SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

[ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
            OF THE SECURITIES  EXCHANGE ACT OF 1934

                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
            OF THE SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER 000-29249

                              TRUE PRODUCT ID, INC.
             (Exact name of registrant as specified in its charter)

              DELAWARE                                          16-1499611
(State or other jurisdiction of incorporation               (I.R.S. Employer
  or organization)                                           Identification No.)

          2600 CENTER SQUARE WEST
                 1500 MARKET STREET
          PHILADELPHIA, PENNSYLVANIA                              19102
    (Address of principal executive offices)                   (Zip Code)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 215-496-8102

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of Class)

Indicated by check mark whether 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   .
    ---       ---

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant was $50,043,350 as of December 31, 2006, computed on the basis of the
average of the bid and asked prices on such date.

The registrant's revenues for the year ended June 30, 2007 were $-0-.

As of  September  28,  2007 there were  450,622,336  shares of the  registrant's
Common Stock outstanding.

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

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

DOCUMENTS  INCORPORATED  BY REFERENCE
Portions of the Proxy  Statement  for the 2007 Annual  Meeting of  Stockholders,
which  statement  will be filed  not  later  than 120 days  after the end of the
fiscal year covered by this Report,  are incorporated by reference into Part III
of this Form 10-K to the extent stated herein.


<PAGE>



                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

True Product ID, Inc. (the "Company" or the "Corporation")  produces integrators
for anti-counterfeiting and security surveillance applications and is a provider
of integrated  tracking  devices.  The Company  delivers  turnkey  solutions for
governments,  armed forces, and industry, through its own proprietary technology
and through aggregating the technology,  products, and services of third parties
via licensing agreements and/or joint ventures.

The Company delivers anti-counterfeiting turnkey solutions to governments, armed
forces,  and  industry,  through  its own  proprietary  technology  and  through
aggregating  the  technology,  products,  and  services  of  third  parties  via
licensing agreements and joint ventures.

Counterfeit,  by definition,  denotes the copying,  imitation,  or forging of an
article  by a  perpetrator  who  lacks the  legal  right to do so,  and with the
express purpose of deceiving or defrauding. Counterfeiting encompasses violation
of  intellectual  property  (IP) rights that are  legally  enshrined  in patents
(linked with inventions); copyright (covering literary, musical, artistic works,
and software);  trademarks  (including  words,  brands,  and logos),  industrial
designs and other forms of IP.

The  counterfeiting  industry  comprises  5% to 7% of global  trade and is worth
roughly $450 to $500 billion according to the International Chamber of Commerce.

BUSINESS

The   Company   plans   to  be   the   world   leader   in  the   provision   of
anti-counterfeiting, brand and product authentication, and security products and
services.  The Company's  authentication  solution is an  integrated  management
system based on synthetic  taggant  technology,  in which specific  taggants are
formulated to tag target  objects for  identification  and  authentication.  Our
higher end solutions also employ a proprietary  supporting computer database and
application  (KMAC) to manage  inspections,  as well as collect and analyze data
from scanners in the field for trend  spotting and  responsive  action.  To best
serve its customers'  needs,  especially in China, and to best penetrate certain
global  markets,  in  addition  to its own  technologies,  the  Company has also
explored and is pursuing  strategic  relationships  with companies in the United
States  and  Europe  with  complimentary   anti-counterfeiting   technology  and
continues  to  explore  the  technology  market  for  novel  anti-counterfeiting
solutions in addition to taggant or scanning technology.

The  Company's  authentication  management  system  is  comprised  of a suite of
world-class   technologies,   representing   years  of  empirical  research  and
application to the business of authentication.  The Company's technology is both
focused on  commercial  and civil  applications,  and applies to a wide range of
businesses  plagued by piracy and IP violations,  everything  from cigarettes to
pharmaceuticals,  and from auto parts to currency,  The  Company's  cutting-edge
technology  ultimately  provides  commercial  or government  end-users  with the
authentication  technology needed to protect brand integrity and revenue capture
from piracy and to help  monitor,  manage and address  quality and safety issues
during the global supply chain..

One of our tagging techniques is Synthetic DNA (S-DNA). This involves developing
a taggant  based upon elements and placing that tag on or in the product or item
to be scanned.  Both the physical and chemical properties of S-DNA are extremely
stable.  It is free of toxicity or pollution because only a very small volume is
used,  resistant  to high  temperature  and  abrasion,  strong  acid and  strong
alkaline,  the S-DNA does not dissolve in common  solvents.  Owing to its strong
permeability, S-DNA bonds to all objects on a molecular level with the exception
of cut glass and diamonds.

Without changing the original  production process or adding any facilities,  the
manufacturer only needs to apply S-DNA elemental taggant of different proportion
on different positions on the products (directly on the product itself or on its
packaging  material) as  information  points,  and then use a  micro-intelligent
analysis  system to  authenticate  the product  information.  The  analysis  and
management of the taggant  information  through the data  management  system can
effectively and  economically  protect the products against  counterfeiting  and
duplication.

Another of our tagging technology involves designing a molecule that responds to
certain Infra-Red or Ultra-Violet light. This tag is also highly specialized and
similar to S-DNA is extremely difficult to copy or fake.



                                       1
<PAGE>


The last of the Company's  tagging  technology  implements a technology known as
particle pattern  recognition and  verification.  Each product is printed with a
two-dimensional  data matrix that contains  information  about a random particle
pattern  located  somewhere  on the package as well.  The scanner then reads the
data matrix and the  particle  pattern and submits this  information  to KMAC or
another  central  database.  That data can  contain  information  related to the
product/location  and whether or not the product is fake or real.  KMAC can then
determine if that serial number for  "appropriateness." For example, if the same
product  serial number passes  through a scan point more than once,  one of them
MUST be a counterfeit.

The  customized  information  of a given  tagged  object is stored in KMAC,  the
Company's  proprietary data management system. This system is able to detect all
information related to the identity of the tagged object at any time or location
with extremely high accuracy.

To ensure the highest level of security,  our tagging system  involves  stacking
tags. That is, multiple  technologies  are used to generate a single tag, making
it extremely  difficult to copy or spoof. This combined with the real time power
of  KMAC  to  provide   back-end   verification,   yields   the  most   advanced
anti-counterfeit solution in the world.

Our  authentication  management system can be widely applied to various goods or
products such as medicine,  food,  apparel,  tobacco,  alcohol,  vehicle  parts,
cosmetics,  electronic components, jewelry, art and cultural artifacts, athletic
merchandise,  as well as  financial  instruments  such as currency,  checks,  or
receipts.  The Company's  proprietary  authentication system is multi-functional
and can  serve as a means to tag  materials  and  products  at each  step in the
supply chain,  from tagging raw materials and products during the  manufacturing
process to, post-production  movement of products from transport to distribution
to end-users.  Above all, our  authentication and tracking system is well suited
to law  enforcement  by,  for  example,  customs  agents  preventing  smuggling,
thwarting  counterfeiting  of financial  documents and currency,  and curtailing
piracy of high-end manufactured goods.

STRATEGY

See Item 6 below.  Management's  Discussions and Analysis of Financial Condition
and Results of Operation.

THE PRODUCTS AND SERVICES:

SYNTHETIC DNA (S-DNA)

The Company's  marking  process  involves the  application  of a combination  of
inorganic  elements.  These  elements  penetrate  the surface of an object and a
molecular bond is formed.  The method of  application  can vary depending on the
item to be tagged.  Coded  elements can be placed on an object using a colorless
carrier  rendering them invisible to the human eye, or can include a fluorescent
element so that they glow under UV light.  The specific  ratios of elements that
comprise the synthetic DNA create a unique identity code for a given client,  or
a specific  product,  division,  or product  run  within  the  client's  area of
concern.  The  number  of  potential  mix  ratios  or  identity  codes is in the
billions.

Depending on the surface structure, a high percentage of the chemical penetrates
and bonds with the item's  molecular  structure.  Once the synthetic DNA (S-DNA)
has entered the item, its removal,  whether by chemical solvent or abrasion,  is
extremely difficult.  Total removal of the S-DNA that has penetrated the item is
extremely  difficult.  We have tested and proven our  capability  to introduce a
synthetic DNA into a product during the manufacturing  process.  This enables us
to invisibly attach a "fingerprint to the product via synthetic DNA which can be
applied to industrial parts, apparel,  consumer electronics,  jewelry,  CD-ROMs,
sporting goods, as well as currency.

HANDHELD SCANNERS/ ANALYZERS

Like the common commercial bar code scanner,  the Company's  wireless  hand-held
analyzer is used to identify  synthetic  DNA codes.  This analysis when combined
with the KMACK system can identify,  for example,  the  legitimate  owner of the
marked item, the production run from which it originated and whether the product
is genuine or a counterfeit. Our analyzer allows customers to engage in:

-  Product  identification  &  authentication  based on two  types  of  distinct
technologies: taggant and detection device technology.

 - Our  turnkey  system  enables  brand  owners  (OEM's)  the  ability to reduce
liability, protect brand integrity,  increase profitability and protect customer
confidentiality.




                                       2
<PAGE>

 - TPID  taggant  includes  tags  that can be  (optionally)  read by a number of
different reader types including:

 - XRF as well as Infa-Red (IR),  scanners can read individual  items for on the
spot verification of a product's authenticity.

-  Marker  Systems  uses  microscopic  particles<  Optical/Audible  System  uses
multi-functional  additives  Elemental  System  -  Elemental  Additive  Particle
Pattern - Standard 2D bar code scanner

We  intend  to  either  lease  or sell  the  scanners  depending  upon  customer
conditions and other business considerations.

CONSULTING AND DATA SERVICES

The Company intends to generate consulting and data services from the use of its
KMAC proprietary  computerized  database, the sale of KMAC generated data and by
licensing the KMAC system to third parties.

PRODUCT AUTHENTICATION SERVICES

Product  authentication  services include: 1) credited scans associated with the
work order, 2) additional  scans required and 3) management of inspectors by the
Company.

COMPETITION

There are currently  five competing  technologies  for  anti-counterfeiting  and
security surveillance applications and is a integrated tracking devices. The are
radio    frequency    identification    ("RFID")    systems,    taggants,    DNA
("Deoxyribonucleic Acid"), synthetic DNA and traceless technology.

Chip Based RFID competitors include:

o      Omron
o      Lowry Computer Products
o      Markem Corporation
o      Tana Consultancy Services

Chipless RFID competitors include:

o      Inkode
o      Cross ID

Ink Based Taggant competitors include:

o      TraceTag International
o      Inksure Technologies Inc.
o      Sun Chemical
o      Dupont Authentication Systems (DAS_

DNA competitors include:

o      Applied DNA Sciences, Inc.
o      TraceTag International

Synthetic DNA competitors include:

o      DNA Technologies, Inc.
o      identify GmbH
o      ID Global

Traceless Technology competitors include:

o      Eastman Kodak




                                       3
<PAGE>



Microtaggant competitors include:

o      Microtrace LLC
o      Authentix

INTELLECTUAL PROPERTY

Currently,  the  Company  has filed an  application  for a patent with the State
Intellectual   Property   Office  of  the   People's   Republic  of  China  (No.
200510089020.1)  filed  August  3,  2005 for the  "Method  and  Apparatus  Using
Chemical Elemental Taggant and the Chemical Elemental Taggant"

Additionally,  the Company has filed an application for a patent with the Patent
Cooperation Treaty (No.  PCT/CN2006/001946) filed August 2, 2006 for the "Method
for Tagging and Detecting  Articles and  Apparatus  thereof".  In May 2007,  the
Chinese  State  Intellectual   Property  Office,   acting  as  an  International
Preliminary  Examining  Authority  (IPEA)  under the Patent  Cooperation  Treaty
(PCT), has issued a favorable  International Search Report (ISR) with respect to
the PCT application. In the ISR, the IPEA did not identify any publication that,
alone or in combination, would prevent the invention as claimed from meeting the
novelty and inventive step requirements for  patentability  under the PCT. While
the ISR identified  three  publications  (a Chinese patent,  a US patent,  and a
published  paper),  each of these  publications was classified as a "category A"
publication  designating it as "a document defining the general state of the art
which is not considered to be of particular  relevance." The application will be
further examined at the  national/regional  stage,  and additional  publications
affecting  patentability  may be identified at that time.  The Company  believes
that the  favorable  ISR,  especially  since it was issued by the Chinese  State
Intellectual  Property Office as the IPEA,  bodes well for the future success of
the application  and represents a significant  step in protecting our technology
worldwide and in securing TPID's place as a global leader in the  authentication
and anti-counterfeiting industry.

The Company also has its KMAC proprietary computerized database system where new
plug-ins are continually developed to support interfacing with customer database
systems as well as any new potential  scanners in the market place and real time
reporting to the central KMAC system.

EMPLOYEES

As of June 30,  2007,  we had two  employees  based  in the  United  States  and
forty-four employees based in China.

WEB SITE POSTINGS

Our annual report on Form 10-KSB and quarterly reports on Form 10-QSB filed with
the U.S.  Securities and Exchange Commission are available to the public free of
charge through its website as soon as reasonably  practicable  after making such
filings. Our website can be accessed at the following address: www.tpid.net. The
website  of our  Chinese  joint  venture  company  affiliate,  True  Product  ID
Technology   (Beijing)   Limited   ("TPID   Beijing"),   can  be   accessed   at
www.trueproductid.com The information found on our and TPID Beijing's website or
that may be accessed through our and TPID Beijing's  website is not part of this
report and is not incorporated herein by this reference.


ITEM 2. PROPERTIES

As of June 30, 2007, we lease certain office space for our executive  offices in
Philadelphia  totaling 300 square feet and an office consisting of 13,000 square
feet in Beijing China for that operation.

ITEM 3. LEGAL PROCEEDINGS

We are subject to dispute and litigation in the ordinary course of business.  We
are not  aware of any  pending  or  threatened  litigation  that we  believe  is
reasonably  likely  to  have  a  material  adverse  effect  on  us,  based  upon
information available at this time.

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

None


                                       4
<PAGE>



                                     PART II

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


Our common  stock is traded on the OTC  Bulletin  Board  (Symbol:  TPDI) and the
information  presented for the following  periods  reflects the high and low bid
information  as  reported  by the OTC  Bulletin  Board.  Our common  stock began
trading on the OTC  Bulletin  Board in the fourth  quarter of fiscal  2006.  The
prices below may not represent actual  transactions.  These  quotations  reflect
inter-dealer prices, without retail markup, markdown or commissions.

                                MARKET PRICE RANGE
                                    FISCAL 2007                 FISCAL 2006
                                    -----------                 -----------

                               HIGH            LOW

     First Quarter          $  0.210         $ 0.100
     Second Quarter         $  0.199         $ 0.026
     Third Quarter          $  0.250         $ 0.100
     Fourth Quarter         $  0.170         $ 0.050       $0.380       $  0.160

At September 28, 2007, we had 2,685 stockholders of record.

On May 4, 2006,  the Company  also  amended the  articles  of  incorporation  to
increase   the   authorized   shares  of  common  stock  from   100,000,000   to
1,000,000,000,  of  which  800,000,000  shares  are  designated  as  Class A and
200,000,000 shares are designated as Class B.

On May 8,  2006,  the  Company  declared  a 2 for 1 forward  stock  split of the
Company's common stock, to be effective on May 23, 2006.

We have not  historically  declared or paid dividends with respect to our common
stock and have no intention to pay dividends in the foreseeable future.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with, and is qualified in
its entirety by, our audited financial  statements and notes thereto,  and other
financial information included elsewhere in this Annual Report on Form 10-KSB.

Certain statements  contained in this  "Management's  Discussion and Analysis of
Financial  Condition and Results of Operations" and elsewhere in this report are
forward-looking   statements  that  involve  risks  and   uncertainties.   These
statements relate to future events or our future financial performance.  In some
cases,  forward-looking  statements  can be  identified by  terminology  such as
"may", "will", "should",  "expect",  "anticipate",  "intend", "plan", "believe",
"estimate",  "potential",  or  "continue",  the negative of these terms or other
comparable  terminology.   These  statements  involve  a  number  of  risks  and
uncertainties.   Actual  events  or  results  may  differ  materially  from  any
forward-looking  statement  as a result  of  various  factors,  including  those
described above under "Risk Factors".

The Company's Current Strategy and Priorities
---------------------------------------------

The  Company's  current  priority  is to solidify  its  strategic  position  and
opportunities  in China.  Many of the goods in the  world  are  manufactured  in
China. That includes both Chinese manufacturers and multinational  corporations.
That includes goods  manufactured in China for both the domestic  Chinese market
and for export.  As such,  China and its government and industries  face many of
the more  significant  challenges  associated  with  counterfeiting  and product
safety,  which the Company seeks to address through its technology.  It is China
where the  Company  and its  Chinese  joint  venture  affiliate  have earned the


                                       5
<PAGE>

respect of government and industry.  As reported on the website sponsored by the
Association of Chinese Anti-Counterfeiting  Technology,  www.21cata.com.cn,  our
technology was recently recognized by representatives  from the Chinese Ministry
of Public Security.  As reported on TPID Beijing's website,  our technology also
received a favorable initial assessment from the Chinese Ministry of Science and
Technology.  It is  China  where  the  Company  and its  Chinese  joint  venture
affiliate   are  working   with   government   and   industry   on   significant
anti-counterfeiting,  safety,  and other  initiatives  and  where the  Company's
technology has been  designated  and/or  registered as an exclusive or preferred
technology in connection with those  initiatives.  It is China where the Company
through  its Chinese  joint  venture  affiliate  has  entered  into  significant
contracts.   The  Company's  immediate  priority  is  to  begin  fulfilling  and
generating revenues from China contracts.

The National Contract with AQSIQ To Mark Chinese Liquefied Natural Gas Container
--------------------------------------------------------------------------------
and Special Equipment
---------------------

As reported in its press  release on August 27, 2007,  the Company,  through its
Chinese  joint  venture  affiliate,  entered  into a contract  with the National
Quality  Inspection  Department of the State General  Administration for Quality
Supervision,  Inspection  and  Quarantine  of the  People's  Republic  of  China
("AQSIQ"),  to develop a national  safety/security  system for China's liquefied
natural gas and other pressurized canisters and other special equipment.

According   to  its   website   (www.aqsiq.gov.cn),   AQSIQ  is  a   ministerial
administrative  organ directly under the State Council of the People's  Republic
of  China  in  charge  of  national  quality,  metrology,  entry-exit  commodity
inspection,   entry-exit   health   quarantine,   entry-exit  animal  and  plant
quarantine,   import-export   food  safety,   certification  and  accreditation,
standardization, as well as administrative law-enforcement.  AQSIQ is considered
the Chinese counterpart to the United States Consumer Product Safety Commission.
See The  U.S.  Consumer  Product  Safety  Commission-AQSIQ  Joint  Statement  on
Enhancing  Consumer  Product  Safety  dated  September  11,  2007,  available at
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07305.pdf.

The AQSIQ  Contract  follows an AQSIQ  Circular to every  quality and  technical
supervision bureau in all provinces, autonomous regions and municipalities under
the control of the Chinese  Central  Government.  The AQSIQ  Circular sets out a
5-year  AQSIQ  National  Security/Safety  Plan to protect  against  the  illegal
production,  circulation,  and use of certain "special  equipment" (the "Plan").
AQSIQ's mission in the Circular is, among other things, to protect public safety
from safety  accidents  and other risks caused by  counterfeit  and  substandard
"special  equipment."  Among the  "special  equipment"  referenced  in the AQSIQ
Circular are liquefied gas tanks, oxygen tanks, and other pressurized containers
and pipes,  elevators,  lift  machinery;  and  equipment  at large  recreational
facilities and automobile plants.

In its Circular,  AQSIQ has explicitly designated our technology and our Chinese
joint venture  company  affiliate as the  exclusive  technology  and  technology
provider  to  help  AQSIQ   develop,   implement  and  administer  its  National
Security/Safety  Plan.  Under the AQSIQ Circular,  TPID Beijing is to help AQSIQ
develop  national  special  equipment  security  identification  standards  (the
"standards"), a special equipment identification information security management
system (the "management system"),  and a special equipment  security/safety logo
(the "logo").

As a result of the  Circular,  AQSIQ  has  entered  into a  Project  Cooperation
Agreement with the Company's Chinese joint venture company  affiliate  (Contract
No. 0076180).  ASQIQ subsequently  entered into supplementary  provisions to the
Project  Cooperation  Agreement in connection  with the initial phase of AQSIQ's
National Security/Safety Plans relating to liquefied natural gas containers (the
"LNG Contract").

Under the LNG Contract,  TPID Beijing is to provide and apply a security logo to
all LNG containers in China.  According to Chinese  government  statistics,  the
total number of LNG  containers  in China is  currently  over 130 million and is
expected to increase in quantity by 10% every year. Under the LNG Contract, TPID
Beijing is to receive a fixed  taggant  price per LNG  container.  The  specific
taggant  price per LNG container is not being  disclosed due to its  proprietary
nature.

Under the LNG  Contract,  TPID Beijing is to provide  50,000 units of one of its
highly  proprietary   scanners  and  15,000  units  of  another  of  its  highly
proprietary  scanners to approximately  20,000 LNG gas stations,  30,000 special
equipment  manufacturers,  and  40,000  "platforms"  in  China.  Under  the  LNG
Contract, TPID Beijing is to receive a fixed price per scanner, with a different
fixed  price for each type of  scanner.  The  specific  price per scanner is not
being disclosed due to its proprietary nature.

Finally,  under the LNG  Contract,  TPID  Beijing  is to  establish  a  security
management  information system for 50,000  enterprises.  Under the LNG Contract,
TPID Beijing is to receive a fixed price per enterprise.  The specific price per
enterprise is not being  disclosed due to its proprietary  nature.  According to


                                       6
<PAGE>

<TABLE>


AQSIQ,  among such enterprises and platforms include 5,016 enterprises in charge
of  manufacturing  LNG  containers  and  other  pressurized  containers,  14,995
enterprises in charge of charging LNG containers, 8,747 enterprises in charge of
manufacturing,  installing, reequipping and repairing boilers, and approximately
1,823 institutes in the Chinese state quality  inspection system which check LNG
containers.

Since AQSIQ's Circular,  Project  Cooperation  Agreement and LNG Contract,  TPID
Beijing and AQSIQ have met and  continue to meet on a routine  basis to develop,
coordinate,   and  implement  AQSIQ's  National   Safety/Security  Plan  and  in
particular as the Plan initially pertains to LNG containers. The initial revenue
projections  set  forth by  AQSIQ in the LNG  Contract  (as  corrected  to fix a
mathematical miscalculation in the original Chinese version of the LNG Contract)
to mark the 130 million LNG  containers  (at a fixed  price per  container),  to
provide  the  50,000  and  15,000  proprietary  scanners  (at fixed  prices  per
scanner),  and to develop a security  management  information  system for 50,000
enterprises (at a fixed price per enterprise) total 2,720,000,000  Chinese Yuan,
which equates to over US$362,000,000.

Subsequent  (yet  ongoing)  consultations  between  AQSIQ and TPID  Beijing have
produced the following latest gross revenue projections:

<S>                                                                             <C>     <C>
Year                                        Gross Revenue in Chinese Yuan               Gross Revenue in US Dollars
                                                                                        (based on www.xe.com exchange rate on
                                                                                        09-27-07 of US$1=0.133094 RMB)

Year 1                                      801,800,000                                 106,714,769.20
------------------------------------------- ------------------------------------------- ---------------------------------------
Year 2                                      1,612,250,000                               214,580,801.50
------------------------------------------- ------------------------------------------- ---------------------------------------
Year 3                                      2,815,770,000                               374,762,092.38
------------------------------------------- ------------------------------------------- ---------------------------------------
Year 4                                      2,686,930,000                               357,614,261.42
------------------------------------------- ------------------------------------------- ---------------------------------------
Year 5                                      2,054,400,000                               273,428,313.60
------------------------------------------- ------------------------------------------- ---------------------------------------
TOTAL                                       9,971,150,000                               1,327,100,238.10
------------------------------------------- ------------------------------------------- ---------------------------------------

These  revenue  projections  included not only LNG  containers,  but also oxygen
tanks,  fixed pressure  containers,  boilers and other items. They were based on
specific unit prices and number of items  provided by AQSIQ per year for each of
the five  years to mark LNG  tanks,  fixed  pressured  containers,  tank car and
oxygen space, and boilers. They were based on specific unit prices and number of
items  provided by AQSIQ per year for each of the five years for three  specific
types of scanners and for automatic marking equipment and intellectual  charging
equipment.  They were based on specific unit prices and number of items provided
by AQSIQ per year for each of the five years for software sales  associated with
system  building  and  client-side  software.  The number of items were based on
certain Chinese official  publications  including Special  Equipment  Statistics
Data  Publication  of 2005  published  on April 7, 2007,  the Special  Equipment
Statistics  Data  Publication  of 2006  published on June 18,  2007,  and Safety
Status White Book of State Special  Equipment  published in July 2007. These are
all AQSIQ publications. The revenue projections were based on the information in
the following chart:





                                       7
<PAGE>

-----------------------------------------------------------------------------------------------------
Time    Category    Name                       Number of Units
-----------------------------------------------------------------------------------------------------

The    The fee for  LNG Container                         20 million
first  marking the
year   special
       equipment
-----------------------------------------------------------------------------------------------------
                    Fixed pressure container              0
-----------------------------------------------------------------------------------------------------
                    Tank car and Oxygen space             0
-----------------------------------------------------------------------------------------------------
                    Boiler                                0
-----------------------------------------------------------------------------------------------------
                    Mark for checking gas bottles         0
----------------------------------------------------------------------------------------------------
       Intellectual TPID Scanner                          3000
       Scanner
-----------------------------------------------------------------------------------------------------
                    TPID Scanner                          200
-----------------------------------------------------------------------------------------------------
                    TPID Scanner                          25000
-----------------------------------------------------------------------------------------------------
                    Automatic marking equipment           400
-----------------------------------------------------------------------------------------------------
                    Intellectual charging equipment       10000
-----------------------------------------------------------------------------------------------------
       Software     System building                       3
       sales        Client-side software                  6040
-----------------------------------------------------------------------------------------------------
TOTAL GROSS REVENUE                                       801,800,000 Chinese Yuan/
                                                          US$106,714,769.20

-----------------------------------------------------------------------------------------------------
TIME    CATEGORY    NAME                     NUMBER OF UNITS
-----------------------------------------------------------------------------------------------------
THE     THE FEE FOR LNG CONTAINER                         30 MILLION
SECOND  MARKING THE
YEAR    SPECIAL
        EQUIPMENT
-----------------------------------------------------------------------------------------------------
                    FIXED PRESSURE CONTAINER              0
-----------------------------------------------------------------------------------------------------
                    TANK CAR AND OXYGEN SPACE             0
-----------------------------------------------------------------------------------------------------
                    BOILER                                0
-----------------------------------------------------------------------------------------------------
                    MARK FOR CHECKING LNG CONTAINER       0
-----------------------------------------------------------------------------------------------------
       INTELLECTUAL TPID SCANNER                          5000
       SCANNER
-----------------------------------------------------------------------------------------------------
                    TPID SCANNER                          250
-----------------------------------------------------------------------------------------------------
                    TPID SCANNER                          62500
 ----------------------------------------------------------------------------------------------------
                    AUTOMATIC MARKING EQUIPMENT           500
-----------------------------------------------------------------------------------------------------
                    INTELLECTUAL CHARGING EQUIPMENT       25000
-----------------------------------------------------------------------------------------------------
        SOFTWARE    SYSTEM BUILDING                       5
        SALES       CLIENT-SIDE SOFTWARE                  15050
-----------------------------------------------------------------------------------------------------
 TOTAL GROSS REVENUE                                       1,612,250,000 CHINESE YUAN/
                                                          US$214,580,801.50
-----------------------------------------------------------------------------------------------------


                                       8
<PAGE>



-----------------------------------------------------------------------------------------------------
TIME   CATEGORY    NAME                                   NUMBER OF UNITS
-----------------------------------------------------------------------------------------------------
THE    THE FEE FOR LNG CONTAINER                          40 MILLION
THIRD  MARKING THE
YEAR   SPECIAL
       EQUIPMENT
-----------------------------------------------------------------------------------------------------
                   FIXED PRESSURE CONTAINER               1.923 MILLION
-----------------------------------------------------------------------------------------------------
                   TANK CAR AND OXYGEN SPACE              31 THOUSAND
-----------------------------------------------------------------------------------------------------
                   BOILER                                 186 THOUSAND
-----------------------------------------------------------------------------------------------------
                   MARK FOR CHECKING LNG CONTAINER        0
-----------------------------------------------------------------------------------------------------
       INTELLECTUALTPID SCANNER                           7000
       SCANNER
-----------------------------------------------------------------------------------------------------
                   TPID SCANNER                           150
-----------------------------------------------------------------------------------------------------
                   TPID SCANNER                           125000
-----------------------------------------------------------------------------------------------------
                   AUTOMATIC MARKING EQUIPMENT            300
-----------------------------------------------------------------------------------------------------
                   INTELLECTUAL CHARGING EQUIPMENT        50000
-----------------------------------------------------------------------------------------------------
       SOFTWARE    SYSTEM BUILDING                        10
       SALES       CLIENT-SIDE SOFTWARE                   30030
-----------------------------------------------------------------------------------------------------
TOTAL GROSS REVENUE                                       2,815,770,000 CHINESE YUAN/
                                                          US$374,614,261.42

-----------------------------------------------------------------------------------------------------
TIME   CATEGORY    NAME                                   NUMBER OF UNITS
-----------------------------------------------------------------------------------------------------
THE    THE FEE FOR LNG CONTAINER                          50 MILLION
FOURTH MARKING THE
YEAR   SPECIAL
       EQUIPMENT
-----------------------------------------------------------------------------------------------------
                   FIXED PRESSURE CONTAINER               69 THOUSAND
-----------------------------------------------------------------------------------------------------
                   TANK CAR AND OXYGEN SPACE              2 THOUSAND
-----------------------------------------------------------------------------------------------------
                   BOILER                                 186 THOUSAND
-----------------------------------------------------------------------------------------------------
                   MARK FOR CHECKING LNG CONTAINER        20MILLION
-----------------------------------------------------------------------------------------------------
      INTELLECTUAL TPID SCANNER                           0
      SCANNER
-----------------------------------------------------------------------------------------------------
                   TPID SCANNER                           1300
-----------------------------------------------------------------------------------------------------
                   TPID SCANNER                           100000
-----------------------------------------------------------------------------------------------------
                   AUTOMATIC MARKING EQUIPMENT            1300
-----------------------------------------------------------------------------------------------------
                   INTELLECTUAL CHARGING EQUIPMENT        40000
-----------------------------------------------------------------------------------------------------
       SOFTWARE    SYSTEM BUILDING                        8
       SALES       CLIENT-SIDE SOFTWARE                   25300
-----------------------------------------------------------------------------------------------------
TOTAL GROSS REVENUE                                       2,686,930,000 CHINESE YUAN/
                                                          US$357,614,261.42
-----------------------------------------------------------------------------------------------------


                                       9
<PAGE>



-----------------------------------------------------------------------------------------------------
TIME   CATEGORY    NAME                    NUMBER OF UNITS
-----------------------------------------------------------------------------------------------------
THE    THE FEE FOR GAS BOTTLE                             80 MILLION
FIFTH  MARKING THE
YEAR   SPECIAL
       EQUIPMENT
-----------------------------------------------------------------------------------------------------
                   FIXED PRESSURE CONTAINER               72 THOUSAND
------------------------------------------------------------------------------------------------------
                   TANK CAR AND OXYGEN SPACE              2 THOUSAND
------------------------------------------------------------------------------------------------------
                   BOILER                                 186 THOUSAND
------------------------------------------------------------------------------------------------------
                   MARK FOR CHECKING GAS BOTTLES          30 MILLION
------------------------------------------------------------------------------------------------------
       INTELLECTUALTPID SCANNER                           0
       SCANNER
------------------------------------------------------------------------------------------------------
                   TPID SCANNER                           823
------------------------------------------------------------------------------------------------------
                   TPID SCANNER                           62375
------------------------------------------------------------------------------------------------------
                   AUTOMATIC MARKING EQUIPMENT            823
------------------------------------------------------------------------------------------------------
                   INTELLECTUAL CHARGING EQUIPMENT        24950
------------------------------------------------------------------------------------------------------
       SOFTWARE    SYSTEM BUILDING                        7
       SALES       CLIENT-SIDE SOFTWARE                   15793
------------------------------------------------------------------------------------------------------
TOTAL GROSS REVENUE                                       2,054,400,000 CHINESE YUAN/
                                                          US$273,428,313.60
</TABLE>

Continued  consultation  and  coordination  between  AQSIQ and TPID  Beijing are
ongoing and the revenue  projections are subject to change and revisions as such
coordination and consultation continue.

Under AQSIQ's supplementary  provisions and project cooperation agreement,  TPID
Beijing is to: (a) begin  marking  LNG  containers  in the first year and finish
marking them in three years;  (b) begin marking other fixed pressure  containers
in the third year and finish  marking  them in one year;  and (c) begin  marking
boilers in the third year and finish marking them in three years.

Under AQSIQ's Circular and Project Cooperation  Agreement,  the initial phase of
Plan starts LNG containers in the designated pilot areas of Beijing  (referenced
by AQSIQ as the site of the 2008  Olympics)  and  Guangdong  Province.  Beijing,
China's capital,  has a population of over 14 million.  Guangdong Province has a
population of over 110 million. To implement the Beijing/Guangdong  Pilot Phase,
TPID  Beijing  will use SDNA  taggant  developed by the Company as well as three
types of highly  developed  scanners  developed by the Company.  The Company and
TPID BJ may supplement its technology  with  technology  from several  prominent
technology companies in the United States and Europe.

Preliminarily,  based on consultations with AQSIQ to date, to begin to implement
the  Beijing/Guangdong  Pilot Phase,  TPID Beijing has  determined the estimated
amount of producing lines,  scanners and related software needed;  projects that
it will  initiate  manufacture  and  coordinate  the  technology  team by  early
November;  and projects that the trial work will take  approximately six months,
at which time it believes  that it will have  completed the  development  of the
national  security  logo standard and can begin  implementation  of the security
logo  standard   throughout  China  beyond  Beijing  and  Guangdong.   Based  on
consultations  with  AQSIQ to date,  TPID  Beijing  projects  that the  expenses
associated  with the  Beijing/Guangdong  Pilot Phase will run  approximately  15
million Chinese Yuan or approximately US$2 million.  As stated above, the latest
gross  revenue  projections  for year one of the AQSIQ  contract is  801,800,000
Chinese Yuan or  US$106,714,769.20,  which includes,  but is not limited to, the
Beijing/Guangdong Pilot Phase.

Regarding  technological  implementation for the Beijing/Guangdong  Pilot Phase,
TPID Beijing will utilize scanners  developed by the Company.  At the same time,
TPID Beijing may  supplement  the  Company's  technology  with  technology  from
several  prominent  technology  companies in the United States and Europe.  TPID
Beijing  will also  utilize  its SDNA  taggant,  which  may have to be  produced
outside China.

Regarding  funding to implement  the  Beijing/Guangdong  Pilot Phase and beyond,
TPID has met with and received  significant  interest from several prominent and
well-funded entities in China with significant government  relationships.  These
entities are not only interested in funding  implementation  of the entire AQSIQ
Contract  but  are  also  interested  in  using  TPID's   technologies  to  help
anti-counterfeit  their own  products  and the  products of other  companies  or

                                       10
<PAGE>


organizations.  TPID has also met with  potential  funders in and from the U.S.,
Hong Kong, and other parts of Asia.

Also,  in August  2007,  our Chinese  joint  venture  affiliate  entered into an
agreement with the Beijing China Printing & Calligraphy Collector Association to
apply taggant  information  technology to calligraphy and painting  artworks and
jointly establish the service platform for the authentication  management system
of the calligraphy and painting  artworks in China. The agreement  extends until
April 12, 2012.

RISK FACTORS:  RISKS RELATED TO OPERATING A BUSINESS IN THE PEOPLE'S REPUBLIC OF
CHINA ("PRC")

Joint ventures such as TPID Beijing are subject to general risks of operating in
the PRC.  These  include  risks  associated  with  the  political  and  economic
environment,  foreign  currency  exchange  and the legal  system in the PRC. The
economy of the PRC  differs  significantly  from the  economies  of the  western
industrialized  nations in such  respects as  structure,  level of  development,
growth  rate,   capital   reinvestment,   repatriation,   resource   allocation,
self-sufficiency,  rate of  inflation  and balance of payment  positions,  among
others. The PRC government  encourages  substantial private economic activities,
but this has only been the case since the early 1990's. Recent pronouncements in
the PRC were enacted to facilitate  foreign  investment  in certain  segments of
Chinese  industries which to date were primarily  reserved for  Chinese-owned or
Chinese state-owned enterprises. Moreover, recent pronouncements were enacted to
facilitate the ability of Western entities to either hold a majority interest in
a  Chinese  joint  venture  company  or to  form  a  wholly-owned  foreign-owned
enterprise. Given the recent nature of these pronouncement, it remains to be see
how uniformly they will be enforced and interpreted  throughout China.  Further,
despite  the  recent  pronouncements,  when a  western  entity  is  involved  in
significant  Chinese  government-related  initiatives  as the Company is,  there
remains  advantages to forming a Sino-Western joint venture to build the type of
relationships   needed  to  secure  and   effectuate   such   government-related
initiatives.

The  Chinese  economy has  experienced  significant  growth in the past  several
years,  but such growth has been uneven among various sectors of the economy and
geographic  regions.  On one hand, China's development and growth have presented
opportunities for the Company. The Company and its Chinese joint venture company
affiliate have been designated to help Chinese  government and industry  address
issues and challenges  precipitated by such development and growth. On the other
hand,  such  development  and growth may present  risks to entities  operating a
business in the PRC such as the Company and its Chinese  joint  venture  company
affiliate and their contracts and other  opportunities in China.  Because of the
challenges  created by such growth,  the PRC  government has indicated and taken
certain steps to control such growth and address such challenges. Actions by the
PRC  government to control  inflation,  for example,  have  restrained  economic
expansion  in the recent past across  several  industrial  sectors.  Similar and
continued  actions by the PRC  government in the future could have a significant
adverse effect on domestic economic condition in the PRC.

While there have been  tremendous  strides since its admission into the WTO, the
PRC's  comprehensive  system  of laws is  still  developing  and  evolving,  and
enforcement  of  existing  laws  at  many  different  government  levels  may be
uncertain,  sporadic, and not uniform. There have been many laws and regulations
promulgated in recent years dealing with economic matters in general and foreign
investment in general.

There is no  guarantee  that there will not be any  changes  respecting  Chinese
government, economy, laws, and regulation which may adversely affect the Company
and its Chinese  joint venture  company  affiliate.  There is no guarantee  that
Chinese  Government  may in the future  enact  regulatory,  legal,  economic and
political  regulations or policies which would adversely  affect the Company and
its Chinese joint venture company  affiliate and the contracts and opportunities
in China.

The Company's Continued Efforts in Non-China Markets
----------------------------------------------------

As stated above, the Company's immediate priority is to focus on solidifying its
foothold  in China,  implementing  its  China  contracts,  especially  the AQSIQ
Contract,  and generating  revenues from its China contracts.  Nonetheless,  the
Company  continues its efforts to penetrate  markets outside China.  Its current
strategy for non-China markets however is to enter into strategic  relationships
(whether in the form of a joint venture,  licensing or other  arrangement)  with
leading  companies in certain markets outside China,  which have developed their
own technologies  complimentary to the Company's,  have established  significant
distribution  networks  in those  markets,  and have  expressed  an  interest in
distributing  the  Company's  technologies  in those  markets.  To that end, the
Company has met with and  received  interest  from  companies  with  significant
networks in India,  the Philippines,  Malaysia,  Indonesia,  Europe,  the United
States,  and Canada.  The Company's strategy is to benefit from those companies'
already established  distribution networks and operational capabilities in those


                                       11
<PAGE>


<TABLE>

markets,  while  minimizing  the  resources  the  Company  itself  would need to
distribute and operate in those markets.

The Company's Funding Efforts
-----------------------------

On January  17,  2007,  we closed an  initial  bridge  financing  with a private
investor for $500,000;  a portion of these  proceeds  went to fulfill  orders in
China and to enhance our ability and our Chinese joint venture partner and their
facilities  and staff to address  growing  opportunities  for our  products  and
services in China and elsewhere.

To date, other than the above bridge financing,  funding for the Company's China
and US operations have predominantly come from The MacKay Group Limited ("MKG").
As  reported in the  Company's  Form 8-K filed  August 17,  2007,  according  to
financial   records  relating  to  TPID  Beijing,   to  date  MKG  has  advanced
approximately  US$1 million to or for TPID Beijing and its  anti-counterfeiting/
product   authentication   operations  and  anticipates   advancing   additional
significant funds to or for TPID Beijing.

As reported in the Company's  August 17, 2007 Form 8-K, on August 15, 2007,  MKG
executed a binding term sheet to provide the Company with a line of credit of up
to One Hundred Fifty Thousand Dollars  (US$150,000) to help fund the initiatives
and operations in China and the U.S. The terms and conditions were as follows:

<S>                                                                             <C>

o        Repayment Term: one (1) year commencing from the receipt of each tranche of Funds (the "Repayment Term");
         --------------

o        Interest: 12% compound interest per annum;
         --------

o        Prepayment: no prepayment without MKG's approval
         ----------

o        Convertibility:
         --------------

o                 At anytime  during the  Repayment  Term,  MKG has the right to
                  convert the entire amount of principal and accrued interest or
                  any portions  thereof into shares of the Registrant at a share
                  price  equal to the lesser of: (a) the 70% of the share  price
                  at the close of the market as of receipt of funds;  or (b) the
                  terms  extended by the  Registrant  to a funder making a total
                  equity  investment  of at least US$2 million or in  connection
                  with a  merger/acquisition  or change in control (the "Convert
                  Rate");

o        Warrants:   The  Registrant  shall  issue  to  MKG  without  additional
         consideration  warrants  to  purchase  that  number  of  shares  of the
         Registrant's  common stock equal to the principal  amounts  advanced by
         MKG,  exercisable  at a share exercise price equal to the Convert Rate.
         The term for the warrants shall be five (5) years.

</TABLE>

A copy of MKG's  Binding Term Sheet  regarding its line of credit is attached as
an exhibit to the Company's August 17, 2007 Form 8-K.

As further reported in the Company's August 17, 2007 Form 8-K, MKG also executed
on August 15, 2007 a memorandum of  understanding  ("MOU") with the Company,  in
which upon  MKG's  request,  the  Company  will  repay MKG for monies  which MKG
advanced to or for the Company or TPID Beijing,  between May 30, 2006 and August
1, 2007, to help support TPID  Beijing's  operations in China (the "MKG Advanced
China Funds").  To qualify for  repayment,  the MKG Advanced China Funds must be
properly  documented,  must have been used solely for TPID JV and its operations
related to the field of anti-counterfeiting and product authentication,  and are
subject to other requirements.

Under the MOU,  MKG and the  Company  shall work in good faith to agree upon the
repayment  terms and  conditions,  which shall be  memorialized  in a definitive
written  agreement(s).  The parties agree that the repayment  arrangement  shall
come in the form of a convertible note with appropriate  compound  interest with
warrants.  The terms and conditions shall be, at a minimum,  comparable to those
the Company has given to funders as of August 1, 2007.  In the event that MKG is
provided  repayment terms by the Company which are more  advantageous than those
extended to other funders as of August 1, the Company's  arrangement  with other
funders as of August 1, 2007 should be  modified  to provide  the other  funders
with the same terms and  conditions  given by the  Company to MKG. A copy of the
memorandum  of  understanding  between  the  Company  and MKG is  attached as an
exhibit to its August 17, 2007 Form 8-K.

As stated  above,  to implement the  Beijing/Guangdong  Pilot Phase of the AQSIQ
Contract and beyond,  TPID has met with and received  significant  interest from
several prominent and well-funded entities in China with significant  government
relationships.  These entities are not only interested in funding implementation
of  the  entire  AQSIQ  Contract  but  are  also   interested  in  using  TPID's
technologies  to help  anti-counterfeit  their own  products and the products of


                                       12
<PAGE>

other companies or  organizations.  TPID has also met with potential  funders in
and from the U.S., Hong Kong, and other parts of Asia.

The Company's Restructuring Efforts
-----------------------------------

On a related front, we took a step in our restructuring efforts by entering into
a January 4, 2007 Restructuring  Agreement with Sure Trace Security Corporation,
Sure Trace Asia  Limited and William  Chan.  This initial  restructuring  effort
resulted  in our  acquisition  of an initial 40%  interest in the Chinese  Joint
Venture  Company,  which  strengthens  our  operations  and revenue  recognition
ability,  and  which  will  enable  East and West to  develop  stronger  working
relationships.  Further, it completes the steps envisioned months ago whereby we
can  now  grow  separate  and  totally  independent  from  Sure  Trace  Security
Corporation   and  Sure  Trace  Asia   Limited.   We  continue  to  further  our
restructuring  efforts  in  China.  A copy  of the  Restructuring  Agreement  is
attached as an exhibit to the Company's Form 8-K filed January 10, 2007.

The  Restructuring  Agreement  provided,  among  other  things,  that  we  issue
6,000,000 shares of our common stock (valued at $1,320,000),  assume a liability
of approximately $319,000 of which $100,000 was paid in the third fiscal quarter
against the  liability,  with the  remainder  due through June 30, 2007.  We are
currently  in default of the  payments  due March 31, 2007 and June 30, 2007 and
plan to make the required payments from the next round of financing we receive.

We also agreed to pay SSTY  approximately $1.2 million within three years of the
date  of the  Restructuring  Agreement.  The  Restructuring  Agreement  provided
however  that we are not  obligated  to pay SSTY any  accrued  royalties,  which
resulted in the reversal of $637,500 previously accrued.  The net effect of this
was to record an  approximate  $2.1 million  investment in joint venture for our
40% interest.

In January  2007,  subsequent  to our  acquisition  of the 40%  interest  in the
Chinese Joint  Venture  Company,  we provided the Chinese Joint Venture  Company
$250,000 to help support operations in China.

On May 11, 2007, we entered into the Acquisition Agreement with Sichuan Valencia
Trading Limited ("SVTL") for an additional 20% ownership interest in the Chinese
JV Company.

Immediately prior to the execution of the Acquisition Agreement,  SVTL owned 20%
of the total interests, rights, assets, shares, and/or other ownership interests
of the Chinese JV Company.  Under the  Acquisition  Agreement,  SVTL sold to the
Company the STVL 20%  Chinese JV  Interest in return for 100 million  restricted
common  shares of the Company  (valued at  $15,500,000).  With its January  2007
acquisition of 40% of the Chinese JV Company and the acquisition of the SVTL 20%
Chinese JV  Interest,  we now own 60% of the total  ownership  interests  of the
Chinese JV Company,  allowing us to, among other things,  recognize  100% of the
revenues of the Chinese JV Company in accordance with applicable  consolidation,
revenue recognition, accounting, and other principles, guidelines and standards.

Among the  industries/applications in China which we have been approached to use
our technology are (1) automobile,  motorcycles and automobile/motorcycle  parts
and auto  insurance  policies  and other  documentations;  (2)  cigarettes;  (3)
currency,  checks,  and other financial  documentation;  (4) computer  software,
hardware,  and other  electronics;  (5)  national  welfare  and  sports  lottery
tickets;  (6)  government  records and other  items,  such as property  records,
official invoices,  and military uniforms;  (7) sports tickets;  (8) soft drink,
liquor,  and other beverages;  (9) art and antiques;  and (10)  building-related
materials.

Our cash balance as of June 30, 2007 was  $42,774.  The majority of the June 30,
2007 cash  balance  was held in China by the  Chinese  Joint  Venture,  which we
consolidate into our financial statements. Of the $500,000 raised in the January
2007  bridge  financing;  $250,000  was  loaned to the joint  venture to provide
working capital,  $100,000 was paid against the $319,000  assumed  liability and
the  remainder of  approximately  $150,000 was utilized to pay accounts  payable
generated since the change in control in March 2006.

Since the change in control of the Company on March 16, 2006,  the  employees of
the Company  United States  operation  have not received any payroll.  It is the
Company's intention to seek strategic partnerships that result in an infusion of
cash into the Company.

Based  upon  our  business  plan  for the  current  year we do not  expect  that
significant expenditures for the purchase of plant and equipment or research and
development as our existing products are not labor intensive. We expect that our
existing cash balances and cash flows from operations (as of June 30, 2007) will
not be  sufficient  to finance  our working  capital  and  capital  expenditures


                                       13
<PAGE>

requirements  through Fiscal 2008. We continue to seek strategic debt and equity
investors  and  partners  who share our vision and will invest in the  long-term
strategic  vision of our ability to go forward.  Additionally,  we may  generate
cash via the sale of shares in the equity  markets or from cash  generated  from
product licensing transactions. However, if events occur or circumstances change
such  that we fail  to meet  our  operating  plan as  expected,  we may  require
additional  funds to  support  our  working  capital  requirements  or for other
purposes and may seek to raise additional funds through public or private equity
or debt financing or from other  sources.  We cannot be assured that any form of
such financing will be available on commercially reasonable terms or at all.

Starting March 2006, James MacKay  ("MacKay") agreed to serve as our Chairman of
the Board of Directors  for a  three-year  term with an annual  compensation  of
$300,000.  As reported in our Form 10-KSB/A  filed November 13, 2006, we entered
into a formal consulting  agreement with MacKay,  memorializing our arrangement,
on November 11, 2006. A copy of MacKay's November 11, 2006 Consulting  Agreement
with us is attached as an exhibit to our  November  13, 2006 Form  10-KSB/A.  At
June 30, 2007 Mr. MacKay is owed $387,500  representing all compensation  earned
by him since he joined us. On November  13, 2006 Mr.  MacKay  vested  39,559,961
shares of our common stock as part of the aforementioned Services Agreement. The
common  shares of our stock  closed  trading on  November  13, 2006 at $0.07 per
share resulting in a valuation of $2,769,197,  which was expensed in the quarter
ending  December 31, 2006. Mr. MacKay's common shares vested to him prior to the
vesting of common shares to Mr. Bendis.

On March 12, 2007,  James MacKay  resigned as our interim  Chairman of the Board
and a director,  our then Chief  Executive  Officer and  President  replaced Mr.
MacKay as the  Chairman  of the Board.  Mr.  MacKay  continued  to  support  the
Company's initiatives in China and elsewhere.

In March 2006, we entered into an Executive Employment Agreement with Richard A.
Bendis ("Bendis"), where Bendis became our President and Chief Executive Officer
for a three-year term, with annual  compensation of $500,000.  In or about March
2007,  he  also  assumed  the  title  of  Company  chairman  upon  Mr.  MacKay's
resignation of same.  At June 30, 2007 Mr. Bendis is owed $645,833  representing
all  compensation  earned  by him  since he  joined  us.  Additionally,  accrued
liabilities  include $49,973  representing  unreimbursed  employee  expenditures
primarily for travel.  On November 13, 2006 Mr. Bendis vested  30,329,303 shares
of  our  common  stock  as  part  of  the  aforementioned  Executive  Employment
Agreement.  Our common  stock  closed  trading on November 13, 2006 at $0.07 per
share resulting in a valuation of $2,123,051,  which was expensed in the quarter
ending December 31, 2006.

On August 17, 2007 we announced that to help best  facilitate the development of
the Chinese markets,  that (1) Mr. Bendis voluntarily  resigned his positions as
our Chairman of the Board,  chief  executive  officer,  and  president  and as a
director. Mr. Bendis will serve as a consultant to us and we have entered into a
consulting  agreement  with Mr.  Bendis;  (2) James  MacKay,  who is involved in
facilitating  the  development  of the  Chinese  markets  and who was our former
chairman of the Board, will again serve as our chairman of the Board; (3) Sergio
Luz,  who is also  involved  in  facilitating  the  development  of the  Chinese
markets, will serve as our president and has joined our Board of Directors;  and
(4) Li Ning, who is the chief executive officer of our Chinese Joint Venture and
who is also involved in  facilitating  the  development of the Chinese  markets,
joined our Board.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 7.  FINANCIAL STATEMENTS

Our consolidated  financial statements and the report of Rotenberg & Co. LLP are
attached to this  Annual  Report on Form  10-KSB  beginning  on page F-1 and are
incorporated herein by reference.

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

None


                                       14
<PAGE>


ITEM 8A. CONTROLS AND PROCEDURES I DO NOT KNOW THE RAMIFICATIONS OF THE PURCHASE
AND  CONSOLIDATION  OF THE CHINESE VENTURE ON THE BELOW  STATEMENT.  YOU NEED TO
CHECK WITH ROTENBERG BEFORE YOU MAKE THESE STATEMENTS!

1.   EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of  the  end of  the  period  covered  by  this  report,  we  carried  out an
evaluation,  under the supervision and with the participation of our management,
including the Chief Executive  Officer and the Chief Financial  Officer,  of the
effectiveness  of  our  disclosure  controls  and  procedures.   Based  on  that
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that our disclosure  controls and procedures as of the end of the period covered
by this report have been  designed and are  functioning  effectively  to provide
reasonable  assurance  that the  information  required to be  disclosed by us in
reports filed under the Securities Exchange Act of 1934 is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.  Our  independent  registered  public  accounting  firm noted no material
weaknesses.

Our management,  including the Chief  Executive  Officer and the Chief Financial
Officer,  does not expect that our disclosure  controls or our internal  control
over  financial  reporting  will  prevent  all errors  and all fraud.  A control
system,  no matter how well  designed  and  operated,  cannot  provide  absolute
assurance that the objectives of the controls systems are met, and no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.  Further, the design of a
control  system must reflect the fact that there are resource  constraints,  and
the  benefits of controls  must be  considered  relative to their  costs.  These
inherent limitations include the realities that judgments in decision-making can
be faulty and that  breakdowns  can occur  because of simple errors or mistakes.
Controls can also be  circumvented  by the individual  acts of some persons,  by
collusion of two or more people, or by management override of the controls.  The
design of any system of controls is based in part on certain  assumptions  about
the likelihood of future  events,  and there can be no assurance that any design
will  succeed  in  achieving  its  stated  goals  under  all  potential   future
conditions.  Over time,  controls  may become  inadequate  because of changes in
conditions  or  deterioration  in the  degree of  compliance  with  policies  or
procedures.  Because of the inherent  limitations  in a  cost-effective  control
system, misstatements due to error or fraud may occur and not be detected.

2.  Internal Control Over Financial Reporting

   (a) Management's Annual Report on Internal Control Over Financial Reporting
       ------------------------------------------------------------------------

In accordance with SEC Release No. 33-8618,  the Company will omit the report of
the Company's  management on internal control over financial  reporting,  and in
accordance  with current  rules plan to file such report in our Annual Report on
Form 10-KSB covering the fiscal year ended January 31, 2008.

   (b) Attestation Report of the Registered Public Accounting Firm
       -----------------------------------------------------------

In  accordance  with  SEC  Release  No.  33-8618,  the  Company  will  omit  the
attestation  report of  Rotenberg & Co. LLP on  management's  assessment  of the
Company's  internal  control over  financial  reporting and in  accordance  with
current rules plan to file such  attestation in our Annual Report on Form 10-KSB
covering the fiscal year ended June 30, 2008.

   (c) Changes in Internal Control Over Financial Reporting
       ----------------------------------------------------

No change in our internal control over financial  reporting  occurred during our
most recent fiscal quarter that has materially  affected or is reasonable likely
to materially affect, our internal control over financial  reporting,  except as
noted in the first paragraph of this Item 9A - Controls and Procedures.

ITEM 8B.   OTHER INFORMATION

None

                                       15
<PAGE>



                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

Except as set forth herein,  the information  set forth in our definitive  Proxy
Statement pursuant to Regulation 14A of the Securities Exchange Act of 1934 (the
"Exchange  Act") to be filed with the  Securities  and  Exchange  Commission  is
incorporated herein by reference in response to this Item 9.

ITEM 10.  EXECUTIVE COMPENSATION

The  information  set  forth  in our  definitive  Proxy  Statement  pursuant  to
Regulation  14A of the Exchange Act to be filed with the Securities and Exchange
Commission is incorporated herein by reference in response to this Item 10.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The  information  set  forth  in our  definitive  Proxy  Statement  pursuant  to
Regulation  14A of the Exchange Act to be filed with the Securities and Exchange
Commission is incorporated herein by reference in response to this Item 11.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  set  forth  in our  definitive  Proxy  Statement  pursuant  to
Regulation  14A of the Exchange Act to be filed with the Securities and Exchange
Commission is incorporated herein by reference in response to this Item 12.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The  information  set  forth  in our  definitive  Proxy  Statement  pursuant  to
Regulation  14A of the Exchange Act to be filed with the Securities and Exchange
Commission is incorporated herein by reference in response to this Item 14.







                                       16
<PAGE>



                                   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.

                                     TRUE PRODUCT ID, INC.

                                     /s/ Sergio Luz
                                     --------------
                                     Sergio Luz,
                                     President and Principal Financial Officer


Date: October 1, 2007

     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.



/s/ Sergio Luz                                               October 1, 2007
------------------------------------------------------
Sergio Luz,
President and Principal Financial Officer and Director





                                       16
<PAGE>


                              TRUE PRODUCT ID, INC.
                           ANNUAL REPORT ON FORM 10-K
                             ITEMS 8, 14(C) AND (D)
                FINANCIAL STATEMENTS, CERTAIN EXHIBITS & SCHEDULE














                                       17
<PAGE>




ITEM 13. EXHIBITS:
                                                                       PAGES
                                                                   OF SEQUENTIAL
                                                                NUMBERING SYSTEM
                                                                ----------------

                                 EXHIBIT INDEX

31.1   CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

32.1   CERTIFICATION OF CHIEF EXECUTIVE  OFFICER  AND  CHIEF  FINANCIAL  OFFICER
       PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
       SARBANES-OXLEY ACT




















                                       18
<PAGE>












           TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
                          (A DEVELOPMENT STAGE COMPANY)
                            (A DELAWARE CORPORATION)
                           PHILADELPHIA, PENNSYLVANIA

                     --------------------------------------
                                FINANCIAL REPORTS
                                       AT
                                  JUNE 30, 2007
                     --------------------------------------








<PAGE>

<TABLE>

<CAPTION>









TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA


TABLE OF CONTENTS
----------------------------------------------------------------------------------------------------------
<S>                                                                             <C>             <C>

Report of Independent Registered Public Accounting Firm                                             F-1

Consolidated Balance Sheets at June 30, 2007 and 2006                                               F-2

Consolidated Statements of Changes in Stockholders' Equity for the
Years Ended June 30, 2007 and 2006                                                                  F-3

Consolidated Statements of Operations for the Years Ended June 30, 2007 and 2006                    F-5

Consolidated Statements of Cash Flows for the Years Ended June 30, 2007 and 2006                    F-7

Notes to Consolidated Financial Statements                                                      F-9 - F-17


</TABLE>







<PAGE>



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors
  and Stockholders
True Product ID, Inc.
(Formerly ONTV, Inc.)
Pennsylvania


         We have audited the  accompanying  consolidated  balance sheets of True
Product ID (formerly  ONTV,Inc.)  as of June 30, 2007 and 2006,  and the related
consolidated   statements  of  operations,   changes  in  stockholders'   equity
(deficit), and cash flows for each of the two years in the period ended June 30,
2007. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our 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 consolidated  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 financial position of the Company
as of June 30, 2007,  and the results of its  operations  and its cash flows for
each of the two years in the period  ended June 30,  2007,  in  conformity  with
accounting principles generally accepted in the United States of America.

/s/ Rotenberg & Co., LLP
------------------------
Rotenberg & Co., LLP
Rochester, New York
  October 1, 2007




                                      F-1
<PAGE>

<TABLE>

<CAPTION>


TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA

CONSOLIDATED BALANCE SHEETS
=========================================================================================================================


                                                                                      JUNE 30,              June 30,
                                                                                       2007                   2006
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>    <C>                       <C>

ASSETS

CURRENT ASSETS
Cash and Cash Equivalents                                                              $   42,774                $   --
Accounts Receivable                                                                        31,806                    --
Prepaid Expenses                                                                            2,933                    --
-------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                                                       77,513                    --

PROPERTY AND EQUIPMENT - NET OF ACCUMULATED DEPRECIATION                                  136,305                    --

OTHER ASSETS
Interest Receivable - Related Party                                                        30,188                12,938
Note Receivable - Related Party                                                           300,000               300,000
Intangible Assets - Net of Accumulated Amortization                                    17,601,191                    --
Technology License - Net of Accumulated Amortization                                      521,566               581,458
-------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                          $18,666,763             $ 894,396
=========================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts Payable and Accrued Expenses                                                 $ 1,345,642             $ 538,821
Current portion of capital lease                                                            7,351                    --
-------------------------------------------------------------------------------------------------------------------------
Note Payable                                                                              219,410                    --
-------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                                               1,572,403               538,821

OTHER LIABILITIES
Note Payable - SSTY                                                                     1,095,590                    --
Long term portion of Capital Lease                                                         35,989                    --
Accrued Expenses - Related Party                                                          521,500               521,500
Due to Related Party                                                                      176,240               176,240
-------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE DEBENTURE                                                                     500,000                    --
-------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                                       3,901,722             1,236,561
-------------------------------------------------------------------------------------------------------------------------
MINORITY INTEREST                                                                       (124,466)                    --
STOCKHOLDERS' EQUITY
Common Stock:  $.001 Par; 1,000,000,000 Shares Authorized;
               440,622,336 and 254,712,096 Shares Issued,
               respectively; and 440,622,336 and 254,712,096
               Shares Outstanding, respectively                                           440,622               254,712
Additional Paid-In Capital                                                             23,123,913             1,425,075
Accumulated Deficit                                                                    (8,663,876)           (2,020,452)
-------------------------------------------------------------------------------------------------------------------------
                                                                                       14,900,659             (340,665)
Less: Stock Held in Trust                                                                 (1,500)               (1,500)
-------------------------------------------------------------------------------------------------------------------------
Foreign Currency Translation Adjustment                                                   (9,652)                    --
-------------------------------------------------------------------------------------------------------------------------

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                   14,889,507             (342,165)
-------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                           $ 18,666,763             $ 894,396
=========================================================================================================================

</TABLE>


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


                                      F-2
<PAGE>

<TABLE>

<CAPTION>

TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
====================================================================================================================================
                                     Common Stock ($0.001 Par) Preferred Stock ($0.001 Par)
                                     ---------------------------------------------------------
                                                                                                 Additional
                                     Number of               Number of           Accumulated       Paid-In      Stock Held  Treasury
                                      Shares      Value       Shares    Value      Deficit         Capital       In Trust     Stock
====================================================================================================================================
<S>                                 <C>          <C>         <C>       <C>       <C>             <C>           <C>         <C>


BALANCE - JUNE 30, 2005             23,721,861   $ 23,721    20,000    $ 20      $  (855,372)   $ 1,057,079    $(1,500)    $(17,709)

Transfer to Related Party in
   Connection With Sale of
   Subsidiaries                           --         --        --        --             --             --         --         17,709

Issuance of 52,349,249 Shares of
    Common Stock and 16,000 Shares
    of Preferred Stock for
    Acquisition
    of Technology License           52,349,249     52,349    16,000      16             --       546,562.00       --           --

2 for 1 Stock Split                 23,721,861     23,722      --        --             --          (23,722)      --           --

Additional Issuance of Common Stock
     to STC For Acquisition of
     Technology License and
     cancellation of preferred
     stock                         154,919,125    154,920   (36,000)    (36)            --         (154,844)      --           --

Net Income                                --         --        --        --       (1,165,080)          --         --           --
------------------------------------------------------------------------------------------------------------------------------------

BALANCE - JUNE 30, 2006            254,712,096   $254,712      --        --      $(2,020,452)   $ 1,425,075    $(1,500)        --
====================================================================================================================================

====================================================================================================================================
19 to 1 Stock Split                  8,574,547     8,575       --        --           --             (8,575)       --          --
====================================================================================================================================

====================================================================================================================================
Common Stock Issuance for
Consulting Agreement                   446,429       446       --        --           --             62,054        --          --
====================================================================================================================================

====================================================================================================================================


                                           Foreign
                                           Currency
                                           Translation



BALANCE - JUNE 30, 2005                       --

Transfer to Related Party in
   Connection With Sale of
   Subsidiaries                               --

Issuance of 52,349,249 Shares of
    Common Stock and 16,000 Shares
    of Preferred Stock for
    Acquisition
    of Technology License                     --

2 for 1 Stock Split

Additional Issuance of Common Stock
     to STC For Acquisition of
     Technology License and
     cancellation of preferred
     stock                                    --

Net Income                                    --
-----------------------------------

BALANCE - JUNE 30, 2006                       --
===================================

===================================
19 to 1 Stock Split                           --
===================================

===================================
Common Stock Issuance for
Consulting Agreement                          --
===================================

===================================



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

                                      F - 3

<PAGE>


Stock Based Compensation            69,889,264    69,889       --        --           --          4,822,339        --          --

====================================================================================================================================

====================================================================================================================================
Common Stock Issued as Part of
Restructuring Agreement              6,000,000     6,000       --        --           --          1,314,000        --          --
====================================================================================================================================
Stock Based Compensation for
Member of Board of Directors         1,000,000     1,000       --        --           --            109,000        --          --
====================================================================================================================================

====================================================================================================================================
Acquistion of Addirional 20% of
Chinese Venture                    100,000,000   100,000       --        --           --         15,400,000        --          --
====================================================================================================================================

====================================================================================================================================
Net Income                                --        --         --        --      (6,643,424)                       --          --
====================================================================================================================================

====================================================================================================================================
Foreign Currency Translation
Adjustment
====================================================================================================================================

====================================================================================================================================
Balance-June 30, 2007              440,622,336  $440,622       --        --     $(8,663,876)    $23,123,893     $(1,500)       --




                                           Foreign
                                           Currency
                                           Translation



Stock Based Compensation                     --

=================================

=================================
Common Stock Issued as Part of
Restructuring Agreement                      --
=================================
Stock Based Compensation for                 --
Member of Board of Directors
=================================

=================================
Acquistion of Addirional 20% of
Chinese Venture                              --
=================================

=================================
Net Income                                   --
=================================

=================================
Foreign Currency Translation
Adjustment                                 (9,652)
=================================

=================================
Balance-June 30, 2007                     $(9,652)

</TABLE>

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

                                      F-4
<PAGE>

<TABLE>

<CAPTION>

TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA

CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------------------------------------------------------
                                                                         Year Ended                      Cumulative
                                                                          June 30,                     Since Inception
                                                            -------------------------------------- -------------------------
                                                                                                      (October 1, 2005
                                                                       2007                 2006      To June 30, 2007)
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>      <C>           <C>

REVENUES, NET OF RETURNS                                            $    --               $   --                    $   --
----------------------------------------------------------------------------------------------------------------------------

EXPENSES
Amortization and Depreciation                                        64,893               17,469                     82,362
Payroll and Payroll Taxes                                                --
Technology License Fee                                              450,000              187,500                    637,500
Officer and Director Compensation                                 5,802,248              253,333                  6,055,581
Other                                                               286,299              185,488                    471,787
----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES                                                    6,603,440              643,790                  7,247,230
============================================================================================================================

LOSS BEFORE OTHER INCOME, PROVISION FOR
  INCOME TAXES, MINORITY INTEREST AND
  DISCONTINUED OPERATIONS                                       (6,603,440)             (643,790)               (7,247,230)

OTHER INCOME
Loss on Equity Investment                                          (65,513)                   --                   (65,513)
----------------------------------------------------------------------------------------------------------------------------
Interest Expense                                                   (19,197)                   --                   (19,197)
----------------------------------------------------------------------------------------------------------------------------
Interest Income - Related Party                                      17,250               12,938                    30,188
----------------------------------------------------------------------------------------------------------------------------
Interest Income                                                         197                   --                       197
----------------------------------------------------------------------------------------------------------------------------

LOSS BEFORE PROVISION FOR INCOME TAXES,
MINORITY INTEREST AND DISCONTINUED
OPERATIONS                                                      (6,670,703)             (630,852)               (7,301,555)

Provision for Income Taxes                                               --                   --                        --
----------------------------------------------------------------------------------------------------------------------------

LOSS FROM OPERATIONS                                            (6,670,703)             (630,852)               (7,301,555)
----------------------------------------------------------------------------------------------------------------------------

MINORITY INTEREST                                                    27,279                    --                   27,279
----------------------------------------------------------------------------------------------------------------------------

DISCONTINUED OPERATIONS
Loss from Operations of Disposed
  Subsidiaries, Net of Taxes                                             --              (10,245)                  (10,245)
Loss from Disposal of Subsidiaries, Net of Taxes                         --             (523,983)                 (523,983)
----------------------------------------------------------------------------------------------------------------------------

LOSS FROM DISCONTINUED OPERATIONS                                        --             (534,228)                (534,228)
----------------------------------------------------------------------------------------------------------------------------

NET LOSS FOR THE PERIOD                                        $(6,643,424)          $(1,165,080)             $(7,808,504)
============================================================================================================================

EARNINGS PER SHARE
============================================================================================================================



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

                                      F-5

<PAGE>


Weighted Average Number of Common Shares
  Outstanding - Basic and Diluted                               322,888,146           61,109,375               440,622,336

Earnings Per Common Share
   - Basic and Diluted
     Loss from Operations                                         $   (0.02)            $  (0.01)                $   (0.02)
     Income (Loss) from Discontinued Operations                          --                (0.01)                       --
                                                             ---------------------------------------------------------------
      Net Income (Loss)                                           $   (0.02)            $  (0.02)                $   (0.02)
============================================================================================================================

</TABLE>
















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

                                      F-6
<PAGE>

<TABLE>

<CAPTION>

TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA

CONSOLIDATED STATEMENTS OF CASH FLOWS
=================================================================================================================================
                                                                                                                 Cumulative
                                                                                                              Since Inception
                                                                                                              (October 1, 2005
Year Ended June 30,                                                                2007               2006   To June 30, 2007)
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>              <C>                   <C>

CASH FLOWS FROM OPERATING ACTIVITIES

NET LOSS FOR THE PERIOD                                                      $(6,643,424)      $ (1,165,080)         $(7,808,504)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) FOR
THE PERIOD TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Amortization and depreciation                                                     64,893             17,469               82,362
Stock Based Compensation                                                       5,002,248                --             5,002,248
Issuance of common stock for consulting fees                                      62,500                --                62,500
Loss from Equity Investment                                                       65,513                --                65,513
Loss on Disposal of Subsidiaries                                                      --           523,983               523,983
Loss from Operations of Disposed Subsidiaries                                        --             10,245                10,245
Foreign Currency Translation                                                      (9,652)               --                (9,652)
Minority Interest                                                                (27,279)               --               (27,279)

CHANGES IN ASSETS AND LIABILITIES:
Accounts Receivable                                                                 (400)               --                  (400)
Prepaid Expenses                                                                  (1,247)               --                (1,247)
Interest Receivable - Related Party                                              (17,250)         (12,938)               (30,188)
Accounts Payable and Accrued Expenses                                          1,067,343           538,821             1,606,164
Accrued Expenses - Related Party                                                     --             87,500                87,500
---------------------------------------------------------------------------------------------------------------------------------

NET CASH FLOWS FROM OPERATING ACTIVITIES                                        (436,755)               --              (436,755)
---------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Cash and Cash Equivalents in Disposed Subsidiaries                                    --          (50,823)               (50,823)
Cash and Cash Equivalents in Acquired Entity                                      43,422                --                43,422
---------------------------------------------------------------------------------------------------------------------------------
Purchase of Fixed Assets                                                                                --                (8,191)
---------------------------------------------------------------------------------------------------------------------------------

NET CASH FLOWS FROM INVESTING ACTIVITIES                                          35,231           (50,823)              (15,592)
---------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Sale of Convertible Debentures                                      500,000               --               500,000
Proceeds from Equity Financing by Chinese Venture                                 46,014                --                46,014
                                                                                                             --------------------
Repayment of Debt                                                               (101,716)               --              (101,716)
---------------------------------------------------------------------------------------------------------------------------------

NET CASH FLOWS FROM FINANCING ACTIVITIES                                         444,298                --               444,298
---------------------------------------------------------------------------------------------------------------------------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                           42,774           (50,823)               (8,049)

Cash and Cash Equivalents - Beginning Year                                           --             50,823                50,823
---------------------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS - END OF YEAR                                      $    42,774       $       --            $    42,774

                                                                                            - continued -


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

                                      F-7
<PAGE>


TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA


CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
=================================================================================================================================
                                                                                                                Cumulative
                                                                                                             Since Inception
                                                                                                             (October 1, 2005
Year Ended June 30,                                                                 2007           2006     To June 30, 2007
---------------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES
=================================================================================================================================

Interest Paid                                                                   $  1,223       $   --                $    1,223
Income Taxes Paid                                                               $   --         $   --                $     --
---------------------------------------------------------------------------------------------------------------------------------


NON-CASH INVESTING AND FINANCING ACTIVITIES
=================================================================================================================================

SALE OF SUBSIDIARY VIA THE ISSUANCE OF NOTE RECEIVABLE                          $   --         $ 300,000             $   300,000

ISSUANCE OF COMMON AND PREFERRED STOCK FOR ACQUISITION
  OF TECHNOLOGY LICENSE                                                         $   --         $ 598,927             $   598,927

ISSUANCE OF COMMON STOCK AS PART OF CONSULTING AGREEMENT                        $ 62,500       $    --               $    62,500

ISSUANCE OF COMMON  STOCK TO  EXECUTIVE  OFFICERS AS PART OF SERVICES
AND EMPLOYMENT AGREEMENTS                                                       $ 4,892,248    $    --               $ 4,892,248

ISSUANCE  OF  COMMON  STOCK  TO  DIRECTOR  FOR  COMPENSATION  FOR HIS
SERVICES                                                                        $   110,000    $    --               $   110,000

ISSUANCE  OF COMMON  STOCK  AND  NOTES  PAYABLE  AND  ELIMINATION  OF
ACCRUED  ROYALTY AS PART OF  ACQUISITION  OF 60%  INTEREST IN CHINESE
JOINT VENTURE                                                                   $17,597,500    $    --               $17,597,500

ASSETS AND LIABILITIES TRANSFERRED TO RELATED PARTY
  IN CONNECTION WITH SALE OF SUBSIDIARIES:
  Cash and Cash Equivalents                                                     $    --        $  50,823             $    50,823
  Inventory                                                                     $    --        $ 296,544             $   296,544
  Property and Equipment                                                        $    --        $  54,189             $    54,189
  Accounts Receivable - Related Party                                           $    --        $  37,850             $    37,850
  Deposits                                                                      $    --        $   6,667             $     6,667
  Due from Officer                                                              $    --        $  82,193             $    82,193
  Intangible Assets                                                             $    --        $ 260,542             $   260,542
  Investments in Affiliates                                                     $    --        $ 107,561             $   107,561
  Accounts Payable and Accrued Expenses                                         $    --        $(210,769)            $  (210,769)
  Debt                                                                          $    --        $  (6,321)            $    (6,321)
  Due to Related Party                                                          $    --        $ 137,240             $   137,240
  Treasury Stock                                                                $    --        $  17,709             $    17,709
=================================================================================================================================
</TABLE>





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

                                      F-8
<PAGE>



TRUE PRODUCT ID, INC. & SUBSIDIARIES (FORMERLY ONTV, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
PHILADELPHIA, PENNSYLVANIA


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -   BASIS OF PRESENTATION

           The  consolidated  financial  statements  of True  Product ID, Inc. &
           Subsidiaries  (formerly ONTV,  Inc.) (the "Company")  included herein
           have  been  prepared  by  the  Company,  pursuant  to the  rules  and
           regulations of the Securities  and Exchange  Commission  (the "SEC").
           Subsequent to the acquisition of an additional 20% ownership interest
           in TPID  (Beijing)  Ltd.  (the  "Chinese  Venture")  on May 11,  2007
           raising its ownership  interest to 60% and giving the Company control
           of the Chinese Venture, the accounts of the Chinese Venture are fully
           consolidated with the accompanying minority interest reflected. Prior
           to May 11, 2007 but  subsequent to the Company's  acquisition of it's
           initial 40% ownership of the Chinese  Venture on January 5, 2007, the
           Company  accounted  for it's  investment  under the equity  method of
           accounting  whereby the Company  recognized its proportional share of
           the  Chinese  Venture's  net  income  /  loss  on  the  Statement  of
           Operations  under  the  caption  "Loss  on  Equity  Investment".  All
           material   inter-company   transactions   have  been   eliminated  in
           consolidation.

           The  accompanying   consolidated  financial  statements  reflect  all
           adjustments  of a normal  and  recurring  nature  which  are,  in the
           opinion of  management,  necessary  to present  fairly the  financial
           position, results of operations and cash flows of the Company for the
           periods presented.

           In  preparing  its  consolidated  financial  statements,  the Company
           included  only  expenses  and  other  financial  information  of  the
           consolidated  Chinese JV from May 2007 (which is only the last months
           of the  fiscal  year).  It was May  2007  when it  acquired  majority
           ownership  and control of the Chinese JV. The Company did not include
           the  expenses and other  financial  information  of the  consolidated
           Chinese  JV  for  the  whole  entire  fiscal  year.  This  method  of
           presentation is consistent with  Accounting  Research  Bulletin (ARB)
           51, including paragraph 11 thereof.

           NATURE OF OPERATIONS

           On May 4th 2006,  the Articles of  Incorporation  of ONTV,  Inc. were
           amended to change the name of the  Corporation  to True  Product  ID,
           Inc.  (formerly ONTV,  Inc.).  True Product ID, Inc.  (formerly ONTV,
           Inc.) is an independently operated company which produces integrators
           for  anti-counterfeiting   security  surveillance   applications  and
           provides   integrated   tracking  devices  and  services  across  all
           industries. The Company delivers "cradle to grave" tailored solutions
           for governments,  armed forces, and industry, through its proprietary
           technology and through converging technologies, products and services
           of third parties.

           NEW ACCOUNTING PRONOUNCEMENTS

           In July 2006,  the  Financial  Accounting  Standards  Board  ("FASB")
           issued  FASB  Interpretation  No.  48  ("FIN  48"),  "Accounting  for
           Uncertainty in Income Taxes-an  Interpretation  of FASB Statement No.
           109, " which  clarifies  the  accounting  for  uncertainty  in income
           taxes.  FIN 48  prescribes a recognition  threshold  and  measurement
           criteria for the financial statement recognition and measurement of a
           tax  position  taken or expected to be taken in a tax return.  FIN 48
           also provides guidance on  de-recognition,  classification,  interest
           and  penalties,   accounting  in  interim  periods,   disclosure  and
           transition.  The  provisions  of  FIN  48  are  effective  as of  the
           beginning  of the  Company's  2008 fiscal year,  with the  cumulative
           effect  of  the  change  in  accounting   principle  recorded  as  an
           adjustment  to  opening  retained  earnings.  The  Company  does  not
           anticipate that the adoption of FIN 48 will have a material effect on
           the  Company's  results  of  operations,  cash  flows,  or  financial
           condition.

           In September  2006,  FASB issued  Statement  of Financial  Accounting
           Standards No. 157 ("SFAS No. 157"), "Fair Value  Measurements."  SFAS
           No. 157 defines fair value,  establishes  a framework  for  measuring
           fair  value  and  requires  enhanced  disclosures  about  fair  value
           measurements.  SFAS No. 157  requires  companies to disclose the fair
           value  of  its  financial  instruments  according  to  a  fair  value
           hierarchy.  Additionally,  companies are required to provide  certain


                                      F-9
<PAGE>

          disclosures  regarding  instruments within the hierarchy,  including a
          reconciliation  of the  beginning  and ending  balances for each major
          category  of assets and  liabilities.  SFAS 157 is  effective  for the
          Company's 2008 fiscal year. We do not anticipate  that the adoption of
          SFAS No. 157 will have a material  effect on the Company's  results of
          operations, cash flows, or financial condition.


           In September  2006, the Securities  and Exchange  Commission  ("SEC")
           issued Staff Accounting Bulletin No. 108, "Considering the Effects of
           Prior Year  Misstatements  when Quantifying  Misstatements in Current
           Year Financial Statements" ("SAB 108"). SAB 108 provides interpretive
           guidance  on how the  effects of the  carryover  or reversal of prior
           year misstatements should be considered in quantifying a current year
           misstatement. The SEC staff believes that registrants should quantify
           errors  using both the balance  sheet and income  statement  approach
           when  quantifying  a  misstatement.  SAB  108 is  effective  for  the
           Company's  fiscal year ending June 30, 2007.  The adoption of SAB 108
           did  not  have  a  material  effect  on  the  Company's   results  of
           operations, cash flows, or financial condition.


           On February 15,  2007,  the FASB issued FASB  Statement  No. 159, The
           Fair Value Option for Financial  Assets and  Financial  Liabilities -
           Including an  Amendment  of FASB  Statement  No. 115.  This  standard
           permits an entity to choose to measure many financial instruments and
           certain  other  items  at  fair  value.  Most  of the  provisions  in
           Statement 159 are elective;  however, the amendment to FASB Statement
           No.  115,  Accounting  for  Certain  Investments  in Debt and  Equity
           Securities,  applies  to all  entities  with  available-for-sale  and
           trading  securities.  The FASB's  stated  objective  in issuing  this
           standard is as follows:  "to improve financial reporting by providing
           entities  with the  opportunity  to mitigate  volatility  in reported
           earnings   caused  by  measuring   related  assets  and   liabilities
           differently   without  having  to  apply  complex  hedge   accounting
           provisions."  The fair value  option  established  by  Statement  159
           permits  all  entities  to choose to measure  eligible  items at fair
           value at  specified  election  dates.  A business  entity will report
           unrealized  gains and losses on items for which the fair value option
           has been elected in earnings (or another performance indicator if the
           business  entity  does  not  report   earnings)  at  each  subsequent
           reporting date. The fair value option:  (a) may be applied instrument
           by instrument,  with a few exceptions,  such as investments otherwise
           accounted for by the equity method; (b) is irrevocable  (unless a new
           election date occurs);  and (c) is applied only to entire instruments
           and not to portions of instruments.  Statement 159 is effective as of
           the beginning of the Company's  2008 Fiscal Year 2008 (July 1, 2007).
           Early  adoption is  permitted  as of the  beginning  of the  previous
           fiscal year  provided  that the entity makes that choice in the first
           120 days of that fiscal year and also elects to apply the  provisions
           of  FASB  Statement  No.  157,  Fair  Value  Measurements.  We do not
           anticipate  that the  adoption  of FASB  Statement  159  will  have a
           material effect on the Company's  results of operations,  cash flows,
           or financial condition.


NOTE B -  SIGNIFICANT ACCOUNTING POLICIES

          USE OF ESTIMATES:

          The preparation of financial  statements in conformity with accounting
          principles generally accepted in the United States of America requires
          the Company to make estimates and assumptions that affect the reported
          amounts of assets and liabilities, the disclosed amounts of contingent
          assets and  liabilities,  and the  reported  amounts  of  revenue  and
          expenses.  If the underlying  estimates and assumptions upon which the
          financial  statements  are based change in the future,  actual amounts
          may  differ  from  those  included  in the  accompanying  consolidated
          financial statements.

          PRINCIPLES OF CONSOLIDATION:

          The  accompanying   consolidated   financial  statements  include  the
          accounts of the Corporation  and its  wholly-owned  subsidiaries.  All
          material   intercompany   transactions   have   been   eliminated   in
          consolidation.


                                      F-10
<PAGE>


          CASH AND CASH EQUIVALENTS:

          Cash and cash  equivalents  consist  principally  of currency on hand,
          demand  deposits at  commercial  banks,  and liquid  investment  funds
          having maturity of three months or less at the time of purchase.

          PROPERTY, PLANT AND EQUIPMENT:

          Property,  plant and equipment is stated at cost and depreciated  over
          the  estimated  useful  lives of the  assets  using the  straight-line
          method. The estimated useful lives of the related assets are generally
          three to seven years.

          INTANGIBLE ASSETS:

           STATEMENT NO. 142, "Goodwill and Other Intangible  Assets," addresses
           financial  accounting  and reporting for acquired  goodwill and other
           intangible  assets.  It  addresses  how  intangible  assets  that are
           acquired  should be accounted for in financial  statements upon their
           acquisition.  This  Statement  also  addresses how goodwill and other
           intangible  assets  should  be  accounted  for  after  they have been
           initially recognized in the financial statements.  In accordance with
           Statement No. 142 goodwill and other  intangible  assets are reviewed
           at least  annually for  impairment.  Unless  circumstances  otherwise
           dictate,  annual  impairment  testing  is  performed  in  the  fourth
           quarter,

           Among the  intangible  assets  acquired by the Company as a result of
           its  acquisition  of ultimately 60% of the Chinese Joint Venture were
           significant  contract  opportunities  in China.  Pursuant  to a joint
           venture  contract with the Company's  predecessor,  the Chinese Joint
           Venture had the exclusive  rights to all  contracts  relating to SDNA
           and KMAC  technologies in the PRC, Hong Kong, and Macau.  The Chinese
           JV has developed  significant  relationships  with important  Chinese
           government  and industry  agencies and  entities.  Relationships  are
           critical  to doing  business  in the  PRC,  especially  when  Chinese
           government  is involved.  At the time the Company  completed the last
           transaction  resulting in its  ownership of 60% of the Chinese  Joint
           Venture,  the Joint  Venture  through its  relationships  had several
           contracts  pending in China. The contracts were  significant  because
           (1) they involved  significant  revenues;  (2) they were supported by
           Chinese government and/or were involved government  initiatives;  and
           (3)  they  were  national  in  scope  or cut  across  certain  entire
           industries.  By acquiring  majority  ownership  of the Chinese  Joint
           Venture,  the Company  was able to  consolidate  the Joint  Venture's
           revenues and other  financials  into the  Company's  own  financials.
           Subsequent  to  the  last  transaction  resulting  in  the  Company's
           majority  ownership of the Joint Venture,  the Joint Venture  entered
           into a significant  contract with the Chinese  counterpart  to the US
           Product  Consumer  Safety  Agency  ("AQSIQ").  The  latest  projected
           revenues  from that  five-year  contract  were  approximately  US$1.3
           billion. There are many other pending contracts also.


           FOREIGN CURRENCY TRANSLATION:

           The assets and liabilities of the Company's international  subsidiary
           are translated to U.S. dollars at exchange rates in effect at the end
           of the year,  and income and expense items are  translated at average
           rates of  exchange  in effect  during  the period of  ownership.  The
           effects of exchange rate  fluctuations  on the translated  amounts of
           foreign  currency  assets and liabilities are included as translation
           adjustments in  shareholders'  equity.  Gains and losses from foreign
           currency transactions are included in income of the period.

                                     F-11
<PAGE>

           INCOME TAXES:

           The Company  accounts  for income taxes in  accordance  with SFAS No.
           109,  Accounting  for  Income  Taxes,  using the asset and  liability
           approach,  which requires recognition of deferred tax liabilities and
           assets  for  the  expected  future  tax   consequences  of  temporary
           differences  between the  carrying  amounts and the tax basis of such
           assets and liabilities.  This method utilizes  enacted  statutory tax
           rates in effect for the year in which the temporary  differences  are
           expected to reverse and gives  immediate  effect to changes in income
           tax rates upon enactment.  Deferred tax assets are recognized, net of
           any valuation allowance,  for temporary differences and net operating
           loss and tax credit  carry  forwards.  Deferred  income  tax  expense
           represents the change in net deferred assets and liability  balances.
           There were no material deferred tax assets or liabilities at June 30,
           2007 and 2006.

           Deferred income taxes result from temporary  differences  between the
           basis of assets and liabilities  recognized for  differences  between
           the financial  statement and tax basis thereon,  and for the expected
           future tax benefits to be derived from net  operating  losses and tax
           credit carry forwards.  A valuation  allowance is recorded to reflect
           the likelihood of realization of deferred tax assets.

           FAIR VALUE OF FINANCIAL INSTRUMENTS:

           As of June 30, 2007, the carrying value of cash and cash equivalents,
           accounts receivables,  accounts payable and notes payable and current
           maturities of long-term debt approximated fair value because of their
           short maturity.

NOTE C - DISCONTINUED OPERATIONS

           In September 2005, the  stockholders of the Company approved the sale
           of the Seen OnTV,  Inc.  subsidiary,  along with all of the Company's
           assets  associated  with the  operations  of Seen OnTV,  Inc.,  which
           included all of the other wholly-owned subsidiaries, to the Company's
           Former President,  Daniel M. Fasano. In return, Mr. Fasano has agreed
           to pay  the  Company  $300,000,  through  a Note  Receivable  bearing
           interest at 5.75% annually,  and assume  responsibility of all of the
           Company's liabilities, including all potential outstanding litigation
           liabilities,  except for any amounts  owed to Mr.  Fasano for accrued
           and unpaid  compensation and amounts owed to Seen OnTV, Inc. by ONTV,
           Inc.  In  addition,  25%  of  the  net,  after-tax  income  from  the
           operations  of Seen OnTV,  Inc will be paid to ONTV,  Inc.  until the
           purchase price, plus accrued  interest,  is paid in full. As a result
           of this sale,  ONTV, Inc. had no  subsidiaries or revenue  generating
           operations.

NOTE D -   CHANGE IN CONTROL

           On  March  16,  2006,  the  Company  acquired  a  Technology  License
           ("License")  from Sure  Trace  Security  Corporation  ("SSTY") for an
           initial  term  of  five  years,  with  an  automatic  renewal  for an
           additional  five years.  The License grants the Company the worldwide


                                      F-12
<PAGE>

           rights   to    manufacture    and   sell    products    using   STC's
           "anti-counterfeiting  technology".  In exchange for this License, the
           Company issued 52,349,249 shares of common stock and 16,000 shares of
           preferred  stock,  valued in total at  $598,927.  The License will be
           amortized as a charge to  operations on a  straight-line  method over
           the ten year term of the License.

           Estimated annual  amortization  expense for the five years succeeding
           March 31, 2006 is as follows:

                      2007        2008         2009        2010        2011
           -----------------------------------------------------------------
                   $59,893     $59,892      $59,893     $59,893     $59,893
           =================================================================

           On March 21, 2006,  Daniel M. Fasano,  Former President and Director,
           sold 20,000  shares of the Series A  Preferred  Stock owned and under
           his control, to SSTY, a related party.

           As a result  of the  above  transactions,  there has been a change in
           control of the Company, as SSTY now owns and/or controls 78.8% of the
           outstanding common stock voting rights.

           An additional  154,919,125 shares were issued for the purchase of the
           technology license.

           The outstanding preferred shares were cancelled.

           In May 2006 the  stockholders of SSTY were issued a stock dividend of
           1 share of True Product ID, Inc.  (TPDI)  (formerly  ONTV,  Inc.) for
           every 19 shares of STC (SSTY) that each SSTY  stockholder  owned. The
           Payable Date for these dividend  shares was May 30, 2006. The Payable
           Date was the date the Company's  transfer agent issued and mailed the
           stock dividend  certificates  to SSTY  shareholders as of the May 25,
           2006 Record Date.

NOTE E -   EMPLOYMENT AND DIRECTOR AGREEMENTS

           Starting March 2006, James MacKay  ("MacKay")  agreed to serve as the
           Company's  Chairman of the Board of Directors  for a three-year  term
           with an annual compensation of $300,000. As reported in the Company's
           Form 10-KSB/A filed November 13, 2006, the Company and MacKay entered
           into a formal consulting  agreement,  memorializing their arrangement
           on November 11, 2006. A copy of MacKay's November 11, 2006 Consulting
           Agreement with the Company is attached as an exhibit to the Company's
           November  13,  2006 Form  10-KSB/A.  At June 30,  2007 and 2006,  Mr.
           MacKay is owed $387,500 and $87,500,  respectively,  representing all
           compensation  earned by him since he joined the Company.  See Note Q-
           Certain  Item  Reclassifications.  On November  13,  2006 Mr.  MacKay
           vested 39,559,961 shares of the Company's common stock as part of the
           aforementioned Services Agreement. The common shares of the Company's
           stock  closed  trading  on  November  13,  2006 at  $0.07  per  share
           resulting  in a valuation  of  $2,769,197,  which was expensed in the
           quarter ending  December 31, 2006. Mr.  MacKay's common shares vested
           to him prior to the vesting of common shares to Mr. Bendis.

           On March 12, 2007,  James MacKay resigned as the interim  Chairman of
           the Board and a director of the Company.  Richard A. Bendis, then the
           Company's Chief Executive Officer and President,  replaced Mr. MacKay
           as the Chairman of the Board. Mr. MacKay will continue to support the
           Company's initiatives in China and elsewhere.


                                      F-13
<PAGE>

           In March  2006,  the Company  entered  into an  Executive  Employment
           Agreement with Richard A. Bendis ("Bendis"),  where Bendis will serve
           as  the  Company's  President  and  Chief  Executive  Officer  for  a
           three-year  term, with annual  compensation  of $500,000.  Mr. Bendis
           subsequently  assumed the  additional  position of Chairman  upon Mr.
           MacKay's  resignation  in March 2007. At June 30, 2007 and 2006,  Mr.
           Bendis is owed $645,833 and $145,833, respectively,  representing all
           compensation earned by him since he joined the Company. Additionally,
           accrued  liabilities  at June 30, 2007 and 2006  include  $49,973 and
           $31,057,    respectively,    representing    unreimbursed    employee
           expenditures  primarily  for travel.  On November 13, 2006 Mr. Bendis
           vested 30,329,303 shares of the Company's common stock as part of the
           aforementioned  Executive Employment Agreement.  The common shares of
           the Company's  stock closed trading on November 13, 2006 at $0.07 per
           share  resulting in a valuation of $2,123,051,  which was expensed in
           the quarter ending December 31, 2006.

           On June 14, 2007 Michael Antonopolos was vested with 1,000,000 shares
           of the Company's restricted common stock for his services as a member
           of the  Company's  Board  of  Directors.  The  common  shares  of the
           Company's  stock  closed  trading on June 14, 2007 at $0.11 per share
           resulting in a valuation of $110,000, which was expensed

           See Note P -  Subsequent  Event -  Management  Changes for changes in
           Messrs. MacKay's and Bendis' roles and responsibilities.

NOTE F -   EQUITY MATTERS

           On May 4, 2006, the Company amended the articles of  incorporation to
           change the name of the Corporation to True Product ID, Inc. (formerly
           ONTV, Inc.).

           On  May  4,  2006,   the  Company   also   amended  the  articles  of
           incorporation to increase the authorized  shares of common stock from
           100,000,000  to  1,000,000,000,   of  which  800,000,000  shares  are
           designated as Class A and 200,000,000  shares are designated as Class
           B.

           On May 8, 2006, the Company declared a 2 for 1 forward stock split of
           the Company's common stock, to be effective on May 23, 2006.

           As more fully set forth in the Company's  Form 10-KSB filed  November
           3, 2005,  including Note F, a certain number of shares are being held
           in trust as a result of a loan  agreement the Company's  predecessor,
           ONTV, Inc., under prior management,  entered in June 2000, ONTV, Inc.
           entered  into a loan  agreement  with Emanuel  Tarboti,  an unrelated
           party,  in the amount of $250,000.  This note was for working capital
           and was secured by a promissory  note and 1,500,000  shares of common
           stock.  These  shares  are  issued and are being held in trust by the
           Company.  A copy of the  Company's  November  3, 2005 Form  10-KSB is
           available        at        the        SEC's        website        at:
           http://www.sec.gov/Archives/edgar/data/1011550/000100487805000160/
           june05form10k11-05.txt.

NOTE G -   TECHNOLOGY LICENSE

           During the year ended June 30, 2007 and 2006,  the  Company  incurred
           $450,000  and  $187,500,  respectively,  of expense for a  technology
           license from SSTY (See Note D for further  details).  Effective April
           15, 2006 the license  requires  that  $75,000 per month be paid for a
           period of five years. At June 30, 2007 and 2006, the entire amount of
           the expense  remains  unpaid and it included in accounts  payable and
           accrued expenses.


                                      F-14
<PAGE>

<TABLE>

NOTE H -   INCOME TAXES

           During  the year  ended  June 30,  2006 the  Company  had a change of
           control event,  which  prospectively  limits the use of net operating
           loss  carryforwards  generated  prior to the March 16, 2006 change in
           control (See Note D). At June 30, 2007, the Company had net operating
           loss  carryforwards  expiring in 2027 and 2026.  At June 30, 2007 and
           2006  a  valuation   allowance   equal  to  the  net  operating  loss
           carryforward  has been  provided to fully  reserve the  deferred  tax
           assets  which would have been  generated  by the net  operating  loss
           carryforwards as, in the assessment of the Company's  management,  it
           is more likely  than not that the net  operating  loss  carryforwards
           will not be realized.

NOTE I -   CAPITAL LEASE

           The  following  is a schedule by years of minimum  future  rentals on
           noncancellable capital leases as of June 30, 2007:

           Fiscal Year ending June 30:

           2008                                              $  11,756
           2009                                                 11,755
           2010                                                 11,756
           2011                                                 11,755
           2012                                                  8,816
                                                             ---------

           Total minimum payments required                      55,838
           Less amount representing interest                    12,498
                                                             ---------

           Present value of net minimum lease payments          43,340

           Current portion of capital leases                     7,351
                                                             ---------

           Long-term portion of capital leases               $  35,989
                                                             ---------

           Fixed assets included  $42,803 of assets under capital lease with
           amortization expense of $2,253 for the year ended June 30, 2007.


NOTE J -   EARNINGS PER SHARE

           The following  table sets forth the computation of basic and diluted
           earnings per share:
<S>                                                                 <C>                 <C>


           FOR THE YEARS ENDED JUNE 30,                                   2007                2006
                                                                    ----------------------------------
             NUMERATOR:

             Loss from Operations                                   $  (6,643,424)      $    (630,852)

             Loss from Discontinued Operations                               --              ( 54,228)
                                                                    ----------------------------------

             Net Income (Loss)                                      $  (6,643,424)      $  (1,165,080)
                                                                    ==============      ==============


                                      F-15
<PAGE>



             DENOMINATOR:

             Denominator for basic earnings per share--adjusted
             weighted-average shares                                   322,888,146         61,109,375
                                                                    ==============      ==============

             BASIC AND DILUTED EARNINGS PER SHARE:

             FROM OPERATIONS                                        $       (0.02)      $       (0.01)
                                                                    ==============      ==============
             FROM DISCONTINUED OPERATIONS                           $           -       $       (0.01)
                                                                    ==============      ==============
             NET LOSS                                               $      (0.02)       $       (0.02)
                                                                    ==============      ==============
</TABLE>

           The   average   number  of  common   shares   outstanding   had  been
           retroactively  adjusted  to reflect  the 2 for 1 forward  stock split
           effective May 23, 2006. (See Note F).

NOTE K - RELATED PARTY TRANSACTIONS

           The accrued  expense of $521,500 is for salary that is owed to former
           ONTV, Inc. President Dan Fasano.

           The related  party  expense of $176,240 is for money that was owed to
           former subsidiary "Seen On TV".

           The  circumstances  giving  rise  to  these  related  party  expenses
           associated with salary owed to former ONTV, Inc. President Dan Fasano
           prior to April  2006  (which he had  agreed to defer)  and with money
           owed to former subsidiary, "Seen ON TV," prior to April 2006 were set
           forth in  detail in the  Company's  November  3,  2005  Form  10-KSB,
           including  Notes H and J and were also  referenced  in the  Company's
           subsequent  Form 10-QSBs.  A copy of the  Company's  November 3, 2005
           Form 10-KSB is available on the SEC's website at:


           http://www.sec.gov/Archives/edgar/data/1011550/000100487805000160/
           june05form10k11-05.txt.
           A copy of the Company's  subsequent Form 10-QSBs are available on the
           SEC's website at:
           http://www.sec.gov/Archives/edgar/data/1011550/000100487805000184/
           sept05form10qsb12-05.txt
           http://www.sec.gov/Archives/edgar/data/1011550/000100487806000017/
           0001004878-06-000017-index.htm
           http://www.sec.gov/Archives/edgar/data/1011550/000112178106000100/
           ontv10qsb33106.txt

           In FY 2007 there were also a note receivable and interest receivables
           from  a  related  party  in  the  amounts  of  $300,000  and  $30,188
           respectively. These receivables arose from the September 2005 sale by
           the  Company to Dan Fasano,  the former  president  of the  Company's
           predecessor,  ONTV,  of all the shares of Seen On TV and other assets
           incidental  to the  business  of Seen On TV.  In  return  for all the
           shares  of Seen ON TV and  other  assets,  Fasano  agreed  to pay the
           Company $300,000 (the "Purchase Price") on the following terms:

           o   25% of the net,  after-tax  income from the operations of Seen On
               TV will be paid to the Company  until the  Purchase  Price,  plus
               accrued interest, is paid in full.

           o   The unpaid amount of the Purchase  Price bears  interest at 5.75%
               per year. Interest will not be compounded.

           o   Mr. Fasano may, at any time, and in his sole discretion, elect to
               assume all or a certain amount of the Company's  liabilities,  in
               which  case the  Purchase  Price will be reduced by the amount of
               any liabilities assumed.


                                      F-16
<PAGE>


           o   Assume all of the  Company's  liabilities,  with the exception of
               any   amounts   owed  to  Mr.   Fasano  for  accrued  and  unpaid
               compensation.

           The sale was described in detail in the  Company's  Form 10-KSB filed
           November 11, 2005.



NOTE L - RESTRUCTURING AGREEMENT

           The Company  acquired a 60%  ownership  interest in the Chinese Joint
           Venture  as  a  result  of  two  separate  transactions.   The  first
           transaction was the January 2007 acquisition of 40% of the Chinese JV
           from  Sure  Trace  Security  Corporation  and  affiliates,  which  is
           described  in this  Note.  The  second  transaction  was the May 2007
           acquisition  of an  additional  20% of the  Chinese  JV from  Sichuan
           Valencia Trading Limited, which is described in Note N.

           On January 4, 2007 the Company entered into a Restructuring Agreement
           with Sure  Trace  Security  Corporation  ("SSTY"),  Sure  Trace  Asia
           Limited  ("STA"),  and  William  Chan  ("Chan")  (the  "Restructuring
           Agreement");  and (2) an Amendment to the March 21, 2006  SSTY-Fasano
           Agreement entered into on January 4, 2007 between the Company,  SSTY,
           and Fasano, (the "Amended Payment Agreement").  These material events
           were reported in the Company's Form 8-K filed on January 10, 2007, to
           which a copy  of the  Restructuring  Agreement  and  Amended  Payment
           Agreement were attached as exhibits.

           Pursuant to the Restructuring  Agreement,  the Company acquired a 40%
           ownership  interest in a Chinese  joint  venture  company  named True
           Product ID Technology (Beijing) Limited (the "Chinese Venture"), held
           by SSTY,  STA, and Chan. The remaining 60% ownership  interest in the
           Chinese Venture is held by unrelated Chinese entities.

           Under the Restructuring Agreement:

           (a) SSTY agreed:

           (i) To  terminate  in its  entirety  the  March  16,  2006  licensing
           agreement  between SSTY and the Company  (then known as ONTV,  Inc.),
           wherein SSTY licensed to TPID certain  contractual  rights of SSTY in
           exchange for, inter alia, a royalty, and certain payments to SSTY and
           others and  repayment,  so that the Company has no  liability  (past,
           present,  and future) thereunder  (accrued royalties of $637,500 were
           therefore eliminated as part of the accounting for this transaction);
           and

           (ii) To strike and negate in its  entirety  Article I and  Article V,
           Section  5.02 (the  "Stricken  Provisions")  of the  March  17,  2006
           Agreement to Issue Stock for Technology  License between SSTY and the
           Company (then known as ONTV, Inc.) ("March 17 Agreement"), so that as
           of January 4, 2007, the Company has no obligation (past, present, and
           future)  under the March 17, 2006  Agreement  to issue  shares of the
           Company to SSTY in addition  to the shares SSTY had already  received
           and had distributed to its shareholders as a dividend.

           (b) The Company agreed:


                                      F-16
<PAGE>


           (i) To pay SSTY a royalty in the  amount of 2% of its gross  receipts
           which the Company  actually  receives  and  collects  from  customers
           outside  China,  Hong  Kong,  and  Macau  for  a  period  of 2  years
           commencing as of January 4, 2007. As the were no gross  receipts,  no
           royalty was recorded for this period;

           (ii) To pay SSTY all reasonable,  direct out-of-pocket  expenses SSTY
           incurred  and/or paid on the  Company's  behalf after the  Registrant
           ceased being a subsidiary of SSTY,  provided  that such  post-spinout
           expenses  are  substantiated  by original  invoices  and other proper
           documentation;

           (iii) To assume,  pursuant  to the  Amended  Payment  Agreement,  all
           outstanding  payments owed by SSTY to the former control block holder
           of ONTV, Inc. (Fasano),  which relates to the acquisition of ONTV. As
           of August 2006, SSTY owed Fasano $285,000, excluding certain interest
           and  penalties,  plus 6 million  common shares of the Company,  which
           SSTY  had  previously  agreed  post-SSTY's  acquisition  of ONTV  but
           pre-spinout,  in return  for,  inter alia,  Fasano  agreeing to waive
           $85,000 of the balance owed by SSTY and all interest and penalties on
           the $85,000.  Under the Amended  Payment  Agreement,  the Company has
           agreed [a] to pay Fasano  $100,000 by January 31,  2007;  $185,000 by
           March 31, 2007;  and interest and  penalties by June 30, 2007 and [b]
           to assume SSTY's  obligation to issue Fasano 6 million  common shares
           of the Registrant (valued at $1,320,000 on January 6, 2007, the issue
           date of the stock).  If the Company  timely makes  payments under the
           Amended Payment Agreement,  the amount of such penalties and interest
           is  $34,410;  in the  event  that the  Company  fails to make  timely
           payments under the Amended Payment Agreement, interest will accrue on
           the unpaid  portions at 25% simple interest per annum. A note payable
           of $319,410  was recorded to reflect  this  assumed  liability  and a
           $100,000  payment was made in January 2007 against this note payable.
           TPID is  currently  in default of the payments due March 31, 2007 and
           June 30, 2007 and plans to make the required  payments  from the next
           round of financing received by TPID.

           (iv)  Pay  SSTY,  on an  interest-free  basis,  within 3 years of the
           effective date of the Restructuring  Agreement $1,130,000,  minus the
           amount of  penalties  and interest  TPID must pay the former  control
           block  holder  under the  Amended  Payment  Agreement  (the  "Subject
           Payment").  TPID is also obligated to make the following  prepayments
           towards the Subject Payment: (a) $50,000 upon receipt of the first $1
           million of investment  raised by TPID after January 4, 2007;  and (b)
           25% of any  investment  raised by TPID  after the  initial $1 million
           investment.  The  obligations of SSTY to make the Subject Payment are
           secured by a security interest in the Registrant's ownership interest
           in Chinese Joint  Venture until the Subject  Payment is paid in full.
           SSTY is authorized to file the appropriate UCC-1 financing statements
           to perfect such a security interest in all appropriate jurisdictions.
           A note  payable of  $1,095,590  note  payable was recorded to reflect
           this  obligation.  The  recorded  amount  is net of  the  $34,410  of
           penalties and interest reflected in the note payable discussed in the
           previous paragraph.

           Under  the  Restructuring  Agreement,  SSTY and the  Company  further
           agreed,  to  non-competition  provisions in which (1) SSTY in general
           agreed not to compete with the Registrant in the  anti-counterfeiting
           and/or product authentication business; and (2) the Company agreed in
           general not to compete with SSTY in the geo-tracking-related business
           or any business related to All-in-One-Key.


                                      F-17
<PAGE>


           The Effective Date of the  Restructuring  Agreement is the earlier of
           (a) February 18, 2007, (b) upon the conclusion of aspects, if any, of
           the ongoing  investigation by the Securities and Exchange  Commission
           relating to SSTY which may affect the  transactions  contemplated  in
           the Restructuring Agreement. The SEC commenced a formal investigation
           of SSTY in August 2005, which remained ongoing during the period when
           SSTY acquired and owned the  controlling  interest in the  Registrant
           and delivered  the shares it held in the  Registrant as a dividend to
           SSTY stockholders.  As part of the  investigation,  the SEC Staff has
           questioned  whether the  delivery of the shares to SSTY  shareholders
           required  registration  with  the  SEC.  The  Effective  Date  of the
           Restructuring  Agreement was  subsequently  determined to be February
           18, 2007.

           The total value of the  transaction is $2,097,500 and was recorded on
           the balance sheet as investment  in the Chinese  Venture.  During the
           four months that the Company  owned a 40%  ownership  interest in the
           Chinese  Venture,  the Company  recognized an equity loss of $65,513,
           which was 40% of the loss  recognized by the Chinese  Venture  during
           that period.

NOTE M - BRIDGE FINANCING/CONVERTIBLE DEBENTURE

           On January 17, 2007 the Company  closed an initial  bridge  financing
           with a private  investor for  $500,000;  a portion of these  proceeds
           will go to fulfill existing orders in China; and the Company has sent
           a  representative  from the US to  Beijing  to work with the  Chinese
           Venture to fulfill these orders.

           The financing took the form of a convertible note with an 8% interest
           rate,  and is referenced in the above balance sheet as a "Convertible
           Debenture".  For the sake of clarity,  the  reference to  Convertible
           Debenture in the Company's  balance sheets means the bridge financing
           described in this Note. Additionally, investors will receive warrants
           to purchase  additional  shares of Company's  common stock at a price
           per share  equal to the price per share of the  shares  issued in the
           First  Equity  Financing,  with 20%  warrant  coverage  if the bridge
           converts within 4 months; 35% warrant coverage if the bridge converts
           within 8 months;  and 50%  warrant  coverage  if the bridge  converts
           after 8 months.  The "First Equity Financing" is defined as the first
           financing  following  the date of Closing in which the Company  sells
           preferred  stock or other equity  securities and obtains net proceeds
           (including  debt  conversion)  in an amount  not less than $2 million
           (including  the  conversion of the Debt).  The warrants  shall have a
           seven-year exercise period.

           The Debt (including  accrued  interest) shall  automatically  convert
           into the  Company's  preferred  stock issued in  connection  with the
           closing of the First Equity  Financing at 100% of the price per share
           paid to the Company for such securities.

           If the Debt  does  not  convert  in  connection  with a First  Equity
           Financing on or before the Maturity Date, the Debt shall be converted
           into  shares of the  Company's  common  stock at a price equal to the
           average  closing price per share for the 30-day period  preceding the
           Maturity Date.

           The maturity date is the earliest to occur of (i) the date of closing
           of the First  Equity  Financing,  (ii) the date of the  closing  of a
           merger  or  reorganization  of the  Company  with or into  any  other
           entity,  or a sale of all or  substantially  all of the assets of the
           corporation,   or  any  other   transaction   or  series  of  related
           transactions in which the Company's stockholders immediately prior to
           such  transaction(s) own immediately after such  transaction(s)  less
           than fifty  percent  (50%) of the equity  securities of the surviving


                                      F-18
<PAGE>

           corporation  or its  parent  or  (iii)  any  time  after  the  second
           anniversary of the date of Closing.

NOTE N - ACQUISITION OF ADDITIONAL 20% OF CHINESE VENTURE

           On May 11, 2007 the Company  entered  into an  acquisition  agreement
           (the  "Acquisition  Agreement") with Sichuan Valencia Trading Limited
           ("SVTL"),  a Chinese limited  liability  company duly organized under
           Chinese  law.  As set  forth  in Note  L,  prior  to the  Acquisition
           Agreement  with SVTL,  the Company had acquired 40% of the Chinese JV
           from other entities.

           Immediately prior to the execution of the Acquisition Agreement, SVTL
           owned 20% of the total  interests,  rights,  assets,  shares,  and/or
           other  ownership  interests of True Product ID  Technology  (Beijing)
           Limited,  formerly known as Sure Trace Technology  (Beijing)  Limited
           (the  "Chinese  Venture"),  a Chinese  technology  limited  liability
           corporation  duly formed and  organized  under Chinese law (the "SVTL
           20% Chinese JV Interest"). Under the Acquisition Agreement, SVTL sold
           to the  Company  the SVTL 20%  Chinese JV  Interest in return for 100
           million   restricted   common  shares  of  the  Company,   valued  at
           $15,500,000. As set forth in more detail in the Acquisition Agreement
           and prior SEC  filings,  the 100 million  shares was less than 50% of
           the  approximately  209  million  shares  provided  as a dividend  to
           shareholders   of  TPID  US'  former  parent,   Sure  Trace  Security
           Corporation,  which resulted in TPID US' being a separate independent
           entity entitled to receive approximately 42.5% of the revenues of the
           Chinese  Venture.  With its January  2007  acquisition  of 40% of the
           Chinese  Venture  and the  acquisition  of the  SVTL 20%  Chinese  JV
           Interest,  the Company now owns 60% of the total ownership  interests
           of the Chinese Venture,  allowing the Company to, among other things,
           recognize  100%  of  the  revenues  of  the  Chinese  JV  Company  in
           accordance  with  applicable   consolidation,   revenue  recognition,
           accounting, and other principles, guidelines and standards.

           Under the Acquisition Agreement, SVTL representative,  Sergio da Luz,
           was  appointed to the Company's  Board of Directors,  and SVTL agreed
           to,  inter  alia,   standard   non-competition   and  confidentiality
           provisions.

           The operations of the Chinese Venture  operation were included in the
           Company's  operations  subsequent  to  May 1,  2007.  There  were  no
           revenues  recognized  relative to the Chinese  Venture and $68,197 of
           expense were recognized with a compensating $27,279 minority interest
           recognized  for the 40% portion of the  Chinese  Venture not owned by
           the Company.

           The  composition of the purchase price and the related  allocation is
           as follows:

           PURCHASE OF INITIAL 40% INTEREST IN CHINESE VENTURE:

           Common  Stock of the Company  issued for the  initial  40%  ownership
           interest (6,000,000 shares at $0.22 per share)            $1,320,000

           Note payable - Fasano                                        319,410

           Note payable - SSTV                                        1,095,590

           Less _ Royalty payment forgiven                             (637,500)
                                                                      ---------

           Net Consideration                                         $2,097,500

           PURCHASE OF ADDITIONAL 20% INTEREST IN CHINESE VENTURE:

           Common Stock of the Company issued for the additional 20% ownership
           interest (100,000,000 shares at $0.155 per share)         $15,500,000
                                                                     -----------

           Total Consideration                                       $17,597,500
                                                                     ===========

           An internal  valuation was  performed to allocate the purchase  price
           which  determined  that all of the purchase price should be allocated


                                      F-19
<PAGE>

           to Customer  Contacts and Contracts  with an  amortization  period of
           five years.  During fiscal 2007 no amortization  expense was recorded
           as the 60% interest  was held less than two months and the  contracts
           to which the excess purchase price was allocated have not commenced.

           There is no  unaudited  pro forma  condensed  results  of  operations
           presented,  as the  Company  has not been  able to  obtain  financial
           information  from the Chinese Venture for periods prior to January 1,
           2007.

NOTE O - FOREIGN OPERATIONS:

           Subsequent to the  acquisition  of the additional 20% interest in the
           Chinese  Venture by the Company  raising its  ownership to 60% of the
           Chinese  Venture  on May 11,  2007,  the  majority  of the  Company's
           operating  activities have been in China. The functional  currency of
           the Chinese  Venture is the Yuan and the financial  statements of the
           Chinese Venture have been converted from Yuan to U.S.  Dollars at the
           exchange  rate in effect.  There were no  foreign  currency  gains or
           losses  included  in the June 30, 2007  Statement  of  Operations.  A
           Foreign Currency Translation Adjustment of ($9,652) was included as a
           component  of  Shareholders'  Equity at June 30,  2007 to reflect the
           change in value of assets and  liabilities  in the Chinese  Venture's
           balance sheet.

           Accounts Receivable

           There was $31,806 US in accounts  receivable  in 2007,  virtually all
           from the Chinese  Joint  Venture.  These arose in part from  customer
           purchases of taggant,  scanners  and other  equipment  and  materials
           associated  with trial and pilot runs  associated  with the Company's
           securing Chinese contracts.  The Company believes that these accounts
           receivable will be collected in China in due course, given the fairly
           recent  nature of the  accounts  receivable  (at least  according  to
           Chinese standards), the ongoing nature of certain trial or pilot runs
           and relationship with Chinese customers,  the relationships involving
           Chinese  government  entities,  and  the  significance  of the  Joint
           Venture's     continued     efforts     towards    certain    Chinese
           government-related initiatives.

NOTE P - SUBSEQUENT EVENTS:

           FINANCING / FUNDING

           The MacKay Group  Limited  (MKG) agreed on August 15, 2007 to provide
           the  Company a line of credit in the  amount of up to  US$150,000  in
           accordance with the following terms and conditions,:

           o  Repayment Term: one (1) year commencing from the receipt of each
              tranche of Funds (the "Repayment Term");
           o  Interest: 12% compound interest per annum;
           o  Prepayment: no prepayment without MKG's approval
           o  Convertibility:

           o  At anytime during the Repayment Term, MKG has the right to convert
              the  entire  amount  of  principal  and  accrued  interest  or any
              portions  thereof into the Company's common stock at a share price
              equal to the  lesser  of:  (a) the 70% of the  share  price at the
              close of the  market  as of  receipt  of  funds;  or (b) the terms
              extended  by  the  Company  to a  funder  making  a  total  equity
              investment  of at  least  US$2  million  or in  connection  with a
              merger/acquisition or change in control (the "Convert Rate");

           o  Warrants:  The  Company  shall  issue  to MKG  without  additional
              consideration,  warrants to purchase  that number of shares of the
              Company's common stock equal to the principal  amounts advanced by
              MKG,  exercisable  at a share  exercise price equal to the Convert
              Rate. The term for the warrants shall be five (5) years;

                                      F-20
<PAGE>


           MKG also  executed on August 15, 2007 a memorandum  of  understanding
           ("MOU") with the Company,  in which upon MKG's  request,  the Company
           will repay MKG for monies which MKG advanced to or for the Company or
           the Chinese  Venture between May 30, 2006 and August 1, 2007, to help
           support the Chinese  Venture (the "MKG  Advanced  China  Funds").  To
           qualify for repayment,  the MKG Advanced China Funds must be properly
           documented,  must have been used solely for  Chinese  Venture and its
           operations  related to the field of  anti-counterfeiting  and product
           authentication, and are subject to other requirements.

           Under the MOU, MKG and the Company  shall work in good faith to agree
           upon the repayment terms and conditions,  which shall be memorialized
           in a  definitive  written  agreement(s).  The parties  agree that the
           repayment  arrangement  shall come in the form of a convertible  note
           with  appropriate  compound  interest  with  warrants.  The terms and
           conditions  shall be, at a minimum,  comparable  to those the Company
           has given to funders  as of August 1, 2007.  In the event that MKG is
           provided  repayment terms by the Company which are more  advantageous
           than those  extended to other  funders as of August 1, the  Company's
           arrangement  with  other  funders  as of  August  1,  2007  should be
           modified  to  provide  the  other  funders  with the same  terms  and
           conditions  given by the Company to MKG. A copy of the  memorandum of
           understanding  between the Company and MKG was attached as an Exhibit
           to the Form 8-K filing.

           According to financial  records relating to the Chinese  Venture,  to
           date  MKG  has  advanced  approximately  US$1  million  to or for the
           Chinese Venture and its  anti-counterfeiting/  product authentication
           operations, and consistent with the aforementioned Binding Term Sheet
           anticipates  advancing  additional  significant  funds  to or for the
           Chinese  Venture.  Funds advanced  between May 30, 2006 and August 1,
           2007 are subject to the documentation  and other  requirements in the
           MOU.

           BOARD OF DIRECTOR COMPENSATION AGREEMENT

           On August 16, 2007,  the Company  entered  into an agreement  with Li
           Ning, the CEO of the Company's Chinese Venture,  to issue Li Ning ten
           million  (10,000,000)  restricted  common  shares in  return  for his
           serving as a member of the Company's Board of Directors and otherwise
           supporting  the Company with regard to its  initiatives  in China.  A
           copy of  Registrant's  agreement with Li Ning is attached to the Form
           8-K as an Exhibit.

           MANAGEMENT CHANGES

           On August 17, 2007 the Company announced that to help best facilitate
           the  development of the Chinese  markets,  that (1) Richard A. Bendis
           voluntarily resigns his positions of Company's chairman of the Board,
           chief  executive  officer,  and  president  and as a director  of the
           Company.  Mr.  Bendis  will serve as a  consultant  to us and we have
           entered  into a  consulting  agreement  with Mr.  Bendis;  (2)  James
           MacKay,  who is  involved  in  facilitating  the  development  of the
           Chinese  markets  and who was the  Company's  former  chairman of the
           Board, will serve as the Company's  chairman of the Board; (3) Sergio
           Luz, who is also  involved in  facilitating  the  development  of the
           Chinese markets,  will serve as the Company's  president;  and (4) Li
           Ning,  who is the chief  executive  officer of the Company's  Chinese
           Venture and who is also involved in  facilitating  the development of
           the Chinese markets, joined the Company's Board.

           CUSTOMER CONTRACT

           Early in September 2007, the Company announced that the State General
           Administration for Quality Supervision,  Inspection and Quarantine of
           the People's  Republic of China ("AQSIQ") has agreed to supplementary
           provisions  to its  project  cooperation  agreement  with our Chinese
           joint venture affiliate company, which establish details and a target
           pricing structure  regarding the use of the Company's S-DNA and KMACK


                                      F-21
<PAGE>

           technologies  for Chinese  liquefied  natural  gas  ("LNG")  bottles,
           tanks, and other containers.

           AQSIQ's  supplementary   provisions  require  the  Company's  Chinese
           Venture to provide a special equipment  security/safety  logo, and to
           implement  a special  equipment  identification  security  management
           system,  for LNG  containers  throughout  China.  Based  on  official
           Chinese  records,  AQSIQ projects that there are currently a total of
           130 million LNG tanks in China and that total is expected to increase
           by  approximately  10 percent  every year.  AQSIQ wants the Company's
           Chinese Venture to complete marking of the LNG containers  nationwide
           within 3 years, with marking to begin immediately in select areas.

           AQSIQ's  supplementary   provisions  further  require  the  Company's
           Chinese  Venture to provide  certain  types of its  proprietary  SDNA
           readers/scanners to approximately  25,000 LNG gas stations and 15,000
           manufacturers  throughout  China and to  integrate  the  stations and
           manufacturers  into  a  special  equipment   identification  security
           management system.

           In its  supplementary  provisions,  AQSIQ sets out  certain  "target"
           prices for the  Company's  Chinese  Venture to provide  (1) a special
           equipment  identification  security/safety  logo for 130  million LNG
           tanks (a price for  marking  each LNG tank);  (2) 50,000 of a certain
           type of its proprietary S-DNA readers/scanners; (3) 15,000 of another
           type of its proprietary S-DNA reader/scanner;  and (4) an information
           management  system for 50,000  platforms/ports  for LNG gas stations,
           special equipment manufacturers and other entities in China.

           As set forth in more detail in the  Company's  Form 10-KSB,  the most
           recent  consultations  between TPID Beijing and AQSIQ,  have produced
           projections  of total gross revenues over a 5-year period for the use
           of the  Company's  technology  for LNG  containers  and other special
           equipment of approximately  9,971,150,000 Chinese Yuan, which equates
           to approximately  $1,327,100,238.10  U.S. Dollars as of September 27,
           2007. Continued  consultation and coordination between AQSIQ and TPID
           Beijing are ongoing and the AQSIQ contract projections are subject to
           change and  revision.  The Company has not yet completed its analysis
           as to what would be net revenues.  The Company anticipates it will be
           in a better  position to more fully  ascertain the expenses needed to
           implement  this  LNG  tank  phase of the  AQSIQ  project  cooperation
           agreement as more details are gathered  during the Company's  Chinese
           Venture's   continued   coordination  and  consultation  with  AQSIQ,
           provincial  and local  authorities,  LNG gas  stations,  and  special
           equipment manufacturers.

NOTE Q - CERTAIN ITEM RECLASSIFICATIONS:

          Certain  expenses  and items from prior  years were  reclassified  to,
          among other things,  reflect  current nature of certain  arrangements.
          For instance,  the $87,500 owed to Mr.  MacKay,  which was  previously
          classified as payroll expense, has been reclassified as other expenses
          to, among other things, better reflect the consulting and other nature
          of that arrangement.



                                      F-22