----

----

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

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

| Delaware                                           |   |   |   | 16-1499611                                    |
|----------------------------------------------------|--------|--------|--------|-----------------------------------------------|
| (State      or other jurisdiction ofincorporation) |   |   |   | (I.R.S.      EmployerIdentification      No.) |

|   | 1615 Walnut Street, 3rd      FloorPhiladelphia,      Pennsylvania |  19102           |
|--------|-------------------------------------------------------------------|-----------------------|
|   |  (Address of      principal executive offices)               |  (Zip      Code) |
|   |                                                              |                  |

----

----

| ·   | 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. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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’sauthenticity. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Marker      Systems uses microscopic particles; Optical/Audible System uses      multi-functional additives; Elemental System – Elemental Additive Particle      Pattern – Standard 2D bar codescanner. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Lowry      Computer Products |
|--------|------------------------------|

|   | Markem      Corporation |
|--------|-------------------------|

|   | Tana      Consultancy Services |
|--------|--------------------------------|

----

| Funder                                        | Amount      of funding | Shares      issued | Shares      in Warrants |
|-----------------------------------------------|------------------------|--------------------|-------------------------|
| Davina      Lockhart                          | $58,500                | 39,000             | 14,625                  |
| Justin      Stanley                           | $50,000                | 33,333             | 12,500                  |
| Jerry      Bratton                            | $50,000                | 33,333             | 12,500                  |
| Jerry      Bratton                            | $100,000               | 66,667             | 25,000                  |
| BC      LTD                                   | $100,000               | 66,667             | 25,000                  |
| DOUBLE      U MASTER FUND L.P.                | $50,000                | 33,333             | 12,500                  |
| Webster      Mrak & Blumberg Pension Plan |                   |               |                    |
| f/b/o      Richard Blumberg                   | $197,800               | 131,867            | 49,450                  |
| Webster      Mrak & Blumberg Pension Plan |                   |               |                    |
| f/b/o      Christine Mrak                     | $196,200               | 130,800            | 49,050                  |
| Richard      Blumberg                         | $177,500               | 118,333            | $44,375                 |

| Name                    | Shares     | Services      provided                                                                                                                                                                                                                                                                                                                           |
|-------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| James      MacKay       | 19,142,742 | Per      consulting and debt forgiveness agreements.  MacKay was our      founder and the founder of TPID Beijing, TPID HK, and all of our China      initiatives; the originator of AQSIQ Gas Tank Contract and all other China      contracts, our former chairman, chairman of TPID Beijing, and current      consultant since 2005 |
| Ke      Ke Wang         | 250,000    | Per      employment agreement.  Wang has been our president since January      2008                                                                                                                                                                                                                                                    |
| Wilson      Hendricks   | 1,000,000  | Per      employment agreement.  Hendricks was former CEO and Director      from March-October 2008 and our former COO from  November 2007      to March 2008                                                                                                                                                                 |
| Brandee      Dunavant   | 100,000    | Per      services agreement.  Dunavant has been a consultant since      November 2007                                                                                                                                                                                                                                                  |
| Jon      Brunot         | 100,000    | Per      services agreement. Brunot has been a consultant since November      2007                                                                                                                                                                                                                                                               |
| Celebrity      Foods    | 1,000,000  | Per      consultant agreement.  It has been a  consultant since      2006                                                                                                                                                                                                                                                    |
| Michael      Antonoplos | 400,000    | Per      consultant agreement.  Antonoplos has been a consultant since      the Fall of 2006, a director since April 2007 and our secretary since      November 2007.                                                                                                                                                                  |
| William      Chan       | 1,000,000  | Per      consulting agreement. Chan was a former director, TPID Beijing; the former      president TPID HK; and has been consultant since before    2006                                                                                                                                                                                         |
| Sergio      da Luz      | 1,000,000  | Per      consulting agreement. Da Luz was our former president & director from      May 2007 to June 2008 and a former director TPID Beijing  since      2007                                                                                                                                                                      |
| Eric      Littman       | 200,000    | securities      counsel since March 2008                                                                                                                                                                                                                                                                                                         |
| Tom      Hess           | 200,000    | corporate      counsel since November 2007                                                                                                                                                                                                                                                                                                       |
| Richard      Blumberg   | 300,000    | Per      consulting agreement; consultant & counsel since March      2008                                                                                                                                                                                                                                                                    |
| Herbert      Towning    | 180,000    | Per      consulting agreement related to fund raising; since April    2008                                                                                                                                                                                                                                                                       |
| Ann      Shek           | 100,000    | Consultant,      TPID Beijing and TPID HK (since 2006)                                                                                                                                                                                                                                                                                           |
| Liu      Leung Wai      | 100,000    | Consultant,      TPID Beijing and TPID HK (since 2006)                                                                                                                                                                                                                                                                                           |
| Chan      Chi Wei       | 100,000    | Consultant,      TPID Beijing and TPID HK (since 2006)                                                                                                                                                                                                                                                                                           |
| David      Hong         | 100,000    | Current      director; Consultant, TPID Beijing and TPID HK (since December      2007)                                                                                                                                                                                                                                                           |

----

| ·   | Repayment Term:      one (1) year commencing from the receipt of each tranche of Funds (the      “Repayment Term”); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | Interest: 12%      compound interest per annum; |
|--------------------|-------------------------------------------------|

| ·   | Prepayment: no      prepayment without MKG’s approval |
|--------------------|-------------------------------------------------------------|

| ·   | 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 Company 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”); |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Warrants: The      Registrant 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. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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      the “Royalty”); and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Off-Balance SheetArrangements

|     Name,      Age andPrincipal      Occupation |  Year FirstAppointed | Certain      Other Information |
|---------------------------------------------------------------------|--------------------------------|--------------------------------|

| Michael      J. Antonopolos (56), Director  | 2007 | Antonopolos      is a 32-year veteran of the commercial real estate industry and is a      principal of a firm he started in 2000 which provides debt and equity for      a variety of real estate investments.  As a partner in a      privately held real estate investment fund, Antonopolos was instrumental      in raising and placing over $700 million in investment opportunities. He      has been involved in the development of over 7 million square feet of      office, retail, and industrial properties and has negotiated lease and      equity transactions valued at more than $9 billion.  Antonopolos      was also a part of a 23 person strategic task force charged with preparing      a 5-year strategic plan for a $350 million international service company.      Prior to 2000, Antonoplos was Senior Vice President and Managing Director      for a national real estate services company where he directed all      corporate advisory activities throughout the Eastern U.S.  In      this capacity,  Antonoplos advised corporate clients on      administration and strategic implementation of their real estate      portfolios, which exceeded $7 billion in total value.  |
|--------------------------------------------------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| David      Bruce Hong (39), Director             | 2008 | Educated      in the United States and England, Hong previously helped oversee      distribution, sales and business development for Asian and multinational      companies in a variety of diverse industries in the People’s Republic of      China, Hong Kong, Macau, Taiwan, Philippines, Thailand, Malaysia,      Indonesia, Japan and the United States, serving as CEO, a board member,      director for the Asian-Pacific Region, director for business development,      and other capacities. He helped oversee distribution, sales, promotions,      and business development in the Asian-Pacific Region for such companies as      7-Eleven, KFC, Sands, 3M, Audi, Budweiser, Citibank, J. Walter Thompson,      and Nestle, among others. He was also a licensed financial controller      within the insurance industry for more than 10 years, and has extensive      logistic management experience.  Hong has helped our Chinese      operations since December 2007.                                                                                                                                                                                                                                                        |

|                                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Richard      A. Bendis-President/CEO      (March 2006 to August 2007)-Chairman      (March 12, 2007 to August 2007) | Employment      Agreement:--March      2006 to August 9, 2007--$500,000/      year--30,329,303      shares Consulting      Agreement:--August      9, 2007 to March 31, 2008--$240,000/      year On      March 31, 2008, Bendis agreed to eliminate all compensation and other      monies owed by the Company under any employment and consulting agreement      (approximately $863,244), in return for the Company’s agreement to allow      him to maintain stock previously issued tohim. |

----

|                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| James      MacKayChairman      (March 2006 to March 2007; August 2007 to November 2007)                                                                               | Consulting      Agreement-November 2007:-$300,000/year-39,559,961      shares In      November 2007, MacKay agreed to eliminate all consulting fees owed to him      up to November 7, 2007 (approximately $462,500). Pursuant      to the Company’s agreements wherein MacKay eliminated certain debt owed to      him and the MacKay Group by the Company as of November 2007 and wherein      MacKay agreed to help secure the AQSIQ Chinese National Gas Tank Contract,      in June 2008, the Board authorized the issuance to MacKay of 19,142,742      restricted shares of common stock.  |
| William      R. Dunavant--CEO      and Chairman (November 2007 to March 2008)--Managing      Director, Global Strategic Initiative (March-July 2008)                  | Employment      Agreement-November 2007--$240,000/year--200,000,000      sharesAmended      Employment Agreement-March 2008--$200,000/year                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Wilson      W. Hendricks--COO      (November 2007 to March 2008)--CEO      and director (March to October 2008)                                                       | Employment      Agreement-November 2007--$150,000/yearAmended      Employment Agreement-March 2008--$240,000/year--500,000      shares upon completion of reverse stock split (anticipated May      2008)--opportunity      to receive another 500,000 shares at end of year 1 In      June 2008, as authorized by the Board, Hendricks was issued 1,000,000      restricted common shares.                                                                                                                                                                                                                  |
| KeKe      Wang-President      (January 2008)                                                                                                                          | Employment      Agreement-January 2008--$150,000/year--250,000      shares upon completion of reverse stock split (anticipated May      2008)--opportunity      to receive another 250,000 shares at end of year 1                                                                                                                                                                                                                                                                                                                                                                                                |
| Li      Ning--Director      (August 2007 to February 2008)                                                                                                            | Director’s      Agreement—August 2007:--10,000,000      shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Sergio      da Luz--Director      (May 2007 to June 2008)--President      (August 2007 to November 2007)--President,      China (November 2007 to January 2008)  | Currently      an employment contract does not exist. In      June 2008, as authorized by our Board, da Luz was issued 1,000,000      restricted common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Michael      J. Antonoplos--Director      (April 2007)--Secretary      (November 2007)                                                                                | Director’s      Agreement :--      1,000,000 shares (pre-reverse stock split) In      June 2008, as authorized by the Board, Antonoplos was issued 400,000      restricted common shares.                                                                                                                                                                                                                                                                                                                                                                                                                   |

| ·   | Each      person who is known by us to beneficially own 5% or more of our      outstanding common stock; |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | Each      of our executive officers named in the Summary Compensation      Table; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | Each      of our directors; and |
|--------------------|---------------------------------|

| ·   | All      of our officers and directors as agroup. |
|--------------------|---------------------------------------------------|

| Name      of Beneficial Owner                                                                      |   | Amount      and Nature of Beneficial Ownership of Stock |   | Percentage      of class of Common Shares Owned |
|----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|-------------------------------------------------|
| James      MacKay (3)                                                                              |   | 19,406,006                                              |   | 53.21%                                          |
| Rene      Hamouth (4)                                                                              |   | 3,000,000                                               |   | 8.23%                                           |
| William      Dunavant (5)                                                                          |   | 2,000,000                                               |   | 5.48%                                           |
| Michael      Antonopolos (1) (2) (6)                                                               |   | 400,000                                                 |   | 1.1%                                            |
| David      Hong (1) (7)                                                                            |   | 100,000                                                 |   | <1%                                          |
| Ke      Ke Wang (2) (8)                                                                            |   | 250,000                                                 |   | <1%                                          |
|                                                                                               |   |                                                    |   |                                            |
| All      of our directors and officers as a group including those named      above(3      persons) |   | 750,000                                                 |   | 2.06%                                           |

| (1) | Director |
|-----|----------|

| (2) | Officer |
|-----|---------|

| (3) | Includes      19,142,742 shares of Common Stock issued to MacKay pursuant to his      agreements to forgive debt owed to him and MKG prior to August 1, 2007 and      to help the Company with the AQSIQ National Gas Tank Contract, as well as      shares received as a result of the May 2006 issuance of dividend shares.      MacKay also holds 1,000,000 shares of Series A Preferred Stock of the      Corporation |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4)        Issued      to the Hamouth Family Trust as consideration for consulting the Company      regarding market matters. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Issued      to Dunavant pursuant to his November 2007 employment    agreement |
|-----|-------------------------------------------------------------------------------|

|   | (6)        Issued      to Antonoplos for services rendered as director since April 2007,      secretary since November 2007 and as a consultant since Fall of      2006 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Issued      to Hong for services rendered as consultant to TPID Beijing and TPID HK      since December 2007 |
|-----|--------------------------------------------------------------------------------------------------------------|

| (8) | Issued      to Wang pursuant to his January 2008 employment  agreement |
|-----|------------------------------------------------------------------------|

----

|   | TRUE      PRODUCT ID, INC.                |
|--------|-------------------------------------------|
|   |                                      |
|   | /s/  Ke      Ke Wang            |
|   | Ke      Ke Wang, President                |
|   |                                      |
|   | /s/  Michael      J. Antonoplos |
|   | Michael      J. Antonoplos                |

----

| TRUE      PRODUCT ID, INC.(A      DEVELOPMENT STAGE COMPANY)PHILADELPHIA,      PENNSYLVANIA   TABLE      OF CONTENTS  Report      of Independent Registered Public Accounting Firm for the Year Ended June      30, 2008F-2  Consolidated      Balance Sheets at June 30, 2008 and June 30,      2007                                                          F-3  Consolidated      Statements of Operations for the Years Ended June 30, 2008 and      2007                               F-4  Consolidated      Statements of Changes in Stockholders Equity for the Years      Ended     June      30, 2008, 2007 and      2006                                                                                                                    F-5 Consolidated      Statements of Cash Flows for the Years Ended June 30, 2008 and      2007F-6-F-7 Notes      to Consolidated Financial      Statements                                                                                                 F-8-F-20    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| TRUE      PRODUCT ID, INC.                                                                                                                                                                                                                                                     |   |          |        |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|--------|--------|
| (A      DEVELOPMENT STAGE COMPANY)                                                                                                                                                                                                                                             |   |          |        |   |   |   |
| CONSOLIDATED      BALANCE SHEETS                                                                                                                                                                                                                                               |   |          |        |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |
|                                                                                                                                                                                                                                                                           |   | June      30, |        |   |   |   |
| ASSETS                                                                                                                                                                                                                                                                         |   | 2008          |        |   | 2007   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |
| CURRENT      ASSETS:                                                                                                                                                                                                                                                           |   |          |        |   |   |   |
|   Cash      and cash equivalents                                                                                                                                                                                                                                     |   | $             | 32,171      |   |   | $      | 42,774 |   |
|   Accounts      receivable                                                                                                                                                                                                                                           |   |          | 152,751     |   |   |   | 31,806 |   |
|   Other      current assets                                                                                                                                                                                                                                          |   |          | 39,436      |   |   |   | 2,933 |   |
|       Total      current assets                                                                                                                                                                                                                  |   |          | 224,358     |   |   |   | 77,513 |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| PROPERTY      AND EQUIPMENT - Net                                                                                                                                                                                                                                              |   |          | 138,722     |   |   |   | 136,305 |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| Interest      on note receivable                                                                                                                                                                                                                                               |   |          | 47,438      |   |   |   | 30,188 |   |
| Note      receivable                                                                                                                                                                                                                                                           |   |          | 300,000     |   |   |   | 300,000 |   |
| Intangible      assets - net                                                                                                                                                                                                                                                   |   |          | 461,674     |   |   |   | 521,566 |   |
| Goodwill                                                                                                                                                                                                                                                                       |   |          | 13,301,191  |   |   |   | 17,601,191 |   |
|       TOTAL      ASSETS                                                                                                                                                                                                                          |   | $             | 14,473,383  |   |   | $      | 18,666,763 |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                |   |          |        |   |   |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| CURRENT      LIABILITIES:                                                                                                                                                                                                                                                      |   |          |        |   |   |   |   |   |
|   Accounts      payable and accrued expenses                                                                                                                                                                                                                         |   | $             | 991,700     |   |   | $      | 1,345,642 |   |
|   Current      portion of capital lease                                                                                                                                                                                                                              |   |          | 8,202       |   |   |   | 7,351 |   |
|   Related      party payable                                                                                                                                                                                                                                         |   |          | 668,781     |   |   |   | - |   |
|   Notes      payable                                                                                                                                                                                                                                                 |   |          | 219,410     |   |   |   | 219,410 |   |
|   Accrued      interest payable                                                                                                                                                                                                                                      |   |          | 54,853      |   |   |   | - |   |
|       Total      current liabilities                                                                                                                                                                                                             |   |          | 1,942,946   |   |   |   | 1,572,403 |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| NON-CURRENT      LIABILITIES:                                                                                                                                                                                                                                                  |   |          |        |   |   |   |   |   |
|   Long-term      portion of capital lease                                                                                                                                                                                                                            |   |          | 27,786      |   |   |   | 35,989 |   |
|   Accrued      interest payable                                                                                                                                                                                                                                      |   |          | -           |   |   |   | 176,240 |   |
|   Convertible      debenture                                                                                                                                                                                                                                         |   |          | 500,000     |   |   |   | 500,000 |   |
|   Accrued      expenses                                                                                                                                                                                                                                              |   |          | -           |   |   |   | 521,500 |   |
|   Notes      payable - SSTY                                                                                                                                                                                                                                          |   |          | -           |   |   |   | 1,095,590 |   |
|       TOTAL      LIABILITIES                                                                                                                                                                                                                     |   |          | 2,470,732   |   |   |   | 3,901,722 |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| Minority      interest                                                                                                                                                                                                                                                         |   |          | (468,644    | )      |   |   | (124,466 | ) |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| Commitments      and contingencies                                                                                                                                                                                                                                             |   |          |        |   |   |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| STOCKHOLDERS’      EQUITY:                                                                                                                                                                                                                                               |   |          |        |   |   |   |   |   |
| Preferred      Stock:  $.001 Par value; 5,000,000 shares authorized; 0 shares      issued and outstanding at June 30, 2008 and 2007                                                                                                                                  |   |          | -           |   |   |   | - |   |
| Class      A common stock, $.001 par value; authorized 800,000,000 shares      authorized;  9,542,000 shares issued and 6,425,899 shares      issuable at June 30, 2008 and 440,622,335 shares issued and      outstanding  at June 30, 2007, respectively |   |          | 15,968      |   |   |   | 440,622 |   |
| Class      B common stock: $.001 par value; 200,000,000 shares authorized; shares      issued and outstanding at June 30, 2008 and 2007                                                                                                                                        |   |          | -           |   |   |   | - |   |
| Additional      paid-in capital                                                                                                                                                                                                                                                |   |          | 58,055,744  |   |   |   | 23,123,913 |   |
| Accumulated      deficit during development stage                                                                                                                                                                                                                              |   |          | (45,563,739 | )      |   |   | (8,663,876 | ) |
|                                                                                                                                                                                                                                                                           |   |          | 12,507,973  |   |   |   | 14,900,659 |   |
|     Less:      stock held in trust                                                                                                                                                                                                                         |   |          | (1,500      | )      |   |   | (1,500 | ) |
|     Foreign      currency translation adjustment                                                                                                                                                                                                           |   |          | (35,178     | )      |   |   | (9,652 | ) |
|     Total      stockholders’ equity                                                                                                                                                                                                                  |   |          | 12,471,295  |   |   |   | 14,889,507 |   |
|   TOTAL      LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                    |   | $             | 14,473,383  |   |   | $      | 18,666,763 |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
| See      notes to consolidated financial statements.                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |
|                                                                                                                                                                                                                                                                           |   |          |        |   |   |   |   |   |

----

----

| TRUE      PRODUCT ID, INC.                                                               |   |                    |        |   |   |   |        |                    |   |
|------------------------------------------------------------------------------------------|--------|-------------------------|-------------|--------|--------|--------|-------------|-------------------------|--------|
| (A      DEVELOPMENT STAGE COMPANY)                                                       |   |                    |        |   |   |   |        |                    |   |
| CONSOLIDATED      STATEMENTS OF OPERATIONS                                               |   |                    |        |   |   |   |        |                    |   |
|                                                                                     |   |                    |        |   |   |   |        | Period      October 1,  |   |
|                                                                                     |   |                    |        |   |   |   |        | 2005      (Date of      |   |
|                                                                                     |   | For      the Year Ended |        |   |   |   |        | Inception)      Through |   |
|                                                                                     |   | June      30,           |        |   |   |   |        | June      30, 2008      |   |
|                                                                                     |   | 2008                    |        |   | 2007   |   |        |                    |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |
| REVENUE,      net of returns                                                             |   | $                       | -           |   |   | $      | -           |                    |   | $ | - |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| EXPENSES:                                                                                |   |                    |        |   |   |   |        |                    |   |   |   |   |
|   Consulting      fees                                                         |   |                    | 27,839,621  |   |   |   | 62,500      |                    |   |   | 27,902,121 |   |
|   Officer      and director compensation                                       |   |                    | 5,025,000   |   |   |   | 5,739,748   |                    |   |   | 11,080,581 |   |
|   General      and administrative                                              |   |                    | 1,526,559   |   |   |   | 286,299     |                    |   |   | 2,888,404 |   |
|   Amortization      and depreciation                                           |   |                    | 99,011      |   |   |   | 64,893      |                    |   |   | 181,373 |   |
|   Technology      license fee                                                  |   |                    | -           |   |   |   | 450,000     |                    |   |   | 637,500 |   |
|       Total      expenses                                  |   |                    | 34,490,191  |   |   |   | 6,603,440   |                    |   |   | 42,689,979 |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| NET      LOSS FROM OPERATIONS                                                            |   |                    | (34,490,191 | )      |   |   | (6,603,440  | )                       |   |   | (42,689,979 | ) |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| OTHER      INCOME (EXPENSE):                                                             |   |                    |        |   |   |   |        |                    |   |   |   |   |
|   Write      down on impairment of intangible assets                           |   |                    | (4,300,000  | )      |   |   | -           |                    |   |   | (4,300,000 | ) |
|   Forgiveness      of debt                                                     |   |                    | 1,583,753   |   |   |   | -           |                    |   |   | 1,583,753 |   |
|   Interest      income                                                         |   |                    | 17,250      |   |   |   | 17,447      |                    |   |   | 47,635 |   |
|   Interest      expense                                                        |   |                    | (54,853     | )      |   |   | (19,197     | )                       |   |   | (74,050 | ) |
|   Loss      on equity investment                                               |   |                    | -           |   |   |   | (65,513     | )                       |   |   | (65,513 | ) |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| NET      LOSS BEFORE MINORITY INTEREST AND   DISCONTINUED      OPERATIONS |   |                    | (37,244,041 | )      |   |   | (6,670,703  | )                       |   |   | (45,498,155 | ) |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| MINORITY      INTEREST                                                                   |   |                    | 344,178     |   |   |   | 27,279      |                    |   |   | 468,644 |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| DISCONTINUED      OPERATIONS                                                             |   |                    |        |   |   |   |        |                    |   |   |   |   |
|   Loss      from operations of disposed subsidiaries, net of taxes             |   |                    | -           |   |   |   | -           |                    |   |   | (10,245 | ) |
|   Loss      from disposal of subsidiaries, net of taxes                        |   |                    | -           |   |   |   | -           |                    |   |   | (523,983 | ) |
|       Loss      from discontinued operations               |   |                    | -           |   |   |   | -           |                    |   |   | (534,228 | ) |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| NET      LOSS                                                                            |   |                    | (36,899,863 | )      |   |   | (6,643,424  | )                       |   |   | (45,563,739 | ) |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| OTHER      COMPREHENSIVE LOSS:                                                           |   |                    |        |   |   |   |        |                    |   |   |   |   |
|    Foreign      currency translation adjustment                           |   |                    | 25,526      |   |   |   | 9,652       |                    |   |   | 35,178 |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| TOTAL      COMPREHENSIVE LOSS                                                            |   | $                       | (36,874,337 | )      |   | $      | (6,633,772  | )                       |   | $ | (45,528,561 | ) |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| NET      LOSS PER SHARE:                                                                 |   |                    |        |   |   |   |        |                    |   |   |   |   |
|      Basic      and Diluted                                     |   | $                       | (5.29       | )      |   | $      | (0.02       | )                       |   |   |   |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| WEIGHTED-AVERAGE      SHARES:                                                            |   |                    |        |   |   |   |        |                    |   |   |   |   |
|      Basic      and Diluted                                     |   |                    | 6,974,112   |   |   |   | 322,888,146 |                    |   |   |   |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
| See      notes to consolidated financial statements.                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |
|                                                                                     |   |                    | F-5         |   |   |   |        |                    |   |   |   |   |
|                                                                                     |   |                    |        |   |   |   |        |                    |   |   |   |   |

----

----

| TRUE      PRODUCT ID, INC.                                                                                                                            |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (A      DEVELOPMENT STAGE COMPANY)                                                                                                                    |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |
| CONSOLIDATED      STATEMENTS OF STOCKHOLDERS' EQUITY                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
|                                                                                                                                                  |                Common      Stock                                                               |                Preferred      Stock | Accumulated                                                                                                                                                               |   | Additional                                                                                                                                                                |   | Stock      Held                                                                                                                                                           |   | Treasury                                                                                                                                                                  |
|                                                                                                                                                  | Shares                                                                                                                                                                    |                                                                                                           | $                                                                                                                                                                         |   | Shares                                                                                                                                                                    |   | $                                                                                                                                                                         |   | Deficit                                                                                                                                                                   |   | Paid      in Capital                                                                                                                                                      |   | in      Trust                                                                                                                                                             |   | Stock                                                                                                                                                                     |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Balance      October 1, 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 subsidiary                                                                                  |                           -             |                                                                                                           |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                   17,709                                                        |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Issuance      of stock  for acquisition of technology license                                                                               |            52,349,249                                                                                              |                                                                                                           |                   52,349                                                        |   |                   16,000                                                        |   |                          16                  |   |                           -             |   |                 546,562                                                                   |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| 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      loss                                                                                                                                         |                           -             |                                                                                                           |                           -             |   |                           -             |   |                           -             |   |            (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                                                                                                   |                 446,428                                                                   |                                                                                                           |                        446                             |   |                           -             |   |                           -             |   |                           -             |   |                   62,054                                                        |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Stock      based compensation                                                                                                                         |            70,889,264                                                                                              |                                                                                                           |                   70,889                                                        |   |                           -             |   |                           -             |   |                           -             |   |              4,931,339                                                                                   |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Common      stock issued as part of restructuring agreement                                                                                           |              6,000,000                                                                                   |                                                                                                           |                     6,000                                             |   |                           -             |   |                           -             |   |                           -             |   |              1,314,000                                                                                   |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Acquisition      of additional 20% of chinese venture                                                                                                 |          100,000,000                                                                                                         |                                                                                                           |                 100,000                                                                   |   |                           -             |   |                           -             |   |                           -             |   |            15,400,000                                                                                              |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Miscellaneous                                                                                                                                         |                           -             |                                                                                                           |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                          20                  |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Net      loss                                                                                                                                         |                           -             |                                                                                                           |                           -             |   |                           -             |   |                           -             |   |            (6,643,424)                                                                                             |   |                           -             |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Foreign      currency translation adjustment                                                                                                          |                           -             |                                                                                                           |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                           -             |   |                           -             |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Balance      June 30, 2007                                                                                                                            |          440,622,335                                                                                                         |                                                                                                           |  $             440,622                                                                              |   |                           -             |   |  $                       -                        |   |  $        (8,663,876)                                                                                                        |   |  $        23,123,913                                                                                                         |   |  $               (1,500)                                                                  |   |  $                       -                        |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Common      stock issuance for consulting agreement                                                                                                   |          465,000,000                                                                                                         |                                                                                                           |                 465,000                                                                   |   |                             - |   |                             - |   |                             - |   |            20,354,621                                                                                              |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Stock      based compensation                                                                                                                         |            35,000,000                                                                                              |                                                                                                           |                   35,000                                                        |   |                             - |   |                             - |   |                             - |   |              2,815,000                                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Issuance      of common stock for cash                                                                                                                |            12,842,866                                                                                              |                                                                                                           |                   12,843                                                        |   |                             - |   |                             - |   |                             - |   |                 488,125                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| 100      to 1 reverse stock split                                                                                                                     |        (943,923,201)                                                                                                                   |                                                                                                           |               (943,923)                                                                             |   |                             - |   |                             - |   |                             - |   |                 943,923                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Common      stock issuance for consulting agreement                                                                                                   |              4,680,000                                                                                   |                                                                                                           |                     4,680                                             |   |                             - |   |                             - |   |                             - |   |              7,015,320                                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Stock      based compensation                                                                                                                         |              1,450,000                                                                                   |                                                                                                           |                     1,450                                             |   |                             - |   |                             - |   |                             - |   |              2,173,550                                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Issuance      of common stock for retirement of debt                                                                                                  |                 295,899                                                                   |                                                                                                           |                        296                             |   |                             - |   |                             - |   |                             - |   |                 443,552                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Adjustment      to restructuring agreement                                                                                                            |                             - |                                                                                                           |                             - |   |                             - |   |                             - |   |                             - |   |                 697,740                                                                   |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Net      loss                                                                                                                                         |                             - |                                                                                                           |                             - |   |                             - |   |                             - |   |          (36,899,863)                                                                                                        |   |                             - |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Foreign      currency translation adjustment                                                                                                          |                             - |                                                                                                           |                             - |   |                             - |   |                             - |   |                             - |   |                             - |   |                             - |   |                             - |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
| Balance      June 30, 2008                                                                                                                            |            15,967,899                                                                                              |                                                                                                           |  $               15,968                                                                   |   |                           -             |   |  $                       -                        |   |  $      (45,563,739)                                                                                                                   |   |  $        58,055,744                                                                                                         |   |  $               (1,500)                                                                  |   |  $                       -                        |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           | See      notes to consolidated financial statements.                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |
|                                                                                                                                                  |                                                                                                                                                                      |                                                                                                           |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |   |                                                                                                                                                                      |

----

----

| TRUE      PRODUCT ID, INC.                                                                                           |   |            |        |   |   |   |       |                    |   |
|----------------------------------------------------------------------------------------------------------------------|--------|-----------------|-------------|--------|--------|--------|------------|-------------------------|--------|
| (A      DEVELOPMENT STAGE COMPANY)                                                                                   |   |            |        |   |   |   |       |                    |   |
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                                           |   |            |        |   |   |   |       |
|                                                                                                                 |   |            |        |   |   |   |       | Period      October 1,  |   |
|                                                                                                                 |   | Year      Ended |        |   |   |   |       | 2005      (Date of      |   |
|                                                                                                                 |   | June      30,   |        |   |   |   |       | Inception)      Through |   |
|                                                                                                                 |   | 2008            |        |   | 2007   |   |       | June      30, 2008      |   |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                                           |   |            |        |   |   |   |       |                    |   |
|   Net      loss                                                                                            |   | $               | (37,244,041 | )      |   | $      | (6,670,703 | )                       |   | $ | (45,498,155 | ) |
| Adjustments      to reconcile net loss to net cash used in operating      activities:                                |   |            |        |   |   |   |       |                    |   |
|     Depreciation      and amortization                                                           |   |            | 99,011      |   |   |   | 64,893     |                    |   |   | 181,373 |   |
|     Stock      based compensation                                                                |   |            | 5,025,000   |   |   |   | 5,002,248  |                    |   |   | 11,080,581 |   |
|     Issuance      of common stock for consulting fees                                            |   |            | 27,839,621  |   |   |   | 62,500     |                    |   |   | 27,902,121 |   |
|     Forgiveness      of debt                                                                     |   |            | (1,583,753  | )      |   |   | -          |                    |   |   | (1,583,753 | ) |
|     Write      off of goodwill                                                                   |   |            | 4,300,000   |   |   |   | -          |                    |   |   | 4,300,000 |   |
|     Loss      from equity investment                                                             |   |            | -           |   |   |   | 65,513     |                    |   |   | 65,513 |   |
|     Loss      on disposal of subsidiaries                                                        |   |            | -           |   |   |   | -          |                    |   |   | 523,983 |   |
|     Loss      from operations of disposed subsidiaries                                           |   |            | -           |   |   |   | -          |                    |   |   | 10,245 |   |
|     Minority      interest                                                                       |   |            | (344,178    | )      |   |   | (27,279    | )                       |   |   | (468,644 | ) |
|   Changes      in operating assets and liabilities:                                                        |   |            |        |   |   |   |       |                    |   |   |   |   |
|     Accounts      receivable                                                                     |   |            | (120,945    | )      |   |   | (400       | )                       |   |   | (152,751 | ) |
|     Prepaid      expenses                                                                        |   |            | -           |   |   |   | (1,247     | )                       |   |   | - |   |
|     Other      current assets                                                                    |   |            | (36,503     | )      |   |   | -          |                    |   |   | (39,436 | ) |
|     Interest      on note receivable                                                             |   |            | (17,250     | )      |   |   | (17,250    | )                       |   |   | (47,438 | ) |
|     Accounts      payable and accrued expenses                                                   |   |            | 478,399     |   |   |   | 1,101,974  |                    |   |   | 1,798,409 |   |
|     Related      party payable                                                                   |   |            | 668,781     |   |   |   | -          |                    |   |   | 668,781 |   |
|     Accrued      expenses - related party                                                        |   |            | -           |   |   |   | -          |                    |   |   | 87,500 |   |
|     Accrued      interest payable                                                                |   |            | 54,853      |   |   |   | -          |                    |   |   | 54,853 |   |
|           Net      cash provided by (used in) operating activities |   |            | (881,005    | )      |   |   | (419,751   | )                       |   |   | (1,116,818 | ) |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                                           |   |            |        |   |   |   |       |                    |   |   |   |   |
|    Investment      in acquired entity                                                                 |   |            | -           |   |   |   | 43,422     |                    |   |   | 43,422 |   |
|    Purchase      of fixed assets                                                                      |   |            | (41,536     | )      |   |   | (8,191     | )                       |   |   | (182,842 | ) |
|    Cash      and cash equivalents in disposed subsidiaries                                            |   |            | -           |   |   |   | -          |                    |   |   | (50,823 | ) |
|           Net      cash used in investing activities               |   |            | (41,536     | )      |   |   | 35,231     |                    |   |   | (190,243 | ) |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                                           |   |            |        |   |   |   |       |                    |   |   |   |   |
|   Proceeds      from issuance of common stock for cash                                                     |   |            | 500,968     |   |   |   | -          |                    |   |   | 500,968 |   |
|   Proceeds      from sale of convertible debentures                                                        |   |            | -           |   |   |   | 500,000    |                    |   |   | 500,000 |   |
|   Proceeds      from financing                                                                             |   |            | 443,848     |   |   |   | 46,014     |                    |   |   | 489,862 |   |
|   Repayment      of capital lease obligation                                                               |   |            | (7,352      | )      |   |   | (7,352     | )                       |   |   | (14,704 | ) |
|   Repayment      of debt                                                                                   |   |            | -           |   |   |   | (101,716   | )                       |   |   | (101,716 | ) |
|           Net      cash provided by financing activities           |   |            | 937,464     |   |   |   | 436,946    |                    |   |   | 1,374,410 |   |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
| FOREIGN      CURRENCY TRANSLATION                                                                                    |   |            | (25,526     | )      |   |   | (9,652     | )                       |   |   | (35,178 | ) |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
|  NET      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                      |   |            | (10,603     | )      |   |   | 42,774     |                    |   |   | 32,171 |   |
|     BEGINNING      OF PERIOD                                                                     |   |            | 42,774      |   |   |   | -          |                    |   |   | - |   |
|     END      OF PERIOD                                                                           |   | $               | 32,171      |   |   | $      | 42,774     |                    |   | $ | 32,171 |   |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
| Supplementary      disclosure of cash flow information:                                                              |   |            |        |   |   |   |       |                    |   |
|      Cash      paid for interest                                                            |   | $               | -           |   |   | $      | 1,223      |                    |   | $ | 1,223 |   |
|      Cash      paid for taxes                                                               |   | $               | -           |   |   | $      | -          |                    |   | $ | - |   |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
| See      notes to consolidated financial statements.                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |
|                                                                                                                 |   |            |        |   |   |   |       |                    |   |   |   |   |

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| TRUE      PRODUCT ID, INC.                                                                                                                                                    |   |            |                   |   |   |   |       |                    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|------------------------|--------|--------|--------|------------|-------------------------|--------|
| (A      DEVELOPMENT STAGE COMPANY)                                                                                                                                            |   |            |                   |   |   |   |       |                    |   |
| CONSOLIDATED      STATEMENTS OF CASH FLOWS - continued                                                                                                                        |   |            | Period      October 1, |   |
|                                                                                                                                                                          |   | Year      Ended |                   |   |   |   |       | 2005      (Date of      |   |
|                                                                                                                                                                          |   | June      30,   |                   |   |   |   |       | Inception)      Through |   |
|                                                                                                                                                                          |   | 2008            |                   |   | 2007   |   |       | June      30, 2008      |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES                                                                                                                              |   |            |                   |   |   |   |       |                    |   |
| 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 |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |
| Sale      of subsidiary via the issuance of note receivable                                                                                                                   |   | $               | -                      |   |   | $      | -          |                    |   | $ | 300,000 |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |
| Issuance      of common and preferred stock for acquisition of technology      license                                                                                        |   | $               | -                      |   |   | $      | -          |                    |   | $ | 598,927 |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |
| Issuance      of common stock for retirement of debt                                                                                                                          |   | $               | 443,848                |   |   | $      | -          |                    |   | $ | 443,848 |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |
| Adjustment      to restructuring agreement                                                                                                                                    |   | $               | 697,740                |   |   | $      | -          |                    |   | $ | 697,740 |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |
| Assets      and liabilities transferred to related party in connection with sale      of subsidiaries:                                                              |   |
|   Cash      and cash equivalents                                                                                                                                    |   | $               | -                      |   |   | $      | -          |                    |   | $ | 50,823 |   |
|   Inventory                                                                                                                                                         |   | $               | -                      |   |   | $      | -          |                    |   | $ | 296,544 |   |
|   Property      and equipment                                                                                                                                       |   | $               | -                      |   |   | $      | -          |                    |   | $ | 54,189 |   |
|   Accounts      receivable - related party                                                                                                                          |   | $               | -                      |   |   | $      | -          |                    |   | $ | 37,850 |   |
|   Deposits                                                                                                                                                          |   | $               | -                      |   |   | $      | -          |                    |   | $ | 6,667 |   |
|   Due      from officer                                                                                                                                             |   | $               | -                      |   |   | $      | -          |                    |   | $ | 82,193 |   |
|   Intangible      assets                                                                                                                                            |   | $               | -                      |   |   | $      | -          |                    |   | $ | 260,542 |   |
|   Investments      in affiliates                                                                                                                                    |   | $               | -                      |   |   | $      | -          |                    |   | $ | 107,561 |   |
|   Accounts      payable and accrued expenses                                                                                                                        |   | $               | -                      |   |   | $      | -          |                    |   | $ | (210,769 | ) |
|   Debt                                                                                                                                                              |   | $               | -                      |   |   | $      | -          |                    |   | $ | (6,321 | ) |
|   Due      to related party                                                                                                                                         |   | $               | -                      |   |   | $      | -          |                    |   | $ | 137,240 |   |
| Treasury      stock                                                                                                                                                           |   | $               | -                      |   |   | $      | -          |                    |   | $ | 17,709 |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |
|                                                                                                                                                                          |   |            |                   |   |   |   |       |                    |   |   |   |   |

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FIN 48-1,“Definition of Settlement in FASB Interpretation No. 48”, (“FSP FIN 48-1”),which was issued on May 2, 2007. FSP FIN 48-1 amends FIN 48 to provide guidanceon how an entity should determine whether a tax position is effectively settledfor the purpose of recognizing previously unrecognized tax benefits. The term“effectively settled” replaces the term “ultimately settled” when used todescribe recognition, and the terms “settlement” or “settled” replace the terms“ultimate settlement” or “ultimately settled” when used to describe measurementof a tax position under FIN 48. FSP FIN 48-1 clarifies that a tax position canbe effectively settled upon the completion of an examination by a taxingauthority without being legally extinguished. For tax positions consideredeffectively settled, an entity would recognize the full amount of tax benefit,even if the tax position is not considered more likely than not to be sustainedbased solely on the basis of its technical merits and the statute of limitationsremains open. The adoption of FSP FIN 48-1 did not have an impact on theaccompanying consolidated financial statements. 

| a.   | Recognizes      and measures in its financial statements the identifiable assets acquired,      the liabilities assumed, and any noncontrolling interest in the      acquiree. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Recognizes      and measures the goodwill acquired in the business combination or a gain      from a bargain purchase. |
|----------------|------------------------------------------------------------------------------------------------------------------------|

| c.   | Determines      what information to disclose to enable users of the financial statements      to evaluate the nature and financial effects of the business      combination. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                         |   | Year      EndedJune      30, |
|----------------------------------------------|--------|------------------------------|
|                                         |   |  2008                   |  2007 |
|  Equipment,      Furniture and fixtures |   |  $204,121               |  $141,307 |
|  Less      accumulated depreciation     |   |  (65,399)               |  (5,002) |
|  Total                                  |   |  $138,722               |  $136,305 |

|   |                                                        |   | 2008                                              |   | 2007                                        |
|--------|-------------------------------------------------------------|--------|---------------------------------------------------|--------|---------------------------------------------|
|   | Current:                                                    |   |                                              |   |                                        |
|   |     Federal                             | $      |         - | $      |        - |
|   |     State                               |   |         - |   |        - |
|   | Deferred:                                                   |   |                                              |   |                                        |
|   |     Federal                             |   | (12,702,778)                                      |   | (2,286,999)                                 |
|   |     State                               |   |    (2,241,667)                     |   |    (403,588)                 |
|   | Tax      (benefit) from the decrease in valuation allowance |   |   14,944,445                            |   |  2,690,587                             |
|   | Provision      (benefit) for income taxes, net              | $      | -                                                 | $      | -                                           |

|                                                 |   | 2008                                              |
|------------------------------------------------------|--------|---------------------------------------------------|
| Statutory      federal income tax rate               |   | 35.0%                                             |
| State      income taxesOtherValuation      allowance |   |  5.5%   -      % (40.5)% |
|  Effective      tax rate                        |   |    (0.0      )%                    |

|                                              |   |   | 2008             |
|---------------------------------------------------|--------|--------|------------------|
| Net      operating loss-carryforwards             |   |   |             |
|    expiring      between 2019-2026 |   | $      |  45,563,739 |
| Depreciation      and amortization                |   |   | -                |
| Other                                             |   |   | -                |
| Deferred      income tax asset                    |   | $      | 45,563,739       |

|                               |   |   | 2008                   |
|------------------------------------|--------|--------|------------------------|
| Deferred      tax assets:          |   | $      | -                      |
|    Current          |   |   | -                      |
|    Non-current      |   |   |   18,453,314 |
| Less:      valuation allowance     |   |   | (18,453,314)           |
| Net      deferred income tax asset |   | $      | -                      |

----