U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, 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 MARCH 31, 2007

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 of
Incorporation or Organization) | (I.R.S. Employer  Identification No.)



|                                                |           
|----------------------------------------------- | ----------
|238 Northeast 1st Avenue, Delray Beach, Florida | 33444     
|(Address of Principal Executive Offices)        | (Zip Code)



|                            
|----------------------------
|(561) 279-8200              
|(Companys Telephone Number)



|                                                                                   
|-----------------------------------------------------------------------------------
|                                                                                   
|(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)





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 registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [ X]



As of March 31, 2007, the Company had 36,846,150 shares of common stock issued and outstanding.



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



1





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TABLE OF CONTENTS



PART I  FINANCIAL INFORMATION





|                                                                     |                                                     |   | 
|-------------------------------------------------------------------- | --------------------------------------------------- | - | 
|PART I  FINANCIAL INFORMATION                                       | PAGE                                               
|                                                                     |                                                     |  
|ITEM 1. FINANCIAL STATEMENTS                                         | 3                                                  
|                                                                     |                                                     |  
|                                                                     |                                                     |  
|                                                                     | BALANCE SHEET AS OF MARCH 31, 2006                  | 3
|                                                                     |                                                     |  
|                                                                     |                                                     |  
|                                                                     | STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED | 4
|                                                                     | MARCH 31, 2006 AND MARCH 31, 2005                   |  
|                                                                     |                                                     |  
|                                                                     |                                                     |  
|                                                                     | STATEMENTS OF CASH FLOWS FOR THREE MONTHS ENDED     | 5
|                                                                     | MARCH 31, 2006 and MARCH 31, 2005                   |  
|                                                                     |                                                     |  
|                                                                     |                                                     |  
|                                                                     | NOTES TO FINANCIAL STATEMENTS                       | 7
|                                                                     |                                                     |  
|ITEM 2.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS  | 9                                                  
|                                                                     | AND RESULTS OF OPERATIONS                           |  
|                                                                     |                                                     |  
|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                                                 









2





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PART I  FINANCIAL INFORMATION



ITEM 1.  FINANCAL STATEMENTS.



INZON CORPORATION

BALANCE SHEET

AS OF MARCH 31, 2007

(Unaudited)



|                                                                  |   |            
|----------------------------------------------------------------- | - | -----------
|ASSETS                                                           
|Current Assets                                                    |   |            
|Cash in bank                                                      | $ | 67         
|Accounts receivable-net of doubtful accounts of  $31,787          |   | 81,750     
|Advances & deposits                                               |   | 7,855      
|Total Current Assets                                              |   | 89,672     
|Fixed Assets                                                      |   |            
|Equipment, Furniture & fixtures- net of depreciation  of $127,890 |   | 123,701    
|Total Fixed Assets                                                |   | 123,701    
|Trademarks                                                        |   | 20,000     
|Software - net of amortization of $ 443,428                       |   | 652,882    
|Deferred expenses -net of amortization of $ 145,904               |   | 87,056     
|Total Assets                                                      | $ | 973,311    
|                                                                  |   |            
|LIABILITIES AND STOCKHOLDERS DEFICIT                            
|Current Liabilities                                               |   |            
|Current portion long term debt                                   |   | 43,397     
|Notes payable                                                     |   | 197,792    
|Accounts payable                                                  |   | 1,658,124  
|Accrued payroll and payroll taxes                                 |   | 253,237    
|Compensation payable-related parties                              |   | 986,066    
|Deposits                                                          |   | 15,000     
|Accrued interest                                                  |   | 33,602     
|Total Current Liabilities                                         |   | 3,179,883  
|Long Term Liabilities                                             |   |            
|Notes payable - equipment                                         |   | 112,912    
|Less; current portion                                             |   | (43,397)   
|Total Long Term Debt                                              |   | 69,515     
|Total Liabilities                                                 |   | 3,256,733  
|Stockholders Deficit                                             |   |            
|Common stock, $0.001 par value; authorized 500,000,000 shares;    |   |            
|issued and outstanding 36,846,150 shares                          |   | 36,849     
|Additional paid-in capital                                        |   | 2,254,728  
|Retained  (deficit)                                               |   | (4,574,999)
|Total Stockholders Deficit                                       |   | (2,276,087)
|Total Liabilities and Stockholder Deficit                         | $ | 973,311    



See accompanying notes to financial statements



3





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INZON CORPORATION

STATEMENTS OF OPERATIONS

FOR THREE MONTHS ENDED MARCH 31, 2007 AND 2006

(Unaudited)







|                                              |   |                    |  |   |                  |  |   |            |  |   |            
|--------------------------------------------- | - | ------------------ |  | - | ---------------- |  | - | ---------- |  | - | -----------
|                                              |   | Three Months Ended |  |   | Six Months Ended
|                                              |   | March 31           |  |   | March 31        
|                                              |   | 2007               |  |   | 2006             |  |   | 2007       |  |   | 2006       
|                                              |   |                    |  |   |                  |  |   |            |  |   |            
|Sales                                         | $ | 92,600             |  | $ | 1,673,266        |  | $ | 126,400    |  | $ | 4,421,825  
|Cost of sales                                 |   | --                 |  |   | 1,689,793        |  |   | --         |  |   | 4,544,484  
|Gross Profit(Loss)                            |   | 92,600             |  |   | (16,527)         |  |   | 126,400    |  |   | (122,659)  
|Selling, General, and Administrative Expenses |   | 342,617            |  |   | 544,334          |  |   | 715,999    |  |   | 891,097    
|Depreciation and Amortization                 |   | 97,851             |  |   | 98,049           |  |   | 195,702    |  |   | 195,249    
|Interest Charges (Net of Interest Income)     |   | 3,849              |  |   | 4,730            |  |   | 7,749      |  |   | 35,654     
|                                              |   | 444,317            |  |   | 647,113          |  |   | 919,450    |  |   | 1,122,000  
|Net Loss Before Income Taxes                  |   | (351,717)          |  |   | (663,640)        |  |   | (793,050)  |  |   | (1,244,659)
|Income Tax Expense (Benefit)                  |   | --                 |  |   | --               |  |   | --         |  |   | --         
|Net Income (Loss)                             | $ | (351,717)          |  | $ | (663,640)        |  | $ | (793,050)  |  | $ | (1,244,659)
|Net Loss per share                            | $ | (0.0095)           |  | $ | (0.0191)         |  | $ | (0.0215)   |  | $ | (0.0370)   
|Weighted Average Number of Common Shares      |   |                    |  |   |                  |  |   |            |  |   |            
|Used to Compute Net Income (Loss) per         |   |                    |  |   |                  |  |   |            |  |   |            
|Weighted Average Share                        |   | 36,846,150         |  |   | 34,679,150       |  |   | 36,818,897 |  |   | 33,614,150 



See accompanying notes to financial statements



4





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INZON CORPORATION

STATEMENTS OF CASH FLOWS

FOR THREE MONTHS ENDED MARCH 31, 2006 AND 2005

(Unaudited)



|                                                 |                  |           |  |   |            
|------------------------------------------------ | ---------------- | --------- |  | - | -----------
|                                                 | Six Months Ended
|                                                 | March 31,       
|                                                 |                  | 2007      |  |   | 2006       
|Cash Flows From Operating Activities             |                  |           |  |   |            
|Net profit (loss)                                | $                | (793,050) |  | $ | (1,244,659)
|Adjustments to reconcile net profits (loss)      |                  |           |  |   |            
|to net cash used in operating activities:        |                  |           |  |   |            
|Depreciation and amortization                    |                  | 195,702   |  |   | 195,249    
|Stock for services                               |                  | --        |  |   | 35,000     
|Stock for expenses                               |                  | 99,200    |  |   | --         
|Forgiveness of accrued interest                  |                  | --        |  |   | 30,350     
|Changes in operating assets and liabilities      |                  |           |  |   |            
|Accounts receivable                              |                  | (64,700)  |  |   | 55,911     
|Deposits                                         |                  | --        |  |   | (34,655)   
|Accounts payable                                 |                  | 94,920    |  |   | 1,016,418  
|Accrued employment expense-related parties       |                  | 343,800   |  |   | 16,425     
|Accrued expense-related parties                  |                  | --        |  |   | 25,512     
|Accrued expense                                  |                  | 136,977   |  |   | 65,717     
|Net Cash Used In                                 |                  |           |  |   |            
|Operating Activities                             |                  | 12,849    |  |   | 191,618    
|                                                 |                  |           |  |   |            
|Cash Flow From Investing Activities              |                  |           |  |   |            
|Cost of capital acquired                         |                  | --        |  |   | (25,500)   
|Equipment                                        |                  | --        |  |   | (104,100)  
|Net Cash used by                                 |                  |           |  |   |            
|Investing Activities                             |                  | --        |  |   | (129,600)  
|                                                 |                  |           |  |   |            
|Cash Flows From Financing Activities             |                  |           |  |   |            
|Loan  payments                                  |                  | (18,000)  |  |   | (110,000)  
|Long term liabilities                            |                  | --        |  |   | (20,347)   
|Net Cash Provided By                             |                  |           |  |   |            
|Financing Activities                             |                  | (18,000)  |  |   | (130,347)  
|                                                 |                  |           |  |   |            
|Increase (Decrease) In Cash and                  |                  |           |  |   |            
|Cash Equivalents                                 |                  | (5,151)   |  |   | (98,679)   
|                                                 |                  |           |  |   |            
|Cash and Cash Equivalents at Beginning of Period |                  | 5,218     |  |   | 208,192    
|                                                 |                  |           |  |   |            
|Cash and Cash Equivalents at End of Period       | $                | 67        |  | $ | 109,513    











See accompanying notes to financial statements



5





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Supplemental Disclosures of Cash Flow Information



|                                                        |   |        |  |   |        
|------------------------------------------------------- | - | ------ |  | - | -------
|Cash paid during the period for:                        |   |        |  |   |        
|Interest                                                | $ | --     |  | $ | --     
|Income taxes                                            | $ | --     |  | $ | --     
|                                                        |   |        |  |   |        
|Supplemental Information, Nonmonetary transactions      |   |        |  |   |        
|                                                        |   |        |  |   |        
|Noncash Investing and Financing Activities              |   |        |  |   |        
|1,750,000 shares @ $0.2857 for debt                     | $ | --     |  | $ | 500,000
|992,000 shares @ $0.10 for expense                      | $ | 99,200 |  | $ | --     
|350,000 shares @ 0.75 for interest and deferred expense | $ | --     |  | $ | 262,500
|70,000 shares @ $0.50 for service                       | $ | --     |  | $ | 35,000 



See accompanying notes to financial statements



6





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INZON CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Unaudited)





NOTE 1.

BASIS OF PRESENTATION



The condensed balance sheet of InZon Corporation, a Nevada corporation (Company), as of March 31, 2007 (unaudited) and the related statements of operations and cash flows for the six months ended March 31, 2006 and 2007 (unaudited) are enclosed.  In the opinion of Company management, all adjustments necessary for a fair presentation of such financial statements have been included.  Such adjustments consisted only of normal recurring items.



The financial statements and notes are presented as permitted by Form 10-QSB 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, 2006



Interim Financial Statements.



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.





7





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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 two quarters of fiscal years 2006 and 2005 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.

GOING CONCERN CONSIDERATIONS



As of March 31, 2007, the Company reported an accumulated deficit of $4,574,999.  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 March 31, 2007, these factors raise substantial doubt about the Companys ability to continue as a going concern.



NOTE 4.

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.



NOTE 5.

CHANGES IN EQUITY



During the period ending December 31, 2006 the Company issued 992,000 shares of common stock for service with a total value of $99,200. The net effect of this transaction increased common stock by $ 992 and paid in capital by $ 98,208.



NOTE 6.

CONCENTRATION OF REVENUE AND SUPPLIERS



The Company is highly dependent on three customers and two suppliers. The loss of any of these customers or suppliers could have an adverse affect on the Companys business.



NOTE 7.

FINANCING AGREEMENT



On March 27, 2006 the Company signed a securities purchase agreement with Macenta Group, LLC ( the Purchaser). Under the terms of the agreement, the Purchaser agrees to purchase common stock in the Company with a total value of  Five Million dollars in increments of a minimum of One Million dollars.  The purchase price of the shares is the moving average closing price for the 15 trading days prior to closing discounted by a factor of  twenty percent (20%).  In addition the Purchaser is entitled to receive one warrant for every five common shares purchased at closing.  Each warrant is convertible  to one share of common stock at $1.00 per share. None of the warrants may be converted to common shares until the Companys stock has traded for at least 15 consecutive trading days with a closing price of $ 1.60 per share and fifty percent (50%) of the warrants may not be converted to common shares until the Companys trading common shares has traded for at least 15 consecutive days at a closing price of $ 2.10 per share. To date no shares have been purchased under this agreement.





8





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NOTE 8.

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 proceed ring during the same time period.





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sVoIP technology provides complete voice, fax, data and conference call services on an ASP platform utilizing its own worldwide hybrid VoIP/TDM network.  Presently the Voice over Internet Protocol (VoIP) is a fragmented market with a number of small companies providing services without a strong backbone network.  Most of these companies are targeting the US domestic market, which is very difficult to compete in and does not provide viable margins.



The Companyshybrid TDM (Traditional Voice) and IP Telephony technology (or Transitional Telecom technology), uses leading edge monitoring and management software to thoroughly evaluate profitability in real-time and further enhance our ability to remain competitive. These systems employ dynamic routing that will allow systems to immediately react to changing network conditions and reroute based on predefined criteria.  A web-based mechanism will be provided to allow external access for our customers and suppliers to more readily obtain or offer new rates and codes.  Currently, this is one of the most time consuming aspects of daily operations in wholesale telecom.  By streamlining this process, the Company is able to provide maximum value and compelling niche appeal to potential customers and suppliers.



The Company is focusing on wholesale outbound traffic to Latin America, Asia and Europe. The Companyutilizes 60 Hudson, New York, New York as a collocation center with initial traffic capacity to handle up to 1.2 million minutes per day under a Collocation Facilities License Agreement.



For the next phase, traffic capacity is intended to be added to handle up to 10 million minutes per day.  Approximately 30% of the overall capacity is intended to be allocated to international traffic associated with VoIP product applications, with the remainder of available capacity utilized for Latin American wholesale expansion.



The Company has secured a profit sharing agreement with a broadband provider for traffic termination into the U.S.  This agreement allows the Company to interconnect with African customers at 60 Hudson, New York, New York, for lowest cost termination into U.S. from Africa, with a high quality of service (QoS).  In addition, the Company has established an interconnection agreement with a Mexican telecommunications company that will allow the Company to service its U.S. tier 2 customers under agreement for VoIP termination into Mexico at competitive prices.  Finally, the Company has secured a VoIP services agreement with an offshore service provider to deploy VoIP subscription products throughout Asia.  The Company considers that all these agreements were entered into in the ordinary course of business.





9





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Results of Operations.



a)

Revenues and Gross Margin Loss.



The Company reported revenues of $1,673,266 for three months period and $ 4,421,825 for the six months period ended March 31, 2006. This compares to $92,600 and $ 126,400  for the comparable periods ending March  31, 2007. The decrease in sales was due to the drop in VoIP business due to the Companys inability to finance the required deposits to carry traffic on the vendors routes.  The Companys revenue is from the licenses agreements for supporting customer upgrades to their software platforms.



The Company incurred a gross margin loss of $ 16,527 for the three months period and $122,659 for the six months period ending in March 31, 2006.  During the same periods ending March 31, 2007 the gross margin profits were $ 92,600 and $ 126,400 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 $544,334 were incurred in the three months period and $ 891,097 for the six months period ending March 31, 2006 compared to $342,617 for the three months and $715,999 for the six months ending March 31, 2007. These decreases were due to reduced staffing of the Company.





(c)

Depreciation and Amortization.



Depreciation and amortization for the three months period was $ 127,068 and for the six months period was $ 195,249 ending March 31, 2006. This compares to $ 97,851 in the three months period and $ 195,702 for the six months period ending March 31, 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 $4,730 in the three months period and $ 35,654 for the six months period ending March 31, 2006, compared with $ 3,849 and $ 7,749 for the same periods ending March 31, 2007 respectively. The interest expense reduction for the six months is the result conversion of debt during the 2006 period.



(e)

Income Tax Benefit.



At December 31, 2007, the Company had available net operating loss carryforwards of approximately $4.5 million that may provide future tax benefits expiring beginning in September 2024. Because of the uncertainty of future income, the net loss carryforward  has been reserved.





(f)

Net Loss.



The Company reported a net loss of $663,640 for the three months period and $1,244,659 for the six months period ending March 31, 2006 as compared to a net loss of $351,717 for the respective three months period and $ 793,050 for the six months period ending March 31, 2007.  The decreased loss was due primarily to the elimination of negative gross margin from the VoIP traffic and reduction of expenses during the periods ended March 31, 2007 over the same periods in 2006.





10





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Capital Expenditures.



There were no capital expenditures during the quarter ended March 31, 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, 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.







11





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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.





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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 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.





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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.







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.



|       |                                                            
|------ | -----------------------------------------------------------
|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























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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:  May 10, 2007 | By: /s/  David F. Levy                
|                     | David F. Levy, Chief Executive Officer
|                     |                                       
|Dated:  May 10, 2007 | By: /s/ Richard Dea                   
|                     | Richard Dea, Chief Financial Officer  





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