<PAGE>

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

                                  FORM 10-KSB/A

(Mark One)

[X]  Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the fiscal year ended June 30, 2005; or

[_]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

Commission file number  0-21555

                               AMASYS CORPORATION
                               ------------------
                 (Name of Small Business Issuer in its charter)

                Delaware                                     54-1812385
                --------                                     ----------
      (State or other jurisdiction                        (I.R.S. Employer
    of incorporation or organization)                    Identification No.)

         625 N. Washington Street, Suite 301, Alexandria, Virginia 22314
         ---------------------------------------------------------------
                     (Address of principal executive office)

Issuer's telephone number, including area code: (703) 797-8111

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

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.01 per share
                                (Title of class)

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

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

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

The Company knows of no trading in its Common Stock since its inception. As of
June 30, 2005, there were 1,775,880 shares of stock held by non-affiliates.

As of June 30, 2005, 2,207,350 shares of the Common Stock of the Registrant were
outstanding.

<PAGE>

                                     PART I

ITEM 1. BUSINESS

Company History
---------------

     AMASYS Corporation ("AMASYS" or the "Company") was incorporated in Delaware
in 1992, and in 1996 received all remaining assets of Infotechnology, Inc.
("Infotech"), a Delaware company, following the completion of Infotech's Chapter
11 Bankruptcy reorganization, in accordance with an Assignment and Assumption
Agreement, dated October 11, 1996, and effective as of June 21, 1996. As a
result of a series of transactions during the 1980's, Infotech, then principally
engaged in the information and communications business, acquired equity
interests in Comtex News Network, Inc. ("Comtex") and Analex Corporation
("Analex"), formerly known as Hadron, Inc. As of June 30, 2004, AMASYS had a 16%
interest in Comtex and less than a 1% equity interest in Analex. The Company's
business is the maintenance of its equity interest in and note receivable from
Comtex and equity interest in Analex.

     On July 2, 2001, the Company filed the following reports with the
Securities and Exchange Commission (the "SEC"): Annual Report on Form 10-K for
the year ended June 30, 2000; the Quarterly Report on Form 10-Q for the quarter
ended September 30, 2000; the Quarterly Report on Form 10-Q for the quarter
ended December 31, 2000; and the Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001. Prior to these filings, the Company had not filed reports
with the SEC except for a Form 8-A, filed in October 1996, for registration of
its common and preferred shares of stock, and a Form 12B-25, filed in December
1996, in which it disclosed that it was unable to file its Form 10-Q for the
quarter ended December 31, 1996 because of the difficulty associated with the
preparation of the Company's initial financial statements as successor to
Infotech. The Annual Report on Form 10-K for the year ended June 30, 2002 was
timely filed. The Annual Report on Form 10-K for the year ended June 30, 2003
was filed on November 7, 2003. The Quarterly Report on Form 10-QSB for the
quarter ended December 31, 2003 was filed on February 20, 2004 pursuant to a
Form 12b-25 filed on February 17, 2004. Subsequent Form 10-QSBs were timely
filed. The Annual Report on Form 10-KSB for the year ended June 30, 2004 was
filed on October 7, 2004 pursuant to a Form 12b-25 filed on September 27, 2004.

Overview
--------

     AMASYS is the successor to Infotech, pursuant to Infotech's bankruptcy
proceeding. AMASYS' primary assets are its equity interest in and note
receivable from Comtex and equity interest in Analex. AMASYS owns 16% of the
outstanding equity of Comtex, while the remainder is publicly owned. Comtex is a
leading wholesaler of electronic real-time news and content to major financial
and business information distributors. On December 9, 2003, the Company executed
an amendment to the Note for the purpose of reducing the conversion price at
which the Amended Note may be converted into common stock of Comtex. Pursuant to
this Third Amendment, the Company agreed to subordinate the Amended Note to both
Comtex's note payable to its former landlord and to a bank financing agreement.
In consideration for these


                                        2

<PAGE>

subordination agreements, Comtex agreed to reduce the conversion price
stipulated in the Amended Note from the previously-stated conversion price of
$1.20 per share to $0.75 per share, and to increase this conversion price by
$0.05 every one hundred and eighty (180) days thereafter, until June 9, 2008,
when the conversion price will reach a cap of $1.20 per share. This will be the
final increase before the Note matures on July 1, 2008. In addition to its 16%
equity ownership of Comtex, the Company also holds a note receivable in the
amount of $856,954 from Comtex (the "Note"). The carrying value of the Note, net
of a $262,687 discount is $594,267. The Company also owns 70,239 shares of
common stock of publicly-held Analex, a defense contractor specializing in
developing innovative technical intelligence and biodefense solutions in support
of U.S. national security. As of June 30, 2005, Analex had 16,046,625 shares of
common stock outstanding. The Company believes that, by virtue of an exemption
to the Investment Company Act of 1940 ("1940 Act"), the Company should not be
deemed to be an "investment company" and, accordingly, should not be required to
register as such. The rules and interpretations of the SEC and the courts
relating to the 1940 Act and to its exemptions are highly complex and uncertain
in numerous aspects. As a result, no assurance can be given that the Company
will not be deemed an "investment company" for purposes of the 1940 Act and be
required to register as an investment company, in which case the Company could
be subject to legal actions by regulatory authorities and others and could be
forced to suspend or terminate operations. The costs of defending any such
action could constitute a material part of the Company's assets.

Comtex News Network, Inc.
-------------------------

     The Company owns 2,153,437 shares of common stock of Comtex (SEC File No.
0-10541). Comtex trades on the OTC Electronic Bulletin Board under the symbol
CMTX. Comtex is a leading wholesaler of electronic real-time news and content to
major financial and business information distributors. Comtex enhances and
standardizes news and other content received from more than 65 newswire services
and publishers in order to provide editorially superior and technically uniform
products to its customers. Its customers then package, integrate and distribute
Comtex products to their end-users. Comtex processes more than 25,000 unique
real-time news stories each day. For each news story, processing includes,
adding stock ticker symbols, indexing by keyword and category, and converting
the diverse publisher materials and formats received into XML, the industry
standard delivery format.

     The demand for news and content distribution paralleled the tremendous
growth of the Internet during the late 1990's. Similarly, the subsequent
collapse of Internet-related businesses has resulted in business consolidation
and failures, the decline of individual investor web sites, and the erosion of
royalties from corporate solution providers. Given these market conditions,
toward the end of fiscal year 2003, Comtex commenced a thorough evaluation of
its market position, product line, pricing and technology strategies as part of
an overall strategic revitalization plan.

     Comtex relies heavily on third-party information sources for the content of
its product offerings. Interruption in, or the termination of, service from a
significant number of its information sources would affect Comtex's ability to
offer products or maintain product quality.


                                        3

<PAGE>

Accordingly, the failure or inability to restore or replace such interrupted or
terminated services could have an adverse effect on Comtex's revenues.

     Comtex also relies heavily on third party providers for telecommunications,
electrical power, internet connectivity, and related or similar services as well
as system redundancy for the development and delivery of its products. Failure
of, interruption in, or the termination of, these services would also affect
Comtex' ability to create and deliver products. Accordingly, the failure or
inability to restore or replace such interrupted or terminated services could
have an adverse effect on Comtex's revenues.

     Comtex is a publicly-traded company and more information concerning the
operations of Comtex can be found in its own filings with the SEC.

Analex Corporation
------------------

     The Company owns 70,239 shares of the common stock of Analex (SEC File No.
0-5404), which trades on the American Stock Exchange under the symbol ANLX.
Analex specializes in developing intelligence, systems engineering and
biodefense solutions in support of national security. Analex focuses on
designing, developing and testing aerospace products and systems; developing
innovative technical solutions for the intelligence community; developing
medical defenses and treatments for infectious agents used in biological warfare
and terrorism; and analyzing and supporting defense systems.

Employees
---------

     At June 30, 2005, the Company used the services of two consultants, both of
whom serve as officers of the Company. The Company has no employees.

RELATIONSHIP WITH THE PENSION BENEFIT GUARANTY CORPORATION ("PBGC")

     As previously discussed (see "Company History"), pursuant to the confirmed
orders of the United States Bankruptcy Court for the Southern District of New
York (the "Court"), entered on June 23, 1994 and finalized on January 2, 1997,
Infotech's Third Joint Plan of Reorganization, dated March 30, 1994, as amended
(the "Plan"), was confirmed, and the Company and Infotech entered into an
Assignment and Assumption Agreement, dated October 11, 1996, and effective as of
June 21, 1996, whereby the Company acquired certain assets and assumed certain
liabilities of Infotech. As called for by the Plan, the Company issued to the
PBGC, 196,000 shares of the Company's 5% convertible preferred stock (Series "A"
Preferred Stock), convertible into 1,960,000 shares of the Company's common
stock.

     Furthermore, the Company entered into an agreement with the PBGC granting
PBGC certain rights. In addition to the issuance to the PBGC of the Company's
Series "A" Preferred Stock, the Company:


                                        4

<PAGE>

1)   issued to the PBGC a $1,500,000 zero coupon note effective June 21, 1996,
     for which a settlement was reached ("Settlement") in which $189,998 was
     paid in full satisfaction of such note on February 1, 2002.

2)   granted the PBGC the right to name two members to the Boards of Directors
     of both the Company and Comtex, which right was waived by the PBGC in the
     Settlement; and

3)   granted the PBGC the unilateral right, through December 31, 2001, which has
     since expired, to require the Company to use its best efforts to liquidate
     the Company's interest in Analex and Comtex through secondary offerings and
     private sales.

     On August 18, 2005, the Company was notified by PBGC that all of the Series
A Preferred Stock owned by PBGC was sold to a third party.

SUBSEQUENT EVENTS

     On September 26, 2006, AMASYS signed an agreement to acquire all of the
shares of common stock of World Mineral Corporation, a Nevada corporation (WMC)
from WMC shareholders in exchange for an aggregate of 14,775,000 newly issued
shares of AMASYS common stock. As part of the contemplated transaction, AMASYS
has signed agreements to redeem and convert all of its outstanding Series A
Preferred Stock.

     Following the closing of the contemplated transaction, WMC will become a
wholly-owned subsidiary of AMASYS and the newly issued shares held by WMC will
represent approximately 74% percent of the total outstanding shares of common
stock of AMASYS. AMASYS also executed agreements on September 25, 2006 to redeem
from the holders of its Preferred Stock, pro rata to their respective ownership
interests, 55,209 shares of AMASYS Series A Preferred Stock (the "Series A") in
consideration for: (a) AMASYS' entire interest in the outstanding promissory
note in favor of AMASYS made by Comtex News Network, Inc. (Comtex) in the
principal amount of $857,000; and (b) 2,153,437 shares of Comtex common stock.
Pursuant to the agreement, the holders of the Series A converted the balance of
the Series A shares, together with any and all rights to accrued but unpaid
dividends thereon, into 2,111,860 shares of AMASYS Common Stock. Therefore,
effective September 25, 2006, AMASYS no longer owns the promissory note made by
Comtex and AMASYS no longer holds any shares of Comtex common stock.

ITEM 2. PROPERTIES

     The Company owns no real estate. The Company leases certain space from
Comtex on a month-to-month basis. During fiscal 2005, the Company incurred
$3,600 to Comtex for the pro rata portion of its office and administrative
expenses to Comtex for its use of the facilities at 625 N. Washington Street,
Alexandria, Virginia.


                                        5

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

     AMASYS has no outstanding, material legal proceedings.

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

     None.


                                        6

<PAGE>

                                     PART II

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

     The Company's Common Stock, par value $.01 per share ("Common Stock"), has
not traded since its initial registration on Form 8-A with the SEC. There is no
established public trading market for the Common Stock.

     The approximate number of holders of record of the Company's Common Stock
as of June 30, 2005 was 669.

     The Company has never declared or paid a cash dividend on its Common Stock
and does not anticipate the declaration or payment of cash dividends to
shareholders in the foreseeable future.

     The Company does not have any equity compensation program that was not
approved by stockholders, other than its employee stock option plan.

     Set forth below is certain information as of June 30, 2005 regarding equity
compensation to directors and executive officers of the Company that has been
approved by stockholders.

<TABLE>
<CAPTION>
                        NUMBER OF SECURITIES TO
EQUITY COMPENSATION   BE ISSUED UPON EXERCISE OF                        NUMBER OF SECURITIES
 PLANS APPROVED BY      OUTSTANDING OPTIONS AND    WEIGHTED AVERAGE   REMAINING AVAILABLE FOR
    STOCKHOLDERS                RIGHTS              EXERCISE PRICE      ISSUANCE UNDER PLAN
-------------------   --------------------------   ----------------   -----------------------
<S>                           <C>                        <C>                   <C>
Stock Option Plan..             900,000 (1)              $0.01                 50,000
                                -------                  -----                 ------

   Total...........             900,000                  $0.01                 50,000
                                =======                  =====                 ======
</TABLE>

----------
(1)  Options to purchase 50,000 shares of common stock expired during fiscal
     year 2003 pursuant to their terms.

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

     The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with our financial
statements and related notes appearing elsewhere in this report. This discussion
and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions. Actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including but not limited to the risks discussed in this report.

     The Company employs no staff with financial expertise, rather it relies on
part-time outside professionals for such expertise.


                                        7

<PAGE>

CRITICAL ACCOUNTING POLICIES

     Our financial statements were prepared in conformity with U.S. generally
accepted accounting principles. As such, management is required to make certain
estimates, judgments and assumptions that they believe are reasonable based upon
the information available. These estimates and assumptions affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of income and expense during the periods presented. The
significant accounting policies which management believes are the most critical
to aid in fully understanding and evaluating our reported financial results
include the following:

Derivatives
-----------

     SFAS 133 establishes accounting and reporting standards for derivative
instruments and requires that all derivatives be recorded on the balance sheet
at fair value. Additionally, the accounting for changes in fair value depends on
whether the derivative instrument is designated and qualifies as part of a
hedging relationship and, if so, the nature of the hedging activity. Changes in
the fair value of derivatives that do not qualify for hedge treatment are
recognized currently in earnings.

     We have a Note from Comtex. In August 2001, the Note was amended to include
a provision that allows us to convert all or a portion of the outstanding
principal amount, plus accrued interest, into common stock of Comtex. In
accordance with SFAS 133, we have accounted for this conversion option as an
embedded derivative. As a result, the conversion option is being carried at fair
value determined using a Black-Scholes model with changes in the fair value
being recognized currently in earnings. As of June 30, 2005, the balance of the
derivative asset was $104,739 and for the fiscal year ended June 30, 2005, we
recognized other expense of $23,804 due to the decline in value of this
derivative.

Investment in Comtex
--------------------

     At June 30, 2005 and 2004, we had a 16% ownership interest in Comtex. Since
we have the ability to significantly influence the operations of Comtex, we
account for our investment in Comtex under the equity method of accounting. We
can significantly influence the operations of Comtex since (i) if we converted
our note receivable-related party into shares of Comtex, we would have a 22%
ownership interest in Comtex, (ii) the Company as well as our Chairman and CEO
are Comtex's largest individual shareholders, (iii) the Company and our Chairman
and CEO have a combined ownership interest in Comtex of 32%, and (iv) our
Chairman is the Chairman of the Board and interim Chief Executive Officer of
Comtex. During the year ended June 30, 2005, we recognized equity in earnings of
Comtex of $132,988 and during the year ended June 30, 2004, we recognized losses
of $216,350 for our share of Comtex losses.

     As of June 30, 2005, the basis of our investment in Comtex has been
increased to $57,743 through the recognition of the Company's share of Comtex's
earnings. In prior periods, losses in excess of the investment basis adjusted
the basis of the Note, in accordance with EITF 98-13, ACCOUNTING BY AN EQUITY
METHOD INVESTOR FOR INVESTEE LOSSES WHEN THE INVESTOR HAS


                                        8

<PAGE>

LOANS TO AND INVESTMENTS IN OTHER SECURITIES OF THE INVESTEE. During the year
ended June 30, 2005,equity in earnings of Comtex were sufficient to fully
restore basis in the Note to $854,956 as well as partially restore basis in the
investment of common stock.

Note Receivable from Comtex
---------------------------

     Statement of Financial Accounting Standards No. 114, ACCOUNTING BY
CREDITORS FOR IMPAIRMENT OF A LOAN ("SFAS 114"), suggests that when certain
indicators are present, a loan should be evaluated for collectibility. Since
Comtex experienced prior year losses, we evaluated the Note for collectibility.
As a result, we evaluated whether or not there is an impairment loss by
comparing the fair value of the collateral (including cash and security interest
in the accounts receivable of Comtex) to the carrying value of the Note of
$594,267. We believe that since the fair value of our collateral exceeded the
carrying value of the Note, we should not record an impairment charge at June
30, 2005.

Valuation of Deferred Tax Assets
--------------------------------

     We recognize deferred tax assets and liabilities based on the difference
between the financial statement and tax bases of assets and liabilities. We
regularly review our deferred tax assets for recoverability and establish a
valuation allowance based on historical taxable income, projected future taxable
income and the expected timing of the reversals of existing temporary
differences. Based upon the level of historical taxable income and projections
for future taxable income over the periods in which the net operating loss
carryforwards are available to reduce income taxes payable, we have established
a full valuation allowance against the deferred tax assets.

Results of Operations
---------------------

COMPARISON OF THE FISCAL YEAR ENDED JUNE 30, 2005 TO THE FISCAL YEAR ENDED
--------------------------------------------------------------------------
JUNE 30, 2004
-------------

     The Company had net income of $175,366 in fiscal year 2005 compared to a
net loss of $218,802 in fiscal year 2004. The decrease is explained below.

     OPERATING COSTS AND EXPENSES. Operating costs and expenses decreased
$65,599 to $180,838 in fiscal year 2005 due to a decrease in auditing and
accounting related fees. The Company restated prior periods financial statements
during the annual audit for the year ended June 30, 2003. The expenses related
to that restatement were recognized in the operating costs and expenses for the
year ended June 30, 2004.

     OTHER INCOME (EXPENSE): Other income (expense) increased $328,569 from
other income of $27,635 in fiscal year 2004 to other income of $356,204 in
fiscal year 2005 primarily due to an increase of $349,338 in the Company's share
of the equity in earnings of Comtex. During fiscal year 2005, the loss on
derivative asset increased $19,909, which was due to a lesser number of shares
into which the note receivable can be converted and fluctuations in the option
price calculated using a Black-Scholes option pricing-model.


                                        9

<PAGE>

Liquidity and Capital Resources
-------------------------------

     The Company had net working capital of $246,691 at June 30, 2005. The
Company has had minimal operating activity since commencing operations in 1996
and has not had any other uses of funds. Accordingly, the Company has not
required any funding sources. The Company expects to meet its short-term
obligations through payments of interest from the Note and from the sales of
equity interests in Analex.

Cautionary Statements Concerning Forward-Looking Statements
-----------------------------------------------------------

     Except for the historical information contained herein, the matters
discussed in this Form 10-KSB include forward-looking statements within the
meaning of Section 21E of the Securities and Exchange Act of 1934. These
forward-looking statements may be identified by reference to a future period or
by use of forward-looking terminology such as "anticipate", "expect", "could",
"may" or other words of a similar nature. Forward-looking statements, which the
Company believes to be reasonable and are made in good faith, are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those expressed in any forward-looking statement made by, or on
behalf of, the Company.

ITEM 7. FINANCIAL STATEMENTS

     The information required by this item is set forth under Item 13, which is
incorporated herein by reference.

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

     None.

ITEM 8A. CONTROLS AND PROCEDURES

     Under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer, we evaluated the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
Rule 13a-15 (e) and 15d-15(e) under the Exchange Act) as of the end of the
period covered by this annual report. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of the end of
the period covered by this annual report, our disclosure controls and procedures
were effective to ensure that information required to be disclosed in the
reports that the Company files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.

ITEM 8B. OTHER INFORMATION

     None.


                                       10

<PAGE>

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; COMPLIANCE WITH
        SECTION 16(A) OF THE EXCHANGE ACT.

DIRECTORS

     The following table contains information as of June 30, 2005 as to each
Director of the Company:

                                     Director   Office Held
Name                         Since   Age        with the Company
----                         -----   --------   ----------------
C.W. Gilluly, Ed.D.          1992    59         Chairman of the Board, President
                                                and Chief Executive Officer

Robert F. Delaney (1,2)      1992    80         Director

Robert J. Lynch, Jr. (1,2)   1992    72         Director

Thomas E. McMahan (1,2)      1992    62         Director

(1)  Member of the Audit Committee. The Audit Committee met four times during
     the fiscal year ended June 30, 2005.

(2)  Member of the Compensation Committee

     C.W. GILLULY, Ed.D. has served as Chairman of the Board, President and
Chief Executive Officer of the Company since June 1992. Dr. Gilluly served as
President of Comtex from June 1992 until May 1993, as Chief Executive Officer
from June 1992 until September 1997, as Chairman of the Board from June 1992
until December 2002, and as Vice-Chairman from December 2002 through June 2003.
He continues to serve as a Director of Comtex and has served as interim Chief
Executive Officer since February 2004. Dr. Gilluly served on the Board of
Directors of Analex until March 2003, where he was Chairman of the Board from
October 1994 until January 2001, and also served as Chief Executive Officer from
May 1993 through March 2000.

     ROBERT F. DELANEY has been Facilitator of Long Range Study at the U.S.
Naval War College and a management consultant specializing in the area of
organizational development. From 1981 through 1991, Mr. Delaney served as
president of the RFD Group and Michael W. Moynihan Associates, Management and
Public Affairs Consultants. In 1990, Mr. Delaney was an Intelligence Briefing
Officer for Operation Desert Storm at the Naval Medical Corps, Fort Dix, New
Jersey. Since 1972, Mr. Delaney has been a lecturer at the NATO Defense College,
Armed Forces Staff College, Defense Information School, Marine Corp Schools and
the U.S. Naval War College.


                                       11

<PAGE>

     ROBERT J. LYNCH, JR. is the President of American & Foreign Enterprises,
Inc., a private corporation managing U.S. and international investments in
industrial and real estate opportunities, for whom he has worked for thirty-six
years. Mr. Lynch also serves as a Director of Comtex. Mr. Lynch has been
designated as the financial expert serving on the Audit Committee.

     THOMAS E. MCMAHAN is the founder of McMahan Associates, a private
corporation that provides strategic investment advice and counsel to the
financial information industry. From 1995 to 2000, Mr. McMahan served as senior
vice president for corporate development for MERGENT, INC., a $60 million
diversified financial information business. Mr. McMahan served as General
Manager of Shark Information Systems, a subsidiary of Infotechnology, Inc., in
1993 and served as Vice President for Business Development of Infotechnology,
Inc. in 1990. From 1972 though 1990, Mr. McMahan served in various capacities at
McGraw-Hill/Standard & Poor's, including Senior Vice President and Chief of
Staff of Standard & Poor's Trader Services from 1988 through 1990.

EXECUTIVE OFFICER

     As of June 30, 2005, the only executive officer of the Company who is not
also a Director of the Company is S. Amber Gordon, the Corporate Secretary of
the Company.

     S. AMBER GORDON (51) was appointed Corporate Secretary and Treasurer of the
Company in October 1996. Ms. Gordon also serves as the Corporate Secretary of
Comtex, a position she has held since May 1996. Ms. Gordon has been the
President of S.A. Gordon Enterprises, Inc., a financial relations and marketing
communications firm, since 1985. Ms. Gordon also served in senior management
positions, the most recent of which was Executive Vice President of Analex, an
information technology company serving the intelligence community, from June
1991 through August 2000.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires the Company's executive officers
and Directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Executive officers, Directors and greater than 10%
stockholders are required by the SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.

     Based solely on a review of copies of such reports of ownership furnished
to the Company, or written representations that no forms were necessary, the
Company believes that during the past fiscal year, its executive officers,
Directors and greater than 10% beneficial owners complied with all applicable
filing requirements.

CODE OF ETHICS

     The Company has not adopted a code of ethics given its limited operations.


                                       12

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The following table sets forth information concerning all compensation paid
or accrued by the Company to its President and Chief Executive Officer, during
the fiscal year ended June 30, 2004. Neither Dr. Gilluly nor any other officer
of the Company receives compensation in excess of $100,000 per year.

<TABLE>
<CAPTION>
                                                                 Long-Term
                                                            Compensation Awards
                                 Annual Compensation   ----------------------------
Name and             Fiscal      -------------------   Stock Options     All Other
Principal Position    Year        Salary      Bonus        Granted      Compensation
------------------   ------      --------   --------   -------------   ------------
<S>                   <C>         <C>          <C>           <C>          <C>
C.W. Gilluly (1)      2005        $36,000      --            --           $6,805
Chairman              2004        $15,000      --            --           $6,805
                      2003        $    --      --            --           $6,805
</TABLE>

----------
(1)  Dr. Gilluly did not receive any salary from 1992 through fiscal 2003. In
     1996, he received a grant of stock options, described below.

STOCK OPTION GRANTS

     No stock options were granted during the fiscal year ended June 30, 2005.
In accordance with the Company's Stock Option Plan, Dr. Gilluly received a grant
of 350,000 options in November 1996, at an exercise price of $0.01 per share. He
has not received any further grants.

OPTIONS EXERCISED AND YEAR-END OPTION VALUES

     The following table sets forth certain information regarding the value of
unexercised options held by the named executive officer as of June 30, 2005.

                        FISCAL YEAR-END OPTION VALUES (1)

<TABLE>
<CAPTION>
                                                      Number of Shares            Value of Unexercised
                   Shares                          Underlying Unexercised         In-the-Money Options
               Acquired upon   Value Realized     Options at June 30, 2005          at June 30, 2005
                Exercise of     From Exercise   ---------------------------   ---------------------------
Name              Options        Of Options     Exercisable   Unexercisable   Exercisable   Unexercisable
----           -------------   --------------   -----------   -------------   -----------   -------------
<S>                  <C>              <C>         <C>               <C>           <C>             <C>
C.W. Gilluly         --               --          350,000           --            $--             --
</TABLE>

----------
(1)  As there has been no trading in the Company's stock since its formation,
     the Company determined that the market value of its common stock
     approximates its exercise price of $.01, based on an assumed liquidation
     value of the Company's investments in Comtex and Analex; however, there can
     be no assurance that this is an accurate reflection of the market value.


                                       13

<PAGE>

STOCK OPTION PLAN

     The Company's Stock Option Plan was approved pursuant to the Confirmation
of the Third Amended Plan of Reorganization of Infotech on June 21, 1994 and was
effective as of the Effective Date of the Plan, on June 21, 1996. The Plan
provides for the issuance of incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, and non-qualified
stock options in order to recruit and retain key employees, consultants and
Directors.

COMPENSATION OF DIRECTORS

     The Company pays non-employee members of the Board $1,000 per quarter and
$500 per board meeting, plus travel expenses incurred in connection with
attendance at Board meetings. During fiscal year 2005, each of the Company's
non-employee Directors received compensation of $7,250 for services rendered to
the Company.

EMPLOYMENT AGREEMENTS

     The Company has no employment agreements.

             COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER

     The Committee reports that during the fiscal year ended June 30, 2005, Dr.
Gilluly received payment of $36,000 as compensation for his services as
President and Chief Executive Officer of the Company.

                                         SUBMITTED BY THE COMPENSATION COMMITTEE

                                         Robert F. Delaney
                                         Robert J. Lynch, Jr.
                                         Thomas E. McMahan

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     None

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

     The following table sets forth information as of June 30, 2005, regarding
the beneficial ownership of the Company's Common Stock of (i) each person known
to the Company to be the beneficial owner, within the meaning of Section 13(d)
of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), of
more than 5% of the outstanding shares of Common Stock, (ii) each Director of
the Company, (iii) each executive officer of the Company named in the


                                       14

<PAGE>

Summary Compensation Table (see "Executive Compensation") and (iv) all executive
officers and Directors of the Company as a group. Unless otherwise indicated,
the address of each named beneficial owner is c/o AMASYS Corp., 625 North
Washington Street, Suite 301, Alexandria, Virginia 22314. Except to the extent
indicated in the footnotes, each of the beneficial owners named below has sole
voting and investment power with respect to the shares listed.

Name and Address of              Amount and Nature of     Percentage
 Beneficial Owner                Beneficial Ownership    of Class (1)
-------------------              --------------------    ------------
Sutter Capital Management, LLC         1,960,000 (2)         47.0%
1640 School Street
Moraga, California 94556

C.W. Gilluly, Chairman and CEO           427,048 (3)         16.7

Robert F. Delaney, Director               50,000 (4)          2.2

Robert J. Lynch, Jr., Director            56,245 (4)(5)       2.5

Thomas E. McMahan, Director               77,043 (4)          3.4

Joshua Angel                             191,578              8.7
c/o Angel & Frankel, P.C.
460 Park Avenue, 8th Floor
New York, NY 10022

Robert Frankel                           128,901              5.8
c/o Angel & Frankel, P.C.
460 Park Avenue, 8th Floor
New York, NY 10022

S. Amber Gordon                          300,655 (6)         12.0

All Directors and Executive
Officers as a group
(5 persons)                              910,991 (7)         30.3

----------
(1)  Each percentage of beneficial ownership is calculated using a different
     denominator, consisting of the total number of shares outstanding
     (2,207,350), increased by the number of options owned by the beneficial
     owner that are exercisable within 60 days. The percentage of beneficial
     ownership of all Directors and executive officers as a group is based on
     the sum of the total number of shares outstanding and all outstanding
     options held by Directors and executive officers that are exercisable
     within 60 days.

(2)  Based solely on a Schedule 13D filed with the Securities and Exchange
     Commission on August 29, 2005 by Sutter Capital Management, LLC. Includes
     1,960,000 shares which may be acquired upon the conversion of AMASYS
     Preferred Shares held by Sutter Capital Management, LLC.

(3)  Includes 350,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.

(4)  Includes 50,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.

(5)  Includes 245 shares held by Mr. Lynch's wife.

(6)  Includes 300,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.

(7)  Includes 800,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.


                                       15

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Dr. Gilluly serves as Chairman of the Board and Chief Executive Officer of
the Company. Dr. Gilluly also serves as Director and interim Chief Executive
Officer of Comtex. Mr. Lynch, a Director of the Company, also serves as a
Director of Comtex.


                                       16

<PAGE>

                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a) 1. FINANCIAL STATEMENTS

                Report of Independent Registered Public Accounting
                   Firm (Kaiser Scherer & Schlegel, PLLC)              F-1

                Balance Sheet at June 30, 2005                         F-2

                Statements of Operations for the fiscal
                   years ended June 30, 2005 and 2004                  F-3

                Statements of Stockholders' Equity  (Deficit)
                   for the fiscal years ended June 30, 2005 and 2004   F-4

                Statements of Cash Flows for the fiscal
                   years ended June 30, 2005 and 2004                  F-5

                Notes to Financial Statements                          F-6

             2. FINANCIAL STATEMENT SCHEDULES

                The schedules for which provision is made in the applicable
                accounting regulation of the Securities and Exchange
                Commission are not required under the related instructions
                or are inapplicable and therefore have been omitted.

             3. EXHIBITS

Number       Description
------       -----------
1.1          Specimen certificate for the Common Stock, $.01 par value, of the
             Registrant (incorporated by reference to the Company's Form 8-A
             filed on October 15, 1996).

2.1          Third Joint Chapter 11 Plan of Reorganization for Infotechnology,
             Inc. dated March 30, 1994, as confirmed by the Bankruptcy Court
             (incorporated by reference to the Company's Form 8-A filed on
             October 15, 1996).

2.2          Order Confirming Third Joint Plan of Reorganization dated as of
             June 23, 1994 of Infotechnology, Inc. and Questech Capital
             Corporation (incorporated by reference to the Company's Form 8-A
             filed on October 15, 1996).


                                       17

<PAGE>

2.3          Assignment and Assumption Agreement between the Company and
             Infotechnology, Inc. (incorporated by reference to the Company's
             Form 8-A filed on October 15, 1996).

3.1          Restated Certificate of Incorporation of AMASYS Corporation
             (incorporated by reference to the Company's Form 8-A filed on
             October 15, 1996).

3.2          Bylaws of AMASYS Corporation (incorporated by reference to the
             Company's Form 8-A filed on October 15, 1996).

10.1         AMASYS Corporation Stock Option Plan (incorporated by reference to
             the Company's Form 10-K, for the year ended June 30, 2000, filed on
             July 2, 2001).

10.2         Second Amendment to Amended, Consolidated and Restated 10% Senior
             Subordinated Secured Note between the Company and Comtex News
             Network, Inc. (incorporated by reference to the Company's Form
             10-K, for the year ended June 30, 2001, filed on September 28,
             2001).

10.3         Payment and Release Agreement between the Company and the Pension
             benefit Guaranty Corporation dated February 1, 2002. (incorporated
             by reference to the Company's Form 10-Q, for the quarter ended
             December 31, 2001, filed on February 13, 2002).

10.4         Note between the Company and C.W. Gilluly dated December 21, 2001.
             (incorporated by reference to the Company's Form 10-Q, for the
             quarter ended December 31, 2001, filed on February 13, 2002).

10.5         Note between the Company and C.W. Gilluly dated February 12, 2002.
             (incorporated by reference to the Company's Form 8-K filed on
             February 20, 2002).

31.1         Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
             2002.

31.2         Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
             2002.

32.1         Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
             2002.

32.2         Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
             2002.

         (b) REPORTS ON FORM 8-K

         No reports on Form 8-K were filed by the Company during the last
quarter of the period covered by this Report.


                                       18

<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Our Audit Committee is responsible for appointment of the Company's
independent registered public accounting firm. During the year ended June 30,
2004, the Company engaged Kaiser Scherer & Schlegel, PLLC and ceased using Ernst
& Young LLP to conduct its annual audit and quarterly reviews of the financial
statements and to provide services in connection with the SEC proxy statement
filing.

     The following table sets forth aggregate fees billed to the Company by its
principal accountants for the fiscal years ended June 30, 2004 and 2003.

                                                     FISCAL YEARS ENDED JUNE 30,
                                                     ---------------------------
                                                        2005             2004
                                                     ----------       ----------
Audit Fees........................................      $33,750         $106,225
Audit-Related Fees................................           --               --
Tax Fees..........................................           --               --
                                                     ----------       ----------
All Other Fees....................................           --               --
                                                     ==========       ==========

Fees for audit services include fees associated with the annual audit and the
reviews of the Company's quarterly reports on Form 10-QSB.

     The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent registered public accounting firm, either
by approving an engagement prior to the engagement or pursuant to a pre-approval
policy with respect to particular services. These services may include audit
services, review services, and other services. The independent registered public
accounting firm and management are required to periodically report to the full
Audit Committee regarding the extent of services provided by the independent
registered public accounting firm in accordance with the pre-approval, and the
fees for the services performed to date.


                                       19

<PAGE>

                                   SIGNATURES
                                   ----------

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, there unto duly authorized.

Date: January 19, 2007


AMASYS CORPORATION


By: /s/ C.W. Gilluly
    -----------------------------------
    C.W. Gilluly, Ed.D.
    President and Chief Executive Officer
    (Principal Executive Officer and
    Principal Financial and Accounting Officer)



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

DIRECTORS:
----------

Signature                               Title          Date
---------                               -----          ----


/s/ C.W. Gilluly                        Chairman       January 19, 2007
-------------------------------------   and Director
C.W. Gilluly, Ed.D.


/s/ Robert F. Delaney                   Director       January 19, 2007
-------------------------------------
Robert F. Delaney


/s/ Robert J. Lynch, Jr.                Director       January 19, 2007
-------------------------------------
Robert J. Lynch, Jr.


/s/ Thomas E. McMahan                   Director       January 19, 2007
-------------------------------------
Thomas E. McMahan


                                       20

<PAGE>

             Report of Independent Registered Public Accounting Firm

Board of Directors
AMASYS Corporation

We have audited the accompanying balance sheet of AMASYS Corporation as of June
30, 2005 and the related statements of operations, stockholders' equity, and
cash flows for years ended June 30, 2005 and June 30, 2004. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. We did not audit the financial statements of the Comtex News Network,
Inc., an investee company of AMASYS Corporation, of which AMASYS Corporation
owns 16% of the outstanding stock and accounts for its investments under the
equity method of accounting (See Note 2). The investment in Comtex News Network,
Inc. was $57,166 as of June 30, 2005, and equity in its net income (loss) was
$132,988 and $(216,250), respectively, for the years ended June 30, 2005 and
2004. The financial statements of Comtex News Network, Inc. were audited by
other auditors whose report contains a going concern uncertainty due to
recurring operating losses for Comtex News Network, Inc. and has been furnished
to us, and our opinion, insofar as it relates to the amounts included for Comtex
News Network, Inc., is based solely on the report of the other auditors.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we 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 statements presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, based on our audit and the report of other auditors, the 2005
and 2004 financial statements referred to above present fairly, in all material
respects, the financial position of AMASYS Corporation at June 30, 2005, and the
results of its operations and its cash flows for the year ended June 30, 2005
and 2004, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 10, the accompanying financial statements have been
restated to include certain omitted disclosures. No adjustments were made to the
balance sheet, statement of operations, stockholders equity, and cash flows, as
previously reported.


                                        /s/ Kaiser Scherer & Schlegel, PLLC

McLean, Virginia
September 27, 2005, except for Note 10, as to which the date is January 19, 2007


                                      F - 1

<PAGE>

                               AMASYS Corporation

                                  Balance Sheet

                                                                 JUNE 30,
                                                                   2005
                                                                ----------
ASSETS
Current assets:
   Cash and cash equivalents                                    $    1,024
   Short-term investment                                           249,348
                                                                ----------
Total current assets                                               250,372

Note receivable - related party, net of discount of $262,687
   at June 30, 2005                                                594,267
Investment in common stock-related party                            57,743
Derivative asset                                                   104,739
                                                                ----------
Total assets                                                    $1,007,121
                                                                ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses                        $    3,681
                                                                ----------
Total current liabilities                                            3,681

Stockholders' equity
Preferred stock, $.01 par value; 1,000,000 shares authorized;
   196,000 Series A shares issued and outstanding;
   liquidation value $1,960,000                                      1,960
Common stock, $0.01 par value; 20,000,000 shares authorized;
   2,207,350 shares issued and outstanding                          22,073
Additional paid-in capital                                         799,485
Accumulated other comprehensive income                             178,474
Retained earnings                                                    1,448
                                                                ----------
Total stockholders' equity                                       1,003,440
                                                                ----------

Total liabilities and stockholders' equity                      $1,007,121
                                                                ==========

                             SEE ACCOMPANYING NOTES.


                                      F - 2

<PAGE>

                               AMASYS Corporation
                            Statements of Operations

                                             YEAR ENDED JUNE 30,
                                              2005         2004
                                           ----------   ----------
Operating costs and expenses:
   Professional services                   $  161,085   $  220,992
   General and administrative                  19,753       25,445
                                           ----------   ----------
Total operating costs and expenses            180,838      246,437

Other income (expense):
   Interest income                            177,955      177,955
   Equity in earnings (losses) of Comtex      132,988     (216,350)
   Loss on derivative asset                   (23,804)      (3,895)
   Gain on sale of short-term investment       69,065       69,675
   Other income                                    --          250
                                           ----------   ----------
Total other income                            356,204       27,635
                                           ----------   ----------

Income (loss) before income taxes             175,366     (218,802)
Provision for income taxes                         --           --
                                           ----------   ----------

Net income (loss)                          $  175,366   $ (218,802)
                                           ==========   ==========
Income (loss) per share:
   Basic                                   $     0.04   $    (0.14)
                                           ==========   ==========
   Diluted                                 $     0.04   $    (0.14)
                                           ==========   ==========
Weighted average number of shares:
   Basic                                    2,207,350    2,207,350
                                           ==========   ==========
   Diluted                                  4,167,350    2,207,350
                                           ==========   ==========

                             SEE ACCOMPANYING NOTES.


                                      F - 3

<PAGE>

                               AMASYS Corporation
                       Statements of Stockholders' Equity
                       Years Ended June 30, 2004 and 2005

<TABLE>
<CAPTION>
                                                                                           ACCUMULATED   (ACCUMULATED
                                           COMMON STOCK      PREFERRED STOCK  ADDITIONAL      OTHER        DEFICIT)        TOTAL
                                       -------------------  ----------------    PAID-IN   COMPREHENSIVE    RETAINED    STOCKHOLDERS'
                                         SHARES     AMOUNT   SHARES   AMOUNT    CAPITAL      INCOME        EARNINGS        EQUITY
                                       ---------   -------  -------   ------  ----------  -------------  ------------  -------------
<S>                                    <C>         <C>      <C>       <C>      <C>          <C>            <C>         <C>
Balance, June 30, 2003                 2,207,350   $22,073  196,000   $1,960   $786,106     $273,389       $  44,884   $1,128,412
   Increase in equity due to capital
      transactions of Comtex                                                     13,337                                    13,337
   Unrealized loss on short-term
      investment                                                                             (37,577)                     (37,577)
   Net loss                                                                                                 (218,802)    (218,802)
                                                                                                                       ----------
   Comprehensive loss                                                                                                    (256,379)
                                       ---------   -------  -------   ------   --------     --------       ---------   ----------
Balance, June 30, 2004                 2,207,350    22,073  196,000    1,960    799,443      235,812        (173,918)     885,370

   Increase in equity due to capital
      transactions of Comtex                                                         42                                        42
   Unrealized loss on short-term
      investment                                                                             (57,338)                     (57,338)
   Net income                                                                                                175,366      175,366
                                                                                                                       ----------
   Comprehensive income                                                                                                   118,028
                                       ---------   -------  -------   ------   --------     --------       ---------   ----------
Balance, June 30, 2005                 2,207,350   $22,073  196,000   $1,960   $799,485     $178,474       $   1,448   $1,003,440
                                       =========   =======  =======   ======   ========     ========       =========   ==========
</TABLE>

                             SEE ACCOMPANYING NOTES.


                                       F - 4

<PAGE>

                               AMASYS Corporation
                            Statements of Cash Flows

                                                           YEAR ENDED JUNE 30,
                                                             2005        2004
                                                          ---------   ---------
Operating activities
--------------------
Net income (loss)                                         $ 175,366   $(218,802)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
   Amortization on note receivable discount                 (92,260)    (92,261)
   Loss on derivative asset                                  23,804       3,895
   Gain on sale of short-term investment                    (69,065)    (69,675)
   Equity in (earnings) losses of Comtex                   (132,988)    216,350
   Changes in operating assets and liabilities:
      Accounts payable and accrued expenses                  (4,793)      4,587
                                                          ---------   ---------
Net cash used in operating activities                       (99,936)   (155,906)

Investing activities
--------------------
Proceeds from sale of short-term investment                  90,953      92,246
                                                          ---------   ---------
Net cash provided by investing activities                    90,953      92,246

Net decrease in cash                                         (8,983)    (63,660)
Cash at beginning of year                                    10,007      73,667
                                                          ---------   ---------
Cash at end of year                                       $   1,024   $  10,007
                                                          =========   =========

                             SEE ACCOMPANYING NOTES.


                                      F - 5

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

                                  June 30, 2005

1. ORGANIZATION AND BASIS OF PRESENTATION

AMASYS Corporation (the "Company") was incorporated in Delaware in 1992, and in
1996 received all of the remaining assets of Infotechnology, Inc. ("Infotech"),
a Delaware company, following the completion of Infotech's Chapter 11 Bankruptcy
reorganization, in accordance with an Assignment and Assumption Agreement, dated
October 11, 1996 and effective as of June 21, 1996. The Company's principal
business is the maintenance of its equity interests in and note receivable from
Comtex News Network, Inc. ("Comtex") and its equity interest in Analex
Corporation ("Analex").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents
-------------------------

The Company considers all short-term securities purchased with a maturity of
three months or less to be cash equivalents.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.

Concentrations of Credit Risk
-----------------------------

The Company's financial instruments that are subject to credit risk consist
primarily of cash, note receivable-related party, short-term investment and
investment in common stock - related party. Cash is maintained with a financial
institution, which has high credit standings. The note receivable -related party
is secured by a continuing interest in all receivables, purchase orders and all
patents and technology now or hereafter held or received by Comtex and is
subordinated to Comtex's bank financing agreement. The Note is one of two
primary sources of cash for funding continuing operations of the Company in the
form of periodic interest payments. The other primary source is from sales of
the short-term investment. Thus, the Company is dependent upon Comtex to
continue making interest payments until maturity and upon the market value of
the investment to Analex to meet its short-term obligations.

The Company considers the fair value of the collateral on the Note when
assessing credit risk. Management periodically evaluates the carrying value of
its short-term investment and investment in common stock - related party for
impairment and recognizes an impairment charge when a decline in the market
value of its investments below the basis is judged to be other-than-temporary.
At June 30, 2005, the Company does not consider any of the investments impaired.


                                      F - 6

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

Derivative Instruments
----------------------

SFAS 133 establishes accounting and reporting standards for derivative
instruments and requires that all derivatives be recorded on the balance sheet
at fair value. Additionally, the accounting for changes in fair value depends on
whether the derivative instrument is designated and qualifies as part of a
hedging relationship and, if so, the nature of the hedging activity. Changes in
the fair value of derivatives that do not qualify for hedge treatment are
recognized currently in earnings.

As discussed in Note 4, the Company has a note receivable-related party from
Comtex. In August 2001, the parties amended the note receivable - related party
to include a provision that allows the Company to convert all or a portion of
the outstanding principal amount, plus accrued interest, into common stock of
Comtex. In accordance with SFAS 133, the Company has accounted for this
conversion option as an embedded derivative. As a result, the conversion option
is carried at fair value determined using a Black-Scholes model with changes in
the fair value recognized currently in earnings. For the past ten years, the
Company has engaged the services of a CPA firm to prepare the derivative asset
valuation. The procedures utilized to compute the derivative asset evaluation
using the Black-Scholes model were originally established by a major,
international accounting firm. These procedures have been consistently followed
since inception. As of June 30, 2005 the balance of the derivative asset was
$104,739 and for the fiscal years ended June 30, 2005 and 2004, the Company
recognized other expense of $23,804 and $3,895, respectively, due to the decline
in value of this derivative.


                                      F - 7

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

The fair value of the derivative instrument is estimated quarterly using the
following assumptions:

<TABLE>
<CAPTION>
                                                             Quarter Ended
                                         ----------------------------------------------------
                                         September 30,   December 31,    March 31,   June 30,
                                             2004            2004          2005        2005
                                         -------------   ------------   ----------   --------
<S>                                        <C>            <C>           <C>          <C>
Risk free rate of interest                          4%             4%            4%         4%
Expected dividend rate                              0%             0%            0%         0%
Expected life in years                           3.75            3.5          3.25        3.0
Per share market price of Comtex stock     $     0.12     $     0.22    $     0.18   $   0.14
Conversion factor                          $     0.80     $     0.85    $     0.85   $   0.90
Number of shares under option               1,071,193      1,008,181     1,008,181    952,171
Derivative asset value                     $   42,848     $   50,409    $   60,491   $104,739
</TABLE>

<TABLE>
<CAPTION>
                                                             Quarter Ended
                                         ------------------------------------------------------
                                         September 30,   December 31,    March 31,    June 30,
                                             2003            2003          2004         2004
                                         -------------   ------------   ----------   ----------
<S>                                         <C>           <C>           <C>          <C>
Risk free rate of interest                         4%              4%            4%           4%
Expected dividend rate                             0%              0%            0%           0%
Expected life in years                          4.75             4.5          4.25          4.0
Per share market price of Comtex stock      $   0.24      $     0.19    $     0.17   $     0.20
Conversion factor                           $   1.20      $     0.75    $     0.75   $     0.80
Number of shares under option                714,128       1,142,605     1,142,605    1,071,193
Derivative asset value                      $121,402      $  182,817    $  125,687   $  128,543
</TABLE>


                                      F - 8

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

As indicated in the above table, the primary fluctuations in the fair value of
the derivative instrument are the per share market price of Comtex stock, the
conversion factor and the number of shares under option.

Short-Term Investment
---------------------

Under Statement of Financial Accounting Standards No. 115, ACCOUNTING FOR
CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES, the Company has classified
its investment in Analex as an "available-for-sale" security. As a result, the
investment is carried at fair value, with unrealized gains and losses, net of
tax, reported as a separate component of stockholders' equity. Realized gains
and losses on sales of securities are included in earnings using the specific
identification method.

During the fiscal years ended June 30, 2005 and 2004, the Company reclassified
unrealized gains of $69,065 and $69,675, respectively, on the available-for-sale
security included as a separate component of stockholders' equity due to the
sale of securities to realized gains.

Investment in Common Stock - Related Party
------------------------------------------

At June 30, 2005 and 2004, the Company had a 16% ownership interest in Comtex.
The Company evaluated the applicability of the provisions of FASB Interpretation
No. 46, CONSOLIDATION OF VARIABLE INTEREST ENTITIES (FIN 46), to its equity
investment in Comtex. Specifically, the company has determined that Comtex is
not a variable interest entity because the requirements of paragraphs 4(h) and 5
are not met:

     1.   AMASYS did not participate in the design or redesign of Comtex

     2.   Comtex's activities neither involve nor are conducted on behalf of
          AMASYS

     3.   AMASYS' equity and subordinated debt are less than half of the total
          of Comtex's equity, subordinated debt and other subordinated financial
          support, based on the fair values of the interests in Comtex

     4.   Comtex's activities are not primarily related to securitizations or
          other forms of asset-backed financing or single-lessee leasing
          arrangements

Since the Company does have the ability to significantly influence the
operations of Comtex, however, the Company accounts for its investment in Comtex
under the equity method of accounting. The Company can significantly influence
the operations of Comtex since (i) if the Company converted its note
receivable-related party into shares of Comtex, the Company would have a 22%
ownership interest in Comtex, (ii) the Company as well as the Company's Chairman
and CEO are Comtex's largest individual shareholders, (iii) the Company and the
Company's Chairman and CEO have a combined ownership interest in Comtex of 32%
and (iv) the Company's Chairman and Chief Executive Officer is concurrently
serving as Chairman and interim Chief Executive Officer of Comtex. During the
year ended June 30, 2005, the Company recognized equity in earnings of $132,988
and for the year ended June 30, 2004, the Company recognized a loss of $216,350
for the Company's share of Comtex losses.


                                      F - 9

<PAGE>

                               AMASYS Corporation

                         Notes to Financial Statements

At June 30, 2004, the Company's equity share of Comtex losses had exceeded the
Company's basis in the investment in common stock - related party accounted for
under equity method accounting. Additional losses in excess of basis were
accounted for as an adjustment to the basis of other investments in the investee
(note receivable from Comtex) held by the Company in accordance with EITF 98-13
"ACCOUNTING BY AN EQUITY METHOD INVESTOR FOR INVESTEE LOSSES WHEN THE INVESTOR
HAS LOANS TO AND INVESTMENTS IN OTHER SECURITIES OF THE INVESTEE." Subsequent
investee income has been recorded as adjustments to the adjusted basis of the
other investments in the reverse order of the application of the investor's
share of the investee's losses. As of June 30, 2005, equity in Comtex earnings
has been sufficient enough to fully restore basis to the Note to $856,954 and to
restore basis in the investment in common stock-related party up to $57,743.

The Company increases (decreases) its equity investment in Comtex and its
stockholders' equity as a result of capital transactions by Comtex. For the
fiscal year ended June 30, 2005, the Company recognized an increase in
stockholders' equity of $42 and for the fiscal year ended June 30, 2004, the
Company recognized an increase in stockholders' equity of $13,337 related to
issuances by Comtex of its common stock or other equity transactions.

<TABLE>
<CAPTION>
                                                           Quarter Ended
                                          ----------------------------------------------
                                            September     December     March      June
                                             30, 2004     31, 2004   31, 2005   30, 2005
                                          -------------   --------   --------   --------
<S>                                         <C>           <C>        <C>        <C>
Beginning balance of Investment in
Common Stock-Related Party                  $   0.00      $   0.00   $   0.00   $   0.00

Equity in earnings (losses) of Comtex       $ 15,246      $ 18,913   $ 12,989   $ 68,217

Equity in equity transactions of Comtex     $   (153)     $    195   $     40   $     40

Equity in (earnings) losses allocated
to the Note basis                           $(15,093)     $(19,108)  $(13,029)  $ 10,434

Ending balance of Investment in Common
Stock-Related Party                         $   0.00      $   0.00   $   0.00   $ 57,743
</TABLE>


                                     F - 10

<PAGE>

                               AMASYS Corporation

                         Notes to Financial Statements

<TABLE>
<CAPTION>
                                                           Quarter Ended
                                          -----------------------------------------------
                                            September      December     March      June
                                             30, 2003      31, 2003   31, 2004   30, 2004
                                          -------------   ---------   --------   --------
<S>                                         <C>           <C>         <C>        <C>
Beginning balance of Investment in
Common Stock-Related Party                  $127,727      $  94,349   $   0.00   $   0.00

Equity in earnings (losses) of Comtex       $(39,974)     $(164,065)  $(10,723)  $ 22,605

Equity in equity transactions of Comtex     $  6,596      $   3,899   $  2,536   $    306

Equity in (earnings) losses allocated
to the Note basis                           $   0.00      $  65,817   $  8,187   $(22,911)

Ending balance of Investment in Common
Stock-Related Party                         $ 94,349      $    0.00   $   0.00   $   0.00
</TABLE>

Income Taxes
------------

The Company accounts for income taxes in accordance with SFAS 109, ACCOUNTING
FOR INCOME TAXES. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using the enacted tax rates in effect for the year in
which the differences are expected to reverse. Deferred tax assets are reduced
by a valuation allowance when the Company cannot make the determination that it
is more likely than not that some portion or all of the related tax asset will
be realized.

Stock-Based Compensation
------------------------

SFAS No. 123 ("SFAS 123"), ACCOUNTING FOR STOCK-BASED COMPENSATION, requires
that companies either recognize compensation expense for grants of stock options
and other equity instruments based on fair value, or provide pro forma
disclosure of net income (loss) and net income (loss) per share in the notes to
the financial statements. At June 30, 2005, the Company has a stock-based
compensation plan, which is described more fully in Note 8. The Company accounts
for this plan under the recognition and measurement principles of Accounting
Principles Board Opinion No. 25 ("APB 25"), ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES, and related interpretations. Accordingly, no compensation cost has
been recognized under SFAS 123 for the Company's employee stock option plan. Due
to the fact that options granted in 1996 were


                                     F - 11

<PAGE>

                               AMASYS Corporation

                         Notes to Financial Statements

immediately exercisable, net income (loss) and earnings (loss) per share is the
same under SFAS 123 and APB 25 for the fiscal years ended June 30, 2005 and
2004.

SFAS No. 148 ("SFAS 148"), ACCOUNTING FOR STOCK-BASED COMPENSATION-TRANSITION
AND DISCLOSURE, amends SFAS 123. SFAS 148 provides alternative methods of
transition for a voluntary change to the fair value-based method of accounting
for stock-based employee compensation and amends the disclosure requirements of
SFAS 123 to require disclosures in both the annual and interim financial
statements about the method of accounting for stock-based employee compensation
and the effect of the method used on reported results. The Company will continue
to account for its employee stock option plans in accordance with APB 25 and
related interpretations, which results in no charge to earnings when options are
issued at fair market value. The company has adopted the disclosure rules of
SFAS 148 and does not expect that this statement will have a material impact on
its financial statements.

In December 2004, the FASB issued SFAS No. 123R, ("SFAS 123R), Share-Based
Payment, amending SFAS 123 to require companies to record as expense the effect
of equity-based compensation, including stock options, over the applicable
vesting period. SFAS 123R also requires more extensive disclosures concerning
stock options than required under current standards. The new rule applies to
option grants made after adoption as well as options that are not vested at the
date of adoption. SFAS 123R becomes effective no later than fiscal periods
beginning after December 15, 2005 for small business issuers. The Company does
not believe that the adoption of SFAS 123R will have a significant effect on its
financial statements since its stock options are fully vested.

Comprehensive Income (Loss)
---------------------------

Comprehensive income (loss) is defined as the change in equity of a business
enterprise during a period from non-owner sources. The Company's comprehensive
income (loss) includes unrealized gains (losses) on its short-term investment,
as well as reclassification adjustments resulting from gains on sales of
short-term investments that were realized and included in net income in the
current period. In accordance with paragraphs 18 through 20 of SFAS 130, these
gains had also been included in Other Comprehensive Income as unrealized holding
gains in the period in which they arose. These gains are, therefore, deducted
from Other Comprehensive Income to avoid including them twice.

During the year ended June 30, 2005, the Company reclassified realized gains of
$69,065 and recognized net unrealized losses of $11,727 or its short-term
investments.

Accumulated other comprehensive income of $178,474 at June 30, 2005 represents
the Company's unrealized gain on its short-term investment.

Earnings per Share
------------------

Basic earnings per share ("EPS") is computed by dividing net income (loss)
available to common stockholders by weighted average common shares outstanding.
Diluted EPS is computed


                                     F - 12

<PAGE>

                               AMASYS Corporation

                         Notes to Financial Statements

similarly, except that it includes the assumed exercise of stock options and the
conversion of Preferred Stock as long as the effect is not anti-dilutive.

Fair Value of Financial Instruments
-----------------------------------

The Company considers cash, short-term investment, note receivable - related
party, investment in common stock - related party, derivative asset and accounts
payable to be financial instruments. The carrying amounts reported in the
balance sheet for cash, short-term investment and accounts payable and accrued
expenses equal or closely approximate their fair value due to the short-term
nature of these assets and liabilities. The fair value of the derivative asset
was determined using a Black-Scholes option pricing model. The fair value of the
Company's note receivable - related party approximates its face value of
$856,954 and has been estimated taking into consideration the collectibility of
the Note based on the fair value of the collateral, the discount on the Note
using the effective interest rate, the adjustments when required under EITF
99-13, ACCOUNTING BY AN EQUITY METHOD INVESTOR FOR INVESTEE LOSSES WHEN THE
INVESTOR HAS LOANS TO AND INVESTMENTS IN OTHER SECURITIES OF THE INVESTEE, and
the Company's intent and ability to hold the Note until maturity. The trading
value of the Company's investment in common stock-related party was $301,481 as
of June 30, 2005.

The Note is convertible as follows:

                                         For Years Ended June 30,
                                         ------------------------
                                             2005        2004
                                           --------   ----------
Face Value of Note                         $856,954   $  856,954
Conversion price per share                 $   0.90   $     0.80
Number of Comtex shares into which the
Note is convertible                         952,171    1,071,193
Comtex share price                         $   0.14   $     0.20

3. INVESTMENT IN COMMON STOCK - RELATED PARTY

At June 30, 2005, the Company had a 16% ownership interest in Comtex. The
following information presents condensed balance sheet information as of June
30, 2005 and condensed income statement information for each of the years ended
June 30, 2005 and 2004 for Comtex:

                                   JUNE 30,
                                     2005
                                  ----------
Current assets                    $2,200,544
Other assets                         479,665
Current liabilities                1,388,649
Long-term liabilities                885,372


                                     F - 13

<PAGE>

                               AMASYS Corporation

                         Notes to Financial Statements

                                       YEAR ENDED JUNE 30,
                                    ------------------------
                                       2005          2004
                                    ------------------------
Revenues                            $7,970,492   $ 8,164,756
Gross profit                         4,195,360     4,557,015
Net income (loss)                      728,586    (1,212,287)

4. NOTE RECEIVABLE - RELATED PARTY

The Company was assigned a note receivable from Comtex in connection with the
Assignment and Assumption Agreement, which was initially recorded at its
estimated fair value. In June 1999, the note was amended to incorporate
outstanding interest of approximately $254,000 into the principal amount of the
note receivable, which was due July 1, 2002. The note bears interest at 10% and
is collateralized by a continuing interest in all receivables, purchase orders,
and all patents and technology now or hereafter held or received by Comtex.

In August 2001, the Company and Comtex signed an amendment to the Note Payable
to AMASYS, (Second Amendment to Amended, Consolidated and Restated 10% Senior
Subordinated Secured Note) (the "Amended Note") extending the term of the
Amended Note from July 1, 2002 until July 1, 2008. In addition to the extension
of the term, the Amended Note included a provision for the Company to convert
all or a portion of the outstanding principal amount, plus accrued interest,
into common stock of Comtex. The Amended Note is convertible at a price of $1.00
per share, which price increases by $0.10 upon each anniversary of the
amendment.

On December 9, 2003, the Company and Comtex executed an amendment to the Amended
Note for the purpose of reducing the price at which the Amended Note may be
converted into common stock of Comtex. Pursuant to the Third Amendment, the
Company agreed to subordinate the Amended Note to both Comtex's note payable to
its former landlord and pursuant to Comtex's financing agreement with a third
party financial institution. In consideration for these subordination
agreements, Comtex agreed to reduce the conversion price stipulated in the
Amended Note from the previously-stated conversion price of $1.20 per share to
$0.75 per share, and to increase this conversion price by $0.05 every one
hundred and eighty (180) days thereafter, until June 9, 2008, when the
conversion price will reach $1.20 per share. This will be the final increase
before the Note matures on 1 July 2008. At the date of the amendment, the
conversion price of the Amended Note was in excess of the stock price. As of
June 30, 2005, the Amended Note had a principal balance of $856,954. Interest
paid to AMASYS totaled approximately $86,000 and $86,000 for the fiscal years
2005 and 2004, respectively. At June 30, 2004, the Company recognized losses in
excess of basis of the investment in Comtex stock as an adjustment to the basis
of the Note of $75,287 (See Note 2).


                                     F - 14

<PAGE>

                               AMASYS Corporation

                         Notes fo Financial Statements

<TABLE>
<CAPTION>
                                                          Quarter Ended
                                        -------------------------------------------------
                                          September      December     March       June
                                           30, 2004      31, 2004   31, 2005    30, 2005
                                        -------------   ---------   ---------   ---------
<S>                                       <C>           <C>         <C>         <C>
Beginning balance Note                    $ 781,667     $ 802,677   $ 828,778   $ 846,520
Receivable-Related Party

Equity in (earnings) losses allocated
to the Note basis                         $  15,093     $  19,068   $  13,029   $  10,434

EITF 98-10 Adjustment                     $   5,917     $   7,034   $   4,712   $    0.00

Discount on Note Receivable               $(331,882)    $(308,817)  $(285,752)  $(262,687)

Ending balance of Note
Receivable-Related Party                  $ 470,795     $ 519,962   $ 560,767   $ 594,267
</TABLE>

<TABLE>
<CAPTION>
                                                          Quarter Ended
                                        -------------------------------------------------
                                          September      December     March       June
                                           30, 2003      31, 2003   31, 2004    30, 2004
                                        -------------   ---------   ---------   ---------
<S>                                       <C>           <C>         <C>         <C>
Beginning balance Note
Receivable-Related Party                  $ 856,954     $ 856,954   $ 791,137   $ 782,950

Equity in (earnings) losses allocated
to the Note basis                         $    0.00     $ (65,817)  $  (8,187)  $  22,911

EITF 98-10 Adjustment                     $    0.00     $    0.00   $    0.00   $ (24,193)

Discount on Note Receivable               $(424,142)    $(401,077)  $(378,012)  $(354,947)

Note Receivable-Related Party,
net of discount                           $ 432,812     $ 390,060   $ 404,938   $ 426,721
</TABLE>


                                     F - 15

<PAGE>

                               AMASYS Corporation

                         Notes fo Financial Statements

Since Comtex has experienced prior year losses, the Company evaluated the Note
for collectibility. As a result, the Company evaluated whether or not there is
an impairment loss by comparing the fair value of the collateral (including cash
and security interest in the accounts receivable of Comtex) to the carrying
value of the Note of $594,267. Since the fair value of the collateral exceeds
the carrying value of the Note, the Company did not record an impairment charge
at June 30, 2005.

The Company calculated the fair value of the conversion option to be $701,486 as
of the date of the amendment using a Black-Scholes option-pricing model. The
$701,486 represents a discount on the Amended Note which the Company is
accreting into earnings over the life of the Amended Note under the effective
interest method. For the fiscal years ended June 30, 2005 and 2004, the Company
recognized interest income of $177,955 and $177,955, respectively, which
included $92,260 and $92,261, respectively, related to accretion of the
discount. The effective interest rate on the Amended Note was 21%.

5. RELATED PARTY TRANSACTIONS

The Company leases certain space from Comtex on a month-to-month basis. For the
years ended June 30, 2005 and 2004, the Company incurred rent expense of $3,600
and $3,600, respectively, to Comtex which is included in general and
administrative expenses in the Company's statements of operations. In addition,
certain Comtex employees provide accounting and corporate services to the
Company. For the years ended June 30, 2005 and 2004, the Company paid consulting
fees of $54,000 and $35,000, respectively, which is primarily included in
professional services in the Company's statements of operations.


                                     F - 16

<PAGE>

                               AMASYS Corporation

                         Notes fo Financial Statements

6. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

                                                         YEAR ENDED JUNE 30,
                                                          2005         2004
                                                       ----------   ----------
Numerator:
   Net income (loss)                                   $  175,366   $ (218,802)
   Preferred stock dividend                               (98,000)     (98,000)
                                                       ----------   ----------
   Numerator for basic earnings (loss) per share           77,366     (316,802)
   Effect of dilutive securities                           98,000           --
                                                       ----------   ----------
   Numerator for diluted earnings (loss) per share     $  175,366   $ (316,802)
                                                       ==========   ==========
Denominator:
   Denominator for basic earnings (loss) per share
      - weighted average shares                         2,207,350    2,207,350
Effect of dilutive securities:
   Convertible preferred stock                          1,960,000           --
                                                       ----------   ----------
   Denominator for diluted earnings (loss) per share    4,167,350    2,207,350
                                                       ==========   ==========
Basic earnings (loss) per share                        $     0.04   $    (0.14)
                                                       ==========   ==========
Diluted earnings (loss) per share                      $     0.04   $    (0.14)
                                                       ==========   ==========

For the years ended June 30, 2005 and 2004, the 900,000 shares issuable upon the
exercise of stock options have been excluded from the computation since their
effect was not dilutive. For the year ended June 30, 2004, the 1,960,000 shares
issuable upon the conversion of the Series A Preferred Stock have been excluded
from the computation since their effect was not dilutive.

7. INCOME TAXES

The following table reconciles the Company's statutory tax rate to the effective
tax rate:

                                   YEAR ENDED JUNE 30,
                                     2005       2004
                                   --------   --------
Tax benefit at statutory rate         34.00%      34.0%
Reconciling items:
   Permanent items                     0.00%       0.0%
   State income taxes                  3.96%       4.8%
   Change in valuation allowance     (37.96)%    (38.8)%
                                   --------   --------
Effective tax rate                      0.0%       0.0%
                                   ========   ========


                                     F - 17

<PAGE>

                               AMASYS Corporation

                         Notes fo Financial Statements

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
deferred tax assets as of June 30, 2005 are as follows:

                                               JUNE 30,
                                                 2005
                                             -----------
Deferred tax assets:
Net operating losses carryforwards           $ 2,851,242
Discount on note receivable- related party        99,716
Equity method reporting                           29,171
                                             -----------
   Total deferred tax assets                   2,980,129

Deferred tax liabilities:
Derivative asset                                 (39,759)
                                             -----------
   Total deferred tax liabilities                (39,759)
                                             -----------

Net deferred tax asset                         2,940,370
Valuation allowance                           (2,940,370)
                                             -----------
Deferred tax asset, net                      $        --
                                             ===========

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some or all of the deferred tax asset
will not be realized. The ultimate realization of the deferred tax asset is
dependent upon the generation of future taxable income during the periods in
which the net operating loss carryforwards are available. Management considers
projected future taxable income, the scheduled reversal of deferred tax
liabilities and available tax planning strategies that can be implemented by the
Company in making this assessment. Based upon the level of historical taxable
income and projections for future taxable income over the periods in which the
net operating loss carryforwards are available to reduce income taxes payable,
management has established a valuation allowance such that the net deferred tax
asset is $0 as of June 30, 2005. The net change in the valuation allowance
during the fiscal year ended June 30, 2005 was an increase of $4,570,078.

As of June 30, 2005 the Company had net operating loss carryforwards for federal
income tax purposes of approximately $7.5 million, of which $6.2 million expire
in 2006. Utilization of these net operating losses may be subject to limitations
under IRC Section 382, in the event of significant changes in stock ownership of
the Company.


                                     F - 18

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

8. STOCKHOLDERS' EQUITY

Preferred Stock
---------------

The Company is authorized to issue 1,000,000 shares of preferred stock, of which
196,000 shares have been designated as Series A Preferred Stock (the "Preferred
Stock"). The Preferred Stock was issued to PBGC in connection with the
Assignment and Assumption Agreement. The Preferred Stock is convertible into
shares of common stock of the Company at the rate of 10 shares of common stock
for each share of Preferred Stock. Holders of the Preferred Stock are entitled
to receive dividends, when, as, and if, declared by the board of Directors at a
cumulative annual rate of $.50 per share. The holders are entitled to a
liquidation preference of $10 per share, plus an amount equal to any accrued but
unpaid dividends to the payment date. No such dividends have been declared to
date. The holders of the Preferred Stock are entitled to vote, along with the
common stockholders, based on each share of Preferred Stock, except in certain
circumstances which require an affirmative vote of a majority of the holders of
Preferred Stock. The Company has the right to redeem the Preferred Stock, after
payment of the PBGC Note, at a price equal to the greater of $10.50 per share or
an amount computed based on market value, as defined, plus accrued but unpaid
dividends.

At June 30, 2005, the aggregate cumulative preferred dividends were $882,000.

The Company adopted a Stock Option Plan (the "Plan") under which 950,000 shares
of common stock were reserved for issuance upon exercise of granted stock
options. The Plan provides for grants of incentive stock options to eligible
employees, officers, and Directors of the Company. Eligible employees are
defined as any persons regularly employed by the Company, including key
employees and consultants. In November 1996, 950,000 stock options were granted
with an exercise price equal to fair value at the date of grant. The term of the
options granted under the Plan may not exceed 10 years. The stock options
granted vested immediately.

At June 30, 2005 and 2004, 900,000 stock options were outstanding and
exercisable, respectively. The exercise price of all options is $0.01 per share.
The weighted average remaining contractual life of options outstanding at June
30, 2005 and 2004 is 1.3 years and 2.3 years, respectively.


                                     F - 19

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

9. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of the quarterly results of operations for the years
ended June 30, 2005 and 2004.

<TABLE>
<CAPTION>
                                                    QUARTER ENDED
                               ------------------------------------------------------
                               SEPTEMBER 30,   DECEMBER 31,    MARCH 31,    JUNE 30,
                                   2004            2004          2005         2005
                               -------------   ------------   ----------   ----------
<S>                             <C>             <C>           <C>          <C>
Operating costs and expenses    $   64,344      $   47,486    $   32,781   $   36,227
Other (expense) income             (20,043)        113,502        95,772      166,973
Net (loss) income                  (84,387)         66,016        62,991      130,746

Net (loss) income per share:
   Basic                        $    (0.05)     $     0.02    $     0.02   $     0.05
   Diluted                      $    (0.05)     $     0.02    $     0.02   $     0.03
Weighted average
number of shares:
   Basic                         2,207,350       2,207,350     2,207,350    2,207,350
   Diluted                       2,207,350       4,167,350     4,167,350    4,167,350
</TABLE>

<TABLE>
<CAPTION>
                                                    QUARTER ENDED
                               ------------------------------------------------------
                               SEPTEMBER 30,   DECEMBER 31,    MARCH 31,    JUNE 30,
                                    2003           2003          2004         2004
                               -------------   ------------   ----------   ----------
<S>                             <C>             <C>           <C>          <C>
Operating costs and expenses    $ (102,396)     $  (90,893)   $  (27,147)  $  (26,002)
Other (expense) income              (6,522)        (23,311)         (414)      57,883
Net (loss) income                 (108,918)       (114,204)      (27,561)      31,881

Net (loss) income per share:
   Basic                        $    (0.06)     $    (0.06)   $    (0.02)  $    0.003
   Diluted                      $    (0.06)     $    (0.06)   $    (0.02)  $    0.003
Weighted average
number of shares:
   Basic                         2,207,350       2,207,350     2,207,350    2,207,350
   Diluted                       2,207,350       2,207,350     2,207,350    2,207,350
</TABLE>


                                     F - 20

<PAGE>

                               AMASYS Corporation

                          Notes to Financial Statements

NOTE 10. RESTATEMENT

In accordance with comments received from staff of the Securities and Exchange
Commission, the disclosures contained in the Company's 2005 financial statements
have been revised, as follows:

     a)   disclosure has been included to specify how management considered the
          requirements of paragraphs 4(h) and 5 of FIN 46R in determining the
          accounting for the Company's investment in Comtex (See Note 2);

     b)   a roll forward of the changes in both the Company's equity investment
          in Comtex and its note receivable from Comtex that result from
          applying the equity method of accounting has been included (See Note
          2);

     c)   disclosure has been included to specify how management determined that
          it could rely on a valuation by an outside consultant to value the
          derivative asset using the Black-Scholes model and to set forth all
          material assumptions used in the valuation and the reasons for
          significant fluctuations in the valuation (See Note 2);

     d)   disclosure has been included to provide an analysis of changes in the
          value of the derivative asset (See Note 2);

     e)   disclosure has been included to specify management's estimate of the
          fair value of the note receivable from Comtex and to specify the
          number of shares into which the note is convertible, the conversion
          price per share and the Comtex per share price (See Note 2);

     f)   disclosure has been included to disclose the number of shares of
          securities that could potentially dilute basic EPS in the future that
          were not included in the computation of diluted EPS because to do so
          would have been antidilutive for the periods presented (See Note 6).

There were no changes to the Company's balance sheet as of June 30, 2005, and
the related statements of operations, stockholders' equity, and cash flows for
the years ended June 30, 2005 and 2004, as previously reported.


                                     F - 21