UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





|                                                               |                                                                             
|-------------------------------------------------------------- | ----------------------------------------------------------------------------
|ý                                                              | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
|                                                               | ACT OF 1934                                                                 
|For the quarterly period ended: June 30, 2008                 
|or                                                            
|                                                               |                                                                             
| ̈                                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
|                                                               | ACT OF 1934                                                                 
|For the transition period from: _____________ to _____________



COMMISSION FILE NUMBER: 0-17345



INZON CORPORATION

(Exact Name of Company as Specified in Its Charter)

|                             |  |                    
|---------------------------- |  | -------------------
|Nevada                       |  | 41-1578316         
|(State or Other Jurisdiction |  | (I.R.S. Employer   
|of Incorporation)            |  | Identification No.)



238 Northeast 1st Avenue, Delray Beach, Florida 33444

(Address of Principal Executive Office) (Zip Code)

(561) 279-8200

(Registrants telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

|                                                                                                                                                                                                                                              |   |     |   |                           |   |  |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --- | - | ------------------------- | - |  |  | 
|Indicate by check mark whether the registrant (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 registrant was
|required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                                                                                                    |  ̈ | Yes | ý | 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.                                                                                  
|                                                                                                                                                                                                                                              |  
|Large accelerated filer                                                                                                                                                                                                                       |  ̈ |     |   | Accelerated filer         |  ̈ | 
|Non-accelerated filer                                                                                                                                                                                                                         |  ̈ |     |   | Smaller reporting company | ý | 
|                                                                                                                                                                                                                                              |  
|Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).                                                                                                                                       |  ̈ | Yes | ý | No                       
|                                                                                                                                                                                                                                              |  
|Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.                                                                                                                
|                                                                                                                                                                                                                                             
|As of August 15, 2008, the Company had 75,974,469 shares of common stock issued and outstanding.                                                                                                                                             







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TABLE OF CONTENTS



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|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|PART I. - FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 1.Financial Statements
3
Consolidated Balance Sheet as of June 30, 2008
3
Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2008 and 2007
4
Consolidated Statements Of Cash Flows for the Nine Months Ended June 30, 2008 and 2007
5
Notes To Consolidated Financial Statements
6
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
12
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
19
Item 4T. Controls And Procedures.
19
PART II  OTHER INFORMATION
Item 1. Legal Proceedings.
21
Item 2. Unregistered Sales of Equity Securities and use of proceeds.
21
Item 3. Defaults upon Senior Securities.
21
Item 4. Submission of Matters to a Vote of Security Holders.
21
Item 5. Other Information
21
Item 6. Exhibits
21
Signature
22
Exhibit Index
23
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





2



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PART I. - FINANCIAL INFORMATION



ITEM 1.

FINANCIAL STATEMENTS

INZON CORPORATION

CONSOLIDATED BALANCE SHEET

|                                                                |  |               |            |   |  |  |  | 
|--------------------------------------------------------------- |  | ------------- | ---------- | - |  |  |  | 
|                                                                |  | June 30, 2008 |           
|ASSETS                                                          |  | (Unaudited)   |           
|Current assets                                                  |  |               |           
|Cash                                                            |  | $             | 275        |  
|Accounts receivable-net of doubtful accounts of  $96,187        |  |               | 14,351     |  
|Total Current Assets                                            |  |               | 14,626     |  
|Fixed Assets                                                    |  |               |            |  
|Equipment, software, furniture & fixtures- net                  |  |               |            |  
|of depreciation  of $ 936,876                                   |  |               | 527,785    |  
|Total property and equipment                                    |  |               | 527,785    |  
|                                                                |  |               |            |  
|Trademarks                                                      |  |               | 20,000     |  
|                                                                |  |               |            |  
|Total Assets                                                    |  | $             | 562,411    |  
|                                                                |  |               |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                            |  |               |            |  
|Current liabilities                                             |  |               |            |  
|                                                                |  | $             |            |  
|Notes payable and equipment loan including interest of $ 50,679 |  |               | 365,079    |  
|Accounts payable                                                |  |               | 1,678,133  |  
|Accrued payroll and payroll taxes                               |  |               | 666,192    |  
|Warrant deposit                                                 |  |               | 200,000    |  
|Compensation payable-related parties                            |  |               | 630,000    |  
|Accrued expenses-related parties                                |  |               | 74,750     |  
|Advances- related party                                         |  |               | 3,000      |  
|Total Current liabilities                                       |  |               | 3,617,154  |  
|                                                                |  |               |            |  
|Total liabilities                                               |  |               | 3,617,154  |  
|                                                                |  |               |            |  
|Stockholders Equity                                            |  |               |            |  
|Common stock                                                    |  |               |            |  
|$0.001 par value 500,000,000 shares  authorized                 |  |               |            |  
|75,974,469 shares issued and outstanding                        |  |               | 75,974     |  
|Paid-in capital                                                 |  |               | 6,875,639  |  
|Stock payable                                                   |  |               | 2,000      |  
|Prepaid expense paid with stock                                 |  |               | (571,458   | )
|Accumulated deficit                                             |  |               | (9,436,898 | )
|Total Stockholders equity                                      |  |               | (3,054,743 | )
|Total liabilities and stockholder equity                        |  | $             | 562,411    |  







The accompanying notes are an integral part of the financial statements

3



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INZON CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                     |  |                    |            |   |                   |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------ |  | ------------------ | ---------- | - | ----------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                     |  | Three Months Ended |            |   | Nine Months Ended |  
|                                     |  | June 30,           |            |   | June 30           |  
|                                     |  | 2008               |            |   | 2007              |   |            | 2008 |  |   | 2007       |  
|Income                               |  | $                  | 23,500     |   |                   | $ | 21,600     |      |  | $ | 66,700     |   |  | $ | 148,000    |  
|                                     |  |                    |            |   |                   |   |            |      |  |   |            |   |  |   |            |  
|Gross profit                         |  |                    | 23,500     |   |                   |   | 21,600     |      |  |   | 66,700     |   |  |   | 148,000    |  
|                                     |  |                    |            |   |                   |   |            |      |  |   |            |   |  |   |            |  
|General, and administrative expenses |  |                    | 378,819    |   |                   |   | 366,037    |      |  |   | 1,142,333  |   |  |   | 1,061,036  |  
|Depreciation and amortization        |  |                    | 74,670     |   |                   |   | 97,851     |      |  |   | 253,020    |   |  |   | 293,553    |  
|Bad debt expense                     |  |                    | --         |   |                   |   | 64,400     |      |  |   | --         |   |  |   | 64,400     |  
|Total operating expense              |  |                    | 453,489    |   |                   |   | 528,288    |      |  |   | 1,395,353  |   |  |   | 1,418,989  |  
|Loss from operations                 |  |                    | (431,889   | ) |                   |   | (506,688   | )    |  |   | (1,328,653 | ) |  |   | (1,270,989 | )
|Other income(expense)                |  |                    |            |   |                   |   |            |      |  |   |            |   |  |   |            |  
|Interest expense                     |  |                    | (6,624     | ) |                   |   | (6,086     | )    |  |   | (19,871    | ) |  |   | (13,835    | )
|Impairment loss                      |  |                    | --         |   |                   |   | --         |      |  |   | (2,049,761 | ) |  |   | --         |  
|Other expense                        |  |                    | --         |   |                   |   | (30,855    | )    |  |   | --         |   |  |   | (30,855    | )
|Total other income(expense)          |  |                    | (6,624     | ) |                   |   | (36,941    | )    |  |   | (2,069,632 | ) |  |   | (44,690    | )
|Net loss                             |  |                    | (438,513   | ) |                   |   | (543,629   | )    |  |   | (3,398,285 | ) |  |   | (1,315,679 | )
|                                     |  |                    |            |   |                   |   |            |      |  |   |            |   |  |   |            |  
|Earnings per share(Basic):           |  |                    |            |   |                   |   |            |      |  |   |            |   |  |   |            |  
|Loss from operations                 |  | $                  | (0.0058    | ) |                   | $ | (0.0145    | )    |  | $ | (0.0493    | ) |  | $ | (0.0357    | )
|Weighted average number of shares    |  |                    |            |   |                   |   |            |      |  |   |            |   | 
|Outstanding(Basic)                   |  |                    | 75,964,469 |   |                   |   | 37,582,414 |      |  |   | 68,944,276 |   |  |   | 36,803,778 |  





The accompanying notes are an integral part of the financial statements

4



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INZON CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                         |  |                   |            |   |      |   |            |  
|-------------------------------------------------------- |  | ----------------- | ---------- | - | ---- | - | ---------- | -
|                                                         |  | Nine Months Ended |           
|                                                         |  | June 30,          |           
|                                                         |  | 2008              |            |   | 2007 |  
|CASH FLOWS FROM OPERATING ACTIVITY                       |  |                   |            |   |      |  
|Net loss                                                 |  | $                 | (3,398,285 | ) |      | $ | (1,315,679 | )
|Adjustments to reconcile loss from continuing operations |  |                   |            |   |      |   |            |  
|to net cash used in operating activities:                |  |                   |            |   |      |   |            |  
|Depreciation and amortization                            |  |                   | 224,002    |   |      |   | 293,553    |  
|Impairment loss                                          |  |                   | 2,049,761  |   |      |   | --         |  
|Bad debt expense                                         |  |                   | --         |   |      |   | 64,400     |  
|Stock based compensation                                 |  |                   | --         |   |      |   | 249,200    |  
|Changes in operating assets and liabilities              |  |                   |            |   |      |   |            |  
|Increase(decrease) in accounts receivable                |  |                   | 7,201      |   |      |   | (61,700    | )
|Increase in deposits                                     |  |                   | --         |   |      |   | 1,655      |  
|Increase in prepaid                                      |  |                   | 29,017     |   |      |   | --         |  
|Increase in accounts payable                             |  |                   | 41,532     |   |      |   | 49,728     |  
|Increase in accrued employment expense-related parties   |  |                   | 630,000    |   |      |   | 465,550    |  
|Increase in accrued expense-related parties              |  |                   | 74,700     |   |      |   | --         |  
|Increase in payroll and taxes                            |  |                   | 86,251     |   |      |   | 98,479     |  
|Increase in prepaid expense paid by stock                |  |                   | 216,875    |   |      |   | --         |  
|Increase in accrued interest                             |  |                   | 19,870     |   |      |   | 39,677     |  
|Net cash used in operating activities                    |  |                   | (19,026    | ) |      |   | (115,137   | )
|                                                         |  |                   |            |   |      |   |            |  
|CASH FLOW FROM INVESTING ACTIVITIES                      |  |                   |            |   |      |   |            |  
|Net cash from investing activities                       |  |                   | --         |   |      |   | --         |  
|                                                         |  |                   |            |   |      |   |            |  
|CASH FLOW FROM FINANCING ACTIVITIES                      |  |                   |            |   |      |   |            |  
|Advances from related party                              |  |                   | 3,000      |   |      |   |            |  
|Payments made on loans                                   |  |                   | --         |   |      |   | (18,000    | )
|Proceeds from notes payable                              |  |                   | --         |   |      |   | 156,595    |  
|Net cash provided(used) in financing activities          |  |                   | 3,000      |   |      |   | (138,595   | )
|                                                         |  |                   |            |   |      |   |            |  
|NET CHANGE IN CASH                                       |  |                   | (16,026    | ) |      |   | 23,458     |  
|                                                         |  |                   |            |   |      |   |            |  
|CASH AT BEGINNING OF PERIOD                              |  |                   | 16,301     |   |      |   | 5,217      |  
|                                                         |  |                   |            |   |      |   |            |  
|CASH AS END OF PERIOD                                    |  | $                 | 275        |   |      | $ | 28,675     |  



|                                                      |  |   |         |  |  |   |        | 
|----------------------------------------------------- |  | - | ------- |  |  | - | ------ | 
|SUPPLEMENTAL INFORMATION                              |  |   |         |  |  |   |        | 
|Interest                                              |  | $ | --      |  |  | $ | --     | 
|Income taxes                                          |  | $ | --      |  |  | $ | --     | 
|                                                      |  |   |         |  |  |   |        | 
|Supplemental schedule of nonmonetary transactions     |  |   |         |  |  |   |        | 
|10,000,000 shares @$0.04 per share for note guarantee |  | $ | 400,000 |  |  |   | --     | 
|3,000,000 shares @$0.05 per share for services        |  | $ | 150,000 |  |  |   | --     | 
|992,000 shares @ $0.10 for expense                    |  | $ | --      |  |  | $ | 99,200 | 



The accompanying notes are an integral part of the financial statements

5



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INZON CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



NOTE 1. BASIS OF PRESENTATION



The consolidated balance sheet of InZon Corporation, a Nevada corporation (Company), as of June 30, 2008 (unaudited) and the related statements of operations and cash flows for the nine months ended June 30, 2008 and 2007 (unaudited) are enclosed.  In the opinion of Company management, all adjustments necessary for a fair presentation of such consolidated financial statements have been included.  Such adjustments consisted only of normal recurring items.



The consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the Companys annual financial statements and notes contained in the Form 10-KSB for the fiscal year ended September 30, 2007



Interim Consolidated Financial Statements.



The interim consolidated 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 consolidated 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, 2008 The accompanying consolidated  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, 2007.



NOTE 2:

CRITICAL ACCOUNTING POLICIES



Use of Estimates.



The preparation of consolidated 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 consolidated 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.



Impaired Fair Value of Financial Instruments.



The carrying amounts for the Companys cash, accounts payable, accrued liabilities, due to stockholder and officers approximate fair value due to the short-term maturity of these instruments.



Income Taxes.



In February 1992, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.  SFAS No. 109 required a change from the deferred method of accounting for income taxes of Accounting Principles Board Opinion No. 11 to the asset and liability method of accounting for income taxes.  Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Under SFAS No. 109, the effect on deferred tax



6



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assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  Effective January 1, 1993, the Company adopted SFAS No. 109.



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 first quarters of fiscal years 2008 and 2007 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.



NOTE 3.

RECENT ACCOUNTING PRONOUNCEMENTS



In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133, (SFAS 161) as amended and interpreted, which requires enhanced disclosures about an entitys derivative and hedging activities and thereby improves the transparency of financial reporting.  Disclosing the fair values of derivative instruments and their gains and losses in a tabular format provides a more complete picture of the location in an entitys financial statements of both the derivative positions existing at period end and the effect of using derivatives during the reporting period.  Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows.  SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  Early adoption is permitted.



At June 30, 2008, the Company did not have any derivative instruments or hedging activities. Management is aware of the requirements of SFAS 161 and will disclose when appropriate.



NOTE 4.  GOING CONCERN CONSIDERATIONS



As of June 30, 2008, the Company reported an accumulated deficit of $ 9,436,898.  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, 2008, these factors raise substantial doubt about the Companys ability to continue as a going concern.



NOTE 5.

RELATED PARTY TRANSACTIONS



Two officers and directors have previously entered into employment agreements with InZon.  Each of these agreements is for a term of five years from June 1, 2004.  Under these agreements, these individuals will be paid an annual salary of $240,000 and $180,000, respectively.  Also, these individuals will be entitled to a bonus annually equal to no less than 1.5% percent of the net profits of the Company (net profits being defined according to Generally Accepted Accounting Principles); each may elect to take this bonus in any combination of cash and stock.  In addition, each employee will be entitled to certain other medical, dental, and insurance benefits.



One of the officers and directors of the company entered into an employment agreement dated October 1, 2005 for a term of 5 years with InZon.  Under this agreement this individual will be paid a salary of $ 144,000 per year.  In addition the individual will be entitled to certain medical, dental and insurance benefits.



On June 25, 2007 two officers agreed to cancel their employment agreements with the Company and to waive their rights to accrued compensation under their agreements dated June 1, 2004 and October 1, 2005 that was not compensated by the issuance of stock to them on July 16, 2007. On August 1, 2007 new employment contracts were



7



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issued effective October 1, 2007 for both officers. Under the terms of the contracts each party will receive a base compensation of $ 300,000 and $ 240,000 per annum respectively plus annual bonuses at the discretion of the board of directors and car allowances and employee benefits in addition to their salaries and bonuses.



On July 16, 2007, the Company issued 7,377,555 of common stock to two current officers and directors for a total value of $ 885,307 of which 5,141,909 shares were for outstanding consulting payables with a value of $ 617,029 and 3,235,646 shares were for services with a value of $ 268,278.



On September 18, 2007 the Company entered into an employment agreement with Sidney Camper III, CEO of the Company effective October 1, 2007.  Under the terms of the agreement Mr. Camper will receive a salary of $ 300,000 per annum plus bonuses at the discretion of the board of directors plus employee benefits and monthly car allowance.



The Company rents office space on a 41 month lease that commenced August 1, 2007 at the rate of $ 6,500 per month. The office space is owned by a related party of one of the officers and directors.



NOTE 6.

CHANGES IN EQUITY



On February 6, 2008 the Company signed an indemnification agreement with one of the officers and directors of the Company.  The agreement indemnifies the officer from any actions by a lender in which the officers guarantees $ 1,500,000 of Company debt. As compensation for the issuance of the guarantee, the Company issued 10,000,000 shares of restricted common stock to the officer valued at $ 400,000. As the Company has not yet incurred  the debt, the Company is carrying the compensation as a prepaid with stock on the balances sheet of $ 400,000.



On February 12, 2008 the Company issued 1,500,000 shares of common stock per the Agreement and Plan of Reorganization dated August 3, 2007. (see Note 12: Commitments and Contingencies)



On March 11, 2008 the Company issued 3,000,000 shares of common stock to a non related party with a value of $150,000 for services to be rendered over a 24 month period.  As all the services have not been rendered, the Company is carrying the compensation as a prepaid with stock on the balance sheet of $ 150,000.  As of June 30, 2008 the Company has expensed compensation of $ 21,875 against the prepaid with stock of $ 150,000.



NOTE 7.

CONCENTRATION OF REVENUE AND SUPPLIERS



The Company is highly dependent on two customers. The loss of either of these customers could have an adverse affect on the Companys business.



NOTE 8.

LEASE AGREEMENT



On August 1, 2007 the Company entered into a Commercial Lease Agreement, with SAE Group, Inc, the landlord, for 5,000 square feet of office space located in Delray Beach, Florida.   The lease is effective August 1, 2007, and has a 41 months term, expiring on December 31, 2010.  Under the lease the base rent is $6,500 for the first twelve months, but the base rent may be adjusted in the second twelve month period and each twelve months period thereafter by three percent. In addition, the Company is required to carry liability insurance in the amount of $1 million.  The following is a schedule by year of the future minimum rental payments required under operating leases that have non-cancellable lease terms in excess of one year as of June  30, 2008:



|      |             |        
|----- | ----------- | -------
|      | Fiscal Year
|2008  | $           | 19,695 
|2009  |             | 80,541 
|2010  |             | 82,959 
|2011  |             | 21,309 
|Total | $           | 204,504







8



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NOTE 9.

SOFTWARE, PROPERTY AND EQUIPMENT



Software, property and equipment at June 30, 2008 consisted of the following:



|                                                |   |          
|----------------------------------------------- | - | ---------
|Software                                        | $ | 1,096,310
|Transmission equipment                          |   | 326,150  
|Furniture and fixtures                          |   | 42,201   
|Total                                           |   | 1,464,661
|Less: accumulated depreciation and amortization | $ | 936,876  
|Net of depreciation                             | $ | 527,785  



NOTE 10.

INCOME TAXES



At June 30, 2008 and 2007, the Company had a federal operating loss carryforward of approximately $6,493,363 and $3,442,279, respectively, which expires in 2027.



NOTE 11.

NOTES PAYABLE



The following notes remain open as of June 30, 2008



|                                        |  |               |  |                   |  |                  |        
|--------------------------------------- |  | ------------- |  | ----------------- |  | ---------------- | -------
|Payee                                   |  | Interest Rate |  | Maturity Date     |  | Principal Amount
|Stout Advisors, Inc                     |  | 10%           |  | On Demand         |  | $                | 28,785 
|Mosaic Composite                        |  | 10%           |  | On Demand         |  |                  | 17,203 
|Deal Flow, Inc                          |  | 10%           |  | January 1, 2008   |  |                  | 12,500 
|Birchstreet Enterprises, Inc            |  | 10%           |  | January 1, 2008   |  |                  | 7,500  
|Stout Advisors, Inc                     |  | 10%           |  | January 1, 2008   |  |                  | 2,500  
|Stout Advisors, Inc                     |  | 10%           |  | January 1, 2008   |  |                  | 15,000 
|Stout Advisors, Inc                     |  | 8%            |  | October, 1 2007   |  |                  | 60,000 
|Paul Price                              |  | 8%            |  | October 1, 2007   |  |                  | 40,000 
|Accrued interest                        |  |               |  |                   |  |                  | 32,722 
|Total note payable including interest   |  |               |  |                   |  |                  | 216,210
|                                        |  |               |  |                   |  |                  |        
|EPL                                     |  | 7.9%          |  | September 1, 2009 |  |                  | 130,912
|Accrued Interest                        |  |               |  |                   |  |                  | 17,957 
|Total equipment loan including interest |  |               |  |                   |  | $                | 148,869



NOTE 12.

COMMITMENTS AND CONTINGENCIES



On August 3, 2007 the Company through its subsidiary InZon Holdco, Inc acquired all the outstanding stock of Vericash, Inc. Under the terms of the agreement the Company issued on the date of the agreement 1,500,000 shares of restricted common stock with a value of $ 38,920. On February 12, 2008 the Company issued an additional 1,500,000 shares of restricted stock with a value of $ 1,500.  An additional 2,000,000 shares of restricted stock with a value of $ 2,000 for a total of 5,000,000 shares for a total value of $ 117,760 are to be issued as follow:



|                        |          
|----------------------- | ---------
|August 4, 2008          | 500,000  
|February 3, 2009        | 500,000  
|August 3, 2009          | 500,000  
|February 3, 2010        | 500,000  
|Total additional shares | 2,000,000





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The remaining 2,000,000 shares to be issued has been recorded as a stock payable in the accompanying balance sheet as of June 30, 2008.  The acquisition of Vericash, Inc. consisted of telecommunication equipment valued at $116,760 which there was no associated liabilities.The shares due to be issued on August 4, 2008 have not yet been issued.



The Company is party to three legal actions as set forth below.  The Company believes it has adequately accounted for the potential liabilities which may result from these legal actions.



On November 8, 2006, in civil proceedings styled Ipex, Inc. v. InZon Corporation, as Case Number GIC864677, in the Superior Court of San Diego County, California, an uncontested judgment including attorneys fees and court costs, in the original amount of $559,166.00, was entered against the Company. To date, the judgment holder has not taken any action to enforce the judgment against the Company or it assets;



The Company is a defendant in civil proceedings initiated during the fiscal year ending September 30, 2007, styled Verisign, Inc. v. Inzon Corporation, as Case Number 50 2007 CA 019126XXXXMBAO, in the Circuit Court of the Fifteenth Judicial District, Palm Beach County, Florida. The Company has negotiated a settlement of all claims of the plaintiff for $14,000, payable in 14 monthly installments commencing February 15, 2008; and



The Company is a defendant in civil proceedings initiated during the fiscal year ending September 30, 2007, styled Starvox Communications, Inc. v. Inzon Corporation, as Case Number 50 2007 CA 9642XXXXMB, in the Circuit Court of the Fifteenth Judicial District, Palm Beach County, Florida, in which the plaintiff seeks to recover $149,263 plus attorneys fees and costs under a written contract between the parties for the purchase and sale of telecommunication services. The Company through outside counsel has moved the Court for dismissal based on mandatory arbitration and State of New York venue and jurisdictional provisions in the underlying contract. The likely outcome of such litigation is presently unknown, as the plaintiff may be unable to establish that the Company is subject to the jurisdiction of the courts of the State of New York.



On February 5, 2008 the Company signed a letter of intent to acquire a private Florida corporation that operates as a licensed Competitive Local Exchange Carrier. Under the terms of the letter and subject to a definitive agreement, the Company will acquire all the outstanding shares of the Company.



NOTE 13.

DEPOSIT ON WARRANT SUBSCRIPTION



On August 7, 2007 the Company issued a warrant subscription agreement to an unrelated party to purchase common stock in the Company valued at $ 750,000.  Under the terms of the agreement the warrant holder has a right to purchase 500,000 shares at fifty cents per share and 500,000 shares at one dollar per share. The warrant is non dilutive and is exercisable at any time up to twenty four months from the date of the agreement. The Company received a total of $200,000 and has reflected this amount as a deposit on the accompanying balance sheet.



NOTE 14.

PREPAID EXPENSES PAID IN COMMON STOCK



On September 9, 2007 the Company signed a one year financial and public relations consulting agreement with a non related party. Under the terms of the agreement the party received 1,000,000 shares of the Companys common stock valued at $ 260,000. As the cost of the contract is expensed over a twelve month period the Company is carrying a prepaid of $ 43,333 on the balance sheet for the 2 months remaining on the contract.



On February 6, 2008 the Company signed an indemnification agreement with one of the officers and directors of the Company.  The agreement indemnifies the officer from any actions by a lender in which the officers guarantees $ 1,500,000 of Company debt. As compensation for the issuance of the guarantee, the Company issued 10,000,000 shares of restricted common stock to the officer valued at $ 400,000. As the Company has not yet incurred the debt, the Company is carrying the compensation as a prepaid with stock on the balances sheet of $ 400,000. The agreement was rescinded on August 14, 2008. (See Note 16: Subsequent Events)



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NOTE 15.

IMPAIRMENT LOSS



On October 1, 2007, InZon Wireless, Inc., a wholly-owned subsidiary of the Company acquired 50% of South Pacific Management Holdings Limited, (SPMH) a British Virgin Islands company. SPMH has an interest in a provisional communication license in the South Pacific. The Company issued 19,521,527 restricted shares of the Companys common stock of which the Company was required to issued 9,760,764 at the time of closing and retained 9,760,763 shares to be released subject to further due diligence. The Company determined the license was not commercially viable so the 9,760,763 retained shares were cancelled and the Company elected to impair the $ 2,049,761 value of the transaction.



NOTE 16.

SUBSEQUENT EVENTS



On August 14, 2008 the Company and one of the directors and officers of the Company signed an agreement to rescind the February 6, 2008 indemnification agreement.  Under the terms of the rescission agreement the officer will return the 10,000,000 shares issued to him per the agreement and will not guarantee any loans as originally agreed.







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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-Q, 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, the Company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.



The Companys proprietary switches and systems control 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 August 3, 2007, the Company and its wholly-owned subsidiary, InZon Holdco, Inc., a Nevada corporation, entered into a Plan and Agreement of Reorganization with Mr. Lino G. Morris, the sole shareholder of Vericash, a Florida corporation.  Under the terms of the Agreement, Vericash was merged with and into InZon Holdco, Inc, the Company issued 1,500,000 restricted shares of its common stock, par value $0.001 per share to the VCI Stockholder, and InZon Holdco, Inc changed its name to Vericash Ltd. The Company will issue an additional 3,500,000 shares of its common stock over the next two years as part of this transaction.



On September 17, 2007, the Company entered into a written agreement with Good Deal, LLC and InZon Wireless, Inc., a wholly-owned subsidiary of the Company. Under the terms of the agreement the Company, at closing on October 1, 2007, issued 19,521,527 restricted shares of the Companys common stock for the transfer to



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InZon Wireless, Inc. 2,500 shares of South Pacific Management Holdings Limited, a British Virgin Islands company, which represents fifty percent (50%) of the total issued and outstanding capital shares of South Pacific Holdings Limited. Per the agreement 9,760,764 of the shares issued by the Company were delivered. The Company had till December 31, 2007 to determine the commercial viability of the commercial license held via SPMH. South Pacific Management Holdings Limited was formed to hold communication licenses in certain Pacific Ocean island areas that are available for development. The company determined the license was not commercially viable so the Company cancelled the retained shares. Due to the lack of commercial viability of the license, the Company impaired the value of the total transaction showing a total impairment loss of $ 2,049,761.



Results of Operations.



(a)

Revenues and Gross Margin Loss.



The Company reported revenues of $ 23,500 for three months period and $ 66,700 for the nine months period ended June 30, 2008. This compares to $21,600 and $ 148,000  for the comparable periods ending June 30, 2007. The decrease in sales was due to the drop in revenue from the licenses agreements for supporting customer upgrades to their software platforms.



The Company earned a gross margin profit of $ 23,500 for the three months period and $ 66,700 for the nine months period ending in June 30, 2008.  During the same periods ending June 30, 2007 the gross margin profits were $ 21,600 and $ 148,000 respectively.  The gross margin is from licenses agreements using the SAE software to maintain customer platforms.



(b)

Selling, General, and Administrative Expenses.



Selling, general and administrative expenses of $ 378,819 were incurred in the three months period and $ 1,142,333 for the nine months period ending June 30, 2008 compared to $366,037 for the three months and $1,061,036 for the nine months ending June 30, 2007. These variance between periods in insignificant and not due to any specific thing.



(c)

Depreciation and Amortization.



Depreciation and amortization for the three months period was $ 130,611 and for the nine months period was $ 247,190 ending June 30, 2008. This compares to $ 97,851 in the three months period and $ 293,553 for the nine months period ending June 30, 2007.  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 $ 6,624 in the three months period and $ 19,871 for the nine months period ending June 30, 2008 compared with $ 6,086 and $ 13,835 for the same periods ending June 30, 2007 respectively. The interest expense increase is due to the increase in notes payable in the nine months period ending in 2008 over 2007.



(e)

Income Tax Benefit.



At June 30, 2008, the Company had available net operating loss carryforwards of approximately $9.4 million that may provide future tax benefits expiring beginning in September 2025. Because of the uncertainty of future income, the net loss carryforward  has been reserved.





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(f)

Net Loss.



The Company reported a net loss of $ 438,513 for the three months period and $ 3,398,285 for the nine months period ending June 30, 2008 as compared to a net loss of $543,629 for the respective three months period and $ 1,315,679 for the nine months period ending June 30, 2007.  The increase in the loss for the 9 months period ending in 2008 over 2007 is due to the impairment loss incurred from the investment in a Company subsidiary.



Capital Expenditures.



There were no capital expenditures during the quarter ended June 30, 2008.



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 December 29, 2007, the Companys independent auditor stated that the financial statements for the year ended September 30, 2007 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 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.



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(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.



(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



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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 50.6% 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.



(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



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COO); 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.



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



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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.



ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSER ABOUT MARKET RISK.



As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide information required under this Item.



ITEM 4T.

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.



The Company is party to three legal actions as set forth below.  The Company believes it has adequately accounted for the potential liabilities which may result from these legal actions.



On November 8, 2006, in civil proceedings styled Ipex, Inc. v. InZon Corporation, as Case Number GIC864677, in the Superior Court of San Diego County, California, an uncontested judgment including attorneys fees and court costs, in the original amount of $559,166.00, was entered against the Company. To date, the judgment holder has not taken any action to enforce the judgment against the Company or it assets;



The Company is a defendant in civil proceedings initiated during the fiscal year ending September 30, 2007, styled Verisign, Inc. v. Inzon Corporation, as Case Number 50 2007 CA 019126XXXXMBAO, in the Circuit Court of the Fifteenth Judicial District, Palm Beach County, Florida. The Company has negotiated a settlement of all claims of the plaintiff for $14,000, payable in 14 monthly installments commencing February 15, 2008; and



The Company is a defendant in civil proceedings initiated during the fiscal year ending September 30, 2007, styled Starvox Communications, Inc. v. Inzon Corporation, as Case Number 50 2007 CA 9642XXXXMB, in the Circuit Court of the Fifteenth Judicial District, Palm Beach County, Florida, in which the plaintiff seeks to recover $149,263 plus attorneys fees and costs under a written contract between the parties for the purchase and sale of telecommunication services. The Company through outside counsel has moved the Court for dismissal based on mandatory arbitration and State of New York venue and jurisdictional provisions in the underlying contract. The likely outcome of such litigation is presently unknown, as the plaintiff may be unable to establish that the Company is subject to the jurisdiction of the courts of the State of New York.



ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On February 6, 2008 the Company issued 10,000,000 shares of restricted common stock for the guaranteeing of debt with a value of $ 400,000 ($0.04 per share).



On March 11, 2008 the Company issued 3,000,000 shares of restricted common stock for services with a value of $ 150,000 ($0.05 per share).



ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None



ITEM 5.

OTHER INFORMATION.

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 19, 2008 | By:               | /s/ DAVIDLEVY        
|                        |                   | David Levy           
|                        |                   | Chairman of the Board



|                       |     |                        
|---------------------- | --- | -----------------------
|                       |     |                        
|                       |     |                        
|Dated: August 19, 2008 | 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 Levy    
|       |  |                                                         
|31.2   |  | Rule 13a-14(a)/15d-14(a) Certification of Richard Dea   
|       |  |                                                         
|32     |  | Section 1350 Certification of David Levy and Richard Dea





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