U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

|X| ANNUAL  REPORT  UNDER  PURSUANT  TO  SECTION  13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005

|_| 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: 0-16397


                       APPLIED SPECTRUM TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)


           Delaware                                     41-2185030
(State or other  jurisdiction of                      (IRS Employer
 incorporation or organization)                    Identification No.)


                  65 Norwood Avenue, Upper Montclair, NJ 07043
                    (Address of principal executive offices)


                                 (973) 783-1117
                           (Issuer's telephone number)


       SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: NONE


         SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
                     Common Stock, Par Value $.01 Per Share
                                (Title of Class)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES |X| NO |_|

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. |X|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES |X| NO |_|

Issuer's revenues for its most recent fiscal year:    $0
                                                     ----

As of December 12, 2005,  2,953,941 shares of the registrant's Common Stock were
outstanding.  The  aggregate  market value of the voting  common  equity held by
non-affiliates  (based on the  closing  bid price of such stock as  reported  on
December 12, 2005 by the NASD Over-the-Counter Bulletin Board) was approximately
$134,275.

                    DOCUMENTS INCORPORATED BY REFERENCE: None

           Transitional Small Business Disclosure Format (Check One):
                                 Yes |_| No |X|
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item Number and Caption                                                         Page

PART I

<S>          <C>                                                                <C>
Item 1.      Description of Business..............................................1

Item 2.      Description of Properties............................................6

Item 3.      Legal Proceedings....................................................6

Item 4.      Submission of Matters to a Vote of Security Holders..................6


PART II

Item 5.      Market for Common Equity and Related Stockholder Matters.............7

Item 6.      Management's Discussion and Analysis or Plan of Operations...........7

Item 7.      Financial Statements................................................12

Item 8.      Changes in and Disagreements With Accountants on Accounting and
             Financial Disclosure................................................12

Item 8A.     Controls and Procedures.............................................13


PART III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act....................13

Item 10.    Executive Compensation...............................................15

Item 11.    Security Ownership of Certain Beneficial Owners and Management.......15

Item 12.    Certain Relationships and Related Transactions.......................16

Item 13.    Exhibits and Reports on Form 8-K.....................................17

Item 14.    Principal Accountant Fees and Services...............................18
</TABLE>

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

Summary

     Applied Spectrum  Technology,  Inc. ("we",  "us",  "our", or the "Company")
plans to seek a target  company  with  which to merge or to  complete a business
combination.  In any  transaction,  we will  be the  surviving  entity,  and our
stockholders will retain a percentage ownership interest in the post-transaction
company. The amount of the retained equity ownership by our stockholders will be
negotiated by our  management and the target  company.  We currently are a shell
company and have nominal assets and business operations.

     We will not  restrict  our search to any  specific  business,  industry  or
geographic  location,  and we may participate in a business venture of virtually
any kind or nature.  This  discussion  of our plan for  acquiring  an  operating
business is purposefully  general,  and it is not meant to be restrictive of the
virtually  unlimited  discretion to search for and enter into potential business
opportunities.  We anticipate  that we will be able to  participate  in only one
potential  business venture because of our nominal assets and limited  financial
resources.

     We may  require  additional  financing  to  execute  our plan to acquire an
operating  company.  The  accompanying  financial  statements  include  a "going
concern" explanatory paragraph from our accountants.

History and background

     We were  organized as a Minnesota  corporation  on February  17, 1982.  The
technology on which our original products were based,  including Spread Spectrum
Technology,  permit data and  telemetry to be  transmitted  simultaneously  over
telephone wire without interfering with normal voice service.  Our were known as
data/voice  multiplexing ("DVM") equipment and were aimed at operating telephone
companies in the  telecommunications  market.  Our lack of  financial  resources
caused us to pursue a plan of  dissolution as approved by our Board of Directors
and approved by our shareholders on November 30, 1993.

     During fiscal 1994, we began  implementing a plan of voluntary  dissolution
pursuant to  Minnesota  law that was approved by our  shareholders  at a Special
Shareholders'  Meeting held on November 30, 1993. Under our plan of dissolution,
most of our assets were sold during 1994 with some  payments  deferred into 1995
and beyond.  The recovery  period ran through 1997.  During fiscal 1995, most of
the tangible asset sales were collected and only technology licenses remained to
be  collected.  During  fiscal 1996,  we  continued to collect  license fees and
payments on one equipment  lease.  The results of the plan of  dissolution  were
successful and all  liabilities and expenses were either paid or were covered in
reserves.

     On November 17, 2000, a Special Meeting of the  shareholders of the Company
was held at which time the plan of  dissolution  was  revoked.  Pursuant  to the
proposal for revocation,  a liquidating  dividend of approximately  $212,000 was
paid pro-rata to our  shareholders  in August 2001. We have been inactive  since
1994.

Redomestication Merger

     On October 7, 2005, we and Applied Spectrum Technologies,  Inc., a Delaware
corporation  ("Applied - Delaware") entered into a certain Agreement and Plan of
Merger  ("Plan  of  Merger").  Pursuant  to  the  Plan  of  Merger,  subject  to
stockholder  approval, we were to merge with and into Applied - Delaware for the
purposes  of the  redomestication  from the State of  Minnesota  to the State of
Delaware  (the  "Merger").  On October 24,  2005,  we filed a  Definitive  Proxy
Statement  pursuant to Section 14(a) of the Securities  Exchange Act of 1934, as
amended,  with the Securities and Exchange  Commission for the purpose of voting
on the Merger.

     On November 14, 2005, the holders of a majority of our  outstanding  shares
of common stock  approved the Merger.  The Merger was  completed on November 17,
2005,  and the  Articles of Merger were filed with the States of  Minnesota  and
Delaware on November 17, 2005. The full text of the Articles of Merger  together
with the accompanying Plan of Merger were attached as Exhibit 2.1 to our Current
Report filed with the SEC on November 17, 2005.


                                       1
<PAGE>

     Pursuant to the  Merger,  (i) we changed our  corporate  domicile  from the
State  of  Minnesota  to  the  State  of  Delaware;   (ii)  the  Certificate  of
Incorporation  and  Bylaws of Applied - Delaware  became the  equivalent  of our
certificate  of  incorporation  and by-laws,  respectively;  (iii) the number of
shares of authorized  stock changed from 10,000,000  shares of common stock, par
value of $0.01 per share,  to 150,000,000  shares of common stock,  par value of
$0.001 per share and 5,000,000  shares of preferred  stock, par value $0.001 per
share;  (iv) each share of our common  stock  automatically  converted  into one
share of  common  stock of  Applied  -  Delaware;  and (v)  Applied  -  Delaware
continued as a reporting  company under the Securities  Exchange Act of 1934, as
amended,  with its  common  stock  quoted and  trading  on the  Over-the-Counter
Bulletin Board  maintained by the National  Association  of Securities  Dealers,
Inc. ("OTC BB") upon consummation of the Merger.

     Applied - Delaware is the  surviving  corporation  in the  Merger,  and all
references  hereinafter to the "Company",  "we",  "us", and "our" shall refer to
the surviving corporation.  Immediately following the Merger, Applied - Delaware
had 2,953,941  shares of common stock  outstanding,  which is the same number of
shares outstanding immediately prior to the Merger. The trading of shares of our
common stock on the OTC BB will continue under the same ticker  symbol,  "APSP."
Mark R.  Littell,  our sole director and our Chief  Executive  Officer and Chief
Financial  Officer  prior to the Merger  continued in such  positions  after the
Merger. of Applied - Delaware.

     We currently have no material  assets,  liabilities or ongoing  operations.
Nevertheless,  we  believe  that we may be able to  recover  some  value for our
stockholders by the adoption and  implementation of a plan to seek,  investigate
and,  if the  results  of  the  investigation  warrant,  effectuate  a  business
combination  with a  suitable  privately-held  company  that has  both  business
history and operating assets. Our potential success will be primarily  dependent
on the efforts and abilities of our management  team,  which will have virtually
unlimited  discretion in searching for, negotiating and entering into a business
combination transaction.

     In connection with a business combination, significant additional shares of
common stock will need to be issued to the owners of the operating company since
we do not have significant  assets of our own to purchase the operating company.
The acquisition issuance will significantly dilute the ownership interest of our
current  stockholders.  In addition,  at and  following the time of the business
combination,  we will  likely be  required  to issue  shares  of  common  stock,
options,  awards and warrants in  connection  with  employee  benefit  plans and
employment  arrangements,  for financing  the future  operations of the acquired
business, for acquiring other businesses, for forming strategic partnerships and
alliances,  and for stock dividends and stock splits. Such issuances will result
in further dilution to our current stockholders.

     We believe that the  reincorporation  in the State of Delaware will give us
more  flexibility and simplicity in various  corporate  transactions,  including
implementation  and  completion  of a  business  combination  with an  operating
business.

Proposed Change of Control Transaction

     On December 14, 2005,  Norwood  Venture  Corp.  ("Norwood  Venture") and KI
Equity  Partners  III,  LLC ("KI  Equity")  entered  into a  certain  securities
purchase agreement, as amended ("Purchase  Agreement"),  which provides that, at
the  closing  of the  transactions  contemplated  under the  Purchase  Agreement
("Closing"),  Norwood  Venture  will sell  2,281,302  shares  of  common  stock,
representing  approximately  77.2% of our outstanding shares of common stock, to
KI Equity at a price of $175,000. The closing of the transaction contemplated by
the Purchase  Agreement is  contingent  on several  factors,  including  but not
limited to the  delivery of various  closing  documents  and  certificates,  the
resignation of our existing  officers as of the Closing,  and resignation of our
current sole director  effective upon the expiration of the ten-day period after
the filing with the SEC,  and  mailing to our  stockholders,  of an  information
statement  under  Section  14(f) of the  Securities  Exchange  Act of  1934,  as
amended,  and Rule  14f-1  promulgated  under  the  Exchange  Act  ("Information
Statement").

     Mark R.  Littell,  our sole  officer and  director,  is the  President  and
controlling stockholder of Norwood Venture. The Purchase Agreement provides that
Mark R. Littell shall resign his officer  positions  with us effective as of the
Closing and that we shall, effective as of the Closing, appoint Kevin R. Keating
as a director, and our President, Treasurer and Secretary.


                                       2
<PAGE>

     The  Purchase  Agreement  further  contemplates  that Mark R.  Littell will
continue as one of our  directors  following  the Closing  until such time as we
comply with Section  14(f) of the  Securities  Exchange Act of 1934, as amended,
and Rule 14f-1 promulgated under the Exchange Act. The Information Statement was
filed with the SEC on December 15, 2005 and was mailed to our stockholders on or
about  December  19,  2005.  As such,  Mark R. Littell is expected to submit his
resignation  as a director  effective as of the  expiration  of the ten (10) day
period following the filing of the Information Statement. We will, to the extent
permitted by applicable law, secure the resignation of, or remove,  the existing
directors and officers as set forth above so as to enable Kevin R. Keating to be
appointed as a director and officer in  accordance  with the Purchase  Agreement
effective as of the Closing.  Mark R. Littell has also  indicated  his intent to
resign as an officer effective on the Closing and as a director effective as the
expiration of the ten (10) day period  following the filing of this  information
statement.

     We anticipate that, in connection with the proposed sale by Norwood Venture
of certain shares of our common stock as contemplated by the Purchase Agreement,
Mark R. Littell and Norwood  Venture  will enter into an agreement  releasing us
from any and all claims they have against us.

     Kevin R. Keating is the father of Timothy J. Keating,  the majority  member
of Keating Investments,  LLC. Keating Investments, LLC is the managing member of
KI Equity  Partners  III,  LLC,  which is the party  acquiring  the  controlling
interest in us pursuant to the Purchase Agreement.  Keating Investments,  LLC is
also the managing member and 90% owner of Keating Securities,  LLC, a registered
broker-dealer.  Kevin  R.  Keating  is not  affiliated  with  and has no  equity
interest in Keating  Investments,  LLC, KI Equity  Partners  III, LLC or Keating
Securities,  LLC and disclaims any beneficial  interest in the shares of Applied
Spectrum's common stock to be acquired by KI Equity Partners III, LLC.

     We believe that, following the proposed change of control  transaction,  we
will  continue to seek,  investigate  and,  if the results of the  investigation
warrant,  effectuate  a  business  combination  with a  suitable  privately-held
company that has both  business  history and  operating  assets.  Our  potential
success  will be  primarily  dependent  on the efforts and  abilities of our new
management  team,  which will have virtually  unlimited  discretion in searching
for, negotiating and entering into a business combination transaction.

Employees

     We  currently do not have any  employees.  Our sole officer and a director,
Mark R. Littell, serves in such capacities without salary or bonus.

Risk Factors

     An  investment  in our  common  stock  involves  investment  risks  and the
possibility  of the  loss of an  investor's  entire  investment.  A  prospective
investor should evaluate all information about us and the risk factors discussed
below in relation to his financial circumstances before investing in us.

         1. No  Current  Operating  Business.  We  currently  have  no  relevant
operating business,  revenues from operations or assets. Our business plan is to
seek a merger or business combination with an operating business. We face all of
the risks inherent in the  investigation,  acquisition,  or involvement in a new
business  opportunity.  An investor's  purchase of any of our securities must be
regarded as placing funds at a high risk in a new or "start-up" venture with all
of the unforeseen  costs,  expenses,  problems,  and  difficulties to which such
ventures are subject.

         2. No Assurance of Success or Profitability. There is no assurance that
we will  acquire a suitable  and  favorable  business  opportunity  in a reverse
merger  transaction.  In  addition,  even if we become  involved  in a  business
opportunity,  there is no assurance  that the business we acquire will  generate
revenues or profits,  or that the value of our common  stock will  increase as a
result of the acquired business opportunity.


                                       3
<PAGE>

         3. Possible  Business - Not  Identified  and Highly Risky.  We have not
identified and have no commitments to enter into or acquire a specific  business
opportunity and therefore we can disclose the risks and hazards of a business or
opportunity  that we acquire only in a general  manner,  and cannot disclose the
risks and  hazards of any  specific  business or other  opportunity  that we may
enter into. An investor can expect a potential business  opportunity to be quite
risky.  Our  acquisition of or  participation  in a business  opportunity  could
result in a total loss to our investors and  stockholders if the target business
is  unsuccessful.  Further,  any  investment  in us may  continue  to be  highly
illiquid.

         4. Type of Business Acquired. The type of business that may be acquired
is not identified. Therefore, our investors and stockholders have to rely on our
management  to  determine  which  target  business  to  pursue.   There  are  no
controlling  parameters  of the business to be  acquired.  Thus,  ultimately  an
investment will depend on the target business and therefore investors in us will
be  subject  to all the  risks  that  would be  associated  with  that  selected
business.  Our  management may have the right to approve and authorize a reverse
merger  transaction  with a target  company  without  obtaining  the vote of the
majority of our stockholders.

         5. Impracticability of Exhaustive Investigation.  We have limited funds
and lack full-time management which will likely make it impracticable to conduct
a complete and exhaustive  investigation and analysis of a business  opportunity
before we commit our  limited  capital and other  resources  to acquire a target
business. Management decisions,  therefore, likely will be made without detailed
feasibility studies,  independent analysis,  market surveys, and the like which,
if we  had  more  funds  available  to  us,  would  be  desirable.  We  will  be
particularly  dependent in making  decisions  upon  information  provided by the
promoter,  owner,  sponsor,  or others associated with the business  opportunity
seeking to be acquired by us.

         6. Lack of Diversification. Because of our limited financial resources,
it is unlikely that we will be able to diversify our acquisitions or operations.
The inability to diversify our  activities  into more than one area will subject
our  investors and  stockholders  to economic  fluctuations  within a particular
business  or industry  and  therefore  increase  the risks  associated  with the
investment.  We only intend to acquire a single  business  opportunity  and thus
your investment will lack diversification.

         7.  Possible  Reliance upon  Unaudited  Financial  Statements.  We will
require audited  financial  statements from target  companies that we propose to
acquire.  No assurance can be given,  however,  that audited  financials will be
available  at the  closing of the  reverse  merger  transaction.  In cases where
audited  financials  are  unavailable,  we  will  have to  rely  upon  unaudited
information  received  from  target  companies'  management  that  has not  been
verified by outside auditors. We, at the time of acquisition, will be subject to
the reporting provisions of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and thus will be required to furnish certain  information about
significant  acquisitions,   including  audited  financial  statements  for  any
business that the shell company acquires.  Consequently,  acquisition  prospects
that do not have or are unable to obtain the required audited statements may not
be  appropriate  for  acquisition so long as the reporting  requirements  of the
Exchange  Act are  applicable.  But, in cases where we have  completed a reverse
merger  transaction  in reliance on unaudited  financial  statements and audited
statements  cannot  subsequently  be  obtained,  the  continued  ability  of the
post-transaction company to remain a reporting company and publicly trading will
be in jeopardy and may significantly reduce the value of your investment.

         8. Investment Company Regulation. We do not intend to become classified
as an  "investment  company"  under  the  Investment  Company  Act of 1940  (the
"Investment  Act").  We believe  that we will not become  subject to  regulation
under the  Investment  Act because (i) we will not be engaged in the business of
investing or trading in securities,  and (ii) any  acquisition  undertaken  will
result in the target company  obtaining a majority  interest in us. Should there
be  a  requirement  to  register  as  an  investment  company,  it  would  cause
significant  registration and compliance  costs. Any violation of the Investment
Act will subject us to materially adverse consequences. Should the SEC find that
we are  subject  to  the  Investment  Act,  and  order  registration  under  the
Investment  Act,  we would  resist  such  finding  and take  steps to avoid such
registration.  Irrespective  of  whether  the SEC or we were to  prevail in such
dispute about whether or not we are an investment company,  however, the damages
and delays would be costly.

         9. Other  Regulation.  Any acquisition  made by us may be of a business
that is  subject  to  regulation  or  licensing  by  federal,  state,  or  local
authorities. Foreign companies may also be considered, and be subject to similar
business  regulations  as are  applicable  in the United  States and also may be
subject to limitations on ownership by foreign persons and entities.  Compliance
with such  regulations  and  licensing  can be expected to be a  time-consuming,
expensive process and may limit our other investment opportunities. We intend to
pursue potential business  opportunities in foreign countries,  including China,
and as such,  such  opportunities  will be subject to foreign  country  laws and
regulations   affecting  foreign  investment,   business  operations,   currency
exchange, repatriation of profits, and taxation, which will increase the risk of
your investment.


                                       4
<PAGE>

         10.  Dependence upon Management.  We will be heavily dependent upon the
skills, talents, and abilities of our management to implement our business plan.
Our management  may devote limited time to our affairs,  which may be inadequate
for our  business,  and may delay the  acquisition  of any business  opportunity
considered.   Furthermore,   management   has  little   experience  in  seeking,
investigating,  and  acquiring  businesses  and will  depend  upon  its  limited
business  knowledge in making decisions  regarding our acquisition of a business
opportunity.  Because  investors  will not be able to  evaluate  the  merits  of
possible  business  acquisitions  by  us,  they  should  critically  assess  the
information concerning the management.

         11.  Dependence  upon  Outside  Advisors.  To  supplement  the business
experience of management,  we may be required to employ  accountants,  technical
experts, appraisers,  attorneys, or other consultants or advisors. Some of these
outside  advisors  may be our  affiliates  or  their  affiliated  entities.  The
selection of any such advisors will be made by our management  without any input
from stockholders.

         12. Conflicts of Interest.  Our management has other business interests
to which they will devote primary attention. As a result,  conflicts of interest
may arise  that can be  resolved  only  through  the  exercise  by them of their
judgment as may be consistent with their fiduciary  duties.  Our management will
try to resolve  conflicts to the best advantage of all concerned,  but there may
be times  when an  acquisition  opportunity  is given to  another  entity to the
disadvantage of our stockholders and for which there will be no recourse.

         13.  Need for  Additional  Financing.  In all  likelihood  we will need
additional  funds  to  take  advantage  of any  available  acquisition  business
opportunity.  Even if we were to obtain  sufficient funds to acquire an interest
in a business  opportunity,  we may not have sufficient capital to fully exploit
the  opportunity.  Our  ultimate  success  will depend upon our ability to raise
additional  capital  at  the  time  of  the  acquisition  and  thereafter.  When
additional  capital may be needed,  there can be no assurance that funds will be
available  from any  source  or,  if  available,  that they can be  obtained  on
acceptable terms.

         14. Borrowing Transactions. There is a possibility that any acquisition
of a business opportunity by us will require borrowing against the assets of the
business opportunity to be acquired, or against the projected future revenues or
profits of the business  opportunity.  This leverage could increase our exposure
to larger losses.  There is no assurance that any business  opportunity acquired
through  borrowing and leverage will generate  sufficient  revenues to cover the
related debt and expenses.

         15. No Foreseeable Dividends. We do not intend to pay any dividends. We
do not  foresee  making any cash  distributions  in the manner of a dividend  or
otherwise.

         16.  Loss of Control  by Present  Management  and  Stockholders.  It is
likely that any  acquisition of an operating  company will result in a change in
control of the then current directors, officers and the stockholders. Therefore,
our management  prior to the acquisition  will be changed to those of the target
company and its  stockholders,  who will then control the combined  company.  At
that time, our  stockholders  will be at investment risk for the decisions about
the  business by persons that they may not know or have any ability to influence
through a board seat or by the voting mechanism of stockholders.

         17. Dilutive Effects of Issuing Additional Common Stock. In any reverse
merger transaction,  for tax reasons and management  reasons,  the owners of the
target  company  will be issued a large  number of shares of common  stock which
will dilute the ownership interest of our current stockholders.  In addition, at
the time of the reverse merger,  it will be likely that there will be additional
authorized  but  unissued  shares  that  may be  later  issued  by the  then new
management for any purpose without the consent or vote of the stockholders.  The
acquisition  issuance and  additional  issuances  that may occur will dilute the
interests of our stockholders after the reverse merger transaction.


                                       5
<PAGE>

         18.  Thinly-traded  Public Market.  Our securities  will be very thinly
traded,  and the  price if traded  may not  reflect  the  value of the  company.
Moreover,  there may be a reverse  split of the shares which may not reflect the
value of the company  either.  There can be no  assurance  that there will be an
active market for our shares either now or after we complete the reverse merger.
The market  liquidity  will be  dependant  on the  perception  of the  operating
business  and any steps that its  management  might take to bring the company to
the awareness of investors.  There can be no assurance  given that there will be
any  awareness  generated.  Consequently  investors may not be able to liquidate
their  investment  or  liquidate  it at a price that  reflects  the value of the
business.  If a more  active  market  should  develop,  the  price may be highly
volatile.  Because there may be a low price for our  securities,  many brokerage
firms may not be willing to effect  transactions in the  securities.  Even if an
investor finds a broker willing to effect a transaction in the  securities,  the
combination  of brokerage  commissions,  transfer fees,  taxes,  if any, and any
other  selling  costs may  exceed  the  selling  price.  Further,  many  lending
institutions  will not permit the use of such  securities as collateral  for any
loans.

         19.  Possible  Rule 144 Sales.  The  majority  of our shares  currently
outstanding are "restricted securities" within the meaning of Rule 144 under the
Securities  Act of 1933,  as amended (the "Act").  As restricted  shares,  these
shares may be resold only  pursuant to an  effective  registration  statement or
under  the  requirements  of  Rule  144  or  other  applicable   exemption  from
registration  under the Act and as required under  applicable  state  securities
laws.  Rule  144  provides  in  essence  that a person  who has held  restricted
securities  for a period of one year may, under certain  conditions,  sell every
three months, in brokerage transactions, a number of shares that does not exceed
the  greater of 1.0% of a  company's  outstanding  common  stock or the  average
weekly trading volume during the four calendar weeks prior to the sale. There is
no  limit  on  the  amount  of  restricted  securities  that  may be  sold  by a
non-affiliate after the restricted  securities have been held by the owner for a
period of two years. Current stockholders who own 10% or more of our shares will
likely be deemed an affiliate  until 90 days after a reverse merger is completed
with a target company.  After such 90-day period,  and assuming said shares have
been held for more than two years,  these stockholders may be able to sell their
shares  without  volume  restrictions.  A sale under Rule 144 or under any other
exemption from the Act, if available, or pursuant to subsequent registrations of
our  shares,  may have a  depressive  effect upon the price of our shares in any
market that may develop.

ITEM 2.  DESCRIPTION OF PROPERTIES.

     Our current offices are located at 65 Norwood Avenue,  Upper Montclair,  NJ
07043  which are the  offices of Norwood  Venture.  The use of these  offices is
provided at no cost to us.

     We do not own any real or  personal  property  nor do we have any  plans to
acquire  any  real  or  personal  property  in the  future.  We do not  own  any
significant  business  operating  assets.  We do  not  maintain  any  policy  of
insurance to insure any property or business operations.

ITEM 3.  LEGAL PROCEEDINGS.

        We are not aware of any pending or threatened legal proceedings in which
we are involved.

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

     There were no matters  submitted to a vote of our  stockholders  during the
fourth quarter of the fiscal year ended September 30, 2005. However, on November
14, 2005, at a special meeting of our stockholders, the holders of a majority of
our outstanding shares of common stock approved the Merger which is described in
more detail in Part I, Item I, above.


                                       6
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
         BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

     Our common stock was traded on the national,  over-the-counter market under
the symbol ASTI after our initial public offering in January 1988.  However,  we
were  notified  by NASD that,  due to low  trading  volume,  it would not report
transactions in our common stock after October 13, 1989.

     On  September  16,  2005,  our  common  stock  commenced  quotation  on the
Over-the-Counter  Bulletin Board ("OTC BB")  maintained by the NASD. Our trading
symbol is APSP. Our common stock trades only sporadically and has experienced in
the past,  and is expected to  experience in the future,  significant  price and
volume  volatility.  Based on information  available to us, the high and low bid
quotation for our stock on the Over-the-Counter Bulletin Board during the period
from  September  16,  2005  through  September  30,  2005 was $0.05  and  $0.10,
respectively.  The  quotations  reflect  inter-dealer  prices and do not include
retail  mark-ups,  mark-downs  or  commissions.  The  prices do not  necessarily
reflect actual transactions.

     The Company's  transfer agent is  Computershare  Trust  Company,  Inc., 350
Indiana Street, Suite 800, Golden, Colorado, 80401

     As of October 1, 2005,  there were  approximately  792 holders of record of
our common stock.

     Other than the  liquidating  dividend  paid in August,  2001, we have never
declared or paid cash dividends on our common stock,  and we do not intend to do
so in the foreseeable future. We currently intend to retain all earnings, if and
when generated, to finance our operations.  The declaration of cash dividends in
the future will be determined by the board of directors based upon our earnings,
financial condition, capital requirements and other relevant factors.

     As a result of the  Merger,  effective  November  17,  2005,  the number of
shares of our authorized  stock changed from 10,000,000  shares of common stock,
par value of $0.01 per share, to 150,000,000  shares of common stock,  par value
of $0.001 per share and 5,000,000  shares of preferred  stock,  par value $0.001
per share.

Recent Sales of Unregistered Securities.

     There were no sales of  unregistered  securities  during  the fiscal  years
ended September 30, 2005, 2004 and 2003.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Forward-Looking Statements

     The following  discussion may contain  certain  forward-looking  statements
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Exchange  Act of 1934.  Such  statements  are intended to be
covered by the safe harbors created by such provisions. These statements include
the plans  and  objectives  of  management  for  future  growth of the  Company,
including plans and objectives  related to the  consummation of acquisitions and
future private and public issuances of the Company's equity and debt securities.
The forward-looking statements included herein are based on current expectations
that  involve  numerous  risks and  uncertainties.  Assumptions  relating to the
foregoing  involve  judgments  with  respect  to,  among  other  things,  future
economic,  competitive and market conditions and future business decisions,  all
of which are difficult or impossible to predict accurately and many of which are
beyond the  control of the  Company.  Although  the  Company  believes  that the
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could be inaccurate and,  therefore,  there can be no assurance that
the  forward-looking  statements  included  in this Form 10-KSB will prove to be
accurate.   In  light  of  the   significant   uncertainties   inherent  in  the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.


                                       7
<PAGE>

     The words "we," "us" and "our" refer to the  Company.  The words or phrases
"would be," "will allow," "intends to," "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," or similar expressions
are intended to identify  "forward-looking  statements."  Actual  results  could
differ  materially from those  projected in the forward looking  statements as a
result of a number of risks and uncertainties, including but not limited to: (a)
limited  amount of resources  devoted to achieving  our business  plan;  (b) our
failure to  implement  our  business  plan within the time period we  originally
planned to  accomplish;  (c) because we are  seeking to merge with an  operating
business  which has not yet been  identified,  you will be  unable to  determine
whether we will ever become  profitable;  and (d) other risks that are discussed
in this Form 10-KSB or included in our previous  filings with the Securities and
Exchange Commission.

Plan of Operations

General Business Plan

     Our plan of operation is to seek a target company with which to merge or to
complete a business  combination.  In any transaction,  we will be the surviving
entity, and our stockholders will retain a percentage  ownership interest in the
post-transaction  company.  The amount of the retained  equity  ownership by our
stockholders will be negotiated by our management and the target company. We may
also be required to pay cash and/or  equity fees to third parties that advise us
in connection with the merger or business combination, commonly refereed to as a
reverse  merger.  These third party advisors may include  certain  affiliates of
ours and their affiliated entities.

     Typically in connection  with the reverse merger  transaction  involving us
and the target  company,  there will be a capital  funding  event for the target
business on a combined basis either at the time of the reverse merger or shortly
thereafter.  This may be a private placement by either us or the target company,
if the funding event is contingent on the closing of the reverse merger.  If the
funding event is after the reverse  merger,  it will likely be a public offering
or  private  placement  of our  securities.  It will  often be the case that the
liquidity  opportunity for our existing stockholders will be tied to the ability
of the old and new investors of the target  enterprise to have  liquidity in the
market for their financial investment.  Therefore,  our stockholders may have to
continue to hold their  investment or may face competition in being able to sell
their shares in the  post-transaction  business in the public market,  which may
depress the price for such a volume of securities.

     We will not  restrict  our search to any  specific  business,  industry  or
geographic  location,  and we may participate in a business venture of virtually
any kind or nature.  This  discussion  of our plan for  acquiring  an  operating
business is purposefully  general,  and it is not meant to be restrictive of the
virtually  unlimited  discretion to search for and enter into potential business
opportunities.  We anticipate  that we will be able to  participate  in only one
potential  business venture because of our nominal assets and limited  financial
resources.

     We may seek a  business  opportunity  with  entities  which  have  recently
commenced operations,  or that desire to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets,  to
develop a new  product  or  service,  or for other  corporate  purposes.  We may
acquire assets and establish wholly owned  subsidiaries in various businesses or
acquire existing businesses as subsidiaries.

     We expect that the selection of a business  opportunity will be complex and
risky. Due to general economic  conditions,  rapid technological  advances being
made in some  industries  and  shortages of available  capital,  we believe that
there are  numerous  potential  targets  with  either  sound  business  ideas or
operations  seeking the benefits of a shell  company that has complied  with the
federal  reporting  requirements for public  companies and is publicly  trading.
Such  benefits  may  include  facilitating  or  improving  the  terms  on  which
additional  equity  financing may be sought,  providing  liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable  statutes) for all stockholders and other factors.
Potentially,  available  business  opportunities  may  occur  in many  different
industries and at various stages of development, all of which will make the task
of  comparative  investigation  and  analysis  of  such  business  opportunities
extremely  difficult and complex.  We have,  and will continue to have,  limited
capital  with which to provide  the owners of  business  opportunities  with any
significant cash or other assets. We will,  however,  be able to offer owners of
target candidates the opportunity to acquire a controlling ownership interest in
an  issuer  who has  complied  with the  reporting  requirements  under  federal
securities  laws  without  incurring  the cost and time  required  to conduct an
initial public offering.


                                       8
<PAGE>

     The analysis of new business  opportunities will be undertaken by, or under
the  supervision  of, our management who will likely engage outside  advisors to
assist us in this analysis.  Some of these outside advisors may be affiliates of
ours or their  affiliated  entities.  We intend to  concentrate  on  identifying
preliminary  prospective  business  opportunities  which may be  brought  to our
attention through present associations of our officers and directors,  or by our
advisors. In analyzing prospective business opportunities, we will consider such
matters as (i) available  technical,  financial and managerial  resources;  (ii)
working capital and other financial  requirements;  (iii) history of operations,
if any and  prospects  for the  future;  (iv)  nature of  present  and  expected
competition;  (v) quality,  experience  and depth of management  services;  (vi)
potential for further research,  development or exploration; (vii) specific risk
factors not now  foreseeable  but that may be anticipated to impact the proposed
activities  of the  company;  (viii)  potential  for growth or  expansion;  (ix)
potential  for  profit;  (x) public  recognition  and  acceptance  of  products,
services or trades;  (xi) name  identification;  and (xii) other factors that we
consider relevant. As part of our investigation of the business opportunity,  we
or our advisors expect to meet  personally with or interview  management and key
personnel.

     We may also have to compensate  certain  advisors,  finders and  investment
banking firms for services  rendered in connection  with the  identification  of
target   operating   companies  and  the   negotiation  and  completion  of  the
transaction. Due to our limited resources, it is expect that all or a portion of
this  compensation will be in the form of our common stock or from cash provided
by the target  company or the funding event.  Additional  issuance of our common
stock will have a further  dilutive  effect on the percentage of shares held our
stockholders.

     We will not acquire or merge with any company for which  audited  financial
statements  cannot be obtained within a reasonable  period of time after closing
of the proposed transaction.

Acquisition Opportunities

     In implementing a structure for a particular business  acquisition,  we may
become a party to a merger,  consolidation,  reorganization,  joint venture,  or
licensing agreement with another company or entity. We may also acquire stock or
assets of an existing business. Our management may have the right to approve and
authorize a reverse merger  transaction with a target company without  obtaining
the vote of the majority of our  stockholders.  Further,  upon consummation of a
reverse  merger  transaction,  it is probable  that our present  management  and
stockholders will no longer be in control of us. In addition, our management, as
part of the terms of the  reverse  merger  transaction,  may  resign  and may be
replaced by new directors without a vote of our stockholders.  Any and all sales
of shares of our common stock may only be made in compliance with the securities
laws of the United States and any applicable state.

     It is anticipated that certain  securities  issued by us in connection with
the reverse merger would be issued in reliance upon exemptions from registration
under application federal and state securities laws. In some circumstances, as a
negotiated element of the reverse merger transaction,  we will be asked to agree
to register all or a part of such securities  immediately  after the transaction
is consummated or at specified times thereafter. In such a case, we will attempt
to negotiate the registration of some or all of our current  outstanding  shares
which are  restricted,  but there is no guarantee that this will be accomplished
or,  if  accomplished,   that  the  registration   rights  identical.   If  such
registration  occurs, it will be undertaken by the surviving entity after it has
successfully  consummated  a  reverse  merger  and is no  longer  considered  an
inactive  company.  The issuance of substantial  additional  securities by us in
connection  with the reverse  merger and their  potential  sale into any trading
market which may develop in our securities  may have a depressive  effect on the
value of our securities in the future. There is no assurance that such a trading
market will develop.

     While the actual terms of a reverse merger transaction cannot be predicted,
it is  expected  that the  parties  to any  business  transaction  will  find it
desirable to avoid the  creation of a taxable  event and thereby  structure  the
business  transaction in a so-called  "tax-free"  reorganization  under Sections
368(a)(1) or 351 of the Internal  Revenue Code (the "Code").  In order to obtain
tax-free  treatment  under the Code,  it may be necessary  for the owners of the
acquired business to own 80 percent or more of the voting stock of the surviving
entity. In such event, the equity interest retained by our current  stockholders
would be less  than 20  percent  of the  issued  and  outstanding  shares of the
surviving  entity.  This  would  result in  significant  dilution  in the equity
interests of our stockholders.


                                       9
<PAGE>

     In addition to the tax considerations discussed above, it is likely that in
any reverse merger, and depending upon, among other things, the target company's
assets and  liabilities,  the equity  interests  of our  stockholders  after the
transaction  will be a small  percentage of the  post-transaction  company.  The
percentage  ownership  may be subject to  significant  reduction in the event we
acquire a target company with significant assets and expectations of growth.

     We will  participate in a business  opportunity  only after the negotiation
and  execution  of  appropriate  written  agreements.  Although the terms of the
acquisition  agreements cannot be predicted,  generally such agreements will (i)
require  specific  representations  and  warranties by all of the parties;  (ii)
specify certain events of default and remedies therefor;  (iii) detail the terms
of closing and the  conditions  which must be  satisfied  by each of the parties
prior to and after closing; (iv) outline the manner of bearing costs,  including
costs   associated   with  our   attorneys  and   accountants;   (v)  set  forth
indemnification provisions; and (vi) include miscellaneous other terms.

     As stated above,  we will not acquire or merge with any entity which cannot
provide independent  audited financial  statements within a reasonable period of
time after closing of the proposed  transaction.  Included in these requirements
is the affirmative duty to file independent audited financial statements as part
of a  Current  Report  on Form  8-K,  required  to be  filed  with  the SEC upon
consummation of a merger or acquisition, as well as audited financial statements
included in an Annual Report on Form 10-K (or Form 10-KSB,  as  applicable).  If
such audited financial  statements are not available at closing,  or within time
parameters necessary to insure compliance with the reporting  requirements under
federal securities laws, or if the audited financial  statements provided do not
conform to the  representations  made by the  business to be  acquired,  we will
attempt to negotiate a provision in the definitive closing documents to void the
transaction.  However,  there  is no  guarantee  that we will be  successful  in
including  such a provision  and,  in such case,  the  continued  ability of the
post-transaction  company to remain a reporting company and publicly trading may
be in jeopardy.

Competition

     We are an  insignificant  participant  among the firms which  engage in the
reverse  merger of shell  companies into an operating  business.  There are many
established  venture  capital and  financial  concerns  that have  significantly
greater financial and personnel  resources and technical expertise than we have.
In view of our limited financial resources and limited management  availability,
we will continue to be at a significant competitive disadvantage compared to our
competitors.  As a result,  we may not be able to find suitable target companies
with which to complete a reverse merger transaction.

Results of Operations

    During the fiscal year ended  September  30, 1994, we began  implementing  a
plan of voluntary dissolution pursuant to Minnesota law that was approved by our
shareholders at a Special Shareholders' Meeting held on November 30, 1993. Under
our plan of  dissolution,  most of our assets  were sold  during  1994 with some
payments  deferred into 1995 and beyond.  The recovery  period ran through 1997.
During the fiscal year ended  September  30, 1995,  most of the  tangible  asset
sales were  collected  and only  technology  licenses  remained to be collected.
During the fiscal year ended September 30, 1996, we continued to collect license
fees and payments on one equipment lease. The results of the plan of dissolution
were  successful  and all  liabilities  and  expenses  were  either paid or were
covered in reserves. On November 17, 2000, a Special Meeting of our shareholders
was held at which time the plan of dissolution was revoked with the intention of
using to the corporate shell to acquire an operating business.

    Pursuant  to  the  proposal  for  revocation,   a  liquidating  dividend  of
approximately $212,000 was paid pro-rata to our shareholders in August 2001. The
Company has been inactive since 1994.

     For the year ended  September 30, 2005, we had net income (loss) of $4,522,
as compared with net income (loss) of $(9,686) for the year ended  September 30,
2004.  During the years ended  September 30, 2005 and 2004, we were inactive and
had no sales  revenue.  We  received  interest  income  of $410 and $180 for the
fiscal years ended  September  30, 2005 and 2004,  respectively,  which has been
reflected in other income.  Other income for the fiscal year ended September 30,
2005 totaling $5,912 relates to accrued liabilities being written off.


                                       10
<PAGE>

      During the fiscal year ended  September  30,  2005,  certain  current year
expenditures  of  maintaining  our public company  status  totaling  $6,120 were
offset  against  estimated  accrued  expenses  recorded in  connection  with the
winding down of our business in 2001.

Liquidity and Capital Resources

     Our total assets as September 30, 2005 are $18,936,  which are comprised of
other  assets.  Our total  liability  as  September  30,  2005 is $1,568.  Total
stockholders' equity as of September 30, 2005 is $17,368.

     We have no current  commitments  under operating or capital leases and have
not entered into any  contracts  for financial  derivative  instruments  such as
futures, swaps and options.

     The  following  is a summary of the  Company's  cash flows from  operating,
investing, and financing activities:

<TABLE>
<CAPTION>
                                                            Year Ended                       Year Ended
                                                        September 30, 2005               September 30, 2004
                                                        ------------------               ------------------
<S>                                                     <C>                              <C>
    Cash Flows from Operating Activities                        $0                               $0

    Cash Flows from Investing Activities                         0                                0

    Cash Flows from Financing Activities                         0                                0

    Net Change in Cash                                          $0                               $0
</TABLE>

     Management  considers  it  possible  that  additional  funds may need to be
raised,  either  through loans or via private  placements  of common  stock,  to
sustain our liquidity in the near term.

Going Concern

     We have sustained recurring  operating losses,  currently have no source of
operating  revenue,  and have only limited  working capital with which to pursue
our business plan, which  contemplates the completion of a business  combination
with an operating company.  The amount of capital required to sustain operations
until the successful  completion of a business  combination is subject to future
events  and  uncertainties.  It may be  necessary  for us to  secure  additional
working  capital  through  loans or sales of common  stock,  and there can be no
assurance  that such funding will be available in the future.  These  conditions
raise substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

     Use of Estimates

         The  preparation of financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.


                                       11
<PAGE>

     Deferred Taxes

         We  recognize   deferred  tax  assets  and  liabilities  based  on  the
differences  between the financial  statement carrying amounts and the tax bases
of assets and liabilities.  Management regularly reviews our deferred tax assets
for  recoverability  and  establishes a valuation  allowance based on historical
taxable income,  projected future taxable income, and the expected timing of the
reversals of existing temporary differences. Management has recorded a valuation
allowance to reduce  deferred tax assets  including  those  associated  with net
operating  losses.  The  assessment  realization  of deferred tax  provisions is
dependent upon future taxable income,  and based on historical  evidence,  it is
more likely than not that such provision will not be utilized.  Further,  in the
case  of  an   acquisition  of  a  new  business  by  us,  the  ability  of  the
post-acquisition   business  to  utilize  our  net   operating   losses  may  be
significantly  impaired  or  eliminated.  As of  September  30,  2005,  we  have
established  a valuation  allowance  equal to the net deferred tax asset,  since
management  is unable  to  determine  that we will  generate  sufficient  future
taxable income to allows us to realize the deferred tax asset.

ITEM 7.  FINANCIAL STATEMENTS

     The following financial statements required by this item are filed herewith
following the signature page to this report:

<TABLE>
<CAPTION>
                                                                                                Page
<S>                                                                                          <C>
    Report of Independent Registered Public Accounting Firm                                     F-1a
    Report of Previous, Independent Registered Public Accounting Firm                           F-1b
    Balance Sheets - As of September 30, 2005                                                   F-2
    Statements of Operations - For the years ended September 30, 2005 and 2004                  F-3
    Statement of Stockholders' Equity - For the years ended September 30, 2005 and 2004         F-4
    Statements of Cash Flows - For the years ended September 30, 2005 and 2004                  F-5
    Notes to Financial Statements                                                            F-6 to F-7
</TABLE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     On October 13, 2005,  we dismissed  Hoberman,  Miller,  Goldstein & Lesser,
CPA's,  P.C. as our independent  registered public accounting firm. The decision
was approved by our Board of Directors.

     The report of  Hoberman,  Miller,  Goldstein & Lesser,  CPA's,  P.C. on our
financial  statements for the fiscal years ended September 30, 2004 and 2003 did
not contain an adverse opinion or disclaimer of opinion. During our fiscal years
ended September 30, 2004 and 2003,  there were no  disagreements  with Hoberman,
Miller,  Goldstein & Lesser,  CPA's, P.C. on any matter of accounting principles
or practices,  financial statement  disclosure,  or auditing scope or procedure,
which  disagreements,  if not resolved to the satisfaction of Hoberman,  Miller,
Goldstein & Lesser, CPA's, P.C. would have caused Hoberman,  Miller, Goldstein &
Lesser, CPA's, P.C. to make reference to the subject matter of the disagreements
in connection with its report on the financial statements for such years.

     On October 13, 2005, De Joya Griffith & Company, LLC was engaged as our new
independent registered public accounting firm. During the two most recent fiscal
years  preceding  the  engagement  of De Joya  Griffith & Company,  LLC,  we did
consult  with  De  Joya  Griffith  &  Company,  LLC  regarding  either:  (i) the
application  of  accounting  principles  to  a  specified  transaction,   either
completed  or proposed,  or the type of audit  opinion that might be rendered on
our  financial  statements;  or (ii) any matter that was either the subject of a
disagreement  or  event  identified  in  paragraph  (a)(1)(iv)  of  Item  304 of
Regulation S-B.

      There were no disagreements with De Joya Griffith & Company,  LLC, whether
or not resolved, on any matter of accounting principles or practices,  financial
statement disclosure, or auditing scope or procedure,  which, if not resolved to
with the  satisfaction of De Joya Griffith & Company,  LLC, would have caused it
to make  reference to the subject  matter of the  disagreement(s)  in connection
with its report.


                                       12
<PAGE>

ITEM 8A. CONTROLS AND PROCEDURES

      As of the end of the period covered by this report,  the Company conducted
an evaluation,  under the  supervision and with the  participation  of the Chief
Executive  Officer and Chief  Financial  Officer,  of the  Company's  disclosure
controls and procedures (as defined in Rules  13a-15(e) and 15d-15(e)  under the
1934 Act.  Based on this  evaluation,  the  Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures are effective to ensure that information  required to be disclosed by
the Company in reports that it files or submits  under the 1934 Act is recorded,
processed,  summarized  and  reported  within  the  time  periods  specified  in
Securities and Exchange  Commission rules and forms.  There was no change in the
Company's  internal  control over financial  reporting during the Company's most
recently completed fiscal quarter that has materially affected, or is reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following  table  sets  forth  the  names,  positions  and ages of our
executive  officers and  directors.  All of our  directors  serve until the next
annual  meeting of  stockholders  or until  their  successors  are  elected  and
qualify.  Officers  are  elected by the board of  directors  and their  terms of
office  are,  except to the  extent  governed  by  employment  contract,  at the
discretion of the board of directors.

      Name                Age                         Position
--------------------  -----------  ---------------------------------------------
Mark R. Littell           54       Chief  Executive  Officer,  Chief  Financial
                                            Officer and Director


     Mark R.  Littell  has been the Chief  Executive  Officer,  Chief  Financial
Officer and a Director of Applied  Spectrum since January 1998.  Since May 1988,
Mr.  Littell  has been the  President  and  controlling  stockholder  of Norwood
Venture Corp., a Small Business Investment Company ("SBIC").  Norwood Venture is
the controlling stockholder of Applied Spectrum.

Audit Committee and Audit Committee Financial Expert

     Our board of directors functions as an audit committee and performs some of
the same functions as an audit committee including:  (1) selection and oversight
of our  independent  accountant;  (2)  establishing  procedures for the receipt,
retention and treatment of complaints  regarding  accounting,  internal controls
and auditing matters;  and (3) engaging outside  advisors.  We are not a "listed
company"  under  SEC  rules  and is  therefore  not  required  to have an  audit
committee  comprised  of  independent  directors.  Our  board of  directors  has
determined  that its members do not include a person who is an "audit  committee
financial  expert"  within the meaning of the rules and  regulations of the SEC.
Our board of directors has  determined  that each of its members is able to read
and understand  fundamental  financial  statements and has substantial  business
experience that results in that member's financial sophistication.  Accordingly,
the board of directors  believes  that each of its members  have the  sufficient
knowledge and experience necessary to fulfill the duties and obligations that an
audit committee would have.

Code of Ethics

     A code of ethics relates to written standards that are reasonably  designed
to deter wrongdoing and to promote:

     o    Honest and ethical  conduct,  including the ethical handling of actual
          or apparent  conflicts of interest  between  personal and professional
          relationships;


                                       13
<PAGE>

     o    Full, fair, accurate,  timely and understandable disclosure in reports
          and  documents  that are filed with,  or submitted  to, the SEC and in
          other public communications made by an issuer;
     o    Compliance with applicable governmental laws, rules and regulations;
     o    The  prompt  internal  reporting  of  violations  of  the  code  to an
          appropriate person or persons identified in the code; and
     o    Accountability for adherence to the code.

     Due to the limited scope of our current  operations,  we have not adopted a
corporate  code of ethics  that  applies  to its  principal  executive  officer,
principal accounting officer, or persons performing similar functions.

Board Meetings; Nominating and Compensation Committees

     Our  directors  and  officers  do not receive  remuneration  from us unless
approved by the Board of Directors  or pursuant to an  employment  contract.  We
have no  employment  contracts  currently in place.  Directors may be paid their
expenses,  if any, of attendance at such meeting of the Board of Directors,  and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated fixed  compensation as director.  No such payment shall preclude any
director  from  serving  us in any other  capacity  and  receiving  compensation
therefor.  No compensation  has been paid to our directors for attendance at any
meetings during the last fiscal year.

     We are not a  "listed  company"  under  SEC  rules  and are  therefore  not
required to have a compensation  committee or a nominating committee.  We do not
currently  have a  compensation  committee.  Our Board of Directors is currently
comprised of only one member,  Mark R. Littell,  who is also Applied  Spectrum's
sole officer acting as Chief Executive Officer and Chief Financial  Officer.  We
have no employees,  and any  compensation for our directors and officers must be
approved by the Board of Directors.

     We neither  have a  nominating  committee  for  persons to be  proposed  as
directors  for  election  to the  Board  of  Directors  nor a formal  method  of
communicating  nominees from  shareholders.  We do not have any  restrictions on
shareholder  nominations under our certificate of incorporation or by-laws.  The
only  restrictions  are those  applicable  generally  under Delaware law and the
federal  proxy  rules.  Currently,  the  entire  Board of  Directors  decides on
nominees, on the recommendation of the sole member of the Board of Directors who
is not  independent.  The Board of  Directors  will  consider  suggestions  from
individual   shareholders,   subject  to  evaluation  of  the  person's  merits.
Stockholders  may  communicate  nominee  suggestions  directly to the sole Board
member,  accompanied by biographical  details and a statement of support for the
nominees.  The  suggested  nominee  must also  provide a statement of consent to
being  considered  for  nomination.  Although  there are no formal  criteria for
nominees,  the Board of  Directors  believes  that  persons  should be  actively
engaged in business endeavors, have a financial background, and be familiar with
acquisition strategies and money management.

     Because the  management  and  directors of the Company are the same person,
the Board of Directors  has  determined  not to adopt a formal  methodology  for
communications  from shareholders on the belief that any communication  would be
brought to the Boards' attention by virtue of the co-extensive capacities served
by Mark R. Littell.

Conflicts of Interest

     Certain  conflicts  of  interest  existed  at  September  30,  2005 and may
continue to exist  between us and our sole  officer and director due to the fact
that he has other  business  interests to which he devotes his  attention.  Each
officer  and  director  may  continue  to do so  notwithstanding  the fact  that
management time should be devoted to our business.

     Certain conflicts of interest may exist between us and our management,  and
conflicts  may  develop  in the  future.  We have not  established  policies  or
procedures  for the  resolution  of current or potential  conflicts of interests
between us, our officers and directors or affiliated  entities.  There can be no
assurance that management will resolve all conflicts of interest in favor of us,
and  conflicts  of  interest  may arise that can be  resolved  only  through the
exercise  by  management  their best  judgment as may be  consistent  with their
fiduciary  duties.  Our  management  will try to resolve  conflicts  to the best
advantage of all concerned.


                                       14
<PAGE>

Indemnification

     Under  Delaware  law and  pursuant  to our  articles of  incorporation  and
bylaws,  we may indemnify  our officers and  directors for various  expenses and
damages   resulting   from  their  acting  in  these   capacities.   Insofar  as
indemnification  for liabilities arising under the Securities Act of 1933 may be
permitted to our officers or directors pursuant to those provisions, our counsel
has informed us that, in the opinion of the SEC, this indemnification is against
public   policy  as   expressed  in  the   Securities   Act,  and  is  therefore
unenforceable.

Section 16(a) Beneficial Ownership Reporting

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
that  directors,  executive  officers  and  persons who own more than 10% of the
outstanding common stock of certain reporting  companies file initial reports of
ownership  and reports of changes in  ownership  in such  common  stock with the
Securities and Exchange Commission ("SEC"). Officers, directors and stockholders
who own more  than 10% of the  outstanding  common  stock of  certain  reporting
companies are required by the SEC to furnish such  companies  with copies of all
Section 16(a)  reports they file. We are required to comply with Section  16(a).
Accordingly,  stock ownership  information  contained in this report is based on
what is known to us.

ITEM 10. EXECUTIVE COMPENSATION

     The following Executive  Compensation Chart highlights the compensation for
our executive officers. No other executive officers received salary and bonus in
excess of $100,000 for the prior three fiscal years.

<TABLE>
<CAPTION>
                                                                                Long Term Compensation
                                                                        --------------------------------------
                                         Annual Compensation                     Awards             Payouts
                               ---------------------------------------- -------------------------- -----------
                                                                                      Securities
        Name                                               Other        Restricted    Underlying
         and                                               Annual          Stock       Options/       LTIP        All Other
      Principal                  Salary      Bonus       Compensation     Award(s)    SARs (#)      Payouts       Compensation
      Position          Year       ($)        ($)           ($)             ($)          (2)          ($)            ($)
---------------------- ------- ------------ --------- ----------------- ------------ ------------- ----------- -----------------
<S>                     <C>        <C>         <C>           <C>            <C>          <C>          <C>            <C>
Mark R.  Littell (CEO   2005       $0          $0            $0             N/A          N/A          N/A            N/A
and CFO)                2004       $0          $0            $0             N/A          N/A          N/A            N/A
                        2003       $0          $0            $0             N/A          N/A          N/A            N/A
---------------------- ------- ------------ --------- ----------------- ------------ ------------- ----------- -----------------
</TABLE>


     There was no other  compensation  paid to Mark R. Littell during the fiscal
year ended  September  30, 2005 in his capacity as an officer or director of the
Company.  There were no option grants to Mark R. Littell  during the fiscal year
ended  September  30,  2005,  and no options  were  exercised by Mark R. Littell
during the fiscal year ended September 30, 2005.

         We did not pay any  compensation  to any  director  in the  year  ended
September 30, 2005.


                                       15
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     We have set forth in the following table certain information  regarding our
common stock beneficially owned as of December 14, 2005 for (i) each stockholder
we know to be the  beneficial  owner  of 5% or  more of our  outstanding  common
stock,  (ii)  each of our  executive  officers  and  directors,  and  (iii)  all
executive  officers and directors as a group. In general,  a person is deemed to
be a "beneficial  owner" of a security if that person has or shares the power to
vote or direct the voting of such security, or the power to dispose or to direct
the  disposition  of such  security.  A person is also deemed to be a beneficial
owner of any securities of which the person has the right to acquire  beneficial
ownership  within 60 days. To the best of our knowledge,  all persons named have
sole  voting  and  investment  power  with  respect  to such  shares,  except as
otherwise noted. At December 14, 2005, 2,953,941 shares of our common stock were
outstanding.

<TABLE>
<CAPTION>
                  Name                       Number of Shares Beneficially                Percent of Shares
                                                         Owned*

<S>                                          <C>                                          <C>
Norwood Venture Corp.                                   2,282,562                               77.3%
c/o Mark R. Littell
65 Norwood Avenue
Montclair, NJ 07043 (1)

Mark R. Littell                                         2,282,562                               77.3%
65 Norwood Avenue
Montclair, NJ 07043 (2)

All  Executive  Officers and Directors as               2,282,562                               77.3%
a group (one person)
</TABLE>

     *    Beneficial ownership is determined in accordance with the rules of the
          Securities and Exchange  Commission and generally  includes  voting or
          investment  power with respect to  securities.  Shares of common stock
          issuable   upon  the   exercise  of  options  or  warrants   currently
          exercisable or convertible  within 60 days, are deemed outstanding for
          computing the percentage  ownership of the person holding such options
          or  warrants  but  are  not  deemed   outstanding  for  computing  the
          percentage ownership of any other person.

     (1)  Mark R.  Littell  is the  President  and  controlling  stockholder  of
          Norwood Venture Corp. and exercises  voting and investment  power over
          with respect to the shares of common stock of Applied  Spectrum  owned
          by Norwood Venture.

     (2)  Includes the 2,282,562  shares of Applied  Spectrum common stock owned
          by  Norwood  Venture  over  which  Mark  R.  Littell  has  voting  and
          investment control.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We anticipate that, in connection with the proposed sale by Norwood Venture
of certain shares of our common stock as contemplated by the Purchase Agreement,
Mark R.  Littell  and Norwood  Venture  will enter into an  agreement  releasing
Applied Spectrum from any and all claims they have against Applied Spectrum.

     Other than the above  transactions or otherwise set forth in this report we
have not entered into any material  transactions  with any  director,  executive
officer,  and nominee for director,  beneficial owner of five percent or more of
our common stock,  or family members of such persons.  Also, we have not had any
transactions with any promoter. We are not a subsidiary of any company.


                                       16
<PAGE>

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a) Exhibits.

         The  following  exhibits are  incorporated  by reference or included as
part of this report:

Exhibit Number Description
-------------- -----------
     2.1       Articles of Merger between Applied Spectrum Technologies, Inc., a
               Minnesota corporation, and Applied Spectrum Technologies, Inc., a
               Delaware  corporation,  together  with the  Agreement and Plan of
               Merger. Incorporated by reference to Exhibit 2.1 of the Company's
               Current  Report on Form 8-K dated  November 17, 2005 and filed on
               November 22, 2005.

     3.1       Certificate of Incorporation  of Applied  Spectrum  Technologies,
               Inc.,  a  Delaware  corporation.  Incorporated  by  reference  to
               Exhibit  3.3 of the  Company's  Current  Report on Form 8-K dated
               November 17, 2005 and filed on November 22, 2005.

     3.2       Bylaws  of  Applied  Spectrum  Technologies,   Inc.,  a  Delaware
               corporation.  Incorporated  by  reference  to Exhibit  3.4 of the
               Company's  Current Report on Form 8-K dated November 17, 2005 and
               filed on November 22, 2005.

     31        Certification  pursuant to Section 302 of the  Sarbanes-Oxley Act
               of 2002. Included as Exhibit in this Form 10-KSB.

     32        Certification  of Chief  Executive  Officer  and Chief  Financial
               Officer of the Company,  pursuant to 18 U.S.C.  Section  1350, as
               adopted  pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
               2002. Included as Exhibit in this Form 10-KSB.

(b) Reports on Form 8-K.

         On  September  20,  2005,  in its  Current  Report  on Form  8-K  dated
September 16, 2005, the Company  reported the  commencement  of quotation of its
common stock on the OTC BB.

         On October 19, 2005,  in its Current  Report on Form 8-K dated  October
13,  2005,  the  Company  reported  the  change  of its  certifying  accountants
described more fully in Item 8 of this Report.

         On November 22, 2005,  in its Current  Report on Form 8-K dated October
17, 2005,  the Company  reported the  completion of its  redomestication  merger
described more fully in Item 1 of this Report.


                                       17
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1) AUDIT FEES

     The  aggregate  fees  billed  for  each of the last two  fiscal  years  for
professional  services rendered by the principal accountant for the audit of the
Company's  annual  financial  statements  and  review  of  financial  statements
included  in the  Company's  Form  10-KSB  (17 CFR  249.308a)  or 10-QSB (17 CFR
249.308b) or services that are normally provided by the accountant in connection
with statutory and regulatory  filings or engagements for those fiscal years was
$7,500 for the fiscal  year ended  September  30, 2004 and $7,500 for the fiscal
year ended September 30, 2005.

(2) AUDIT-RELATED FEES

     There  were no  fees  billed  in each of the  last  two  fiscal  years  for
assurance and related  services by the principal  accountant that are reasonably
related to the  performance  of the audit or review of the  Company's  financial
statements.

(3) TAX FEES

     There  were no  fees  billed  in each of the  last  two  fiscal  years  for
professional  services rendered by the principal  accountant for tax compliance,
tax advice, and tax planning.

(4) ALL OTHER FEES

     There  were no other fees  billed in each of the last two fiscal  years for
products  and  services  provided by the  principal  accountant,  other than the
services reported above.

RE-APPROVAL POLICIES AND PROCEDURES

     Before the accountant is engaged by the issuer to render audit or non-audit
services,  the  engagement  is approved by the  Company's the board of directors
acting as the audit committee.


                                       18
<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                             APPLIED SPECTRUM TECHNOLOGIES, INC.


Date: December 28, 2005                      By:  /s/ Mark R. Littell
                                                  ----------------------
                                                  Mark R. Littell
                                                  Chief Executive Officer

     In accordance with the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities and on December 28, 2005.

         Signatures                                           Title


         /s/ Mark R. Littell                      Chief Executive Officer, Chief
         ---------------------------              Financial Officer and Director

<PAGE>


                       APPLIED SPECTRUM TECHNOLOGIES, INC.

                              FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005









                                       1
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

                                                                         Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-1a

REPORT OF PREVIOUS, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM        F-1b

BALANCE SHEETS                                                           F-2

STATEMENTS OF OPERATIONS                                                 F-3

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)                              F-4

STATEMENTS OF CASH FLOWS                                                 F-5

NOTES TO FINANCIAL STATEMENTS                                         F-6 to F-7


                                       2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Applied Spectrum Technologies, Inc.
Upper Montclair, New Jersey

We have audited the accompanying balance sheet of Applied Spectrum Technologies,
Inc.  as of  September  30,  2005  and the  related  statements  of  operations,
stockholders'  equity and cash flows for the year then ended. These consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted our audit in  accordance  with  standards of the Public  Accounting
Oversight  Board  (United  States).  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Applied Spectrum Technologies,
Inc. as of September 30, 2005,  and the results of its operations and cash flows
for the year then  ended in  conformity  with  accounting  principles  generally
accepted in the United States.


/s/ De Joya Griffith & Company, LLC
De Joya Griffith & Company, LLC
December 22, 2005
Henderson, Nevada


                                      F-1a
<PAGE>

        REPORT OF PREVIOUS, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Applied Spectrum Technologies, Inc.

We have audited the accompanying statements of operations, shareholders' equity,
and  cash  flows of  Applied  Spectrum  Technologies,  Inc.  for the year  ended
September 30, 2004.  These financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  results of  operations  and cash flows of Applied
Spectrum Technologies, Inc. for the year ended September 30, 2004, in conformity
with U.S. generally accepted accounting principles.


/s/ HOBERMAN, MILLER, GOLDSTEIN & LESSER, CPA'S, P.C.

October 19, 2004


                                      F-1b
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.

                                 BALANCE SHEETS

                                                          September 30, 2005
                                                          ------------------
ASSETS

CURRENT ASSET

     Other assets                                         $          18,936
                                                          -----------------

TOTAL ASSETS                                              $          18,936
                                                          =================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

     Accounts payable and accrued expenses                $           1,568
                                                          -----------------
     Total current liabilities                                        1,568

STOCKHOLDERS' EQUITY
     Common stock, $0.01 par value, 10,000,000
         shares authorized; 2,953,941 shares
         issued and outstanding                                      29,539
     Additional paid-in capital                                  16,064,213
     Accumulated deficit                                        (16,076,384)
                                                          ------------------
     Total stockholders' equity                                      17,368
                                                          -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $          18,936
                                                          =================

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


                                      F-2
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                  For the Years Ended
                                                                                      September 30,
                                                                       -----------------------------------------
                                                                              2005                    2004
                                                                       -----------------       -----------------
<S>                                                                    <C>                     <C>
Revenue                                                                $                -      $                -

Operating expenses:
     General and administrative expenses                                           1,800                   9,866
                                                                       -----------------       -----------------
Loss from operations                                                              (1,800)                (9,866)

Other income (expense)
     Interest income                                                                 410                     180
     Other income                                                                  5,912                       -
                                                                       -----------------       -----------------
Net income (loss)                                                      $           4,522       $          (9,686)
                                                                       =================       =================
Net income (loss) per share (basic and diluted)                        $            0.00*      $           (0.00)*
                                                                       ==================      =================
Weighted average shares of common stock outstanding                            2,953,941               2,953,941
                                                                       =================       =================
</TABLE>

* Less than $ 0.01 per share

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


                                      F-3
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                Common Stock              Additional
                                          ------------------------          Paid-in          Accumulated
                                             Share       Amount             Capital             Deficit          Total
                                          ---------    -----------     --------------------------------------------------
<S>                                       <C>          <C>             <C>                <C>                 <C>
Balance, October 1, 2003                  2,953,941    $    29,539     $    16,062,413    $    (16,071,220)   $    20,732

Net loss for the year ended
     September 30, 2004                           -              -                   -              (9,686)        (9,686)
                                          ---------    -----------     ---------------    ----------------    -----------

Balance, September 30, 2004               2,953,941         29,539          16,062,413         (16,080,906)        11,046

Contributed capital - rent                        -              -               1,800                   -          1,800

Net income for the year ended
     September 30, 2005                           -              -                   -               4,522          4,522
                                          ---------    -----------     ---------------    ----------------    -----------

Balance, September 30, 2005               2,953,941    $    29,539     $    16,064,213    $    (16,076,384)   $    17,368
                                          =========    ===========     ===============    ================    ===========
</TABLE>

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


                                      F-4
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  For the Years Ended
                                                                                       September 30,
                                                                       -----------------------------------------
                                                                              2005                    2004
                                                                       -----------------       -----------------
<S>                                                                    <C>                     <C>
CASH FLOWS FROM OPERATIONS

Net income (loss)                                                      $           4,522       $          (9,686)
Adjustments to reconcile net income (loss) to net
     cash used in operating activities:
     Rent expense contributed                                                      1,800                       -
     Accrued liabilities written-off as other income                              (5,912)

     Changes in:
         Accounts payable                                                         (8,034)                      -
         Accrued expenses                                                            (20)                  7,372
         Other assets                                                              7,644                   2,314
                                                                       -----------------       -----------------
              Net cash used in operating activities                                    -                       -
                                                                       -----------------       -----------------
Net change in cash                                                                     -                       -
Cash, beginning of period                                                              -                       -
                                                                       -----------------       -----------------
Cash, end of period                                                    $               -       $               -
                                                                       =================       =================
</TABLE>

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


                                      F-5
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2005

1.   Summary of Significant Accounting Policies

     The Company

     Applied  Spectrum  Technologies,  Inc. (the "Company") was  incorporated on
     February  17,  1982 in the State of  Minnesota  and  currently  has minimal
     activities.   The  Company  was  previously  engaged  in  the  development,
     manufacture, marketing and sale of products for the digital transmission of
     data.

     Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  date of the  financial  statements  and  the  reported
     amounts of  revenues  and  expenses  during the  reporting  period.  Actual
     results could differ from those estimates.

     Loss Per Share

     Loss per share is computed  by dividing  the net loss for the period by the
     weighted  average  number  of shares of  common  stock.  Outstanding  stock
     options  are not  included in the loss per share  calculations  as they are
     anti-dilutive.

2.   Other Income

     Other income  totaling $5,912 for the year ended September 30, 2005 consist
     of accrued  liabilities  dating back to 2001 which have been written off by
     the Company.

3.   Income Taxes

     The Company  accounts  for income  taxes in  accordance  with  Statement of
     Financial Accounting Standards No. 109, ("SFAS 109") "Accounting for Income
     Taxes." Under the asset and  liability  method,  deferred  income taxes are
     recognized for the tax consequences of "temporary  differences" by applying
     enacted  statutory  tax rates  applicable  to future  years to  differences
     between  the  financial  statements  carrying  amounts and the tax bases of
     existing assets and liabilities. Under SFAS 109, deferred tax assets may be
     recognized for temporary differences that will result in deductible amounts
     in future periods. A valuation allowance is recognized, if on the weight of
     available evidence,  it is more likely than not that some portion or all of
     the  deferred  tax asset  will not be  realized.  As a result of changes in
     ownership  of the Company,  pursuant to Internal  Revenue Code Section 382,
     the utilization of the NOL will be substantially  reduced. In addition, due
     to  uncertainties  surrounding the Company's  ability to utilize the NOL in
     future years,  the Company  established a valuation  allowance equal to the
     deferred tax asset.


                                      F-6
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2005

4.   Related Party Transactions

     Mr. Mark Littell,  the Company's Chief Executive  Officer is also President
     of Norwood  Venture  Corp.,  a  shareholder  in the  Company.  The  Company
     maintains  its office in the office of Norwood  Venture.  The office  space
     provided by Norwood  Venture has been valued at $150 per month and has been
     accounted  for  contributed  capital since there is no actual cash payments
     involved.  For the year ended  September 30, 2005, the Company had recorded
     $1,800 of rent expense as contributed capital.

5.   Other Assets

     Other  assets  consist of three bank  accounts  held in the name of Norwood
     Venture  Corp.,  a related  party  (see  Note 4),  for the  benefit  of the
     Company.  These funds are  segregated  and are for  specific use by Applied
     Spectrum Technologies, Inc.

6.   Recent Accounting Pronouncements

     In December  2004,  the FASB issued a revised  Statement  123 (SFAS  123R),
     "Accounting  for  Stock-Based  Compensation"  requiring  public entities to
     measure the cost of employee  services received in exchange for an award of
     equity  instruments  based on  grant  date  fair  value.  The cost  will be
     recognized  over the period during which an employee is required to provide
     service in exchange for the award - usually the vesting period.

     The  adoption  of this new  statement  is not  expected  to have a material
     effect on the Company's current financial position,  results of operations,
     or cash flows.

7.   Subsequent Event

     On October 7, 2005, the Company and Applied Spectrum Technologies,  Inc., a
     Delaware  corporation   ("Applied  -  Delaware")  entered  into  a  certain
     Agreement  and Plan of Merger  ("Plan of Merger").  Pursuant to the Plan of
     Merger,  subject to stockholder approval, the Company was to merge with and
     into  Applied - Delaware  for the  purposes of the  redomestication  of the
     Company  from  the  State  of  Minnesota  to the  State  of  Delaware  (the
     "Merger").

     On  November  14,  2005,  the  holders  of  a  majority  of  the  Company's
     outstanding  shares of common  stock  approved  the Merger.  The Merger was
     completed on November 17, 2005,  and the Articles of Merger were filed with
     the States of Minnesota and Delaware on November 17, 2005.

     Upon completion of the Merger,  the Certificate of Incorporation and Bylaws
     of Applied - Delaware became the Company's certificate of incorporation and
     by-laws,  respectively. As such, the Company's Certificate of Incorporation
     now provides for authorized  capital  consisting of  150,000,000  shares of
     common  stock,  par value of  $0.001  per  share  and  5,000,000  shares of
     preferred stock, par value $0.001 per share.


                                      F-7
<PAGE>

                                  Exhibit Index

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   Exhibit
   Number      Description of Exhibit
--------------------------------------------------------------------------------
     31        Certification  pursuant to Section 302 of the  Sarbanes-Oxley Act
               of 2002.
--------------------------------------------------------------------------------
     32        Certification  of Chief  Executive  Officer  and Chief  Financial
               Officer of the Company,  pursuant to 18 U.S.C.  Section  1350, as
               adopted  pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
               2002.
--------------------------------------------------------------------------------