UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form 10-K




(Mark
      One)x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended December 31, 2008OR
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from
                  
      to


Commission file number: 0-23000





TRESTLE
HOLDINGS, INC.


(Exact
name of registrant as specified in its charter)




DELAWARE
            95-4217605(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer Identification No.)P.O.
      BOX 4198,
              NEWPORT
      BEACH, CALIFORNIA
            92661(Address
      of principal executive offices)
            (Zip
      Code)




Registrant’s
telephone number, including area code:


949-903-0468




Securities
registered pursuant to Section 12(b) of the Act:




Title
      of each class
            Name
      of each exchange on which registeredNone
            None




Securities
registered pursuant to Section 12(g) of the Act:




Common
Stock, par value $0.001 per share




Indicate
by check mark if the registrant is a well-known seasoned issuer as defined in
Rule 405 of the Securities Act.  Yes     No x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes   No x




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




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.  (Check one):


Large
      accelerated filer 
            Accelerated
      filer Non-accelerated
      filer  (Do not check if a smaller reporting company)
            Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined by Rule
12b-2 of the Act).  Yes x
     No   




At
January 16, 2009, the aggregate market value of the voting common stock held by
non-affiliates of the Registrant (without admitting that any person whose shares
are not included in such calculation is an affiliate) was approximately
$123,000.  At January 20, 2009, there were 143,257,000 shares of the
Registrant’s common stock outstanding.




DOCUMENTS
INCORPORATED BY REFERENCE




None.














FORWARD-LOOKING
STATEMENTS





This report includes forward-looking
statements with-in the meaning of Section 27A of the Securities Act (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). We have based these statements on our beliefs
and assumptions, based on information currently available to us. These
forward-looking statements are subject to risks and uncertainties.
Forward-looking statements include the information concerning our possible or
assumed future results of operations, our total market opportunity and our
business plans and objectives set forth under the sections entitled "Business"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."





Forward-looking statements are not
guarantees of performance. Our future results and requirements may differ
materially from those described in the forward-looking statements. Many of the
factors that will determine these results and requirements are beyond our
control. In addition to the risks and uncertainties discussed in "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," investors should consider those discussed under "Risk Factors" and,
among others, the following:





Since the sale of substantially all of
our assets to Clarient, we are a non-operating company and are seeking a
suitable transaction with a private company; however we may not find a suitable
candidate or transaction.  If we are unable to consummate a suitable
transaction we will be forced to liquidate and dissolve, which will take three
years to complete and may result in our distributing less cash to our
shareholders.  Additionally, we will be spending cash during the
winding down of the Company and may not have enough cash to distribute to our
shareholders.





These forward-looking statements speak
only as of the date of this report. We do not intend to update or revise any
forward-looking statements to reflect changes in our business anticipated
results of our operations, strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.





PART
I





Item
1.  Description of Business





General





Trestle
Holdings, Inc. ("Trestle Holdings", "Company", “We” or “Our”) seeks
suitable candidates for a business combination with a private
company.  We previously developed and sold digital tissue imaging and
telemedicine applications linking dispersed users and data primarily in the
healthcare and pharmaceutical markets.





On August
20, 2008, pursuant to a Share Purchase Agreement dated August 19, 2008, by and
between W Holdings, LLC (“Holdings”), the Registrant’s former majority
stockholder, and MKM Opportunity Master Fund, Ltd. (“MKM”), Holdings sold to MKM
114,605,772 shares of the Registrant’s common stock, for aggregate cash
consideration equal to $475,000. Also on August 20, 2008, Holdings repurchased
33.33% of its Membership Interests from Strategic Turnaround Equity Partners, LP
(“Strategic”), in exchange for 20,394,228 shares of the Registrant’s common
stock and cash consideration equal to $75,507.  Also on August 20,
2008, W-Net, Inc. assigned to MKM all of its right, privilege, benefit and
remedies in, to and under that certain Revolving Promissory Note dated March 26,
2008 and expiring on September 30, 2008, executed and issued by the Registrant
for the benefit of W-Net, Inc.  As a result of the foregoing
transactions, Holdings no longer holds any shares of the
Registrant.  Also as a result of the foregoing transactions, Holdings
became wholly-owned by W-Net, Inc., a company that is wholly-owned by David
Weiner, a member of the Registrant’s Board of Directors.  Pursuant to
the terms of the Share Purchase Agreement and effective as of the closing of the
transactions contemplated by the Share Purchase Agreement, MKM owns 114,605,772
shares of the Company’s common stock out of a total of 143,257,214
shares  issued and outstanding, or approximately 80%.





On May 5,
2007, W-Net, Inc., a California corporation (“W-Net”), purchased 135,000,000
shares of our Common Stock, par value $0.001 per share (the “Common Shares”),
for an aggregate purchase price of $350,000, or $0.00259 per share.





On
September 22, 2006, we consummated the sale of substantially all of its assets
to Clarient, Inc. for $3,000,000, consisting of approximately $2,203,000 in
cash, $643,000 for the cancellation of the loans from Clarient and assumption of
approximately $154,000 of liabilities.





-
2 -


Competition





Our
primary goal is the acquisition of a target company or business seeking the
perceived advantages of being a publicly held corporation. The Company faces
vast competition from other shell companies with the same objectives. The
Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. A large number of established and well-financed entities,
including small public companies and venture capital firms, are active in
mergers and acquisitions of companies that may be desirable target candidates
for us. Nearly all these entities have significantly greater financial
resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.





Patent
and Trademarks




We
currently do not own any patents, trademarks or licenses of any
kind.




Government
Regulations




There are
no government approvals necessary to conduct our current business.





Employees





The
Company currently has no employees.  The Company engages the services of
independent consultants to assist it with management, software programming and
development.  We plan to engage full-time employees in this area as
our business develops.


-
3 -


Item
1A.  Risk Factors





The following important factors, and
the important factors described elsewhere in this report or in our other filings
with the SEC, could affect (and in some cases have affected) our results and
could cause our results to be materially different from estimates or
expectations.  Other risks and uncertainties may also affect our
results or operations adversely.  The following and these other risks
could materially and adversely affect our business, operations, results or
financial condition.





We
have a history of net losses and will not achieve or maintain
profitability.





We have a history of incurring losses
from operations. As of December 31, 2008, we had an accumulated deficit of
approximately $52,609,000, of which approximately $52,193,000 was incurred prior
to the sale of our tissue imaging and telemedicine business lines to
Clarient.  We anticipate that our existing cash and cash equivalents
will be sufficient to fund our business needs until January 2009. Our ability to
continue may prove more expensive than we currently anticipate and we may incur
significant additional costs and expenses in connection with seeking a suitable
transaction. In the event the Company uses all of its cash resources, W-Net,
Inc. has indicated the willingness to loan the Company funds at the prevailing
market rate until such business combination is consummated.





We
are a non-operating company seeking a suitable transaction and may not find a
suitable candidate or transaction.





Since the sale of substantially all of
our assets to Clarient, we are a non-operating company and are seeking a
suitable transaction with a private company; however, we may not find a suitable
candidate or transaction.  If we are unable to consummate a suitable
transaction we will be forced to liquidate and dissolve which will take three
years to complete and may result in our distributing less cash to our
shareholders.  Additionally, we will be spending cash during the
winding down of the Company and may not have enough cash to distribute to our
shareholders.





We
cannot assure you of the exact amount or timing of any future distribution to
our stockholders.





The precise nature, amount and timing
of any future distribution to our stockholders will depend on and could be
delayed by, among other things, the opportunities for a private company
transaction, administrative and tax filings during or associated with our
seeking a private company transaction or any subsequent dissolution, potential
claim settlements with creditors, and unexpected or greater than expected
operating costs associated with any potential private company transaction or any
subsequent liquidation. Furthermore, we cannot provide any assurances that we
will actually make any distributions.  Any amounts we actually
distribute to our stockholders may be less than the price or prices at which our
common stock has recently traded or may trade in the future.




We
will continue to incur claims, liabilities and expenses that will reduce the
amount available for distribution to stockholders.




Claims,
liabilities and expenses incurred while seeking a private company transaction or
any subsequent dissolution, such as legal, accounting and consulting fees and
miscellaneous office expenses, will reduce the amount of assets available for
future distribution to stockholders. If available cash and amounts received on
the sale of non-cash assets are not adequate to provide for our obligations,
liabilities, expenses and claims, we may not be able to distribute meaningful
cash, or any cash at all, to our stockholders.





We
will continue to incur the expenses of complying with public company reporting
requirements.




We have
an obligation to continue to comply with the applicable reporting requirements
of the Securities Exchange Act of 1934, as amended, even though compliance with
such reporting requirements is economically burdensome.


-
4 -




In
the event of liquidation, our Board of Directors may at any time turn management
of the liquidation over to a third party, and our directors may resign from our
board at that time.




If we are
unable to find or consummate a suitable private company transaction, our
directors may at any time turn our management over to a third party to commence
or complete the liquidation of our remaining assets and distribute the available
proceeds to our stockholders, and our directors may resign from our board at
that time. If management is turned over to a third party and our directors
resign from our board, the third party would have sole control over the
liquidation process, including the sale or distribution of any remaining
assets.




If
we are deemed to be an investment company, we may be subject to substantial
regulation that would cause us to incur additional expenses and reduce the
amount of assets available for distribution.




If we
invest our cash and/or cash equivalents in investment securities, we may be
subject to regulation under the Investment Company Act of 1940. If we are deemed
to be an investment company under the Investment Company Act because of our
investment securities holdings, we must register as an investment company under
the Investment Company Act. As a registered investment company, we would be
subject to the further regulatory oversight of the Division of Investment
Management of the Securities and Exchange Commission, and our activities would
be subject to substantial regulation under the Investment Company Act.
Compliance with these regulations would cause us to incur additional expenses,
which would reduce the amount of assets available for distribution to our
stockholders. To avoid these compliance costs, we intend to invest our cash
proceeds in money market funds and government securities, which are exempt from
the Investment Company Act but which currently provide a very modest
return.




If
we fail to create an adequate contingency reserve for payment of our expenses
and liabilities,  in the event of dissolution, our stockholders could
be held liable for payment to our creditors of each such stockholder’s pro rata
share of amounts owed to the creditors in excess of the contingency reserve, up
to the amount actually distributed to such stockholder.




In the event of dissolution or a
distribution of substantially all our assets, pursuant to the Delaware General
Corporation Law, we will continue to exist for three years after the dissolution
became effective or for such longer period as the Delaware Court of Chancery
shall direct, for the purpose of prosecuting and defending suits against us and
enabling us gradually to close our business, to dispose of our property, to
discharge our liabilities and to distribute to our stockholders any remaining
assets. Under the Delaware General Corporation Law, in the event we fail to
create an adequate contingency reserve for payment of our expenses and
liabilities during this three-year period, each stockholder could be held liable
for payment to our creditors of such stockholder’s pro rata share of amounts
owed to creditors in excess of the contingency reserve, up to the amount
actually distributed to such stockholder.





However, the liability of any
stockholder would be limited to the amounts previously received by such
stockholder from us (and from any liquidating trust or trusts) in the
dissolution. Accordingly, in such event a stockholder could be required to
return all distributions previously made to such stockholder. In such event, a
stockholder could receive nothing from us under the plan of dissolution.
Moreover, in the event a stockholder has paid taxes on amounts previously
received, a repayment of all or a portion of such amount could result in a
stockholder incurring a net tax cost if the stockholder’s repayment of an amount
previously distributed does not cause a commensurate reduction in taxes payable.
There can be no assurance that any contingency reserve established by us will be
adequate to cover any expenses and liabilities.





Our auditors have
expressed a going concern opinion.





Primarily as a result of our recurring
losses and our lack of liquidity, the Company received a report from our
independent auditors that includes an explanatory paragraph describing the
substantial uncertainty as to our ability to continue as a going concern for the
year ended December 31, 2008.





-
5 -


Any
future sale of a substantial number of shares of our common stock could depress
the trading price of our common stock, lower our value and make it more
difficult for us to pursue or consummate a private company
transaction.





Any sale of a substantial number of
shares of our common stock (or the prospect of sales) may have the effect of
depressing the trading price of our common stock. In addition, these sales could
lower our value and make it more difficult for us to engage in a private company
transaction. Further, the timing of the sale of the shares of our common stock
may occur at a time when we would otherwise be able to engage in a private
company transaction on terms more favorable to us.





Our
stock price is likely to be highly volatile because of several factors,
including a limited public float.





The market price of our stock is likely
to be highly volatile because there has been a relatively thin trading market
for our stock, which causes trades of small blocks of stock to have a
significant impact on our stock price. You may not be able to resell our common
stock following periods of volatility because of the market's adverse reaction
to volatility.





Other factors that could cause such
volatility may include, among other things:





·
            announcements
      concerning our strategy,





·
            litigation;
      and





·
            general
      market conditions.





Because
our common stock is considered a "penny stock" any investment in our common
stock is considered to be a high-risk investment and is subject to restrictions
on marketability.





Our common stock is currently traded on
the OTC Bulletin Board and is considered a "penny stock." The OTC Bulletin Board
is generally regarded as a less efficient trading market than the NASDAQ Capital
Market.





The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks." Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, to deliver a
standardized risk disclosure document prepared by the SEC, which specifies
information about penny stocks and the nature and significance of risks of the
penny stock market. The broker-dealer also must provide the customer with bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and any salesperson in the transaction, and monthly account statements
indicating the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that, prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our common stock.





Since our common stock is subject to
the regulations applicable to penny stocks, the market liquidity for our common
stock could be adversely affected because the regulations on penny stocks could
limit the ability of broker-dealers to sell our common stock and thus your
ability to sell our common stock in the secondary market.  There is no
assurance our common stock will be quoted on NASDAQ or the NYSE or listed on any
exchange, even if eligible.





We
have additional securities available for issuance, including preferred stock,
which if issued could adversely affect the rights of the holders of our common
stock.





Our articles of incorporation authorize
the issuance of 1,500,000,000 shares of common stock and 5,000,000 shares of
preferred stock.  The common stock and the preferred stock can be
issued by, and the terms of the preferred stock, including dividend rights,
voting rights, liquidation preference and conversion rights can generally be
determined by, our board of directors without stockholder approval. Any issuance
of preferred stock could adversely affect the rights of the holders of common
stock by, among other things, establishing preferential dividends, liquidation
rights or voting powers. Accordingly, our stockholders will be dependent upon
the judgment of our management in connection with the future issuance and sale
of shares of our common stock and preferred stock, in the event that buyers can
be found therefor. Any future issuances of common stock or preferred stock would
further dilute the percentage ownership of our Company held by the public
stockholders.





-
6 -


Item 1B.  Unresolved Staff
Comments




None.




Item
2.  Properties.




We
are currently not obligated under any leases.  We currently pay $500
per month on a month to month basis for office space.





Item
3.  Legal Proceedings.




None




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





None





.PART II




Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.




Market
Prices


The
shares of our common stock have been listed and principally quoted on the OTC
Bulletin Board under the trading symbol “TLHO.OB” since October 6,
2003.  Prior to October 6, 2003, the Company’s common stock was traded
on the OTC Bulletin Board under the symbol “SLDE.OB” and prior to August 9,
2002, the Company’s common stock was traded on the OTC Bulletin Board under the
symbol “SUNE.OB.”




The
following table sets forth, for the fiscal quarters indicated, the high and low
sale price for our common stock, as reported on the OTC Bulletin
Board.




Quarterly
      period
            High
            LowFiscal
      year ended December 31, 2007:First
      Quarter
            $0.11
            $0.18Second
      Quarter
            $0.03
            $0.20Third
      Quarter
            $0.05
            $0.10Fourth
      Quarter
            $0.03
            $0.10Fiscal
      year ended December 31, 2008:First
      Quarter
            $0.07
            $0.03Second
      Quarter
            $0.07
            $0.01Third
      Quarter
            $0.03
            $0.01Fourth
      Quarter
            $0.02
            $0.01





Holders


As of January 19, 2009, there were
approximately 900 shareholders of the Company's Common Stock.





Dividends


With one
exception, we have not paid any cash dividends on our common stock since our
inception and do not anticipate paying any cash dividends on our common stock in
the foreseeable future.  Future dividend policy will be determined
periodically by our board of directors based upon conditions then existing,
including our financial condition, status of any transaction or liquidation and
other relevant factors.  On May 7, 2007, the Company paid a dividend
of $0.121712 per share from proceeds from the transaction with
Clarient.




-
7 -


Recent
Sale of Unregistered Securities.





None




Item 6.  Selected Financial
Data.





Not
Applicable





Item
7.   Management’s Discussion and Analysis of Financial Condition
and Results of Operations.




The
following  discussion  should be read in
conjunction  with the Financial  Statements  and
notes  thereto  included in Item 8 of Part II of this Annual
Report on Form 10-K.





Overview





The
Company is a non-operating public company and our operating results through
September 22, 2006 are not meaningful to our future results.  The
Company is seeking out suitable candidates for a business combination with a
private company.  The Company previously developed and sold digital
tissue imaging and telemedicine applications linking dispersed users and data
primarily in the healthcare and pharmaceutical markets.





On August
20, 2008, pursuant to a Share Purchase Agreement dated August 19, 2008, by and
between Holdings, the Registrant’s former majority stockholder, and MKM,
Holdings sold to MKM 114,605,772 shares of the Registrant’s common stock, for
aggregate cash consideration equal to $475,000. Also on August 20, 2008,
Holdings repurchased 33.33% of its Membership Interests from Strategic, in
exchange for 20,394,228 shares of the Registrant’s common stock and cash
consideration equal to $75,507.  Also on August 20, 2008, W-Net, Inc.
assigned to MKM all of its right, privilege, benefit and remedies in, to and
under that certain Revolving Promissory Note dated March 26, 2008 and expiring
on September 30, 2008, executed and issued by the Registrant for the benefit of
W-Net, Inc.  As a result of the foregoing transactions, Holdings no
longer holds any shares of the Registrant.  Also as a result of the
foregoing transactions, Holdings became wholly-owned by W-Net, Inc., a company
that is wholly-owned by David Weiner, a member of the Registrant’s Board of
Directors.  Pursuant to the terms of the Share Purchase Agreement and
effective as of the closing of the transactions contemplated by the Share
Purchase Agreement, MKM owns 114,605,772 shares of the Company’s common stock
out of a total of 143,257,214 shares  issued and outstanding, or
approximately 80%.





On May 5,
2007, W-Net purchased 135,000,000 shares of the Company’s Common Shares for an
aggregate purchase price of $350,000.00, or $0.00259 per share.





On
September 22, 2006, the Company consummated the sale of substantially all of its
assets to Clarient for $3,000,000, consisting of approximately $2,203,000 in
cash, $643,000 for the cancellation of the loans from Clarient and assumption of
approximately $154,000 of liabilities.





Recently Issued Accounting
Pronouncements





Refer to
Note 2 to the consolidated financial statements for a complete description of
recent accounting standards which we have not yet been required to implement and
may be applicable to our operation, as well as those significant accounting
standards that have been adopted during 2007.





Critical Accounting
Policies





The preparation of our financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amount of expenses during the reporting period. On an ongoing basis, we evaluate
our estimates which are based on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances. The
result of these evaluations forms the basis for making judgments about the
carrying values of assets and liabilities and the reported amount of expenses
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions. The following accounting policies
require significant management judgments and estimates:





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8 -


We
account for our business acquisitions under the purchase method of accounting in
accordance with SFAS 141, "Business Combinations." The total cost of
acquisitions is allocated to the underlying net assets, based on their
respective estimated fair values. The excess of the purchase price over the
estimated fair value of the tangible net assets acquired is recorded as
intangibles. Determining the fair value of assets acquired and liabilities
assumed requires management's judgment and often involves the use of significant
estimates and assumptions, including assumptions with respect to future cash
inflows and outflows, discount rates, asset lives, and market multiples, among
other items.





We base
out estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. There can be no assurance that
actual results will not differ from these estimates.





Certain
reclassifications have been made to the prior fiscal year amounts disclosed in
the financial statements to conform to the presentation for the fiscal year
ended December 31, 2008. These reclassifications had no effect on the reported
net loss or stockholders’ equity.





Fiscal Year 2008Compared to Fiscal Year
2007




Results
from Operations




The
information below represents our historical numbers.  These numbers
are not meaningful going forward due to the sale of all of our business
lines.




Revenues




Revenues
were zero for the years ended December 31, 2008 and 2007.




Cost
of Sales




Cost of
sales was zero for the years ended December 31, 2008 and 2007.




Selling,
General and Administrative Expenses




Selling,
general and administrative expenses were $119,000 and $179,000 for the years
ended December 31, 2008 and 2007, respectively.  The decrease in
selling, general and administrative expenses was due to less activities of the
Company.




Interest
Income and Other, Net




Interest
income/(expense) and other, net was $(2,000) and $14,000 in the years ended
December 31, 2008 and 2007, respectively.  The decrease of $16,000 was
due to a lower cash balance.




Liquidity and Capital
Resources




Net cash used in operating activities
was $112,000 and $112,000 in the years ended December 31, 2008 and 2007,
respectively.





Net cash provided by/(used) in
financing activities was $82,000 and $(655,000) in 2008 and 2007,
respectively.   The decrease of $655,000 in cash used in
financing activities was primarily due to the dividend of $1,005,000 paid to the
shareholders in 2007 offset by $350,000 for the issuance of common
stock.





On May 5,
2007, W-Net, purchased 135,000,000 shares of the Common Stock, par value $0.001
per share (the “Common Shares”) of the Company for an aggregate purchase price
of $350,000.00, or $0.00259 per share.





On May 7,
2007, the Company paid a dividend of $1,005,000 to shareholders of record as of
April 19, 2007.




-
9 -


The
Company suffered recurring losses from operations and has an accumulated deficit
of $52,609,000 at December 31, 2008.  Currently, we are a
non-operating public company. The Company is seeking out suitable candidates for
a business combination with a private company.  In the event the
Company uses all of its cash resources, MKM has indicated the willingness to
loan the Company funds at the prevailing market rate until such business
combination is consummated.





Going Concern
Uncertainties





As of the date of this annual report,
there is doubt regarding our ability to continue as a going concern as we have
not generated sufficient cash flow to fund our business operations and loan
commitments.  Our future success and viability, therefore, are
dependent upon our ability to generate capital financing.  The failure
to generate sufficient revenues or raise additional capital may have a material
and adverse effect upon the Company and our shareholders.





Capital
Expenditures





None




Commitments and Contractual
Obligations




None





Off-Balance Sheet
Arrangements




As
of December 31, 2008, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.





Item
7A.   Quantitative and Qualitative Disclosures about Market
Risk.




Not
Applicable








-
10 -






Item
8.




TRESTLE
HOLDINGS, INC.





TABLE OF CONTENTS


PAGEREPORTS
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              
              12FINANCIAL
      STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2008 and
      2007Balance
      Sheets
              
              13Statements
      of Operations
              
              14Statements
      of Stockholders' Equity
              
              15Statements
      of Cash Flows
              
              16Notes
      to  Financial Statements
              
              17
      to 23

















-
11 -


REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM











To the
Board of Directors


Trestle
Holdings, Inc


Newport
Beach, California





We have
audited the consolidated balance sheets of Trestle Holdings, Inc. (the
“Company”) as of December 31, 2008 and 2007, and the related consolidated
statements of operations, stockholders’ equity and cash flows for the years then
ended.  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 audits.





We
conducted our audits 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 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 the Company as of December
31, 2008 and 2007, and the results of their operations and their cash flows for
the year then ended, in conformity with U.S. generally accepted accounting
principles.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has incurred significant losses
from operations and has an accumulated deficit of $52,609,000 as of December 31,
2008. These conditions raise substantial doubt about the Company’s ability to
continue as a going concern. These consolidated financial statements do not
include any adjustments that might result from such uncertainty.





/s/
Goldman Parks Kurland Mohidin





Encino,
California


January
      9, 2009





-
12 -





TRESTLE
HOLDINGS, INC.





CONSOLIDATED BALANCE
SHEETS





December 31,2008
              
              2007ASSETSCURRENT
      ASSETSCash
      and cash equivalents
              
              $
              1,000
              
              $
              31,000Prepaid
      expenses and other assets
              
              
              4,000
              
              7,000TOTAL
      CURRENT ASSETS
              
              
              5,000
              
              38,000TOTAL
      ASSETS
              
              $
              5,000
              
              $
              38,000LIABILITIES
      AND STOCKHOLDERS' EQUITY/(DEFICITCURRENT
      LIABILITIES:Accounts
      payable
              $
              7,000
              
              $
              1,000Note
      payable
              
              82,000
              
              
              —TOTAL
      CURRENT LIABILITIES
              
              89,000
              
              
              1,000STOCKHOLDERS'
      EQUITY/(DEFICIT):Preferred
      stock, $10 par value, 5,000,000 shares authorized, zero and zero shares
      issued and outstanding at December 31, 2008 and 2007,
      respectively
              
              —
              
              
              —Series B
      Convertible Preferred Stock, $1,000 stated value, 250,000 shares
      authorized, zero and zero shares issued and outstanding at December 31,
      2008 and 2007, respectively, liquidation preference of zero and zero at
      December 31, 2008 and 2007, respectively
              
              —
              
              
              —Common
      stock, $.001 par value, 1,500,000,000 shares authorized, 143,257,214 and
      143,257,214 issued and outstanding at December 31, 2008 and 2007,
      respectively
              
              143,000
              
              
              143,000Additional
      paid in capital
              
              52,382,000
              
              
              52,382,000Accumulated
      deficit
              
              (52,609,000
              )
              
              (52,488,000
              )Total
      stockholders' equity/(deficit)
              
              (84,000)
              
              
              37,000TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
              $
              5,000
              
              $
              38,000







See
accompanying notes to consolidated financial statements.


-
13 -




TRESTLE HOLDINGS, INC.




CONSOLIDATED
STATEMENTS OF OPERATIONS








Years
      Ended December 31,2008
            
            
            2007REVENUESProduct
            
            $
            —
            
            
            $
            —Software
      support
            
            
            —
            
            
            
            —Total
      revenues
            
            
            —
            
            
            
            —COST
      OF SALES
            
            
            —
            
            
            
            —GROSS
      PROFIT
            
            
            —
            
            
            
            —OPERATING
      EXPENSESResearch
      and development
            
            
            —
            
            
            
            —Selling,
      general and administrative expenses
            
            
            119,000
            
            
            
            179,000Total
      operating expenses
            
            
            119,000
            
            
            
            179,000LOSS
      FROM OPERATIONS
            
            
            (119,000
            )
            
            
            (179,000
            )Interest
      income/(expense) and other, net
            
            
            (2,000
            )
            
            
            14,000NET
      LOSS APPLICABLE TO COMMON STOCKHOLDERS
            
            $
            (121,000
            )
            
            $
            (165,000
            )NET
      LOSS PER SHARE OF COMMON STOCK—Basic and diluted
            
            $
            (0.001
            )
            
            $
            (0.002
            )WEIGHTED
      AVERAGE SHARES OUTSTANDING—Basic and diluted
            
            
            143,257,000
            
            
            
            96,284,000








See
accompanying notes to consolidated financial statements.


-
14 -


TRESTLE
HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY


YEARS
ENDED DECEMBER 31, 2008 and 2007











Series
      B Preferred
            
            Common
      StockShares
            
            Amount
            
            Shares
            
            Amount
            
            Additional
              Paid
      in
              Capital
            
            Accumulated
      Deficit
            
            TotalBALANCE,
      DECEMBER 31, 2006
            
            
            0
            
            $
            0
            
            8,257,000
            
            $
            8,000
            
            $
            53,172,000
            
            $
            (52,323,000
            )
            $
            857,000Issuance
      of common stock for cash
            
            
            
            
            
            
            
            135,000,000
            
            
            135,000
            
            
            215,000
            
            
            
            
            
            350,000Dividends
      paid on company common stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,005,000)
            
            
            
            
            
            (1,005,000)Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (165,000)
            
            
            (165,000)BALANCE,
      DECEMBER 31, 2007
            
            
            0
            
            $
            0
            
            143,257,000
            
            $
            143,000
            
            $
            52,382,000
            
            $
            (52,488,000)
            
            $
            37,000Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (121,000)
            
            
            (121,000)BALANCE,
      DECEMBER 31, 2008
            
            
            0
            
            $
            0
            
            143,257,000
            
            $
            143,000
            
            $
            52,382,000
            
            $
            (52,609,000)
            
            $
            (84,000)











See
accompanying notes to consolidated financial statements.








-
15 -


TRESTLE
HOLDINGS, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS





Years
      Ended December 31,2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Loss
      from continuing operations
            
            $
            (121,000
            )
            
            $
            (165,000
            )Changes
      in operating assets and liabilities, net of effects from
      acquisition/disposition of business:Prepaid
      expenses and other assets
            
            
            3,000
            
            
            
            111,000Accounts
      payable
            
            
            6,000
            
            
            
            (58,000
            )Net
      cash used in operating activities
            
            
            (112,000
            )
            
            
            (112,000
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Net
      proceeds from issuance of note payable
            
            
            82,000
            
            
            
            —Net
      proceeds from issuance of common stock
            
            
            —
            
            
            
            350,000Dividends
      paid on company common stock
            
            
            —
            
            
            
            (1,005,000
            )Net
      cash provided by/(used in) financing activities
            
            
            82,000
            
            
            
            (655,000
            )NET
      DECREASE IN CASH
            
            
            (30,000
            )
            
            
            (767,000
            )CASH,
      Beginning of year
            
            
            31,000
            
            
            
            798,000CASH,
      End of year
            
            $
            1,000
            
            
            $
            31,000





Years
      Ended December 31,2008
            
            2007SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      received/(paid) during the period for:Interest
            
            $
            —
            
            
            $
            14,000Income
      taxes
            
            
            —
            
            
            
            —





NON-CASH FINANCING
ACTIVITY:





None.





See
accompanying notes to consolidated financial statements.


-
16 -


TRESTLE
HOLDINGS, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


YEARS
ENDED DECEMBER 31, 2008 and 2007





NOTE
1.    SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





Current
Operations and Background— We are a non-operating public company
and our operating results through September 22, 2006 are not meaningful to our
future results.  We seek suitable candidates for a business
combination with a private company.  We previously developed and sold
digital tissue imaging and telemedicine applications linking dispersed users and
data primarily in the healthcare and pharmaceutical markets.





On August
20, 2008, pursuant to a Share Purchase Agreement dated August 19, 2008, by and
between Holdings, the Registrant’s former majority stockholder, and MKM,
Holdings sold to MKM 114,605,772 shares of the Registrant’s common stock, for
aggregate cash consideration equal to $475,000. Also on August 20, 2008,
Holdings repurchased 33.33% of its Membership Interests from Strategic, in
exchange for 20,394,228 shares of the Registrant’s common stock and cash
consideration equal to $75,507.  Also on August 20, 2008, W-Net, Inc.
assigned to MKM all of its right, privilege, benefit and remedies in, to and
under that certain Revolving Promissory Note dated March 26, 2008 and expiring
on September 30, 2008, executed and issued by the Registrant for the benefit of
W-Net, Inc.  As a result of the foregoing transactions, Holdings no
longer holds any shares of the Registrant.  Also as a result of the
foregoing transactions, Holdings became wholly-owned by W-Net, Inc., a company
that is wholly-owned by David Weiner, a member of the Registrant’s Board of
Directors.  Pursuant to the terms of the Share Purchase Agreement and
effective as of the closing of the transactions contemplated by the Share
Purchase Agreement, MKM owns 114,605,772 shares of the Company’s common stock
out of a total of 143,257,214 shares  issued and outstanding, or
approximately 80%.





On May 5,
2007, W-Net purchased 135,000,000 shares of the Company’s Common Shares for an
aggregate purchase price of $350,000.00, or $0.00259 per share.





On
September 22, 2006, the Company consummated the sale of substantially all of its
assets to Clarient for $3,000,000, consisting of approximately $2,203,000 in
cash, $643,000 for the cancellation of the loans from Clarient and assumption of
approximately $154,000 of liabilities.





Going
Concern — The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern.  The Company has suffered recurring losses from operations
since its inception and has an accumulated deficit of $52,609,000 at December
31, 2008.  The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classifications of liabilities that might be necessary
should the Company be unable to continue its existence.  The recovery
of the Company’s assets is dependent upon continued operations of the
Company.





In addition, the Company's recovery is
dependent upon future events, the outcome of which is
undetermined.  The Company intends to continue to attempt to raise
additional capital, but there can be no certainty that such efforts will be
successful.





Basis of
Presentation and Principles of Consolidation— The accompanying financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States of America.





Use of
Estimates —The preparation of financial statements in conformity with
generally accepted accounting principles 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.





Cash and Cash
Equivalents— The Company considers investments with original maturities
of 90 days or less to be cash equivalents.





-
17 -


Income
Taxes —The Company records income taxes in accordance with the provisions
of Statement of Financial Accounting Standards (“SFAS”) No. 109,
“Accounting for Income Taxes.”  The standard requires, among other
provisions, an asset and liability approach to recognize deferred tax
liabilities and assets for the expected future tax consequences of temporary
differences between the financial statement carrying amounts and tax basis of
assets and liabilities.  Valuation allowances are provided if, based
upon the weight of available evidence, it is more likely than not that some or
all of the deferred tax assets will not be realized.





Stock-Based
Compensation— On January 1, 2006, the Company adopted SFAS No. 123
(revised 2004), “Share-Based Payment,” (“SFAS 123(R)”) which was issued in
December 2004. SFAS 123(R) revises SFAS No. 123, “Accounting for Stock Based
Compensation,” and supersedes APB Opinion No. 25, “Accounting for Stock Issued
to Employees,” and its related interpretations. SFAS 123(R) requires recognition
of the cost of employee services received in exchange for an award of equity
instruments in the financial statements over the period the employee is required
to perform the services in exchange for the award. SFAS 123(R) also requires
measurement of the cost of employee services received in exchange for an award.
SFAS 123(R) also amends SFAS No. 95, “Statement of Cash Flows,” to require the
excess tax benefits be reported as financing cash inflows, rather than as a
reduction of taxes paid, which is included within operating cash flows. The
Company adopted SFAS 123(R) using the modified prospective method. Accordingly,
prior period amounts have not been restated. Under this application, the Company
recorded the cumulative effect of compensation expense for the unvested portion
of previously granted awards that remain outstanding at the date of adoption and
recorded compensation expense for all awards granted after the date of
adoption.





SFAS 123(R) provides that income tax
effects of share-based payments are recognized in the financial statements for
those awards that will normally result in tax deduction under existing law.
Under current U.S. federal tax law, the Company would receive a compensation
expense deduction related to non-qualified stock options only when those options
are exercised and vested shares are received. Accordingly, the financial
statement recognition of compensation cost for non-qualified stock options
creates a deductible temporary difference which results in a deferred tax asset
and a corresponding deferred tax benefit in the income statement. The Company
does not recognize a tax benefit for compensation expense related to incentive
stock options unless the underlying shares are disposed in a disqualifying
disposition.





Net Income (Loss)
Per Share — The Company computes net loss per share in accordance with
SFAS No. 128, “Earnings per Share,” and Securities and Exchange Commission
(“SEC”) Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of
SFAS No. 128 and SAB 98, basic and diluted net loss per share is computed by
dividing the net loss available to common stockholders for the period by the
weighted average number of shares of common stock outstanding during the
period.  Common equivalent shares related to stock options and warrants
have been excluded from the computation of basic and diluted earnings per share,
for the years ended December 31, 2008 and 2007 because their effect is
anti-dilutive.





Concentration of
Credit Risk — Financial instruments that potentially subject the Company
to a concentration of credit risk consist of cash.  The Company
maintains its cash with high credit quality financial institutions; at times,
such balances with any one financial institution may exceed FDIC insured
limits.





Financial
Instruments —Our financial instruments
consist of cash, accounts payable, and notes payable.  The carrying
values of cash, accounts payable, and notes payable are representative of their
fair values due to their short-term maturities.





-
18 -


Recently Issued
Accounting Pronouncements—


Business Combinations-In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business
Combinations (“SFAS 141R”). SFAS 141R significantly changes the accounting for
business combinations. Under SFAS 141R, an acquiring entity will be required to
recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS 141R will change
the accounting treatment for certain specific items, including:





·  Acquisition
costs will be generally expensed as incurred;


·  Noncontrolling
interests (formerly known as “minority interests” – see SFAS 160 discussion
below) will be valued at fair value at the acquisition date;


·  Acquired
contingent liabilities will be recorded at fair value at the acquisition date
and subsequently measured at either the higher of such amount or the amount
determined under existing guidance for non-acquired contingencies;


·  In-process
research and development will be recorded at fair value as an indefinite-lived
intangible asset at the acquisition date;


·  Restructuring
costs associated with a business combination will be generally expensed
subsequent to the acquisition date; and


·  Changes
in deferred tax asset valuation allowances and income tax uncertainties after
the acquisition date generally will affect income tax expense.





SFAS 141R
also includes a substantial number of new disclosure requirements. SFAS 141R
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. Earlier adoption is prohibited. Accordingly, since
we are a calendar year-end company we recorded and disclosed business
combinations following existing GAAP until January 1, 2009. We expect SFAS
141R will have an impact on accounting for business combinations once adopted
but the effect is dependent upon acquisitions at that time.





Noncontrolling Interests in
Consolidated Financial Statements – An Amendment of ARB No. 51-In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51 (“SFAS
160”). SFAS 160 establishes new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. Specifically, this statement requires the recognition of a
noncontrolling interest (minority interest) as equity in the consolidated
financial statements and separate from the parent’s equity. The amount of net
income attributable to the noncontrolling interest will be included in
consolidated net income on the face of the income statement. SFAS 160 clarifies
that changes in a parent’s ownership interest in a subsidiary that do not result
in deconsolidation are equity transactions if the parent retains its controlling
financial interest. In addition, this statement requires that a parent recognize
a gain or loss in net income when a subsidiary is deconsolidated. Such gain or
loss will be measured using the fair value of the noncontrolling equity
investment on the deconsolidation date. SFAS 160 also includes expanded
disclosure requirements regarding the interests of the parent and its
noncontrolling interest. SFAS 160 is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
Like SFAS 141R discussed above, earlier adoption is prohibited. We have not
completed our evaluation of the potential impact, if any, of the adoption of
SFAS 160 on our consolidated financial position, results of operations and cash
flows.







Fair Value Measurements-In
September 2006, FASB issued SFAS No. 157,“Fair Value
Measurements,”whichestablishes a framework
for measuring fair value, and expands disclosures about fair value measurements
required under the accounting pronouncements, but does not change existing
guidance as to whether or not an instrument is carried at fair value.
Additionally, it establishes a fair value hierarchy that prioritizes the
information used to develop those assumptions. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Earlier application is
encouraged, provided that the reporting entity has not yet issued financial
statements for fiscal year, including financial statements for an interim period
within the fiscal year. The Company is currently evaluating the impact, if any,
that SFAS No. 157 will have on its financial statements.




-
19 -




Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements
No. 87, 88, 106, and 132R-In September 2006, the FASB, issued SFAS, No.
158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an Amendment of FASB Statements No. 87, 88, 106, and 132R,” which
requires employers to recognize the underfunded or overfunded status of a
defined benefit postretirement plan as an asset or liability in its statement of
financial position and to recognize changes in the funded status in the year in
which the changes occur through accumulated other comprehensive income.
Additionally, SFAS No. 158 requires employers to measure the funded status of a
plan as of the date of its year-end statement of financial position. The new
reporting requirements and related new footnote disclosure rules of SFAS No. 158
are effective for fiscal years ending after December 15, 2006. We adopted the
provisions of SFAS No. 158 for the year end 2006, and the effect of recognizing
the funded status in accumulated other comprehensive income was not significant.
The new measurement date requirement applies for fiscal years ending after
December 15, 2008.




NOTE
2 – NOTE PAYABLE.





On March
26, 2008, we entered into a Revolving Promissory Note (the “Note”) with W-Net,
Inc., a California corporation (“W-Net”).  Under the terms of the
Note, W-Net agreed to advance to the Company, from time to time and at the
request of the Company, amounts up to $100,000.  All advances shall be
paid on or before September 30, 2008 which was extended to March 31, 2009 and
interest shall accrue from the date of any advances on any principal amount
withdrawn, and on accrued and unpaid interest thereon, at the rate of six
percent (6%) per annum, compounded annually.





On August
20, 2008, W-Net, Inc. assigned to MKM all of its right, privilege, benefit and
remedies in, to and under that certain Revolving Promissory Note dated March 26,
2008 and expiring on March 31, 2009, executed and issued by the Registrant for
the benefit of W-Net, Inc.





On
September 8, 2008, we entered into a Note with MKM.  Under the terms
of the Note, MKM agreed to advance to the Company, from time to time and at the
request of the Company, amounts up to an aggregate of $100,000 until March 31,
2009.  All advances shall be paid on or before March 31, 2009 and
interest shall accrue from the date of any advances on any principal amount
withdrawn, and on accrued and unpaid interest thereon, at the rate of six
percent (6%) per annum, compounded annually.  As of December 31, 2008
we have accrued $2,000 of interest.





NOTE
3 - WARRANTS





During
the year ended December 31, 2008, the Company did not issue any warrants and
2,005,000 warrants expired.  We have had 112,000 warrants issued and
outstanding at December 31, 2008.





Balance
      at December 31, 2007
            
            
            2,117,000Expired
            
            
            2,005,000Balance
      at December 31, 2008
            
            
            112,000





NOTE
4 - STOCK OPTION PLANS





The Company's employee stock option
plans (the "Plans") provide for the grant of non-statutory or incentive stock
options to the Company's employees, officers, directors or
consultants.  The Compensation Committee of our board of directors
administers the Plans, selects the individuals to whom options will be granted,
determines the number of options to be granted, and the term and exercise price
of each option.  Stock options granted pursuant to the terms of the
Plans generally cannot be granted with an exercise price of less than 100% of
the fair market value on the date of the grant (110% for awards issued to a 10%
or more stockholder).  The term of the options granted under the Plans
cannot be greater than 10 years; 5 years for a 10% or more
stockholder.  Options vest at varying rates generally over five
years.  An aggregate of 1,855,000 shares were reserved under the
Plans, of which 1,815,000 shares were available for future grant at December 31,
2008.





-
20 -


The
Company has elected to adopt the detailed method provided in SFAS No. 123(R) for
calculating the beginning balance of the additional paid-in capital pool (“APIC
pool”) related to the tax effects of employee stock-based compensation, and to
determine the subsequent impact on the APIC pool and Consolidated Statements of
Cash Flows of the income tax effects of employee stock-based compensation awards
that are outstanding upon the adoption of SFAS No. 123(R).





The fair
value of each stock option granted is estimated on the date of the grant using
the Black-Scholes option pricing model.  The Black-Scholes option
pricing model has assumptions for risk free interest rates, dividends, stock
volatility and expected life of an option grant.  The risk free
interest rate is based upon market yields for United States Treasury debt
securities at a 7-year constant maturity.  Dividend rates are based on
the Company’s dividend history.  The stock volatility factor is based
on the last 60 days of market prices prior to the grant date.  The
expected life of an option grant is based on management’s
estimate.  The fair value of each option grant, as calculated by the
Black-Scholes method, is recognized as compensation expense on a straight-line
basis over the vesting period of each stock option award.








The
following summarizes pricing and term information for options issued to
employees and directors which are outstanding as of December 31,
2008:





Options
      Outstanding
            
            Options
      ExercisableRange
      of Exercise Prices
            Number
      Outstanding at September 30, 2008
            
            Weighted
      Average Remaining Contractual
              Life
            
            Weighted
      Average Exercise Price
            
            Number
      Exercisable at December 31, 2008
            
            Weighted
      Average Exercise Price$67.50
            
            10,000
            
            
            0.75
            
            
            $67.50
            
            
            10,000
            
            
            67.50








NOTE
5 - EARNINGS PER SHARE





The following table sets forth common
stock equivalents (potential common stock) for the years ended December 31, 2008
and 2007 that are not included in the loss per share calculation above because
their effect would be anti-dilutive for the periods indicated:





Year
      Ended December 31,2008
            
            
            2007Weighted
      average common stock equivalents:Plan
      Stock Options
            
            
            10,000
            
            
            
            10,000Non-Plan
      Stock Options
            
            
            —
            
            
            
            —Warrants
            
            
            112,000
            
            
            
            2,117,000





NOTE 6 - INCOME TAX





The income tax (benefit)expense for the
years ended December 31, 2008 and 2007 consisted of the
following:





Years
      Ended December 31,2008
            
            
            2007Current
            
            $
            —
            
            
            $
            —Change
      in deferred tax asset
            
            
            38,000
            
            
            
            115,000Change
      in valuation allowance
            
            
            (38,000
            )
            
            
            (115,000
            )Provision
      for income taxes
            
            $
            —
            
            
            $
            —








-
21 -


Income
tax (benefit) expense computed at the statutory federal income tax rate of 34%
and the provision for income tax (benefit) expense in the financial statements
for the years ended December 31, 2008 and 2007 differ as follows:





Years
      Ended December 31,2008
            
            2007Provision
      computed at the statutory rate
            
            $
            (38,000
            )
            
            $
            (115,000
            )Change
      in valuation allowance
            
            
            38,000
            
            
            
            115,000Income
      tax provision
            
            $
            —
            
            
            $
            —








The
following are the components of the Company's deferred tax assets and
(liabilities) at December 31, 2008 and 2007:





Years
      Ended December 31,2008
            
            
            2007Federal
      net operating loss carryforward
            
            $
            11,084,000
            
            
            $
            11,043,000State
      net operating loss carryforward
            
            
            23,000
            
            
            
            13,000Total
      deferred tax asset
            
            
            11,107,000
            
            
            
            11,056,000Deferred
      state taxes
            
            
            —
            
            
            
            —Total
      deferred tax liability
            
            
            —
            
            
            
            —Net
      deferred tax asset
            
            
            11,107,000
            
            
            
            11,056,000Valuation
      allowance
            
            
            (11,107,000
            )
            
            
            (11,056,000
            )Net
      deferred tax asset/(liability)
            
            $
            —
            
            
            $
            —





At December 31, 2008, the Company has a
net operating loss carryforward of approximately $32,599,000 and $288,000 for
federal and state income tax purposes, respectively. These net operating loss
carryforwards begin to expire in 2018 and 2009, respectively. The net operating
losses can be carried forward to offset future taxable income, if
any.  Realization of the above carryforwards may be subject to
utilization limitations, which may inhibit the Company's ability to use these
carryforwards in the future.  Because of the change in ownership, the
use loss carryforwards are limited per the IRS tax code.




NOTE
7 - COMMITMENTS AND CONTINGENCIES





Leases—The Company currently is not party to any leases





Rent expense charged to operations for
the years ended December 31, 2008 and 2007 was $6,000 and $6,000.





Litigation— The Company is currently not party to any legal
proceedings.





Consulting
Agreements—On June 18, 2007, the Company entered into an agreement with
Venor, Inc. to provide consulting services for six months.  The
agreement was dated to be effective as of May 25, 2007.  Mr.
Stoppenhagen, a principle of Venor, Inc., will continue to serve as Interim
President and Secretary.  Venor, Inc. will be paid $3,000 per
month.  For the year ended December 31, 2008, Mr. Stoppenhagen
received $36,000.





-
22 -


NOTE
8 - CONCENTRATION OF CREDIT RISK





We
maintain our cash balances in various financial institutions that from time to
time exceed amounts insured by the Federal Deposit Insurance Corporation up to
$100,000, per financial institution.  As of December 31, 2008, our deposits
did not exceed insured amounts.  We have not experienced any losses in
such accounts and believe we are not exposed to any significant credit risk on
cash.





NOTE
9 - RELATED PARTIES





Other
than as listed below, we have not been a party to any significant transactions,
proposed transactions, or series of transactions, in which, to our knowledge,
any of our directors, officers, five percent beneficial security holder, or any
member of the immediate family of the foregoing persons has had or will have a
direct or indirect material interest.


-
23 -





Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.





Not
applicable




Item
9A(T).  Controls and Procedures.




(a)
Evaluation of Disclosure Controls and Procedures




We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms
and that such information is accumulated and communicated to our management,
including our interim President, who serves as our principal executive officer
and principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure.





Our
interim President reviewed and evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined by Rule
240.13a-15(e) or 15d-15(e)) of the Exchange Act Rule 13a-15 as of the end of the
period covered by this report.  Based upon this evaluation, our interim
President concluded that, as of the end of such period, our disclosure controls
and procedures are effective as of the end of the fiscal year
covered by this Form 10-K.




(b)
Management’s Annual Report on Internal Control over Financial
Reporting




The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act and for assessing the effectiveness of internal
control over financial reporting.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, projections of any evaluation of
effectiveness of internal control over financial reporting to future periods are
subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.




Management
has assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2008.  In making its assessment of
internal control over financial reporting, management used the criteria
established in Internal Control — Integrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway
Commission.  This assessment included an evaluation of the design of
the Company’s internal control over financial reporting and testing of the
operational effectiveness of those controls.  Based on the results of
this assessment, management has concluded that the Company’s internal control
over financial reporting was effective as of December 31, 2008.




This
Annual Report on Form 10-K does not include an attestation report of the
Company’s registered public accounting firm regarding internal control over
financial reporting.  Management’s report was not subject to
attestation by the Company’s registered public accounting firm pursuant to
temporary rules of the SEC that permit the Company to provide only management’s
report in this Annual Report on Form 10-K.




(c)
Changes in Internal Control over Financial Reporting




There
were no changes in the Company’s internal control over financial reporting that
occurred during the fourth quarter of the year ended December 31, 2008 that have
materially affected, or that are reasonably likely to materially affect, the
Company’s internal control over financial reporting.




Item
9B.  Other Information.





None





-
24 -


PART
III




Item
10.  Directors, Executive Officers and Corporate
Governance.




Directors




The Company’s
directors at December 31, 2008 were:




Name of
      Nominee
            Age
            Position(s) with
      TrestleGary
      Freeman
            41
            DirectorSteven
      Walin
            52
            DirectorDavid
      Skirloff
            43
            Chairman
      of the Board





GARY
FREEMAN was elected Co-President and Chief Financial Officer of the Company in
January 2003, and resigned the position of Co-President in September 2003 and
Chief Financial Officer in July 2004. Mr. Freeman is currently a Partner in
Beach, Freeman, Lim & Cleland, LLP’s Audit and Accounting services division.
Mr. Freeman also serves as a director of GVI Security Solutions, Inc., a
position on which he has served since October 2006, and Trist Holdings, Inc., a
position on which he has served since July 2007. In conjunction with various
consulting engagements, Mr. Freeman has assumed interim senior level management
roles at numerous public and private companies during his career. Mr. Freeman
was Vice President and director of Kellogg & Andelson, a Southern California
based public accounting firm. In 2000, Mr. Freeman co-founded Catalyst Business
Systems, a consulting firm, which merged with Kellogg & Andelson in 2002.
From 1990 to 2000, Mr. Freeman worked at BDO Seidman, LLP in various capacities,
including as a partner from 1998 to 2000.





STEVEN
WALIN is the Chief Executive Officer and a Director of GVI Security Solutions,
Inc., a position in which he has served since March 2006. Mr. Walin has over 20
years of experience in the security industry. Most recently, from April 2003
until his appointment as Chief Executive Officer of GVI Security Solutions,
Inc., Mr. Walin served as the President of GE Security Enterprise Solutions, a
division of General Electric Company that provides security solutions, including
video monitoring, intrusion and access control systems. Prior to his employment
with GE, from July 2001, Mr. Walin served as the Senior Vice President - North
America Security for the Security Systems Division of Siemens Building
Technologies. Prior to that, Mr. Walin had been the President and Chief
Operating Officer of Securities Technology Group, Inc. until it was acquired by
Siemens in July 2001.





DAVID
SKRILOFF is Portfolio Manager of MKM Capital Advisors,
LLC.  Previously, he was a managing director at Vision Capital
Advisors, LLC, a position he has held since January 2006. Prior to Vision,
Mr. Skriloff was a managing director at Duncan Capital, from January 2004
to December 2005. Before Duncan, Mr. Skriloff was EVP of Business
Development for Millivision, Inc. from September 2001 to December 2003.
Mr. Skriloff earned a BS in Electrical Engineering from Carnegie-Mellon
University in 1987 and an MBA from NYU in 1992.




Executives




The
Company’s executive officer at December 31, 2008 was:




Name of
      Nominee
            Age
            Position(s) with
      TrestleEric
      Stoppenhagen
            35
            Interim
      President and Secretary







Certain
information about Mr. Stoppenhagen is set forth below.




ERIC
STOPPENHAGEN was appointed President and Secretary in September 2006. From June
2003 to September 2006, Mr. Stoppenhagen served as Vice President of Finance for
Trestle Acquisition Corp.  Mr. Stoppenhagen has served in an executive
capacity for several other public and private companies; including President of
Trist Holdings, Inc., and Chief Financial Officer of Jardinier Corporation.
 He holds a Juris Doctorate and Masters of Business Administration both
from George Washington University.  Additionally, he holds a
Bachelor of Science in Finance and a Bachelor of Science in Accounting both from
Indiana University. Mr. Stoppenhagen is a certified public
accountant.





-
25 -


Certain
Legal Proceedings




To our
knowledge, during the past five years, none of our directors, executive
officers, promoters, control persons, or nominees has been:




•
            the
      subject of any bankruptcy petition filed by or against any business of
      which such person was a general partner or executive officer either at the
      time of the bankruptcy or within two years prior to that
    time;





•
            convicted
      in a criminal proceeding or is subject to a pending criminal proceeding
      (excluding traffic violations and other minor
  offenses);





•
            subject
      to any order, judgment, or decree, not subsequently reversed, suspended or
      vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or





•
            found
      by a court of competent jurisdiction (in a civil action), the Commission
      or the Commodity Futures Trading Commission to have violated a federal or
      state securities or commodities
law.





Section
16(a) Beneficial Ownership Reporting Compliance.





Section
16(a) of the Securities Exchange Act of 1934 requires that our executive
officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, file reports of ownership and changes
in ownership with the SEC.  Executive officers, directors and
greater-than-ten percent stockholders are required by SEC regulations to furnish
us with all Section 16(a) forms they file.  Based solely on our review
of the copies of the forms received by us and written representations from
certain reporting persons that they have complied with the relevant filing
requirements, we believe that, during the year ended December 31, 2008, all of
our executive officers, directors and greater-than-ten percent stockholders
complied with all Section 16(a) filing requirements.




Code
of Ethics




The
Company has adopted a Code of Ethics that applies to its principal executive
officers, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of the Company’s
Code of Ethics may be obtained free of charge by contacting the Company at the
address or telephone number listed on the cover page hereof.




Audit
Committee




The Audit
Committee is currently comprised of two members: Mr. Freeman (Chairman) and Mr.
Walin.  Currently, Mr. Freeman and Mr. Walin are both independent as
defined by the listing standard of NASDAQ as now in effect.  The Board
has identified Mr. Freeman as a financial expert within the meaning of
applicable regulatory standards.





The Audit
Committee pre-approves the performance of audit and non-audit services by the
Company’s accountants and reviews the Company’s internal control systems,
financial reporting procedures, the general scope of the Company’s annual audit,
the fees charged by the independent accountants, and the fairness of any
proposed transaction between any officer, director or other affiliate of the
Company and the Company. With respect to the foregoing, the Audit Committee
makes recommendations to the full Board and performs such further functions as
may be required or delegated to the Committee by the Board of
Directors.  The Board of Directors has adopted a written charter for
the Audit Committee. A copy of the Company’s Audit Committee Charter may be
obtained free of charge by contacting the Company at the address or telephone
number listed on the cover page hereof.





-
26 -


Director
Independence




Our board
of directors currently consists of three members: Gary Freeman, Steven Walin and
David Skirloff.




We do not
have a separately designated compensation or nominating committee of our board
of directors and the functions customarily delegated to these committees are
performed by our full board of directors.  We are not a “listed
company” under SEC rules and are therefore not required to have separate
committees comprised of independent directors.  We have, however,
determined that Gary Freeman and Steven Walin are “independent” as that term is
defined in Section 4200 of the Marketplace Rules as required by the NASDAQ Stock
Market.




Item
11.  Executive Compensation





The
following table and related footnotes show the compensation paid during the
fiscal years ended December 31, 2008 and 2007 and to the Company's executive
officer.





SUMMARY
COMPENSATION TABLE





Annual
      Compensation
            Long Term
      CompensationName
      and Principal Position
            Year
            Salary
            Bonus
            Other
      Annual
              Compensation
            Awards
      of
              Stock,
      Options
              and
      WarrantsEric
      Stoppenhagen
              Interim
      President
            2008
              2007
            N/A
              N/A
            N/A
              N/A
            $36,000(1)
              $61,000(1)
            N/A
              N/A




(1)           This
represents amounts paid to Venor, Inc. for Eric Stoppenhagen to provide
financial consulting services and serve as Interim President and
Secretary.  Additionally, Mr. Stoppenhagen receives a $500 allowance
per month for office expenses.





Employment
Agreements





On June 18, 2007, we entered into an
agreement with Venor, Inc. to provide consulting services for six
months.  The agreement was dated to be effective as of May 25,
2007.  Mr. Stoppenhagen, a principle of Venor, Inc., will continue to
serve as Interim President and Secretary.  Venor, Inc. will be paid
$3,000 per month for consulting services and $500 per month for office
space.  For the years ended December 31, 2008 and 2007, Mr.
Stoppenhagen received $36,000 and $61,000, respectively.




Options
Exercised and Year-End Option Values




The
following table sets forth certain information regarding the value of
unexercised options held by the named executive officer as of December 31,
2008.





Name
            Number
      of Securities
              Underlying
      Options
              and Warrants
      Granted
            Percent
      of Total
              Options
      and Warrants
              Granted in Fiscal
      Year
            Exercise
      or Base
              Price($/Share)Eric
      Stoppenhagen
            0
            0
            0





Aggregated
Option and Warrant Exercises in the Last Fiscal Year and Fiscal Year-End Option
and Warrant Values





The following table and related
footnotes set forth option exercises in 2008 and year-end option values for the
Company's Executive Officers.





Name
            Shares
      Acquired
              on Exercise
      (#)
            Value Realized
      ($)
            Number
      of
              Securities
      Underlying
              Unexercised
      Options
              and
      Warrants
              at
      12/31/08
            Value
      of Unexercised
              In-the-Money
      Options
              and
      Warrants
              at
      12/31/08Eric
      Stoppenhagen
            0
            N/A
            0
            0





-
27 -


Compensation
of Directors





Directors
of the Company are entitled to receive $7,500 in cash each year for serving on
the Board which is paid at the beginning of each quarter.




Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters





The
following table sets forth certain information regarding beneficial ownership of
our common stock as of January
20, 2009 by (i) each person who "beneficially" owns more than
5% of all outstanding shares of our common stock, (ii) each director and the
executive officer identified above, and (iii) all directors and executive
officers as a group.





Name
      and Address of
              Beneficial
      Owner
            Amount
      of Common
              Stock
      and Nature of
              Beneficial
      Owner
            Percent
      of Class of
              Common
      Stock(1)Strategic
      (2)
            44,994,000
            31.41%MKM (3)
            89,999,772
            62.83%Mr.
      Stoppenhagen (4)
            50,000
            *All
      Officers and Directors as a group(5) (4 persons)
            90,049,772
            62.86%





*           Represents
less than 1%.





(1)
            The
      percent of Common Stock owned is calculated using the sum of (A) the
      number of shares of Common Stock owned, and (B) the number of warrants and
      options of the beneficial owner that are exercisable within 60 days, as
      the numerator, and the sum of (Y) the total number of shares of Common
      Stock outstanding (143,257,214), and (Z) the number of warrants and
      options of the beneficial owner that are exercisable within 60 days, as
      the denominator.





(2)
            The
      address of Strategic is c/o Trestle Holdings, Inc., P.O. Box 4198, Newport
      Beach, CA 92661-4198. Percent of class of Common Stock includes
      exercisable options/warrants to purchase zero shares of Common Stock
      within 60 days.





(3)
            The
      address of MKM is c/o Trestle Holdings, Inc., P.O. Box 4198, Newport
      Beach, CA 92661-4198. Percent of class of Common Stock includes
      exercisable options/warrants to purchase zero shares of Common Stock
      within 60 days. MKM is beneficially owed by David Skirloff the Company’s
      Chairman.





(4)
            The
      address of Mr. Stoppenhagen is c/o Trestle Holdings, Inc., P.O. Box 4198,
      Newport Beach, CA 92661-4198. Percent of class of Common Stock
      includes exercisable options/warrants to purchase zero shares of Common
      Stock within 60 days.





(5)
            Includes
      the beneficial ownership of Messrs. Skirloff and Stoppenhagen. The
      beneficial ownership calculation includes the total number of
      options/warrants of such persons exercisable within 60 days held by such
      persons to purchase zero shares of common stock. Assuming that none of
      such persons exercises within 60 days any of such his respective options
      or warrants, the beneficial ownership of the group is approximately 95%.
      Messrs. Freeman and Walin do not have any beneficial ownership in the
      Company





-
28 -


Equity
Compensation Plan Information





The following table sets forth certain
information regarding the Company’s equity compensation plans as of December 31,
2008.


Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              (a)
            Weighted-average
      exercise price of outstanding options, warrants and rights
              (b)
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
              (c)Equity
      compensation plans approved by security holders
            10,000
            $
      67.50
            1,815,000Equity
      compensation plans not approved by security holders
            112,000
            $
      2.99
            0Total
            113,000
            $
      8.94
            1,815,000





Our
current employee stock option plans (the “Plans”) provide for the grant of
non-statutory or incentive stock options to the Company’s employees, officers,
directors or consultants.




The board
of directors administers the Plans, selects the individuals to whom options will
be granted, determines the number of options to be granted, and the term and
exercise price of each option.  Stock options granted pursuant to the
terms of the Plans generally cannot be granted with an exercise price of less
than 100% of the fair market value on the date of the grant (110% for awards
issued to a 10% or more stockholder).  The term of the options granted
under the Plans cannot be greater than 10 years; 5 years for a 10% or more
stockholder.  Options vest at varying rates generally over five
years.  An aggregate of 1,855,000 shares were reserved under the
Plans, of which 1,815,000 shares were available for future grant at December 31,
2008.





Changes in Control
Arrangements





There
existed no change in control arrangements at December 31, 2008.





Item
13.   Certain Relationships and Related Transactions, and Director
Independence.





Other than as under the caption
Employment Agreements above, we have not been a party to any significant
transactions, proposed transactions, or series of transactions, and in which, to
our knowledge, any of our directors, officers, five percent beneficial security
holder, or any member of the immediate family of the foregoing persons has had
or will have a direct or indirect material interest.





-
29 -


Item
14.  Principal Accountant Fees and Services





Independent
Public Accountants





Audit
Fees





The
aggregate fees billed by GPKM for the audit of the
Company’s  financial statements in the years ended December 31, 2008
and 2007, the reviews of the quarterly reports on Form 10-QSB for the same
fiscal years and statutory and regulatory filings were $15,000 for 2008 and
$16,000  for 2007.





Audit-Related
Fees





There were no fees billed by GPKM for
audit-related services for the years ended December 31, 2008 and
2007.


Tax
Fees





GPKM billed the Company $1,200 and
$1,200 for tax related services for the years ended December 31, 2008 and 2007,
respectively.





All
Other Fees





There were no fees billed by GPKM for
other services not described above for the years ended December 31, 2008 and
2007.





Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services of
Independent Auditors




The Board’s policy is to
pre-approve all audit and permissible non-audit services provided by the
independent registered public accounting firm. These services may include audit
services, audit-related services, tax services and other services. Pre-approval
is generally detailed as to the particular service or category of services and
is generally subject to a specific budget. The independent registered public
accounting firm and management are required to periodically report to the Board
regarding the extent of services provided by the independent registered public
accounting firm in accordance with this pre-approval, and the fees for the
services performed to date. The Board may also pre-approve particular services
on a case-by-case basis.





The Board has determined that
the rendering of the services other than audit services byGPKMis compatible with
maintaining the principal accountant’s independence.




1. Audit
services include audit work performed in the preparation of financial
statements, as well as work that generally only the independent auditor can
reasonably be expected to provide, including comfort letters, statutory audits,
and attest services and consultation regarding financial accounting and/or
reporting standards.




2. Audit-Related
services are for assurance and related services that are reasonably related to
the audit or review of our financial statements.




3. Tax
services include all services performed by the independent auditor’s tax
personnel except those services specifically related to the audit of the
financial statements, and includes fees in the areas of tax compliance, tax
planning, and tax advice.




4. Other Fees
are those associated with products or services not captured in the other
categories.





-
30 -


PART
IV




Item
15.  Exhibits and Financial Statement Schedules.




(a)
            The
      following documents are filed as a part of this
  Report:




1.
            Financial
      Statements. The following financial statements of
      Trestle Holdings, Inc. are included in
  Item 8:




Report of
Independent Registered Public Accounting Firm.




Balance
Sheets as of December 31, 2008 and 2007.




Statements
of Operations for the year ended December 31, 2008 and 2007.




Statements
of Stockholders’ Equity (Deficit) for the years ended December 31, 2008 and
2007.




Statements
of Cash Flows for the years ended December 31, 2008 and 2007.




Notes to
Financial Statements.









2.
            Financial
      Statement Schedule(s):




All
schedules are omitted for the reason that the information is included in the
financial statements or the notes thereto or that they are not required or are
not applicable.




3.
            Exhibits:




Exhibit Number
            Description of
      Exhibit*3.1
            Third
      Amended and Restated Articles of Incorporation of the Company dated
      November 2, 2006 (incorporated herein by reference to Exhibit 3.1 of
      Company's Quarterly Report on Form 10-QSB for the quarter ended
      September 30, 2006)*3.2
            Amendment
      to the Third Amended and Restated Articles of Incorporation of the Company
      dated August 17, 2007 (incorporated herein by reference to Exhibit 3.1 of
      Company's Form 8-K dated August 17, 2007)*3.3
            By-laws
      of the Company (incorporated herein by reference to Appendix C of
      Company's definitive Proxy Statement dated May 30,
    2002)*10.1
            Asset
      purchase agreement between the Company and Clarient, Inc. (incorporated by
      reference to Exhibit 10.1 of the Company's Form 8-K dated June
      19, 2006)*10.2
            Consulting
      agreement between the Company and Eric Stoppenhagen (incorporated by
      reference to Exhibit 99.1 of the Company's Form 8-K dated
      September 25, 2006)*10.3
            Share
      purchase agreement between the Company and W-Net, Inc. (incorporated by
      reference to Exhibit 10.1 of the Company's Form 8-K dated April
      20, 2007)*10.4
            Consulting
      agreement between the Company and Venor, Inc. (incorporated by reference
      to Exhibit 10.1 of the Company's Form 8-K dated June 18,
      2007)31
            Certification
      of President pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted
      pursuant to section 302 of the Sarbanes-Oxley Act of 2002.32
            Certification
      of the Company’s Chief Executive Officer and Chief Financial Officer,
      pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.


*           Previously
filed.


-
31 -


SIGNATURES




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





Trestle Holdings, Inc.Date:
      January 20, 2009
            
            
            By:
            /s/  
      ERIC STOPPENHAGEN
              -----------------------------------------------------------
              Name:
      Eric Stoppenhagen
              Title:
      Interim President
              (Principal
      Executive Officer, Principal Financial and Accounting
Officer)


POWER OF ATTORNEY




The
undersigned directors and officer of Trestle Holding, Inc. do hereby constitute
and appoint Eric Stoppenhagen with full power of substitution and
resubstitution, as their true and lawful attorneys and agents, to do any and all
acts and things in our name and behalf in our capacities as directors and
officer and to execute any and all instruments for us and in our names in the
capacities indicated below, which said attorney and agent, may deem necessary or
advisable to enable said corporation to comply with the Securities Exchange Act
of 1934, as amended and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this Annual Report on
Form 10-KSB, including specifically but without limitation, power and authority
to sign for us or any of us in our names in the capacities indicated below, any
and all amendments (including post-effective amendments) hereto, and we do
hereby ratify and confirm all that said attorneys and agents, or either of them,
shall do or cause to be done by virtue hereof.




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.







SIGNATURE
            
            TITLE
            
            DATE/s/  
      ERIC STOPPENHAGEN
              ------------------------------------
              Eric
      Stoppenhagen
            
            Interim
      President
              (Principal Executive Officer,Principal Financial and Accounting Officer)
            
            January
      20, 2009/s/  
      DAVID SKRILOFF
              ------------------------------------
              David
      Skriloff
            
            Chairman
            
            January
      20, 2009/s/
      GARY FREEMAN
              -------------------------------------
              Gary
      Freeman
            
            Director
            
            January
      20, 2009/s/  
      STEVEN WALIN
              ------------------------------------
              Steven
      Walin
            
            Director
            
            January
      20, 2009


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