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

                                  -------------


                                   FORM 10-KSB

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

                    FOR THE FISCAL YEAR ENDED JUNE 30, 2008.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

                          COMMISSION FILE NO. 000-21477

                                  ASPEON, INC.
              (EXACT NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

                               DELAWARE 52-1945748
                  (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
            OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

                       2460 WEST 26th AVENUE, SUITE 380-C
                             DENVER, COLORADO 80211
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (303) 380 9784
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities  registered pursuant to Section 12(g) of the Act: COMMON STOCK, $0.01
PAR VALUE

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

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

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

    The Registrant's revenues for its fiscal year ended June 30, 2008 were $0.

    The aggregate market value of the voting common stock held by non-affiliates
of the Registrant on September 26, 2008 was approximately $87,207 based upon the
reported  closing  sale price of such  shares on the Over the  Counter  Bulletin
Board for that date.  As of September  26, 2008,  there were  19,710,575  shares
outstanding of which 8,720,659 shares were held by non-affiliates.

    Transitional Small Business Disclosure Format.  Yes [ ]  No [X]


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<PAGE>


                                  ASPEON, INC.

                        2008 ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS

   ITEM                                DESCRIPTION                         PAGE

Part I

Item 1.    Description of Business........................................   3

Item 2.    Description of Properties......................................   6

Item 3.    Legal Proceedings..............................................   6

Item 4.    Submission of Matters to a Vote of Security Holders............  17

Part II

Item 5.    Market for Common Equity and Related Stockholder Matters.......   8

Item 6.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations......................................   9

Item 7.    Financial Statements...........................................  17

Item 8.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure.......................................  17

Item 8a.   Controls and Procedures........................................  17

Part III

Item 9.    Directors, Executive Officers, Promoters and Control Persons:
           Compliance with Section 16(a) of the Exchange Act..............  17

Item10.    Executive Compensation.........................................  20

Item 11.   Security Ownership of Certain Beneficial Owners and
           Management.....................................................  21

Item 12.   Certain Relationships and Related Transactions.................  21

Item 13.   Exhibits ......................................................  22





                                       2
<PAGE>

                           FORWARD-LOOKING STATEMENTS

In addition to historical information, some of the information presented in this
Annual Report on Form 10-KSB contains  "forward-looking  statements"  within the
meaning of the  Private  Securities  Litigation  Reform Act of 1995  (the"Reform
Act").  Although  Aspeon,  Inc.  ("Aspeon" or the  "Company,"  which may also be
referred to as "we," "us," or "our") believes that its expectations are based on
reasonable  assumptions  within the bounds of its  knowledge of its business and
operations:  there can be no  assurance  that  actual  results  will not  differ
materially from our expectations. Such forward-looking statements are subject to
risks and  uncertainties  that could cause actual  results to differ  materially
from those  anticipated,  including  but not  limited  to, our  ability to reach
satisfactorily negotiated settlements with our outstanding creditors, raise debt
and, or, equity to fund  negotiated  settlements  with our creditors and to meet
our ongoing  operating  expenses and merge with another entity with  experienced
management and opportunities for growth in return for shares of our common stock
to create value for our shareholders. Cautionary statements regarding the risks,
uncertainties and other factors associated with these forward-looking statements
are  discussed  under  "Risk  Factors"  in this  Form  10-KSB.  You are urged to
carefully consider these factors, as well as other information contained in this
Form 10-KSB and in our other periodic reports and documents filed with the SEC.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION

We were  incorporated in the State of Delaware in September 1995, under the name
Sunwood Research,  Inc. We changed our name to Javelin Systems,  Inc. in October
1996 and to Aspeon, Inc. in December 1999.

Effective June 30, 2003, we made the decision to  discontinue  all our remaining
operating  businesses  and are now focused on reaching  satisfactory  negotiated
settlements with our outstanding  creditors,  maintaining our financial  records
and  Securities  and Exchange  Commission  (`SEC")  filings on a current  basis,
raising debt and/or,  equity to fund negotiated  settlements  with our creditors
and to meet our ongoing operating  expenses and attempting to merge with another
entity with experienced  management and  opportunities  for growth in return for
shares of our common stock to create value for our shareholders. There can be no
assurance that this series of events will be successfully completed.

In January 2008,  Pennaluna & Co, a broker  dealer,  submitted a Form 15c-211 on
our behalf seeking to have our shares of common stock  re-listed on the over the
counter bulletin board. Effective January 21, 2008, our shares were re-listed on
the Over the Counter Bulletin Board and the Pink Sheets.

On April 2, 2008 we held an annual meeting of stockholders at which the majority
of  stockholders  voted  to  re-elect  Messrs.  Cutler,  Whiting  and  Green  as
directors,  authorize a reverse  split of our common  stock on a fifteen for one
basis, appoint Larry O'Donnell, CPA, P.C. as our independent auditor, change our
name  to a name  to be  determined  by the  Board  of  Directors,  increase  the
authorized  number of our Common Shares from twenty million  (20,000,000) to one
hundred  million  (100,000,000)  and  increase  the  authorized  number  of  our
Preferred   Shares  from  one  million   (1,000,000)   to  twenty  five  million
(25,000,000).  We have increased the number of our  authorized  shares of Common
Shares and  preferred  Shares and are  currently  in the process of obtaining an
effective date for the fifteen for one reverse spilt from the State of Delaware.

HISTORICAL BUSINESS OPERATIONS

During the  twelve  month  periods  ended June 30,  2008 and 2007,  our  primary
activities  have been to maintain our financial  statements and SEC filings on a
current  basis,   attempt  to  negotiate   satisfactory   settlements  with  our
outstanding  creditors,  obtain a listing on the over the counter bulletin board
and raise debt and/or, equity to fund these activities.

PLANNED OPERATIONS

Our plan of operation is to reach satisfactory  negotiated  settlements with our
outstanding  creditors,  obtain  debt or  equity  finance  to meet  our  ongoing
operating  expenses  and attempt to merge with another  entity with  experienced
management and opportunities for growth in return for shares of our common stock
to create value for our  shareholders.  There is can be no  assurance  that this
series of events can be successfully  completed,  that any such business will be
identified or that any stockholder will realize any return on their shares after


                                       3
<PAGE>

such a transaction has been completed. Any merger or acquisition completed by us
can be expected  to have a  significant  dilutive  effect on the  percentage  of
shares held by our current stockholders.

General Business Plan
--------------------------------

We intend to seek, investigate and, if such investigation  warrants,  acquire an
interest in  business  opportunities  presented  to us by persons or firms which
desire to seek the  advantages of an issuer who has complied with the Securities
Act of 1934 (the "1934  Act").  We will not  restrict our search to any specific
business,  industry or geographical location, and we may participate in business
ventures of virtually any nature.  This  discussion of our proposed  business is
purposefully  general  and is  not  meant  to be  restrictive  of our  virtually
unlimited   discretion  to  search  for  and  enter  into   potential   business
opportunities.  We  anticipate  that we may be able to  participate  in only one
potential business venture because of our lack of financial resources.

We may seek a business  opportunity with entities which have recently  commenced
operations,  or that desire to utilize the public  marketplace in order to raise
additional capital in order to expand into new products or markets, to develop a
new product or service, or for other corporate  purposes.  We may acquire assets
and  establish  wholly  owned  subsidiaries  in  various  businesses  or acquire
existing businesses as subsidiaries.

We expect  that the  selection  of a business  opportunity  will be complex  and
risky. Due to general economic  conditions,  rapid technological  advances being
made in some  industries  and  shortages of available  capital,  we believe that
there are numerous firms seeking the benefits of an issuer who has complied with
the 1934 Act. Such benefits may include  facilitating  or improving the terms on
which  additional  equity  financing  may be  sought,  providing  liquidity  for
incentive  stock  options  or  similar  benefits  to  key  employees,  providing
liquidity (subject to restrictions of applicable  statutes) for all stockholders
and other factors.  Potentially,  available business  opportunities may occur in
many different  industries and at various  stages of  development,  all of which
will make the task of  comparative  investigation  and analysis of such business
opportunities  extremely  difficult and complex.  We have,  and will continue to
have,  essentially  no assets to provide the owners of  business  opportunities.
However,  we  will be  able  to  offer  owners  of  acquisition  candidates  the
opportunity  to acquire a  controlling  ownership  interest in an issuer who has
complied  with the 1934 Act  without  incurring  the cost and time  required  to
conduct an initial public offering.

The analysis of new business  opportunities  will be undertaken by, or under the
supervision of, our board of directors.  We intend to concentrate on identifying
preliminary  prospective  business  opportunities  which may be  brought  to our
attention through present associations of our director, professional advisors or
by our stockholders.  In analyzing prospective business  opportunities,  we will
consider  such matters as (i)  available  technical,  financial  and  managerial
resources; (ii) working capital and other financial requirements;  (iii) history
of operations,  if any, and prospects for the future; (iv) nature of present and
expected competition;  (v) quality, experience and depth of management services;
(vi) potential for further research,  development or exploration; (vii) specific
risk  factors  not now  foreseeable  but that may be  anticipated  to impact the
proposed  activities of the company;  (viii)  potential for growth or expansion;
(ix) potential for profit;  (x) public  recognition  and acceptance of products,
services or trades;  (xi) name  identification;  and (xii) other factors that we
consider relevant. As part of our investigation of the business opportunity,  we
expect to meet  personally  with  management  and key  personnel.  To the extent
possible,  we intend to utilize  written reports and personal  investigation  to
evaluate the above factors.

We will not  acquire  or merge  with any  company  for which  audited  financial
statements  cannot be obtained within a reasonable  period of time after closing
of the proposed transaction.

Acquisition Opportunities
------------------------------------

In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation,  reorganization, joint venture, or licensing
agreement with another company or entity. We may also acquire stock or assets of
an existing  business.  Upon consummation of a transaction,  it is probable that
our present  management and stockholders  will no longer be in control of us. In
addition,  our  sole  director  may,  as part of the  terms  of the  acquisition
transaction,  resign  and be  replaced  by new  directors  without a vote of our
stockholders,  or sell his  stock  in us.  Any such  sale  will  only be made in
compliance  with the  securities  laws of the United  States and any  applicable
state.

It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration  under  application  federal
and state securities laws. In some circumstances, as a negotiated element of the


                                       4
<PAGE>

transaction,  we  may  agree  to  register  all  or a part  of  such  securities
immediately   after  the  transaction  is  consummated  or  at  specified  times
thereafter.  If such registration occurs, it will be undertaken by the surviving
entity after it has  successfully  consummated a merger or acquisition and is no
longer  considered an inactive company.  The issuance of substantial  additional
securities and their potential sale into any trading market which may develop in
our  securities  may have a depressive  effect on the value of our securities in
the future. There is no assurance that such a trading market will develop.

 While the actual terms of a  transaction  cannot be  predicted,  it is expected
that the parties to any business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the business  transaction in a
so-called  "tax-free"  reorganization  under  Sections  368(a)(1)  or 351 of the
Internal Revenue Code (the "Code").  In order to obtain tax-free treatment under
the Code, it may be necessary for the owner of the acquired  business to own 80%
or more of the  voting  stock  of the  surviving  entity.  In  such  event,  our
stockholders  would retain less than 20% of the issued and outstanding shares of
the surviving entity. This would result in significant dilution in the equity of
stockholders.

As part of our  investigation,  we expect to meet personally with management and
key  personnel,  visit  and  inspect  material  facilities,  obtain  independent
analysis of verification of certain  information  provided,  check references of
management and key personnel,  and take other reasonable investigative measures,
to the extent of our limited financial resources and management  expertise.  The
manner in which we participate  in an  opportunity  will depend on the nature of
the  opportunity,  the  respective  needs and desires of both  parties,  and the
management of the opportunity.

With  respect to any merger or  acquisition,  and  depending  upon,  among other
things,  the target company's assets and liabilities,  our stockholders  will in
all likelihood hold a substantially  lesser percentage  ownership interest in us
following any merger or acquisition.  The percentage ownership may be subject to
significant  reduction in the event we acquire a target  company with assets and
expectations  of growth.  Any merger or  acquisition  can be  expected to have a
significant   dilutive   effect  on  the   percentage  of  shares  held  by  our
stockholders.

We will  participate in a business  opportunity  only after the  negotiation and
execution of appropriate written business agreements. Although the terms of such
agreements  cannot be predicted,  generally we anticipate  that such  agreements
will (i) require specific  representations and warranties by all of the parties;
(ii) specify  certain  events of default;  (iii) detail the terms of closing and
the conditions which must be satisfied by each of the parties prior to and after
such  closing;  (iv)  outline  the  manner of  bearing  costs,  including  costs
associated with the Company's attorneys and accountants;  (v) set forth remedies
on defaults; and (vi) include miscellaneous other terms.

As stated  above,  we will not  acquire or merge with any  entity  which  cannot
provide independent  audited financial  statements within a reasonable period of
time after  closing of the  proposed  transaction.  We are subject to all of the
reporting  requirements included in the 1934 Act. Included in these requirements
as part of a Current Report on Form 8-K,  required to be filed with the SEC upon
consummation of a merger or acquisition, as well as audited financial statements
included  in an Annual  Report on Form 10-K (or Form 10-KSB as  applicable).  If
such audited financial  statements are not available at closing,  or within time
parameters  necessary to insure our compliance  within the  requirements  of the
1934 Act, or if the audited financial  statements provided do not conform to the
representations  made by that business to be acquired,  the  definitive  closing
documents will provide that the proposed  transaction  will be voidable,  at the
discretion  of our  present  management.  If such  transaction  is  voided,  the
definitive  closing  documents  will also  contain  a  provision  providing  for
reimbursement for our costs associated with the proposed transaction.

Competition
-----------------

We believe we are an insignificant  participant  among the firms which engage in
the acquisition of business  opportunities.  There are many established  venture
capital and financial  concerns that have  significantly  greater  financial and
personnel resources and technical expertise than we have. In view of our limited
financial resources and limited management availability,  we will continue to be
at a significant competitive disadvantage compared to our competitors.

Investment Company Act 1940
-----------------------------------------

Although we will be subject to regulation  under the  Securities Act of 1933, as
amended, and the 1934 Act, we believe we will not be subject to regulation under
the  Investment  Company Act of 1940 (the "1940 Act")  insofar as we will not be
engaged in the business of investing or trading in  securities.  In the event we


                                       5
<PAGE>

engage in business  combinations  that result in us holding  passive  investment
interests in a number of entities,  we could be subject to regulation  under the
1940 Act.  In such event,  we would be  required  to  register as an  investment
company  and  incur  significant  registration  and  compliance  costs.  We have
obtained no formal  determination  from the SEC as to our status  under the 1940
Act  and,  consequently,  any  violation  of the 1940 Act  would  subject  us to
material adverse consequences.  We believe that, currently,  we are exempt under
Regulation 3a-2 of the 1940 Act.

INTELLECTUAL PROPERTY

We do not hold any patents or patent applications.

EMPLOYEES

As of June 30, 2008 and 2007,  we did not have any  operational  activities  and
those  activities  necessary  to the  continual  existence  of the Company  were
performed by our directors and officers, as required.

FACTORS AFFECTING FUTURE PERFORMANCE

The factors affecting our future performance changed dramatically as a result of
our decision to  discontinue  the last of our operating  businesses in June 2003
and the transfer of our  remaining  assets to the trustee for the benefit of the
creditors  of Aspeon  and CCI on  January  1,  2004.  Rather  than an  operating
business, our business is to reach satisfactory  negotiated settlements with our
outstanding  creditors,  obtain debt and, or, equity finance to fund  negotiated
settlements  with our creditors and to meet our ongoing  operating  expenses and
attempt  to  merge  with  another   entity  with   experienced   management  and
opportunities  for growth in return  for  shares of our  common  stock to create
value for our  shareholders.  Although there is no assurance that this series of
events will be successfully  completed,  we believe we can successfully complete
an  acquisition  or merger which will enable us to continue as a going  concern.
Any  acquisition  or  merger  will  most  likely  be  dilutive  to our  existing
stockholders.

The factors  affecting our future  performance  are listed and  explained  below
under the section  "Risk  Factors" in  Management's  Discussion  and Analysis of
Financial Condition and Results of Operations.

ITEM 2. DESCRIPTION OF PROPERTIES

Our mailing  address is 2460 West 26th Avenue,  Suite 380-C,  Denver,  Colorado,
80211, and we maintain two small storage units in Dana Point, California for our
corporate records.

Currently,  we lease two  storage  units in Dana Point,  California  on month to
month  leases  providing  us with a total of  approximately  250 square  feet of
storage space to maintain certain of our corporate records returned to us by our
attorneys. The rent on these units is $425 per month.

ITEM 3. LEGAL PROCEEDINGS

There is no pending legal action against the Company.


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

We held an Annual  Meeting of  Stockholders  on April 2, 2008 and the results of
the stockholder voting was as follows:

Resolution  1: To elect three (3) directors to hold office until the next annual
meeting of stockholders or until their  respective  successors have been elected
and qualified: Nominees David Cutler, Wesley Whiting and Redgie Green:

FOR         11,606,228

WITHHOLD         6,422

Resolution  2: To authorize a reverse split of common stock on a fifteen for one
basis, by which each fifteen shares shall become one share:  and the appropriate
Articles of Amendment to implement the reverse spilt.  Fractional shares will be
rounded up to the next whole share:


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<PAGE>

FOR          11,494,448

AGAINST         103,652

ABSTAIN          14,550

Resolution  3: To appoint  Larry  O'Donnell,  CPA,  P.C. of Aurora,  Colorado as
independent auditor for the fiscal year ended June 30, 2008:

FOR         11,605,578

AGAINST          1,422

ABSTAIN          5,650

Resolution  4: To change the  Company's  name to a name to be  determined by the
Board of Directors;  and the appropriate  Articles of Amendment to implement the
name change:

FOR         11,605,453

AGAINST          3,447

ABSTAIN          3,750

Resolution  5: To authorize  the officers and  directors of the Company to amend
the Company's  Articles of Incorporation to increase the number of Common Shares
authorized from twenty million (20,000,000) to one hundred million (100,000,000)

FOR         11,498,639

AGAINST        107,991

ABSTAIN          6,020

Resolution  6: To authorize  the officers and  directors of the Company to amend
the  Company's  Articles of  Incorporation  to increase  the number of Preferred
Shares   authorized  from  one  million   (1,000,000)  to  twenty  five  million
(25,000,000)  in such  classes and series and with such rights,  privileges  and
preferences as the Board may hereafter determine:

FOR        11,492,339

AGAINST        83,391

ABSTAIN        36,920

Resolution  7: To transact  such other  business as may properly come before the
Annual Meeting::

FOR         11,600,378

AGAINST          4,122

ABSTAIN          8,150

We have  increased  the  number of our  authorized  shares of Common  Shares and
preferred Shares and are currently in the process of obtaining an effective date
for the fifteen for one reverse spilt from the State of Delaware.




                                       7
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our shares of common  stock were  listed on the Nasdaq  National  Market  System
under the  symbol  "ASPEE."  On  October  10,  2000,  the  Nasdaq  Stock  Market
("Nasdaq")  suspended  trading  in our  shares of common  stock  while it sought
additional  information from us. On October 11, 2000, Nasdaq sent a letter to us
stating that our shares of common stock would be delisted  from Nasdaq if we did
not  file our Form  10-K  for the  fiscal  year  ended  June 30,  2000  with the
Securities  and Exchange  Commission  ("SEC") by October 18, 2000. Our Form 10-K
for the  fiscal  year  ended  June 30,  2000 was not  filed  with the SEC by the
October 18, 2000  deadline.  On  November 9, 2000 we  participated  in a hearing
before the Nasdaq Listing Qualifications Panel which was held for the purpose of
evaluating  whether our shares of common  stock  would  continue to be listed on
Nasdaq or if they  would be  delisted.  Effective  January 4, 2001 our shares of
common stock were delisted from Nasdaq. As we were delinquent in our SEC filings
our  shares  of  common  stock  were not  eligible  to be listed on the over the
counter  bulletin board and  consequently  commenced  trading on the Pink Sheets
under the symbol ASPE.PK. Subsequently our shares of common stock have ceased to
be traded on the Pink Sheets and were traded on the Gray Sheets.

In January 2008,  Pennaluna & Co, a broker  dealer,  submitted a Form 15c-211 on
our behalf seeking to have our shares of common stock  re-listed on the over the
counter bulletin board. Effective January 21, 2008, our shares were re-listed on
both the Over the Counter Bulletin Board and the Pink Sheets.

The following  table sets forth the range of high and low bid quotations for the
Common Stock of each full quarterly period during the fiscal year ended June 30,
2008. The quotations were obtained from  information  published by the FINRA and
reflect interdealer prices, without retail mark-up,  mark-down or commission and
may not necessarily represent actual transactions.


                2008                        HIGH              LOW
                ----                        ----              ---
        June 30, 3008                      $0.005            $0.005
        March 31, 2008                      0.011             0.011
        December 31, 2007                  0.0001            0.0001
        September 30, 2007                  0.001            0.0001

Last Reported  Price.  On September 26, 2008, the last reported bid price of the
common  stock  reported  on the Over the Counter  Bulletion  Board was $0.01 per
share.

Holders.  As of  September  26,  2008,  there were 129  holders of record of the
common stock. We believe that we have  approximately  2,000 beneficial owners of
our common stock.  In many  instances,  a registered  stockholder is a broker or
other  entity  holding  shares  in  street  name for one or more  customers  who
beneficially  own the shares.  Our transfer  agent is Mountain  Share  Transfer,
Inc., 1625 Abilene Drive, Broomfield, Colorado, 80020. Mountain Share Transfer's
telephone number is 303-460-1149.

Dividends.  We have not paid or declared cash  distributions or dividends on our
common stock and do not intend to pay cash dividends in the foreseeable  future.
Future cash  dividends  will be determined by our board of directors  based upon
our earnings,  financial  condition,  capital  requirements  and other  relevant
factors.

Penny Stock Regulation  Broker-dealer  practices in connection with transactions
in "penny  stocks" are  regulated  by certain  penny stock rules  adopted by the
Securities and Exchange Commission. Penny stocks generally are equity securities
with a price of less than $5.00.  Excluded from the penny stock  designation are
securities  registered  on certain  national  securities  exchanges or quoted on
NASDAQ,  provided  that  current  price and volume  information  with respect to
transactions  in such securities is provided by the  exchange/system  or sold to
established customers or accredited investors.

The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not  otherwise  exempt  from the  rules,  to deliver a  standardized  risk
disclosure  document that provides  information about penny stocks and the risks
in the penny stock market. The broker-dealer also must provide the customer with
current bid and offer  quotations for the penny stock,  the  compensation of the


                                       8
<PAGE>

broker-dealer  and its salesperson in connection with the  transaction,  and the
monthly account  statements showing the market value of each penny stock held in
the customer's  account.  In addition,  the penny stock rules generally  require
that prior to a  transaction  in a penny stock,  the  broker-dealer  must make a
special written  determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.

These  disclosure  requirements  may have the  effect of  reducing  the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock  rules.  As our  securities  have become  subject to the penny stock
rules, investors may find it more difficult to sell their securities.

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

The following  discussion  should be read in conjunction  with the  consolidated
financial  statements  and notes  thereto  and the other  financial  information
included  elsewhere in this report.  This  discussion  contains  forward-looking
statements that involve risks and uncertainties. Our actual results could differ
materially  from those  anticipated  in these  forward  looking  statements as a
result of any number of factors,  including those set forth under "Risk Factors"
and elsewhere in this report.

PLAN OF OPERATION

We intend to seek  private  merger  candidates  to acquire in a reverse  merger.
There is no  assurance  that  any  such  business  will be  located  or that any
stockholder  will realize any return on their  shares after such a  transaction.
Any merger or acquisition  completed by us can be expected to have a significant
dilutive effect on the percentage of shares held by our current stockholders. We
believe we are an insignificant  participant among the firms which engage in the
acquisition  of  business  opportunities.  There  are many  established  venture
capital and financial  concerns that have  significantly  greater  financial and
personnel resources and technical expertise than we have. In view of our limited
financial resources and limited management availability,  we will continue to be
at a significant competitive disadvantage compared to our competitors.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30,  2008,  we had $15 cash on hand,  $1,015 of assets,  no operating
business or other source of income,  outstanding liabilities of $6,238,656 and a
stockholders' deficit of $6,237,641.

In our Annual  Reports on Form  10-KSB for the fiscal  years ended June 30, 2008
and 2007,  the  Report of the  Independent  Registered  Public  Accounting  Firm
included an explanatory  paragraph that  describes  substantial  doubt about our
ability to continue as a going concern.  Our financial statements for the twelve
months ended June 30, 2008 have been  prepared on a going concern  basis,  which
contemplates  the  realization of assets and the  settlement of liabilities  and
commitments in the normal course of business. We reported an accumulated deficit
of  $91,224,607  and a working  capital  deficiency of $6,237,641 as of June 30,
2008

Consequently,  we are now dependent on raising  additional equity and/or debt to
fund any  negotiated  settlements  with our  outstanding  creditors and meet our
ongoing operating expenses.  There is no assurance that we will be able to raise
the  necessary  equity and,  or, debt that we will need to be able to  negotiate
acceptable  settlements  with our  outstanding  creditors  or fund  our  ongoing
operating expenses.

During the fiscal  years  ended June 30,  2008 and 2007,  one of our  directors,
David J. Cutler, and a company controlled by Mr. Cutler,  advanced to us $73,987
and $84,937  respectively  by way of loan,  bearing  interest at 8%, to meet our
ongoing  operating  expenses  and  fund  the  costs of  bringing  our  financial
statements  and SEC  reporting  up to  date.  As at June 30,  2008  the  balance
outstanding to Mr.  Cutler,  and the company  controlled by Mr. Cutler,  totaled
$362,048,  including  accrued  interest  (during 2007 -  $304,439).  There is no
assurance  that Mr. Cutler will  continue to provide us with further  funding in
the future.

It is our current intention to seek to reach satisfactory negotiated settlements
with our outstanding creditors, raise debt and, or, equity financing to fund the
negotiated settlements with our creditors and to meet ongoing operating expenses
and  attempt  to merge with  another  entity  with  experienced  management  and
opportunities  for growth in return  for  shares of our  common  stock to create
value for our  shareholders.  There is no  assurance  that this series of events
will be satisfactorily completed.

CRITICAL ACCOUNTING POLICIES

Financial  Reporting  Release  No.  60  requires  all  companies  to  include  a
discussion of critical accounting policies and estimates used in the preparation
of their  financial  statements.  On an on-going basis, we evaluate our critical


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<PAGE>

accounting  policies  and  estimates.   We  base  our  estimates  on  historical
experience  and on various  other  assumptions  that we believe to be reasonable
under  the  circumstances,  the  results  of which  form our  basis  for  making
judgments  about the  carrying  values of assets  and  liabilities  that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates under different assumptions or conditions.

Our  significant  accounting  policies are  described in Note 1 to the financial
statements on page 32 below. These policies were selected because they represent
the more significant accounting policies and methods that are broadly applied in
the preparation of our financial statements. However, it should be noted that we
intend to acquire a new operating business. The critical accounting policies and
estimates for such new  operations  will, in all  likelihood,  be  significantly
different from our current policies and estimates.

OFF  BALANCE  SHEET   ARRANGEMENTS,   CONTRACTUAL   OBLIGATIONS  AND  COMMERCIAL
COMMITMENTS

Financial  Reporting  Release  No.  61  requires  all  companies  to  include  a
discussion  to  address,  among  other  things,  liquidity,   off-balance  sheet
arrangements, contractual obligations and commercial commitments. Details of the
arrangements,  contractual  obligations and commercial commitments are described
in Note. 6 to the financial statements on page 36 below.

RESULTS OF OPERATIONS

THE FISCAL YEAR ENDED JUNE 30,  2008  COMPARED TO THE FISCAL YEAR ENDED JUNE 30,
2007

General and Administrative Expenses

General and  administrative  expenses  for the fiscal year ended June 30,  2008,
were  $113,943  compared to $84,132 for the fiscal year ended June 30, 2007,  an
increase of $29,811.  The  increase  arose due  increased  legal fees arising in
twelve months ended June 30, 2008 relating to our re-listing on the OTC Bulletin
Board and the Pink Sheets.

Gain on Statute Barred Liabilities

During the twelve  months ended June 30, 2008,  we  recognized a gain on statute
barred  liabilities  of  $2,102,917  compared  to  no  gain  on  statute  barred
liabilities in the twelve months ended June 30, 2007, an increase of $2,102,917.

During the twelve months ended June 30, 2008, outstanding liabilities, which had
been incurred more than four years ago, were statute barred under the state laws
of California  and we recognized a gain on these statute  barred  liabilities of
$2,102,917.  No outstanding  liabilities had become statute barred in the twelve
months ended June 30, 2007.

Income  (Loss) from Operations

The  income  from  operations  during the  fiscal  year ended June 30,  2008 was
$1,988,974  compared to a loss from  operations  of $(84,132)  during the fiscal
year ended June 30,  2007,  an increase in income of  $2,073,106  was due to the
factors explained above.

Net Interest (Expense) and Other Income (Expense)

During the fiscal year ended June 30, 2008,  we incurred net interest  (expense)
and other income (expense) of $(24,354)  compared to net interest  (expense) and
other income  (expense) of $(18,436) for the fiscal year ended June 30, 2007, an
increase of $5,918.  The  increase  was a result of the  increase in the average
principal  balance of the loan made to us by our  director,  Mr.  Cutler,  and a
company  controlled by Mr. Cutler,  to fund our ongoing  operating costs between
the two periods.

No interest expense was accrued in the fiscal years ended June 30, 2008 and 2007
in  respect  of  liabilities  outstanding  as  at  January  1,  2004,  as  these
liabilities  are  anticipated  to be settled at, or at less than,  the  carrying
value at which they are currently recorded in our balance sheet.

Provision for Income Taxes

No  provision  for income  taxes was required in the fiscal years ended June 30,
2008 and 2007. We had sufficient carried forward tax losses to offset the profit
arising in the twelve months ended June 30, 2008 and we incurred  taxable losses
in the twelve months ended June 30, 2007.


                                       10
<PAGE>

Net Income (Loss) and Comprehensive Income (Loss)

We  recognized a net income of  $1,864,620during  the fiscal year ended June 30,
2008,  compared to a net loss of  $(102,568)  for the fiscal year ended June 30,
2007, the increase in net income of $2,067,188 was due to the factors  discussed
above.

Our  comprehensive  income (loss) was identical to our net income (loss) for the
twelve months ended June 30, 2008 and 2007.

CASH FLOW INFORMATION FOR THE FISCAL YEARS ENDED JUNE 30, 2008 AND 2007

As of June 30,  2008,  we had $15 cash on hand,  $1,015 of assets,  no operating
business or other source of income,  outstanding liabilities of $6,238,656 and a
stockholders' deficit of $6,237,641.

In our Annual  Reports on Form  10-KSB for the fiscal  years ended June 30, 2008
and 2007,  the  Report of the  Independent  Registered  Public  Accounting  Firm
included an explanatory  paragraph that  describes  substantial  doubt about our
ability to continue as a going concern.  Our financial statements for the twelve
months ended June 30, 2008 have been  prepared on a going concern  basis,  which
contemplates  the  realization of assets and the  settlement of liabilities  and
commitments in the normal course of business. We reported an accumulated deficit
of  $91,224,607  and a working  capital  deficiency of $6,237,641 as of June 30,
2008.

Consequently,  we are now dependent on raising  additional equity and/or debt to
fund any  negotiated  settlements  with our  outstanding  creditors and meet our
ongoing operating expenses.  There is no assurance that we will be able to raise
the  necessary  equity and,  or, debt that we will need to be able to  negotiate
acceptable  settlements  with our  outstanding  creditors  or fund  our  ongoing
operating expenses.

For the year  ended  June 30,  2008,  net cash used in  operations  was  $73,972
compared to net cash used in  operations  of $84,944 for the year ended June 30,
2007,  a decrease of $10,972.  In the twelve  months ended June 30, 2008 the net
income of  $1,964,620,  after  adjustment  for the  $2,102,917  non cash gain on
statute barred debt,  resulted in a cash loss of $(138,397).  This was partially
offset by a positive movement of $64,325 in operating liabilities. This compares
to a cash loss of $(102,568), without any need for adjustment of non cash items,
in the  twelve  months  ended  June 30,  2007  which was  partially  offset by a
positive movement of $18,355 in operating assets and liabilities.

During the fiscal years ended June 30, 2008 and 2007.  We did not receive or use
any cash in investing activities.

During the fiscal year ended June 30, 2008, we received  $73,987 from  financing
activities,  compared to $84,937 in the twelve  months  ended June 30,  2007,  a
decrease  of $10,950  The  decrease  represented  the  reduced  level of funding
required to be provided to us by Mr. Cutler, one of our directors.

ACCOUNTING PRONOUNCEMENTS

In February 2007, the Financial  Accounting  Standards  Board (FASB) issued SFAS
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities -
Including an  Amendment  of FASB  Statement  No.  115." This  statement  permits
entities to choose to measure many financial instruments and certain other items
at fair  value.  Most of the  provisions  of SFAS No. 159 apply only to entities
that  elect the fair  value  option.  However,  the  amendment  to SFAS No.  115
"Accounting for Certain  Investments in Debt and Equity  Securities"  applies to
all entities with  available-for-sale  and trading  securities.  SFAS No. 159 is
effective as of the beginning of an entity's first fiscal year that begins after
November 15, 2007.  Early  adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provision of SFAS No. 157, "Fair Value Measurements."  The adoption
of this  statement  is not expected to have a material  effect on our  financial
statements.

In March 2007,  the FASB ratified the Emerging  Issues Task Force ("EITF") Issue
No.  06-11,  Accounting  for Income Tax  Benefits  of  Dividends  on Share Based
Payment Awards ("EITF  06-11").  EITF 06-11 requires  companies to recognize the
income tax benefit  realized  from  dividends or dividend  equivalents  that are
charged   to   retained   earnings   and  paid  to   employees   for   nonvested
equity-classified  employee  share-based  awards as an  increase  to  additional
paid-in  capital.  EITF 06-11 is  effective  for fiscal  years  beginning  after
September  15,  2007.  The  adoption  of EITF  06-11 is not  expected  to have a
material effect on our financial statements.

In  June  2007,  the  FASB  ratified  EITF  Issue  No.  07-03,   Accounting  for
Nonrefundable Advance Payments for Goods and Services Received for Use in Future
Research  and  Development   Activities  ("EITF  07-03").  EITF  07-03  requires


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<PAGE>

companies to defer nonrefundable  advance payments for goods and services and to
expense  that  advance  payment  as the  goods are  delivered  or  services  are
rendered. If the company does not expect to have the goods delivered or services
performed,  the advance  should be expensed.  EITF 07-03 is effective for fiscal
years  beginning  after  December  15,  2007.  The adoption of EITF 07-03 is not
expected to have a material effect on our financial statements.

In  December  2007,  the FASB  issued  SFAS No.  141  (Revised  2007),  Business
Combinations,  or SFAS No. 141R.  SFAS No. 141R will change the  accounting  for
business combinations. Under SFAS No. 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  SFAS No. 141R will
change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
first  annual  reporting  period  beginning  on  or  after  December  15,  2008.
Accordingly,  any  business  combinations  we  engage  in will be  recorded  and
disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141R
will have an impact on accounting for business combinations once adopted but the
effect is dependent upon  acquisitions  at that time. We are still assessing the
impact of this pronouncement.

In December  2007,  the FASB issued SFAS No. 160,  Noncontrolling  Interests  in
Consolidated Financial  Statements--An Amendment of ARB No. 51, or SFAS No. 160.
SFAS  No.  160  establishes  new  accounting  and  reporting  standards  for the
noncontrolling  interest  in a  subsidiary  and  for  the  deconsolidation  of a
subsidiary.  SFAS No. 160 is effective  for fiscal  years  beginning on or after
December 15, 2008. We believe that SFAS 160 should not have a material impact on
our financial position or results of operations.

In  December  2007,  the  Emerging  Issues  Task  Force  issued  EITF No.  07-1,
Accounting  for  Collaborative   Arrangements.   EITF  No.  07-1  requires  that
transactions  with third parties (i.e.,  revenue generated and costs incurred by
the partners)  should be reported in the appropriate line item in each company's
financial statement and includes enhanced disclosure  requirements regarding the
nature  and  purpose  of the  arrangement,  rights  and  obligations  under  the
arrangement,  accounting policy,  amount and income statement  classification of
collaboration  transactions  between the  parties.  EITF No.  07-1 is  effective
January  1,  2009 and shall be  applied  retrospectively  to all  prior  periods
presented for all collaborative  arrangements existing as of the effective date.
The  Company  does not expect  that the  adoption  of EITF No.  07-1 will have a
material  effect  on  its  consolidated   results  of  operations  or  financial
condition.

In March  2008,  the FASB  issued  FAS No.  161,  Disclosures  about  Derivative
Instruments and Hedging Activities,  an amendment of FASB Statement No. 133. FAS
No. 161 changes the  disclosure  requirements  for  derivative  instruments  and
hedging  activities.  Entities are required to provide disclosures about (a) how
and why derivative  instruments  are used, (b) how  derivative  instruments  and
related  hedged  items  are  accounted  for under FAS No.  133,  Accounting  for
Derivative Instruments and Hedging Activities,  and its related interpretations,
and (c) how derivative  instruments and related hedged items affect the entity's
financial  position,  financial  performance,  and cash  flows.  FAS No.  161 is
effective  January 1, 2009. The Company does not expect that the adoption of FAS
No. 161 will have a material effect on its consolidated results of operations or
financial condition.

EFFECTS OF INFLATION

Although  we  cannot  accurately  anticipate  the  effect  of  inflation  on our
operations, we do not believe that inflation has had, or is likely in the future
to have, a material effect on our results or financial condition.

SUBSEQUENT EVENTS

None.

                                  RISK FACTORS

You should be aware that there are various risks  associated  with our business,
and us, including the ones discussed below. You should carefully  consider these
risk factors, as well as the other information contained in this Form 10-KSB, in
evaluating us and our business.

The factors affecting our future performance changed dramatically as a result of
the  discontinuance of the last of our operating  businesses  effective June 30,
2003 and the  transfer of all of our assets to a trustee of the  assignment  for
the benefit of Aspeon and CCI creditors  effective  January 1, 2004. Rather than
an  operating  business,  our  business  is  to  reach  satisfactory  negotiated
settlements with our outstanding  creditors,  raise debt and/or,  equity to fund


                                       12
<PAGE>

the settlements  with creditors or meet our ongoing  operating costs and attempt
to merge with another entity with experienced  management and  opportunities for
growth  in  return  for  shares  of our  common  stock to  create  value for our
shareholders.  There  is no  assurance  that  this  series  of  events  will  be
successfully  completed.  Although  there is no  assurance,  we  believe  we can
successfully complete an acquisition or merger, which will enable us to continue
as a going  concern.  Any  acquisition or merger will most likely be dilutive to
our existing stockholders.

WE HAVE A SUBSTANTIAL BALANCE OF OUTSTANDING LIABILITIES

At June 30, 2008, we had outstanding  liabilities of approximately $ 6.2 million
due to  creditors  who were not  eligible to be part of the  assignment  for the
benefit of Aspeon and CCI  creditors,  or who elected not to  participate in our
assignment  for the benefit of Aspeon and CCI creditors.  We have no assets,  no
operating  business or our source of income  from which to pay these  creditors.
Accordingly  we must  attempt to  negotiate  acceptable  settlements  with these
outstanding  creditors and then attempt to raise debt and, or, equity funding to
finance the payment of the agreed settlements. There can be no assurance that we
shall be able to negotiate acceptable settlements with our outstanding creditors
or that we shall be able to raise the necessary  debt and, or, equity finance to
fund any such agreed  settlements.  If we are unable to settle these liabilities
it is  unlikely  that  we  will  be  able to  merge  with  another  entity  with
experienced  management and opportunities for growth in return for shares of our
common stock to create value for our shareholders

WE HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES

At June 30,  2008,  we had an  accumulated  deficit in excess $91  million and a
stockholders' deficit of approximately $6.2 million. Future losses are likely to
occur as we have no  sources  of income  to meet our  operating  expenses.  As a
result of these,  among other factors,  we received a report on our consolidated
financial  statements  for the  years  ended  June 30,  2008  and 2007  from our
independent accountants that include an explanatory paragraph stating that there
is  substantial  doubt  about  our  ability  to  continue  as a  going  concern.
Consistent with our business plan, we plan on reaching  satisfactory  negotiated
settlements  with our  outstanding  creditors,  raising  additional debt and/or,
equity to fund settlements with our creditors and to meet our ongoing  operating
expenses and attempting to merge with another entity with experienced management
and  opportunities for growth in return for shares of our common stock to create
value for our shareholders. There can be no assurance that this series of events
will be  successfully  completed.  No  assurances  can be given  that we will be
successful  in  acquiring   operations,   generating  revenues  or  reaching  or
maintaining profitable operations.

OUR EXISTING FINANCIAL  RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING
EXPENSES

We have no sources of income at this time and no existing cash balances that are
adequate to meet our ongoing  operating  expenses.  In the short term, unless we
are able to raise additional debt and/or,  equity we shall be unable to meet our
ongoing operating expenses. On a longer term basis, we plan to acquire an entity
with  experienced  management and the  opportunities  for growth in exchange for
shares of our common stock and are  dependent  on achieving a successful  merger
with a profitable company. No assurances can be given that we will be successful
in  acquiring  operations,   generating  revenues  or  reaching  or  maintaining
profitable operations.

WE INTEND TO PURSUE THE ACQUISITION OF AN OPERATING BUSINESS

Our sole strategy is to acquire an operating business. Successful implementation
of this  strategy  depends  on our  ability to  identify a suitable  acquisition
candidate,   acquire  such  company  on  acceptable   terms  and  integrate  its
operations.  In  pursuing  acquisition  opportunities,  we  compete  with  other
companies  with similar  strategies.  Competition  for  acquisition  targets may
result in  increased  prices of  acquisition  targets and a  diminished  pool of
companies  available  for  acquisition.  Acquisitions  involve a number of other
risks,  including  risks of  acquiring  undisclosed  or  undesired  liabilities,
acquired  in-process  technology,   stock  compensation  expense,  diversion  of
management attention, potential disputes with the seller of one or more acquired
entities and possible  failure to retain key  acquired  personnel.  Any acquired
entity or assets may not perform  relative to our  expectations.  Our ability to
meet these challenges has not been established.

SCARCITY OF, AND COMPETITION FOR, BUSINESS OPPORTUNITIES AND COMBINATIONS

We believe we are an insignificant  participant  among the firms which engage in
the acquisition of business  opportunities.  There are many established  venture
capital and financial  concerns that have  significantly  greater  financial and
personnel  resources  and  technical  expertise  than we have.  Nearly  all such
entities have significantly greater financial resources, technical expertise and
managerial  capabilities than us and, consequently,  we will be at a competitive


                                       13
<PAGE>

disadvantage in identifying  possible  business  opportunities  and successfully
completing  a business  combination.  Moreover,  we will also compete in seeking
merger or acquisition candidates with numerous other small public companies.  In
view of our limited financial resources and limited management availability,  we
will continue to be at a significant  competitive  disadvantage  compared to our
competitors.

WE HAVE NOT EXECUTED ANY FORMAL  AGREEMENT FOR A BUSINESS  COMBINATION  OR OTHER
TRANSACTION AND HAVE ESTABLISHED NO STANDARDS FOR BUSINESS COMBINATIONS

We have not executed any formal  arrangement,  agreement or  understanding  with
respect to engaging in a merger with,  joint  venture with or  acquisition  of a
private or public  entity.  There can be no assurance that we will be successful
in identifying and evaluating suitable business opportunities or in concluding a
business combination. We have not identified any particular industry or specific
business  within an industry  for  evaluation.  There is no assurance we will be
able to negotiate a business combination on terms favorable,  if at all. We have
not  established a specific  length of operating  history or specified  level of
earnings,  assets,  net worth or other  criteria  which we will require a target
business opportunity to have achieved, and without which we would not consider a
business combination. Accordingly, we may enter into a business combination with
a business opportunity having no significant operating history,  losses, limited
or no  potential  for  earnings,  limited  assets,  negative  net worth or other
negative characteristics.

REDUCTION OF PERCENTAGE  SHARE  OWNERSHIP  FOLLOWING  BUSINESS  COMBINATION  AND
DILUTION TO STOCKHOLDERS

Our  primary  plan of  operation  is based  upon a business  combination  with a
private concern which, in all likelihood,  would result in us issuing securities
to stockholders of such private company.  The issuance of previously  authorized
and unissued  shares of our common stock would result in reduction in percentage
of shares  owned by present  and  prospective  stockholders  and may result in a
change in control or management.  In addition,  any merger or acquisition can be
expected to have a significant  dilutive  effect on the percentage of the shares
held our stockholders.

BECAUSE  INSIDERS  CONTROL OUR ACTIVITIES,  THAT MAY CAUSE US TO ACT IN A MANNER
THAT IS MOST  BENEFICIAL  TO THEM AND NOT TO OUTSIDE  SHAREHOLDERS  WHICH  COULD
CAUSE US NOT TO TAKE ACTIONS THAT OUTSIDE INVESTORS MIGHT VIEW FAVORABLY

Our executive officers,  directors, and holders of 5% or more of our outstanding
common stock beneficially own approximately 70% of our outstanding common stock.
As a result,  they  effectively  control  all  matters  requiring  director  and
stockholder  approval,  including  the  election of  directors,  the approval of
significant   corporate   transactions,   such  as  mergers  and  related  party
transaction.  These  insiders  also have the  ability to delay or  perhaps  even
block,  by their  ownership of our stock,  an  unsolicited  tender  offer.  This
concentration  of  ownership  could have the effect of  delaying,  deterring  or
preventing a change in control of our company that you might view favorably.

OUR DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE RESOLVED FAVORABLY
TO US.

Certain  conflicts  of  interest  may exist  between our  directors  and us. Our
Directors  have other business  interests to which they devote their  attention,
and may be expected to  continue  to do so  although  management  time should be
devoted to our business.  As a result,  conflicts of interest may arise that can
be resolved  only  through  exercise  of such  judgment  as is  consistent  with
fiduciary  duties to us.  See  "Directors,  Executive  Officers,  Promoters  and
Control Persons" (page 17), and "Conflicts of Interest." (page 19).

OUR CHIEF EXECUTIVE OFFICER HAS THE ABILITY TO EFFECTIVELY CONTROL SUBSTANTIALLY
ALL ACTIONS TAKEN BY STOCKHOLDERS

Mr. Cutler,  an officer and director of the Company owns in excess of our 50% of
our issued  and  outstanding  common  stock and is able to  effectively  control
substantially all actions taken by our  stockholders,  including the election of
directors.  Such  concentration  of  ownership  could  also  have the  effect of
delaying,  deterring or  preventing a change in control that might  otherwise be
beneficial to stockholders  and may also discourage  acquisition bids for us and
limit the amount  certain  investors  may be willing to pay for shares of common
stock.

LOSS OF  CONTROL  BY OUR  PRESENT  MANAGEMENT  AND  STOCKHOLDERS  MAY OCCUR UPON
ISSUANCE OF ADDITIONAL SHARES.

We may issue further shares as consideration  for the cash or assets or services
out of our  authorized  but  unissued  common stock that would,  upon  issuance,
represent  a majority  of our  voting  power and  equity.  The result of such an


                                       14
<PAGE>

issuance would be those new  stockholders  and management  would control us, and
persons  unknown could replace our  management at this time.  Such an occurrence
would result in a greatly  reduced  percentage of ownership of us by our current
stockholders.

WE MAY DEPEND UPON OUTSIDE  ADVISORS,  WHO MAY NOT BE  AVAILABLE  ON  REASONABLE
TERMS AND AS NEEDED.

To supplement the business  experience of our officers and directors,  we may be
required to employ accountants,  technical experts,  appraisers,  attorneys,  or
other  consultants  or advisors.  Our Board without any input from  stockholders
will make the selection of any such  advisors.  Furthermore,  it is  anticipated
that such  persons may be engaged on an "as needed"  basis  without a continuing
fiduciary  or other  obligation  to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates,  if they
are able to provide the required services.

THE  REGULATION  OF PENNY  STOCKS  BY SEC AND  FINRA  MAY HAVE AN  EFFECT ON THE
TRADABILITY OF OUR SECURITIES.

Our securities are currently listed on the Over-the-Counter  Bulletin Board. Our
shares are subject to a  Securities  and Exchange  Commission  rule that imposes
special sales practice requirements upon broker-dealers who sell such securities
to  persons  other than  established  customers  or  accredited  investors.  For
purposes of the rule, the phrase "accredited investors" means, in general terms,
institutions  with assets in excess of $5,000,000,  or individuals  having a net
worth in excess of $1,000,000  or having an annual income that exceeds  $200,000
(or  that,  when  combined  with  a  spouse's  income,  exceeds  $300,000).  For
transactions  covered  by the  rule,  the  broker-dealer  must  make  a  special
suitability  determination for the purchaser and receive the purchaser's written
agreement  to the  transaction  prior to the  sale.  Consequently,  the rule may
affect the ability of  broker-dealers to sell our securities and also may affect
the  ability of  purchasers  in this  offering to sell their  securities  in any
market that might develop therefore.

In addition,  the  Securities  and Exchange  Commission  has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3,  15g-4,  15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules may further  affect the ability of owners of Shares to sell our securities
in any market that might develop for them.

Shareholders  should  be  aware  that,  according  to  Securities  and  Exchange
Commission,  the  market  for penny  stocks has  suffered  in recent  years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the  security  by one or a few  broker-dealers  that are  often  related  to the
promoter or issuer; (ii) manipulation of prices through prearranged  matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices   involving   high-pressure   sales  tactics  and  unrealistic   price
projections  by  inexperienced  sales persons;  (iv)  excessive and  undisclosed
bid-ask  differentials  and  markups  by  selling  broker-dealers;  and  (v) the
wholesale dumping of the same securities by promoters and  broker-dealers  after
prices  have been  manipulated  to a desired  consequent  investor  losses.  Our
management is aware of the abuses that have occurred  historically  in the penny
stock  market.  Although  we do not  expect to be in a position  to dictate  the
behavior  of the market or of  broker-dealers  who  participate  in the  market,
management  will strive within the confines of practical  limitations to prevent
the described patterns from being established with respect to our securities.

OUR STOCK  WILL IN ALL  LIKELIHOOD  BE THINLY  TRADED AND AS A RESULT YOU MAY BE
UNABLE  TO SELL AT OR NEAR ASK  PRICES OR AT ALL IF YOU NEED TO  LIQUIDATE  YOUR
SHARES.

The shares of our common stock may be  thinly-traded  on the OTC Bulletin Board,
meaning that the number of persons interested in purchasing our shares of common
stock  at or near ask  prices  at any  given  time  may be  relatively  small or
non-existent.  This situation is attributable to a number of factors,  including
the fact  that we are a small  company  which  is  relatively  unknown  to stock
analysts,  stock brokers,  institutional  investors and others in the investment
community that generate or influence  sales volume,  and that even if we came to
the  attention  of such  persons,  they  tend to be  risk-averse  and  would  be
reluctant to follow an unproven, early stage company such as ours or purchase or
recommend  the  purchase  of our  shares of common  stock  until such time as we
became more  seasoned  and  viable.  As a  consequence,  there may be periods of
several  days or more when  trading  activity  in our shares of common  stock is
minimal or non-existent,  as compared to a seasoned issuer which has a large and
steady volume of trading activity that will generally  support  continuous sales
without an adverse effect on Securities  price. We cannot give you any assurance
that a broader or more  active  public  trading  market for our shares of Common
Stock  will  develop  or be  sustained,  or  that  any  trading  levels  will be
sustained. Due to these conditions, we can give investors no assurance that they
will be able to sell  their  shares of common  stock at or near ask prices or at
all if you need money or  otherwise  desire to  liquidate  your shares of common
stock of our Company.


                                       15
<PAGE>

RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.

All of the  outstanding  shares of common  stock held by our  present  officers,
directors,  and affiliate  stockholders are "restricted  securities"  within the
meaning of Rule 144 under the Securities Act of 1933, as amended.  As restricted
Shares,  these Shares may be resold only  pursuant to an effective  registration
statement or under the requirements of Rule 144 or other  applicable  exemptions
from  registration  under  the  Act  and  as  required  under  applicable  state
securities  laws. We are registering all of our outstanding  Shares so officers,
directors and affiliates will be able to sell their Shares if this  Registration
Statement becomes effective.  Rule 144 provides in essence that a person who has
held restricted  securities for six months may, under certain  conditions,  sell
every three months, in brokerage transactions,  a number of Shares that does not
exceed  the  greater  of 1.0% of a  company's  outstanding  common  stock or the
average  weekly trading volume during the four calendar weeks prior to the sale.
There is no limit on the amount of restricted  securities  that may be sold by a
nonaffiliate after the owner has held the restricted  securities for a period of
six months. A sale under Rule 144 or under any other exemption from the Act, may
have a  depressive  effect upon the price of the common stock in any market that
may develop.

THE PRICE OF OUR COMMON STOCK COULD BE HIGHLY VOLATILE

Having  obtained a listing on the over the counter  bulletin  board it is likely
that our common stock will be subject to price volatility, low volumes of trades
and large spreads in bid and ask prices quoted by market makers.  Due to the low
volume of  shares  traded on any  trading  day,  persons  buying or  selling  in
relatively  small  quantities may easily  influence  prices of our common stock.
This low volume of trades  could also cause the price of our stock to  fluctuate
greatly,  with large  percentage  changes in price  occurring in any trading day
session.  Holders of our common stock may also not be able to readily  liquidate
their  investment or may be forced to sell at depressed prices due to low volume
trading.  If high  spreads  between  the bid and ask prices of our common  stock
exist  at  the  time  of  a  purchase,   the  stock  would  have  to  appreciate
substantially  on a relative  percentage  basis for an investor to recoup  their
investment.  Broad  market  fluctuations  and  general  economic  and  political
conditions  may also adversely  affect the market price of our common stock.  No
assurance can be given that an active market in our common stock will develop or
be sustained. If an active market does not develop,  holders of our common stock
may be unable to readily  sell the  shares  they hold or may not be able to sell
their shares at all.

WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON STOCK

We do not  anticipate  paying  any cash  dividends  on our  common  stock in the
foreseeable future.

ITEM 7. FINANCIAL STATEMENTS

Our financial statements are included herein commencing on page 26.

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

We have not had any disagreements with our auditors.

ITEM 8A.  CONTROLS AND PROCEDURES

Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules  13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of
1934,  as  amended  (the  "Exchange  Act"))  that are  designed  to ensure  that
information  required to be disclosed in our reports  under the Exchange Act, is
recorded,  processed,  summarized and reported within the time periods  required
under  the  SEC's  rules and forms  and that the  information  is  gathered  and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b), Mr. David Cutler, our Chief Executive Officer
and Chief Financial  Officer carried out an evaluation under the supervision and
with the participation of our management, of the effectiveness of the design and
operation of our  disclosure  controls and  procedures  pursuant to Exchange Act


                                       16
<PAGE>

Rule  15d-14 as of the end of the period  covered by this  report.  Based on the
foregoing evaluation,  Mr. Cutler has concluded that our disclosure controls and
procedures  are  effective  in  timely  alerting  them to  material  information
required  to be  included  in  our  periodic  SEC  filings  and to  ensure  that
information  required to be disclosed in our periodic SEC filings is accumulated
and  communicated to our management,  including our Chief Executive  Officer and
Chief Financial Officer, to allow timely decisions regarding required disclosure
as a result of the deficiency in our internal  control over financial  reporting
discussed below.

ITEM 8A(T).   Controls and Procedures

Management's Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal
control over financial  reporting for the company in accordance  with as defined
in Rules  13a-15(f) and 15d-15(f)  under the Exchange Act. Our internal  control
over financial  reporting is designed to provide reasonable  assurance regarding
the  reliability  of  financial  reporting  and  the  preparation  of  financial
statements  for  external   purposes  in  accordance  with  generally   accepted
accounting   principles.   Our   management   conducted  an  evaluation  of  the
effectiveness  of our internal  control over  financial  reporting  based on the
framework in Internal Control - Integrated  Framework issued by the Committee of
Sponsoring  Organizations of the Treadway Commission.  Our internal control over
financial reporting includes those policies and procedures that:

         (i)        pertain to the  maintenance  of records  that, in reasonable
                    detail,  accurately and fairly reflect the  transactions and
                    dispositions of our assets;

         (ii)       provide reasonable  assurance that transactions are recorded
                    as necessary to permit preparation of financial

         (iii)      provide reasonable  assurance regarding prevention or timely
                    detection of unauthorized acquisition, use or

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

Management's  assessment of the  effectiveness  of the small  business  issuer's
internal control over financial reporting is as of the year ended June 30, 2008.
We believe that internal control over financial reporting is effective.  We have
not identified  any,  current  material  weaknesses  considering  the nature and
extent of our current operations and any risks or errors in financial  reporting
under current operations.

This  annual  report  does not include an  attestation  report of the  company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public  accounting  firm pursuant to temporary rules of the SEC that
permit the Company to provide only management's report in this annual report.

There  was no change in our  internal  control  over  financial  reporting  that
occurred  during the fiscal  quarter  ended June 30, 2008,  that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.

                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

As of June 30, 2008, our directors and officers were:


                                       17
<PAGE>

                 NAME             AGE             POSITION

          David J. Cutler         52      President, Chief Executive Officer,
                                          Chief Financial Offricer, and Director

          Wesley F Whiting        76      Secretary and Director

          Redgie Green            55      Director


David J. Cutler - President, Chief Executive Officer, Chief Financial Office and
Director. Mr. Cutler became our sole director and officer on April 22, 2005. Mr.
Cutler has more than 25 years of experience in international finance, accounting
and  business  administration.  He held  senior  positions  with  multi-national
companies such as Reuters Group Plc and the Schlumberger  Ltd. and has served as
a director for two British  previously  publicly quoted companies -- Charterhall
Plc and  Reliant  Group  Plc.  From  March 1993  until  1999,  Mr.  Cutler was a
self-employed  consultant providing accounting and financial advice to small and
medium-sized  companies in the United Kingdom and the United States.  Mr. Cutler
was  Chief  Financial  Officer  and  subsequently  Chief  Executive  Officer  of
Multi-Link Telecommunications, Inc., a publicly quoted voice messaging business,
from 1999 to 2005.  Since  March  2006,  Mr.  Cutler  has been  Chief  Executive
Officer,  Chief  Financial  Officer  and a director  of Concord  Ventures,  Inc.
(formerly Cavion Technologies,  Inc.), a publicly listed shell company and Chief
Executive  Officer,  Chief Financial Officer and a director of Atomic Paintball,
Inc., a development  stage owner and operator of paintball  parks,  since August
2006. Mr. Cutler has a masters degree from St.  Catherine  College in Cambridge,
England and  qualified as a British  Chartered  Accountant  and as Chartered Tax
Advisor with Arthur Andersen & Co. in London. He was subsequently  admitted as a
Fellow of the UK  Institute  of  Chartered  Accountants.  Since  arriving in the
United  States Mr.  Cutler has  qualified as a Certified  Public  Accountant,  a
Fellow of the AICPA Institute of Corporate Tax Management, a Certified Valuation
Analyst of the National Association of Certified Valuation Analysts and obtained
an executive MBA from Colorado State University.

Wesley Whiting, Director. Mr. Whiting became our Secretary and director in March
2006. Mr. Whiting was President,  Director,  and Secretary of Berge Exploration,
Inc.  (1978-88)  and  President,  Vice  President,  and  director of NELX,  Inc.
(1994-1998),  and was Vice  President  and  director  of  Intermountain  Methane
Corporation (1988-1991), and President of Westwind Production, Inc. (1997-1998).
He was a director of Kimbell deCar Corporation from 1998, until 2000, and he has
been  President and a director of Dynadapt  System,  Inc. (now Sun River Energy,
Inc.) since 1998. He was a Director of Colorado Gold & Silver, Inc. from 1999 to
2000. He was President and director of Business Exchange Holding Corp. from 2000
to 2002 and  Acquisition  Lending,  Inc.  (2000-2002).  He was director and Vice
President  of  Utilitec,  Inc,  1999 to 2002 and has  been  Vice  President  and
director of Agro  Science,  Inc.  since 2001.  He was  President and director of
Premium  Enterprises,  Inc.  from October 2002 to December 31, 2002.  He is Vice
President and director of Evergreen Associates,  Inc. and Resource Science, Inc.
He was appointed Director and Secretary of BSA SatelLINK,  Inc. in 2002 to 2008.
He was President  and Director of Fayber  Group,  Inc. from 2003 to 2005 when he
resigned.  He has also been Director of Life USA,  Inc.  since 2003 and has been
President  since  2007.  He has been  appointed  as an officer  and  director of
Captech  Financial,  Inc.  in May 2006 to July 2007.  He served as a director of
Baymark Technologies, Inc. 2005-2006. He is a director of Concord Ventures, Inc.
(formerly Cavion  Technologies,  Inc.) (2006) and Aspeon,  Inc.  (2007).  He was
appointed as a director of Intreorg, Inc. and 4-G Paintball, Inc. in 2008.

Redgie Green, Director. Mr. Green has served as a director of the Company, since
March 2006. Mr. Green has been Secretary and Director of Dynadapt  System,  Inc.
(now Sun River Energy, Inc.) since 1998. He has been an active investor in small
capital  and  high-tech  adventures  since  1987.  Mr.  Green was a director  of
Colorado Gold & Silver,  Inc. in 2000.  He was a director for Houston  Operating
Company in late 2004 until December  2004. He recently  served as a director for
Mountains West Exploration,  Inc. in 2005. He is a director of Concord Ventures,
Inc. (formerly Cavion Technologies, Inc.) (2006) and was appointed as an officer
and director of Captech Financial,  Inc. in May 2006. He served as a director of
Baymark Technologies,  Inc. 2005-2006. He was appointed as a director of Aspeon,
Inc.  in 2007.  He has been  appointed  a director  of  Intreorg,  Inc.  and 4-G
Paintball, Inc. in 2008.

COMMITTEES OF THE BOARD OF DIRECTORS

In the  ordinary  course  of  business,  the  board  of  directors  maintains  a
compensation committee and an audit committee

The  primary  function  of the  compensation  committee  is to  review  and make
recommendations  to the board of  directors  with  respect to the  compensation,
including bonuses,  of our officers and to administer the grants under our stock
option plan.


                                       18
<PAGE>

The  functions  of the  audit  committee  are to  review  the scope of the audit
procedures employed by our independent  auditors, to review with the independent
auditors our  accounting  practices  and policies and  recommend to whom reports
should be submitted,  to review with the independent  auditors their final audit
reports,  to review  with our  internal  and  independent  auditors  our overall
accounting and financial controls,  to be available to the independent  auditors
during  the year for  consultation,  to  approve  the audit fee  charged  by the
independent  auditors,  to report to the board of directors with respect to such
matters and to recommend the selection of the independent auditors.

In the absence of a separate audit committee our Board of Directors functions as
audit  committee and performs some of the same functions of an audit  committee,
such as recommending a firm of independent certified public accountants to audit
the  annual   financial   statements;   reviewing   the   independent   auditors
independence,  the financial  statements  and their audit report;  and reviewing
management's administration of the system of internal accounting controls.

CONFLICTS OF INTEREST - GENERAL.

Our directors and officers are, or may become,  in their individual  capacities,
officers,  directors,  controlling shareholder and/or partners of other entities
engaged in a variety of businesses.  Thus,  there exist  potential  conflicts of
interest   including,   among  other  things,   time,  efforts  and  corporation
opportunity,  involved in participation with such other business entities. While
each  officer  and  director of our  business is engaged in business  activities
outside of our  business,  they devote to our business such time as they believe
to be necessary.

CONFLICTS OF INTEREST - CORPORATE OPPORTUNITIES

Presently no requirement contained in our Articles of Incorporation,  Bylaws, or
minutes which requires  officers and directors of our business to disclose to us
business opportunities which come to their attention. Our officers and directors
do,  however,  have a  fiduciary  duty of  loyalty to us to  disclose  to us any
business  opportunities  which come to their attention,  in their capacity as an
officer  and/or  director  or  otherwise.  Excluded  from  this  duty  would  be
opportunities  which the person  learns  about  through  his  involvement  as an
officer and director of another company. We have no intention of merging with or
acquiring  an  affiliate,  associate  person or  business  opportunity  from any
affiliate or any client of any such person.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section  16(a)  of  the  Securities  Exchange  Act  requires  our  Officers  and
Directors, and persons who own more than 10% of a registered class of our equity
securities,  to file reports of ownership and changes in ownership with the SEC.
Officers,  directors  and  greater  than 10%  shareholders  are  required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file. Based
solely on our review of copies of such  reports  received,  and  representations
from certain  reporting  persons,  we believe that, during the fiscal year ended
June 30, 2007, all Section 16(a) filing requirements applicable to our officers,
directors and greater than 10% beneficial  owners were filed in compliance  with
all  applicable  requirements  with the  exception  of David J Cutler,  Wesley F
Whiting and Redgie Green who had not filed.

CODE OF ETHICS

A code of ethics relates to written  standards  that are reasonably  designed to
deter wrongdoing and to promote;

-    Honest and ethical  conduct,  including  the ethical  handling of actual or
     apparent   conflicts  of  interest   between   personal  and   professional
     relationships;

-    Full, fair, accurate,  timely and understandable  disclosure in reports and
     documents that are filed with, or submitted to, the SEC and in other public
     communications made by an issuer;

-    Compliance with applicable governmental laws, rules and regulations;

-    The prompt  internal  reporting of violations of the code to an appropriate
     person or persons identified in the code; and

-    Accountability for adherence to the code.


                                       19
<PAGE>

     Due to the limited scope of our current  operations,  we have not adopted a
corporate  code of ethics  that  applies  to our  principal  executive  officer,
principal accounting officer, or persons performing similar functions.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain information concerning  compensation paid
by the Company to its sole  officer for the fiscal years ended June 30, 2008 and
2007 (the "Named Executive Officers"):

<TABLE>
<CAPTION>

                                   SUMMARY COMPENSATION TABLE

                                                                           Non-equity     Nonqualified
                                                                           incentive        deferred
                                                   Stock      Option          plan        compensation     All other
                               Salary     Bonus     awards     awards     compensation      earnings     compensation     Total
Name & Position     Year        ($)        ($)        ($)        ($)          ($)             ($)             ($)          ($)
----------------- ---------- ----------- --------- ---------- ---------- --------------- --------------- -------------- -----------
<S>               <C>        <C>         <C>       <C>        <C>        <C>             <C>             <C>            <C>

David         J.
Cutler,
President,  CEO,    2008      $60,000*     $-0-      $ -0-      $ -0-        $ -0-            $-0-           $-0-        $60,000
CFO and Director    2007      $60,000      $-0-      $ -0-      $ -0-        $ -0-            $-0-           $-0-        $60,000
</TABLE>


* Includes  $40,000 in fees payable to  Burlingham  Corporate  Finance,  Inc., a
company  controlled by Mr. Cutler,  in respect of services provided to us by Mr.
Cutler.

EMPLOYMENT AND CONSULTING AGREEMENTS

There were no employment  contracts or consulting  agreements with our directors
or officers during the fiscal years ended June 30, 2008 and 2007.

                              DIRECTOR COMPENSATON

The following table sets forth certain information concerning  compensation paid
to the Company's directors during the year ended June 30, 2008:

<TABLE>
<CAPTION>
                                                                                       Nonqualified
                                                                        Non-equity       deferred
                   Fees earned or                                       incentive      compensation       All other
                    paid in cash     Stock awards     Option awards        plan          earnings       compensation         Total
      Name               ($)              ($)              ($)         compensation         ($)            ($) (1)            ($)
                                                                           ($)
------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------
<S>                <C>              <C>              <C>              <C>             <C>              <C>              <C>

------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------
David J. Cutler         $ -0-            $ -0-            $ -0-           $ -0-            $ -0-          $ 60,000         $ 60,000
------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------

------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------
Wesley Whiting          $ -0-            $ -0-            $ -0-           $ -0-            $ -0-            $ -0-            $ -0-
------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------

------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------
Redgie Green            $ -0-            $ -0-            $ -0-           $ -0-            $-0-             $ -0-            $ -0-
------------------ ---------------- ---------------- ---------------- --------------- ---------------- ---------------- ------------
</TABLE>

(1)  The other compensation consists of the individual's salary for his services
     as an officer of the Company for the year ended June 30, 2008.

     Includes $40,000 in fees payable to Burlingham  Corporate Finance,  Inc., a
     company  controlled by Mr. Cutler, in respect of services provided to us by
     Mr. Cutler.


                                       20
<PAGE>


STOCK OPTION PLAN

In August 1996, we adopted a stock  incentive award plan (the "1996 Plan") under
which the Board of Directors  (the "Board"),  or a committee  appointed for such
purpose, was authorized to grant options,  restricted stock or other stock-based
compensation to the directors,  officers,  eligible  employees or consultants to
acquire up to an aggregate of 300,000 shares of our common stock. Options issued
under the Plan  generally  vested over a 3-year  period  based on the  following
schedule:  40% after year one,  30% after  year two,  and 30% at the end of year
three. All options expired ten years from the date of grant.

In December 1997, our stockholders  approved our 1997 Equity Incentive Plan (the
"1997 Plan") under which the Board,  or a committee  appointed for such purpose,
was  authorized  to  grant  options,   restricted  stock  or  other  stock-based
compensation to the directors,  officers,  eligible  employees or consultants to
acquire up to an  aggregate  of 2,100,000  shares of our common  stock.  Options
issued under the 1997 Plan  generally  vested 20% per year over a 5-year period.
All options expired ten years from the date of grant

In April 1999,  the Board approved our 1999  Non-Officer  Stock Option Plan (the
"1999 Plan") under which the Board,  or a committee  appointed for such purpose,
was  authorized  to  grant  non-statutory   options  to  eligible  employees  or
consultants  who were not officers or members of the Board,  to acquire up to an
aggregate of 3,000,000  shares of our common  stock.  Options  granted under the
1999  Plan  vested  25%  per  year  over  a  4-year  period,  in  equal  monthly
installments  over thirty-six  months or 100% upon grant  issuance.  All options
expired ten years from the date of grant.

No stock options were issued or  outstanding  during the fiscal years ended June
30, 2008 or 2007.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  tables  set  forth  certain  information   regarding  beneficial
ownership of our common stock, as of September 26, 2008, by:

o each  person  who is known  by  Aspeon  to own  beneficially  more  than 5% of
Aspeon's  outstanding  common stock, o each of Aspeon's named executive officers
and directors, and o all executive officers and directors as a group.

Shares of common stock not outstanding but deemed  beneficially  owned by virtue
of the right of an  individual  to acquire the shares of common  stock within 60
days are treated as outstanding  only when determining the amount and percentage
of common stock owned by such individual.  Except as noted below the table, each
person has sole voting and investment power with respect to the shares of common
stock shown.

As at September 26, 2008:

<TABLE>
<CAPTION>

                                                              NUMBER OF      PERCENT OF
          NAME AND ADDRESS OF BENEFICIAL OWNER (1)             SHARES        OUTSTANDING
   -----------------------------------------------------   -------------  --------------
<S>                                                        <C>            <C>

   David J. Cutler                                            10,989,916
   Wesley F. Whiting                                                   0               0%
   Redgie Green                                                        0               0%
                                                            ------------     ------------
   All executive officers and directors as a group,
   3 people.                                                  10,989,916            55.8%
</TABLE>

(1) The above officers and directors' address is c/o Aspeon, Inc. 2460 West 26th
Avenue, Suite 380-C, Denver, Colorado, 80211.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the fiscal  years  ended June 30,  2008 and 2007,  one of our  directors,
David J. Cutler, and a company controlled by Mr. Cutler,  advanced to us $73,987
and $84,937  respectively  by way of loan,  bearing  interest at 8%, to meet our
ongoing  operating  expenses  and  fund  the  costs of  bringing  our  financial
statements  and SEC  reporting  up to  date.  As at June 30,  2008  the  balance
outstanding to Mr.  Cutler,  and the company  controlled by Mr. Cutler,  totaled
$362,048,  including  accrued interest (2007 - $304,439).  There is no assurance
that Mr. Cutler will continue to provide us with further funding in the future.


                                       21
<PAGE>

During the twelve months ended June 30, 2008, we incurred  $40,000 in consulting
fees payable to Burlingham Corporate Finance, Inc.  ("Burlingham") in respect of
remuneration  for Mr.  Cutler's  services to us as a director and  officer.  Mr.
Cutler is the principal shareholder of Burlingham.

                                     PART IV

ITEM 13. EXHIBITS

The following documents are filed as a part of this Report.

     Exhibits.  The  following is a complete  list of exhibits  filed as part of
     this Form 10-KSB.  Exhibit numbers correspond to the numbers in the Exhibit
     Table of Item 601 of Regulation S-K.

   EXHIBIT
   NUMBER                       DESCRIPTION AND METHOD OF FILING


    31.1          Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act

    32.1          Certification of Principal Executive and Officer pursuant to
                  Section 906 of the Sarbanes-Oxley Act


ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

We incurred $2,800 and $6,000 to our current auditors,  O'Donnell, in the fiscal
years ended June 30, 2008 and 2007 respectively.

Tax Fees

We did not incur any tax fees to our current auditors,  O'Donnell, in the fiscal
years ended June 30, 2008 and 2007 for  professional  services  rendered for tax
compliance, tax advice, and tax planning.

All Other Fees

We incurred $720 and $1,050 to our current  auditors,  O'Donnell,  in the fiscal
years ended June 30, 2008 and 2007 for the review of our quarterly filings.

It is the role of the Audit Committee,  or in the absence of an audit committee,
the Board of Directors,  to consider whether,  and determine that, the auditor's
provision  of  non-audit  services  would be  compatible  with  maintaining  the
auditor's independence.




                                       22
<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

                                                                            PAGE

REPORT ON THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.........         25

CONSOLIDATED BALANCE SHEETS - June 30, 2008 and 2007................         26

CONSOLIDATED STATEMENTS OF OPERATIONS -- For the Years Ended June 30,
 2008 and 2007                                                               27

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT -
For the Years Ended June 30, 2008 and 2007                                   28

CONSOLIDATED STATEMENTS OF CASH FLOWS -- For the Years Ended June 30,
2008 and 2007                                                                29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS......................             30




                                       23
<PAGE>

           REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Aspeon, Inc.
Denver, Colorado

I have audited the  accompanying  balance sheets of Aspeon,  Inc. as of June 30,
2008 and 2007 and the related statements of operations,  stockholders'  deficit,
and cash  flows for the years  ended  June 30,  2008 and 2007.  These  financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.

I conducted my audits in  accordance  with the  standards of the Public  Company
Accounting Oversight Board (United States).  Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  I believe that my audits provide a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial  position of Aspeon,  Inc. as of June 30, 2008
and 2007 and the results of it's  operations  and cash flows for the years ended
June 30,  2008 and  2007 in  conformity  with  accounting  principles  generally
accepted in the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 2 to the  financial
statements,  the Company had suffered  significant losses, had a working capital
deficit  as of  June  30,  2008  and  2007  and no  ongoing  source  of  income.
Management's  plans to address  these matters are also included in Note 2 to the
financial  statements.  These  conditions  raise  substantial  doubt  about  the
Company's  ability to continue as a going concern.  The financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.




/s/ Larry O' Donnell
Larry O'Donnell CPA, PC
Aurora, Colorado
September 21, 2008



                                       24
<PAGE>

<TABLE>
<CAPTION>

                                                  ASPEON, INC.
                                              CONSOLIDATED BALANCE
                                                     SHEETS

                                                                                                           JUNE 30,
                                                                                                    2008              2007
                                                                                             ------------------------------------
                               ASSETS
<S>                                                                                          <C>               <C>

Current Assets

      Cash & Cash Equivalents                                                                $              15 $               -
      Prepaid Expenses and Other Current Assets                                                          1,000             1,000

                                                                                             ------------------------------------
                   Total Current Assets                                                                  1,015             1,000

                                                                                             ------------------------------------
      TOTAL ASSETS                                                                           $           1,015 $           1,000
                                                                                             ====================================

                               LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY

Current Liabilities

      Accounts Payable                                                                       $       4,998,397 $       6,757,616
      Unearned Income & Customer Deposits                                                              236,128           236,128
      Accrued Expenses                                                                                 656,067           599,245
      Notes Payable                                                                                    348,064           402,078
      Deferred Earnouts                                                                                      -           208,195

                                                                                             ------------------------------------
                   Total Current Liabilities                                                         6,238,656         8,203,262

COMMITMENTS AND CONTINGENCIES (Note. 6)

STOCKHOLDERS' (DEFICIT)EQUITY

      Preferred Stock, $0.01 par value: 25,000,000 and 990,000 shares authorized                             -                 -
      respectively, no shares issued and outstanding.
      Common Stock, $0.01 par value: 100,000,000 and 20,000,000 shares                                 197,106           200,000
      authorized, respectively, 19, 710, 575 and 20,000,000 shares issued and
      oustanding, respectively
      Additional Paid In Capital                                                                    84,849,860        84,846,965
      Treasury Stock                                                                                   (60,000)          (60,000)
      Accumulated Deficit                                                                          (91,224,607)      (93,189,227)
                                                                                             ------------------------------------
                   Total Stockholders' (Deficit) Equity                                             (6,237,641)       (8,202,262)

                                                                                             ------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                         $           1,015 $           1,000
                                                                                             ====================================
</TABLE>



                 See accompanying Notes to Consolidated Financial Statements.


                                       25
<PAGE>

<TABLE>
<CAPTION>

                                     ASPEON, INC.
                         CONSOLIDATED STATEMENTS OF OPERAIONS

                                                                                       FOR THE YEARS ENDED
                                                                                             JUNE 30,
                                                                                      2008             2007
                                                                                ---------------------------------
<S>                                                                             <C>             <C>

OPERATING EXPENSES

      General and Administrative                                                $       113,943 $         84,132
      Gain on Statute Barred Debt                                                    (2,102,917)               -

                                                                                ---------------------------------
      Total Operating (Income) Expenses                                              (1,988,974)          84,132

OPERATING (INCOME) LOSS                                                               1,988,974          (84,132)

Interest and Other Income / (Expenses) Net                                              (24,354)         (18,436)

                                                                                ---------------------------------
Income(Loss) before Income Taxes                                                      1,964,620         (102,568)

Provision for Income Taxes                                                                    -                -

                                                                                ---------------------------------
NET INCOME  (LOSS)                                                              $     1,964,620 $       (102,568)
                                                                                =================================


NET INCOME (LOSS) PER COMMON SHARE
                                                                                $     0.10      $     (0.01)
                                                                                =================================
      Basic & Diluted

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

      Basic & Diluted                                                              19,965,997       20,000,000
                                                                                =================================
</TABLE>






               See accompanying Notes to Consolidated Financial Statements.


                                       26

<PAGE>

<TABLE>
<CAPTION>

                                          ASPEON, INC.
                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                           FOR THE YEARS ENDED JUNE 30, 2008 and 2007

                       Common Stock           Treasury Stock     Additional                 Accumulated
                                                                  Paid - in    Accumulated  Comprehensive   Comprehensive
                     Shares      Amount     Shares      Amount     Capital     Deficit      Profit/(Loss)  Profit/(Loss)   Total

                       #           $          #           $           $             $             $                         $
                   -----------  ---------  ---------  ---------- ------------  ------------ -----------    ----------- ------------
<S>                <C>          <C>        <C>        <C>        <C>           <C>           <C>           <C>         <C>

Balance, June 30,
    2006           20,000,000    200,000   (200,000)    (60,000)  84,846,965   (93,158,526)       71,867                 (8,099,694)

Net & Comprehen-
    sive (Loss)             -          -          -           -            -      (102,568)            -     (102,568)     (102,568)
                                                                                                           ============

                   -----------  ---------  ---------  ---------- ------------  ------------   -----------               ------------
Balance, June 30,
    2007            20,000,000 $  200,000   (200,000)$   (60,000)$ 84,846,965 $ (93,261,094) $     71,867               $(8,202,262)
                   -----------  ---------  ---------  ---------- ------------  ------------   -----------               ------------


Share Cancellation   (289,425)    (2,894)         -           -        2,894             -             -                          -

Net & Comprehen-
    sive (Loss)             -          -          -           -            -     1,964,620             -    1,964,620     1,964,620
                                                                                                           ============

                   -----------  ---------  ---------  ---------- ------------  ------------   -----------               ------------
Balance, June 30,
    2008            19,710,575 $  197,106   (200,000)$   (60,000)$ 84,849,859 $ (91,296,474) $     71,867               $(6,237,642)
                   ===========  =========  =========  ========== ============  ============   ===========               ============

</TABLE>

                  See accompanying Notes to Consolidated Financial Statements.



                                       27

<PAGE>

<TABLE>
<CAPTION>

                                          ASPEON, INC.
                              CONSOLIDATED STATEMENT OF CASH FLOWS


                                                                              FOR THE YEARS ENDED
                                                                                    JUNE 30,
                                                                             2008             2007
                                                                       --------------------------------
<S>                                                                    <C>             <C>

CASH FLOW USED IN OPERATING ACTIVITIES

NET INCOME (LOSS)                                                      $     1,964,620 $      (102,568)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH
USED IN OPERATING ACTIVITIES

      Gain on Statute Barred Debt                                           (2,102,917)              -

CHANGES IN OPERATING ASSETS & LIABILITIES
      (Increase) in Prepaid Expenses                                                 -            (812)
      Increase in Accounts Payable                                               7,503               -
      Increase in Accrued Expenses                                              56,822          18,436

                                                                       --------------------------------
      Total Cash Flow Used In Operating Activities                             (73,972)        (84,944)

CASH FLOW FROM INVESTING ACTIVITIES                                                  -               -

                                                                       --------------------------------
      Total Cash Flow Provided By Investing Activities                               -               -

CASH FLOW FROM FINANCING ACTIVITIES

      Advances under Notes Payable                                              73,987          84,937

                                                                       --------------------------------
      Total Cash Flow Provided By   Financing Activities                        73,987          84,937

INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                         $            15 $            (7)

Cash and Cash Equivalents at the beginning of the period               $             - $             7
                                                                       ================================
Cash and Cash Equivalents at the end of the period                     $            15 $             -
                                                                       ================================

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest                                                 $        49,400 $             -
                                                                       ================================
Cash paid for income tax                                               $             - $             -
                                                                       ================================







              See accompanying Notes to Consolidated Financial Statements.

</TABLE>

                                       28

<PAGE>

                                  ASPEON, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

We were  incorporated in the State of Delaware in September 1995, under the name
Sunwood Research,  Inc. We changed our name to Javelin Systems,  Inc. in October
1996 and to Aspeon, Inc. in December 1999.

Nature of  Operations  --  Effective  June 30,  2003,  we made the  decision  to
discontinue  all our  remaining  operating  businesses  and are now  focused  on
reaching  satisfactory  negotiated  settlements with our outstanding  creditors,
raising debt and/or equity to fund negotiated settlements with our creditors and
to meet our ongoing  operating  expenses  and  attempting  to merge with another
entity with experienced  management and  opportunities  for growth in return for
shares of our common stock to create value for our shareholders. There can be no
assurance that this series of events will be successfully completed.

Significant Accounting Policies:

Principles  of  Consolidation  --  The   accompanying   consolidated   financial
statements include the accounts of Aspeon and its wholly-owned subsidiaries. All
significant inter-company transactions and balances have been eliminated.

Cash and Cash  Equivalents  -- Cash and  cash  equivalents  consist  of cash and
highly  liquid debt  instruments  with  original  maturities  of less than three
months.

Inventories - Inventories consisted primarily of point of sale computer hardware
and  components  and were stated at the lower of cost  (first-in  first-out)  or
market.  All our remaining  inventories  were  transferred to the trustee of the
assignment for the benefit of Aspeon and CCI creditors effective January 1, 2004
after which we held no inventory.

Property and Equipment- All our remaining property and equipment was transferred
to the trustee of the  assignment  for the  benefit of Aspeon and CCI  creditors
effective January 1, 2004 after which we held no property or equipment.

Deferred  Costs and Other --  Offering  costs  with  respect  to issue of common
stock,  warrants or options by us were initially  deferred and ultimately offset
against the proceeds from these equity transactions if successful or expensed if
the proposed equity transaction is unsuccessful.

Financial Instruments -- The estimated fair values for financial instruments was
determined  at  discrete  points in time based on relevant  market  information.
These  estimates  involved  uncertainties  and  could  not  be  determined  with
precision.  The carrying  amounts of the note receivable,  accounts  receivable,
accounts payable and accrued liabilities  approximated fair value because of the
short-term  maturities  of these  instruments.  The fair value of notes  payable
approximated to their carrying value as generally their interest rates reflected
our effective annual borrowing rate.

Income Taxes -- We account for income taxes under the  liability  method,  which
requires  recognition  of deferred tax assets and  liabilities  for the expected
future tax  consequences  of events  that have been  included  in the  financial
statements  or  tax  returns.  Under  this  method,   deferred  tax  assets  and
liabilities  are  determined  based  on the  difference  between  the  financial
statements  and tax bases of assets and  liabilities  using enacted tax rates in
effect for the year in which the differences are expected to reverse.

Comprehensive Income (Loss) -- Comprehensive income is defined as all changes in
stockholders'  equity (deficit),  exclusive of transactions with owners, such as
capital  investments.  Comprehensive income includes net income or loss, changes
in certain assets and liabilities  that are reported  directly in equity such as
translation  adjustments on investments in foreign  subsidiaries  and unrealized
gains (losses) on available-for-sale  securities.  During the fiscal years ended
June  30,  2008  and  2007,  our  net  income  /  (loss)  was  identical  to our
comprehensive income / (loss).

                                       29
<PAGE>

Income  (Loss)  Per  Share  -- The  income  (loss)  per  share is  presented  in
accordance  with the provisions of Statement of Financial  Accounting  Standards
(SFAS) No. 128,  Earnings Per Share.  SFAS No. 128 replaced the  presentation of
primary and fully diluted earnings (loss) per share (EPS) with a presentation of
basic EPS and diluted  EPS.  Basic EPS is  calculated  by dividing the income or
loss available to common  stockholders by the weighted  average number of common
stock  outstanding for the period.  Diluted EPS reflects the potential  dilution
that could occur if  securities  or other  contracts  to issue common stock were
exercised or converted  into common  stock.  Basic and diluted EPS were the same
for the fiscal years ended June 30 2008 and 2076, as we had no outstanding stock
options or warrants during these periods.

Stock-Based  Compensation -- As permitted under the SFAS No. 123, Accounting for
Stock-Based  Compensation,  we  account  for  our  stock-based  compensation  in
accordance with the provisions of Accounting  Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees.  As such,  compensation expense is
recorded  on the date of grant if the  current  market  price of the  underlying
stock  exceeds  the  exercise  price.  Certain  pro  forma  net  income  and EPS
disclosures  for employee  stock option grants are also included in the notes to
the financial  statements as if the fair value method as defined in SFAS No. 123
had been applied.  Transactions in equity  instruments  with  non-employees  for
goods or services are accounted for by the fair value method.

Use of Estimates -- The preparation of our consolidated  financial statements in
conformity with generally accepted accounting  principles requires management to
make  estimates  and  assumptions  that  affect the  amounts  reported  in these
financial  statements and accompanying  notes.  Actual results could differ from
those estimates.  Due to uncertainties inherent in the estimation process, it is
possible that these estimates could be materially revised within the next year.

Recently  Issued  Accounting  Pronouncements  -- In February 2007, the Financial
Accounting  Standards  Board (FASB)  issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial  Liabilities - Including an Amendment of FASB
Statement No. 115." This  statement  permits  entities to choose to measure many
financial  instruments  and  certain  other  items  at fair  value.  Most of the
provisions  of SFAS No.  159 apply  only to  entities  that elect the fair value
option.  However,  the  amendment  to  SFAS  No.  115  "Accounting  for  Certain
Investments  in  Debt  and  Equity  Securities"  applies  to all  entities  with
available-for-sale  and trading securities.  SFAS No. 159 is effective as of the
beginning of an entity's  first fiscal year that begins after November 15, 2007.
Early  adoption is permitted as of the beginning of a fiscal year that begins on
or before  November  15,  2007,  provided  the entity  also  elects to apply the
provision  of SFAS No. 157,  "Fair  Value  Measurements."  The  adoption of this
statement is not expected to have a material effect on our financial statements.

In March 2007,  the FASB ratified the Emerging  Issues Task Force ("EITF") Issue
No.  06-11,  Accounting  for Income Tax  Benefits  of  Dividends  on Share Based
Payment Awards ("EITF  06-11").  EITF 06-11 requires  companies to recognize the
income tax benefit  realized  from  dividends or dividend  equivalents  that are
charged   to   retained   earnings   and  paid  to   employees   for   nonvested
equity-classified  employee  share-based  awards as an  increase  to  additional
paid-in  capital.  EITF 06-11 is  effective  for fiscal  years  beginning  after
September  15,  2007.  The  adoption  of EITF  06-11 is not  expected  to have a
material effect on our financial statements.

In  June  2007,  the  FASB  ratified  EITF  Issue  No.  07-03,   Accounting  for
Nonrefundable Advance Payments for Goods and Services Received for Use in Future
Research  and  Development   Activities  ("EITF  07-03").  EITF  07-03  requires
companies to defer nonrefundable  advance payments for goods and services and to
expense  that  advance  payment  as the  goods are  delivered  or  services  are
rendered. If the company does not expect to have the goods delivered or services
performed,  the advance  should be expensed.  EITF 07-03 is effective for fiscal
years  beginning  after  December  15,  2007.  The adoption of EITF 07-03 is not
expected to have a material effect on our financial statements.

In  December  2007,  the FASB  issued  SFAS No.  141  (Revised  2007),  Business
Combinations,  or SFAS No. 141R.  SFAS No. 141R will change the  accounting  for
business combinations. Under SFAS No. 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  SFAS No. 141R will
change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
first  annual  reporting  period  beginning  on  or  after  December  15,  2008.
Accordingly,  any  business  combinations  we  engage  in will be  recorded  and
disclosed following existing GAAP until January 1, 2009. We expect SFAS No. 141R
will have an impact on accounting for business combinations once adopted but the
effect is dependent upon acquisitions at that time. The adoption of SFAS No 141R
is not expected to have a material effect on our financial statements.


                                       30
<PAGE>

In December  2007,  the FASB issued SFAS No. 160,  Noncontrolling  Interests  in
Consolidated Financial  Statements--An Amendment of ARB No. 51, or SFAS No. 160.
SFAS  No.  160  establishes  new  accounting  and  reporting  standards  for the
noncontrolling  interest  in a  subsidiary  and  for  the  deconsolidation  of a
subsidiary.  SFAS No. 160 is effective  for fiscal  years  beginning on or after
December 15, 2008. We believe that SFAS 160 should not have a material impact on
our financial position or results of operations.

In  December  2007,  the  Emerging  Issues  Task  Force  issued  EITF No.  07-1,
Accounting  for  Collaborative   Arrangements.   EITF  No.  07-1  requires  that
transactions  with third parties (i.e.,  revenue generated and costs incurred by
the partners)  should be reported in the appropriate line item in each company's
financial statement and includes enhanced disclosure  requirements regarding the
nature  and  purpose  of the  arrangement,  rights  and  obligations  under  the
arrangement,  accounting policy,  amount and income statement  classification of
collaboration  transactions  between the  parties.  EITF No.  07-1 is  effective
January  1,  2009 and shall be  applied  retrospectively  to all  prior  periods
presented for all collaborative  arrangements existing as of the effective date.
The  Company  does not expect  that the  adoption  of EITF No.  07-1 will have a
material  effect  on  its  consolidated   results  of  operations  or  financial
condition.

In March  2008,  the FASB  issued  FAS No.  161,  Disclosures  about  Derivative
Instruments and Hedging Activities,  an amendment of FASB Statement No. 133. FAS
No. 161 changes the  disclosure  requirements  for  derivative  instruments  and
hedging  activities.  Entities are required to provide disclosures about (a) how
and why derivative  instruments  are used, (b) how  derivative  instruments  and
related  hedged  items  are  accounted  for under FAS No.  133,  Accounting  for
Derivative Instruments and Hedging Activities,  and its related interpretations,
and (c) how derivative  instruments and related hedged items affect the entity's
financial  position,  financial  performance,  and cash  flows.  FAS No.  161 is
effective  January 1, 2009. The Company does not expect that the adoption of FAS
No. 161 will have a material effect on its consolidated results of operations or
financial condition.

Business  Segments -- In June 1997,  the FASB  issued SFAS No. 131,  Disclosures
About Segments of an Enterprise and Related  Information  ("SFAS No. 131"). SFAS
No. 131 changes the way public  companies  report segment  information in annual
financial  statements  and also  requires  those  companies  to report  selected
segment  information  in  interim  financial  reports to  stockholders.  It also
establishes  standards  for related  disclosures  about  products and  services,
geographic areas, and major customers. Management believes our operations during
fiscal 2008 and 2007  comprised  only one segment and as such,  adoption of SFAS
No. 131 does not impact the disclosures made in our financial statements.

2.       GOING CONCERN AND LIQUIDITY

As of June 30,  2008,  we had $15 cash on hand,  $1,015 of assets,  no operating
business or other source of income,  outstanding liabilities of $6,238,656 and a
stockholders' deficit of $6,237,641.

In our Annual  Reports on Form  10-KSB for the fiscal  years ended June 30, 2008
and 2007,  the  Report of the  Independent  Registered  Public  Accounting  Firm
included an explanatory  paragraph that  describes  substantial  doubt about our
ability to continue as a going concern.  Our financial statements for the twelve
months ended June 30, 2008 have been  prepared on a going concern  basis,  which
contemplates  the  realization of assets and the  settlement of liabilities  and
commitments in the normal course of business. We reported an accumulated deficit
of  $91,224,607  and a working  capital  deficiency of $6,237,641 as of June 30,
2008

Consequently,  we are now dependent on raising  additional equity and/or debt to
fund any  negotiated  settlements  with our  outstanding  creditors and meet our
ongoing operating expenses.  There is no assurance that we will be able to raise
the  necessary  equity and,  or, debt that we will need to be able to  negotiate
acceptable  settlements  with our  outstanding  creditors  or fund  our  ongoing
operating expenses.

During the fiscal  years  ended June 30,  2008 and 2007,  one of our  directors,
David J. Cutler, and a company controlled by Mr. Cutler,  advanced to us $73,987
and $84,937  respectively  by way of loan,  bearing  interest at 8%, to meet our
ongoing  operating  expenses  and  fund  the  costs of  bringing  our  financial
statements  and SEC  reporting  up to  date.  As at June 30,  2008  the  balance
outstanding to Mr.  Cutler,  and the company  controlled by Mr. Cutler,  totaled
$362,048,  including  accrued interest (2007 - $304,439).  There is no assurance
that Mr. Cutler will continue to provide us with further funding in the future.


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It is our current intention to seek to reach satisfactory negotiated settlements
with our outstanding creditors, raise debt and, or, equity financing to fund the
negotiated settlements with our creditors and to meet ongoing operating expenses
and  attempt  to merge with  another  entity  with  experienced  management  and
opportunities  for growth in return  for  shares of our  common  stock to create
value for our  shareholders.  There is no  assurance  that this series of events
will be satisfactorily completed.

3. ASSETS

Effective  January 1, 2004,  all our  remaining  assets,  with the  exception of
certain other receivables, were transferred to the trustee of the assignment for
benefit of the Aspeon and CCI creditors at a fair market value of $496,000.  Our
only remaining  asset - other  receivables - related to Directors' and Officers'
insurance due from our  insurance  company to be paid to our attorneys for legal
fees  incurred  in respect of the lawsuit  brought  against us by certain of our
shareholders. This balance has now been paid in full to our attorneys.

Since April 2005 we have  accumulated  certain other nominal  current assets - a
bank  account and certain  prepaid  expenses - with funds  provide to us by loan
from our sole director, David J Cutler.

4. LIABILITIES

In December  2003, we appointed  attorney Frank Blundo Jr. P.C. as trustee of an
assignment for the benefit of the Aspeon and CCI creditors  commencing effective
January 1, 2004.  On January 1, 2004,  all of  Aspeon's  and CCI's  assets  were
transferred to the trustee for the benefit of those Aspeon and CCI creditors who
elected  to  participate  in the  assignment  for the  benefit of Aspeon and CCI
creditors.  The assets  transferred  had a fair  market  value of  $496,000  and
creditors  totaling $3.7 million  elected to be participate  in, and be bound by
the terms of, the assignment  for the benefit of Aspeon and CCI creditors  under
which they no longer had any further claim against Aspeon or CCI. Certain Aspeon
and  CCI  creditors,  totaling  in  excess  of  $3.1  million,  elected  not  to
participate  in the  assignment  for the benefit of Aspeon and CCI creditors and
remained as outstanding liabilities of Aspeon and CCI.

During the twelve months ended June 30, 2008, outstanding liabilities, which had
been incurred more than four years ago, were statute barred under the state laws
of California  and we recognized a gain on these statute  barred  liabilities of
$2,102,917.

At June  30,  2008  and  2007,  our  total  liabilities  also  included  certain
liabilities  in  respect  of  Javelin  Asia  and RCS that  remained  outstanding
following the termination of their operations.

No interest expense was accrued in the fiscal years ended June 30, 2008 and 2007
in  respect  to  liabilities  outstanding  as  at  January  1,  2004,  as  these
liabilities  are  anticipated  to be settled at, or at less than,  the  carrying
value at which they are currently recorded in our balance sheet.

5. NOTES PAYABLE

Related Party

During the fiscal  years  ended June 30,  2008 and 2007,  one of our  directors,
David J. Cutler, and a company controlled by Mr. Cutler,  advanced to us $73,987
and $84,937  respectively  by way of loan,  bearing  interest at 8%, to meet our
ongoing  operating  expenses  and  fund  the  costs of  bringing  our  financial
statements  and SEC  reporting  up to  date.  As at June 30,  2008  the  balance
outstanding to Mr.  Cutler,  and the company  controlled by Mr. Cutler,  totaled
$362,048,  including  accrued interest (2007 - $304,439).  There is no assurance
that Mr. Cutler will continue to provide us with further funding in the future.

Others

At June 30,  2007,  the  balance of notes  payable,  included a note  payable of
$128,000 to an  individual  who had  previously  sold his business to us. We had
renegotiated  the terms of the  deferred  earn out due to him on the sale of his

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<PAGE>

business, such that the note payable represented the balance due to him. We were
in default in repayment of the note payable as of June 30, 2007.  This liability
became statute barred during the three months ended March 31, 2008. Consequently
we recognized a gain on statute barred  liabilities of $128,000 during the three
months ended March 31, 2008 in respect of this note payable.

6. COMMITMENTS AND CONTINGENCIES:

Leases

At June 30, 2008 and 2007, we were in default on all of our outstanding  capital
and  operating  leases that had been entered into to prior to April 2005 and the
full  amount  of our  liability  under  theses  lease  is  recorded  as  current
liabilities included in our balance of accounts payable.

Rent expense  under  operating  lease  agreements  entered into after April 2005
aggregated to approximately  $4,000 and $5,500 respectively for the fiscal years
ended June 30, 2008 and 2007 and were  included  in general  and  administrative
expenses in our consolidated statements of operations.

Litigation

There is no pending legal action against the Company.

Guarantees

In July, 2001,  Javelin Australia entered into a factoring facility amounting to
approximately  $500,000 or a lesser  amount based on eligible  receivables.  The
facility  was  cancelable  on 30 days  notice by  either  party.  The  agreement
provided for a discount  rate of 1.75% + the bank's  published  overdraft  index
rate and a  factoring  service  fee of  0.50%.  Borrowings  under  the line were
restricted  to the  operations  of  Javelin  Australia  and could not be used to
support our other operations. Aspeon provided a guarantee for this facility that
was to be  released  on its sale of Javelin  Australia  in  January  2003 and in
respect of which it was indemnified by the purchaser of Javelin Australia.

7. RELATED PARTY TRANSACTIONS

During the fiscal  years  ended June 30,  2008 and 2007,  one of our  directors,
David J. Cutler, and a company controlled by Mr. Cutler,  advanced to us $73,987
and $84,937  respectively  by way of loan,  bearing  interest at 8%, to meet our
ongoing  operating  expenses  and  fund  the  costs of  bringing  our  financial
statements  and SEC  reporting  up to  date.  As at June 30,  2008  the  balance
outstanding to Mr.  Cutler,  and the company  controlled by Mr. Cutler,  totaled
$362,048,  including  accrued interest (2007 - $304,439).  There is no assurance
that Mr. Cutler will continue to provide us with further funding in the future.

During the twelve months ended June 30, 2008, we incurred  $40,000 in consulting
fees payable to Burlingham Corporate Finance, Inc.  ("Burlingham") in respect of
remuneration  for Mr.  Cutler's  services to us as a director and  officer.  Mr.
Cutler is the principal shareholder of Burlingham.

8.       STOCKHOLDERS' DEFICIT:

Common Stock - During the fiscal years ended June 30, 2008 and 2007, the Company
did not issue any shares of its common stock

On April 2, 2008 we held an annual meeting of stockholders at which the majority
of  stockholders  voted to  authorize a reverse  split of our common  stock on a
fifteen for one basis and to increase the authorized number of our Common Shares
from twenty million (20,000,000) to one hundred million (100,000,000).

Effective May 18, 2008, at the request of one of our shareholders,  we cancelled
289,425 of our shares belonging to that shareholder.

Preferred  Stock - During the fiscal  years  ended  June 30,  2008 and 2007,  no
preferred stock was issued or outstanding.

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On April 2, 2008 we held an annual meeting of stockholders at which the majority
of stockholders  voted to increase the authorized number of our Preferred Shares
from one million (1,000,000) to twenty five million (25,000,000).

Warrants -- During the financial years ended June 30, 2008 and 2007, no warrants
were issued and outstanding.

Stock  Options - In August 1996,  we adopted a stock  incentive  award plan (the
"1996 Plan") under which the Board of Directors  (the  "Board"),  or a committee
appointed for such purpose, was authorized to grant options, restricted stock or
other stock-based compensation to the directors, officers, eligible employees or
consultants to acquire up to an aggregate of 300,000 shares of our common stock.
Options issued under the Plan generally vested over a 3-year period based on the
following  schedule:  40% after year one, 30% after year two, and 30% at the end
of year three. All options expired ten years from the date of grant.

In December 1997, our stockholders  approved our 1997 Equity Incentive Plan (the
"1997 Plan") under which the Board,  or a committee  appointed for such purpose,
was  authorized  to  grant  options,   restricted  stock  or  other  stock-based
compensation to the directors,  officers,  eligible  employees or consultants to
acquire up to an  aggregate  of 2,100,000  shares of our common  stock.  Options
issued under the 1997 Plan  generally  vested 20% per year over a 5-year period.
All options expired ten years from the date of grant

In April 1999,  the Board approved our 1999  Non-Officer  Stock Option Plan (the
"1999 Plan") under which the Board,  or a committee  appointed for such purpose,
was  authorized  to  grant  non-statutory   options  to  eligible  employees  or
consultants  who were not officers or members of the Board,  to acquire up to an
aggregate of 3,000,000  shares of our common  stock.  Options  granted under the
1999  Plan  vested  25%  per  year  over  a  4-year  period,  in  equal  monthly
installments  over thirty-six  months or 100% upon grant  issuance.  All options
expired ten years from the date of grant.

All outstanding stock options were cancelled on April 22, 2005.

No options  were  issued or  outstanding  during the year ended June 30, 2008 or
2007.

Pro Forma  Stock-Based  Compensation  Disclosures -- We apply APB Opinion 25 and
related  interpretations in accounting for our stock options that are granted to
employees.  Accordingly,  no compensation cost has been recognized for grants of
options to  employees  since the  exercise  prices were not less than the quoted
value of our  common  stock on the  grant  dates.  Had  compensation  cost  been
determined  based on the fair value at the grant dates for awards under the Plan
consistent  with the method of SFAS No. 123, our net income  (loss) and earnings
(loss) per share would have been  unchanged as all expenses in respect of issued
stock options were immaterial.

9. INCOME TAXES:

We currently have very  substantial  net operating  losses  carried  forward for
Federal and State tax purposes which, unless utilized,  expire from 2013 through
2025. However, following the issue of shares effective May 31, 2006, our ability
to use these losses was substantially restricted by the impact of Section 382 of
the Internal Revenue Code.

10.      SUBSEQUENT EVENTS:

None.



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<PAGE>

                                   SIGNATURES

    In  accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934, the  Registrant  duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                 ASPEON, INC.

Date: September 29, 2008                         By:  /s/ David J. Cutler
                                                      --------------------
                                                      David J Cutler
                                                      Chief Executive Officer, &
                                                      Chief Financial Officer

    In accordance with the Securities Exchange Act of 1924, this report has been
signed  by  the  following  persons  on  behalf  of  the  Registrant  and in the
capacities and on the dates indicated.


       SIGNATURE                       TITLE                    DATE


/s/ David J. Cutler            Chief Executive Officer      September 29, 2008
-------------------------               &
David  J. Cutler               Chief Financial Officer
                               (Principal Financial and
                               Accounting Officer)

/s/ David J. Cutler
--------------------------     Director                     September 29, 2008
David J. Cutler


/s/ Wesley F. Whiting
--------------------------     Director                     September 29, 2008
Wesley F. Whiting


/s/ Redgie Green
-------------------------      Director                     September 29, 2008
Redgie Green






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