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, 2006.

[_]      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. [ ]

     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, 2006 were $0.

    The   aggregate   market  value  of  the  voting   common   equity  held  by
non-affiliates of the Registrant on September 27, 2006 was approximately  $9,436
based upon the reported closing sale price of such shares on the Grey Sheets for
that date. As of September 27, 2006, there were 20,000,000 shares outstanding of
which 9,436,225 shares were held by non-affiliates.  Shares of common stock held
by each  officer  and  director  and by each  person  who owns 5% or more of the
outstanding  common stock of the Company have been excluded because such persons
are deemed to be.

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


                                       1
<PAGE>

                                  ASPEON, INC.

                        2006 ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS

ITEM                                  DESCRIPTION                           PAGE

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

Item 2.    Description of Properties........................................  11

Item 3.    Legal Proceedings................................................  12

Item 4.    Submission of Matters to a Vote of Security Holders..............  12

Item 5.    Market for Common Equity and Related Stockholder Matters.......    12

Item 6.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations........................................  13

Item 7.    Financial Statements.............................................  28

Item 8.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure.........................................  28

Item 8a.   Controls and Procedures..........................................  28

Item 9.    Directors, Executive Officers, Promoters and Control Persons:
           Compliance with Section 16(a) of the Exchange Act................  29

Item10.    Executive Compensation...........................................  32

Item 11.   Security Ownership of Certain Beneficial Owners and
           Management.......................................................  33

Item 12.   Certain Relationships and Related Transactions...................  34

Item 13.   Exhibits and Reports on Form 8-K.................................  34



                                       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, vigorously
defend  against  any  further  appeal  that may be made  against  our  currently
successful  defense  of the  law  suit  brought  against  us by  certain  of our
shareholders,  bring our financial records and SEC filings up to date, achieve a
listing on the over the counter  bulletin  board,  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 Sate of Delaware in September  1995 under the name
Sunwood Research,  Inc. We changed our name to Javelin Systems,  Inc. in October
1996 and  subsequently to Aspeon,  Inc. in December 1999. Our mailing address is
2460 West 26th Avenue,  Suite 380-C, Denver,  Colorado,  80211 and our telephone
number is 303-380-9784.

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,  vigorously  defending  against any
further appeal that may be made against our currently  successful defense of the
law suit  brought  against  us by  certain  of our  shareholders,  bringing  our
financial records and SEC filings up to date,  seeking a listing on the over the
counter  bulletin  board,  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.

Prior to our cessation of operations, our principal business activities were:

    - POS PRODUCTS. Javelin Systems, a division of Aspeon, Inc.  ("Javelin") and
CCI Group, Inc. ("CCI"), a subsidiary of Aspeon, Inc.,  designed,  manufactured,
marketed  and sold open system  touch  screen  point of sale  ("POS")  computers
primarily to the foodservice and retail industries (the "POS Products").

    -SOLUTION SERVICES.  Through our CCI, Jade Communications  Limited ("Jade"),
RGB/Trinet Limited ("RGB"), (subsequently renamed Javelin Holdings International
Limited (UK)),  (collectively "RGB/Jade") and Aspact IT Services (Singapore) Pte
Ltd. ("Aspact")  subsidiaries,  we provided  information  technology  management
services  for  customers  that did not intend or were not able to hire their own
information  technology  personnel  (the  "Solution  Services").  These services
included network design and management,  installation of computer systems, local
and wide area network support, maintenance and repair, and help desk support.

    - APPLICATION SERVICES PROVIDER. Through our Aspeon Solutions, Inc. ("Aspeon
Solutions"),  Dynamic  Technologies,  Inc.  ("DTI"),  SB Holdings,  Inc. ("SB"),
Restaurant   Consulting  Services  ("RCS")  and  Monument  Software  Corporation
("Monument")  subsidiaries,  we  operated  as an  application  service  provider
("ASP"). Our ASP services enabled software applications to be deployed, managed,
supported and upgraded from centrally located servers, rather than on individual
computers (the "ASP Services").  Our ASP Services primarily were directed toward
customers in the foodservice industry.

2

<PAGE>

An over view of the major events since incorporation is as follows:

On November 1, 1996,  we completed  an initial  public  offering  (the "IPO") of
850,000  shares of our common  stock at $5.00 per  share,  netting  proceeds  of
approximately $3.2 million. Proceeds were used to repay debt with an outstanding
balance of approximately $745,000 and for general corporate purposes.

In December  1997,  we acquired  all of the  outstanding  common stock of POSNET
Computers,  Inc. ("Posnet") and CCI Group, Inc. ("CCI"). Posnet and CCI provided
full  turn-key  systems  integration  services,   including  system  consulting,
staging, training, deployment, product support and maintenance.

In March and April 1998, we  established  three  international  subsidiaries  to
expand our sales and distribution channels in the international marketplace. The
international  subsidiaries  were:  Javelin Systems (Europe)  Limited  ("Javelin
Europe")  headquartered  in  England;  Javelin  Systems  International  Pte  Ltd
("Javelin Asia")  headquartered in Singapore;  and Javelin Systems Australia Pty
Limited  ("Javelin  Australia"),   subsequently  renamed  Aspeon  Systems  (Asia
Pacific) Pty Ltd, headquartered in Australia.

In May 1998, Javelin Asia acquired all of the outstanding common stock of Aspact
IT  Services  (Singapore)  Pte  Ltd  ("Aspact").  Aspact  was  headquartered  in
Singapore and provided consulting and system integration services.

In November  1998,  we completed a public  offering of  1,395,000  shares of our
common stock at $6.75 per share, netting proceeds of approximately $8.1 million.
Proceeds  were  used to repay  borrowings  under a  revolving  line of credit of
approximately  $3.2 million,  to purchase all of the outstanding common stock of
RGB/Trinet  Limited  ("RGB"),  which was  subsequently  renamed Javelin Holdings
International Limited (UK), and Jade Communications Ltd ("Jade") and for general
corporate  purposes.  RGB and Jade were  headquartered  in England and  provided
complementary  Wide Area  Networking  (WAN)  products and services  primarily to
large retail, hospitality, and telecommunications companies.

During  the  course of 1998 we  established  a 75% owned  subsidiary,  Teneo Ltd
("Teneo"),  in an effort to expand our service  management and wide area network
solutions business.

In January 1999 the business and assets of Posnet were  transferred  from Posnet
and merged with the business and assets of CCI.

In February  1999,  we completed a public  offering of  2,375,000  shares of our
common  stock at $12.25 per  share,  netting  proceeds  of  approximately  $26.9
million.  Proceeds were used to purchase the outstanding common stock of Dynamic
Technologies,  Inc. ("DTI") and SB Holdings, Inc. ("SB") and for working capital
and general  corporate  purposes.  DTI and SB provided custom  Internet/Intranet
software and services.

In August 1999, we acquired all of the  outstanding  capital stock of Restaurant
Consulting  Services,  Inc.  ("RCS").  RCS  implemented,  operated and supported
packaged software applications for the restaurant industry.

In January 2000, we created Aspeon  Solutions,  Inc.  ("Aspeon  Solutions") as a
wholly owned subsidiary to centralize and continue the rapid  development of our
ASP service business.

On March 8, 2000 we completed a private  placement of  securities  with Marshall
Capital  Management,  Inc., an affiliate of Credit Suisse First Boston, in which
we sold an  aggregate  of 10,000  shares of  Series A  Convertible  Exchangeable
Preferred Stock (the "Preferred  Stock"), a warrant to acquire 583,334 shares of
our common stock and a warrant to acquire  1,250,000 shares of Aspeon Solutions,
one of  our  wholly-owned  subsidiaries.  Proceeds  to us  from  this  placement
amounted to $9.6 million,  net of offering  costs,  which were used primarily to
acquire Monument  Software  Corporation  ("Monument"),  settle future contingent
payments  associated  with the  acquisition  of RCS, hire  management  and staff
personnel,  expand  corporate  facilities and fund our ASP Services  operations.
Monument specialized in the rapid  implementation of enterprise-class  financial
systems with an emphasis on Oracle Financials

During  fiscal 2000,  we  sustained  significant  losses and we had  experienced
negative cash flows from our operations since inception.  As at June 30, 2000 we
were in default of certain covenants under the terms of both our credit facility
and  Preferred  Stock  and were  delinquent  in the  payment  of  various  trade
payables. Our ability to meet our obligations in the ordinary course of business
was  dependent  upon the  success of our  attempts  to return to  profitability,
obtain a waiver of credit line and Preferred  Stock defaults,  raise  additional
financing  through  public and,  or,  private  equity  financings  and  evaluate
potential  strategic  opportunities.  We sought to  return to  profitability  by
streamlining   operations  and  generating   on-going  cost  savings  and  began
evaluating  strategic  opportunities  for our sale or the sale of certain of our
subsidiaries.


                                       4
<PAGE>

As part of our  efforts to  streamline  our  operations,  during  fiscal 2001 we
merged the business of Javelin Asia into Javelin  Australia and renamed  Javelin
Australia as Aspeon  Systems (Asia Pacific) Pty Ltd and we merged the operations
of Monument into those of RCS.

In August 2000, we executed a sale agreement  with the then current  director of
Aspact (the "Purchaser").  The initial purchase price of $350,000 was payable to
us in monthly installments of $14,600 commencing in July 2001.  Consequently,  a
loss on sale of approximately  $229,000 was recognized in the three months ended
September  30, 2000. In the event the Purchaser  consummated  an initial  public
offering or disposed of all or  substantially  all of Aspact's common stock, the
Purchaser   was  required  to  pay:  a)  the  unpaid   balance  of  the  initial
consideration  and b) 50% of the net proceeds  received from the initial  public
offering  less the amount paid under (a),  in an amount not to exceed  $200,000.
Concurrent with the sale agreement,  the Purchaser was terminated as an employee
of ours.

In September  2000, at the  insistence of our auditors,  PricewaterhouseCoopers,
LLC ("PWC"), we announced that we would restate our first quarter 2000 financial
statements as a result of accounting misstatements. In October 2000 we announced
we would  require  additional  time to file our form 10-K  report for the fiscal
year ended June 30, 2000.

 In October 2000, the Nasdaq Stock Market  ("Nasdaq")  suspended  trading in our
common  stock  while it sought  additional  information  from us. On November 9,
2000, we  participated  in a hearing  before the Nasdaq  Listing  Qualifications
Panel which was held for the purpose of evaluating  whether shares of our common
stock would continue to be listed on Nasdaq or if they would be delisted.

In October and November 2000,  eight  purported class action lawsuits were filed
against us, our Chief Executive Officer,  and our former Chief Financial Officer
in the United States  District Court for the Central  District of California for
alleged violations of the Securities  Exchange Act of 1934. After the defendants
moved to dismiss each of the actions,  the lawsuits  were  consolidated  under a
single  action,  entitled "In re Aspeon  Securities  Litigation,"  Case No. SACV
00-995 AHS (ANx), and the appointed lead plaintiff  voluntarily filed an amended
and consolidated  complaint.  The defendants moved to dismiss that complaint and
on April 23, 2001 the Court entered an order  dismissing  the complaint  without
prejudice. On May 21, 2001 the appointed lead plaintiff filed a third complaint,
styled  as a  "First  Amended  Consolidated  Complaint."  On  June 4,  2001  the
defendants  moved to dismiss this complaint and on September 17, 2001 the United
States District Court dismissed the suit with prejudice and entered  judgment in
favor of the us and our officers.  On September  20, 2001 the lead  plaintiff in
the class action suit appealed against the dismissal of the case. On January 21,
2003 the  decision  to dismiss  the case was upheld but the lead  plaintiff  was
given the opportunity to remedy the  deficiencies in the complaint that had been
filed.  Accordingly  on May 30, 2003 the  plaintiff  filed its  "Second  Amended
Consolidated  Complaint" which again was subsequently  dismissed by the District
Court.  On  November  26,  2003 the lead  plaintiff  filed  its  "Third  Amended
Consolidated  Complaint" which was again dismissed with prejudice in March 2004.
The lead  plaintiff  once again  appealed  against the  dismissal and the United
States  Court of Appeals  for the Ninth  Circuit  affirmed  the  dismissal  with
prejudice  on  February  23,  2006.  This is the fifth time that the Courts have
ruled in favor of us and against the  shareholders  who have  brought  this suit
against us. On each of the previous  occasions the shareholders who have brought
this suit  against us have filed an appeal  against the  decision of the Courts.
There can be no  assurance  that the  shareholders  who have  brought  this suit
against us will not file a further  appeal  against the Courts' latest ruling in
which case we will continue to vigorously defend against the claims.

In December 2000 we restated the results for the fiscal quarters ended September
30,  1999,  December 31, 1999 and March 31, 2000 by an aggregate of $1.7 million
or $0.19 per share.  Revenue was reduced by $679,000 or 1.05%,  our gross profit
was decreased by $206,000 or 1.22%,  $1.4 million of the restatement  related to
an  adjustment  to increase the amount  recorded for the  beneficial  conversion
feature  associated with the issuance of our Preferred Stock in March 2000 based
upon  an  independent   valuation  and  the  remaining  adjustments  related  to
unrecorded  compensation expense,  amortization of intangible assets,  expensing
costs previously capitalized and the additional accrual of general expenses.

Effective  as of January 4, 2001 our shares of common stock were  delisted  from
Nasdaq.  As we were in  arrears  with our  filings  with the SEC,  our shares of
common  stock were not  eligible to be traded on the over the  counter  bulletin
board  and  commenced  trading  on the Pink  Sheets  under the  symbol  ASPE.PK.
Subsequently  our shares of common  stock ceased to be traded on the Pink Sheets
and are now traded on the Gray Sheets.

In January  2001 our  auditors,  PWC,  notified us that it was  terminating  its
auditor relationship with us effective immediately.

In February 2001 our subsidiary, RGB, sold its interest in Teneo to employees of
Teneo for the  consideration of a $350,000 note.  Consequently a gain on sale of
$432,000 was recognized during the quarter ended March 31, 2001.


                                       5
<PAGE>

On March 1, 2001 we completed the sale of the  consulting  contracts and certain
of the fixed assets our DTI  subsidiary to a company  controlled by DTI's former
owners and certain of our  shareholders for a purchase price of $900,000 and the
return for  cancellation  of 200,000  of shares of our  common  stock  valued at
$60,000.  With the  completion  of the  transfer of its help desk  business to a
third party on April 27, 2001, the business  activities of DTI ceased. A gain on
the sale of the net assets of DTI totaling  $820,900 was  recognized  during the
quarter ended March 31, 2001.

On March 19,  2001 we  retained  BDO  Seidman,  LLP  ("BDO") as our  independent
auditing firm. However, as PWC, our previous  independent  auditors,  refused to
allow BDO access to PWC's prior year work papers,  BDO was unable to complete an
audit of our financial statements for later periods at that time.

During fiscal 2001,  despite our efforts to return to profitability and the sale
of certain of our subsidiaries,  we continued to generate significant losses, to
be in default of certain covenants under the terms of our Preferred Stock, to be
delinquent  in the  payment of various  trade  payables  and had been  unable to
replace  our line of credit  which had been  repaid in full during the course of
the year.  While we had  appointed  new  auditors,  we were  unable to  generate
audited  financial  accounts  due to the lack of  cooperation  from our previous
auditors and consequently were unable to comply with the listing requirements of
either Nasdaq or the over the counter bulletin board. Our relegation to the Pink
Sheets had serious adverse consequences for both the confidence of our customers
or potential  customers and our ability to attract new debt or equity financing.
The  lawsuits  brought  against  us by certain  of our  shareholders  diverted a
significant  amount of our management's time from our operations which were also
severely effected by the collapse of the tech market in early 2001. Nevertheless
we  continued  press  ahead by  attempting  to return to  profitability  through
further cost reductions,  renegotiate the terms of our Preferred  Stock,  settle
the outstanding shareholder litigation, evaluate strategic opportunities for our
sale or the sale of certain of our  subsidiaries  and raise additional debt and,
or, equity funding.

In August 2001 we, together with our Chief Executive Officer,  filed a six count
complaint against our former auditors,  PWC, alleging  professional  negligence,
intentional   interference  with  prospective   business  advantage,   negligent
interference  with  prospective  economic  advantage,  violation  of  California
Business and Professions Code Sections 17200 and 17500, and defamation.

On March 22, 2002 we signed an  agreement  to sell our  subsidiary  RGB (renamed
Javelin Holdings  International Ltd.), the UK holding company that in turn owned
our Javelin Europe and Jade  subsidiaries,  to an investment group that included
members of the existing UK  management  team for  $125,995 and the  repayment of
inter-company  debt.  $750,000 was paid on signing with $175,000 to be paid upon
completion of a technology escrow agreement

On May 1, 2002 we signed an agreement  with the holder of our  Preferred  Shares
that had been in default. Under that agreement,  in return for a cash payment of
$447,500  by us (a) we  were  released  from  all  liabilities  relating  to our
outstanding Series A Convertible  Exchangeable Preferred Stock and the documents
under which those  securities had been issued and were  outstanding;  (b) all of
our  outstanding  Series  A  Convertible   Exchangeable   Preferred  Stock  were
cancelled; (c) a warrant previously issued by us entitling the holder thereof to
purchase  583,334  shares of our common stock was  cancelled;  and (d) a warrant
previously  issued by our  subsidiary,  Aspeon  Solutions,  entitling the holder
thereof to purchase 1,250,000 shares of the common stock of Aspeon Solutions was
cancelled.  We believed  that the  settlement  had a net positive  effect on our
balance sheet of approximately $19 million.

In June 2002 we terminated the activities of RCS.

On January 17, 2003, we sold our Australian  subsidiary,  Javelin Australia,  to
Mr.  Matthew  Maley.  Prior to the sale,  Mr.  Maley had  served as our  general
manager  of  that  subsidiary.  We  received  $80,000  at the  closing  of  this
transaction.  Under the Share Sale Agreement  relating to this transaction,  Mr.
Maley agreed to cause Javelin  Australia to pay its account payable to us in the
amount of $239,000 in monthly installments of $10,000 each until the full amount
of the account  payable has been paid.  Mr. Maley  personally  guaranteed  these
payments.

During the fiscal years  ending June 30, 2002 and 2003,  we used every effort to
return to profitability  through  on-going cost reductions,  to raise additional
debt and, or, equity  funding and to identify  strategic  opportunities  for our
sale or the sale of certain of our subsidiaries  However,  the weak tech market,
together with our inability to produce audited accounts and come into compliance
with the  listing  conditions  of  Nasdaq  or over the  counter  bulletin  board
markets,  meant we were  unable to attract new  customers  or the debt or equity
financing necessary to secure our financial future.

On June 30,  2003 we  decided  to  discontinue  the  operations  of our last two
operating businesses,  Javelin and CCI. Javelin ceased operations with immediate
effect while CCI completed  certain  outstanding  customer orders before ceasing
production on August 3, 2003 and continued to  subcontract  certain  maintenance
activities through December 31, 2003.


                                       6
<PAGE>

In August  2003 we reached an out of court  settlement  in our law suit  against
PWC. Under the terms of the settlement we received a payment of $1.3 million and
agreement to write off certain  outstanding  invoices for  accounting  and legal
fees. Consequently we recognized a gain of $1,007,000 on the settlement although
the net cash we received after all costs totaled only $136,000.

In December 2003, we appointed attorney Frank G Blundo Jr. P.C. as trustee in an
assignment  for the  benefit  of the  creditors  of  Aspeon  and CCI  commencing
effective January 1, 2004.  Effective 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 participate 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.  Consequently  we
recognized a gain of $3.2 million on the establishment of the assignment for the
benefit of Aspeon and CCI creditors. 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.

Following the establishment for the assignment for the benefit of Aspeon and CCI
creditors in January  2004,  we had no assets,  no  operating  business or other
source  of  income,  outstanding  liabilities  in  excess  of $7.9  million,  an
outstanding  law suit brought  against us by certain of our  shareholders,  were
substantially in arrears in respect of maintaining our financial records and our
SEC filings,  were no longer  listed on Nasdaq or the over the counter  bulletin
board and in due course ceased to be listed on the Pink Sheets.

In April 2005, we appointed David J Cutler as a new director and Chief Executive
Officer  and  subsequent  to  that  are now  focused  on  reaching  satisfactory
negotiated  settlements  with our outstanding  creditors,  vigorously  defending
against any further  appeal that may be made  against our  currently  successful
defense of the law suit  brought  against  us by  certain  of our  shareholders,
bringing our financial records and SEC filings up to date,  seeking a listing on
the over the counter bulletin board,  raising additional debt and, or, equity to
finance  settlements with 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.

On April 22, 2005, our sole  director,  David J Cutler entered into an agreement
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI creditors, subject to due diligence, to invest up to $50,000 cash
in us for the benefit of our  creditors  in return for a number of shares of our
common stock to be  determined.  Following  the  completion of the due diligence
process  during the three  months ended  December  31, 2005,  it was agreed with
Frank G Blundo,  Jr. P.C.,  trustee of the  assignment for the benefit of Aspeon
and CCI creditors, that Mr. Cutler would invest $20,000 in us for the benefit of
Aspeon and CCI creditors in return for a number of shares of our common stock to
be  determined.  Accordingly  during the three  months  ended  December 31, 2005
$20,000  which had been  placed in escrow  with Frank G Blundo,  Jr. P.C. by Mr.
Cutler was  released  for the  benefit of Aspeon and CCI  creditors.  On May 31,
2006,  based on an  independent  third  party  valuation,  the  majority  of our
independent  directors  approved  the issue of  10,536,775  shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

On  September  9, 2005 we  received a letter  from the SEC dated  June 24,  2005
indicating that unless we came into  compliance with the reporting  requirements
under the Securities Exchange Act of 1934 within 15 days we may be deregistered.
On  September  12,  2005 we faxed a letter  to the SEC's  Office of  Enforcement
Liaison  indicating  our  intention to come into  compliance  with the reporting
requirements under the Securities Exchange Act of 1934 by November 15, 2005.

On September 12, 2005 we retained Larry  O'Donnell,  CPA, P.C.  (`O'Donnell') as
our independent auditing firm.

By November 15, 2005 we  completed  all required SEC filings for the period July
1, 2003 through September 30, 2005.  However,  we had not completed all required
SEC  filings  in  respect  of the period  April 1, 2001  through  June 30,  2003
although  we had  included  substantial  financial  extracts  and  all  material
disclosures  in respect  of these  periods in the  filings we had  completed  in
respect  of  subsequent  periods.  We  believed  the  cost  to  shareholders  in
completing  these  filings in  respect of these  earlier  periods  exceeded  any
benefit to shareholders in completing  these filings as the information in these
filings  was at  least  two  to  four  years  old,  no  longer  relevant  to our
shareholders given our decision to cease all trading operations made on June 30,
2003 and that all material  information in respect of these earlier  periods has
been made available to our shareholders in our SEC filings for later periods.


                                       7
<PAGE>

In January 2006 we were contacted by the SEC's Office of Enforcement Liaison who
notified us that while they  recognized the progress we had made in bringing our
SEC filings up to date, they still considered us to be delinquent in our filings
because of our  failure to  complete  filings in respect of the period  April 1,
2001 through June 30, 2003..  In August 2006, on the basis of further audit work
and a review of subsequent  events performed by O'Donnell,  O'Donnell  completed
the audit of our June 30, 2001 financial statements.  In September 2006 we filed
forms 10-QSB for the three months ended September 30, 2001, the six months ended
December  31, 2001 and the nine months ended March 31,  2002.  We are  currently
establishing the likely costs and practicality of completing the SEC filings and
related financial statements for the period April 1, 2002 through June 30, 2003.
In the meantime there continues to be a risk that our shares of common stock may
be  deregistered  by the SEC's Office of  Enforcement  Liaison due the continued
delinquency  of our SEC filings for the period  April 1, 2002  through  June 30,
2003.

On February 23, 2006 the United  States  Court of Appeals for the Ninth  Circuit
affirmed the  dismissal  with  prejudice  of the law suit brought  against us by
certain of our  shareholders.  This is the fifth time that the Courts have ruled
in favor of us and against the  shareholders  who have brought this suit against
us. On each of the previous  occasions  the  shareholders  who have brought this
suit against us have filed an appeal  against the decision of the Courts.  There
can be no assurance that the  shareholders who have brought this suit against us
will not file a further  appeal  against the Courts' latest ruling in which case
we will continue to vigorously defend against the claims.

Effective  March 13,  2006,  David  Cutler,  at that time our sole  director and
officer,  appointed  Wesley F Whiting  and Redgie  Green as new,  non  executive
directors to join him on our board of directors.

On May 31, 2006, based on an independent third party valuation,  the majority of
our independent  directors approved the issue of 10,536,775 shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

In August 2006,  on the basis of further  audit work and a review of  subsequent
events  performed by  O'Donnell,  O'Donnell  completed the audit of our June 30,
2001 financial statements. In September 2006 we filed forms 10-QSB for the three
months ended  September 30, 2001, the six months ended December 31, 2001 and the
nine months ended March 31, 2002. We are currently establishing the likely costs
and practicality of completing the SEC filings and related financial  statements
for the period  April 1, 2002  through  June 30,  2003.  In the  meantime  there
continues  to be a risk that our shares of common stock may be  deregistered  by
the SEC's Office of Enforcement Liaison due the continued delinquency of our SEC
filings for the period April 1, 2002 through June 30, 2003.

PLANNED OPERATIONS

Our plan of operation is to reach satisfactory  negotiated  settlements with our
outstanding creditors,  vigorously defend against any further appeal that may be
made against our currently successful defense of the law suit brought against us
by certain of our  shareholders,  bring our financial records and SEC filings up
to date, obtain debt or equity finance to meet our ongoing  operating  expenses,
seek re-listing on the over the counter bulletin board 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 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.


                                       8
<PAGE>

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 sole  director.  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
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.


                                       9
<PAGE>

 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
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.


                                       10
<PAGE>

INTELLECTUAL PROPERTY

    We hold no patents or patent applications.

EMPLOYEES

As of June 30, 2006, we had 1 part-time employee.

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 effective June
30, 2003 and the transfer of our remaining assets to the trustee for the benefit
of the  creditors of Aspeon and CCI  effective  January 1, 2004.  Rather than an
operating business, our business is to reach satisfactory negotiated settlements
with our  outstanding  creditors,  vigorously  defend against any further appeal
that  may be made  against  our  currently  successful  defense  of the law suit
brought against us by certain of our  shareholders,  bring our financial records
and SEC  filings  up to date,  obtain  debt  and,  or,  equity  finance  to fund
negotiated  settlements  with our  creditors  and to meet our ongoing  operating
expenses,  seek to be listed on the over the counter  bulletin board 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  the  following  facilities,   containing,  in  aggregate,
approximately 250 square feet:

<TABLE>
<CAPTION>

   PROPERTY                       YEAR LEASED    SQUARE FEET      EXPIRATION DATE     RENT/MONTH
<S>                               <C>            <C>            <C>                   <C>
   Dana Point, California            2004            150        Month to month               $200

   Dana Point, California            2005            100        Month to month               $149
</TABLE>

We believe that our facilities are satisfactory for our purposes and are in good
condition.

In  February  2004 we entered  into a month to month lease for a 150 square foot
storage unit in Dana Point, California at $ 200 per month to maintain certain of
our corporate records.

In  March  2005 we  entered  into a three  month  lease  for a 300  square  foot
executive  office  suite in Laguna  Hills,  California  at  $1,150  per month to
facilitate  bringing our financial  statements  and SEC filings up to dat . This
lease was terminated in September 2005.

In June 2005 we  entered  into a month to month  lease for a further  100 square
foot  storage  unit in Dana  Point,  California  at $150 per  month to  maintain
certain of our corporate records returned to us by our attorneys.



                                       11
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

In October and November 2000,  eight  purported class action lawsuits were filed
against us, our Chief Executive Officer,  and our former Chief Financial Officer
in the United States  District Court for the Central  District of California for
alleged violations of the Securities  Exchange Act of 1934. After the defendants
moved to dismiss each of the actions,  the lawsuits  were  consolidated  under a
single  action,  entitled "In re Aspeon  Securities  Litigation,"  Case No. SACV
00-995 AHS (ANx), and the appointed lead plaintiff  voluntarily filed an amended
and consolidated  complaint.  The defendants moved to dismiss that complaint and
on April 23, 2001 the Court entered an order  dismissing  the complaint  without
prejudice. On May 21, 2001 the appointed lead plaintiff filed a third complaint,
styled  as a  "First  Amended  Consolidated  Complaint."  On  June 4,  2001  the
defendants  moved to dismiss this complaint and on September 17, 2001 the United
States District Court dismissed the suit with prejudice and entered  judgment in
favor of the us and our officers.  On September  20, 2001 the lead  plaintiff in
the class action suit appealed against the dismissal of the case. On January 21,
2003 the  decision  to dismiss  the case was upheld but the lead  plaintiff  was
given the opportunity to remedy the  deficiencies in the complaint that had been
filed.  Accordingly  on May 30, 2003 the  plaintiff  filed its  "Second  Amended
Consolidated  Complaint" which again was subsequently  dismissed by the District
Court.  On  November  26,  2003 the lead  plaintiff  filed  its  "Third  Amended
Consolidated  Complaint" which was again dismissed with prejudice in March 2004.
The lead  plaintiff  once again  appealed  against the  dismissal and the United
States  Court of Appeals  for the Ninth  Circuit  affirmed  the  dismissal  with
prejudice  on  February  23,  2006.  This is the fifth time that the Courts have
ruled in favor of us and against the  shareholders  who have  brought  this suit
against us. On each of the previous  occasions the shareholders who have brought
this suit  against us have filed an appeal  against the  decision of the Courts.
There can be no  assurance  that the  shareholders  who have  brought  this suit
against us will not file a further  appeal  against the Courts' latest ruling in
which case we will continue to vigorously defend against the claims.

In December 2003, we appointed attorney Frank G Blundo Jr. P.C. as trustee in an
assignment  for the  benefit  of the  creditors  of  Aspeon  and CCI  commencing
effective January 1, 2004.  Effective 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 participate 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.

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

No matters were  submitted by us to a vote of our  security  holders  during our
fiscal years ended June 30, 2006 and 2005 or subsequent to that date.

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 are now traded on the Grey Sheets.

Last Reported  Price.  On September 27, 2005, the last reported bid price of the
common stock reported on the Grey Sheets was $0.0001 per share.


                                       12
<PAGE>


Holders.  As of  November 3, 2005 there were 347 holders of record of the common
stock.  We believe that we have  approximatley  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
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.

  Sale  of  Unregistered  Securities  --  details  concerning  the  sale  of any
unregistered  securities during the period are set out in Note 10. Stockholders'
Deficit of the Financial Statements on page 58 below.

  Stock Incentive  Plans -- details  concerning the activities and status of our
stock  incentive  plan  during the period are set out in Note 10.  Stockholders'
Deficit of the Financial Statements on page 58 below.

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.

OVERVIEW

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,  vigorously  defend  against  any
further appeal that may be made against our currently  successful defense of the
law suit  brought  against  us by  certain  of our  shareholders,  bringing  our
financial records and SEC filings up to date,  seeking a listing on the over the
counter  bulletin  board,  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.

Prior to our cessation of operations, our principal business activities were:

     - POS PRODUCTS. Javelin Systems, a division of Aspeon, Inc. ("Javelin") and
CCI Group, Inc. ("CCI"), a subsidiary of Aspeon, Inc.,  designed,  manufactured,
marketed  and sold open system  touch  screen  point of sale  ("POS")  computers
primarily to the foodservice and retail industries (the "POS Products").


                                       13
<PAGE>

    -SOLUTION SERVICES.  Through our CCI, Jade Communications  Limited ("Jade"),
RGB/Trinet Limited ("RGB"), (subsequently renamed Javelin Holdings International
Limited (UK)),  (collectively "RGB/Jade") and Aspact IT Services (Singapore) Pte
Ltd. ("Aspact")  subsidiaries,  we provided  information  technology  management
services  for  customers  that did not intend or were not able to hire their own
information  technology  personnel  (the  "Solution  Services").  These services
included network design and management,  installation of computer systems, local
and wide area network support, maintenance and repair, and help desk support.

    - APPLICATION SERVICES PROVIDER. Through our Aspeon Solutions, Inc. ("Aspeon
Solutions"),  Dynamic  Technologies,  Inc.  ("DTI"),  SB Holdings,  Inc. ("SB"),
Restaurant   Consulting  Services  ("RCS")  and  Monument  Software  Corporation
("Monument")  subsidiaries,  we  operated  as an  application  service  provider
("ASP"). Our ASP services enabled software applications to be deployed, managed,
supported and upgraded from centrally located servers, rather than on individual
computers (the "ASP Services").  Our ASP Services primarily were directed toward
customers in the foodservice industry.

An over view of the major events since incorporation is as follows:

On November 1, 1996,  we completed  an initial  public  offering  (the "IPO") of
850,000  shares of our common  stock at $5.00 per  share,  netting  proceeds  of
approximately $3.2 million. Proceeds were used to repay debt with an outstanding
balance of approximately $745,000 and for general corporate purposes.

In December  1997,  we acquired  all of the  outstanding  common stock of POSNET
Computers,  Inc. ("Posnet") and CCI Group, Inc. ("CCI"). Posnet and CCI provided
full  turn-key  systems  integration  services,   including  system  consulting,
staging, training, deployment, product support and maintenance.

In March and April 1998, we  established  three  international  subsidiaries  to
expand our sales and distribution channels in the international marketplace. The
international  subsidiaries  were:  Javelin Systems (Europe)  Limited  ("Javelin
Europe")  headquartered  in  England;  Javelin  Systems  International  Pte  Ltd
("Javelin Asia")  headquartered in Singapore;  and Javelin Systems Australia Pty
Limited  ("Javelin  Australia"),   subsequently  renamed  Aspeon  Systems  (Asia
Pacific) Pty Ltd, headquartered in Australia.

In May 1998, Javelin Asia acquired all of the outstanding common stock of Aspact
IT  Services  (Singapore)  Pte  Ltd  ("Aspact").  Aspact  was  headquartered  in
Singapore and provided consulting and system integration services.

In November  1998,  we completed a public  offering of  1,395,000  shares of our
common stock at $6.75 per share, netting proceeds of approximately $8.1 million.
Proceeds  were  used to repay  borrowings  under a  revolving  line of credit of
approximately  $3.2 million,  to purchase all of the outstanding common stock of
RGB/Trinet  Limited  ("RGB"),  which was  subsequently  renamed Javelin Holdings
International Limited (UK), and Jade Communications Ltd ("Jade") and for general
corporate  purposes.  RGB and Jade were  headquartered  in England and  provided
complementary  Wide Area  Networking  (WAN)  products and services  primarily to
large retail, hospitality, and telecommunications companies.

During  the  course of 1998 we  established  a 75% owned  subsidiary,  Teneo Ltd
("Teneo"),  in an effort to expand our service  management and wide area network
solutions business.

In January 1999 the business and assets of Posnet were  transferred  from Posnet
and merged with the business and assets of CCI.

In February  1999,  we completed a public  offering of  2,375,000  shares of our
common  stock at $12.25 per  share,  netting  proceeds  of  approximately  $26.9
million.  Proceeds were used to purchase the outstanding common stock of Dynamic
Technologies,  Inc. ("DTI") and SB Holdings, Inc. ("SB") and for working capital
and general  corporate  purposes.  DTI and SB provided custom  Internet/Intranet
software and services.

In August 1999, we acquired all of the  outstanding  capital stock of Restaurant
Consulting  Services,  Inc.  ("RCS").  RCS  implemented,  operated and supported
packaged software applications for the restaurant industry.

In January 2000, we created Aspeon  Solutions,  Inc.  ("Aspeon  Solutions") as a
wholly owned subsidiary to centralize and continue the rapid  development of our
ASP service business.


                                       14
<PAGE>

On March 8, 2000 we completed a private  placement of  securities  with Marshall
Capital  Management,  Inc., an affiliate of Credit Suisse First Boston, in which
we sold an  aggregate  of 10,000  shares of  Series A  Convertible  Exchangeable
Preferred Stock (the "Preferred  Stock"), a warrant to acquire 583,334 shares of
our common stock and a warrant to acquire  1,250,000 shares of Aspeon Solutions,
one of  our  wholly-owned  subsidiaries.  Proceeds  to us  from  this  placement
amounted to $9.6 million,  net of offering  costs,  which were used primarily to
acquire Monument  Software  Corporation  ("Monument"),  settle future contingent
payments  associated  with the  acquisition  of RCS, hire  management  and staff
personnel,  expand  corporate  facilities and fund our ASP Services  operations.
Monument specialized in the rapid  implementation of enterprise-class  financial
systems with an emphasis on Oracle Financials

During  fiscal 2000,  we  sustained  significant  losses and we had  experienced
negative cash flows from our operations since inception.  As at June 30, 2000 we
were in default of certain covenants under the terms of both our credit facility
and  Preferred  Stock  and were  delinquent  in the  payment  of  various  trade
payables. Our ability to meet our obligations in the ordinary course of business
was  dependent  upon the  success of our  attempts  to return to  profitability,
obtain a waiver of credit line and Preferred  Stock defaults,  raise  additional
financing  through  public and,  or,  private  equity  financings  and  evaluate
potential  strategic  opportunities.  We sought to  return to  profitability  by
streamlining   operations  and  generating   on-going  cost  savings  and  began
evaluating  strategic  opportunities  for our sale or the sale of certain of our
subsidiaries.

As part of our  efforts to  streamline  our  operations,  during  fiscal 2001 we
merged the business of Javelin Asia into Javelin  Australia and renamed  Javelin
Australia as Aspeon  Systems (Asia Pacific) Pty Ltd and we merged the operations
of Monument into those of RCS.

In August 2000, we executed a sale agreement  with the then current  director of
Aspact (the "Purchaser").  The initial purchase price of $350,000 was payable to
us in monthly installments of $14,600 commencing in July 2001.  Consequently,  a
loss on sale of approximately  $229,000 was recognized in the three months ended
September  30, 2000. In the event the Purchaser  consummated  an initial  public
offering or disposed of all or  substantially  all of Aspact's common stock, the
Purchaser   was  required  to  pay:  a)  the  unpaid   balance  of  the  initial
consideration  and b) 50% of the net proceeds  received from the initial  public
offering  less the amount paid under (a),  in an amount not to exceed  $200,000.
Concurrent with the sale agreement,  the Purchaser was terminated as an employee
of ours.

In September  2000, at the  insistence of our auditors,  PricewaterhouseCoopers,
LLC ("PWC"), we announced that we would restate our first quarter 2000 financial
statements as a result of accounting misstatements. In October 2000 we announced
we would  require  additional  time to file our form 10-K  report for the fiscal
year ended June 30, 2000.

 In October 2000, the Nasdaq Stock Market  ("Nasdaq")  suspended  trading in our
common  stock  while it sought  additional  information  from us. On November 9,
2000, we  participated  in a hearing  before the Nasdaq  Listing  Qualifications
Panel which was held for the purpose of evaluating  whether shares of our common
stock would continue to be listed on Nasdaq or if they would be delisted.

In October and November 2000,  eight  purported class action lawsuits were filed
against us, our Chief Executive Officer,  and our former Chief Financial Officer
in the United States  District Court for the Central  District of California for
alleged violations of the Securities  Exchange Act of 1934. After the defendants
moved to dismiss each of the actions,  the lawsuits  were  consolidated  under a
single  action,  entitled "In re Aspeon  Securities  Litigation,"  Case No. SACV
00-995 AHS (ANx), and the appointed lead plaintiff  voluntarily filed an amended
and consolidated  complaint.  The defendants moved to dismiss that complaint and
on April 23, 2001 the Court entered an order  dismissing  the complaint  without
prejudice. On May 21, 2001 the appointed lead plaintiff filed a third complaint,
styled  as a  "First  Amended  Consolidated  Complaint."  On  June 4,  2001  the
defendants  moved to dismiss this complaint and on September 17, 2001 the United
States District Court dismissed the suit with prejudice and entered  judgment in
favor of the us and our officers.  On September  20, 2001 the lead  plaintiff in
the class action suit appealed against the dismissal of the case. On January 21,
2003 the  decision  to dismiss  the case was upheld but the lead  plaintiff  was
given the opportunity to remedy the  deficiencies in the complaint that had been
filed.  Accordingly  on May 30, 2003 the  plaintiff  filed its  "Second  Amended
Consolidated  Complaint" which again was subsequently  dismissed by the District
Court.  On  November  26,  2003 the lead  plaintiff  filed  its  "Third  Amended
Consolidated  Complaint" which was again dismissed with prejudice in March 2004.
The lead  plaintiff  once again  appealed  against the  dismissal and the United
States  Court of Appeals  for the Ninth  Circuit  affirmed  the  dismissal  with
prejudice  on  February  23,  2006.  This is the fifth time that the Courts have
ruled in favor of us and against the  shareholders  who have  brought  this suit
against us. On each of the previous  occasions the shareholders who have brought
this suit  against us have filed an appeal  against the  decision of the Courts.
There can be no  assurance  that the  shareholders  who have  brought  this suit
against us will not file a further  appeal  against the Courts' latest ruling in
which case we will continue to vigorously defend against the claims.


                                       15
<PAGE>

In December 2000 we restated the results for the fiscal quarters ended September
30,  1999,  December 31, 1999 and March 31, 2000 by an aggregate of $1.7 million
or $0.19 per share.  Revenue was reduced by $679,000 or 1.05%,  our gross profit
was decreased by $206,000 or 1.22%,  $1.4 million of the restatement  related to
an  adjustment  to increase the amount  recorded for the  beneficial  conversion
feature  associated with the issuance of our Preferred Stock in March 2000 based
upon  an  independent   valuation  and  the  remaining  adjustments  related  to
unrecorded  compensation expense,  amortization of intangible assets,  expensing
costs previously capitalized and the additional accrual of general expenses.

Effective  as of January 4, 2001 our shares of common stock were  delisted  from
Nasdaq.  As we were in  arrears  with our  filings  with the SEC,  our shares of
common  stock were not  eligible to be traded on the over the  counter  bulletin
board  and  commenced  trading  on the Pink  Sheets  under the  symbol  ASPE.PK.
Subsequently  our shares of common  stock ceased to be traded on the Pink Sheets
and are now traded on the Gray Sheets.

In January  2001 our  auditors,  PWC,  notified us that it was  terminating  its
auditor relationship with us effective immediately.

In February 2001 our subsidiary, RGB, sold its interest in Teneo to employees of
Teneo for the  consideration of a $350,000 note.  Consequently a gain on sale of
$432,000 was recognized during the quarter ended March 31, 2001.

On March 1, 2001 we completed the sale of the  consulting  contracts and certain
of the fixed assets our DTI  subsidiary to a company  controlled by DTI's former
owners and certain of our  shareholders for a purchase price of $900,000 and the
return for  cancellation  of 200,000  of shares of our  common  stock  valued at
$60,000.  With the  completion  of the  transfer of its help desk  business to a
third party on April 27, 2001, the business  activities of DTI ceased. A gain on
the sale of the net assets of DTI totaling  $820,900 was  recognized  during the
quarter ended March 31, 2001.

On March 19,  2001 we  retained  BDO  Seidman,  LLP  ("BDO") as our  independent
auditing firm. However, as PWC, our previous  independent  auditors,  refused to
allow BDO access to PWC's prior year work papers,  BDO was unable to complete an
audit of our financial statements for later periods at that time.

During fiscal 2001,  despite our efforts to return to profitability and the sale
of certain of our subsidiaries,  we continued to generate significant losses, to
be in default of certain covenants under the terms of our Preferred Stock, to be
delinquent  in the  payment of various  trade  payables  and had been  unable to
replace  our line of credit  which had been  repaid in full during the course of
the year.  While we had  appointed  new  auditors,  we were  unable to  generate
audited  financial  accounts  due to the lack of  cooperation  from our previous
auditors and consequently were unable to comply with the listing requirements of
either Nasdaq or the over the counter bulletin board. Our relegation to the Pink
Sheets had serious adverse consequences for both the confidence of our customers
or potential  customers and our ability to attract new debt or equity financing.
The  lawsuits  brought  against  us by certain  of our  shareholders  diverted a
significant  amount of our management's time from our operations which were also
severely effected by the collapse of the tech market in early 2001. Nevertheless
we  continued  press  ahead by  attempting  to return to  profitability  through
further cost reductions,  renegotiate the terms of our Preferred  Stock,  settle
the outstanding shareholder litigation, evaluate strategic opportunities for our
sale or the sale of certain of our  subsidiaries  and raise additional debt and,
or, equity funding.

In August 2001 we, together with our Chief Executive Officer,  filed a six count
complaint against our former auditors,  PWC, alleging  professional  negligence,
intentional   interference  with  prospective   business  advantage,   negligent
interference  with  prospective  economic  advantage,  violation  of  California
Business and Professions Code Sections 17200 and 17500, and defamation.

On March 22, 2002 we signed an  agreement  to sell our  subsidiary  RGB (renamed
Javelin Holdings  International Ltd.), the UK holding company that in turn owned
our Javelin Europe and Jade  subsidiaries,  to an investment group that included
members of the existing UK  management  team for  $125,995 and the  repayment of
inter-company  debt.  $750,000 was paid on signing with $175,000 to be paid upon
completion of a technology escrow agreement

On May 1, 2002 we signed an agreement  with the holder of our  Preferred  Shares
that had been in default. Under that agreement,  in return for a cash payment of
$447,500  by us (a) we  were  released  from  all  liabilities  relating  to our
outstanding Series A Convertible  Exchangeable Preferred Stock and the documents
under which those  securities had been issued and were  outstanding;  (b) all of
our  outstanding  Series  A  Convertible   Exchangeable   Preferred  Stock  were
cancelled; (c) a warrant previously issued by us entitling the holder thereof to
purchase  583,334  shares of our common stock was  cancelled;  and (d) a warrant
previously  issued by our  subsidiary,  Aspeon  Solutions,  entitling the holder
thereof to purchase 1,250,000 shares of the common stock of Aspeon Solutions was
cancelled.  We believed  that the  settlement  had a net positive  effect on our
balance sheet of approximately $19 million.


                                       16
<PAGE>

In June 2002 we terminated the activities of RCS.

On January 17, 2003, we sold our Australian  subsidiary,  Javelin Australia,  to
Mr.  Matthew  Maley.  Prior to the sale,  Mr.  Maley had  served as our  general
manager  of  that  subsidiary.  We  received  $80,000  at the  closing  of  this
transaction.  Under the Share Sale Agreement  relating to this transaction,  Mr.
Maley agreed to cause Javelin  Australia to pay its account payable to us in the
amount of $239,000 in monthly installments of $10,000 each until the full amount
of the account  payable has been paid.  Mr. Maley  personally  guaranteed  these
payments.

During the fiscal years  ending June 30, 2002 and 2003,  we used every effort to
return to profitability  through  on-going cost reductions,  to raise additional
debt and, or, equity  funding and to identify  strategic  opportunities  for our
sale or the sale of certain of our subsidiaries  However,  the weak tech market,
together with our inability to produce audited accounts and come into compliance
with the  listing  conditions  of  Nasdaq  or over the  counter  bulletin  board
markets,  meant we were  unable to attract new  customers  or the debt or equity
financing necessary to secure our financial future.

On June 30,  2003 we  decided  to  discontinue  the  operations  of our last two
operating businesses,  Javelin and CCI. Javelin ceased operations with immediate
effect while CCI completed  certain  outstanding  customer orders before ceasing
production on August 3, 2003 and continued to  subcontract  certain  maintenance
activities through December 31, 2003.

In August  2003 we reached an out of court  settlement  in our law suit  against
PWC. Under the terms of the settlement we received a payment of $1.3 million and
agreement to write off certain  outstanding  invoices for  accounting  and legal
fees. Consequently we recognized a gain of $1,007,000 on the settlement although
the net cash we received after all costs totaled only $136,000.

In December 2003, we appointed attorney Frank G Blundo Jr. P.C. as trustee in an
assignment  for the  benefit  of the  creditors  of  Aspeon  and CCI  commencing
effective January 1, 2004.  Effective 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 participate 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.  Consequently  we
recognized a gain of $3.2 million on the establishment of the assignment for the
benefit of Aspeon and CCI creditors. 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.

Following the establishment for the assignment for the benefit of Aspeon and CCI
creditors in January  2004,  we had no assets,  no  operating  business or other
source  of  income,  outstanding  liabilities  in  excess  of $7.9  million,  an
outstanding  law suit brought  against us by certain of our  shareholders,  were
substantially in arrears in respect of maintaining our financial records and our
SEC filings,  were no longer  listed on Nasdaq or the over the counter  bulletin
board and in due course ceased to be listed on the Pink Sheets.

In April 2005, we appointed David J Cutler as a new director and Chief Executive
Officer  and  subsequent  to  that  are now  focused  on  reaching  satisfactory
negotiated  settlements  with our outstanding  creditors,  vigorously  defending
against any further  appeal that may be made  against our  currently  successful
defense of the law suit  brought  against  us by  certain  of our  shareholders,
bringing our financial records and SEC filings up to date,  seeking a listing on
the over the counter bulletin board,  raising additional debt and, or, equity to
finance  settlements with 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.

On April 22, 2005, our sole  director,  David J Cutler entered into an agreement
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI creditors, subject to due diligence, to invest up to $50,000 cash
in us for the benefit of our  creditors  in return for a number of shares of our
common stock to be  determined.  Following  the  completion of the due diligence
process  during the three  months ended  December  31, 2005,  it was agreed with
Frank G Blundo,  Jr. P.C.,  trustee of the  assignment for the benefit of Aspeon
and CCI creditors, that Mr. Cutler would invest $20,000 in us for the benefit of
Aspeon and CCI creditors in return for a number of shares of our common stock to
be  determined.  Accordingly  during the three  months  ended  December 31, 2005
$20,000  which had been  placed in escrow  with Frank G Blundo,  Jr. P.C. by Mr.
Cutler was  released  for the  benefit of Aspeon and CCI  creditors.  On May 31,
2006,  based on an  independent  third  party  valuation,  the  majority  of our
independent  directors  approved  the issue of  10,536,775  shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

                                       17
<PAGE>

On  September  9, 2005 we  received a letter  from the SEC dated  June 24,  2005
indicating that unless we came into  compliance with the reporting  requirements
under the Securities Exchange Act of 1934 within 15 days we may be deregistered.
On  September  12,  2005 we faxed a letter  to the SEC's  Office of  Enforcement
Liaison  indicating  our  intention to come into  compliance  with the reporting
requirements under the Securities Exchange Act of 1934 by November 15, 2005.

On September 12, 2005 we retained Larry  O'Donnell,  CPA, P.C.  (`O'Donnell') as
our independent auditing firm.

By November 15, 2005 we  completed  all required SEC filings for the period July
1, 2003 through September 30, 2005.  However,  we had not completed all required
SEC  filings  in  respect  of the period  April 1, 2001  through  June 30,  2003
although  we had  included  substantial  financial  extracts  and  all  material
disclosures  in respect  of these  periods in the  filings we had  completed  in
respect  of  subsequent  periods.  We  believed  the  cost  to  shareholders  in
completing  these  filings in  respect of these  earlier  periods  exceeded  any
benefit to shareholders in completing  these filings as the information in these
filings  was at  least  two  to  four  years  old,  no  longer  relevant  to our
shareholders given our decision to cease all trading operations made on June 30,
2003 and that all material  information in respect of these earlier  periods has
been made available to our shareholders in our SEC filings for later periods.

In January 2006 we were contacted by the SEC's Office of Enforcement Liaison who
notified us that while they  recognized the progress we had made in bringing our
SEC filings up to date, they still considered us to be delinquent in our filings
because of our  failure to  complete  filings in respect of the period  April 1,
2001 through June 30, 2003.  In August 2006,  on the basis of further audit work
and a review of subsequent  events performed by O'Donnell,  O'Donnell  completed
the audit of our June 30, 2001 financial statements.  In September 2006 we filed
forms 10-QSB for the three months ended September 30, 2001, the six months ended
December  31, 2001 and the nine months ended March 31,  2002.  We are  currently
establishing the likely costs and practicality of completing the SEC filings and
related financial statements for the period April 1, 2002 through June 30, 2003.
In the meantime there continues to be a risk that our shares of common stock may
be  deregistered  by the SEC's Office of  Enforcement  Liaison due the continued
delinquency  of our SEC filings for the period  April 1, 2002  through  June 30,
2003.

On February 23, 2006 the United  States  Court of Appeals for the Ninth  Circuit
affirmed the  dismissal  with  prejudice  of the law suit brought  against us by
certain of our  shareholders.  This is the fifth time that the Courts have ruled
in favor of us and against the  shareholders  who have brought this suit against
us. On each of the previous  occasions  the  shareholders  who have brought this
suit against us have filed an appeal  against the decision of the Courts.  There
can be no assurance that the  shareholders who have brought this suit against us
will not file a further  appeal  against the Courts' latest ruling in which case
we will continue to vigorously defend against the claims.

Effective  March 13,  2006,  David  Cutler,  at that time our sole  director and
officer,  appointed  Wesley F Whiting  and Redgie  Green as new,  non  executive
directors to join him on our board of directors.

On May 31, 2006, based on an independent third party valuation,  the majority of
our independent  directors approved the issue of 10,536,775 shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

In August 2006,  on the basis of further  audit work and a review of  subsequent
events  performed by  O'Donnell,  O'Donnell  completed the audit of our June 30,
2001 financial statements. In September 2006 we filed forms 10-QSB for the three
months ended  September 30, 2001, the six months ended December 31, 2001 and the
nine months ended March 31, 2002. We are currently establishing the likely costs
and practicality of completing the SEC filings and related financial  statements
for the period  April 1, 2002  through  June 30,  2003.  In the  meantime  there
continues  to be a risk that our shares of common stock may be  deregistered  by
the SEC's Office of Enforcement Liaison due the continued delinquency of our SEC
filings for the period April 1, 2002 through June 30, 2003.



                                       18
<PAGE>

PLAN OF OPERATION

Our  plan of  operations  is to  negotiate  satisfactory  settlements  with  our
outstanding creditors,  vigorously defend against any further appeal that may be
made against our currently successful defense of the law suit brought against us
by certain of our  shareholders,  bring our financial records and SEC filings up
to date, seek a listing on the over the counter bulletin board,  raise debt and,
or,  equity 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.  There can be no assurance
that we will  successfully  complete this series of transactions.  In particular
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,  2006,  we had $7 cash on hand,  $195 of  assets,  no  operating
business or other source of income,  outstanding  liabilities  of  approximately
$8.1 million,  a stockholders'  deficit of approximately  $8.1 million and a law
suit brought against us by certain of our  shareholders  which had been ruled in
our favor by the  Courts but which  could be subject to a further  appeal by the
shareholders in question

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.

If we were to be subject to any further  appeal  which may be made in respect of
the law suit brought  against us by certain of our  shareholders  it is unlikely
that the proceeds from our  Directors' and Officers'  insurance  policy would be
sufficient to meet the damages  assessed and we would have no alternative but to
file for bankruptcy.

During the fiscal  years  ended June 30,  2006 and 2005,  one of our  directors,
David J Cutler, advanced to us $115,000 and $88,000 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. $14,000
of this loan was converted to equity effective May 31, 2006. Since June 30, 2006
Mr. Cutler has  continued to make further  advances to us by way of loan to meet
our ongoing  operating  expenses  and fund the costs of bringing  our  financial
statements and SEC reporting up to date as required.  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,  vigorously  defend against any further appeal
that  may be made  against  our  currently  successful  defense  of the law suit
brought against us by certain of our  shareholders,  bring our financial records
and SEC  filings  up to date,  seek a listing on the over the  counter  bulletin
board,  raise debt and, or, equity financing to fund the negotiated  settlements
with our creditors and to meet ongoing  operating  expanses 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
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.

                                       19
<PAGE>

Our  significant  accounting  policies are  described in Note 1 to the financial
statements on page 45 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. 8 to the financial statements on page 57 below.

FISCAL YEAR ENDED JUNE 30, 2005 COMPARED TO THE FISCAL YEAR ENDED JUNE 30, 2004

On June 30,  2003 we  decided  to  discontinue  the  operations  of our last two
operating  businesses,  Aspeon and CCI. Aspeon ceased  operations with immediate
effect while CCI completed  certain  outstanding  customer orders before ceasing
production  operations  on  August  3, 2003 and its  maintenance  operations  on
December 31, 2003.

In December  2003, we appointed  attorney Frank G Blundo Jr. P.C. as trustee for
an  assignment  for the  benefit  of the  Aspeon  and CCI  creditors  commencing
effective January 1, 2004.  Effective 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 participate 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.

Consequently  form January 1, 2004 we had no assets,  no  operating  business or
other sources of income.

General and Administrative Expenses.

General and administrative expenses for the fiscal year ended June 30, 2006 were
$116,000 compared to $67,000 for the fiscal year ended June 30, 2005, a variance
of  $49,000  or 73%.  The  variance  was  primarily  due to the fact that we had
activities  throughout  the entire  fiscal year ended June 30, 2006 while in the
fiscal year ended June 30,  2005 we only  recommenced  operations  at the end of
April 2005 and  consequently  operated  for less than three months in the fiscal
year ended June 30, 2005.

Loss on Assignment for the Benefit of Creditors

         During the fiscal  year ended  June 30,  2006 we  recognized  a loss of
$20,000 on our assignment for the benefit of the creditors of Aspeon and CCI due
to the payment of $20,000 we made to Frank G Blundo,  Jr.  P.C.,  trustee of the
assignment  for the  benefit of Aspeon  and CCI  creditors,  for the  benefit of
Aspeon and CCI creditors.

         On April 22, 2005,  our sole  director,  David J Cutler entered into an
agreement  with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the
benefit of Aspeon and CCI creditors,  subject to due diligence,  to invest up to
$50,000  cash in us for the benefit of our  creditors  in return for a number of
shares of our common stock to be determined. Following the completion of the due
diligence  process  during the six months ended December 31, 2005, it was agreed
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI  creditors,  that Mr.  Cutler would invest  $20,000 in us for the
benefit  of Aspeon  and CCI  creditors  in return  for a number of shares of our
common  stock to be  determined.  Accordingly  during  the  three  months  ended
December 31, 2005  $20,000  which had been placed in escrow with Frank G Blundo,
Jr. P.C. by Mr. Cutler was released for the benefit of Aspeon and CCI creditors.

         We  incurred  no profit / (loss) on the  assignment  for the benefit of
creditors  in the fiscal year ended June 30,  2005 as no payments  were made for
the benefit of our creditors during the period.

Profit / (Loss) from Operations.

The loss from  operations in the fiscal year ended June 30, 2006 was  $(136,000)
compared to a loss from  operations  of $(68,000) for the fiscal year ended June
30, 2005, a variance of $68,000 or 100%, due to the factors discussed above.

                                       20
<PAGE>

Other Income (Expense), net

Other  income  (expense),  net for the fiscal  year  ended June 30,  2006 was an
expense of  $(11,000)  compared  to an expense of  $(1,000)  for the fiscal year
ended June 30,  2005,  a variance of $10,000,  or more than 100%,  as during the
fiscal year ended June 30, 2006 , interest  accrued for a full twelve  months on
an increasing loan made available to us by one of our directors, David J Cutler,
while in the fiscal year ended June 30, 2005 interest accrued for less than four
months on a significantly lower loan balance.

No interest expense was accrued in the fiscal years ended June 30, 2006 and 2005
in respect of liabilities outstanding as at January 1, 2004 as these liabilities
are  anticipated  to be settled at, oe 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,
2006 and 2005 as we generated taxable losses in both fiscal years.

Net (Loss) and Comprehensive (Loss).

We  reported a net loss of  $(147,000)  in the fiscal  year ended June 30,  2006
compared to a net loss of  $(68,000)  for the fiscal year ended June 30, 20045 a
variance of $79,000 or more than 100% due to the factors outlined above.

The  comprehensive  (loss) / profit was identical to the net (loss) / profit for
the fiscal years ended June 30, 2006 and 2005 respectively.

CASH FLOW INFORMATION

For the  twelve  months  ended  June 30,  2006 net cash used in  operations  was
$(135,000)  compared to net cash used in  operations of $(68,000) for the twelve
months ended June 30, 2005, a variance of $67,000 or 99%.

In the fiscal  year  ended  June 30,  2006 our  operating  activities  generated
negative cash flow of $(147,000)  offset by a net $12,000 of funds  generated by
changes in our working  capital.  This  compares with our fiscal year ended June
30,  2005  where  our  operating  activities  generated  negative  cash  flow of
$(68,000)  and no net funds were  generated  / (used ) by changes in our working
capital.

In the fiscal years ended June 30, 2006 and 2005 no cash generated by or used in
investing  activities  as we  owned  no  investments  to  sell  and  had no cash
available to buy investments.

Cash flow generated from financing  activities in the fiscal year ended June 30,
2006 was $115,000 compared to $88,000 generated from financing activities in the
fiscal  year ended June 30,  2005,  a variance of $27,000 or 31%.  The  variance
arose to increased  financing  provided to us by one of our  directors,  David J
Cutler, $13,000of this increase was by way of debt and $14,000 by way of equity.

ACCOUNTING PRONOUNCEMENTS

In November 2004, the FASB issued  Statement of Financial  Accounting  Standards
No. 151,  "Inventory Costs-- an amendment of ARB No. 43, Chapter 4" (hereinafter
"SFAS No. 151").  This  statement  amends the guidance in ARB No. 43, Chapter 4,
"Inventory  Pricing," to clarify the  accounting  for  abnormal  amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). Under
some  circumstances,  SFAS No. 151  mandates  that  items such as idle  facility
expense, excessive spoilage, double freight, and re-handling costs be recognized
as current-period  charges. In addition, this statement requires that allocation
of fixed production  overheads to the costs of conversion be based on the normal
capacity of the production facilities. This statement is effective for inventory
costs  incurred  during  fiscal years  beginning  after June 15, 2005. We do not
believe  that the  adoption  of SFAS No. 151 will have a material  impact on our
financial conditions or results of operation



                                       21
<PAGE>

In December 2004, the FASB issued  Statement of Financial  Accounting  Standards
No. 152,  which  amends SFAS  Statement  No. 66,  "Accounting  for Sales of Real
Estate," to reference the financial  accounting and reporting  guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP)  04-2,  "Accounting  for  Real  Estate  Time-Sharing  Transactions."  This
statement  also amends  SFAS No. 67,  "Accounting  for Costs and Initial  Rental
Operations  of Real  Estate  Projects,"  to  state  that  the  guidance  for (a)
incidental operations and (b) costs incurred to sell real estate projects,  does
not apply to real estate  time-sharing  transactions.  The  accounting for those
operations  and costs is subject to the guidance in SOP 04-2.  This statement is
effective for financial  statements  for fiscal years  beginning  after June 15,
2005.  We do not believe  that the adoption of SFAS No. 152 will have a material
impact on our financial conditions or results of operation.

In December 2004, the FASB issued  Statement of Financial  Accounting  Standards
No. 153 (hereinafter  "SFAS No. 153"). This statement  addresses the measurement
of  exchanges  of  nonmonetary  assets.  The  guidance  in APB  Opinion  No. 29,
"Accounting  for  Nonmonetary  Transactions,"  is  based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  The guidance in that opinion,  however,  included certain
exceptions  to that  principle.  SFAS No. 153 amends APB Opinion 29 to eliminate
the  exception  for  nonmonetary  exchanges  of  similar  productive  assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial  substance.  A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result of the exchange. This statement is effective for financial statements for
fiscal years beginning after June 15, 2005. Earlier application is permitted for
nonmonetary  asset  exchanges  incurred  during fiscal years beginning after the
date of this  statement  is issued.  We do not believe that the adoption of SFAS
No. 153 will have a material  impact on our  financial  conditions or results of
operation

In  December  2004,  the FASB  issued a  revision  to FASB  Statement  No.  123,
Accounting for Stock Based Compensation.  This Statement  supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance.   This  Statement   establishes   standards  for  the  accounting  for
transactions  in which an entity  exchanges its equity  instruments for goods or
services.  It also addresses  transactions in which an entity incurs liabilities
in  exchange  for  goods or  services  that are  based on the fair  value of the
entity's  equity  instruments  or that may be settled by the  issuance  of those
equity  instruments.  . We do not believe that the adoption of SFAS No. 123( R )
will have a material impact on our financial conditions or results of operation

In March  2005,  the  FASB  Interpretation  No.47  "FIN  47" was  issued,  which
clarifies certain terminology as used in FASB Statement No. 143, "Accounting for
Asset  Retirement  Obligations".  In addition it clarifies  when an entity would
have  sufficient  information to reasonably  estimate the fair value of an asset
retirement obligation. FIN 47 is effective no later than the end of fiscal years
ending after December 15, 2005.  Early  adoption of FIN 47 is encouraged.  We do
not  believe  that the  adoption  of FIN 47 will have a  material  impact on our
financial conditions or results of operation.

In May 2005,  the FASB issued FASB Statement No. 154, which replaces APB Opinion
No.20 and FASB No. 3. This  Statement  provides  guidance  on the  reporting  of
accounting changes and error corrections.  It established,  unless impracticable
retrospective  application  as the  required  method for  reporting  a change in
accounting  principle in the absence of explicit  transition  requirements  to a
newly adopted  accounting  principle.  The Statement also provides guidance when
the retrospective  application for reporting of a change in accounting principle
is  impracticable.  The  reporting  of a  correction  of an error  by  restating
previously issued financial statements is also addressed by this Statement. This
Statement is effective for financial statements for fiscal years beginning after
December 15, 2005.  Earlier  application is permitted for accounting changes and
corrections  of  errors  made in  fiscal  years  beginning  after  the date this
Statement is issued.  We do not believe that the adoption of FASB  Statement No.
154 will have a  material  impact on our  financial  conditions  or  results  of
operation.

In February  2006, the FASB issued FASB Statement No. 155, which is an amendment
of FASB  Statements  No. 133 and 140.  This  Statement;  a)  permits  fair value
remeasurement  for any hybrid  financial  instrument  that  contains an embedded
derivative  that  otherwise  would  require  bifurcation,   b)  clarifies  which
interest-only strip and principal-only strip are not subject to the requirements
of  Statement  133,  c)  establishes  a  requirement  to evaluate  interests  in
securitized   financial  assets  to  identify  interest  that  are  freestanding
derivatives or that are hybrid  financial  instruments  that contain an embedded
derivative  requiring  bifurcation,  d) clarifies that  concentrations of credit
risk in the  form of  subordination  are not  embedded  derivatives,  e)  amends
Statement  140 to eliminate  the  prohibition  on a  qualifying  special-purpose
entity  from  holding a  derivative  financial  instrument  that  pertains  to a
beneficial  interest other than another derivative  financial  instrument.  This
Statement is effective for financial statements for fiscal years beginning after
September 15, 2006.  Earlier  adoption of this  Statement is permitted as of the
beginning of an entity's fiscal year, provided the entity has not yet issued any
financial statements for that fiscal year. We does not believe that the adoption
of  FASB  Statement  No.  155  will  have a  material  impact  on our  financial
conditions or results of operation

                                       22
<PAGE>

In March 2006, the Financial  Accounting  Standards  Board (`FASB')  issued FASB
Statement  No.  156,  which  amends  FASB  Statement  No.  140.  This  Statement
establishes,  among other things, that accounting for all separately  recognized
servicing assets and servicing liabilities.  This Statement amends Statement 140
to  require  that all  separately  recognized  servicing  assets  and  servicing
liabilities be initially measured at fair value, if practicable.  This Statement
permits,  but  does  not  require,  the  subsequent  measurement  of  separately
recognized  servicing assets and servicing  liabilities at fair value. An entity
that uses  derivative  instruments  to mitigate the risks  inherent in servicing
assets and  servicing  liabilities  is required to account for those  derivative
instruments at fair value. Under this Statement,  an entity can elect subsequent
fair value measurement to account for its separately recognized servicing assets
and servicing  liabilities.  By electing that option, an entity may simplify its
accounting  because this Statement  permits income statement  recognition of the
potential  offsetting  changes  in fair  value of  those  servicing  assets  and
servicing liabilities and derivative  instruments Is the same accounting period.
This Statement is effective for financial  statements for fiscal years beginning
after September 15, 2006.  Earlier adoption of this Statement is permitted as of
the beginning of an entity's fiscal year, provided the entity has not yet issued
any  financial  statements  for that fiscal  year.  We do not  believe  that the
adoption of FASB Statement No. 156 will have a material  impact on our financial
conditions or results of operation.

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

In August 2006,  on the basis of further  audit work and a review of  subsequent
events  performed by  O'Donnell,  O'Donnell  completed the audit of our June 30,
2001 financial statements. In September 2006 we filed forms 10-QSB for the three
months ended  September 30, 2001, the six months ended December 31, 2001 and the
nine months ended March 31, 2002. We are currently establishing the likely costs
and practicality of completing the SEC filings and related financial  statements
for the period  April 1, 2002  through  June 30,  2003.  In the  meantime  there
continues  to be a risk that our shares of common stock may be  deregistered  by
the SEC's Office of Enforcement Liaison due the continued delinquency of our SEC
filings for the period April 1, 2002 through June 30, 2003.

                                  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,  vigorously  defend  against  any
further appeal that may be made against our currently  successful defense of the
law suit brought against us by certain of our shareholders,  bring our financial
records  and SEC  filings  up to date,  seek a listing  on the over the  counter
bulletin  board,  raise  debt  and,  or,  equity  to fund 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.






                                       23
<PAGE>

WE HAVE A SUBSTANTIAL BALANCE OF OUTSTANDING LIABILITIES

As at June  30,  2006 we had  outstanding  liabilities  of  approximately  $ 8.1
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 BEEN SUBJECT TO A LAW SUIT BY CERTAIN OF OUR SHAREHOLDERS

In October and November 2000,  eight  purported class action lawsuits were filed
against us, our Chief Executive Officer,  and our former Chief Financial Officer
in the United States  District Court for the Central  District of California for
alleged violations of the Securities  Exchange Act of 1934. After the defendants
moved to dismiss each of the actions,  the lawsuits  were  consolidated  under a
single  action,  entitled "In re Aspeon  Securities  Litigation,"  Case No. SACV
00-995 AHS (ANx), and the appointed lead plaintiff  voluntarily filed an amended
and consolidated complaint.  The defendants moved to dismiss that complaint, and
on April 23, 2001 the Court entered an order  dismissing  the complaint  without
prejudice. On May 21, 2001 the appointed lead plaintiff filed a third complaint,
styled  as a  "First  Amended  Consolidated  Complaint."  On  June 4,  2001  the
defendants  moved to dismiss this complaint and on September 17, 2001 the United
States District Court dismissed the suit with prejudice and entered  judgment in
favor of the us and our officers.  On September  20, 2001 the lead  plaintiff in
the class action suit appealed against the dismissal of the case. On January 21,
2003 the  decision  to dismiss  the case was upheld but the lead  plaintiff  was
given the opportunity to remedy the  deficiencies in the complaint that had been
filed.  Accordingly  on May 30, 2003 the  plaintiff  filed its  "Second  Amended
Consolidated  Complaint" which again was subsequently  dismissed by the District
Court.  On  November  26,  2003 the lead  plaintiff  filed  its  "Third  Amended
Consolidated  Complaint" which was again dismissed with prejudice in March 2004.
.. The lead plaintiff  once again  appealed  against the dismissal and the United
States  Court of Appeals  for the Ninth  Circuit  affirmed  the  dismissal  with
prejudice  on  February  23,  2006.  This is the fifth time that the Courts have
ruled in favor of us and against the  shareholders  who have  brought  this suit
against us. On each of the previous  occasions the shareholders who have brought
this suit  against us have filed an appeal  against the  decision of the Courts.
There can be no  assurance  that the  shareholders  who have  brought  this suit
against us will not file a further  appeal  against the Courts' latest ruling in
which case we will continue to vigorously defend against the claims.

We believe that the proceeds from our Directors' and Officers'  insurance policy
would be  sufficient  to meet the legal cost  incurred in defending  any further
appeal  against the Court's  decision.  However,  there is no assurance that the
proceeds from our Directors' and Officers'  insurance policy would be sufficient
to meet the legal cost  incurred in  defending  any further  appeal  against the
Court's  decision and if they are exhausted there are no further funds to defend
the suit and we would have no alternative but to file for bankruptcy.  Moreover,
if we were to lose an appeal  against the Court's  decision it is unlikely  that
the  proceeds  from the  Directors'  and  Officers'  insurance  policy  would be
sufficient to cover any damages  assessed and again we would have no alternative
but to file for bankruptcy. In the meantime, 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  until  the law suit has  finally  be  settled  on a basis  that is
satisfactory to us.





                                       24
<PAGE>

WE HAVE  INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES

As at June  30,  2006 we had  retained  deficit  in  excess  $90  million  and a
stockholders'  deficit of approximately $ 8.1 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,  2006  and 2005  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,  vigorously  defend  against  any
further appeal that may be made against our currently  successful defense of the
law suit  brought  against  us by  certain  of our  shareholders,  bringing  our
financial records and SEC filings up to date,  seeking a listing on the over the
counter  bulletin  board,  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 COMPEETITION 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
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.






                                       25
<PAGE>

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.

WE ARE OUT OF COMPLIANCE WITH THE LISTING  REQUIREMENTS OF THE NASDAQ MARKET AND
HAVE NOT BEEN LISTED ON THE OVER THE COUNTER BULLETIN BOARD

 In October 2000, the Nasdaq Stock Market  ("Nasdaq")  suspended  trading in the
shares of our common stock while it sought  additional  information  from us. On
November  9, 2000,  we  participated  in a hearing  before  the  Nasdaq  Listing
Qualifications  Panel which was held for the purpose of  evaluating  whether the
shares of our  common  stock  would  continue  to be listed on Nasdaq or if they
would be  delisted.  Effective  as of January 4, 2001,  the shares of our common
stock was  delisted  from the Nasdaq.  As we were in arrears in our filings with
the SEC the shares of our common stock was not eligible to be traded on the over
the counter bulletin board and consequently commenced trading on the Pink Sheets
under the symbol ASPE.PK.  Subsequently the shares of our common stock ceased to
be traded on the Pink  Sheets  and are now  traded on the Gray  Sheets.  Failure
obtain a listing on the over the counter bulletin board may adversely  effective
our  ability  to  acquire  another  entity  with   experienced   management  and
opportunities  for growth in return for shares of our common stock in an attempt
to create value for our shareholders.

THE SEC HAS INDICATED THAT IT MAY DEREGISTER SHARES OF OUR COMMON STOCK

On  September  9, 2005 we  received a letter  from the SEC dated  June 24,  2005
indicating that unless we came into  compliance with the reporting  requirements
under the Securities Exchange Act of 1934 within 15 days we may be deregistered.
On  September  12,  2005 we faxed a letter  to the SEC's  Office of  Enforcement
Liaison  indicating  our  intention to come into  compliance  with the reporting
requirements under the Securities Exchange Act of 1934 by November 15, 2005.

By November 15, 2005 we  completed  all required SEC filings for the period July
1, 2003 through September 30, 2005.  However,  we had not completed all required
SEC  filings  in  respect  of the period  April 1, 2001  through  June 30,  2003
although  we had  included  substantial  financial  extracts  and  all  material
disclosures  in respect  of these  periods in the  filings we had  completed  in
respect  of  subsequent  periods.  We  believed  the  cost  to  shareholders  in
completing  these  filings in  respect of these  earlier  periods  exceeded  any
benefit to shareholders in completing  these filings as the information in these
filings  was at  least  two  to  four  years  old,  no  longer  relevant  to our
shareholders given our decision to cease all trading operations made on June 30,
2003 and that all material  information in respect of these earlier  periods has
been made available to our shareholders in our SEC filings for later periods.




                                       26
<PAGE>

In January 2006 we were contacted by the SEC's Office of Enforcement Liaison who
notified us that while they  recognized the progress we had made in bringing our
SEC filings up to date, they still considered us to be delinquent in our filings
because of our  failure to  complete  filings in respect of the period  April 1,
2001 through June 30, 2003.  In August 2006,  on the basis of further audit work
and a review of subsequent  events performed by O'Donnell,  O'Donnell  completed
the audit of our June 30, 2001 financial statements.  In September 2006 we filed
forms 10-QSB for the three months ended September 30, 2001, the six months ended
December  31, 2001 and the nine months ended March 31,  2002.  We are  currently
establishing the likely costs and practicality of completing the SEC filings and
related financial statements for the period April 1, 2002 through June 30, 2003.
In the meantime there continues to be a risk that our shares of common stock may
be  deregistered  by the SEC's Office of  Enforcement  Liaison due the continued
delinquency  of our SEC filings for the period  April 1, 2002  through  June 30,
2003.

WE HAVE A MAJORITY  STOCKHOLDER WHO WILL HAVE THE ABILITY TO EFFECTIVELY CONTROL
SUBSTANTIALLY ALL ACTIONS TAKEN BY STOCKHOLDERS

On April 22, 2005, our sole  director,  David J Cutler entered into an agreement
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI creditors, subject to due diligence, to invest up to $50,000 cash
in us for the benefit of our  creditors  in return for a number of shares of our
common stock to be  determined.  Following  the  completion of the due diligence
process  during the three  months ended  December  31, 2005,  it was agreed with
Frank G Blundo,  Jr. P.C.,  trustee of the  assignment for the benefit of Aspeon
and CCI creditors, that Mr. Cutler would invest $20,000 in us for the benefit of
Aspeon and CCI creditors in return for a number of shares of our common stock to
be  determined.  Accordingly  during the three  months  ended  December 31, 2005
$20,000  which had been  placed in escrow  with Frank G Blundo,  Jr. P.C. by Mr.
Cutler was  released  for the  benefit of Aspeon and CCI  creditors.  On May 31,
2006,  based on an  independent  third  party  valuation,  the  majority  of our
independent  directors  approved  the issue of  10,536,775  shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

Also in April  2005 Mr.  Cutler  entered  into an  agreement  with Mr.  Stack to
purchase all of Mr. Stack's shares of our common stock. However, it has not been
possible to complete this  transaction  as Mr. Stack has not been able to locate
the share certificates for the majority of the shares in question.

Mr.  Cutler  now owns more  than 50% of our  issued  shares of common  stock and
consequently 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.

THE PRICE OF OUR COMMON STOCK COULD BE HIGHLY VOLATILE

Our common  shares is currently  traded on the Gray Sheets.  Our common stock is
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.



                                       27
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

Our financial statements are included herein commencing on page 40.

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

In September 2000, at the insistence of our auditors,  PWC, we announced that we
would  restate  our  first  quarter  2000  financial  statements  as a result of
accounting misstatements.

In December 2000 we restated the results for the fiscal quarters ended September
30,  1999,  December 31, 1999 and March 31, 2000 by an aggregate of $1.7 million
or $0.19 per share.  Revenue was reduced by $679,000 or 1.05%,  our gross profit
was decreased by $206,000 or 1.22%,  $1.4 million of the restatement  related to
an  adjustment  to increase the amount  recorded for the  beneficial  conversion
feature  associated with the issuance of our Preferred Stock in March 2000 based
upon  an  independent   valuation  and  the  remaining  adjustments  related  to
unrecorded  compensation expense,  amortization of intangible assets,  expensing
costs previously capitalized and the additional accrual of general expenses.

In January 2001 PWC notified us that it was terminating its auditor relationship
with us effective immediately.

On March 19,  2001 we  retained  BDO  Seidman,  LLP  ("BDO") as our  independent
auditing firm. However, as PWC, our previous  independent  auditors,  refused to
allow BDO access to PWC's prior year work papers,  BDO was unable to complete an
audit of our financial statements for later periods.

In August 2001, we, together with our Chief Executive Officer, filed a six count
complaint  against our former  auditors,  PricewaterhouseCoopers  LLP,  alleging
professional  negligence,  intentional  interference  with prospective  business
advantage, negligent interference with prospective economic advantage, violation
of  California  Business and  Professions  Code  Sections  17200 and 17500,  and
defamation.

In August  2003 we reached an out of court  settlement  in our law suit  against
PWC. Under the terms of the settlement we received a payment of $2.3 million and
agreement to write off certain  outstanding  invoices for  accounting  and legal
fees. Consequently we recognized a gain of $1,007,000 on the settlement although
the net cash we received after all costs totaled only $136,000.

As reported in the Form 8-K filed on September 15, 2005, effective September 12,
2005 we appointed O'Donnell as auditors in succession to BDO.

We had no disagreements with BDO or O'Donnell.

ITEM 8A    CONTROLS and PROCEDURES

We conducted an evaluation of the  effectiveness  of the design and operation of
our   disclosure   controls  (as  defined  in  Exchange  Act  Rules   13a-14(c))
("Controls")  as of June 30, 2006 (the  "Evaluation  Date").  The evaluation was
supervised  by David J.  Cutler,  our  Chief  Executive  Officer  and  Principal
Accounting Officer, to test the effectiveness of Controls. Controls are designed
to reasonably  assure that  information  required to be disclosed in our reports
filed  under  the  Exchange  Act,  such  as this  Annual  Report,  is  recorded,
processed, summarized and reported within the time periods as required. Controls
are also designed to reasonably  assure that such information is accumulated and
communicated to our management.

Management does not expect that the Controls will prevent all errors.  No matter
how well designed,  Controls cannot provide absolute assurance that the system's
objectives will be met. Due to resource constraints, the design of Controls must
be  considered  relative to their  costs.  No  evaluation  can provide  absolute
assurance  that  all of the  Company's  control  issues  will  be  detected  and
corrected.  Controls can be circumvented by individual acts, by collusion of two
or more  people  or by  override  of the  controls.  We have  had  only  limited
operations as of the Evaluation  Date and the Controls in place at that time may
be inadequate for future operations.



                                       28
<PAGE>

After evaluating the effectiveness of our Controls, Mr. Cutler concluded that as
of the Evaluation  Date, our Controls were adequate and effective to ensure that
material  information  relating  to the  Company  would be made known to them by
individuals within those entities,  particularly during the period in which this
Form  10-KSB  was being  prepared.  There  were no  significant  changes  in our
internal  controls  or in other  factors  that  could  significantly  affect our
disclosure  controls and procedures  subsequent to the Evaluation  Date, nor any
significant  deficiencies or material weaknesses in such disclosure controls and
procedures requiring corrective actions. As a result, no corrective actions were
taken.  However,  it should be noted that we intend to acquire another operating
business.   The  Controls  necessary  for  such  new  operations  will,  in  all
likelihood, be significantly different from the current Controls.

                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

During  the  fiscal  year  ended  June 30,  2005,  Richard  P Stack was our sole
director  and  executive  officer  from July 1,  2004  through  April 22,  2005.
Effective  April 22,  2005,  David J Cutler was  appointed  as a director and an
officer  and,  following  the  resignation  of Richard P Stack as a director and
officer as the same date, became our sole director and officer:

                NAME            AGE             POSITION
         ---------------        ---  ----------------------------------------
         David J. Cutler        50   President, Chief  Executive Officer,
                                     Chief Financial Officer, and Director
         Richard P Stack        40   Former President, Chief Executive Officer,
                                     Chief Financial Officer and 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 20 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.  Mr. Cutler was  appointed as a director and Chief  Executive
Officer of Cavion  Technologies,  Inc.  effective  March 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.

Richard P. Stack - had been President, Chief Executive Officer and a director of
the  Company  since  the  Company's   inception  in  September  1995  until  his
resignation in April 2005. Prior to that time, from 1991 through September 1995,
Mr. Stack was Managing  Director of  Hi-Technology  Supply,  a manufacturer  and
distributor of personal computers and components located in South Africa,  which
he founded and grew to approximately $6 million in annual sales and 15 employees
prior  to its  sale to a South  Africa-based  personal  computer  and  component
manufacturing  company.  From 1988 through  1991,  Mr. Stack was employed by Pan
American  Airlines in  technical  management  positions.  Mr. Stack holds a B.A.
degree from the University of California at Berkeley.

Wesley F Whiting and Redgie Green were appointed as directors in March 2006.




                                       29
<PAGE>

Effective June 30, 2006, our directors and officers were:


              NAME               AGE             POSITION
       ----------------          ---  ------------------------------------------
       David J. Cutler           49   President, Chief Executive Officer, Chief
                                      Financial Officer and Director

       Wesley F Whiting          73   Secretary and Director

       Redgie Green              51   Director

David J. Cutler - President, Chief Executive Officer, Chief Financial Office and
Director. Biographical details provided above.

Wesley F. Whiting - Secretary and Director.  Mr Whiting became our secretary and
director on March 13, 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  (1988-91),  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.  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 to 2002). He was director and Vice President
of Utilitec, Inc. from 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.  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.  He was a Director of
Baymark   Technologies,   Inc.  and  was  appointed  as  a  Director  of  Cavion
Technolgies, Inc. in March 2006.

Redgie  Green -  Director.  Mr Green  became our  director on March 13, 2006 Mr.
Green has been Secretary and Director of Dynadapt Systems,  Inc. since 1998. Mr.
Green wasthe co-owner and operator of Green's B&R Enterprises, a wholesale donut
baker from 1983 - 2006.  He has been an active  investor  in small  capital  and
high-tech  ventures  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 was recently  elected as a director for Mountains
West  Exploration,  Inc. He was  Secretary,  Treasurer  and  Director of Baymark
Technologies,  Inc and appointed as a  Director of Cavion  Technolgies,  Inc. in
March 2006.

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.

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.


                                       30
<PAGE>

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, 2006, 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.

     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 the  compensation  paid by us for  services
rendered during the fiscal years ended June 30, 2006 and 2005 to Richard P Stack
and David J Cutler who served as our Chief Executive Officers and sole directors
during the fiscal  years in  question.  Messrs.  Whiting  and Green  received no
compensation  from the date of their  appointment  during the fiscal  year ended
June 30, 2006.

<TABLE>
<CAPTION>

                                                                  FISCAL YEAR
                                                                     ENDED                ANNUAL COMPENSATION
               NAME AND PRINCIPAL POSITION                         JUNE 30,            SALARY             BONUS
      --------------------------------------------             ----------------  ----------------- ------------
<S>   <C>                                                      <C>               <C>               <C>
      David J Cutler..............................                   2006             $    60,000               --
        President, Chief Executive Officer, Chief Financial          2005             $    20,000               --
      Officer and Director

      Richard  P Stack............................                   2006             $       --                --
        Former President, Chief Executive Officer, Chief             2005             $     7,000               --
        Financial Officer and Director
</TABLE>


EMPLOYMENT AND CONSULTING AGREEMENTS

There were no employment  contracts or consulting  agreements with our directors
or officers during the fiscal years ended June 30, 2006 and 2005.


                                       31
<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.

As at June  30,  2000 we had a  total  of  2,336,967  options  outstanding  with
exercise prices between $3.78 and $8.04 per share, a weighted  average  exercise
price of $7.92 and an  average  remaining  life of 5.8  years.  656,258 of these
options had vested at an average exercise price of $7.62.

During the fiscal year June 30, 2001,  2,107,500 stock options were issued at an
exercise price of $4.00.  During the fiscal year ended June 30, 2002,  1,655,000
stock  options  were  issued  at an  exercise  price of $0.35 and  600,000  with
exercise  prices ranging from $0.50 to $1.50.  During the fiscal year ended June
30, 2003,  2,000,000 stock options were issued at an exercise price of $0.07 and
600,000 with an exercise price of $0.06.  During the fiscal years ended June 30,
2006, 2005 and 2004, no stock options were issued.

Subsequent to June 30, 2000, no stock options were exercised

During the fiscal  years ended June 20,  2001 to June 30,  2005 all  outstanding
stock options were cancelled.

<TABLE>
<CAPTION>

                                                  JUNE 30, 2006                        JUNE 30, 2005
                                                           WEIGHTED                                   WEIGHTED
                                                           AVERAGE                                    AVERAGE
                                           OPTIONS       EXERCISE PRICE           OPTIONS        EXERCISE PRICE
<S>                                       <C>                <C>                <C>                   <C>
FOR OPTIONS GRANTED AT FAIR MARKET
VALUE ON THE DATE OF GRANT:
Options outstanding beginning of
period................                         --            $0.000               850,000              $0.063
  Granted..........................            --                --                    --                  --
  Exercised........................            --                --                    --                  --
  Canceled.........................            --                --              (850,000)              0.063
                                          ---------          -------            ----------           ----------
Options outstanding................             0            $0.000                    --              $0.000
                                          =========          =======            ==========           ==========
Options exercisable................             0            $0.000                    --              $0.000
                                          =========          =======            ==========           ==========
</TABLE>



                                       32
<PAGE>

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.

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 October 20, 2005, 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 27, 2006:

                                                    NUMBER OF      PERCENT OF
       NAME AND ADDRESS OF BENEFICIAL OWNER          SHARES        OUTSTANDING

David J. Cutler (1)                                  10,536,775
                                                   ------------   ------------
All executive officers and directors as a group.     10,526,775          52.7%


(1) Mr. Cutler's address is c/o Aspeon, Inc. 2460 West 26th Avenue, Suite 380-C,
Denver, Colorado, 80211.

On April  22,  2005,  our then sole  director,  David J Cutler  entered  into an
agreement  with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the
benefit of Aspeon and CCI creditors,  subject to due diligence,  to invest up to
$50,000  cash in us for the benefit of our  creditors  in return for a number of
shares of our common stock to be determined. Following the completion of the due
diligence process during the three months ended December 31, 2005, it was agreed
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI  creditors,  that Mr.  Cutler would invest  $20,000 in us for the
benefit  of Aspeon  and CCI  creditors  in return  for a number of shares of our
common  stock to be  determined.  Accordingly  during  the  three  months  ended
December 31, 2005  $20,000  which had been placed in escrow with Frank G Blundo,
Jr. P.C. by Mr. Cutler was released for the benefit of Aspeon and CCI creditors.
On May 31, 2006, based on an independent third party valuation,  the majority of
our independent  directors approved the issue of 10,536,775 shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

In April 2005 Mr.  Cutler  entered into an agreement  with Mr. Stack to purchase
all of Mr. Stack's shares of our common stock which at the time were believed to
number 679,700.  However,  it has not been possible to complete this transaction
as Mr. Stack has not been able to locate the share certificates for the majority
of the shares in question.

Information concerning any stock options and warrants issued by us is set out in
Note 10 Stockholders Deficit of our Financial Statements on page 58 below.


                                       33
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On April 22, 2005, our sole  director,  David J Cutler entered into an agreement
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI creditors, subject to due diligence, to invest up to $50,000 cash
in us for the benefit of our  creditors  in return for a number of shares of our
common stock to be  determined.  Following  the  completion of the due diligence
process  during the three  months ended  December  31, 2005,  it was agreed with
Frank G Blundo,  Jr. P.C.,  trustee of the  assignment for the benefit of Aspeon
and CCI creditors, that Mr. Cutler would invest $20,000 in us for the benefit of
Aspeon and CCI creditors in return for a number of shares of our common stock to
be  determined.  Accordingly  during the three  months  ended  December 31, 2005
$20,000  which had been  placed in escrow  with Frank G Blundo,  Jr. P.C. by Mr.
Cutler was  released  for the  benefit of Aspeon and CCI  creditors.  On May 31,
2006,  based on an  independent  third  party  valuation,  the  majority  of our
independent  directors  approved  the issue of  10,536,775  shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

During the fiscal  years  ended June 30,  2006 and 2005,  one of our  directors,
David J Cutler, advanced to us $115,000 and $88,000 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.
Effective May 31, 2006 $14,000 of this debt was converted to equity.  Since June
30, 2006 Mr. Cutler has continued to make further  advances to us by way of loan
to meet our  ongoing  operating  expenses  and fund the  costs of  bringing  our
financial  statements  and SEC  reporting  up to date as  required.  There is no
assurance  that Mr. Cutler will  continue to provide us with further  funding in
the future.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

   EXHIBIT
   NUMBER                          DESCRIPTION AND METHOD OF FILING


   2.0(15)     Share Sale  Agreement  dated  January  17, 2003  entered  into by
               Aspeon, Inc. and Matthew James Maley.
   3.1(8)      Registrant's Amended and Restated Certificate of Incorporation.

   3.2         Registrant's  Certificate  of  Amendment  to Amended and Restated
               Certificate of Incorporation.

   3.3(10)     Registrant's Certificate of Designations,  Preferences and Rights
               of the Series A Convertible Exchangeable Preferred Stock.

   3.4(1)      Registrant's Amended and Restated Bylaws.

   4.1(1)      Form of Common Stock Certificate of Registrant.

  10.1(1)      Form of Indemnity  Agreement entered into between the Company and
               its directors and executive officers.*

  10.1 (12)    Agreement  relating  to the  purchase  of the whole of the issued
               share capital of Javelin Holdings International Limited.

  10.1 (13)    Mutual  Release  and  Settlement  Agreement  dated a of  March 22
               between the Company and Castle Creek Technology Partners LLC

  10.1 (14)    Secured  Convertible  Promissory  Note Purchase  Agreement  dated
               September 12, 2002 entered into by Aspeon,  Inc.,  Richard Stack,
               Kenneth Kadlec and Horace Hertz.

  10.2 (14)    Security dated  September 12, 2002 entered into by Aspeon,  Inc.,
               Richard Stack, Kenneth Kadlec and Horace Hertz.

  10.2(1)      1996 Stock Incentive Award Plan (the "1996 Plan").*


                                       34
<PAGE>

  10.3 (14)    Form of Secured  Convertible  Promissory  Note payable by Aspeon,
               Inc., to each of Richard Stack, Kenneth Kadlec and Horace Hertz.


                                       57
<PAGE>

  10.3(1)      Form of Director  Non-Qualified  Stock Option Agreement under the
               1996 Plan.*

  10.4(1)      Form of Employee  Non-Qualified  Stock Option Agreement under the
               1996 Plan.*

  10.5(6)      1997 Equity Incentive Plan, as amended.*

  10.6(6)      Form of Incentive Stock Option Agreement under the 1997 Plan.*

  10.7(6)      Form of Nonstatutory Stock Option Agreement under the 1997 Plan.*

  10.8(1)      Employment  Agreement  dated  August 19,  1996 by and between the
               Company and Richard P. Stack.*

  10.9(6)      Employment  Agreement  dated  January 1, 1998 by and  between CCI
               Group, Inc. and Robert Nichols.*

  10.10(6)     Standard  Industrial/Commercial  Multi-Tenant  Lease-Modified Net
               dated  January 27, 1998 by and between the Company and  BRS-Campo
               Investment Company LP.

  10.11(1)     Standard  Industrial/Commercial  Single-Tenant  Lease-Gross dated
               October 19, 1995 by and between the Company and Robert P. Peebles
               Trust, dated April 11, 1979.

  10.12(2)     Standard  Sublease  dated  September  9, 1997 by and  between the
               Company, D. Howard Lewis and William R. Miller.

  10.13(6)     The Business Center Office/Warehouse Lease dated April 4, 1997 by
               and between CCI Group, Inc and Nooney Krombech Company.

  10.14(2)     Distributor  Agreement  dated  March 14,  1997 by and between the
               Company and ScanSource, Inc.

  10.15(6)     Loan and Security  Agreement  dated June 8, 1998 by and among the
               Company,  CCI Group,  Inc.,  Posnet  Computers,  Inc.  and Finova
               Capital  Corporation and related Secured  Promissory Note, Pledge
               Agreement and Secured Continuing Corporate Guarranty.

  10.16(6)     Form of Warrant  issued by the Company in favor of Finova Capital
               Corporation.

  10.17(8)     Second and Third Amendments to Loan and Security  Agreement dated
               December 15, 1998 and January 10, 1999, respectively by and among
               the Company,  CCI Group, Inc., Posnet Computers,  Inc. and FINOVA
               Capital  Corporation and related Security Promissory Note, Pledge
               Agreement and Secured Continuing Corporate Guaranty.

  10.18(7)     Stock  Purchase  Agreement,  dated  April  23,  1999 by and among
               Javelin Systems,  Inc., Dynamic Technologies,  Inc., SB Holdings,
               Inc., John Biglin, Denise Biglin and John Seitz.

  10.19(9)     1999 Non-Officer Stock Option Plan.*

  10.20(9)     Form of  non-qualified  stock  option  agreement  under  the 1999
               Non-Officer Stock Option Plan.*

  10.21(9)     Form of 1999 Plan Stock Option Grant Notice.*

  10.22(10)    Securities Purchase Agreement,  dated as of March 7, 2000, by and
               among the Company,  Aspeon  Solutions,  Inc. and Marshall Capital
               Management, Inc.


  10.23(10)    Warrant to  Purchase  Common  Stock of the  Company,  dated as of
               March 8, 2000 issued by the  Company in favor of Marshal  Capital
               Management, Inc.


                                       35
<PAGE>

  10.24(10)    Warrant to Purchase Common Stock of Aspeon Solutions,  Inc. dated
               as of March 8, 2000, issued by Aspeon Solutions, Inc. in favor of
               Marshall Capital Management, Inc.

  10.25(10)    Registration  Rights Agreement,  dated as of March 7, 2000 by and
               among the Company,  Aspeon  Solutions,  Inc. and Marshal  Capital
               Management, Inc.

  10.26        Sixth Amendment and Waiver to Loan and Security Agreement Between
               Aspeon, Inc., CCI Group, Inc. and Finova Capital Corporation.

  16.1 (11)    Letter  from   PricewaterhouseCoopers,   LLP   addressed  to  the
               Securities and Exchange Commission.

  16.1 (16)    Letter from BDO  Seidman,  LLP  addressed to the  Securities  and
               Exchange Commission.

  21.1         Subsidiaries

  24.1         Power of Attorney

  27.1         Financial Data Schedule.


(1)  Filed as an exhibit to the Company's  Registration  Statement on Form SB-2,
     as amended (No. 333-11217), and incorporated herein by reference.

(2)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     fiscal year ended June 30, 1997 and incorporated herein by reference.

(3)  Filed as an  exhibit  to the  Company's  Current  Report  on Form 8-K dated
     December 30, 1997 and incorporated herein by reference.

(4)  Filed as an exhibit to the  Company's  Current  Report on Form 8-K/A  dated
     March 4, 1998 and incorporated herein by reference.

(5)  Filed as an  exhibit  to the  Company's  Current  Report  on Form 8-K dated
     January 5, 1998 and incorporated herein by reference.

(6)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     fiscal year ended June 30, 1998 and incorporated herein by reference.

(7)  Filed as an exhibit to the Company's  Current  Report on Form 8-K filed May
     3, 1999, and incorporated herein by reference.

(8)  Filed as an exhibit to the  Company's  Quarterly  report on Form 10-QSB for
     the quarter ended December 31, 1998 and incorporated herein by reference.

(9)  Filed as an exhibit to the  Company's  Annual Report on Form 10-KSB for the
     fiscal year ended June 30, 1999 and incorporated herein by reference.

(10) Filed as an exhibit to the Company's Current Report on Form 8-K dated March
     9, 2000 and incorporated herein by reference.

(11) Filed as an  exhibit  to the  Company's  Current  Report  on Form 8-K dated
     January 21, 2001 and incorporated herein by reference


                                       59
<PAGE>

(12) Filed as an exhibit to the Company's Current Report on Form 8-K dated April
     8, 2002 and incorporated herein by reference

(13) Filed as an exhibit to the Company's  Current  Report on Form 8-K dated May
     14, 2002 and incorporated herein by reference


                                       36
<PAGE>

(14) Filed as an  exhibit  to the  Company's  Current  Report  on Form 8-K dated
     September 27, 2002 and incorporated herein by reference

(15) Filed as an  exhibit  to the  Company's  Current  Report  on Form 8-K dated
     February 3, 2003 and incorporated herein by reference.

(16) Filed as an  exhibit  to the  Company's  Current  Report  on Form 8-K dated
     September 15, 2005 and incorporated herein by reference.

o Management contract or compensatory plan or arrangement of the Company.

(b)      Forms 8-K

On May 4, 2005 we filed a report on Form 8-K reporting the  appointment of David
J Cutler as our director, President, Chief Executive Officer and Chief Financial
Officer and the resignation of Richard P Stack from those positions.

On May 11, 2005 we filed a report on Form 8-K reporting  that David J Cutler had
entered into an agreement with Frank G Blundo, Jr. PC, trustee of the assignment
for the benefit of Aspeon and CCI creditors, subject to due diligence, to invest
up to $50,000 cash in us for the benefit of our creditors in return for a number
of our shares to be determined.

On September 15, 2005 we filed a report on Form 8-K appointing  Larry  O'Donnell
CPA PC as our independent accountant.

On  December  9,  2005 we  filed  a  report  on Form  8-K/A  in  respect  of the
appointment of Larry O'Donnell CPA PC as our independent accountant.

On March 16, 2006 we filed a report on Form 8-K  announcing  the  appointment of
two new, non-executive directors.

On March 28, 2006 we filed a report on Form 8-K  reporting  the  decision of the
United  States Court of Appeals for the Ninth Circuit in respect of the law suit
brought against us by certain of our shareholders.

On May 31, 2006 we filed a report on Form 8-K  reporting the issue of 10,563,775
shares of our common stock to David J Cutler,  one of our directors as repayment
of $14,243 of the loans he had advanced to us.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees.

 We incurred no  aggregate  fees and expenses to our former  auditors,  BDO, and
$5,540 and $0 to our current auditors, O'Donnell, in the fiscal years ended June
30, 2006 and 2005 respectively.

Tax Fees.

We did not  incur  any tax  fees to our  former  auditor,  BDO,  or our  current
auditors,  O'Donnell,  in the  fiscal  years  ended  June 30,  2006 and 2005 for
professional services rendered for tax compliance, tax advice, and tax planning.
No tax fees were incurred in these fiscal years to conserve cash resources.

All Other Fees.

We did not incur any other professional fees to our former auditor,  BDO, or our
current auditors, O'Donnell, in the fiscal years ended June 30, 2006 and 2005 to
conserve cash resources.


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


                                       37
<PAGE>

provision  of  non-audit  services  would be  compatible  with  maintaining  the
auditor's independence.  Any services described above for fiscal year ended June
30, 2004 would have had to be approved  by the Audit  Committee  or the Board of
Directors pursuant to its policies and procedures.

As reported in the Form 8-K filed on September 15, 2005, effective September 12,
2004 we appointed O'Donnell as auditors in succession to BDO.


                                       38
<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

                                                                            PAGE

REPORT ON THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM................  40

CONSOLIDATED BALANCE SHEET - June 30, 2006 and 2005........................  41

CONSOLIDATED STATEMENTS OF OPERATIONS -- For the Years Ended June 30,
2006 and 2005 .............................................................  42

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT -
For the Years Ended June 30, 2006 and 2005 ................................  43

CONSOLIDATED STATEMENTS OF CASH FLOWS -- For the Years Ended June 30,
2006 and 2005 .............................................................  44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................................  45




                                       39
<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,
2006 and 2005 and the related statements of operations,  stockholders'  deficit,
and cash  flows for the years  ended  June 30,  2006 and 2005.  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, 2006
and 2005 and the results of it's  operations  and cash flows for the years ended
June 30,  2006 and  2005 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,  2006  and  2005  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 CPA, PC

Larry O'Donnell CPA, PC
Aurora, Colorado
September 25, 2006


                                       40
<PAGE>

<TABLE>
<CAPTION>

                                  ASPEON, INC.
                           CONSOIDATED BALANCE SHEET

                                                                                                      JUNE 30,
                                                                                                2006             2005
                                                                                         ----------------------------------
<S>                                                                                      <C>              <C>
                              ASSETS

CURRENT ASSETS

      Cash & Cash Equivalents                                                            $              7 $         20,000
      Accounts Receivable                                                                               0                0
      Other Receivables                                                                                 0            5,134
      Inventory                                                                                         0                0
      Prepaid Expenses                                                                                188            1,150

                                                                                         ----------------------------------
                  Total Current Assets                                                                195           26,284

FIXED ASSETS                                                                                            0                0

OTHER ASSETS                                                                                            0                0
                                                                                         ----------------------------------
      TOTAL ASSETS                                                                       $            195 $         26,284
                                                                                         ==================================

                              LIABILITIES & STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES

      Accounts Payable                                                                   $      6,757,616 $      6,762,525
      Unearned Income & Customer Deposits                                                         236,128          236,128
      Accrued Expenses                                                                            580,809          569,792
      Notes Payable                                                                               317,141          216,398
      Deferred Earnouts                                                                           208,195          208,195
                                                                                         ----------------------------------
                  Total Current Liabilities                                                     8,099,889        7,993,039

COMMITMENTS AND CONTINGENCIES (Note. 9)

STOCKHOLDERS' DEFICIT

      Preferred Stock, $0.01 par value: 990,000 shares authorized (1,000,000                            0                0
      authorized, net 10,000 designated as mandatorily redeemable stock), no
      shares issued and outstanding.
      Common Stock, $0.01 par value: 20,000,000 shares authorized,  20,000,000                    200,000           94,361
      and 9,436,225 shares issued and outstanding respectively.
      Additional Paid In Capital                                                               84,846,965       84,938,361
      Treasury Stock                                                                              (60,000)         (60,000)
      Accumulated Deficit                                                                     (93,086,659)     (92,939,477)
                                                                                         ----------------------------------
                  Total Stockholders' Deficit                                                  (8,099,694)      (7,966,754)

                                                                                         ----------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                              $            195 $         26,284
                                                                                         ==================================
</TABLE>

        See accompanying Notes to Consolidated Financial Statements.



                                       41

<PAGE>

<TABLE>
<CAPTION>

                                     ASPEON, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                          FOR THE YEARS ENDED
                                                                               JUNE 30,
                                                                         2006             2005
                                                                   ---------------------------------
<S>                                                                <C>                <C>
OPERATING EXPENSES / (INCOME)

      General & Administrative Expenses                                    116,166           67,248
      Loss on Assignment for the Benefit of Creditors                       20,000                0
                                                                   ---------------------------------
      Total Operating Expenses / (Income)                                 (136,166)         (67,248)

OPERATING PROFIT / (LOSS)                                                 (136,166)         (67,248)

Interest and Other Income / (Expenses) Net                                 (11,017)            (909)
                                                                   ---------------------------------
Profit / (Loss) before Income Taxes                                       (147,183)         (68,157)

Provision for Income Taxes                                                     -                -
                                                                   ---------------------------------
NET PROFIT / (LOSS)                                                $      (147,183)  $      (68,157)
                                                                   =================================

NET PROFIT / (LOSS) PER COMMON SHARE

      Basic & Diluted                                                       ($0.01)          ($0.01)
                                                                   =================================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

      Basic & Diluted                                                   10,175,217        9,436,225
                                                                   =================================
</TABLE>

           See accompanying Notes to Consolidated Financial Statements.

                                       42
<PAGE>

<TABLE>
<CAPTION>

                                          ASPEON, INC.
                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                           FOR THE YEARS ENDED JUNE 30, 2006 and 2005

                    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 2004            9,436,225      94,361    (200,000)   (60,000)    84,938,361    (93,011,343)    71,867                (7,966,754)

Net & Compre-
hensive (Loss)                                                                       (147,183)              (147,183)     (147,183)
                                                                                                            =========
                  -------------  ---------  ----------  ---------  -------------  -------------  ---------              ------------
Balance, June
30 2005            9,436,225      94,361    (200,000)   (60,000)    84,938,361    (93,158,526)    71,867                (8,113,937)

Net & Compre-
hensive (Loss)                                                                       (147,183)              (147,183)     (147,183)
                                                                                                            =========
Issue of equity   10,563,775     105,639                               (91,396)                                             14,243
                  -------------  ---------  ----------  ---------  -------------  -------------  ---------              ------------
Balance, June
30 2006           20,000,000    $200,000    (200,000)  $(60,000)  $ 84,846,965   $(93,158,526) $  71,867               $(8,099,694)
                  =============  =========  ==========  =========  =============  =============  =========              ============
</TABLE>















        See accompanying Notes to Consolidated Financial Statements.

                                       43

<PAGE>

<TABLE>
<CAPTION>

                                  ASPEON, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                              FOR THE YEAR ENDED
                                                                                    JUNE 30
                                                                              2004           2005
                                                                        ------------------------------
<S>                                                                     <C>            <C>
CASH FLOW PROVIDED BY / (USED IN) OPERATING ACTIVITIES

NET  PROFIT / (LOSS)                                                    $     (147,183)$      (68,157)

ADJUSTMENTS TO RECONCILE NET PROFIT / (LOSS) TO NET CASH
PROVIDED BY / (USED IN) OPERATING ACTIVITIES
      Depreciation                                                                   0              0
      Gain on Settlement of Litigation                                               0              0
      Net Cash Received on Settlement of Litigation                                  0              0
      Gain on Assignment for Benefit of Creditors                                    0              0
      Cash transfered to Assignment for Benefit of Creditors                         0              0

CHANGES IN OPERATING ASSETS & LIABILITIES
      (Increase)/Decrease in Accounts Receivable                                     0              0
      (Increase)/Decrease in Other Receivables                                   5,134            503
      (Increase)/Decrease in Inventory                                               0              0
      (Increase)/Decrease in Prepaid Expenses                                      962         (1,150)
      Increase/(Decrease) in Accounts Payable                                   (4,908)          (503)
      Increase/(Decrease) in Unearned Income & Customer Deposits                     0              0
      Increase/(Decrease) in Accrued Expenses                                   11,016            908
                                                                        ------------------------------
      Total Cash Flow provided by / (used in) Operating Activities            (134,979)       (68,398)

CASH FLOW FROM INVESTING ACTIVITIES
      Decrease in Other Assets                                                       0              0
      Purchase of Fixed Assets                                                       0              0
      Proceeds from Sale of Fixed Assets                                             0              0
                                                                        ------------------------------
      Total Cash Flow provided by / (used in) Investing Activities                   0              0

CASH FLOW FROM FINANCING ACTIVITIES
      Advances under Notes Payable                                             100,743         88,398
      Conversion on Notes Payable to Equity                                     14,243              0
                                                                        ------------------------------
      Total Cash Flow provided by / (used in)  Financing Activities            114,986         88,398

INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS                        $      (19,993)$       20,000
                                                                        ==============================

Cash and Cash Equivalents at the beginning of the period                $       20,000 $            0
                                                                        ==============================
Cash and Cash Equivalents at the end of the period                      $            7 $       20,000
                                                                        ==============================

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid for interest                                                  $            0 $            0
                                                                        ------------------------------
Cash paid for income tax                                                $            0 $            0
                                                                        ------------------------------
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.

                                       44

<PAGE>


                                  ASPEON, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

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,
vigorously  defend  against  any  further  appeal  that may be made  against our
currently  successful  defense of the law suit brought  against us by certain of
our  shareholders,  bringing our  financial  records and SEC filings up to date,
seeking a listing on the over the counter bulletin board,  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.

Prior to our cessation of operations, our principal business activities were:

     - POS PRODUCTS. Javelin Systems, a division of Aspeon, Inc. ("Javelin") and
CCI Group, Inc. ("CCI"), a subsidiary of Aspeon, Inc.,  designed,  manufactured,
marketed  and sold open system  touch  screen  point of sale  ("POS")  computers
primarily to the foodservice and retail industries (the "POS Products").

    -SOLUTION SERVICES.  Through our CCI, Jade Communications  Limited ("Jade"),
RGB/Trinet Limited ("RGB"), (subsequently renamed Javelin Holdings International
Limited (UK)),  (collectively "RGB/Jade") and Aspact IT Services (Singapore) Pte
Ltd. ("Aspact")  subsidiaries,  we provided  information  technology  management
services  for  customers  that did not intend or were not able to hire their own
information  technology  personnel  (the  "Solution  Services").  These services
included network design and management,  installation of computer systems, local
and wide area network support, maintenance and repair, and help desk support.

    - APPLICATION SERVICES PROVIDER. Through our Aspeon Solutions, Inc. ("Aspeon
Solutions"),  Dynamic  Technologies,  Inc.  ("DTI"),  SB Holdings,  Inc. ("SB"),
Restaurant   Consulting  Services  ("RCS")  and  Monument  Software  Corporation
("Monument")  subsidiaries,  we  operated  as an  application  service  provider
("ASP"). Our ASP services enabled software applications to be deployed, managed,
supported and upgraded from centrally located servers, rather than on individual
computers (the "ASP Services").  Our ASP Services primarily were directed toward
customers in the foodservice industry.

An over view of the major events since incorporation is as follows:

On November 1, 1996,  we completed  an initial  public  offering  (the "IPO") of
850,000  shares of our common  stock at $5.00 per  share,  netting  proceeds  of
approximately $3.2 million. Proceeds were used to repay debt with an outstanding
balance of approximately $745,000 and for general corporate purposes.

In December  1997,  we acquired  all of the  outstanding  common stock of POSNET
Computers,  Inc. ("Posnet") and CCI Group, Inc. ("CCI"). Posnet and CCI provided
full  turn-key  systems  integration  services,   including  system  consulting,
staging, training, deployment, product support and maintenance.

In March and April 1998, we  established  three  international  subsidiaries  to
expand our sales and distribution channels in the international marketplace. The
international  subsidiaries  were:  Javelin Systems (Europe)  Limited  ("Javelin
Europe")  headquartered  in  England;  Javelin  Systems  International  Pte  Ltd
("Javelin Asia")  headquartered in Singapore;  and Javelin Systems Australia Pty
Limited  ("Javelin  Australia"),   subsequently  renamed  Aspeon  Systems  (Asia
Pacific) Pty Ltd, headquartered in Australia.

In May 1998, Javelin Asia acquired all of the outstanding common stock of Aspact
IT  Services  (Singapore)  Pte  Ltd  ("Aspact").  Aspact  was  headquartered  in
Singapore and provided consulting and system integration services.


                                       45
<PAGE>

In November  1998,  we completed a public  offering of  1,395,000  shares of our
common stock at $6.75 per share, netting proceeds of approximately $8.1 million.
Proceeds  were  used to repay  borrowings  under a  revolving  line of credit of
approximately  $3.2 million,  to purchase all of the outstanding common stock of
RGB/Trinet  Limited  ("RGB"),  which was  subsequently  renamed Javelin Holdings
International Limited (UK), and Jade Communications Ltd ("Jade") and for general
corporate  purposes.  RGB and Jade were  headquartered  in England and  provided
complementary  Wide Area  Networking  (WAN)  products and services  primarily to
large retail, hospitality, and telecommunications companies.

During  the  course of 1998 we  established  a 75% owned  subsidiary,  Teneo Ltd
("Teneo"),  in an effort to expand our service  management and wide area network
solutions business.

In January 1999 the business and assets of Posnet were  transferred  from Posnet
and merged with the business and assets of CCI.

In February  1999,  we completed a public  offering of  2,375,000  shares of our
common  stock at $12.25 per  share,  netting  proceeds  of  approximately  $26.9
million.  Proceeds were used to purchase the outstanding common stock of Dynamic
Technologies,  Inc. ("DTI") and SB Holdings, Inc. ("SB") and for working capital
and general  corporate  purposes.  DTI and SB provided custom  Internet/Intranet
software and services.

In August 1999, we acquired all of the  outstanding  capital stock of Restaurant
Consulting  Services,  Inc.  ("RCS").  RCS  implemented,  operated and supported
packaged software applications for the restaurant industry.

In January 2000, we created Aspeon  Solutions,  Inc.  ("Aspeon  Solutions") as a
wholly owned subsidiary to centralize and continue the rapid  development of our
ASP service business.

On March 8, 2000 we completed a private  placement of  securities  with Marshall
Capital  Management,  Inc., an affiliate of Credit Suisse First Boston, in which
we sold an  aggregate  of 10,000  shares of  Series A  Convertible  Exchangeable
Preferred Stock (the "Preferred  Stock"), a warrant to acquire 583,334 shares of
our common stock and a warrant to acquire  1,250,000 shares of Aspeon Solutions,
one of  our  wholly-owned  subsidiaries.  Proceeds  to us  from  this  placement
amounted to $9.6 million,  net of offering  costs,  which were used primarily to
acquire Monument  Software  Corporation  ("Monument"),  settle future contingent
payments  associated  with the  acquisition  of RCS, hire  management  and staff
personnel,  expand  corporate  facilities and fund our ASP Services  operations.
Monument specialized in the rapid  implementation of enterprise-class  financial
systems with an emphasis on Oracle Financials

During  fiscal 2000,  we  sustained  significant  losses and we had  experienced
negative cash flows from our operations since inception.  As at June 30, 2000 we
were in default of certain covenants under the terms of both our credit facility
and  Preferred  Stock  and were  delinquent  in the  payment  of  various  trade
payables. Our ability to meet our obligations in the ordinary course of business
was  dependent  upon the  success of our  attempts  to return to  profitability,
obtain a waiver of credit line and Preferred  Stock defaults,  raise  additional
financing  through  public and,  or,  private  equity  financings  and  evaluate
potential  strategic  opportunities.  We sought to  return to  profitability  by
streamlining   operations  and  generating   on-going  cost  savings  and  began
evaluating  strategic  opportunities  for our sale or the sale of certain of our
subsidiaries.

As part of our  efforts to  streamline  our  operations,  during  fiscal 2001 we
merged the business of Javelin Asia into Javelin  Australia and renamed  Javelin
Australia as Aspeon  Systems (Asia Pacific) Pty Ltd and we merged the operations
of Monument into those of RCS.

In August 2000, we executed a sale agreement  with the then current  director of
Aspact (the "Purchaser").  The initial purchase price of $350,000 was payable to
us in monthly installments of $14,600 commencing in July 2001.  Consequently,  a
loss on sale of approximately  $229,000 was recognized in the three months ended
September  30, 2000. In the event the Purchaser  consummated  an initial  public
offering or disposed of all or  substantially  all of Aspact's common stock, the
Purchaser   was  required  to  pay:  a)  the  unpaid   balance  of  the  initial
consideration  and b) 50% of the net proceeds  received from the initial  public
offering  less the amount paid under (a),  in an amount not to exceed  $200,000.
Concurrent with the sale agreement,  the Purchaser was terminated as an employee
of ours.

                                       46
<PAGE>

In September  2000, at the  insistence of our auditors,  PricewaterhouseCoopers,
LLC ("PWC"), we announced that we would restate our first quarter 2000 financial
statements as a result of accounting misstatements. In October 2000 we announced
we would  require  additional  time to file our form 10-K  report for the fiscal
year ended June 30, 2000.

 In October 2000, the Nasdaq Stock Market  ("Nasdaq")  suspended  trading in our
common  stock  while it sought  additional  information  from us. On November 9,
2000, we  participated  in a hearing  before the Nasdaq  Listing  Qualifications
Panel which was held for the purpose of evaluating  whether shares of our common
stock would continue to be listed on Nasdaq or if they would be delisted.

In October and November 2000,  eight  purported class action lawsuits were filed
against us, our Chief Executive Officer,  and our former Chief Financial Officer
in the United States  District Court for the Central  District of California for
alleged violations of the Securities  Exchange Act of 1934. After the defendants
moved to dismiss each of the actions,  the lawsuits  were  consolidated  under a
single  action,  entitled "In re Aspeon  Securities  Litigation,"  Case No. SACV
00-995 AHS (ANx), and the appointed lead plaintiff  voluntarily filed an amended
and consolidated  complaint.  The defendants moved to dismiss that complaint and
on April 23, 2001 the Court entered an order  dismissing  the complaint  without
prejudice. On May 21, 2001 the appointed lead plaintiff filed a third complaint,
styled  as a  "First  Amended  Consolidated  Complaint."  On  June 4,  2001  the
defendants  moved to dismiss this complaint and on September 17, 2001 the United
States District Court dismissed the suit with prejudice and entered  judgment in
favor of the us and our officers.  On September  20, 2001 the lead  plaintiff in
the class action suit appealed against the dismissal of the case. On January 21,
2003 the  decision  to dismiss  the case was upheld but the lead  plaintiff  was
given the opportunity to remedy the  deficiencies in the complaint that had been
filed.  Accordingly  on May 30, 2003 the  plaintiff  filed its  "Second  Amended
Consolidated  Complaint" which again was subsequently  dismissed by the District
Court.  On  November  26,  2003 the lead  plaintiff  filed  its  "Third  Amended
Consolidated  Complaint" which was again dismissed with prejudice in March 2004.
The lead  plaintiff  once again  appealed  against the  dismissal and the United
States  Court of Appeals  for the Ninth  Circuit  affirmed  the  dismissal  with
prejudice  on  February  23,  2006.  This is the fifth time that the Courts have
ruled in favor of us and against the  shareholders  who have  brought  this suit
against us. On each of the previous  occasions the shareholders who have brought
this suit  against us have filed an appeal  against the  decision of the Courts.
There can be no  assurance  that the  shareholders  who have  brought  this suit
against us will not file a further  appeal  against the Courts' latest ruling in
which case we will continue to vigorously defend against the claims.

In December 2000 we restated the results for the fiscal quarters ended September
30,  1999,  December 31, 1999 and March 31, 2000 by an aggregate of $1.7 million
or $0.19 per share.  Revenue was reduced by $679,000 or 1.05%,  our gross profit
was decreased by $206,000 or 1.22%,  $1.4 million of the restatement  related to
an  adjustment  to increase the amount  recorded for the  beneficial  conversion
feature  associated with the issuance of our Preferred Stock in March 2000 based
upon  an  independent   valuation  and  the  remaining  adjustments  related  to
unrecorded  compensation expense,  amortization of intangible assets,  expensing
costs previously capitalized and the additional accrual of general expenses.

Effective  as of January 4, 2001 our shares of common stock were  delisted  from
Nasdaq.  As we were in  arrears  with our  filings  with the SEC,  our shares of
common  stock were not  eligible to be traded on the over the  counter  bulletin
board  and  commenced  trading  on the Pink  Sheets  under the  symbol  ASPE.PK.
Subsequently  our shares of common  stock ceased to be traded on the Pink Sheets
and are now traded on the Gray Sheets.

In January  2001 our  auditors,  PWC,  notified us that it was  terminating  its
auditor relationship with us effective immediately.

In February 2001 our subsidiary, RGB, sold its interest in Teneo to employees of
Teneo for the  consideration of a $350,000 note.  Consequently a gain on sale of
$432,000 was recognized during the quarter ended March 31, 2001.

On March 1, 2001 we completed the sale of the  consulting  contracts and certain
of the fixed assets our DTI  subsidiary to a company  controlled by DTI's former
owners and certain of our  shareholders for a purchase price of $900,000 and the
return for  cancellation  of 200,000  of shares of our  common  stock  valued at
$60,000.  With the  completion  of the  transfer of its help desk  business to a
third party on April 27, 2001, the business  activities of DTI ceased. A gain on
the sale of the net assets of DTI totaling  $820,900 was  recognized  during the
quarter ended March 31, 2001.

                                       47
<PAGE>

On March 19,  2001 we  retained  BDO  Seidman,  LLP  ("BDO") as our  independent
auditing firm. However, as PWC, our previous  independent  auditors,  refused to
allow BDO access to PWC's prior year work papers,  BDO was unable to complete an
audit of our financial statements for later periods at that time.

During fiscal 2001,  despite our efforts to return to profitability and the sale
of certain of our subsidiaries,  we continued to generate significant losses, to
be in default of certain covenants under the terms of our Preferred Stock, to be
delinquent  in the  payment of various  trade  payables  and had been  unable to
replace  our line of credit  which had been  repaid in full during the course of
the year.  While we had  appointed  new  auditors,  we were  unable to  generate
audited  financial  accounts  due to the lack of  cooperation  from our previous
auditors and consequently were unable to comply with the listing requirements of
either Nasdaq or the over the counter bulletin board. Our relegation to the Pink
Sheets had serious adverse consequences for both the confidence of our customers
or potential  customers and our ability to attract new debt or equity financing.
The  lawsuits  brought  against  us by certain  of our  shareholders  diverted a
significant  amount of our management's time from our operations which were also
severely effected by the collapse of the tech market in early 2001. Nevertheless
we  continued  press  ahead by  attempting  to return to  profitability  through
further cost reductions,  renegotiate the terms of our Preferred  Stock,  settle
the outstanding shareholder litigation, evaluate strategic opportunities for our
sale or the sale of certain of our  subsidiaries  and raise additional debt and,
or, equity funding.

In August 2001 we, together with our Chief Executive Officer,  filed a six count
complaint against our former auditors,  PWC, alleging  professional  negligence,
intentional   interference  with  prospective   business  advantage,   negligent
interference  with  prospective  economic  advantage,  violation  of  California
Business and Professions Code Sections 17200 and 17500, and defamation.

On March 22, 2002 we signed an  agreement  to sell our  subsidiary  RGB (renamed
Javelin Holdings  International Ltd.), the UK holding company that in turn owned
our Javelin Europe and Jade  subsidiaries,  to an investment group that included
members of the existing UK  management  team for  $125,995 and the  repayment of
inter-company  debt.  $750,000 was paid on signing with $175,000 to be paid upon
completion of a technology escrow agreement

On May 1, 2002 we signed an agreement  with the holder of our  Preferred  Shares
that had been in default. Under that agreement,  in return for a cash payment of
$447,500  by us (a) we  were  released  from  all  liabilities  relating  to our
outstanding Series A Convertible  Exchangeable Preferred Stock and the documents
under which those  securities had been issued and were  outstanding;  (b) all of
our  outstanding  Series  A  Convertible   Exchangeable   Preferred  Stock  were
cancelled; (c) a warrant previously issued by us entitling the holder thereof to
purchase  583,334  shares of our common stock was  cancelled;  and (d) a warrant
previously  issued by our  subsidiary,  Aspeon  Solutions,  entitling the holder
thereof to purchase 1,250,000 shares of the common stock of Aspeon Solutions was
cancelled.  We believed  that the  settlement  had a net positive  effect on our
balance sheet of approximately $19 million.

In June 2002 we terminated the activities of RCS.

On January 17, 2003, we sold our Australian  subsidiary,  Javelin Australia,  to
Mr.  Matthew  Maley.  Prior to the sale,  Mr.  Maley had  served as our  general
manager  of  that  subsidiary.  We  received  $80,000  at the  closing  of  this
transaction.  Under the Share Sale Agreement  relating to this transaction,  Mr.
Maley agreed to cause Javelin  Australia to pay its account payable to us in the
amount of $239,000 in monthly installments of $10,000 each until the full amount
of the account  payable has been paid.  Mr. Maley  personally  guaranteed  these
payments.

During the fiscal years  ending June 30, 2002 and 2003,  we used every effort to
return to profitability  through  on-going cost reductions,  to raise additional
debt and, or, equity  funding and to identify  strategic  opportunities  for our
sale or the sale of certain of our subsidiaries  However,  the weak tech market,
together with our inability to produce audited accounts and come into compliance
with the  listing  conditions  of  Nasdaq  or over the  counter  bulletin  board
markets,  meant we were  unable to attract new  customers  or the debt or equity
financing necessary to secure our financial future.

On June 30,  2003 we  decided  to  discontinue  the  operations  of our last two
operating businesses,  Javelin and CCI. Javelin ceased operations with immediate
effect while CCI completed  certain  outstanding  customer orders before ceasing
production on August 3, 2003 and continued to  subcontract  certain  maintenance
activities through December 31, 2003.

                                       48
<PAGE>

In August  2003 we reached an out of court  settlement  in our law suit  against
PWC. Under the terms of the settlement we received a payment of $1.3 million and
agreement to write off certain  outstanding  invoices for  accounting  and legal
fees. Consequently we recognized a gain of $1,007,000 on the settlement although
the net cash we received after all costs totaled only $136,000.

In December 2003, we appointed attorney Frank G Blundo Jr. P.C. as trustee in an
assignment  for the  benefit  of the  creditors  of  Aspeon  and CCI  commencing
effective January 1, 2004.  Effective 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 participate 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.  Consequently  we
recognized a gain of $3.2 million on the establishment of the assignment for the
benefit of Aspeon and CCI creditors. 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.

Following the establishment for the assignment for the benefit of Aspeon and CCI
creditors in January  2004,  we had no assets,  no  operating  business or other
source  of  income,  outstanding  liabilities  in  excess  of $7.9  million,  an
outstanding  law suit brought  against us by certain of our  shareholders,  were
substantially in arrears in respect of maintaining our financial records and our
SEC filings,  were no longer  listed on Nasdaq or the over the counter  bulletin
board and in due course ceased to be listed on the Pink Sheets.

In April 2005, we appointed David J Cutler as a new director and Chief Executive
Officer  and  subsequent  to  that  are now  focused  on  reaching  satisfactory
negotiated  settlements  with our outstanding  creditors,  vigorously  defending
against any further  appeal that may be made  against our  currently  successful
defense of the law suit  brought  against  us by  certain  of our  shareholders,
bringing our financial records and SEC filings up to date,  seeking a listing on
the over the counter bulletin board,  raising additional debt and, or, equity to
finance  settlements with 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.

On April 22, 2005, our sole  director,  David J Cutler entered into an agreement
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI creditors, subject to due diligence, to invest up to $50,000 cash
in us for the benefit of our  creditors  in return for a number of shares of our
common stock to be  determined.  Following  the  completion of the due diligence
process  during the three  months ended  December  31, 2005,  it was agreed with
Frank G Blundo,  Jr. P.C.,  trustee of the  assignment for the benefit of Aspeon
and CCI creditors, that Mr. Cutler would invest $20,000 in us for the benefit of
Aspeon and CCI creditors in return for a number of shares of our common stock to
be  determined.  Accordingly  during the three  months  ended  December 31, 2005
$20,000  which had been  placed in escrow  with Frank G Blundo,  Jr. P.C. by Mr.
Cutler was  released  for the  benefit of Aspeon and CCI  creditors.  On May 31,
2006,  based on an  independent  third  party  valuation,  the  majority  of our
independent  directors  approved  the issue of  10,536,775  shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

On  September  9, 2005 we  received a letter  from the SEC dated  June 24,  2005
indicating that unless we came into  compliance with the reporting  requirements
under the Securities Exchange Act of 1934 within 15 days we may be deregistered.
On  September  12,  2005 we faxed a letter  to the SEC's  Office of  Enforcement
Liaison  indicating  our  intention to come into  compliance  with the reporting
requirements under the Securities Exchange Act of 1934 by November 15, 2005.

On September 12, 2005 we retained Larry  O'Donnell,  CPA, P.C.  (`O'Donnell') as
our independent auditing firm.

                                       49
<PAGE>

By November 15, 2005 we  completed  all required SEC filings for the period July
1, 2003 through September 30, 2005.  However,  we had not completed all required
SEC  filings  in  respect  of the period  April 1, 2001  through  June 30,  2003
although  we had  included  substantial  financial  extracts  and  all  material
disclosures  in respect  of these  periods in the  filings we had  completed  in
respect  of  subsequent  periods.  We  believed  the  cost  to  shareholders  in
completing  these  filings in  respect of these  earlier  periods  exceeded  any
benefit to shareholders in completing  these filings as the information in these
filings  was at  least  two  to  four  years  old,  no  longer  relevant  to our
shareholders given our decision to cease all trading operations made on June 30,
2003 and that all material  information in respect of these earlier  periods has
been made available to our shareholders in our SEC filings for later periods.

In January 2006 we were contacted by the SEC's Office of Enforcement Liaison who
notified us that while they  recognized the progress we had made in bringing our
SEC filings up to date, they still considered us to be delinquent in our filings
because of our  failure to  complete  filings in respect of the period  April 1,
2001 through June 30, 2003.  In August 2006,  on the basis of further audit work
and a review of subsequent  events performed by O'Donnell,  O'Donnell  completed
the audit of our June 30, 2001 financial statements.  In September 2006 we filed
forms 10-QSB for the three months ended September 30, 2001, the six months ended
December  31, 2001 and the nine months ended March 31,  2002.  We are  currently
establishing the likely costs and practicality of completing the SEC filings and
related financial statements for the period April 1, 2002 through June 30, 2003.
In the meantime there continues to be a risk that our shares of common stock may
be  deregistered  by the SEC's Office of  Enforcement  Liaison due the continued
delinquency  of our SEC filings for the period  April 1, 2002  through  June 30,
2003.

On February 23, 2006 the United  States  Court of Appeals for the Ninth  Circuit
affirmed the  dismissal  with  prejudice  of the law suit brought  against us by
certain of our  shareholders.  This is the fifth time that the Courts have ruled
in favor of us and against the  shareholders  who have brought this suit against
us. On each of the previous  occasions  the  shareholders  who have brought this
suit against us have filed an appeal  against the decision of the Courts.  There
can be no assurance that the  shareholders who have brought this suit against us
will not file a further  appeal  against the Courts' latest ruling in which case
we will continue to vigorously defend against the claims.

Effective  March 13,  2006,  David  Cutler,  at that time our sole  director and
officer,  appointed  Wesley F Whiting  and Redgie  Green as new,  non  executive
directors to join him on our board of directors.

On May 31, 2006, based on an independent third party valuation,  the majority of
our independent  directors approved the issue of 10,536,775 shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

In August 2006,  on the basis of further  audit work and a review of  subsequent
events  performed by  O'Donnell,  O'Donnell  completed the audit of our June 30,
2001 financial statements. In September 2006 we filed forms 10-QSB for the three
months ended  September 30, 2001, the six months ended December 31, 2001 and the
nine months ended March 31, 2002. We are currently establishing the likely costs
and practicality of completing the SEC filings and related financial  statements
for the period  April 1, 2002  through  June 30,  2003.  In the  meantime  there
continues  to be a risk that our shares of common stock may be  deregistered  by
the SEC's Office of Enforcement Liaison due the continued delinquency of our SEC
filings for the period April 1, 2002 through June 30, 2003.

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.

                                       50
<PAGE>

Prior  to  the  transfer,  property  and  equipment  were  stated  at  cost  and
depreciated using the straight-line  method over the following  estimated useful
lives:

Leasehold improvements                               2 - 10 years
Office furniture, fixtures and equipment             5 - 7   years
Computer equipment and software                      3 - 5  years
Equipment on lease                                      3     years
Warehouse equipment                                     7     years
Test equipment                                          7     years
Depot spares                                            7     years
Vehicles                                                5     years

Maintenance  and repairs were  charged to expense as incurred,  and the costs of
additions  and  betterments  were  capitalized.   Leasehold   improvements  were
amortized  over the  shorter of the useful  life of the asset or the life of the
related  lease.  When assets were sold or  otherwise  disposed  of, the cost and
related accumulated depreciation and amortization were removed from the accounts
and any resulting gain or loss was recognized.

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.

Impairment of Long-Lived  and  Intangible  Assets -- In the event that facts and
circumstances indicated that the cost of long-lived and intangible assets may be
impaired, an evaluation of recoverability was be performed. If an evaluation was
required, the estimated future undiscounted cash flows associated with the asset
was compared to the asset's  carrying  amount to  determine  if a write-down  to
market value or discounted cash flow value was required.

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.

Revenue  Recognition -- We sold our hardware and third-party  software  products
both as part of a solutions  package and on a  stand-alone  basis.  Sales of our
products which were part of a solutions  package  typically  included  hardware,
third-party   software  and   installation.   Revenues   associated  with  these
arrangements  were  recognized  upon the completion of the  installation  of the
product.  Sales of  products,  which were part of a solution,  were  included in
products  revenue while  installation  and consulting  services were included in
services  revenue.  Revenues from sales of products sold on a stand-alone  basis
were  recognized  upon shipment to the customer.  Estimated  product returns and
sales allowances were provided for when revenue was recognized.

 Service contract revenues were recognized  ratably over the term of the related
contract.  These  revenues  were  generally  from  maintenance,  help  desk  and
application services arrangements.  Revenues earned under time and material type
arrangements  were  recognized as services were  performed,  and primarily  were
comprised of information technology services.

Revenues  from  fixed  fee  arrangements   under  which  we  provided   software
customization,   development  services,  or  significant   implementations  were
recognized on the  percentage-of-completion  method of accounting,  based on the
costs incurred to total estimated costs. We provided for anticipated losses by a
charge to income in the period the losses were first identified.

                                       51
<PAGE>

Customer  deposits and deferred  revenues -- Customer  deposits  represent  cash
received in advance of product shipment while deferred revenues  represents cash
received in advance of the performance of service contract revenues.

Warranties--  Our  products  were under  warranty  for defects in  material  and
workmanship for one year. Certain components  included our products were covered
by manufacturers'  warranties.  We established an accrual for estimated warranty
costs when the related revenue was recognized.

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,  2006  and  2005  our  net  income  /  (loss)  was  identical  to  our
comprehensive income / (loss).

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 2005 and 2004 as we recorded  losses  during
these years and any calculation of diluted EPS would be anti-dilutive.

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 November 2004, the FASB issued
Statement of  Financial  Accounting  Standards  No. 151,  "Inventory  Costs-- an
amendment of ARB No. 43, Chapter 4" (hereinafter "SFAS No. 151"). This statement
amends the guidance in ARB No. 43,  Chapter 4,  "Inventory  Pricing," to clarify
the accounting for abnormal amounts of idle facility expense,  freight, handling
costs, and wasted material  (spoilage).  Under some circumstances,  SFAS No. 151
mandates that items such as idle facility expense,  excessive  spoilage,  double
freight,  and  re-handling  costs be recognized as  current-period  charges.  In
addition,  this statement requires that allocation of fixed production overheads
to the costs of  conversion  be based on the normal  capacity of the  production
facilities.  This  statement is effective for inventory  costs  incurred  during
fiscal years  beginning after June 15, 2005. We do not believe that the adoption
of SFAS No.  151 will have a  material  impact on our  financial  conditions  or
results of operation

In December 2004, the FASB issued  Statement of Financial  Accounting  Standards
No. 152,  which  amends SFAS  Statement  No. 66,  "Accounting  for Sales of Real
Estate," to reference the financial  accounting and reporting  guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP)  04-2,  "Accounting  for  Real  Estate  Time-Sharing  Transactions."  This
statement  also amends  SFAS No. 67,  "Accounting  for Costs and Initial  Rental
Operations  of Real  Estate  Projects,"  to  state  that  the  guidance  for (a)
incidental operations and (b) costs incurred to sell real estate projects,  does
not apply to real estate  time-sharing  transactions.  The  accounting for those
operations  and costs is subject to the guidance in SOP 04-2.  This statement is
effective for financial  statements  for fiscal years  beginning  after June 15,
2005.  We do not believe  that the adoption of SFAS No. 152 will have a material
impact on our financial conditions or results of operation.

                                       52
<PAGE>

In December 2004, the FASB issued  Statement of Financial  Accounting  Standards
No. 153 (hereinafter  "SFAS No. 153"). This statement  addresses the measurement
of  exchanges  of  nonmonetary  assets.  The  guidance  in APB  Opinion  No. 29,
"Accounting  for  Nonmonetary  Transactions,"  is  based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  The guidance in that opinion,  however,  included certain
exceptions  to that  principle.  SFAS No. 153 amends APB Opinion 29 to eliminate
the  exception  for  nonmonetary  exchanges  of  similar  productive  assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial  substance.  A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result of the exchange. This statement is effective for financial statements for
fiscal years beginning after June 15, 2005. Earlier application is permitted for
nonmonetary  asset  exchanges  incurred  during fiscal years beginning after the
date of this  statement  is issued.  We do not believe that the adoption of SFAS
No. 153 will have a material  impact on our  financial  conditions or results of
operation

In  December  2004,  the FASB  issued a  revision  to FASB  Statement  No.  123,
Accounting for Stock Based Compensation.  This Statement  supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance.   This  Statement   establishes   standards  for  the  accounting  for
transactions  in which an entity  exchanges its equity  instruments for goods or
services.  It also addresses  transactions in which an entity incurs liabilities
in  exchange  for  goods or  services  that are  based on the fair  value of the
entity's  equity  instruments  or that may be settled by the  issuance  of those
equity  instruments.  . We do not believe that the adoption of SFAS No. 123( R )
will have a material impact on our financial conditions or results of operation

In March  2005,  the  FASB  Interpretation  No.47  "FIN  47" was  issued,  which
clarifies certain terminology as used in FASB Statement No. 143, "Accounting for
Asset  Retirement  Obligations".  In addition it clarifies  when an entity would
have  sufficient  information to reasonably  estimate the fair value of an asset
retirement obligation. FIN 47 is effective no later than the end of fiscal years
ending after December 15, 2005.  Early  adoption of FIN 47 is encouraged.  We do
not  believe  that the  adoption  of FIN 47 will have a  material  impact on our
financial conditions or results of operation.

In May 2005,  the FASB issued FASB Statement No. 154, which replaces APB Opinion
No.20 and FASB No. 3. This  Statement  provides  guidance  on the  reporting  of
accounting changes and error corrections.  It established,  unless impracticable
retrospective  application  as the  required  method for  reporting  a change in
accounting  principle in the absence of explicit  transition  requirements  to a
newly adopted  accounting  principle.  The Statement also provides guidance when
the retrospective  application for reporting of a change in accounting principle
is  impracticable.  The  reporting  of a  correction  of an error  by  restating
previously issued financial statements is also addressed by this Statement. This
Statement is effective for financial statements for fiscal years beginning after
December 15, 2005.  Earlier  application is permitted for accounting changes and
corrections  of  errors  made in  fiscal  years  beginning  after  the date this
Statement is issued.  We do not believe that the adoption of FASB  Statement No.
154 will have a  material  impact on our  financial  conditions  or  results  of
operation.

In February  2006, the FASB issued FASB Statement No. 155, which is an amendment
of FASB  Statements  No. 133 and 140.  This  Statement;  a)  permits  fair value
remeasurement  for any hybrid  financial  instrument  that  contains an embedded
derivative  that  otherwise  would  require  bifurcation,   b)  clarifies  which
interest-only strip and principal-only strip are not subject to the requirements
of  Statement  133,  c)  establishes  a  requirement  to evaluate  interests  in
securitized   financial  assets  to  identify  interest  that  are  freestanding
derivatives or that are hybrid  financial  instruments  that contain an embedded
derivative  requiring  bifurcation,  d) clarifies that  concentrations of credit
risk in the  form of  subordination  are not  embedded  derivatives,  e)  amends
Statement  140 to eliminate  the  prohibition  on a  qualifying  special-purpose
entity  from  holding a  derivative  financial  instrument  that  pertains  to a
beneficial  interest other than another derivative  financial  instrument.  This
Statement is effective for financial statements for fiscal years beginning after
September 15, 2006.  Earlier  adoption of this  Statement is permitted as of the
beginning of an entity's fiscal year, provided the entity has not yet issued any
financial statements for that fiscal year. We does not believe that the adoption
of  FASB  Statement  No.  155  will  have a  material  impact  on our  financial
conditions or results of operation

                                       53
<PAGE>

In March 2006, the Financial  Accounting  Standards  Board (`FASB')  issued FASB
Statement  No.  156,  which  amends  FASB  Statement  No.  140.  This  Statement
establishes,  among other things, that accounting for all separately  recognized
servicing assets and servicing liabilities.  This Statement amends Statement 140
to  require  that all  separately  recognized  servicing  assets  and  servicing
liabilities be initially measured at fair value, if practicable.  This Statement
permits,  but  does  not  require,  the  subsequent  measurement  of  separately
recognized  servicing assets and servicing  liabilities at fair value. An entity
that uses  derivative  instruments  to mitigate the risks  inherent in servicing
assets and  servicing  liabilities  is required to account for those  derivative
instruments at fair value. Under this Statement,  an entity can elect subsequent
fair value measurement to account for its separately recognized servicing assets
and servicing  liabilities.  By electing that option, an entity may simplify its
accounting  because this Statement  permits income statement  recognition of the
potential  offsetting  changes  in fair  value of  those  servicing  assets  and
servicing liabilities and derivative  instruments Is the same accounting period.
This Statement is effective for financial  statements for fiscal years beginning
after September 15, 2006.  Earlier adoption of this Statement is permitted as of
the beginning of an entity's fiscal year, provided the entity has not yet issued
any  financial  statements  for that fiscal  year.  We do not  believe  that the
adoption of FASB Statement No. 156 will have a material  impact on our financial
conditions or results of operation.

Business  Segments -- In June 1997,  the Financial  Accounting  Standards  Board
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 2006 and 2005 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,  2006,  we had $7 cash on hand,  $195 of  assets,  no  operating
business or other source of income,  outstanding  liabilities  of  approximately
$8.1 million,  a stockholders'  deficit of approximately  $8.1 million and a law
suit brought against us by certain of our  shareholders  which had been ruled in
our favor by the  Courts but which  could be subject to a further  appeal by the
shareholders in question

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.

If we were to be subject to any further  appeal  which may be made in respect of
the law suit brought  against us by certain of our  shareholders  it is unlikely
that the proceeds from our  Directors' and Officers'  insurance  policy would be
sufficient to meet the damages  assessed and we would have no alternative but to
file for bankruptcy.

During the fiscal  years  ended June 30,  2006 and 2005,  one of our  directors,
David J Cutler, advanced to us $115,000 and $88,000 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.
Effective May 31, 2006 $14,000 of this debt was converted to equity.  Since June
30,2006 Mr. Cutler has  continued to make further  advances to us by way of loan
to meet our  ongoing  operating  expenses  and fund the  costs of  bringing  our
financial  statements  and SEC  reporting  up to date as  required.  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,  vigorously  defend against any further appeal
that  may be made  against  our  currently  successful  defense  of the law suit
brought against us by certain of our  shareholders,  bring our financial records
and SEC  filings  up to date,  seek a listing on the over the  counter  bulletin
board,  raise debt and, or, equity financing to fund the negotiated  settlements
with our creditors and to meet ongoing  operating  expanses 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.

                                       54
<PAGE>

3. ACQUISITIONS AND DISPOSITIONS:

From December  1997 to March 2000 we  established  a number of  subsidiaries  to
conduct  our  operating  activities  and  purchased  other  subsidiaries  for  a
combination of shares of our common stock and cash. From August 2000 to December
2003  our  liquidity  problems  were  such  that  we were  forced  to  sell,  or
discontinue,  all of our operating  businesses.  Our final operating  activities
terminated  in December 2003 and our remaining  assets were  transferred  to the
trustee of the  assignment  for the  benefit  of the  Aspeon  and CCI  creditors
effective  January 1, 2004. A summary of our  acquisitions  and  disposals is as
follows:

<TABLE>
<CAPTION>

<S>                                         <C>                                 <C>
Aspeon, Inc.                                established September 1995.         ceased trading operations as
                                                                                at June 30, 2003.


                                                                                assets transferred to the trustee
                                                                                for the assignment for the benefit
                                                                                of Aspeon and CCI creditors in
                                                                                January 2004.


CCI Group, Inc.                             acquired December 1997.             ceased manufacturing in August
                                                                                2003.

                                                                                ceased providing services December
                                                                                2003.


                                                                                assets transferred to trustee for
                                                                                the assignment for the benefit of
                                                                                Aspeon and CCI creditors January
                                                                                2004.

Posnet Computers, Inc.                      acquired December 1997.             merged into CCI Group, Inc.
                                                                                January 1999.

Javelin Systems Europe, Ltd.                established March 1998.             sold March 2002.

Javelin Systems International Pte Ltd       established March 1998.             merged into Javelin Systems
                                                                                Australia Pty Ltd between
                                                                                June - September 2000.

Javelin Systems Australia Pty Ltd           established March 1998.             sold January 2003.

Aspact IT Services (Singapore) Pte Ltd      acquired May 1998.                  sold August 2000.

Javelin Holdings International Ltd          acquired November 1998.             sold March 2002.
(formerly RGB Trinet Ltd)

Jade Communications, Ltd                    acquired November 1998.             sold March 2002.

Dynamic Technologies, Inc.                  acquired April 1999.                assets sold March 2001.

SB Holdings, Inc.                           acquired April 1999.                assets sold March 2001.

Restaurant Consulting Services, Inc.        acquired August 1999.               ceased trading in June 2002.

Aspeon Solutions, Inc.                      established February 2000.          dormant from June 2002.

Teneo Ltd                                   established March 2000.             sold March 2001.

Monument Software Corporation               acquired March 2000.                merged with RCS in fiscal 2001.
</TABLE>


                                       55
<PAGE>

4. 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 in respect
of legal fees incurred in respect of the law suit brought  against us by certain
of our shareholders.

Since April 2005 we have  accumulated  certain other nominal current assets with
funds provide to us by loan from our sole director, David J Cutler.

5. FIXED ASSETS

As at June 30, 2003 our fixed assets comprised:

Leasehold improvements                                        $   126,512
Office furniture and equipment                                    116,502
Computer equipment                                                599,032
Equipment on lease                                                362,285
Warehouse equipment                                                26,760
Test equipment                                                     37,088
Depot spares                                                      323,910

Less: accumulated depreciation                                 (1,118,850)
                                                              ---------------
Net book value                                                    473,239
                                                              ===============

Effective  January 1, 2004 all fixed assets were  transferred  to the trustee of
the assignment for the benefit of the Aspeon and CCI creditors.

We had no depreciation expense in the fiscal years ended June 30, 2006 and 2005.

6. 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.  Effective  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.

As at June 30,  2006  and  2005 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, 2006 and 2005
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.


                                       56
<PAGE>

7. NOTES PAYABLE

During the fiscal  years  ended June 30,  2006 and 2005,  one of our  directors,
David J Cutler, advanced to us $115,000 and $88,000 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.
Effective May 31, 2006 $14,000 of this debt was converted to equity.  Since June
30, 2006 Mr. Cutler has continued to make further  advances to us by way of loan
to meet our  ongoing  operating  expenses  and fund the  costs of  bringing  our
financial  statements  and SEC  reporting  up to date as  required.  There is no
assurance  that Mr. Cutler will  continue to provide us with further  funding in
the future.

 Also included in the balance on notes payable is a balance due to an individual
who had previously sold his business to us. We had renegotiated the terms of the
deferred earnout due to him on the sale of his business to us such that the note
payable  represented  the balance due to him. We were in default in repayment of
this note  payable  as at June 30,  2006 and 2005 which  remains an  outstanding
liability of ours.

8.COMMITMENTS:

Leases

As at June  30,  2006  and  2005 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 $ 6,000 for the fiscal years ended June 30, 2006 and
2005  and  were  included  in  general  and   administrative   expenses  in  our
consolidated statements of operations.

Litigation

In October and November 2000,  eight  purported class action lawsuits were filed
against us, our Chief Executive Officer,  and our former Chief Financial Officer
in the United States  District Court for the Central  District of California for
alleged violations of the Securities  Exchange Act of 1934. After the defendants
moved to dismiss each of the actions,  the lawsuits  were  consolidated  under a
single  action,  entitled "In re Aspeon  Securities  Litigation,"  Case No. SACV
00-995 AHS (ANx), and the appointed lead plaintiff  voluntarily filed an amended
and consolidated  complaint.  The defendants moved to dismiss that complaint and
on April 23, 2001 the Court entered an order  dismissing  the complaint  without
prejudice. On May 21, 2001 the appointed lead plaintiff filed a third complaint,
styled  as a  "First  Amended  Consolidated  Complaint."  On  June 4,  2001  the
defendants  moved to dismiss this complaint and on September 17, 2001 the United
States District Court dismissed the suit with prejudice and entered  judgment in
favor of the us and our officers.  On September  20, 2001 the lead  plaintiff in
the class action suit appealed against the dismissal of the case. On January 21,
2003 the  decision  to dismiss  the case was upheld but the lead  plaintiff  was
given the opportunity to remedy the  deficiencies in the complaint that had been
filed.  Accordingly  on May 30, 2003 the  plaintiff  filed its  "Second  Amended
Consolidated  Complaint" which again was subsequently  dismissed by the District
Court.  On  November  26,  2003 the lead  plaintiff  filed  its  "Third  Amended
Consolidated  Complaint" which was again dismissed with prejudice in March 2004.
The lead  plaintiff  once again  appealed  against the  dismissal and the United
States  Court of Appeals  for the Ninth  Circuit  affirmed  the  dismissal  with
prejudice  on  February  23,  2006.  This is the fifth time that the Courts have
ruled in favor of us and against the  shareholders  who have  brought  this suit
against us. On each of the previous  occasions the shareholders who have brought
this suit  against us have filed an appeal  against the  decision of the Courts.
There can be no  assurance  that the  shareholders  who have  brought  this suit
against us will not file a further  appeal  against the Courts' latest ruling in
which case we will continue to vigorously defend against the claims.

If we were to be subject to any further  appeal  which may be made in respect of
the law suit brought  against us by certain of our  shareholders  it is unlikely
that the proceeds from our  Directors' and Officers'  insurance  policy would be
sufficient to meet the damages  assessed and we would have no alternative but to
file for bankruptcy.


                                       57
<PAGE>

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.


9. RELATED PARTY TRANSACTIONS

On April 22, 2005, our sole  director,  David J Cutler entered into an agreement
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI creditors, subject to due diligence, to invest up to $50,000 cash
in us for the benefit of our  creditors  in return for a number of shares of our
common stock to be  determined.  Following  the  completion of the due diligence
process  during the three  months ended  December  31, 2005,  it was agreed with
Frank G Blundo,  Jr. P.C.,  trustee of the  assignment for the benefit of Aspeon
and CCI creditors, that Mr. Cutler would invest $20,000 in us for the benefit of
Aspeon and CCI creditors in return for a number of shares of our common stock to
be  determined.  Accordingly  during the three  months  ended  December 31, 2005
$20,000  which had been  placed in escrow  with Frank G Blundo,  Jr. P.C. by Mr.
Cutler was  released  for the  benefit of Aspeon and CCI  creditors.  On May 31,
2006,  based on an  independent  third  party  valuation,  the  majority  of our
independent  directors  approved  the issue of  10,536,775  shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

During the fiscal  years  ended June 30,  2006 and 2005,  one of our  directors,
David J Cutler, advanced to us $115,000 and $88,000 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.
Effective May 31, 2006 $14,000 of this debt was converted to equity.  Since June
30,2006 Mr. Cutler has  continued to make further  advances to us by way of loan
to meet our  ongoing  operating  expenses  and fund the  costs of  bringing  our
financial  statements  and SEC  reporting  up to date as  required.  There is no
assurance  that Mr. Cutler will  continue to provide us with further  funding in
the future.

10.  STOCKHOLDERS' DEFICIT:

Preferred Stock -- We have the authority to issue 1,000,000  shares of preferred
stock of which 10,000 was  subsequently  designated  as  mandatorily  redeemable
stock. The Board of Directors has the authority to issue such preferred stock in
series and determine the rights and preferences of the shares.

Common Stock - On April 22, 2005, our sole director, David J Cutler entered into
an agreement  with Frank G Blundo,  Jr. P.C.,  trustee of the assignment for the
benefit of Aspeon and CCI creditors,  subject to due diligence,  to invest up to
$50,000  cash in us for the benefit of our  creditors  in return for a number of
shares of our common stock to be determined. Following the completion of the due
diligence process during the three months ended December 31, 2005, it was agreed
with Frank G Blundo,  Jr.  P.C.,  trustee of the  assignment  for the benefit of
Aspeon and CCI  creditors,  that Mr.  Cutler would invest  $20,000 in us for the
benefit  of Aspeon  and CCI  creditors  in return  for a number of shares of our
common  stock to be  determined.  Accordingly  during  the  three  months  ended
December 31, 2005  $20,000  which had been placed in escrow with Frank G Blundo,
Jr. P.C. by Mr. Cutler was released for the benefit of Aspeon and CCI creditors.
On May 31, 2006, based on an independent third party valuation,  the majority of
our independent  directors approved the issue of 10,536,775 shares of our common
stock to Mr.  Cutler for the  conversion  of  $14,243  of his debt into  equity.
Following  the issue of these shares of our common stock Mr.  Cutler owned 52.7%
of  our  total  authorized  and  issued  share  capital  and  still  had a  loan
outstanding to us of approximately $178,000.

Treasury  Stock - in connection  with the sale of certain  assets related to the
sale of DTI in March 2001,  200,000  shares of common stock , valued at $60,000,
were cancelled.

Warrants -- During the financial years ended June 30, 2006 and 2005, no warrants
were issued and outstanding.


                                       58
<PAGE>

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.

As at June  30,  2000 we had a  total  of  2,336,967  options  outstanding  with
exercise prices between $3.78 and $8.04 per share, a weighted  average  exercise
price of $7.92 and an  average  remaining  life of 5.8  years.  656,258 of these
options had vested at an average exercise price of $7.62.

During the fiscal year June 30, 2001,  2,107,500 stock options were issued at an
exercise price of $4.00.  During the fiscal year ended June 30, 2002,  1,655,000
stock  options  were  issued  at an  exercise  price of $0.35 and  600,000  with
exercise  prices ranging from $0.50 to $1.50.  During the fiscal year ended June
30, 2003,  2,000,000 stock options were issued at an exercise price of $0.07 and
600,000 with an exercise price of $0.06.  During the fiscal years ended June 30,
2006, 2005 and 2004, no stock options were issued.

Subsequent to June 30, 2000, no stock options were exercised

During the fiscal  years ended June 20,  2001 to June 30,  2005 all  outstanding
stock options were cancelled.

<TABLE>
<CAPTION>

                                                              JUNE 30, 2006                        JUNE 30, 2005
                                                                       WEIGHTED                             WEIGHTED
                                                                       AVERAGE                              AVERAGE
                                                       OPTIONS       EXERCISE PRICE      OPTIONS        EXERCISE PRICE
<S>                                                   <C>                <C>           <C>                   <C>

FOR OPTIONS GRANTED AT FAIR MARKET
VALUE ON THE DATE OF GRANT:
Options outstanding beginning of
period................                                      0             $0.000          850,000              $0.063
  Granted..........................                        --                --                --                  --
  Exercised........................                        --                --                --                  --
  Canceled.........................                        --                --          (850,000)              0.063
                                                      -----------        -------        ----------           ----------
Options outstanding................                         0             $0.000                0              $0.000
                                                      ===========        =======        ==========           ==========
Options exercisable................                         0             $0.000                0              $0.000
                                                      ===========        =======        ==========           ==========
</TABLE>


                                       59
<PAGE>

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.

11. 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 will be  substantially  restricted  by the impact of section
382 of the Internal Revenue Code following such a merger.

12.  SUBSEQUENT EVENTS:

In August 2006,  on the basis of further  audit work and a review of  subsequent
events  performed by  O'Donnell,  O'Donnell  completed the audit of our June 30,
2001 financial statements. In September 2006 we filed forms 10-QSB for the three
months ended  September 30, 2001, the six months ended December 31, 2001 and the
nine months ended March 31, 2002. We are currently establishing the likely costs
and practicality of completing the SEC filings and related financial  statements
for the period  April 1, 2002  through  June 30,  2003.  In the  meantime  there
continues  to be a risk that our shares of common stock may be  deregistered  by
the SEC's Office of Enforcement Liaison due the continued delinquency of our SEC
filings for the period April 1, 2002 through June 30, 2003















                                       60
<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 27, 2006                      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 27, 2006
------------------------
    David J. Cutler                      &
                             Chief Financial Officer
                             (Principal Financial and
                             Accounting Officer)


                                       61