UNITED
STATES SECURITIES AND


EXCHANGE
COMMISSION


Washington,
D.C. 20549





FORM
10-Q





QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934





For the
Quarter Ended September 30, 2008


Commission
File No:0-29249





True Product ID,
Inc.


(Name of
Small Business Issuer in Its Charter)




Delaware
            16-1499611(State of other jurisdiction of Incorporation or
      Organization)
            (Employer
      Identification Number)







1615 Walnut Street, 3rd
    FloorPhiladelphia, PA
            19103(Address of
      principal executive offices)
            (Zip
      Code)







(215) 972-6999


(Issuer's
Telephone Number, Including Area Code)





Check
whether the Issuer: (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 30
days:     Yes [X]    No
[  ]





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





Large
Accelerated filer [   ] Accelerated filer [   ]
Non-accelerated filer [   ] Smaller Reporting Company
[X]





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








AS
OF NOVEMBER 19, 2008, THERE WERE 36,514,390 SHARES OF COMMON STOCK ISSUED AND
OUTSTANDING.














TRUE
      PRODUCT ID, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      BALANCE SHEETSSeptember
      30,
              
              
              June
      30,ASSETS
              
              2008
              
              
              2008(Unaudited)
              
              
              (Audited)CURRENT
      ASSETS:Cash
      and cash equivalents
              
              $
              22,165
              
              
              $
              32,171Accounts
      receivable
              
              
              152,445
              
              
              
              152,751Other
      current assets
              
              
              39,436
              
              
              
              39,436Total
      current assets
              
              
              214,046
              
              
              
              224,358PROPERTY
      AND EQUIPMENT - Net
              
              
              131,734
              
              
              
              138,722Interest
      on note receivable
              
              
              51,751
              
              
              
              47,438Note
      receivable
              
              
              300,000
              
              
              
              300,000Intangible
      assets - net
              
              
              446,701
              
              
              
              461,674Goodwill
              
              
              13,301,191
              
              
              
              13,301,191TOTAL
      ASSETS
              
              $
              14,445,423
              
              
              $
              14,473,383LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
              
              $
              1,182,503
              
              
              $
              991,700Current
      portion of capital lease
              
              
              8,202
              
              
              
              8,202Notes
      payable
              
              
              219,410
              
              
              
              219,410Accrued
      interest payable
              
              
              64,935
              
              
              
              54,853Total
      current liabilities
              
              
              1,475,050
              
              
              
              1,274,165NON-CURRENT
      LIABILITIES:Long-term
      portion of capital lease
              
              
              27,786
              
              
              
              27,786Convertible
      debenture
              
              
              500,000
              
              
              
              500,000Related
      party payable
              
              
              668,781
              
              
              
              668,781TOTAL
      LIABILITIES
              
              
              2,671,617
              
              
              
              2,470,732Minority
      interest
              
              
              (524,443
              )
              
              
              (468,644
              )Commitments
      and contingenciesSTOCKHOLDERS’
      EQUITY:Preferred
      stock: 5,000,000 shares authorized;
              
              
              1,0001,000,000
      shares issued and outstanding at September 30, 2008and
      June 30, 2008
              
              
              -
              
              
              
              -Class
      A common stock: $0.001 par value; authorized 800,000,000shares
      authorized; 15,967,899 shares issued and outstandingat
      September 30, 2008 and 9,542,000 shares issued and6,425,899
      shares issuable at June 30, 2008, respectively
              
              
              15,968
              
              
              
              15,968Class
      B common stock: $0.001 par value; 200,000,000 sharesauthorized;
      no shares issued and outstanding at September 30and
      June 30, 2008
              
              
              -
              
              
              
              -Additional
      paid-in capital
              
              
              58,055,744
              
              
              
              58,055,744Accumulated
      deficit during development stage
              
              
              (45,732,290
              )
              
              
              (45,563,739
              )12,340,422
              
              
              
              12,507,973Less:
      stock held in trust
              
              
              (1,500
              )
              
              
              (1,500
              )Foreign
      currency translation adjustment
              
              
              (40,673
              )
              
              
              (35,178
              )TOTAL
      STOCKHOLDERS' EQUITY
              
              
              12,298,249
              
              
              
              12,471,295TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              14,445,424
              
              
              $
              14,473,383See
      notes to consolidated financial statements.
  2


TRUE
      PRODUCT ID, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      STATEMENTS OF OPERATIONS (Unaudited)Period
      October 1,2005
      (Date ofFor
      the Three Months Ended
              
              
              Inception)
      ThroughSeptember
      30,
              
              
              
              
              
              September
      30, 20082008
              
              
              2007REVENUE,
      net of returns
              
              $
              -
              
              
              $
              -
              
              
              $
              -EXPENSES:Consulting
      fees
              
              
              17,000
              
              
              
              -
              
              
              
              27,919,121Officer
      and director compensation
              
              
              173,069
              
              
              
              767,500
              
              
              
              11,253,650General
      and administrative
              
              
              3,610
              
              
              
              256,279
              
              
              
              2,892,014Amortization
      and depreciation
              
              
              24,901
              
              
              
              22,991
              
              
              
              206,275Technology
      license fee
              
              
              -
              
              
              
              -
              
              
              
              637,500Total
      expenses
              
              
              218,580
              
              
              
              1,046,770
              
              
              
              42,908,560NET
      LOSS FROM OPERATIONS
              
              
              (218,580
              )
              
              
              (1,046,770
              )
              
              
              (42,908,560
              )OTHER
      INCOME (EXPENSE):Write
      down on impairment of goodwill
              
              
              -
              
              
              
              -
              
              
              
              (4,300,000
              )Forgiveness
      of debt
              
              
              -
              
              
              
              -
              
              
              
              1,583,753Interest
      income
              
              
              4,313
              
              
              
              4,313
              
              
              
              51,947Interest
      expense
              
              
              (10,082
              )
              
              
              (11,548
              )
              
              
              (84,132
              )Loss
      on equity investment
              
              
              -
              
              
              
              -
              
              
              
              (65,513
              )NET
      LOSS BEFORE MINORITY INTEREST AND
                DISCONTINUED
      OPERATIONS
              
              
              (224,350
              )
              
              
              (1,054,005
              )
              
              
              (45,722,505
              )MINORITY
      INTEREST
              
              
              55,799
              
              
              
              65,943
              
              
              
              524,443DISCONTINUED
      OPERATIONSLoss
      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
              
              
              (168,551
              )
              
              
              (988,062
              )
              
              
              (45,732,290
              )OTHER
      COMPREHENSIVE INCOME:Foreign
      currency translation adjustment
              
              
              (5,495
              )
              
              
              (3,623
              )
              
              
              (40,673
              )TOTAL
      COMPREHENSIVE LOSS
              
              $
              (174,046
              )
              
              $
              (991,685
              )
              
              $
              (45,772,963
              )NET
      LOSS PER SHARE:Basic
      and Diluted
              
              $
              (0.01
              )
              
              $
              (0.00
              )WEIGHTED-AVERAGE
      SHARES:Basic
      and Diluted
              
              
              15,967,899
              
              
              
              445,513,640See
      notes to consolidated financial statements.




3





TRUE
      PRODUCT ID, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      STATEMENTS OF CASH FLOWS (Unaudited)Period
      October 1,Three
      Months Ended
              
              
              2005
      (Date ofSeptember
      30,
              
              
              
              
              
              Inception)
      Through2008
              
              
              2007
              
              
              September
      30, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (168,551
              )
              
              $
              (988,062
              )
              
              $
              (45,666,706
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
              
              
              24,901
              
              
              
              22,991
              
              
              
              206,274Stock
      based compensation
              
              
              -
              
              
              
              600,000
              
              
              
              11,080,581Issuance
      of common stock for consulting fees
              
              
              -
              
              
              
              -
              
              
              
              27,902,121Forgiveness
      of debt
              
              
              -
              
              
              
              -
              
              
              
              (1,583,753
              )Write
      off of goodwill
              
              
              -
              
              
              
              -
              
              
              
              4,300,000Loss
      from equity investment
              
              
              -
              
              
              
              -
              
              
              
              65,513Loss
      on disposal of subsidiaries
              
              
              -
              
              
              
              -
              
              
              
              523,983Loss
      from operations of disposed subsidiaries
              
              
              -
              
              
              
              -
              
              
              
              10,245Minority
      interest
              
              
              (55,799
              )
              
              
              (65,943
              )
              
              
              (524,443
              )Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              306
              
              
              
              (79,487
              )
              
              
              (152,445
              )Prepaid
      expenses
              
              
              -
              
              
              
              1,933
              
              
              
              -Other
      current assets
              
              
              (4,313
              )
              
              
              -
              
              
              
              (43,749
              )Interest
      on note receivable
              
              
              -
              
              
              
              (4,313
              )
              
              
              (47,438
              )Accounts
      payable and accrued expenses
              
              
              191,803
              
              
              
              284,326
              
              
              
              1,990,212Related
      party payable
              
              
              -
              
              
              
              -
              
              
              
              668,781Accrued
      expenses - related party
              
              
              -
              
              
              
              -
              
              
              
              87,500Accrued
      interest payable
              
              
              10,082
              
              
              
              -
              
              
              
              64,935Net
      cash used in operating activities
              
              
              (1,571
              )
              
              
              (228,555
              )
              
              
              (1,118,389
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Investment
      in acquired entity
              
              
              -
              
              
              
              -
              
              
              
              43,422Purchase
      of fixed assets
              
              
              (2,940
              )
              
              
              -
              
              
              
              (185,782
              )Cash
      and cash equivalents in disposed subsidiaries
              
              
              -
              
              
              
              -
              
              
              
              (50,823
              )Net
      cash used in investing activities
              
              
              (2,940
              )
              
              
              -
              
              
              
              (193,183
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock for cash
              
              
              -
              
              
              
              -
              
              
              
              500,968Proceeds
      from sale of convertible debentures
              
              
              -
              
              
              
              -
              
              
              
              500,000Proceeds
      from financing
              
              
              -
              
              
              
              210,901
              
              
              
              489,862Repayment
      of capital lease obligation
              
              
              -
              
              
              
              -
              
              
              
              (14,704
              )Repayment
      of debt
              
              
              -
              
              
              
              (1,170
              )
              
              
              (101,716
              )Net
      cash provided by financing activities
              
              
              -
              
              
              
              209,731
              
              
              
              1,374,410FOREIGN
      CURRENCY TRANSLATION
              
              
              (5,495
              )
              
              
              (3,839
              )
              
              
              (40,673
              )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              (10,006
              )
              
              
              (22,663
              )
              
              
              22,165BEGINNING
      OF PERIOD
              
              
              32,171
              
              
              
              42,774
              
              
              
              -END
      OF PERIOD
              
              $
              22,165
              
              
              $
              16,272
              
              
              $
              22,165Supplementary
      disclosure of cash flow information:Cash
      paid for interest
              
              $
              -
              
              
              $
              789
              
              
              $
              789Cash
      paid for taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -See
      notes to consolidated financial statements.


4






TRUE
      PRODUCT ID, INC.(A
      DEVELOPMENT STAGE COMPANY)CONSOLIDATED
      STATEMENTS OF CASH FLOWS - continued
              
              Period
      October 1,Three
      Months Ended
              
              
              2005
      (Date ofSeptember
      30,
              
              
              Inception)
      Through2008
              
              
              2007
              
              
              September
      30, 2008NON-CASH
      INVESTING AND FINANCING ACTIVITIESIssuance
      of common stock and notes payable and elimination of accrued royalty
      as
                part
      of acquisition of 60% interest in chinese joint venture
              
              $
              -
              
              
              $
              -
              
              
              $
              17,597,500Sale
      of subsidiary via the issuance of note receivable
              
              $
              -
              
              
              $
              -
              
              
              $
              300,000Issuance
      of common and preferred stock for acquisition of technology
      license
              
              $
              -
              
              
              $
              -
              
              
              $
              598,927Issuance
      of common stock for retirement of debt
              
              $
              -
              
              
              $
              -
              
              
              $
              443,848Adjustment
      to restructuring agreement
              
              $
              -
              
              
              $
              -
              
              
              $
              697,740Assets
      and liabilities transferred to related party in connection with sale
      of
                subsidiaries:Cash
      and cash equivalents
              
              $
              -
              
              
              $
              -
              
              
              $
              50,823Inventory
              
              $
              -
              
              
              $
              -
              
              
              $
              296,544Property
      and equipment
              
              $
              -
              
              
              $
              -
              
              
              $
              54,189Accounts
      receivable - related party
              
              $
              -
              
              
              $
              -
              
              
              $
              37,850Deposits
              
              $
              -
              
              
              $
              -
              
              
              $
              6,667Due
      from officer
              
              $
              -
              
              
              $
              -
              
              
              $
              82,193Intangible
      assets
              
              $
              -
              
              
              $
              -
              
              
              $
              260,542Investments
      in affiliates
              
              $
              -
              
              
              $
              -
              
              
              $
              107,561Accounts
      payable and accrued expenses
              
              $
              -
              
              
              $
              -
              
              
              $
              (210,769
              )Debt
              
              $
              -
              
              
              $
              -
              
              
              $
              (6,321
              )Due
      to related party
              
              $
              -
              
              
              $
              -
              
              
              $
              137,240Treasury
      stock
              
              $
              -
              
              
              $
              -
              
              
              $
              17,709See
      notes to consolidated financial statements.







5






TRUE
PRODUCT ID, INC.


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE
A - BASIS OF PRESENTATION





True
Product ID, Inc. (the “Company” or the “Corporation”) produces integrators for
anti-counterfeiting and security


surveillance
applications and is a provider of integrated tracking devices. The
financial statements are presented on the basis that the Company is a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business over a reasonable length of time.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.  The Company has incurred
operating losses since its inception. This condition raises substantial doubt as
to the Company’s ability to continue as a going concern as such continuance is
dependent upon the Company’s ability to raise sufficient capital.





Certain
information and footnote disclosures normally included in financial statements
prepared in conjunction with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.  These condensed consolidated financial
statements should be read in conjunction with the annual audited consolidated
financial statements and the notes thereto included in the Company's Form 10-KSB
Annual Report and other reports filed with the Securities and Exchange
Commission (SEC).





The
accompanying unaudited interim consolidated financial statements reflect all
adjustments of a normal and recurring nature which are, in the opinion of
management, necessary to present fairly the financial position, results of
operations and cash flows of the Company for the interim periods
presented.  The results of operations or these periods are not
necessarily comparable to, or indicative of, results of any other interim period
or for the fiscal year taken as a whole.





SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES




Principals
of Consolidation




The
consolidated financial statements include the accounts of the Company and any
wholly owned subsidiaries. All material inter-company transactions and balances
have been eliminated in consolidation.





Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statement and the reported amounts of revenues and
expenses during the reporting period. Estimates that are critical to the
accompanying financial statements arise from the determination of the fair value
of the Company’s investment. Because such determination involves subjective
judgment, it is at least reasonably possible that the Company’s estimates could
change in the near term with respect to this matter.





Fair
Value of Financial Instruments





Cash and
cash equivalents, prepaid expenses and other current assets, accounts payable
and accrued expenses, as reflected in the consolidated financial statements,
approximate fair value because of the short-term maturity of these instruments.
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.





Revenue
Recognition





The
Company has adopted and follows the guidance provided in the SEC’s Staff
Accounting Bulletin (“SAB”) No. 104, which provides guidance on the recognition,
presentation and disclosure of revenue in the financial statements.








6






Warrants





The
Company issues warrants to purchase the Company’s common stock in conjunction
with debt and certain preferred stock issues. Warrants are accounted for in
accordance with the provisions of Accounting Principles Bulletin (“APB”) No. 14,
Accounting for Convertible
Debt and Debt Issued with Stock Purchase Warrants(“APB
No.14”) and Emerging Issues Task Force (“EITF”) No. 00-19, Accounting for Derivative Financial
Instruments Accounting for Derivative Financial Instruments Indexed to or
Potentially Settled in Indexed to or Potentially Settled ina Company’s Own Stock(“EITF 00-19”).
The fair value of warrants granted in conjunction with debt and equity issuances
is estimated on the grant date using the Black-Scholes option pricing model. The
value of warrants is separated from the total consideration of each issue and
included as an element of additional paid-in capital.





Net
Loss Per Share





Basic and
diluted net losses per common share are presented in accordance with SFAS
No.128, Earning Per Share, for all periods presented. Stock subscriptions,
options and warrants have been excluded from the calculation of the diluted loss
per share for the periods presented in the statements of operations, because all
such securities were anti-dilutive. The net loss per share is calculated by
dividing the net loss by the weighted average number of shares outstanding
during the periods.





Reclassification





Certain
amounts in the prior year consolidated financial statements have been
reclassified for comparative purposes to conform to the presentation in the
current year consolidated financial statements.





RECENT
ACCOUNTING PRONOUNCEMENTS





Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities





In
June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP
Emerging Issues Task Force (“EITF”) Issue No. 03-6-1, “Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities”. The FSP addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting and,
therefore, need to be included in the earnings allocation in computing earnings
per share under the two-class method. The FSP affects entities that accrue
dividends on share-based payment awards during the awards’ service period when
the dividends do not need to be returned if the employees forfeit the award.
This FSP is effective for fiscal years beginning after December 15, 2008.
The Company is currently assessing the impact of FSP EITF No. 03-6-1 on its
consolidated financial position and results of operations.





Determining
Whether an Instrument (or an Embedded Feature) Is Indexed to an entity's Own
Stock





In June
2008, the FASB ratified EITF Issue No. 07-5, "Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity's Own Stock" (EITF No.
07-5).  EITF No. 07-5 provides that an entity should use a two step
approach to evaluate whether an equity-linked financial instrument (or embedded
feature) is indexed to its own stock, including evaluating the instrument's
contingent exercise and settlement provisions.  It also clarifies on
the impact of foreign currency denominated strike prices and market-based
employee stock option valuation instruments on the evaluation.  EITF
No. 07-5 is effective for fiscal years beginning after December 15,
2008.  The Company is currently assessing the impact of EITF No. 07-5
on its consolidated financial position and results of operations.





Accounting
for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)





In
May 2008, the FASB issued FSP Accounting Principles Board (“APB”) Opinion
No. 14-1, “Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement)”. The FSP
clarifies the accounting for convertible debt instruments that may be settled in
cash (including partial cash settlement) upon conversion.  The FSP
requires issuers to account separately for the liability and equity components
of certain convertible debt instruments in a manner that reflects the issuer's
nonconvertible debt (unsecured debt) borrowing rate when interest cost is
recognized.  The FSP requires bifurcation of a component of the debt,
classification of that component in equity and the accretion of the resulting
discount on the debt to be recognized as part of interest expense in our
consolidated statement of operations.  The FSP requires retrospective
application to the terms of instruments as they existed for all periods
presented.  The FSP is effective for us as of January 1, 2009 and
early adoption is not permitted.  The Company is currently evaluating
the potential impact of FSP APB No. 14-1 upon its consolidated financial
statements.






7






The
Hierarchy of Generally Accepted Accounting Principles




In May
2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No.
162, "The Hierarchy of Generally Accepted Accounting Principles" (SFAS No.
162).  SFAS No. 162 identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of
financial statements.  SFAS No. 162 is effective 60 days following the
SEC's approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, "The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles".  The implementation of this standard
will not have a material impact on the Company's consolidated financial position
and results of operations.




Determination
of the Useful Life of Intangible Assets




In April
2008, the FASB issued FASB Staff Position on Financial Accounting Standard (“FSP
FAS”) No. 142-3, “Determination of the Useful Life of Intangible Assets”, which
amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of intangible assets under
SFAS No. 142 “Goodwill and Other Intangible Assets”.  The intent of this
FSP is to improve the consistency between the useful life of a recognized
intangible asset under SFAS No. 142 and the period of the expected cash flows
used to measure the fair value of the asset under SFAS No. 141 (revised 2007)
“Business Combinations” and other U.S. generally accepted accounting
principles.    The Company is currently evaluating the potential
impact of FSP FAS No. 142-3 on its consolidated financial
statements.




Disclosure
about Derivative Instruments and Hedging Activities




In March
2008, the FASB issued SFAS No. 161, “Disclosure about Derivative Instruments and
Hedging Activities, an amendment of SFAS No. 133”, (SFAS No. 161). This
statement requires that objectives for using derivative instruments be disclosed
in terms of underlying risk and accounting designation. The Company is required
to adopt SFAS No. 161 on January 1, 2009. The Company is currently evaluating
the potential impact of SFAS No. 161 on the Company’s consolidated financial
statements.






Delay
in Effective Date






In
February 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of FASB
Statement No. 157”. This FSP delays the effective date of SFAS No. 157 for
all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years. The impact of adoption was not material to the
Company’s consolidated financial condition or results of
operations.







NOTE
B - FOREIGN OPERATIONS





Since May
2007, the majority of the Company’s operating activities have been in
China.  The functional currency of the Chinese affiliate is the Yuan
and the financial statements of the Chinese affiliate have been converted from
Yuan to U.S. Dollars at the exchange rate in effect.  There were no
foreign currency transaction gains or losses included in the September 30, 2008
statement of operations.  A cumulative foreign currency translation
adjustment of $40,673 is included as a component of shareholders’ equity at
September 30, 2008, to reflect the change in value of assets and liabilities in
the Chinese affiliate’s balance sheet.





NOTE
C - NATIONAL CONTRACT WITH THE PEOPLE’S REPUBLIC OF CHINA





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








NOTE
D - SUBSEQUENT EVENTS







On
October 9, 2008, the Board accepted the resignation of Wilson W. Hendricks III
from the Board and as our chief executive officer and chief accounting officer,
effective October 8, 2008. On October 9, 2008, the Board appointed David Bruce
Hong as a member of the Board to fill the vacancy created by Hendricks'
resignation.






8




On
November 3, 2008, TPID, its Hong Kong affiliate, True Product ID Technology
Limited (“TPID HK”), and its Chinese joint venture affiliate, True Product ID
Technology (Beijing) Limited (“TPID Beijing”), entered into several definitive
agreements with Saddington Limited (“Saddington”), a British Virgin Island
company, which has resulted in, among other things, the complete funding
(estimated at US$50 million) for the Chinese National Gas Tank Contract with the
State General Administration for Quality Supervision, Inspection and Quarantine
of the People's Republic of China (“AQSIQ”) (collectively, the “Saddington
Agreements”).  Consistent with the terms and conditions of the
Saddington Agreements, documentary exchange for closing occurred November 17,
2008 5:00 P.M. Hong Kong time.





Under the
Saddington Agreements, TPID -- without any further funding or other obligation
or liability -- will receive a 5% share of the revenues (as more specifically
set forth below) from the AQSIQ National Gas Tank Project (as described in,
among other filings, TPID’s Forms 10-Q filed November 19, 2007, February 14,
2008, and May 20, 2008 and Form 10-K/A filed October 15, 2008), any other
project and contract with AQSIQ under AQSIQ’s 2007 Official National Special
Equipment Security Standard Circular to anti-counterfeit other Chinese special
equipment (medical gas tanks, elevator parts, automobile manufacturing
equipment, amusement park apparatus, cell phone batteries), the Chinese National
Car and Motorcycle Part Contract with the China Federation of Industry and
Commerce Auto & Motorbike Parts articles for Use Chamber of Commerce (as
reported in TPID’s press release on Business Wire on October 24, 2006), the
Chinese Painting and Calligraphy Contract with the Beijing & Calligraphy
Collector Association (as reported in TPID’s press release on Business Wire on
March 8, 2007 and November 16, 2007), and the Chinese Pharmaceutical Contract
with Helida (Xinyang) Pharmaceuticals Co., Ltd.





TPID’s 5%
share from the AQSIQ Chinese National Gas Tank Contract alone
is conservatively estimated to be at least $15 Million per year.





Under the
Saddington Agreements, Saddington has secured and will provide all of the
funding needed to immediately roll out, much less maintain the rights to, the
AQSIQ Chinese National Gas Tank Contract.  Upon meeting Saddington
representatives, the Chinese Government AQSIQ, which had waited for funding from
TPID for the Chinese National Gas Tank Project for over a year, has authorized
the immediate rollout of the AQSIQ Chinese National Gas Tank Contract for all 23
provinces, 4 municipalities, and 5 autonomous regions in China. Previously, the
initial rollout of the AQSIQ Chinese National Gas Tank Project was planned for
six provinces.  AQSIQ has also advised Saddington that Saddington
should immediately commence the preparations needed to roll out a commensurate
Chinese national campaign for a second category of “special equipment,” elevator
parts, which revenues are expected to be comparable to those for the Chinese
National Gas Tank Project.  Without immediate funding, the AQSIQ
Chinese National Gas Tank Contract would have been lost.





In
addition to the $2.5 Million funding to be delivered at closing, Saddington has
secured and will additionally infuse funding in the order of $15 - $35 Million
for the AQSIQ Chinese National Gas Tank Contract in the first twelve months of
rollout, required for project implementation costs.  In addition to
meeting AQSIQ, Saddington has also commenced supply agreement negotiations with
various suppliers for marking equipment, scanners, identity coding and data
cards and is  working to place orders with each  supplier
and start production within the next few weeks to immediately commence rollout
of the AQSIQ Chinese National Gas Tank Project.




About
Saddington





In
addition to the necessary funding, Saddington and its affiliates bring the
management, operational and technical expertise, manufacturing facilities,
related technology, and other resources needed to immediately rollout the AQSIQ
Gas Tank Contract and other Chinese contracts.  They already operate
in the anti-counterfeiting/ biometric/security arena.  They have
developed and marketed their own advanced mobile scanner, biometric, and
security technology.  They have access to facilities in China which
can manufacture the scanners, identity coding and data cards and other items
needed to immediately rollout the AQSIQ Gas Tank Contract.





Saddington
and its affiliates have developed relationships, and have worked on projects,
with Chinese Government and other governments in Southeast Asia.  They
have successfully implemented contracts and projects in China, Southeast Asia,
and other parts of the world.  In addition to their own funds, they
also have developed significant relationships, and have worked on projects, with
prominent funders in Asia and elsewhere.





Their
representatives bring years of experience in corporate management, corporate
governance and risk management.  They bring years of experience in
project management and implementation. product development, corporate and
institutional banking and finance and debt and equity capital
markets.






9




Saddington
has extensively scrutinized TPID’s business plan and associated materials for
the AQSIQ Chinese National Gas Tank Project, and has developed their own plan
which will not only allow  immediate rollout but will allow rollout
for more provinces and municipalities in China on an expedited
basis.  Saddington will also develop the billing, invoicing and
collection systems for the AQSIQ Chinese National Gas Tank Project, which had
not been established by TPID, and which will serve not only the AQSIQ Chinese
National Gas Tank Contract but for all other AQSIQ and Chinese
contracts.





Saddington
has also extensively analyzed TPID’s technology and will seek to perfect the
technology with its own biometric/anti-counterfeiting technology, so that the
perfected technology can be used for other contracts in China as well as for the
United States, Europe and other parts of the world.  As discussed
below, TPID has the exclusive rights to market the perfected technology for the
United States, Europe and other parts of the world outside Asia, for which
Saddington will help TPID market and fund.





The
Saddington Agreements





The terms
and conditions of the Saddington Agreements are consistent with, memorialize and
delineate the terms and conditions of the TPID-Saddington October 19, 2008
Binding Term Sheet, which was reported in TPID’s Form 8-K filed on October 20,
2008, and which had been unanimously approved by TPID’s board of directors
(“Board”) and majority shareholder, after extensive discussion and
deliberation.  TPID’s Board and majority shareholder have also
reviewed and approved each of the Saddington Agreements.  A copy of
each of the Saddington Agreements is attached as Exhibit 99.1 to TPID’s Form 8-K
filed November 19, 2008 and sub-exhibits 6, 7, 8, and 9 to Exhibit
99.1.





The
principal contract is the TPID-Saddington Asset Purchase
Agreement.  Under this agreement, Saddington agreed to fully fund the
AQSIQ Chinese National Gas Tank Contract (estimated at US$50 Million) and assume
all of TPID’s obligations and liabilities thereunder.  As part of
Saddington’s overall $30-$50 Million funding, TPID is to receive $2.5 Million at
closing allocated as follows: $1.75 Million towards the AQSIQ Chinese National
Gas Contract; $250,000 towards rent, wages and other expenses for TPID Beijing,
and $500,000 towards accounting, auditing and other expenses for
TPID.





Under
this agreement, without any additional funding or other obligation or liability,
TPID will receive from Saddington the following share of the Saddington-funded
AQSIQ Chinese National Gas Tank Contract:





·
            Five
      percent (5%) of Saddington’s Net Operating Profit Before Taxes (“NOPBT”)
      for the first thirty (30) months from the month of first revenue
      receipts.  NOPBT is defined as the total amount of Saddington’s
      operating revenues less the operating expenses including costs of goods or
      technology supplied and share costs of distribution and selling and
      administrative expenses and headquarters expenses of Saddington and prior
      to applying taxes, as adjusted for interest expense on the present value
      of operating leases but excluding interest expense or income on debt and
      cash.


·
            Five
      percent (5%) of the Gross Receipts for the duration of the unexpired sixty
      (60) month term of the AQSIQ Chinese National Gas Tank
      Contract.  Gross Receipts is defined as the total amount of
      funds actually received and collected by Saddington and its respective
      affiliates from sales of product or service utilizing the Subject
      Technology, including, but not limited to, (x) cash, money orders and
      cleared checks less charges imposed by banks for clearing, deposits,
      redeposits or returns and (y) cleared credit card charges less the bank
      discount rate; less the following amounts actually paid by Saddington, its
      respective affiliates, licensees, distributors and manufacturers: i.)
      discounts allowed; ii.) returns; iii.) transportation charges or
      allowances; iv.) packing and transportation packing material costs; v.)
      customs and duties charges; and vi.) sales, transfer and other excise
      taxes or other governmental charges (including any tax or government
      charge, duty or assessment or any tax such as a value added or similar tax
      or government charge) levied on or measured by the sales but no franchise
      or income tax of any kind
whatsoever.





As stated
above, TPID’s 5% Revenue Share from the AQSIQ Chinese National Gas Tank Contract
alone is conservatively estimated to be $15 Million per year.  TPID
will also receive the same revenue share from any other project and contract
with AQSIQ under AQSIQ’s 2007 Official National Special Equipment Security
Standards Circular to anti-counterfeit other Chinese special equipment,
including medical gas tanks, elevator parts, automobile manufacturing equipment,
amusement park apparatus, and cell phone batteries.  AQSIQ has advised
Saddington that Saddington should immediately commence the preparations needed
to roll out a commensurate Chinese national campaign for a second category of
special equipment, elevator parts, which revenues are expected to be comparable
to those for the Chinese National Gas Tank Project.


TPID will
also receive the same revenue share from the Chinese National Car and Motorcycle
Part Contract with the China Federation of Industry and Commerce Auto &
Motorbike Parts articles for Use Chamber of Commerce (as reported in TPID’s
press release on Business Wire on October 24, 2006), the Chinese Painting and
Calligraphy Contract with the Beijing & Calligraphy Collector Association
(as reported in TPID’s press release on Business Wire on March 8, 2007 and
November 16, 2007), and the Chinese Pharmaceutical Contract with Helida
(Xinyang) Pharmaceuticals Co., Ltd.






10




Under the
first agreement, TPID shall also have the exclusive rights (exclusive even to
Saddington) to market and distribute the technology perfected by Saddington in
the course of the AQSIQ Chinese National Gas Tank Contract for the United
States, Europe, and other parts of the world outside Asia.  For an
initial five year term, TPID shall be able exclusively market and distribute the
perfected technology in the United States on a royalty-free
basis.  For Europe and other parts of the world outside Asia,
TPID’s exclusive distribution rights are subject to the same revenue 5% sharing
arrangement which Saddington has given to TPID for the AQSIQ Chinese National
Gas Tank Contract and other Chinese contracts.   Saddington will
help TPID market and fund contracts in the United States and
Europe.  TPID and Saddington have entered to a separate License
Agreement memorializing and consistent with the above license
arrangement.





In
return, Saddington will receive the all rights to the intellectual property of
TPID, TPID Beijing, and TPID Hong Kong, including all trademarks, patents,
marks, and logos; all rights of TPID, TPID Beijing and TPID Hong Kong to all
contracts with AQSIQ, including the AQSIQ Gas Tank Contract; the AQSIQ Gas Tank
Joint Venture; and any and all other contracts in Asia; all of TPID’s and TPID
Hong Kong’s fixed assets in Asia; all of TPID’s and TPID Hong Kong’s business in
Asia, including the right to use the business name of TPID in Asia; TPID’s
interest in TPID Beijing; and the entire share capital of TPID Hong
Kong.  Consistent with these above terms in the Asset Sale Agreement,
TPID, TPID Beijing and Saddington have entered into separate Irrevocable Bill of
Sale and Deed of Indemnity in respect of taxation.  Consistent with
these above terms in the Asset Sale Agreement, TPID, TPID Beijing and Li Ning
(who was the inventor listed on TPID Beijing’s Chinese patent application) have
entered into separate Assignment of Patent Rights.








11


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


OF
OPERATIONS





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





Certain
statements contained in this “Management’s Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this report are
forward-looking   statements that involve risks
and   uncertainties.   These


Statements
relate to future events or our future financial performance.  In some
cases, forward-looking statements can be identified by terminology such as
"may", "will", "should", "expect", "anticipate", "intend", "plan", "believe",
"estimate",  "potential", or "continue", the negative of these terms
or other comparable terminology.   These statements involve a
number of risks and uncertainties.   Actual events or results may
differ materially from any forward-looking statement as a result of various
factors, including those described above under "Risk Factors."





RESULTS
OF OPERATIONS





Three
Months Ended September 30, 2008 and 2007





During
the first three months ended September 30, 2008 of fiscal 2009, the Company had
no revenues, as the operations of the Chinese affiliate had not begun customer
sales, except for certain trial runs conducted for Chinese
customers.  In the first three months ended September 30, 2007 of
fiscal 2008, there were no revenues.





The
Company had operating expenses of $218,580 for the first quarter of Fiscal 2009
with the majority of the expense related to accrued compensation of employees
and consultants, as compared to operating expenses of $1,046,770 for the same
period in the first fiscal quarter of 2008, with the majority of the expense
related to stock compensation of an employee and consultant.





The
Company reported a loss before minority interest of $224,350 for the three
months ended September 30, 2008, compared to a loss before minority interest of
$1,054,005 for the three months ended September 30,  2007. Minority
interest for the current fiscal quarter was a credit of $55,799. The add back of
minority interest represents the 40% portion of the affiliate loss not owned by
the Company.  There was no comparable amount for the first quarter of
fiscal 2007 as the Company only began consolidating the results of the Chinese
affiliate in the fourth quarter of fiscal 2008, when the Company’s interest
increased to 60%.





For the
quarter ended September 30, 2008 the Company had a net loss of $168,551,
compared to a net loss of $988,062, for the quarter ended September 30,
2007.





FINANCIAL
CONDITION





Liquidity
and Capital Resources





During
the three months ended September 30, 2008, the Company's cash decreased by
$10,006 to $22,165.





Cash
utilized by operating activities totaled $1,571 in the three months ended
September 30, 2008.  Cash outflows included the $168,551 net loss for
the period, the $55,799 credit for minority interest which was also non-cash in
nature and an increase in other assets of $4,313 offset by an increase in
accounts payable and accrued expenses of $191,803 and $24,901 of depreciation
and amortization.





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





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






12






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





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





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





RISK
FACTORS:  RISKS RELATED TO THE COMPANY’S CONTINUED EFFORTS IN
NON-CHINA MARKETS





As stated
above, the Company's immediate priority is to focus on solidifying its foothold
in China, implementing its China contracts, especially the AQSIQ Contract, and
generating revenues from its China contracts.  Nonetheless, the
Company continues its efforts to penetrate markets outside China.





With
respect to the United States, the Company has completed its initial business
plan and will target certain strategic industries and applications where the
Company has already successfully demonstrated and tested in the United States or
China, often with multinational companies based in the United States which
manufacture their goods in China. Those industries include, among others,
packaging, pharmaceutical/ biotech (blister packs and bottles), cosmetics, toys
and consumer products, pressurized tanks, and sports and lottery
tickets.





Its
current strategy for non-China markets outside the United States is to enter
into strategic relationships (whether in the form of a joint venture, licensing
or other arrangement) with leading companies in certain markets outside China,
which have developed their own technologies complimentary to the Company's, have
established significant distribution networks in those markets, and/or have
expressed an interest in distributing the Company's technologies in those
markets.  To that end, the Company has met with and received interest
from companies with significant networks in India, the Philippines, Malaysia,
Indonesia, Europe, the United States, Canada and the Middle East.  The
Company's strategy is to benefit from those companies' already established
distribution networks and operational capabilities in those markets, while
minimizing the resources the Company itself would need to distribute and operate
in those markets.  The Company has also met and generated significant
interest from a leading multinational company in the inspection, certification,
and testing field.





RISK
FACTORS:  RISKS RELATED TO CURRENT WORLD FINANCIAL
MARKETS





While the
Company has sought and continues to seek the necessary funding (including for
the AQSIQ Gas Tank Project) from sources throughout the world, it has as of yet
unable to secure such funding.  The recent difficulties and conditions
regarding world markets have exacerbated the Company’s funding
situation.  The current difficulties of the world markets have
affected several of the more prominent potential funders the Company has
approached.  Without immediate funding, the survival of the Company
and the AQSIQ Gas Tank project is at risk.








13






ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





Not
Applicable





ITEM
4T. CONTROLS AND PROCEDURES








Our chief
executive officer and chief financial officer (the “Certifying Officers”) are
responsible for establishing and maintaining disclosure controls and procedures
for our company and our subsidiary. Such officers have concluded (based upon his
evaluation of these controls and procedures as of the end of the period covered
by this report) that our disclosure controls and procedures are effective to
ensure that information required to be disclosed by us in this report is
accumulated and communicated to management, including our principal executive
officers as appropriate, to allow timely decisions regarding required
disclosure.





The
Certifying Officers have also indicated that there were no significant changes
in our internal controls or other factors that could significantly affect such
controls subsequent to the date of his evaluation, and there were no corrective
actions with regard to significant deficiencies and material
weaknesses.




Our
management, including the Certifying Officers, do not expect that our disclosure
controls or our internal controls will prevent all error and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. In addition, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management
override of the control. The design of any systems of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Because of these inherent limitations in
a cost-effective control system, misstatements due to error or fraud may occur
and not be detected.





CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING





As
required by Rule 13a-15(d), the Company's Chief Executive Officer and Chief
Accounting Officer, also conducted an evaluation of the Company’s internal
controls over financial reporting to determine whether any changes occurred
during the fourth fiscal quarter that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting. During the preparation of the Company's financial
statements as of and for the year ended June 30, 2008, the Company concluded
that the then current system of disclosure controls and procedures needed
improvement, partly due to the transition to new management, facilities, and
auditors. As a result of this conclusion, the Company initiated changes in
internal control. It should be noted that any system of controls, however well
designed and operated, can provide only reasonable, and not absolute, assurance
that the objectives of the system will be met. In addition, the design of any
control system is based in part upon certain assumptions about the likelihood of
future events.





Lack
of Adequate Accounting Staff





Due to
limitations in financial and management resources, the Company does not have
adequate accounting staff.  As a result, the Company took steps to
address its understaffed Finance and Accounting team to correct this material
weakness.  The Company engaged an independent contractor with
extensive CFO-level management and SEC reporting experience in public
companies.  The Company feels this addition to the Company's Finance
and Accounting team will improve the quality of future period financial
reporting.


14


PART
II





ITEM
1.     LEGAL PROCEEDINGS





The
Company is subject to disputes and litigation in the ordinary course of
business. The Company is not aware of any pending or threatened litigation that
it believes is reasonably likely to have a material adverse effect on the
financial statement or results of operations, based upon the information
available at this time.





FASANO
LITIGATION





There are
certain claims between the Company and Daniel M. Fasano (Fasano), the former
president and chairman of the Company’s predecessor, OnTV, Inc.  In
April 2006, TPID’s former parent, Sure Trace Security Corporation (“SSTY”)
acquired the controlling interest of OnTV from Fasano.  OnTV then spun
off from SSTY and became a separate and independent company (renamed True
Product ID, Inc.) as a result of a dividend to SSTY shareholders effective June
1, 2006.





Monies
owed the Company by Fasano as a Result of His 2005 Purchase of All Assets of the
Company’s Subsidiary Seen OnTV





In
September 2005, Fasano (then the Company’s president and chairman) purchased of
all the shares of the Company’s subsidiary, Seen OnTV, and other assets
incidental to the business of Seen OnTV, including the domain name, trademark,
and trade name “AsSeenOnTV.com”.  As reported in the Company’s Form
10SB12G filed January 31, 2000, the Company purchased the domain name
“AsSeenOnTv.com” in January 2000 for approximately $5
million.  Pursuant to a written agreement, Fasano owes the Company
$300,000, plus interest at 5.75% per year (since September 2005).  As
of the date of this filing, no monies have been received for this purchase.
Total amount due, including principal and interest, to the Company as of June
30, 2008 is $347,438.





Outstanding
Monies owed by the Company to Fasano from the 2006 SSTY Acquisition of
ONTV





The
Company entered into an amended pay agreement regarding the monies owed to
Fasano from the 2006 SSTY acquisition of OnTV.  Pursuant to the
amended pay agreement, the Company agreed to pay Fasano (1) $100,000 by March
31, 2007; (2) $185,000 by June 30, 2007; and (3) $34,410 in interest and
penalties by June 30, 2007.  Any and all unpaid portions of any
payments due under the amended pay agreement shall accrue simple annual interest
at twenty-five percent (25%), simple, annual interest (or the highest
permissible interest rate allowed in Pennsylvania, New York, Delaware, and/or
Florida).





The
Company remitted the first $100,000 payment but has not yet made the other two
payments totaling $219,410 due June 30, 2007 or any accrued interest thereon
(the “Outstanding ONTV Acquisition Balance”). Total amount due, including
principal and interest, to Fasano by the Company as of June 30, 2008 is
$274,263.





Litigation
Filed By Fasano





On
October 31, 2007, Fasano filed a pro se petition for the
statutory appointment of a receiver in the Delaware Court of
Chancery.  In his petition, Fasano claims that the Company is
insolvent based, in part, due to in excess of $900,000 he claims the Company
owes him that remains unpaid.  In its January 4, 2008 answer to the
Petition, the Company denied and continues to deny that it is insolvent and that
the appointment of a receiver is required.  Unless the matter can be
resolved, a hearing on will likely be scheduled for the fall of
2008.  A prerequisite to Fasano maintaining his action in Delaware is
that TPID be insolvent.  Although the Company disputes that it was
ever insolvent, based upon its recent contract with Saddington Limited, TPID
clearly is not insolvent under Delaware law.  The Company expects to
prevail in this litigation.





Around
the same time, the SEC commenced a review of aspects of the SSTY Acquisition of
OnTV concerning the dividend of unregistered shares of the Company to SSTY
shareholders which resulted in the spin off of the Company from
SSTY.  There was a concern that the SEC would rescind the entire
acquisition.  However, the SEC chose not to rescind the dividend or
the acquisition but instead filed a consent complaint against SSTY and certain
of its executives in September 2007 stating that SSTY failed to register the
spin off of OnTV in violation of Section 5 of the 1933 Securities
Act.





In
February 2008, Fasano filed a separate lawsuit, pro se, in Broward County,
Florida against the Company for damages in the amount of approximately
$900,000.  The Company responded to the lawsuit by filing a Motion to
Dismiss on jurisdictional grounds. The Company believes the lawsuit is without
merit and, if the matter cannot be amicably resolved, intends to vigorously
defend it.






15






In the
course of the litigation, the Company learned from Fasano that part of his
claims against the Company related to deferred salary he was purportedly owed by
the Company prior to the closing of SSTY’s Acquisition of OnTV amounting to
approximately $500,000 as of September 30, 2005.  The Company’s
position is that these types of pre-acquisition expenses, as agreed, would be
extinguished post closing.  Moreover, the Company believes that
Fasano’s claims were released by section 6 of the January 2007 amended pay
agreement, which provides:





“Subject
to the terms and conditions of this Amendment, in consideration of the payments
and undertakings described above and in further consideration which is hereby
acknowledged, Fasano hereby releases and forever discharges SSTY and TPID, their
predecessors, successors, assigns, affiliated companies, shareholders,
administrators, partners, officers, directors, employees, agents and attorneys
from any and all claims and causes of action whatsoever, known or unknown,
foreseen or unforeseen, which any party has or may have by reason of any matter,
cause or thing whatsoever, arising from the March 21, 2006 SSTY-Fasano Agreement
and the ONTV Acquisition, from the beginning of the world to the day of this
Agreement, other than those obligations set forth herein.”





Fasano
has based his claim upon an erroneous entry in TPID's Balance Sheet which has
been corrected by the Company's new auditor.  In net terms, Fasano is
not a creditor of TPID.  The error was discovered and the change in
accounting is supported by a signed contract.  The Company expects to
prevail in this litigation.





EUROPLAN
LITIGATION





In July
2008, Europlan Financial Services Ltd. as Trustee for Ormond Trust and Deborah
Richdale filed suit against the Company, Rene Hamouth, Hamouth Family Trust,
William R. Dunavant, Richard Specht and Wilson W. Hendricks III for an
unspecified amount of damages and injunctive relief.  The plaintiffs allege
that certain consultants or representatives of the Company made
misrepresentations regarding, among other things, the prospective share price of
the Company’s stock, which the plaintiffs allegedly relied upon to purchase our
stock on the open market.  The Company believes that the claims
against it are without merit.  Plaintiffs agreed to extend the time
for the Company to file a responsive pleading to explore possible settlement
negotiations.  If the matter cannot be amicably resolved, the Company
intends to defend the matter vigorously.





ITEM
5.    OTHER INFORMATION




Subsequent
to the filing of the Company’s 10-K for the year ended June 30, 2008, the
Company received emails from Rene Hamouth and Roger Dunavant, both of whom
expressed their opinions that the language in the 10-K which referenced that
they were brought in to raise money for the Company was
inaccurate.  They believe that the language implies that they were
going to be paid money or consideration to raise money for the
Company.  The Company therefore wants to clarify that both Mr. Hamouth
and Mr. Dunavant were issued shares prior to any services being rendered and
that any assistance which either rendered to the Company in raising money was
done without further compensation and no commissions were paid to either
therefrom.




In order
to assure the accuracy of this statement, on November 8, 2008, a letter
including the above paragraph was emailed and faxed to Rene Hamouth’s attorney,
W. Gordon Dobie, Esquire of Winston & Strawn, LLP.  In the letter to
Dobie, the Company requested that he review this language and give us whatever
comments he may have or suggestions.  We further informed Mr. Dobie that if
we did not hear from him, that the Company would assume that he and Mr. Hamouth
had no problem with this language being inserted into TPID’s 10-Q for the period
ended September 30, 2008.  We did not hear back from Dolbie and as such are
including the language in this filing.








ITEM
6.    EXHIBITS AND REPORTS ON FORM 8-K FILED DURING QUARTER
ENDED SEPTEMBER 30, 2008





(a)
Exhibits





Number                                Title





31                                Rule
13a-14(a) Certification





32                                Section
1350 Certification











16







SIGNATURES

















In
accordance with the requirements of the Exchange Act, the Registrant has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





True Product ID,
      Inc.By:  /s/ Ke Ke
      WangKe Ke
      Wang
                President
 Date:
November 19, 2008














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