UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  Form 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended June 30, 2006

                       Commission file number 000-13225

                                  VPGI CORP.
            ------------------------------------------------------
            (Exact name of Registrant as specified in its charter)

                  Texas                               75-1975147
         (State of incorporation)        (I.R.S. Employer Identification No.)

                   700 Gemini, Suite 100, Houston, TX 77056
             (Address of principal executive offices) (Zip Code)

                                (281) 488-3883
             (Registrant's telephone number, including area code)

         SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                     None

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                   Common Stock, par value $.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 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.     [X]

      Indicate by check mark whether the registrant is a large accelerated
 filer, an accelerated filer, or a non-accelerated filer.  See definition of
 "accelerated filer and large accelerated filer" in rule 12b-2 of the
 Exchange Act.

 Large accelerated filer ___  Accelerated filer ___  Non-accelerated filer  X

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

      As of December 31, 2005 the aggregate market value of the common stock
 held by non-affiliates of the Registrant (84,316 shares) was approximately
 $210,790, based on the closing sale price of the Common Stock as reported
 for such date on the OTC Bulletin Board[R] ($2.50).  Shares of Common Stock
 held by each executive officer and director and by each person who owns 5%
 or more of the outstanding Common Stock, based on corporate records and
 Schedule 13D/G filings, have been excluded since such persons may be deemed
 affiliates. This determination of affiliate status is not necessarily a
 conclusive determination for other purposes.  (All share and per share
 data give effect to a one for fifty (1:50) reverse stock split that was
 implemented on September 18, 2006, applied retroactively as if it occurred
 on July 1, 2003.)

      At September 21, 2006 there were 139,191 shares of Registrant's Common
 Stock outstanding.

      DOCUMENTS INCORPORATED BY REFERENCE:  exhibits shown on the Exhibit
 Index.

<PAGE>

                                GENERAL INDEX

                                                            Page Number

 ITEM l.   BUSINESS............................................. 4

 ITEM 1A.  RISK FACTORS......................................... 6

 ITEM 1B.  UNRESOLVED STAFF COMMENTS........................... 11

 ITEM 2.   PROPERTIES.......................................... 11

 ITEM 3.   LEGAL PROCEEDINGS................................... 11

 ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 12

 ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
           STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
           SECURITIES.......................................... 12

 ITEM 6.   SELECTED FINANCIAL DATA............................. 14

 ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATION.................. 14

 ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
           MARKET RISK......................................... 18

 ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......... 19

 ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE................. 20

 ITEM 9A.  CONTROLS AND PROCEDURES............................. 20

 ITEM 9B.  OTHER INFORMATION................................... 20

 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.. 21

 ITEM 11.  EXECUTIVE COMPENSATION.............................. 23

 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT AND RELATED STOCKHOLDER MATTERS.......... 24

 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...... 25

 ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.............. 26

 ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES............. 26

 SIGNATURES.................................................... 27

 EXHIBIT INDEX................................................. 57

<PAGE>

                                  VPGI CORP.

                                    PART I

 ITEM l.   BUSINESS

      (a)  General Development of Business

      VPGI Corp. (the "Company") was incorporated in Texas on July 13, 1984.
  We filed an S-18 registration statement in November 1984 and completed the
 registered offering in January 1985.  In 1996 we introduced a digital media
 device (set top box), which enabled the display of Internet content on a
 television.  In 1998 we added design and cabling services for voice/data
 networks and in 1999 we added computer telephony integration (CTI)
 capabilities to our product offerings with customized call center solutions.

      In December 2002, due to our financial position and the business
 outlook for the foreseeable future, we discontinued normal operations.
 All of our directors resigned, except for the CEO who remained as the sole
 director, and we laid off all of our remaining officers and employees.  We
 conducted no business operations until the second fiscal quarter ended
 December 31, 2004.

      In November 2004 we acquired Venture Pacific Group, Inc. ("VPG").
 Since the acquisition, we have explored the licensing of radio frequency
 identification ("RFID") applications in specialty areas, such as anti-
 counterfeiting of drugs, medical devices, and logistical systems,
 concentrating on Asian deployment, primarily to China.  We have also
 participated in other business ventures and opportunities as they have
 presented themselves.  For example, our revenues during fiscal year 2005
 were derived primarily from the telecommunications (cell phone) industry.

      We are actively seeking a merger candidate, an acquisition of a viable
 business or a buyer of the corporate entity.

      (b)  Financial Information about Industry Segments

      No business segments have existed since we discontinued normal
 operations in December, 2002.

      (c)  Narrative Description of Business

      We conducted no business operations from December 2002 until the second
 fiscal quarter ended December 31, 2004.  We have conducted no significant
 business operations since the acquisition of VPG.  The following information
 therefore relates primarily to normal business operations conducted prior to
 December 2002.

 Major Markets, Products and Services

      Our digital media technology was available for licensing by customers
 wishing to manufacture and market a digital media device that provided easy
 and affordable access to the Internet through the television medium.  The
 units offered video on demand, Internet access, broadcast entertainment
 programming and content streams.  The digital media devices allowed users
 to save and store programming, rewind, and pause television shows in mid-
 broadcast; provided electronic programming guides that allowed users to
 select channels based on television show, actor, or theme and could be used
 to collect demographic information.

      Our CTI technologies offered customized products for customer contact
 centers, which could be designed to support a diverse network of sites, and
 managed voice and data transactions from multiple sources while allowing for
 intelligent routing and queuing.

 Patents, Trademarks and Licenses

      We owned or held rights to all patents, trademarks and licenses that we
 considered to be necessary in the conduct of our business and we continue to
 do so.

 Manufacturing

      We did not own manufacturing facilities, but rather contracted all
 manufacturing to third parties.

 Environmental

      We were in compliance with all applicable environmental laws and
 continue to remain in compliance with such laws.

 Major Customers

      In Fiscal year 2006, we reported no revenues.  In fiscal year 2005,
 one customer accounted for virtually all of our consolidated revenues.  In
 fiscal year 2004, we reported no revenues.

 Employees

      As of June 30, 2006, the Company had one employee.

 Warranty

      The Company has no outstanding warranty obligations.


 ITEM 1A.  RISK FACTORS

      We are a development stage company that currently has limited
 operations and no revenues.  The focus of current management is concerned
 primarily with maintaining our public filings and in locating and completing
 a suitable business combination.  Until we complete a business combination,
 we will have no operations and will generate no operating revenues.  The
 following is a description of important risk factors affecting current and
 future results of our operations.

 Risks Related to our Business


 We are a development stage company with no current operations and,
 accordingly, there is no basis upon which to evaluate our ability to achieve
 our business objective.

      Our business objective is to acquire an operating business in the
 technology industry.  Although we have conducted a preliminary review,
 we have no plans, arrangements or understandings with any prospective
 acquisition candidates nor have we engaged any agent or other representative
 to identify or locate suitable acquisition candidates.  We have no present
 revenues and do not expect to generate any revenues until, at the earliest,
 after the consummation of a business combination.  Since we do not know what
 the operating history, if any, of any potential acquisition will be, there
 is no basis upon which to evaluate our ability to achieve our business
 objective.


 Since we have not currently selected any target business with which to
 complete a business combination, we are unable to currently ascertain the
 merits or risks of the Company's operations.

      Since we have not yet identified a prospective target business, we are
 unable to present any basis to evaluate the possible merits or risks of the
 target business' operations.  While we do not intend to target financially
 unstable companies or companies in the development stage, to the extent we
 complete a business combination with such a company, we may be affected by
 numerous risks inherent in the business operations of those entities.  We
 would consider a company to be financially unstable if, for example, a
 substantial portion of its cash flow were dedicated to its debt service
 obligations or its expected capital expenditure requirements exceeded the
 ability of the target business to fund them.  In addition, we would consider
 a business to be in its early stages of development or growth if it is newly
 formed and is in the process of developing its initial technologies,
 processes, services, or products.  Although our management will endeavor
 to evaluate the risks inherent in a particular target business, we cannot
 assure you that we will properly ascertain or assess all of the significant
 risk factors.  Since we have limited cash resources, we expect that any
 acquisition will require the issuance of a substantial number of shares of
 our capital stock or debt obligations (see sections below); otherwise, we
 will have virtually unrestricted flexibility in identifying and selecting
 a prospective acquisition candidate.


 As we will favor underperforming companies as business combination
 opportunities, we may be subject to the additional risks associated with
 the financial and operational condition of underperforming companies.

      As we evaluate business combination opportunities, we intend to favor
 underperforming companies that we believe have the potential to increase
 their performance substantially through changes in operations or strategy.
 As a result, following the consummation of any such business combination,
 we may be subject to additional risks that would not exist if we were to
 consummate a business combination with companies that are not
 underperforming.  These risks may relate to, among other things, the
 following:

      *  the potentially weak financial, operational and/or strategic
         position of the underperforming company;

      *  identification and retention of individuals with the
         requisite skills and experience to replace the existing
         management of the acquired company;

      *  dedication of substantial resources to restructuring the
         operations and finances of the acquired company;

      *  development of strategic business initiatives, including,
         without limitation, sales and marketing plans and research
         and development plans, as well the identification of
         individuals or third parties capable of executing those
         initiatives; and

      *  restructuring the acquired company's operations to improve
         its business model, financial condition, and results of
         operations.

      To address each of the foregoing risks, we will be required to dedicate
 substantial financial and human resources which would otherwise be used by
 us to expand a business following the business combination, which may have a
 material adverse effect on our business, prospects, financial condition, and
 results of operations.

 We may issue shares of our capital stock to complete a business combination,
 which would dilute the equity interest of our stockholders and could cause a
 change in control of our ownership.

      Our certificate of incorporation authorizes the issuance of up to
 80,000,000 shares of common stock, par value $0.001 per share, and 1,000,000
 shares of preferred stock, par value $1.00 per share.  After the recent
 implementation of a reverse stock split, there were 139,191 shares of our
 common stock outstanding.  Although we have no current commitments to issue
 our securities in any acquisition, we will, in all likelihood, issue a
 substantial number of additional shares of our common stock or preferred
 stock, or a combination of common and preferred stock, to complete a
 business combination.  We additionally expect to issue a substantial
 number of shares of our common stock in conversion of currently outstanding
 convertible preferred stock and convertible debt obligations.  Additional
 shares could be issued in exercise of currently outstanding warrants.  The
 issuance of additional shares of our common stock or any number of shares
 of our preferred stock:

         *  may significantly dilute the equity interest of our public
            shareholders;

         *  may adversely affect prevailing market prices for our
            securities; and

         *  may subordinate the rights of holders of our common stock
            if preferred stock is issued with rights senior to those
            afforded to our common stock.

      The issuance of a substantial number of our shares of common stock will
 also likely cause a change in control, which may affect, among other things,
 our ability to use our net operating loss carry forwards.  At June 30, 2006,
 we had net operating loss carry forwards for Federal income tax purposes of
 approximately $64,602,766, which will expire in various amounts in the years
 2008 through 2022 if not utilized.  These net operating loss carry forwards
 are available to us to offset future taxable income, subject to significant
 limitations and provisions of the Internal Revenue Code.  One such
 limitation provides that if there is a change in control, these net
 operating loss carry forwards can be severely curtailed or lost entirely.
 A change in control would most likely also result in the resignation or
 removal of our present management.


 We may issue debt securities or otherwise incur substantial debt to complete
 a business combination, which may adversely affect our leverage and
 financial condition.

      Although we have no commitments as of the date of this report to issue
 any debt securities, or to otherwise incur additional debt, we may choose
 to incur substantial debt to complete a business combination or to fund
 operations until such time as a business combination can be completed.
 If we issue debt securities, it could result in:

         *  default and foreclosure on our assets if our operating
            revenues after a business combination were insufficient
            to pay our debt obligations;

         *  acceleration of our obligations to repay the indebtedness
            even if we have made all principal and interest payments
            when due if the debt security contains covenants that
            require the maintenance of certain financial ratios or
            reserves and any such covenant is breached without a
            waiver or renegotiation of that covenant;

         *  our immediate payment of all principal and accrued
            interest, if any, if the debt security is payable on
            demand; and

         *  our inability to obtain additional financing, if
            necessary, if the debt security contains covenants
            restricting our ability to obtain additional financing
            while such security is outstanding.


 Our ability to effect a business combination and to execute any potential
 business plan afterwards will be totally dependent upon the efforts of key
 personnel, some of whom may join us following a business combination and
 whom we may have only a limited ability to evaluate.

      Our ability to effect a business combination will be totally dependent
 upon the efforts of our current management and its advisors.  Our current
 management does not intend to assume the day-to-day operational management
 of our target business, and the precise role of any key personnel will be
 the subject of negotiation in any business combination.  Part of the
 analysis of a particular acquisition will include an evaluation of the
 experience and skill set of the target business' management and negotiate
 as part of the business combination that certain members of that management
 remain if it is believed that it is in the best interests of the company.
 The future role of specific key personnel following a business combination,
 however, cannot presently be fully ascertained.


 Our current management will allocate its time to other businesses thereby
 causing conflicts of interest in their determination as to how much time to
 devote to our affairs.  This could impact on our ability to consummate a
 business combination.

      Our current management is not required to commit its full time to our
 affairs, which may result in a conflict of interest in allocating their time
 between our operations and other businesses.  We do not intend to have any
 full time employees prior to the consummation of a business combination.
 All of our executive officers are engaged in other business endeavors and
 are not obligated to contribute any specific number of hours to our affairs.
 If our executive officers' other business affairs require them to devote
 more substantial amounts of time to such affairs, it could limit their
 ability to devote time to our affairs and could impact our ability to
 consummate a business combination.


 We may for a period of time only be able to complete one business
 combination, which would cause us to be solely dependent on a single
 business and a limited number of products or services.

      We may have the ability to complete only a single business combination.
 Accordingly, the prospects for our ability to effect our acquisition
 strategy may be:

         *  solely dependent upon the performance of a single
            business, or

         *  dependent upon the development or market acceptance of a
            single or limited number of products, processes or
            services.

      In this case, we will not be able to diversify our operations or
 benefit from the possible spreading of risks or offsetting of losses, unlike
 other entities that may have the resources to complete several business
 combinations in different industries or different areas of a single
 industry.


 We may be unable to obtain additional financing, if required, to complete
 a business combination or to fund the operations and growth of the target
 business, which could compel us to restructure the transaction or abandon
 a particular business combination.

      We currently pay our ongoing administrative expenses through borrowings
 from Trident Growth Fund, LP ("Trident").  Because we have not yet
 identified any prospective target business, we cannot ascertain the capital
 requirements for any particular transaction.  If our current financial
 resources prove to be insufficient, either because of the size of the
 business combination or the depletion of the available resources in search
 of a target business, we will be required to seek additional financing.
 We cannot assure you that such financing would be available on acceptable
 terms, if at all.  To the extent that additional financing is unavailable
 when needed to consummate a particular business combination, we will be
 compelled to restructure the transaction or abandon that particular business
 combination and seek an alternative target business candidate.  In addition,
 if we consummate a business combination, we may require additional financing
 to fund the operations or growth of the target business.  The failure to
 secure additional financing may stall the development or growth of the
 target business.  None of our officers, directors or stockholders is
 required to provide any financing to us in connection with or after a
 business combination.

             CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

      The statements contained in this report that are not purely historical
 are forward-looking statements.  Our forward-looking statements include,
 but are not limited to, statements regarding our or our management's
 expectations, hopes, beliefs, intentions or strategies regarding the future.
 In addition, any statements that refer to projections, forecasts or other
 characterizations of future events or circumstances, including any
 underlying assumptions, are forward-looking statements.  The words
 "anticipates," "believe," "continue," "could," "estimate," "expect,"
 "intends," "may," "might," "plan," "possible," "potential," "predicts,"
 "project," "should," "would" and similar expressions may identify forward-
 looking statements, but the absence of these words does not mean that a
 statement is not forward-looking.  Forward-looking statements in this
 report may include, for example, statements about our:

         *  ability to complete a combination with one or more target
            businesses;

         *  success in retaining or recruiting, or changes required
            in, our officers, key employees or directors following a
            business combination;

         *  officers and directors allocating their time to other
            businesses and potentially having conflicts of interest
            with our business or in approving a business combination,
            as a result of which they would then receive expense
            reimbursements;

         *  potential inability to obtain additional financing to
            complete a business combination;

         *  potential change in control if we acquire one or more
            target businesses for stock;

         *  public securities' limited liquidity and trading;

         *  our financial performance following any business
            combination.

 The forward-looking statements contained in this report are based on our
 current expectations and beliefs concerning future developments and their
 potential effects on us.  There can be no assurance that future developments
 affecting us will be those that we have anticipated.  These forward-looking
 statements involve a number of risks, uncertainties (some of which are
 beyond our control) or other assumptions that may cause actual results or
 performance to be materially different from those expressed or implied by
 these forward-looking statements.  These risks and uncertainties include,
 but are not limited to, those factors described under the heading "Risk
 Factors."  Should one or more of these risks or uncertainties materialize,
 or should any of our assumptions prove incorrect, actual results may vary in
 material respects from those projected in these forward-looking statements.
 We undertake no obligation to update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise, except as may be required under applicable securities laws and/or
 if and when management knows or has a reasonable basis on which to conclude
 that previously disclosed projections are no longer reasonably attainable.


 ITEM 1B.  UNRESOLVED STAFF COMMENTS

      None.


 ITEM 2.   PROPERTIES

      Until December 2002, we operated from the following locations, all of
 which were closed at June 30, 2005.

      Location       Purpose/Use               Owned/Leased   Square Footage
      --------       -----------               ------------   --------------
      Dallas, TX     Corporate Headquarters      Leased           16,617
      Dallas, TX     Storage facility            Leased            5,120
      Tulsa, OK      Subsidiary office           Leased            7,500

      In May 2005, we leased approximately 2,300 square feet of office space
 in Dallas, Texas for our corporate headquarters, which location at the time
 was deemed suitable for our operations.  Shortly after fiscal 2006 year
 end, this location was also closed.  The Company has no current business
 operations and the current CEO, Mr. Rozelle, utilizes his business office
 located in Houston, Texas for limited administrative functions performed on
 behalf of the Company.


 ITEM 3.   LEGAL PROCEEDINGS

      Prior to closing the business in December 2002, we were routinely a
 party to ordinary litigation incidental to our business, as well as to other
 litigation of a nonmaterial nature.


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

      We held a Special Shareholders' Meeting on September 5, 2006 to vote on
 a  directors'  proposal  to  authorize  the  Board  of  Directors,  in   its
 discretion, to amend  the Company's Articles  of Incorporation  to effect  a
 reverse split of the outstanding shares  of the Company's Common Stock by  a
 ratio not in excess of one (1)  for fifty (50), without further approval  or
 authorization of the Company's shareholders.

      Of 6,895,454 common shares issued and outstanding as of July 31, 2006,
 the Record Date, 5,429,971 were represented in person or by proxy at the
 meeting, which constituted a quorum for the transaction of all business to
 come before the meeting.  The proposal was duly approved by the required
 number of shares represented at the meeting, as follows:

      FOR [5,208,256]          AGAINST [216,855]        ABSTAIN [4,860]



                                   PART II


 ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
           MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market Information

      Our common stock, $.001 par value (the "Common Stock") trades on the
 OTC Bulletin Board under the symbol "VPGC."  Until September 18, 2006, the
 effective date of a reverse stock split, our Common Stock traded on the
 OTC Bulletin Board under the symbol "VPGI."  High and low trade price
 information for our Common Stock is presented below for each quarter in the
 last two fiscal years.  (All share and per share data give effect to a one
 for fifty (1:50) reverse stock split that was implemented on September 18,
 2006, applied retroactively as if it occurred on July 1, 2003.)

      Quarter Ending Date              High Trade          Low Trade
      -------------------              ----------          ---------

      Fiscal 2006
      -----------
      June 30, 2006                      $  4.00            $  2.50
      March 31, 2006                     $  4.50            $  2.50
      December 31, 2005                  $  4.50            $  2.50
      September 30, 2005                 $  7.50            $  4.50

      Fiscal 2005
      -----------
      June 30, 2005                      $ 10.50            $  5.50
      March 31, 2005                     $ 20.00            $  7.50
      December 31, 2004                  $ 12.00            $  2.00
      September 30, 2004                 $  5.00            $  2.00


 Holders

      As of June 30, 2006 there were approximately 15,000 holders of record
 of our common stock.

 Dividends

      We have never paid cash dividends on common shares and do not
 anticipate doing so in the foreseeable future.  In addition, our Series
 2002-G Convertible Preferred Stock contains preferential covenants that
 materially limit the discretion of our Board of Directors with respect
 to payment of dividends or making any other distribution to our common
 shareholders so long as Series 2002-G is outstanding or unconverted.

 Securities Authorized for Issuance under Equity Compensation Plans

<TABLE>
      The following table summarizes our equity compensation plans as of June
 30, 2006:

                                                                      Number of Securities
                       Number of Securities                          Remaining Available For
                        To Be Issued Upon      Weighted-average       Future Issuance Under
                     Exercise of Outstanding   Exercise Price of    Equity Compensation Plans
                       Options, Warrants      Outstanding Options,   (Excluding Securities
 Plan Category             and Rights         Warrants and Rights   Reflected in Column (a))
 --------------------------------------------------------------------------------------------
 <S>                   <C>                   <C>                    <C>
                       (a)                   (b)                    (c)

 Equity Compensation
 Plans Approved by
 Security Holders             35,948               $  26.60                    54,052

 Equity Compensation
 Plans Not Approved by
 Security Holders             34,245               $   3.23                       -0-
                           ---------                -------                 ---------
        Total                 70,193               $  15.20                    54,052
                           =========                =======                 =========

</TABLE>

      Options issued and available for future issuance under stockholder-
 approved plans consist of those authorized pursuant to our 1999 Equity
 Incentive Plan.  (All share and per share data give effect to a one for
 fifty (1:50) reverse stock split that was implemented on September 18, 2006,
 applied retroactively as if it occurred on July 1, 2003.)


 ITEM 6.   SELECTED FINANCIAL DATA

<TABLE>
      All financial data for the years referenced below were derived from our
 Consolidated Financial Statements for those years and the comparability of
 the information is affected by acquisitions, dispositions, and other
 transactions which are described in the footnotes which accompany those
 Consolidated Financial Statements, and which should be read in conjunction
 with this five-year financial summary.  Other factors which may affect the
 comparability of the information for the more recent fiscal years are
 discussed further in Item 7 below.

                                                    Year Ended June 30,
                             -------------------------------------------------------------
                             2006           2005          2004          2003          2002
                             ----           ----          ----          ----          ----
 <S>                      <C>          <C>            <C>           <C>            <C>
 Consolidated Statement
 of Operations Data
 ----------------------
 Revenues                 $       --     $ 12,243     $       --    $  625,785     $5,369,311
 Operating loss             (317,615)    (558,032)       (37,018)   (3,516,230)    (3,894,502)
 Net loss                   (500,941)    (717,477)       (20,355)  (3,435,735)     (2,733,434)
 Net loss attributable
   to common stockholders   (750,241)    (873,818)       (24,655)   (2,123,935)    (1,019,077)
 Loss per Common Share (1)     (5.46)       (7.55)         (0.24)       (25.69)        (14.97)

 Consolidated Balance
   Sheet Data
 --------------------
 Total assets                 87,694      141,777         49,972        62,700      4,842,203
 Long term debt                   --           --             --            --         14,938
 Redeemable preferred stock       --           --             --            --      1,456,000
 Stockholders' equity     (1,043,554)    (557,358)        49,972        50,708      2,018,192
 Number of employees               1            4             --            --             25

 (1)  Basic and diluted loss per share, which was computed based upon the
      weighted average number of common shares outstanding during each fiscal
      year.  All share and per share data give effect to a one for fifty
      (1:50) reverse stock split that was implemented on September 18, 2006,
      applied retroactively as if it occurred on July 1, 2003.
</TABLE>

 ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

      The following discussion provides information to assist in the
 understanding of our financial condition and results of operations and
 should be read in conjunction with the Consolidated Financial Statements
 and related notes appearing elsewhere herein.

                          Forward Looking Statements

      This report may contain "Forward Looking Statements," which are our
 expectations, plans, and projections which may or may not materialize, and
 which are subject to various risks and uncertainties, including statements
 concerning expected expenses and the adequacy of our sources of cash to
 finance our current and future operations.  When used in this report, the
 words "plans," "believes," "expects," "anticipates," "estimates" and similar
 expressions are intended to identify forward-looking statements.  Factors
 which could cause actual results to materially differ from our expectations
 include the following:  general economic conditions and growth in the high
 tech industry; competitive factors and pricing pressures; changes in product
 mix; the timely development and acceptance of new products; and the risks
 described from time to time in our SEC filings.  These forward-looking
 statements speak only as of the date of this report.  We expressly disclaim
 any obligation or undertaking to release publicly any updates or change in
 our expectations or any change in events, conditions or circumstances on
 which any such statement may be based, except as may be otherwise required
 by the securities laws.

                            Results of Operations

 FISCAL YEAR ENDED JUNE 30, 2006 COMPARED TO FISCAL YEAR ENDED JUNE 30, 2005
 ---------------------------------------------------------------------------

 Revenues

      We had no revenues for fiscal year 2006.  Revenues of $12,243 for
 fiscal year 2005 were derived primarily from the resale of refurbished cell
 phones in the telecommunications industry.

 Gross Margin

      We had no gross margin for fiscal year 2006. Gross margin for fiscal
 year 2005 was $12,243, which represented 100% of all revenue in fiscal year
 2005.

 Operating Expenses

      Total operating expenses for fiscal year 2006 decreased to
 approximately $317,615, compared to approximately $570,275 for the same
 period last year.  Significant components of operating expenses for the
 fiscal years ended June 30, 2006 and 2005 consisted of the following:

                                                   Year ended June 30,
                                            -------------------------------
                                                2006                2005
                                            -----------         -----------
 Compensation                              $     85,658        $    133,821
 Facilities                                      23,183               2,162
 Legal expense and professional fees             96,556             160,818
 Write-off of acquired in-process
   research and development                          --             146,819
 Other                                          112,218             126,655
                                            -----------         -----------
 Total                                        $ 317,615        $    570,275
                                            ===========         ===========

      "Other" expenses include public company cost, property taxes,
 telephone, travel, office, insurance, and other general and administrative
 expenses.  The decrease in operating expenses for fiscal year 2006 is
 attributable to decreasing Company operations during fiscal year 2006.

 Interest Expense

      We had total interest expense of $185,748 in fiscal year 2006 as
 compared to $164,582 in fiscal year 2005.  The increase in interest expense
 is attributable to additional financing from Trident received during fiscal
 year 2006.


 FISCAL YEAR ENDED JUNE 30, 2005 COMPARED TO FISCAL YEAR ENDED JUNE 30, 2004
 ---------------------------------------------------------------------------
 Revenues

      Revenues of $12,243 for fiscal year 2005 were derived primarily from
 the resale of refurbished cell phones in the telecommunications industry.
 We discontinued all operations in December 2002 and had no revenues for
 fiscal year 2004.

 Gross Margin

      Gross margin for fiscal year 2005 was $12,243, which represented 100%
 of all revenue in fiscal year 2005.  We had no gross margin for fiscal year
 2004.

 Operating Expenses

      Total operating expenses for fiscal year 2005 increased to
 approximately $570,275, compared to approximately $37,000 for the same
 period last year.  Significant components of operating expenses for the
 fiscal years ended June 30, 2005 and 2004 consisted of the following:

                                                   Year ended June 30,
                                            -------------------------------
                                                2005                2004
                                            -----------         -----------
 Compensation                              $    133,821        $      5,760
 Facilities                                       2,162                   -
 Legal expense and professional fees            160,818              17,860
 Write-off of acquired in-process
   research and development                     146,819                  --
 Other                                          126,655              13,398
                                            -----------         -----------
 Total                                     $    570,275        $     37,018
                                            ===========         ===========

      "Other" expenses include public company cost, property taxes,
 telephone, travel, office, insurance, and other general and administrative
 expenses.  The increase in operating expenses for fiscal year 2005 is
 attributable to resuming Company operations during fiscal year 2005.

 Interest Expense

      We had total interest expense of $164,582 in fiscal year 2005 as
 compared to no interest expense for the previous year.  The increase in
 interest expense is attributable to the financing from Trident received
 during the second fiscal quarter.


                       Liquidity and Capital Resources

      Cash and cash equivalents at June 30, 2006 were $11,032 compared to
 $53,337 at June 30, 2005.  In the past we have relied on available borrowing
 arrangements and sales of our common and preferred stock to supplement
 operations.  However, during 2003 outside financial resources became
 unavailable to us and it was necessary to discontinue operations and
 close the Company.

 Cash Flows from Operations

      Cash used in operations for the fiscal year ended June 30, 2006
 was $338,305 compared to $532,296 used in operations in 2005.  The major
 components of cash used in operations during 2006 were comprised of a
 $500,941 loss from operations, amortization of the discount on debt of
 $64,623, and changes in operating assets and liabilities of $98,013.

      Cash used in operations for the fiscal year ended June 30, 2005
 was $532,296 compared to $9,883 used in operations in 2004.  The major
 components of cash used in operations during 2005 were comprised of a
 $717,477 loss from operations, non-cash charges for the write-off of
 acquired in-process research and development of $146,819, amortization
 of the discount on debt of $98,409, issuance of warrants for services of
 $10,000 offset by changes in operating assets and liabilities of $70,047.

 Cash Flows from Investing Activities

      During fiscal years 2006, 2005 and 2004, no cash was used in investing
 activities.

 Cash Flows from Financing Activities

      During fiscal year 2006, cash of $296,000 was borrowed.

      During fiscal year 2005, cash payments of $20,067 were used for
 dividends declared.  Cash of $605,700 was borrowed during the fiscal year
 2005.

      During fiscal year 2004, we had no financing activities.


                                Other Matters

 Going Concern

      We incurred net losses of $500,941, $717,477 and $20,355 for the years
 ended June 30, 2006, 2005 and 2004, respectively.  In December 2002 we laid
 off all of our employees and discontinued normal operations.  These
 conditions raise substantial doubt about the Company's ability to continue
 as a going concern.

      Before we discontinued normal operations in 2002, we offered enhanced
 digital media solutions and call center computer telephony integration
 software products and services.  With the acquisition of Venture Pacific
 Group, Inc. ("VPG") in November 2004 we expected to become active in
 licensing RFID technologies to integrate with our own technologies to
 develop RFID applications in specialty areas, such as anti-counterfeiting
 of drugs, medical devices, and logistical systems.  We are continuing to
 evaluate all of our options and we are actively seeking a buyer, a merger
 candidate or acquisition of a viable business.  Consequently, the outlook
 for generating sufficient cash to support our operations for the next twelve
 months under present circumstances is extremely guarded.

 Critical Accounting Policies

      The preparation of the consolidated financial statements in conformity
 with accounting principles generally accepted in the United States of
 America requires management to make estimates and assumptions that affect
 the amounts reported in the consolidated financial statements and
 accompanying notes.  Actual results could differ from those estimates.
 The following critical accounting policies are utilized by management
 in the preparation of the consolidated financial statements.

      Revenue Recognition.  During 2005 we recognized a significant portion
 of our revenue while acting as a sales agent or in a similar capacity.  As
 such, we reported revenue based upon the fee earned as acting as an agent.
 Product sales were recognized at the time of delivery and customer
 acceptance.


 ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Prior to December 2002, we were exposed to market risk from changes in
 interest rates which could adversely affect our financial position, results
 of operations and cash flows.  In seeking to minimize the risks from
 interest rate fluctuations, we managed exposures through our regular
 operating and financing activities.  We did not use financial instruments
 for trading or other speculative purposes and we were not a party to any
 leveraged financial instruments.  We were exposed to interest rate risk
 primarily through our borrowing activities, which are described in the
 "Notes Payable" Note to the Consolidated Financial Statements, which are
 incorporated herein by reference.


 ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Consolidated Financial Statements and related Financial Statement
 Schedules are included immediately following the signature page of this
 Form 10-K.

 Selected Quarterly Financial Data (unaudited)

<TABLE>
      The following tables set forth certain unaudited financial data for the
 quarters indicated:

                                   Fiscal 2006 Quarter Ended                               Fiscal 2005 Quarter Ended
                       --------------------------------------------------    ----------------------------------------------------
                        Sept. 30,    Dec. 31,     March 31,     June 30,       Sept. 30,    Dec. 31,      March 31,     June 30,
                          2005         2005         2006          2006           2004         2004          2005          2005
                       ----------   ----------    ---------    ----------    ----------    ----------    ----------    ----------
 <S>                  <C>          <C>           <C>          <C>           <C>           <C>           <C>           <C>
 Net Sales                  $0.00        $0.00        $0.00         $0.00         $0.00          $500        $5,323        $6,720
 Gross Margin               $0.00        $0.00        $0.00         $0.00         $0.00          $500        $5,323        $6,720
 % of net sales                 0%           0%           0%            0%            0%          100%          100%          100%

 Operating income
  (loss)                $(158,252)    $(88,802)    $(26,723)     $(43,838)        $0.00     $(210,678)    $(192,459)    $(154,895)
 % of net sales                 0%           0%           0%            0%            0%            0%            0%            0%

 Net income (loss)      $(221,134)   $(138,076)    $(63,689)     $(78,042)        $0.00     $(244,500)    $(259,973)    $(213,004)
 % of net sales                 0%           0%           0%            0%            0%            0%            0%            0%

 Net income (loss)
  attributable to
  common shareholders   $(283,459)   $(200,401)   $(126,014)    $(140,367)      $(1,075)    $(277,275)    $(322,298)    $(273,170)
 % of net sales                 0%           0%           0%            0%            0%            0%            0%            0%

 Net income (loss)
  attributable to
  common shareholders
  per share - basic and
  diluted*                 $(2.08)      $(1.46)      $(0.91)       $(1.02)       $(0.01)       $(2.46)       $(2.68)       $(2.18)

 * Difference in per share amounts between quarterly financial data and
   year-end results are attributable to rounding.  The above information
   differs from that previously reported for the quarters ended December
   31, 2004 and March 31, 2005 due to impact of stock warrants granted to
   Trident Growth Fund, LP ("Trident") in connection with our issuance of
   a note payable to Trident on November 10, 2004.  The fair value of the
   stock warrants was recorded as a discount to debt and amortized over
   the term of the note payable.  The impact of this adjustment increased
   the loss for the quarters ended December 31, 2004 and March 31, 2005
   by $8,389 and $14,804, respectively.  The loss for the quarter ended
   December 31, 2004 was also increased by $10,000 to reflect the fair
   value of stock warrants issued on November 4, 2004 in settlement of
   litigation.  In addition, revenue for the quarter ended March 31, 2005
   was decreased by $90,902 with a corresponding reduction to the cost of
   product and services to reflect revenue recognition at net as an agent.
   All share and per share data give effect to a one for fifty (1:50)
   reverse stock split that was implemented on September 18, 2006, applied
   retroactively as if it occurred on July 1, 2003.
</TABLE>


 ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE

      None.


 ITEM 9A.  CONTROLS AND PROCEDURES

      Evaluation of Disclosure Controls and Procedures.  Our Chief Executive
 Officer has reviewed and evaluated the effectiveness of our disclosure
 controls and procedures (as defined in Exchange Act Rules 240.13a-15(e) or
 15d-15(e)) as of the end of the period covered by this report.  Based on
 that evaluation, the Chief Executive Officer has concluded that our current
 disclosure controls and procedures provide him with reasonable assurance
 that they are effective to provide him with timely material information
 relating to us required to be disclosed in the reports we file or submit
 under the Exchange Act.

      Annual report on internal control over financial reporting.  Based upon
 the most recent pronouncements of the Securities and Exchange Commission,
 our first annual report on internal control over financial reporting is due
 for inclusion in our annual report on Form 10-K for the twelve month period
 ending June 30, 2008.  We expect to begin the process during next fiscal
 year of identifying a framework to use to evaluate the effectiveness of our
 internal control over financial reporting (as defined in Rule 13a-15(f) or
 15d-15(f) under the Exchange Act.)

      Changes in Internal Control over Financial Reporting.  Our management
 has evaluated whether any change in our internal control over financial
 reporting occurred during the fourth fiscal quarter.  Based on that
 evaluation, management concluded that there has been no change in our
 internal control over financial reporting during the relevant period that
 has materially affected, or is reasonably likely to materially affect, our
 internal control over financial reporting.


 ITEM 9B.  OTHER INFORMATION

 Subsequent Events

      On July 14, 2006, Patrick A. Custer, the sole director of the Company,
 appointed Joseph R. Rozelle as a member to the board of directors of the
 Company.  Concurrently with Mr. Rozelle's appointment as a director, Mr.
 Custer resigned as an officer and director of the Company and Mr. Rozelle
 was elected to the offices of President, Secretary, Treasurer and Chief
 Executive Officer of the Company.

      On September 5, 2006, our stockholders approved and on September 18,
 2006, we implemented a one for fifty (1:50) reverse split of our outstanding
 shares of common stock.  With the completion of the reverse stock split, we
 had approximately 139,191 common shares outstanding.  All share and per
 share data give effect to the reverse stock split, applied retroactively
 as if it occurred on July 1, 2003.


                                   PART III


 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

                              Board of Directors

      The following sets forth, with respect to each member of our Board of
 Directors as of June 30, 2006, his name, age, period served as director,
 present position, if any, with the Company and other business experience.
 All directors in the past have served one-year terms between annual meetings
 of shareholders.

      Patrick A. Custer, 57, was the sole member of the Board and Chief
 Executive Officer at June 30, 2006.  Mr. Custer served as a director from
 1984 to 1985, and from 1987 until the present.  He served as President and
 Chief Executive Officer from 1984 to 1985 and from September 1992 until July
 14, 2006.  From 1986 until 1990, Mr. Custer was an international business
 consultant for Park Central Funding (Guernsey), Ltd.  From 1978 until 1982,
 Mr. Custer was a general securities principal and worked for a major
 brokerage firm as a corporate finance specialist and was owner of his own
 brokerage firm.  He was responsible for structuring and funding IPO's, real
 estate, energy companies, and numerous high-tech start-up companies.  Mr.
 Custer's technical experience includes engineering and management positions
 with Texas Instruments and Honeywell.  Mr. Custer is a graduate of Texas
 Tech University in Finance and Management, with additional studies in
 Electrical Engineering and master studies in Finance.

      Joseph R. Rozelle, 32, succeeded Mr. Custer as the sole member of the
 Board and Chief Executive Officer, effective July 14, 2006.  Mr. Rozelle
 is currently also the President of Nautilus Global Partners, a Limited
 Liability Company dedicated to facilitation of "going public" transactions
 for foreign and domestic operating companies on the public United States
 Exchanges.  From 2004 through January 2006, Mr. Rozelle was a consultant
 with Accretive Solutions, providing Sarbanes-Oxley Compliance consulting
 and other accounting related consulting services.  Prior thereto, Mr.
 Rozelle worked with Momentum Equity Group, LLC and Momentum Bio Ventures
 as a Principal Analyst beginning in the spring of 2002 and winter of 2003,
 respectively through 2004.  Prior to joining Momentum, Mr. Rozelle was an
 associate with Barclays Capital in the Capital Markets Group, specializing
 in asset securitization in the summer of 2001.  Prior thereto, he was the
 Assistant Vice President of Planning and Financial Analysis for a regional
 commercial bank and was responsible for all of the corporate financial
 modeling, risk analysis, mergers and acquisition evaluation, and corporate
 budgeting.  Mr. Rozelle also served as a senior auditor with Arthur
 Andersen, where he was involved in a variety of filings with the SEC
 involving corporate mergers, spin-offs, public debt offerings, and annual
 reports.  Mr. Rozelle holds a Bachelors of Business Administration degree
 from the University of Houston and earned a Masters of Business
 Administration degree from the Jesse H. Jones School of Management at
 Rice University in 2002.  In addition, he is a Certified Public Accountant
 in the State of Texas.

	As of the date of this report, the Company does not have any
 contractual arrangements with Mr. Rozelle.

                              Executive Officers

      The following table lists the names and positions held by all executive
 officers as of June 30, 2006.

      Name                          Position
      ----                          --------

      Patrick A. Custer             Sole Board member, President, Chief
                                    Executive Officer and Principal Financial
                                    Officer


           Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the 1934 Act ("Section 16(a)"), requires our
 directors, executive officers and persons who beneficially own more than
 10% of a registered class of our equity securities ("10% Owners") to file
 reports of beneficial ownership of our securities and changes in such
 beneficial ownership with the Securities and Exchange Commission
 ("Commission").  Directors, executive officers and 10% Owners are also
 required by rules promulgated by the Commission to furnish us with copies
 of all forms they file pursuant to Section 16(a).

      Based solely upon a review of the copies of the forms filed pursuant to
 Section 16(a) furnished to us, or written representations that no year-end
 Form 5 filings were required for transactions occurring during fiscal year
 ended June 30, 2006, we believe that during the fiscal year ended June 30,
 2006, all Section 16(a) filing requirements applicable to our directors,
 executive officers and 10% Owners were complied with.

                               Audit Committee

      We have no active Audit Committee, however, Mr. Custer and Mr. Rozelle
 both meet the definition of an audit committee financial expert, as set
 forth in Item 401(h)(2) of Regulation S-K.

                                Code of Ethics

      We have adopted a code of ethics that applies to our principal
 executive officer, our principal financial officer, and our principal
 accounting officer or controller, or persons performing similar functions.
 A copy of our code of ethics will be provided to any person without charge,
 upon request, by sending such request to us at our principal office.


 ITEM 11.  EXECUTIVE COMPENSATION

<TABLE>
                          Summary Compensation Table

      The following table summarizes the compensation paid over the last
 three completed fiscal years to our Chief Executive Officer and any other
 executive officer who received compensation exceeding $100,000 during the
 fiscal year ended June 30, 2006.
                                                               Long Term Compensation
                                                               ------------------------------------
                           Annual Compensation                 Awards                       Payouts
                           ---------------------------------   ------------------------------------
(a)               (b)      (c)       (d)      (e)              (f)          (g)             (h)      (i)
                                                                                                       All
                                                                                                       Other
 Name and           Year                       Other             Restricted    Securities     LTIP     Compen-
 Principal          Ended                      Annual            Stock         Underlying     Payouts  sation
 Position           June 30 Salary($) Bonus($) Compensation($)   Awards($)     Options(#)       ($)      ($)
----------          -------  --------  -------  --------------   ----------   --------------  -------  ------
<S>                  <C>     <C>       <C>      <C>              <C>          <C>             <C>      <C>
Patrick A. Custer      2006   48,061     -0-      -0-                -0-           -0-          -0-      -0-
 Sole member of the    2005  130,520     -0-     20,000 (1)(2)       -0-           -0-          -0-      -0-
 Board and CEO         2004    -0-       -0-     52,000 (1)(3)       116           -0-          -0-      -0-

 (1)  Other annual compensation to this executive officer, including payment
      of a car allowance and other personal benefits, did  not exceed the
      lesser of $50,000 or 10% of such executive officer's total annual
      salary and bonus for such fiscal year.
 (2)  Amounts paid to Custer Consulting, an entity owned 100% by Pat Custer.
 (3)  Amounts paid by Venture Pacific Group, Inc. (acquired in merger on
      November 10, 2004) to Pat Custer as an independent contractor.

</TABLE>
<PAGE>
<TABLE>

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

      The following table shows aggregate exercises of options (or tandem
 stock appreciation rights) and freestanding stock appreciation rights during
 the fiscal year ended June 30, 2006 by each of the named executive officers.

(a)                (b)             (c)          (d)                (e)
                                                Number of
                                                Securities         Value of
                                                Underlying         Unexercised
                                                Unexercised        In-the-Money
                                                Options at         Options at
                                                FY-End (#)         FY-End ($)(1)
                   Shares
                   Acquired        Value        Exercisable (E)/   Exercisable (E)/
Name               on Exercise(#)  Realized($)  Unexercisable (U)  Unexercisable (U)
------             --------------  -----------  -----------------  -----------------
<S>                <C>             <C>          <C>                <C>

 Patrick A. Custer       -0-            -0-          13,760 (E)       $ 7,750   (E)
                                                       -0-  (U)          -0-    (U)


 (1)  At June 30, 2006, 6,200 of the options were considered "in-the-money,"
      as the fair market value of the underlying securities on that date
      ($2.25) exceeded the exercise price of the options ($1.00).  None of
      the remaining options were considered "in-the-money," as the fair
      market value of the underlying securities did not exceed the exercise
      price of the options.  (All share and per share data give effect to
      a one for fifty (1:50) reverse stock split that was implemented on
      September 18, 2006, applied retroactively as if it occurred on July 1,
      2003.)
</TABLE>

                          Compensation of Directors

      Directors are not paid compensation as such, except for services
 performed in another capacity, such as an executive officer.

   Employment Contracts and Termination and Change-in-Control Arrangements

      At June 30, 2006, we had no employment agreement with any named
 executive officer.

         Compensation Committee Interlocks and Insider Participation

      Mr. Custer participated in advising the Board of Directors concerning
 certain aspects of executive officer compensation during the last completed
 fiscal year.  Mr. Custer is Chairman of the Board, President and Chief
 Executive Officer.


 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
           RELATED STOCKHOLDER MATTERS

      The following table sets forth certain information as of September 28,
 2006 with respect to the beneficial ownership of Common Stock by (i) persons
 known to us to be the beneficial owners of more than 5% of the outstanding
 shares of Common Stock, (ii) all directors of the Company, (iii) each of the
 executive officers and (iv) all directors and executive officers of the
 Company as a group.

      The number of shares of Common Stock beneficially owned by each
 individual set forth below is determined under the rules of the Commission
 and the information is not necessarily indicative of beneficial ownership
 for any other purpose.  Under such rules, beneficial ownership includes
 any shares as to which an individual has sole or shared voting power or
 investment power and any shares which an individual presently, or within 60
 days of September 28, 2006 (the date on which this Form 10-K is due at the
 Commission), has the right to acquire through the exercise of any stock
 option or other right.  Unless otherwise indicated, each individual has sole
 voting and investment power (or shares such powers with his spouse) with
 respect to the shares of Common Stock set forth in the following table.  The
 information is based upon corporate records, information furnished by each
 shareholder, or information contained in filings made with the Securities
 and Exchange Commission.

                                        Number of Shares
    Name and Address                    Amount and Nature          Percent
    of Beneficial Owner                 of Beneficial Ownership    of Class
    -------------------                 -----------------------    --------
    Patrick A. Custer                            46,597 (1)         30.46%
    5% Beneficial Owner,
    P.O. Box 802808
    Dallas, Texas 75380

    Peak Decision International Limited           7,000 (2)          5.00%
    5% Beneficial Owner
    Unit 1603, 16F
    Dina House,
    11 Duddell Street, Central
    Hong Kong

  (1) Includes 5,804 shares owned outright by Mr. Custer; 13,760 shares
      issuable to Mr. Custer upon exercise of vested nonstatutory Employee
      Stock Options; 26,968 shares held of record by Custer Company, Inc., a
      family trust, over which Mr. Custer exercises voting control; 60 shares
      owned by his wife; 3 shares held by his wife for the benefit of his
      minor daughter; and 1 share each held by Mr. Custer for the benefit
      of his two sons.

 (2)  Common shares owned.


 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In November 2004 the Company acquired Venture Pacific Group, Inc.
 ("VPG").  The acquisition resulted in the issuance to VPG shareholders of
 approximately 15,400 new shares of common stock of the Company, which were
 valued at approximately $60,000, according to the stock price at the time.
 (All share and per share data give effect to a one for fifty (1:50) reverse
 stock split that was implemented on September 18, 2006, applied
 retroactively as if it occurred on July 1, 2003.)

      The Company also issued to Trident Growth Fund, LP ("Trident") a new
 series of preferred stock, Series 2004-L Preferred Stock (the "Preferred
 Stock"), to retire an outstanding series of preferred stock of VPG.  The
 Preferred Stock has a liquidation value of $1.75 million and is convertible
 at the option of the holder into a total of 1.75 million shares of Common
 Stock at any time after six months from the issue date.  These preferred
 shares were valued at $175.  (These shares are not affected by the one for
 fifty (1:50) reverse stock split that was implemented on September 18, 2006,
 as the terms of Series 2004-L Preferred Stock contain no reset feature in
 the event of a reverse split.)

      At the time of the merger, our Chief Executive Officer also served as
 the Chief Executive Officer and as a director of VPG and was the beneficial
 owner of approximately 39% of VPG.  Trident Growth Fund, L.P. ("Trident"),
 reported as a beneficial owner of 7.6% of the Company as of June 30, 2004,
 was also a beneficial owner of approximately 35% of VPG.

      All other related party transactions, which require disclosure, are
 included in the Management's Discussion and Analysis or the Notes to
 Consolidated Financial Statements.


 ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

 Audit Fees

      Audit fees include fees paid by the Company to its auditors in
 connection with the annual audit of the Company's financial statements and
 the auditor's review of the Company's interim financial statements.  The
 aggregate fees billed to the Company by CF & Co., L.L.P. for audit services
 for the fiscal years ended June 30, 2006 and 2005 were $43,718 and $36,074,
 respectively.

 Audit Related Fees

      Audit related fees include fees paid by the Company to its auditors for
 services related to accounting consultations and internal control review.
 There were no audit-related fees paid by the Company for either of the
 fiscal years ended June 30, 2006 or 2005.

 Tax Fees

      Tax fees include fees paid by the Company to its auditors for corporate
 tax compliance and tax advisory services.  There were no tax-related fees
 billed to the Company for either of the fiscal years ended June 30, 2006 or
 2005.

 All Other Fees

      All other fees include fees paid by the Company to its auditors for
 all other services rendered by the auditor to the Company.  Fees for other
 services paid by the Company for fiscal years ended June 30, 2006 or 2005
 were -0- and $23,712, respectively.


                                   PART IV

 ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

      (a)  (1)  Financial Statements

           Reference is made to the financial statements filed as part of
           this report.

           (2)  Financial Statement Schedules

           Reference is made to the financial statement schedules filed as
           part of this report.  All other schedules are omitted because
           they are not applicable or not required, or because the required
           information is included in the financial statements or notes
           thereto.

           (3)  Exhibits

           Reference is made to the Exhibit Index at the end of this Form
           10-K for a list of all exhibits filed with and incorporated by
           reference in this report.


                                  SIGNATURES

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

                                  VPGI CORP.


                                  By:   /s/ JOSEPH R. ROZELLE
                                        ---------------------
                                        Joseph R. Rozelle
                                        Chief Executive Officer
                                        and Principal Financial Officer
 October 13, 2006


      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.

      Principal Executive Officer and
      -------------------------------
      Principal Financial and Accounting Officer
      ------------------------------------------

 /s/  JOSEPH R. ROZELLE       Chairman of the Board,         October 13, 2006
      Joseph R. Rozelle       Chief Executive Officer
                              and Director

<PAGE>


           Report of Independent Registered Public Accounting Firm
           -------------------------------------------------------

 Board of Directors
 VPGI Corp. and Subsidiaries

 We have audited the accompanying consolidated  balance sheets of VPGI  Corp.
 and Subsidiaries (A Development Stage Company) as of June 30, 2006 and 2005,
 and  the  related   consolidated  statements  of   operations,  changes   in
 stockholders' equity and cash flows for the years ended June 30, 2006,  2005
 and  2004.  These  consolidated  financial statements are the responsibility
 of management.  Our  responsibility  is  to  express  an  opinion  on  these
 consolidated 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  audits to obtain  reasonable assurance  about
 whether  the  consolidated  financial   statements  are  free  of   material
 misstatement.   An  audit includes  examining,  on a  test  basis,  evidence
 supporting  the  amounts  and  disclosures  in  the  consolidated  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  consolidated financial  statements referred  to  above
 present  fairly,  in  all  material  respects,  the  consolidated  financial
 position of VPGI Corp. and  Subsidiaries as of June  30, 2006 and 2005,  and
 the consolidated results  of their  operations and  their consolidated  cash
 flows for the years ended  June 30, 2006, 2005  and 2004 in conformity  with
 accounting principles generally accepted in the United States of America.

 We have also audited Schedule II for the years ended June 30, 2006, 2005 and
 2004.  In our  opinion,  this schedule  presents  fairly,  in  all  material
 respects, the information required to be set forth therein.

 As shown in the consolidated financial statements, the Company incurred  net
 losses of $500,941, $717,477 and $20,355 for the years ended  June 30, 2006,
 2005 and 2004, respectively.  These  factors, among others, as discussed  in
 Note B  to the  consolidated financial  statements raise  substantial  doubt
 about the Company's ability  to continue as a  going  concern.  Management's
 plans in regard  to these matters  are described in  Note B.  The  financial
 statements do not include any adjustments that might result from the outcome
 of these uncertainties.

 CF & Co., L.L.P.

 Dallas, Texas
 October 13, 2006

<PAGE>

                         VPGI Corp. and Subsidiaries
                        (A Development Stage Company)

                         CONSOLIDATED BALANCE SHEETS

                                   June 30,

                           ASSETS                      2006           2005
                                                   -----------    -----------
 CURRENT ASSETS
   Cash and cash equivalents                      $     11,032   $     53,337
   Trade accounts receivable                                 -         21,000
   Prepaid expenses                                     21,132          7,705
   Other current assets                                      -          4,627
                                                   -----------    -----------
     Total current assets                               32,164         86,669

 OTHER ASSETS
   Pension surplus                                      55,530         55,108
                                                   -----------    -----------
     Total other assets                                 55,530         55,108
                                                   -----------    -----------
     Total assets                                 $     87,694   $    141,777
                                                   ===========    ===========

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

<PAGE>

                          VPGI Corp. and Subsidiaries
                         (A Development Stage Company)

                    CONSOLIDATED BALANCE SHEETS - CONTINUED

                                   June 30,


      LIABILITIES AND STOCKHOLDERS' EQUITY             2006           2005
                                                   -----------    -----------
 CURRENT LIABILITIES
   Note payable, net of deferred loan costs
     of $6,049 and $55,931, respectively,
     for 2006 and 2005, respectively              $    989,951   $    644,069
   Trade accounts payable                               19,145         16,020
   Accrued expenses                                    122,152         39,046
                                                   -----------    -----------
     Total liabilities                               1,131,248        699,135

 COMMITMENTS AND CONTINGENCIES (NOTE G)                      -              -
                                                   -----------    -----------

 STOCKHOLDERS' EQUITY (DEFICIT)
  Preferred stock, cumulative, $1.00 par value;
      1,000,000 shares authorized:
    Series A, 30,000 shares issued and outstanding
      at June 30, 2006 and 2005                         30,000         30,000
    Series H, 2 shares issued and outstanding
      at June 30, 2006 and 2005 (liquidation
      preference of $50,000)                                 2              2
    Series 2002-K, 20 shares issued and outstanding
      at June 30, 2006 and June 30, 2005
      (liquidation preference of $500,000)                  20             20
    Series 2002-G, 152 and 156 shares issued and
      outstanding at June 30, 2006 and 2005,
      respectively (liquidation preference of
      $3.8 million and $3.9 million at June 30,
      2006 and 2005, respectively)                         152            156
    Series 2004-L, 175 shares issued and outstanding
      at June 30, 2006 and 2005 (liquidation
      preference of $1.75 million)                         175            175
  Common stock, $.001 par value; 80,000,000 shares
      authorized; 137,909 and 136,576 shares issued
      and outstanding at June 30, 2006 and 2005,
      respectively                                         138            137
  Additional paid in capital                        60,506,462     60,491,714
  Accumulated deficit                              (60,362,085)   (60,362,085)
  Deficit accumulated during development stage      (1,218,418)      (717,477)
                                                   -----------    -----------
    Total stockholders' equity (deficit)            (1,043,554)      (557,358)
                                                   -----------    -----------
    Total liabilities and stockholders' equity    $     87,694   $    141,777
                                                   ===========    ===========

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

<PAGE>

                         VPGI Corp. and Subsidiaries
                        (A Development Stage Company)

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                             Years ended June 30,


                                Cumulative
                                  During
                                Development
                                   Stage        2006        2005        2004
                                 --------     --------    --------    --------
 Revenues
   Product sales                $   5,548    $       -   $   5,548  $        -
   Consulting and
     support services               6,695            -       6,695           -
                                 --------     --------    --------    --------
     Total revenues                12,243            -      12,243           -

 Cost of products and services
   Cost of product sales                -            -           -           -
   Cost of consulting and
     support services                   -            -           -           -
                                 --------     --------    --------    --------
     Total cost of products
       and services                     -            -           -           -
                                 --------     --------    --------    --------
     Gross margin                  12,243            -      12,243           -

 Operating expenses
   General and administrative     887,890      317,615     570,275      31,258
   Fees paid to related party           -            -           -       5,760
                                 --------     --------    --------    --------
                                  887,890      317,615     570,275      37,018
                                 --------     --------    --------    --------

     Operating loss              (875,647)    (317,615)   (558,032)    (37,018)

 Other (income) expense
   Interest expense               350,330      185,748     164,582           -
   Other income, net               (7,559)      (2,422)     (5,137)    (16,663)
                                 --------     --------    --------    --------
     Total other
       (income) expense           342,771      183,326     159,445     (16,663)
                                ---------     --------    --------    --------
     Net loss                 $(1,218,418)   $(500,941)  $(717,477)  $ (20,355)
                                =========     ========    ========    ========

 Dividend requirements on
   preferred stock                            (249,300)   (156,341)     (4,300)
                                              --------    --------    --------
 Net loss attributable to
   common stockholders                       $(750,241)  $(873,818)  $ (24,655)
                                              ========    ========    ========
 Per share amounts allocable
   to common stockholders -
   Basic and diluted

     Net loss                                   $(5.46)     $(7.55)     $(0.24)

 Weighted average common shares
   outstanding - Basic and diluted             137,409     115,749     102,818


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

<PAGE>
<TABLE>

                                    VPGI Corp. and Subsidiaries
                                   (A Development Stage Company)

                    CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                         For the years ended June 30, 2006, 2005 and 2004
                                                                                                            Deficit
                                                                                                          Accumulated
                                      Common Stock       Preferred Stock      Additional                     During
                                  --------------------  ------------------    paid-in       Accumulated   Development
                                    Shares     Amount    Shares    Amount    capital         deficit         Stage        Total
                                  ---------   --------  --------  --------   -----------   ------------   -----------   ----------
 <S>                              <C>        <C>       <C>       <C>        <C>           <C>            <C>           <C>
 Balances - June 30, 2003            89,722  $      90    30,218 $  30,218  $ 60,342,062  $ (60,321,662) $          -  $    50,708

 Issuance of common stock in
   exchange for services             15,120         15         -         -        15,104              -             -       15,119
 Issuance of warrants
   for services                           -          -         -         -         4,500              -             -        4,500
 Net loss                                 -          -         -         -             -        (20,355)            -      (20,355)
                                  ---------   --------  --------  --------   -----------   ------------   -----------   ----------
 Balances - June 30, 2004           104,842  $     105    30,218 $  30,218  $ 60,361,666  $ (60,342,017) $          -  $    49,972

 Conversion of Series 2002-G
   preferred to common stock         13,334         14       (40)      (40)           26              -             -            -
 Issuance of common stock
   in acquisition                    15,400         15         -         -        59,985              -             -       60,000
 Exercise of warrants into
   common stock                       3,000          3         -         -            (3)             -             -            -
 Issuance of warrants
   in connection with debt                -          -         -         -        60,040              -             -       60,040
 Issuance of warrants
   in litigation                          -          -         -         -        10,000              -             -       10,000
 Issuance of Series
   2004-L preferred                       -          -       175       175             -              -             -          175
 Dividends on issuance of
   Series 2004-L preferred                -          -         -         -             -        (20,068)            -      (20,068)
 Net loss                                 -          -         -         -             -              -      (717,477)    (717,477)
                                  ---------   --------  --------  --------   -----------   ------------   -----------   ----------
 Balances - June 30, 2005           136,576  $     137    30,353 $  30,353  $ 60,491,714  $ (60,362,085) $   (717,477) $  (557,358)

 Conversion of Series 2002-G
   preferred to common stock          1,333          1        (4)       (4)            3              -             -            -
 Issuance of warrants in
   connection with debt                   -          -         -         -        14,745              -             -       14,745
 Net loss                                 -          -         -         -             -              -      (500,941)    (500,941)
                                  ---------   --------  --------  --------   -----------   ------------   -----------   ----------
 Balances - June 30, 2006           137,909  $     138    30,349 $  30,349  $ 60,506,462  $ (60,362,085) $ (1,218,418) $(1,043,554)
                                  =========   ========  ========  ========   ===========   ============   ===========   ==========

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

</TABLE>
<PAGE>

                         VPGI Corp. and Subsidiaries
                        (A Development Stage Company)

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                             Years ended June 30,

                                   Cumulative
                                     During
                                  Development
                                     Stage        2006       2005       2004
                                  -----------   --------   --------   ---------
 Cash flows from operating
   activities
  Net loss                       $(1,218,418)  $(500,941) $(717,477) $  (20,355)
                                  ----------    --------   --------   ---------
  Adjustments to reconcile net
   loss to cash used in
   operating activities:
    Stock compensation expense             -           -          -      15,119
    Issuance of warrants
      for services                    10,000           -     10,000       4,500
      Write-off of acquired
        in-process research
        and development              146,819           -    146,819           -
      Amortization of debt
        discount                     163,032      64,623     98,409           -
      Changes in assets and
        liabilities, net of
        effects from acquisitions
        and dispositions:
         Trade accounts receivable         -      21,000    (21,000)          -
         Prepaid expenses            (25,759)    (13,427)   (12,332)          -
         Other assets                   (931)      4,205     (5,136)      2,845
         Accounts payable and
          accrued liabilities         54,656      86,235    (31,579)    (11,992)
                                  ----------    --------   --------   ---------
    Cash and cash equivalents
     used in operating activities   (870,601)   (338,305)  (532,296)     (9,883)
                                  ----------    --------   --------   ---------
 Cash flows from investing
  activities
    Cash and cash equivalents
      provided by (used in)
      investing activities                 -           -          -           -
                                  ----------    --------   --------   ---------


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

<PAGE>
                         VPGI Corp. and Subsidiaries
                        (A Development Stage Company)

                    CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                             Years ended June 30,


                                   Cumulative
                                     During
                                  Development
                                     Stage        2006       2005       2004
                                  -----------   --------   --------   ---------
 Cash flows from financing
   activities
  Preferred stock dividend paid      (20,067)          -    (20,067)          -
  Net proceeds from issuance
    of notes payable                 901,700     296,000    605,700           -
                                  ----------    --------   --------   ---------
    Cash and cash equivalents
      provided by financing
      activities                     881,633     296,000    585,633           -
                                  ----------    --------   --------   ---------
 Net increase (decrease) in cash
  and cash equivalents                11,032     (42,305)    53,337      (9,883)
                                  ----------    --------   --------   ---------
 Cash and cash equivalents,
   beginning of year                       -      53,337          -       9,883
                                  ----------    --------   --------   ---------
 Cash and cash equivalents,
   end of year                   $    11,032   $  11,032  $  53,337  $        -
                                  ==========    ========   ========   =========
 Supplemental information
   Cash paid for interest        $    66,173   $       -  $  66,173  $        -
                                  ==========    ========   ========   =========

 See Note J for supplemental schedule of non-cash investing and financing
 activities.


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

<PAGE>

                         VPGI Corp. and Subsidiaries
                        (A Development Stage Company)

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                         June 30, 2006, 2005 and 2004


 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Description of Business
  -----------------------
  Until it discontinued  normal operations in December  2002, VPGI Corp.  and
  Subsidiaries (the  Company), offered  enhanced digital  media solutions  to
  customers  worldwide.  It  also  offered  contact center  customer  service
  solutions through  CIMphony[TM], a suite  of computer telephony integration
  (CTI) software products and services.

  Effective July 1, 2004, the Company's management has devoted  substantially
  all  of  its  time  to  the  planning and  acquisition  of new  operations.
  Accordingly, the Company's financial statements  for 2006 are presented  as
  a development  stage enterprise, as  prescribed by  Statement of  Financial
  Accounting Standards No. 7, "Accounting for Development Stage Enterprises".

  Principles of Consolidation
  ---------------------------
  The accompanying consolidated financial statements include the accounts  of
  the Company and  its subsidiaries.   All significant intercompany  balances
  and transactions have been eliminated in consolidation.

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

  Cash Equivalents
  ----------------
  All highly  liquid debt  investments  with an  original maturity  of  three
  months or less are considered to be cash equivalents.

  Fair Value of Financial Instruments
  -----------------------------------
  The Company's financial instruments consist  of cash and cash  equivalents,
  accounts receivable, redeemable preferred stock  and debt.  The fair  value
  of cash and  accounts receivable approximate  the recorded amounts  because
  of the liquidity and short term nature of  these items.  The fair value  of
  debt approximates  the recorded  amounts.   The  fair value  of  redeemable
  preferred stock is reflected by  the recorded amount as it represents  fair
  value based on the market price of the Company's common stock.

  Stock-Based Compensation
  ------------------------
  Effective  July  1,  2005,  the  Company  adopted  Statement  of  Financial
  Accounting  Standards No.  123  (Revised 2004),  Share-Based Payment ("SFAS
  123R"),  which  requires  employee  and  qualifying   director  share-based
  payments to  be accounted for  using the  fair value  method.   Share-based
  compensation  costs related  to  equity  instruments  are  charged  against
  income  ratably over  the  fixed  vesting period  for  the  related  equity
  instruments, with the initial charge  generally recorded in the first  full
  month following the grant.  The  adoption of this  standard did not have  a
  material effect on the Company's financial statements.

  Under  the   modified   prospective  method   transition  of   SFAS   123R,
  compensation  costs related  to  any  non-vested portion  of  stock  option
  awards outstanding at the  adoption date are based  on the grant date  fair
  value of those  awards.  Since all  stock options previously granted  under
  the Company's 2005 stock  option plan were fully  vested prior to June  30,
  2005,  there are  no  deferred  compensation  costs  resulting  from  stock
  options to be accounted for on a prospective basis.  There were no  further
  stock options issued for all years presented.

  Revenue Recognition
  -------------------
  During 2006, the  Company recognized no revenue.   During 2005 the  Company
  recognized a significant  portion of its  revenue while acting  as a  sales
  agent or in  a similar  capacity.  As  such, the  Company reported  revenue
  based  upon  the  fee earned  as acting  as  an agent.  Product sales  were
  recognized at the time of delivery and customer acceptance.

  Loss Per Share
  --------------
  Basic loss  per common share  is based on  the weighted  average number  of
  common shares  outstanding.  Diluted  loss per share  is computed  based on
  the weighted  average number  of  shares outstanding,  plus the  number  of
  additional common  shares  that would  have  been outstanding  if  dilutive
  potential common  shares had  been issued.   In  all years  presented,  all
  potential common shares were anti-dilutive.

  Income taxes
  ------------
  The Company  accounts for  income  taxes in  accordance with  Statement  of
  Financial  Accounting Standard  No.  109,  "Accounting  for  Income  Taxes"
  ("SFAS 109").  SFAS 109  requires that deferred tax assets and  liabilities
  arising from  temporary differences  between  book and  tax basis  will  be
  recognized using  enacted  rates at  the  time such  temporary  differences
  reverse.  In  the  case  of  deferred  tax  assets,  SFAS  109  requires  a
  reduction in deferred tax assets  if it is more  likely than not that  some
  portion or  all  of the  deferred tax  will not  be  realized.   There  are
  accumulated deferred  tax assets  of $21  million, which  are offset  by  a
  valuation allowance  pursuant to  SFAS 109.   Such  losses are  limited  by
  certain Internal Revenue Service regulations.

  Recently issued accounting standards
  ------------------------------------
  On September 29,  2006, the Financial  Accounting Standards Board  ("FASB")
  issued Statement  of  Financial Accounting  Standards No.  158,  Employers'
  Accounting for  Defined  Benefit  Pension and  Other  Postretirement  Plans
  ("SFAS 158").  SFAS 158 requires employers to recognize the over-funded  or
  under-funded status of  a defined benefit postretirement  plan as an  asset
  or liability  in  its statement  of  financial position  and  to  recognize
  changes in  that funded  status in  the  year in  which the  changes  occur
  through other comprehensive income.  SFAS 158 requires employers to measure
  the funded status  of a plan  as of the date  of its year-end statement  of
  financial position (with limited exceptions).

  The Company  is required  to recognize  the funded  status of  its  defined
  benefit postretirement plan and to  provide the required disclosures as  of
  the end of the year ending June 30, 2007.  The requirement to measure  plan
  assets and  benefit obligations  as of  the date  of the  Company's  fiscal
  year-end statement  of financial  position is  effective for  fiscal  years
  ending after December 15, 2008.  As discussed in Note I, the Company is  in
  the  process  of  terminating  its  defined   benefit  postretirement  plan
  and settling  its  benefit  obligations.  Based  upon  information  as  the
  measurement date  of June  1, 2006,  the impact  of SFAS  158 would  be  to
  increase intangible assets by $14,470 and increase equity by  $14,470.  The
  actual impact  of adoption  of  SFAS 158  could differ  significantly  from
  these estimates due to potential changes in underlying economic  conditions
  which influence the  assumptions used in  the actuarial  valuation of  plan
  assets  and obligations,  including  returns  on  pension  assets,  pension
  contributions and changes in interest rates.


 NOTE B - GOING CONCERN MATTERS

  The Company incurred net losses  of $500,941, $717,477 and $20,355 for  the
  years ended June 30,  2006, 2005 and 2004,  respectively.  In addition,  at
  June 30, 2006, the Company  had negative working capital of $1,099,084  and
  negative  stockholders  equity  of  $1,043,554.   These   conditions  raise
  substantial doubt  about  the Company's  ability  to continue  as  a  going
  concern.

  The  Company  is  continuing  to  evaluate  all of its options and actively
  seeking a buyer, a merger candidate or an acquisition of a viable business.

  The financial  statements do  not  include any  adjustment to  reflect  the
  possible effects  on the  recoverability and  classification of  assets  or
  liabilities which may result from the inability of the Company to  continue
  as a going concern.


 NOTE C - BUSINESS COMBINATIONS AND DIVESTITURES

  On November 10,  2004 the Company  signed an Agreement  and Plan of  Merger
  (the "Agreement") to acquire another  company, Venture Pacific Group,  Inc.
  ("VPG").   The merger  was effected  by  merging a  new subsidiary  of  the
  Company into  VPG,  resulting in  VPG  being  the surviving  entity  and  a
  wholly-owned subsidiary  of the  Company.   The merger  was effective  upon
  issuance of the Certificate  of Merger by the  Texas Secretary of State  on
  November 16, 2004.

  The  acquisition  resulted   in  the  issuance   to  VPG  shareholders   of
  approximately 15,400 new shares of common stock of the Company, which  were
  valued at approximately $60,000, according  to the stock price on  November
  10, 2004.   The exchange ratio consisted  of one share  of common stock  of
  the Company ("Common  Stock") for each  five hundred shares  of VPG  common
  stock held by VPG shareholders.  (All share and per share data give  effect
  to a  one for  fifty (1:50)  reverse stock  split that  was implemented  on
  September 18,  2006, applied retroactively  as if  it occurred  on July  1,
  2004.)

  The Company  also  issued to  Trident Growth  Fund,  LP ("Trident")  a  new
  series of preferred  stock, Series 2004-L  Preferred Stock (the  "Preferred
  Stock"), to retire an  outstanding series of preferred  stock of VPG.   The
  Preferred  Stock  has  a  liquidation   value  of  $1.75  million  and   is
  convertible at  the option  of the  holder  into a  total of  1.75  million
  shares of Common Stock at any time after  six  months  from the issue date.
  14% cumulative dividends accrue on  the Preferred Stock, which are  payable
  as follows:   4% dividends are  payable quarterly and  10% dividends  shall
  accumulate and be  payable upon (a) the  conversion of the Preferred  Stock
  to Common Stock,  (b) the redemption  of the Preferred  Stock, or (c)  such
  time as the  Company generates positive  cash flow sufficient  to pay  such
  dividends.  These preferred shares were valued at $175.  Shares  accumulate
  dividends at $245,000 per year.  Dividends in arrears at June 30, 2006  and
  2005 on  Preferred  Stock  totaled  $381,274  and  $136,274,  respectively.
  These shares are unaffected  by the reverse split,  as the terms of  Series
  2004-L Preferred Stock contain no reset  feature in the event of a  reverse
  split.

  Concurrently with  the acquisition of  VPG, the  Company borrowed  $700,000
  from Trident and  executed a Convertible Note  (the "Note") payable at  the
  earlier of: (i) November 10, 2005;  (ii) the closing date of the  Company's
  next public offering;  or (iii) the date  of any change  of control of  the
  Company, as defined therein.   Interest is payable  monthly on the Note  at
  the rate of 14% per  annum.  The Note is  convertible into Common Stock  at
  any time on or after the six month anniversary of the date of issue of  the
  Note, at a per share conversion price  equal to the average of the  closing
  prices of  the Common  Stock for  the  three business  days ending  on  any
  conversion date.

  In connection  with  the issuance  of  debt discussed  above,  the  Company
  issued to  Trident warrants  to  purchase 15,200  shares of  Common  Stock,
  exercisable for five years at  an exercise price of  $5.00 per share.   The
  warrants were valued  at $60,040 and  are included as  a discount to  notes
  payable.

  In accordance  with Statement of  Financial Accounting  Standards No.  141,
  "Business  Combinations",  the  Company   has  accounted  for  the   merger
  transaction using the purchase method of accounting.  The results of  VPG's
  operations have been  included in the financial  statements since the  date
  of acquisition.

  The following table summarizes the  estimated value of the assets  acquired
  and liabilities assumed at the date of acquisition.

       Intangible assets                      $   146,819
       Current liabilities assumed                 86,644
                                               ----------
       Net assets acquired                    $    60,175
                                               ==========

  The $146,819  intangible  asset was  assigned  to in-process  research  and
  development assets  that were  written  off  at  the  date of  acquisition.
  Those write-offs are included in general and administrative expenses.

  The following table summarizes the unaudited pro forma condensed  financial
  information as if the acquisition of VPG  was completed July 1, 2003.   The
  unaudited combined  pro forma  condensed financial  statements are  derived
  from  the historical  financial  statements  of the  Company  and  VPG  and
  reflect adjustments  to present the  write-off of  in-process research  and
  development as of  July 1, 2003.   The pro  forma information is  presented
  for informational purposes  only.   You should not  rely on  the pro  forma
  information  as an  indication  of  the results  of  operations  of  future
  periods or the  results that  actually would have  been   realized had  the
  companies been a single company during the periods presented.

                                            Year Ended June 30,
                                         -------------------------
                                            2005           2004
                                         ----------     ----------

      Revenues                          $    17,243    $    24,961
      Operating expenses                    538,633        914,216
      Other income (expense)               (205,301)       (46,524)
      Net Loss                             (726,691)      (935,779)
      Net Loss attributable to
        common stockholders                (942,532)    (1,178,079)
      Net Loss per share                $     (8.14)   $    (11.46)

  All acquisitions have  been accounted for as  purchases and the  operations
  of the purchased  companies have been included  in the Company's  statement
  of operations  since their  date of  acquisition. Upon  consolidation,  all
  intercompany accounts and transactions have been eliminated.


 NOTE D - NOTES PAYABLE

  In connection with an  acquisition (See Note C),  on November 10, 2004  the
  Company entered  into a note  payable with  Trident Growth  Fund, L.P.  for
  $700,000, at  an annual  interest rate  of 14%,  maturing on  November  10,
  2005.  The loan is collateralized by a security interest in Company assets.
  Interest is payable monthly in cash.

  On  August 10, 2005  the loan  agreement was  modified to  change the  loan
  amount  from  $700,000  to  $750,000  and  the  Company  entered  into   an
  additional note payable with Trident  Growth Fund, L.P., for $50,000 at  an
  annual interest rate of  14%, maturing on August  10, 2006.  In  connection
  with the $50,000 loan, the  Company issued warrants to purchase 720  shares
  of its Common  Stock, exercisable for  five years at  an exercise price  of
  $5.00 per share.  The warrants were valued at approximately $3,500.

  On September 19, 2005 the loan  agreement was again modified to change  the
  loan amount  from $750,000  to $850,000  and the  Company entered  into  an
  additional  note  payable  with  Trident Growth Fund, L.P., for $100,000 at
  an  annual  interest  rate  of  14%,  maturing  on  September 19, 2006.  In
  connection with the $100,000 loan, the Company issued warrants to  purchase
  1,440 shares of its Common Stock, exercisable for five years at an exercise
  price  of $5.00 per share.  The  warrants  were  valued   at  approximately
  $6,000.

  On February 7, 2006  the loan  agreement was again  modified to change  the
  loan amount  from $850,000  to $950,000  and the  Company entered  into  an
  additional note payable with Trident Growth Fund, L.P., for $100,000 at  an
  annual interest rate of 14%, maturing  on February 7, 2007.  In  connection
  with the  $100,000 loan,  the  Company issued  warrants to  purchase  1,440
  shares of  its Common  Stock, exercisable  for five  years at  an  exercise
  price of  $5.00  per share.   The  warrants  were valued  at  approximately
  $1,900.

  On June 27, 2006 the loan agreement  was again modified to change the  loan
  amount  from  $950,000  to  $996,000  and  the  Company  entered  into   an
  additional note payable with Trident  Growth Fund, L.P., for $46,000 at  an
  annual interest rate of 14%, maturing  on February 7, 2007.  In  connection
  with the  $46,000  loan, the  Company  issued warrants  to  purchase  1,520
  shares of  its Common  Stock, exercisable  for five  years at  an  exercise
  price of  $5.00  per share.   The  warrants  were valued  at  approximately
  $3,345.

  The above notes are convertible into Common  Stock at any time on or  after
  the six  month anniversary of  the date  of issue of  the notes,  at a  per
  share conversion price equal  to the average of  the closing prices of  the
  common stock for the  three business days ending  on  any  conversion date.
  In addition, the notes may be redeemed at the earlier of: (i) the  maturity
  dates stated  above; (ii) the  closing date  of the  Company's next  public
  offering; or (iii)  the date of any  change of control  of the Company,  as
  defined therein.

  Negotiations with  Trident to extend  the maturity  date of  the notes  are
  ongoing.  As of the  date of this filing, extension  of the notes is  still
  pending.


 NOTE E - COMMITMENTS AND CONTINGENCIES

  Rentals
  -------
  Total rentals under  cancelable and non-cancelable  leases are included  in
  general and administrative  expenses and were  $23,183, $2,162  and $0  for
  the years  ended  June 30, 2006, 2005  and  2004.   Commitments for  rental
  payments under non-cancelable  operating leases for  the years ending  June
  30 are: 2007 - $43,377; 2008 - $44,519.

  Litigation
  ----------
  The Company is routinely a  party to ordinary litigation incidental to  its
  business, as  well as  to other  litigation of  a nonmaterial  nature,  the
  outcome  of which  management  does  not expect,  individually  or  in  the
  aggregate, to have a material adverse effect on the financial condition  or
  results of operations of the Company.


 NOTE F - CONCENTRATIONS OF CREDIT RISK

  There were no sales during 2006.

  During 2005 one customer represented 100% of sales.

  There were no sales during 2004.


 NOTE G - STOCKHOLDERS' EQUITY AND REDEEMABLE PREFERRED STOCK

  Preferred Stock
  ---------------
  The Company has 1,000,000 shares  authorized of $1.00 par value  cumulative
  preferred stock.  The Company's  articles of incorporation allow the  board
  of directors to determine the  number of shares and determine the  relative
  rights and preferences of any series of preferred stock to be issued.

  In December 1992, the Company issued 140,000 shares of Series A  redeemable
  preferred stock  (stated value  $1 per  share).   In fiscal  2000,  100,000
  shares were redeemed for cash,  and 10,000 shares were converted to  common
  stock, with  the remaining 30,000  outstanding at  June 30,  2006.   Shares
  accumulate dividends at 6%,  or $1,800 per year.   Dividends in arrears  at
  June 30, 2006, 2005  and 2004 on Series  A shares totaled $17,550,  $15,750
  and $13,950, respectively.

  In fiscal  1996,  the Company  issued 55  shares  of Series  H  convertible
  preferred  stock  (stated  value  $25,000  per  share).   52  shares   were
  converted into common stock in fiscal 1997, and one share was converted  in
  fiscal 2000, with the remaining two  shares outstanding  at  June 30, 2006.
  Shares accumulate dividends at 5%, or $2,500  per year and are paid in  May
  and November of  each year.   Shares are convertible  based on  80% of  the
  five day  average closing bid  price of  the Company's  common stock,  with
  minimum  and  maximum  conversion  limits   of  $12  and  $32  per   share,
  respectively.  Dividends of $10,000,  $7,500 and $5,000 were in arrears  on
  Series H shares at June 30, 2006, 2005 and 2004, respectively.

  In June  1999, the  Company issued  720 shares  of Series  D-1  convertible
  preferred stock (stated value $25,000  per share).  The shares  accumulated
  dividends at  5%, or $900,000  per year  and were  convertible into  common
  stock at  $32 per  share.   In  fiscal 2002,  the Company  exchanged  these
  shares for  240 shares  of  Series 2002-G  preferred stock  (stated  valued
  $25,000 per  share).   In  conjunction with  the  exchange of  shares,  all
  accumulated  dividends  associated  with  the  D-1  preferred  stock   were
  released by mutual  agreement.  The  new series of  preferred stock had  no
  provision for dividends and was  convertible into  shares  of common stock.
  Forty-four shares were  converted into common stock  in fiscal 2003,  forty
  shares were converted  into common stock  in fiscal 2005,  and four  shares
  were converted  in fiscal  2006.   As  of June  30, 2006,  the  outstanding
  unconverted 152 shares of Series  2002-G Preferred stock had a  liquidation
  preference of $3.8 million, convertible into 50,667 shares of common  stock
  of the Company.

  In June  2002, the Company  issued 20 shares  of Series 2002-K  convertible
  preferred stock  (stated value  $25,000 per  share).   The shares  have  no
  provision for dividends and are convertible into common shares at $.80  per
  share.   At any time,  at the Company's  sole discretion,  the Company  may
  redeem all  or part  of the  outstanding preferred  shares at  a price  per
  share of 120% of their face value.

  Refer to Note C for preferred stock issued in connection with acquisition.

  Dividends of $-0-,  $20,067 and $-0-  were paid on  preferred stock  during
  the years ended  June 30, 2006, 2005  and 2004,  respectively.   Cumulative
  dividends in  arrears  as of  June  30, 2006,  2005  and 2004  amounted  to
  $408,824, $136,274 and $18,950, respectively.

  Stock Options
  -------------
  The Company  has  periodically granted  stock  options for  employment  and
  outside services  received during the  years reported.   These options  are
  treated as fixed, compensatory awards.

  The Company  has granted compensatory  stock options to  key employees  and
  directors at market value  at the date of grant.  No options  were  granted
  during  2006  and  2004.  During  2005,  options covering 8,000 shares were
  granted that vested immediately.

  During  2005,  no  intrinsic  value  was  assigned  to  options  issued  to
  employees and  directors  and,  accordingly, no  compensation  expense  was
  recognized  in that year.  Had compensation  cost  been  determined on  the
  basis of fair  value, net loss and  net loss per share  for 2006, 2005  and
  2004 would have been increased as follows:

                                         2006          2005          2004
                                      ----------    ----------    ----------
    Net loss
      As reported                    $  (500,941)  $  (717,477)  $   (20,355)
      Deduct:  total stock-based
       employee compensation expense
       determined under fair value
       based method for all awards,
       net of income tax effect                -       (78,960)            -
                                      ----------    ----------    ----------
      Pro forma net loss             $  (500,941)  $  (796,437)  $   (20,355)
                                      ==========    ==========    ==========
    Loss per share
      As reported                          (5.46)        (7.55)        (0.24)
      Pro forma                            (5.46)        (8.23)        (0.24)

  The fair value of  these options was estimated at  the date of grant  using
  the Black-Scholes option pricing model with the following  weighted-average
  assumptions:

                                      2006           2005           2004
                                   ----------     ----------     ----------
    Expected volatility                N/A            219%           N/A
    Risk-free interest rate            N/A           4.24%           N/A
    Expected lives                     N/A          5 years          N/A
    Dividend yield                     N/A             -             N/A


  Additional information with respect to all options outstanding at June  30,
  2006, and changes for the three years then ended was as follows:

                       When Issued        When Issued     When Issued
                      Exercise Price     Exercise Price  Exercise Price
                         Above            Equal to          Below
                      market price      market price     market price
                    ------------------  ---------------  --------------
                            Weighted          Weighted        Weighted
                            average           average         average
                            exercise          exercise        exercise   Total
                   Options    price   Options   price Options   price   Options
                   -------    -----   -------   ----- -------   -----   -------
 Outstanding at
 June 30, 2003      32,220  $206.50    6,576   $42.50   2,096  $  720    40,892

 Granted                 -        -        -        -       -       -         -
 Forfeited          (2,809)   70.50     (188)  621.50  (1,583)    619   (4,580)
                   -------   ------   ------   ------  ------  ------   -------
 Outstanding at
 June 30, 2004      29,411  $219.50    6,388  $ 25.50     513  $1,031    36,312

 Granted                 -        -    8,000    10.00       -       -     8,000
 Forfeited          (2,813)  739.50      (63) 1076.00    (513)  1,031    (3,389)
                   -------   ------   ------  -------  ------  ------   -------
 Outstanding at
 June 30, 2005      26,598  $164.50   14,325   $12.50       -       -    40,923

 Granted                 -        -        -      -         -       -         -
 Forfeited          (4,850)  724.00     (125)  724.00       -       -    (4,975)
                   -------   ------   ------   ------  ------  ------   -------
 Outstanding at
 June 30, 2006      21,748  $ 40.00   14,200  $  6.07       -       -    35,948
                   =======   ======  =======   ======  ======  ======   =======


                                                 Number       Weighted
                                               of shares      average
                                               underlying     exercise
                                                options        price
                                               ----------     -------
    Options exercisable at June 30, 2004          35,051     $ 202.50
                                                  ======      =======
    Options exercisable at June 30, 2005          40,923     $ 111.50
                                                  ======      =======
    Options exercisable at June 30, 2006          35,948     $  26.60
                                                  ======      =======

  No options were granted  during 2006.  For  2005, options granted equal  to
  market value had  a weighted average fair  value per share  of $10.00.   No
  options were granted during 2004.

  Information about stock options outstanding at June 30, 2006 is  summarized
  as follows:

                          Options outstanding             Exercisable
                  --------------------------------  ----------------------
                               Weighted
                               average    Weighted                Weighted
                              remaining   average                 average
                              contractual exercise    Number      exercise
   Exercise prices     Number   life       price    exercisable    price
  ----------------   ---------  -----     -------   -----------   --------
    $   1.00             6,200   1.93     $  1.00       6,200     $  1.00
    $  10.00             8,000   3.75     $ 10.00       8,000     $ 10.00
    $  40.00            21,748   0.66     $ 40.00      21,748     $ 40.00
                     ---------                      ---------
                        35,948                         35,948
                     =========                      =========

  Warrants
  --------
  Common  stock  warrants  issued  and  outstanding  at  June  30,  2006  are
  summarized as follows:

                                                Weighted         Weighted
                                                 average         average
    Range of exercise price           Number  remaining life  exercise price
    ----------------------           -------  --------------  --------------
    $0.05 to $4.50                    13,925       2.89          $  0.64
    $5.00                             20,320       3.66          $  5.00

  All outstanding warrants are exercisable at June 30, 2006.

  During the year ended June 30,  2006, warrants to purchase an aggregate  of
  5,120 shares of the Company's common stock were granted in connection  with
  additional borrowings from  Trident.  The warrants  have an exercise  price
  of $5.00, expire in November 2009 through  June 2011, and were valued at  a
  total of approximately $14,745 upon issuance.

  During the year ended June 30,  2005, warrants to purchase 2,000 shares  of
  the Company's common  stock were granted  in connection  with a  litigation
  settlement.   The  warrants have  an  exercise  price of  $.05,  expire  in
  November 2009, and  were valued at  $10,000 upon  issuance.   Additionally,
  warrants to  purchase 15,200  shares  of the  Company's common  stock  were
  granted in connection with the issuance of long-term debt.  These  warrants
  have an exercise price of $5.00 and expire in November 2009.  The value  of
  the  warrants,  $60,040,   is  included  as   a  discount   on  the   debt.
  Additionally,  in connection  with  the  same  transaction  concerning  the
  issuance  of long-term  debt  in  November  2004,  the  exercise  dates  of
  outstanding warrants  to  purchase an  aggregate  of 6,625  shares  of  the
  Company's common stock were extended  until November 2009, from a  weighted
  average remaining life of 0.89  years to a weighted average remaining  life
  of 5.95 years;  and the exercise  prices of the  warrants were repriced  to
  $.05 per  share  from a  weighted average  exercise  price of  $104.50  per
  share.

  During the year ended June 30,  2004, warrants to purchase 1,000 shares  of
  the  Company's common  stock  were  granted  in  connection  with  services
  provided.  The  warrants have an  exercise price of  $4.50, expire in  July
  2008, and were valued at $4,500.


 NOTE H - INCOME TAXES

  A reconciliation  of  income tax  benefit  computed by  applying  the  U.S.
  Federal  tax rates  to  the  net  loss  and  recorded  income  tax  expense
  (benefit) is as follows:

                                         2006          2005         2004
                                      ----------    ----------    ----------
    Tax benefit at statutory rate    $  (192,092)  $  (272,093)  $    (7,836)
    Change in valuation allowance    $   192,092   $   272,093   $     7,836
                                      ----------    ----------    ----------
                                     $         -   $         -   $         -
                                      ==========    ==========    ==========

  The components of the Company's deferred income taxes at June 30, 2005  and
  2004 are as follows:

                                                 2006         2005
                                              ----------   ----------
    Deferred tax assets
      Net operating loss carryforwards       $21,498,544  $21,306,452
                                              ----------   ----------
      Deferred tax asset                      21,498,544   21,306,452
      Valuation allowance                    (21,498,544) (21,306,452)
                                              ----------   ----------
                                             $         -  $         -
                                              ==========   ==========

  At June  30, 2006, the  Company has  net operating  loss carryforwards  for
  Federal income tax purposes of approximately $64,602,766 which may be  used
  to offset future taxable  income,  subject to significant  limitations  and
  provisions  of the  Internal  Revenue  Code, and  will  expire  in  various
  amounts in the years 2008 through 2022 if not utilized.


 NOTE I - PENSION AND OTHER BENEFIT PROGRAMS

  Prior to a  subsidiary's bankruptcy filing  in 1992, the  subsidiary had  a
  defined benefit plan, which covered substantially all full-time  employees.
  Benefit  accruals were  frozen in accordance with  Section 204(h) of  ERISA
  as of January 1, 1997  and no employees have been  added to the plan  since
  that date.

  Settlement and Plan Termination

  All plan  benefits were  settled with  the purchase  of annuities  totaling
  $583,730 on August 7, 2006.  The Company expects to terminate the plan  and
  distribute remaining assets  during the upcoming  year.   A final  periodic
  benefit cost will be determined at that time.

  The following table sets forth  the funded status of the Company's  defined
  pension plan at June 30 (measurement dates of June 1, 2006 and 2005):

                                                       Pension Benefits
                                                       -----------------
                                                        2006      2005
                                                       -------   -------
  Change in benefit obligation
  Benefit obligation at beginning of year             $613,280  $576,675
  Interest cost                                         25,914    26,586
  Actuarial (gain)/loss                                (30,525)   51,430
  Benefits paid                                        (44,475)  (41,411)
                                                       -------   -------
  Benefit obligation at end of year                   $564,194  $613,280

  Change in plan assets
  Fair value of plan assets at beginning of year      $621,711  $621,608
  Actual return on plan assets                          56,958    41,514
  Benefits paid                                        (44,475)  (41,411)
                                                       -------   -------
  Fair value of plan assets at end of year            $634,194  $621,711
                                                       -------   -------
  Reconciliation of Funded status
  Funded Status (Underfunded)/Overfunded              $ 70,000  $  8,431
  Unrecognized net actuarial loss (gain)               (14,470)   46,677
                                                       -------   -------
     Net amount recognized                            $ 55,530  $ 55,108
                                                       =======   =======

  Amounts recognized in the statement of financial position consist of:

                                                        Pension Benefits
                                                       -----------------
                                                         2006      2005
                                                       -------   -------
  Prepaid benefit cost                                $ 55,530  $ 55,108
                                                       -------   -------
     Net amount recognized                            $ 55,530  $ 55,108
                                                       -------   -------

  The accumulated  benefit obligation for  the defined  benefit pension  plan
  was $564,194 and $613,280 at June 30, 2006 and 2005, respectively.

  Components of Net Periodic Benefit Cost

                                                        Pension Benefits
                                                       -----------------
                                                         2006      2005
                                                       -------   -------
  Interest cost                                       $ 25,914  $ 26,586
  Expected return on plan assets                       (26,336)  (31,722)
  Effect of Special Events                                  --        --
                                                       -------   -------
     Net periodic benefit cost                        $   (422) $ (5,136)
                                                       =======   =======


  Assumptions

  Weighted-average assumptions used to determine benefit obligations at June
  30:

                                                        Pension Benefits
                                                       -----------------
                                                         2006      2005
                                                       -------   -------
  Discount rate                                          6.00%     5.00%
  Rate of compensation increase                            --        --

  Weighted-average assumptions used  to determine net  periodic benefit  cost
  for years ended June 30:

                                                        Pension Benefits
                                                       -----------------
                                                         2006      2005
                                                       -------   -------
  Discount rate                                          5.00%     6.00%
  Expected long-term return on plan assets               5.00%     6.50%
  Rate of compensation increase                           N/A       N/A


  Historical and  future  expected returns  of  multiple asset  classes  were
  analyzed to develop a risk free real  rate of return and risk premiums  for
  each asset class.  The overall rate  for each asset class was developed  by
  combining a  long-term inflation  component,  the risk  free real  rate  of
  return, and  the associated  risk  premium.  A  weighted average  rate  was
  developed based on those overall  rates and the target asset allocation  of
  the plan.

  Plan Assets

  The Company's pension plan weighted-average  asset allocations at June  30,
  2006 and 2005 by asset category are as follows:

                                                    Plan Assets at June 30:
                                                         2006      2005
                                                       -------   -------
  Asset Category
  --------------
  Equity securities                                        33%       24%
  Debt securities                                          67%       76%
                                                       -------   -------
     Total                                                100%      100%
                                                       =======   =======

  Equity securities include Principal Financial  Group, Inc. Common Stock  in
  the amount of $207,775 (33 percent  of total plan assets) and $150,967  (24
  percent of total plan assets) at June 30, 2006 and 2005, respectively.

  Cash Flows

  Contributions
  -------------
  Due to the settlement of all plan obligations, the Company will not be
  required to contribute to the pension plan in the future.


  Estimated Future Benefit Payments
  ---------------------------------
  The following benefit  payments are expected  to be paid  over the next  10
  fiscal years ending:

  2007                              607,000
  2008                                   --
  2009                                   --
  2010                                   --
  2011                                   --
  Years 2012 - 2016                      --

  These amounts are based on actual benefit payments made to settle the
  plan's benefit obligations.

  Components of Net Periodic Benefit Cost for the fiscal year ending June
  30, 2006

  Interest cost                                 25,914
  Expected return on plan assets               (26,336)
                                               -------
     Net periodic benefit cost                $   (422)
                                               =======

  The  interest cost  shown  above  is  based  on  a  Benefit  Obligation  of
  $564,194.

  The expected Return on Plan Assets  is based on $634,194, the market  value
  of assets at June 30, 2006.


 NOTE J - NON-CASH INVESTING AND FINANCING ACTIVITIES

                                            2006         2005         2004
                                         ----------   ----------   ----------
  SUPPLEMENTAL SCHEDULE OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES

  Issuance of common stock
    in acquisition                      $         -   $   60,000  $         -
                                         ==========    =========   ==========
  Issuance of preferred stock
    in acquisition                      $         -   $      175  $         -
                                         ==========    =========   ==========
  Issuance of common stock
    for services                        $         -   $        -  $    15,119
                                         ==========    =========   ==========
  Issuance of common stock warrants
    for services                        $         -   $        -  $     4,500
                                         ==========    =========   ==========
  Exercise of warrants
    into common stock                   $         -   $       (3) $         -
                                         ==========    =========   ==========
  Issuance of warrants in connection
    with debt                           $    14,745   $   60,040  $         -
                                         ==========    =========   ==========
  Conversion of preferred stock
    to common stock                     $        (4)  $      (40) $         -
                                         ==========    =========   ==========
  In-process research and development
    costs acquired through assumption
    of debt                             $         -   $   86,644  $         -
                                         ==========    =========   ==========


 NOTE K - BUSINESS SEGMENT INFORMATION

  No business  segments have existed  since the  Company discontinued  normal
  operations in  December 2002.   Prior to  that, the  Company was  primarily
  engaged  in high  technology  product  sales  and  consulting  and  support
  services.


 NOTE L - RELATED PARTIES

  The Company's CEO held approximately 39% of the common stock of VPG at  the
  time of the merger discussed in Note C.   He also served as a director  and
  the CEO of VPG at  that time.  Trident, reported  as a beneficial owner  of
  7.6% of the  Company as of June  30, 2004, was also  a beneficial owner  of
  approximately 35% of VPG.

  The CEO  previously  paid various  miscellaneous  expenses of  the  Company
  during the fiscal  year ended June  30, 2004.   The CEO  holds the  Company
  harmless from these  expenses and does not  intend  to  seek reimbursement.
  These expenses  are less  than $30,000.   During  the year  ended June  30,
  2004, 5,760  shares of  common stock  with a  market value  of $5,760  were
  issued to the CEO for services.

  During  the year  ended  June  30, 2005,  the  Company  paid  approximately
  $20,000 to a company, 100% owned by the CEO, for management and  consulting
  services.

  During  the  year  ended  June   30,  2006,  the  Company's  CEO   advanced
  approximately $63,378 to the Company  for operating expenses.  At June  30,
  2006, amounts outstanding under  this advance totaled approximately  $9,246
  and are included in accrued expenses.


 NOTE M - SUBSEQUENT EVENT

  On  July 14, 2006, Patrick  A. Custer, the  sole director  of the  Company,
  appointed Joseph R. Rozelle as  a member to the  board of directors of  the
  Company effective as  of July 14,  2006.  Concurrently  with Mr.  Rozelle's
  appointment as a director, Mr.  Custer resigned as an officer and  director
  of the Company  and Mr. Rozelle  was elected to  the offices of  President,
  Secretary, Treasurer and Chief Executive Officer of the Company.

  On September 5, 2006, stockholders approved a one for fifty (1:50)  reverse
  split of  all outstanding  shares of  the Company's  common stock  and  the
  reverse split  was  implemented on  September  18,  2006.   The  par  value
  remained at $.001 per share and the authorized number of common shares  was
  maintained at 80,000,000.  All share and per share data give effect to  the
  reverse stock split,  applied retroactively as  if it occurred  on July  1,
  2003.


 NOTE N - SELECTED QUARTERLY FINANCIAL DATA (unaudited)

<TABLE>
 The following tables set forth certain unaudited financial data for the
 quarters indicated:

                                   Fiscal 2006 Quarter Ended                               Fiscal 2005 Quarter Ended
                       --------------------------------------------------    ----------------------------------------------------
                        Sept. 30,    Dec. 31,     March 31,     June 30,       Sept. 30,    Dec. 31,      March 31,     June 30,
                          2005         2005         2006          2006           2004         2004          2005          2005
                       ----------   ----------    ---------    ----------    ----------    ----------    ----------    ----------
 <S>                  <C>          <C>           <C>          <C>           <C>           <C>           <C>           <C>
 Net Sales                  $0.00        $0.00        $0.00         $0.00         $0.00          $500        $5,323        $6,720
 Gross Margin               $0.00        $0.00        $0.00         $0.00         $0.00          $500        $5,323        $6,720
 % of net sales                 0%           0%           0%            0%            0%          100%          100%          100%

 Operating income
  (loss)                $(158,252)    $(88,802)    $(26,723)     $(43,838)        $0.00     $(210,678)    $(192,459)    $(154,895)
 % of net sales                 0%           0%           0%            0%            0%            0%            0%            0%

 Net income (loss)      $(221,134)   $(138,076)    $(63,689)     $(78,042)        $0.00     $(244,500)    $(259,973)    $(213,004)
 % of net sales                 0%           0%           0%            0%            0%            0%            0%            0%

 Net income (loss)
  attributable to
  common shareholders   $(283,459)   $(200,401)   $(126,014)    $(140,367)      $(1,075)    $(277,275)    $(322,298)    $(273,170)
 % of net sales                 0%           0%           0%            0%            0%            0%            0%            0%

 Net income (loss)
  attributable to
  common shareholders
  per share - basic and
  diluted*                 $(2.08)      $(1.46)      $(0.91)       $(1.02)       $(0.01)       $(2.46)       $(2.68)       $(2.18)

 * Difference in per share amounts between quarterly financial data and
   year-end results are attributable to rounding.  The above information
   differs from that previously reported for the quarters ended December
   31, 2004 and March 31, 2005 due to impact of stock warrants granted to
   Trident Growth Fund, LP ("Trident") in connection with our issuance of
   a note payable to Trident on November 10, 2004.  The fair value of the
   stock warrants was recorded as a discount to debt and amortized over
   the term of the note payable.  The impact of this adjustment increased
   the loss for the quarters ended December 31, 2004 and March 31, 2005
   by $8,389 and $14,804, respectively.  The loss for the quarter ended
   December 31, 2004 was also increased by $10,000 to reflect the fair
   value of stock warrants issued on November 4, 2004 in settlement of
   litigation.  In addition, revenue for the quarter ended March 31, 2005
   was decreased by $90,902 with a corresponding reduction to the cost of
   product and services to reflect revenue recognition at net as an agent.
   All share and per share data give effect to a one for fifty (1:50)
   reverse stock split that was implemented on September 18, 2006, applied
   retroactively as if it occurred on July 1, 2003.
</TABLE>
<PAGE>

                         VPGI Corp. and Subsidiaries
                        (A Development Stage Company)

               SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

               For the years ended June 30, 2006, 2005 and 2004


                         Balance at  Charged to  Charged               Balance
                          beginning  costs and  to other               at end
 Description               of year   expenses   accounts  Deductions   of year
 -----------             ---------   ---------  --------  ----------  ---------

 Year ended June 30, 2004
  Allowance for
  doubtful accounts              -           -         -           -          -

 Year ended June 30, 2005
  Allowance for
  doubtful accounts              -           -         -           -          -

 Year ended June 30, 2006
  Allowance for
  doubtful accounts              -           -         -           -          -

<PAGE>

                                  VPGI CORP.
                               and Subsidiaries

                                EXHIBIT INDEX

 Exhibit Number       Description of Exhibits          Sequential Page Number
 ----------------------------------------------------------------------------

 2.1       Agreement and Plan of Merger dated November 10, 2004
           between the Company and Venture Pacific Group, Inc.
           (filed as Exhibit "2.1" to the Company's Current Report
           on Form 8-K dated as of November 10, 2004, filed on
           November 17, 2004.)                                            N/A

 3(i)      Articles of Incorporation of the Company, as amended and
           restated (filed as Exhibit "3(i)" to the Company's Annual
           Report on Form 10-K for the fiscal year ended June 30,
           2003 and incorporated herein by reference.)                    N/A

 3(ii)     Bylaws of the Company, as amended (filed as Exhibit
           "3(ii)" to the Company's Annual Report on Form 10-K for
           the fiscal year ended June 30, 1999 and incorporated
           herein by reference.)                                          N/A

 4.1       Form of common stock Certificate of the Company (filed as
           Exhibit "4.2" to the Company's annual report on Form 10-K
           for the fiscal year ended June 30, 1994 and incorporated
           herein by reference.)                                          N/A

 4.2       1999 Equity Incentive Plan (filed as Exhibit "4.4" to the
           Company's Registration Statement on Form S-8 filed with
           the Commission on July 12, 2000 and incorporated herein
           by reference.)                                                 N/A

 4.3       Series A Preferred Stock terms and conditions (filed as
           Exhibit "4.3" to the Company's annual report on Form 10-K
           for the fiscal year ended June 30, 1994 and incorporated
           herein by reference.)                                          N/A

 4.4       Series H Preferred Stock terms and conditions (filed as
           Exhibit "4.4" to the Company's Registration Statement on
           Form S-3 originally filed with the Commission on June 20,
           1996 and incorporated herein by reference.)                    N/A

 4.5       Series 2002-G Preferred Stock terms and conditions (filed
           as Exhibit "4.1" to the Company's Current Report on Form
           8-K dated as of March 5, 2002 and incorporated herein by
           reference.)                                                    N/A

 4.6       Form of warrant issued in connection with private placement
           to Bonanza Partners, Ltd. (filed as Exhibit "4.11" to the
           Company's Quarterly Report on Form 10-Q for the fiscal
           quarter ended December 31, 1999 and incorporated herein
           by reference.)                                                 N/A

 4.7       Form of warrant issued in connection with private placement
           to LBI Group, Inc. (filed as Exhibit "4.5" to the Company's
           Registration Statement on Form S-3 filed with the Commission
           on May 19, 2000 and incorporated herein by reference.)         N/A

 4.8       Form of warrant issued to Sagemark Capital, L.P. in
           connection with a loan to the Company (filed as Exhibit
           "4.11" to the Company's Quarterly Report on Form 10-Q for
           the fiscal quarter ended December 31, 2000 and incorporated
           herein by reference.)                                          N/A

 4.9       Securities Purchase Agreement dated March 5, 2002 between
           registrant and Brown Simpson Partners I, Ltd. relating to
           the redemption of registrant's Series 1999-D1 Convertible
           Preferred Stock with Series 2002-G Convertible Preferred
           Stock (filed as Exhibit "99.2" to the Company's Current
           Report on Form 8-K dated as of March 5, 2002 and
           incorporated herein by reference.)                             N/A

 4.10      Registration Rights Agreement dated March 5, 2002 between
           registrant and Brown Simpson Partners I, Ltd. relating to
           the registration of the shares of common stock underlying
           registrant's Series 2002-G Convertible Preferred Stock
           (filed as Exhibit "99.3" to the Company's Current Report
           on Form 8-K dated as of March 5, 2002 and incorporated
           herein by reference.)                                          N/A

 4.11      Settlement and Mutual Release Agreement dated March 5, 2002
           between registrant and Brown Simpson Partners I, Ltd.
           relating to the redemption of registrant's Series 1999-D1
           Convertible Preferred Stock with Series 2002-G Convertible
           Preferred Stock (filed as Exhibit "99.4" to the Company's
           Current Report on Form 8-K dated as of March 5, 2002 and
           incorporated herein by reference.)                             N/A

 4.12      Form of warrant issued to Setfield Limited for services
           rendered (filed as Exhibit "4.18" to the Company's annual
           report on Form 10-K for the fiscal year ended June 30, 2002
           and incorporated herein by reference.)                         N/A

 4.13      Form of warrant issued to Gemini Growth Fund, L.P. in
           connection with a loan to the Company (filed as Exhibit
           "4.19" to the Company's annual report on Form 10-K for the
           fiscal year ended June 30, 2002 and incorporated herein by
           reference.)                                                    N/A

 4.14      Series 2002-K Preferred Stock terms and conditions (filed as
           Exhibit "4.20" to the Company's annual report on Form 10-K
           for the fiscal year ended June 30, 2002 and incorporated
           herein by reference.)                                          N/A

 4.15      Form of warrant issued to Associates Funding Group, Inc. in
           connection with sale of nine subsidiaries (filed as Exhibit
           "4.18" to the Company's Quarterly Report on Form 10-Q for the
           fiscal quarter ended March 31, 2003, filed on May 20, 2003
           and incorporated herein by reference.)                         N/A

 4.16      Form of warrant issued to Akin, Gump, Strauss, Hauer & Feld,
           LLP. in connection with legal services rendered to the
           Company (filed as Exhibit "4.19" to the Company's Quarterly
           Report on Form 10-Q for the fiscal quarter ended March 31,
           2003, filed on May 20, 2003 and incorporated herein by
           reference.)                                                    N/A

 4.17      First Amendment to Series 2002-G Preferred Stock terms and
           conditions (filed as Exhibit "4.21" to the Company's Annual
           Report on Form 10-K for the fiscal year ended June 30, 2003
           and incorporated herein by reference.)                         N/A

 4.18      Form of 190,000 warrants issued to consultants during year
           ended June 30, 2003 in connection with services rendered to
           the Company (filed as Exhibit "4.22" to the Company's Annual
           Report on Form 10-K for the fiscal year ended June 30, 2003
           and incorporated herein by reference.)                         N/A

 4.19      Series 2004-L Preferred Stock terms and conditions (filed as
           Exhibit "4.1" to the Company's Current Report on Form 8-K
           dated as of November 10, 2004, filed on November 17, 2004.)    N/A

 4.20      Form of warrant issued to Trident Growth Fund, L.P. in
           connection with the Loan Agreement dated November 10, 2004
           between the Company and Trident Growth Fund, L.P. (filed as
           Exhibit "4.2" to the Company's Current Report on Form 8-K
           dated as of November 10, 2004, filed on November 17, 2004.)    N/A

 4.21      Amended Form of warrants issued to Trident Growth Fund, L.P.
           in connection with the amended Loan Agreement dated November
           10, 2004 between the Company and Trident Growth Fund, L.P.
           (filed as Exhibit "4.21" to the Company's Annual Report on
           Form 10-K for the fiscal year ended June 30, 2005 and
           incorporated herein by reference.)                             N/A

 10.1      Loan Agreement dated November 10, 2004 between the Company
           and Trident Growth Fund, LP. (filed as Exhibit "10.1" to the
           Company's Current Report on Form 8-K dated as of November 10,
           2004, filed on November 17, 2004.)                             N/A

 10.2      First Amendment to Loan Agreement dated November 10, 2004
           between the Company and Trident Growth Fund, LP. (filed as
           Exhibit "10.2" to the Company's Annual Report on Form 10-K
           for the fiscal year ended June 30, 2005 and incorporated
           herein by reference.)                                          N/A

 10.3      Second Amendment to Loan Agreement dated November 10, 2004
           between the Company and Trident Growth Fund, LP. (filed as
           Exhibit "10.3" to the Company's Annual Report on Form 10-K
           for the fiscal year ended June 30, 2005 and incorporated
           herein by reference.)                                          N/A

 10.4      Lease Agreement between the Company and Memshalah Realty
           dated May 5, 2005 pertaining to the property utilized as
           the corporate headquarters (filed as Exhibit "10.4" to the
           Company's Annual Report on Form 10-K for the fiscal year
           ended June 30, 2005 and incorporated herein by reference.)     N/A

 10.5*     Third Amendment to Loan Agreement dated November 10, 2004
           between the Company and Trident Growth Fund, LP.                61

 10.6*     Fourth Amendment to Loan Agreement dated November 10, 2004
           between the Company and Trident Growth Fund, LP.                64

 21 *      Subsidiaries of the Company.                                    67

 23 *      Consent of Independent Certified Public Accountants.            68

 31 *      Certification of Chief Executive Officer and Principal
           Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a)
           of the Securities and Exchange Act of 1934, as adopted
           pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.      69

 32 *      Certification of Chief Executive Officer and Principal
           Financial Officer pursuant to 18 U.S.C. Section 1350, as
           adopted pursuant to Section 906 of the Sarbanes-Oxley Act
           of 2002.                                                        71
 _______________
 *  Filed herewith.