availability of necessary funding.  In light of the foregoing factors, there can be no assurance that the Company will be able to complete or successfully commercialize its services.  The inability of the Company to successfully complete the development of new services or to do so in a timely manner, could force the Company to scale back operations, or cease operations entirely.



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(g)

Market Acceptance May Affect Plan of Business.



The Companys success is dependent on the market acceptance of its services.  Despite the increasing demand for VoIP technology, this industry is not long established and market acceptance of the Companys services will be dependent, among other things, upon its quality, ease of use, speed, reliability, and cost effectiveness.  Even if the advantages of the Companys services are established, the Company is unable to predict how quickly, if at all, the services will be accepted by the marketplace.



(h)

Ability to Compete Dependent on Protection of Proprietary Rights.



The Companys ability to compete will be dependent in part on the protection of its potential patents, trademarks, trade names, service marks and other proprietary rights.  The Company intends to rely on trade secret and copyright laws to protect the intellectual property that it plans to develop, but there can be no assurance that such laws will provide sufficient protection to the Company, that others will not develop a service that are similar or superior to the Companys, or that third parties will not copy or otherwise obtain and use the Companys proprietary information without authorization.  In addition, certain of the Companys know-how and proprietary technology may not be patentable.



The Company may rely on certain intellectual property licensed from third parties, and may be required to license additional products or services in the future, for use in the general operations of its business plan.  There can be no assurance that these third party licenses will be available or will continue to be available to the Company on acceptable terms or at all.  The inability to enter into and maintain any of these licenses could have a material adverse effect on the Companys business, financial condition or operating results.



There is a risk that some of the Companys products may infringe the proprietary rights of third parties.  In addition, whether or not the Companys products infringe on proprietary rights of third parties, infringement or invalidity claims may be asserted or prosecuted against it and it could incur significant expense in defending them.  If any claims or actions are asserted against the Company, it may be required to modify its products or seek licenses for these intellectual property rights.  The Company may not be able to modify its products or obtain licenses on commercially reasonable terms, in a timely manner or at all.  The Companys failure to do so could have a negative affect on its business and revenues.



(i)

Dependence on Suppliers May Affect Operation of Company.



The Company depends upon broadband Internet connections for moving the traffic of its customers.  There are numerous suppliers of broadband Internet connection with which the Company can use to meet its needs for meeting its customers needs.  The Company does not foresee a shortage of capacity in the near future but should such a change occur, it could dramatically impact the Companys business.  The Company only has limited control over any supplier as to quality controls and various other factors.



(j)

Control by Officers and Directors Over Affairs of the Company May Override Wishes of Other Stockholders.



The Companys officers and directors currently own approximately 66% of the outstanding shares of the Companys common stock.  As a result, such persons, acting together, have the ability to exercise significant influence over all matters requiring stockholder approval.  In addition, all decisions with respect to the management of the Company will be made exclusively by the officers and directors of the Company.  Investors will only have rights associated with stockholders to make decisions that affect the Company.  Accordingly, it could be difficult for the investors hereunder to effectuate control over the affairs of the Company.



Therefore, the success of the Company, to a large extent, will depend on the quality of the directors and officers of the Company.  Accordingly, no person should invest in the Company unless he is willing to entrust all aspects of the management of the Company to the officers and directors.





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(k)

Loss of Any of Current Management Could Have Adverse Impact on Business and Prospects for Company.



The Companys success is dependent upon the hiring of key administrative personnel.  Only two of the Companys officers, directors, and key employees have an employment agreement with the Company (CEO and CFO); therefore, there can be no assurance that these personnel will remain employed by the Company after the termination of such agreements.  Should any of these individuals cease to be affiliated with the Company for any reason before qualified replacements could be found, there could be material adverse effects on the Companys business and prospects.



(l)

Limitations on Liability, and Indemnification, of Directors and Officers May Result in Expenditures by Company.



Under the Companys Articles of Incorporation, as amended and restated, and its Bylaws, as restated, the Company is permitted to indemnify directors, officers, employees and agents of the Company.  In addition, the Nevada Revised Statutes provide for permissive indemnification of officers and directors.  Any indemnification of directors, officer, employees, or agents could result in substantial expenditures being made by the Company in covering any liability of such persons or in indemnifying them.



(m)

Potential Conflicts of Interest May Affect Ability of Officers and Directors to Make Decisions in the Best Interests of Company.



The officers and directors have other interests to which they devote time, either individually or through partnerships and corporations in which they have an interest, hold an office, or serve on boards of directors, and each will continue to do so notwithstanding the fact that management time may be necessary to the business of the Company. As a result, certain conflicts of interest may exist between the Company and its officers and/or directors that may not be susceptible to resolution.  All of the potential conflicts of interest will be resolved only through exercise by the directors of such judgment as is consistent with their fiduciary duties to the Company.  It is the intention of management, so as to minimize any potential conflicts of interest, to present first to the board of directors to the Company, any proposed investments for its evaluation.

(n)

Non-Cumulative Voting May Affect Ability of Shareholders to Influence Company Decisions.

Holders of the shares are not entitled to accumulate their votes for the election of directors or otherwise. Accordingly, the holders of a majority of the shares present at a meeting of shareholders will be able to elect all of the directors of the Company, and the minority shareholders will not be able to elect a representative to the Companys board of directors.



(o)

Absence of Cash Dividends May Affect Investment Value of Companys Stock.

The board of directors does not anticipate paying cash dividends on the shares for the foreseeable future and intends to retain any future earnings to finance the growth of the Companys business. Payment of dividends, if any, will depend, among other factors, on earnings, capital requirements, and the general operating and financial condition of the Company, and will be subject to legal limitations on the payment of dividends out of paid-in capital.



(p)

No Assurance of Public Trading Market and Risk of Low Priced Securities May Affect Market Value of Companys Stock.



The Securities and Exchange Commission (SEC) has adopted a number of rules to regulate penny stocks.  Such rules include Rule 3a51-1 and Rules 15g-1 through 15g-9 under the Securities Exchange Act of 1934, as amended.  Because the securities of the Company may constitute penny stocks within the meaning of the rules (as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, largely traded in the Over the Counter Bulletin Board or the Pink Sheets), the rules would apply to the Company and to its securities.





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The SEC has adopted Rule 15g-9 which established sales practice requirements for certain low price securities.  Unless the transaction is exempt, it shall be unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless prior to the transaction: (i) the broker or dealer has approved the persons account for transactions in penny stock pursuant to this rule and (ii) the broker or dealer has received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a persons account for transactions in penny stock, the broker or dealer must: (a) obtain from the person information concerning the persons financial situation, investment experience, and investment objectives; (b) reasonably determine that transactions in penny stock are suitable for that person, and that the person has sufficient knowledge and experience in financial matters that the person reasonably may be expected to be capable of evaluating the risks of transactions in penny stock; (c) deliver to the person a written statement setting forth the basis on which the broker or dealer made the determination (i) stating in a highlighted format that it is unlawful for the broker or dealer to affect a transaction in penny stock unless the broker or dealer has received, prior to the transaction, a written agreement to the transaction from the person; and (ii) stating in a highlighted format immediately preceding the customer signature line that (iii) the broker or dealer is required to provide the person with the written statement; and (iv) the person should not sign and return the written statement to the broker or dealer if it does not accurately reflect the persons financial situation, investment experience, and investment objectives; and (d) receive from the person a manually signed and dated copy of the written statement.  It is also required that disclosure be made as to the risks of investing in penny stock and the commissions payable to the broker-dealer, as well as current price quotations and the remedies and rights available in cases of fraud in penny stock transactions.  Statements, on a monthly basis, must be sent to the investor listing recent prices for the Penny Stock and information on the limited market.



There is a limited market for the common stock of the Company.  The Company is listed on the Over the Counter Bulletin Board under the symbol IZON.  However, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the market value of the Companys securities.  The regulations governing penny stocks, as set forth above, sometimes limit the ability of broker-dealers to sell the Companys common stock and thus, ultimately, the ability of the investors to sell their securities in the secondary market.



Potential shareholders of the Company should also be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse.  Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses.  The Companys management is aware of the abuses that have occurred historically in the penny stock market. Although the Company does not expect to be in a position to dictate the behavior of the market or of broker dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to the Companys securities.

(q)

Shares Eligible For Future Sale May Afect Price of Common Stock.

All of the shares of common stock that are currently held, directly or indirectly, by management have been issued in reliance on the private placement exemption under the Securities Act of 1933.  Such shares will not be available for sale in the open market without separate registration except in reliance upon Rule 144 under the Securities Act of 1933.  In general, under Rule 144 a person (or persons whose shares are aggregated) who has beneficially owned shares acquired in a non-public transaction for at least one year, including persons who may be deemed affiliates of the Company (as that term is defined under that rule) would be entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of common stock, or the average weekly reported trading volume during the four calendar weeks preceding such sale, provided that certain current public information is then available.  If a substantial number of the shares owned by these shareholders were sold pursuant to Rule 144 or a registered offering, the market price of the common stock could be adversely affected.





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Critical Accounting Policies.



The SEC has issued Financial Reporting release No. 60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies (FRR 60); suggesting companies provide additional disclosure and commentary on their most critical accounting policies.  In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a companys financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, the Companys most critical accounting policies include the use of estimates in the preparation of financial statements.  The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results the Company reports in its financial statements.



The preparation of the financial statements contained in this report requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, the Company evaluates these estimates, including those related to revenue recognition and concentration of credit risk.  The Company bases its estimates on historical experience and on various other assumptions that is believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.



Forward Looking Statements.



The foregoing plan of operations contains forward looking statements within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended.  The words believe, expect, anticipate, intends, forecast, project, and similar expressions identify forward-looking statements.  These are statements that relate to future periods and include, but are not limited to, statements as to the Companys estimates as to the adequacy of its capital resources, its need and ability to obtain additional financing, the features and benefits of its products, its operating losses and negative cash flow, and its critical accounting policies.  Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, those discussed above, as well as risks related to the Companys ability to develop new technology and introduce new products and its ability to protect its intellectual property.  These forward-looking statements speak only as of the date hereof.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.



Off Balance Sheet Arrangements.



The Company does not engage in any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.



ITEM 3.  CONTROLS AND PROCEDURES.



Evaluation of Disclosure Controls and Procedures.



The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer, to allow timely decisions regarding required disclosure.



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As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our principal executive officer; of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).  Based upon the evaluation, our principal executive officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.



Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, and/or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, and/or the degree of compliance with the policies and procedures may deteriorate. Because of the inherent limitations in a cost-effective internal control system, misstatements due to error or fraud may occur and not be detected.



Changes in Disclosure Controls and Procedures.



There were no significant changes in the Companys disclosure controls and procedures, or in factors that could significantly affect those controls and procedures, since their most recent evaluation.







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PART II  OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS.



On April 20, 2006 Ipex, Inc. (plaintiff) filed a lawsuit against the Company in the Superior Court of California, County of San Diego. Under the complaint, the plaintiff claims a breach of contract by the Company. The Plaintiff has taken no further action since the filing of the complaint.





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



None



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.



Not Applicable.



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



None



ITEM 5.  OTHER



None



ITEM 6.  EXHIBITS



Exhibits included or incorporated by reference herein are set forth in the attached Exhibit Index.







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SIGNATURE



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



|                        |     |                                       
|----------------------- | --- | --------------------------------------
|                        |     |                                       
|                        |     | InZon Corporation                     
|                        |     |                                       
|Dated:  August 14, 2007 | By: | /s/  David F. Levy                    
|                        |     | David F. Levy, Chief Executive Officer
|                        |     |                                       
|                        |     |                                       
|Dated: August 14, 2007  | By: | /s/ Richard Dea                       
|                        |     | Richard Dea, Chief Financial Officer  







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EXHIBIT INDEX



Number

Description



31.1

Rule 13a-14(a)/15d-14(a) Certification of David F. Levy



31.2

Rule 13a-14(a)/15d-14(a) Certification of Richard Dea



32

Section 1350 Certification of David F. Levy and Richard Dea





20