UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form 10-K




(Mark
      One)þ
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended June 30, 2008OR
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




AMASYS
CORPORATION


(Exact
name of registrant as specified in its charter)




Delaware
            54-1812385(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer Identification No.)625
      N. Washington Street, Suite 301
              Alexandria,
      VA
            22314(Address
      of principal executive offices)
            (Zip
      Code)




Registrant’s
telephone number, including area code:


(703)
797-8111




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


Title
      of each class
            Name
      of each exchange on which registeredNone
            None




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




Common
Stock, par value $0.01 per share




Indicate
by check mark if the registrant is a well-known seasoned issuer as defined in
Rule 405 of the Securities Act.  Yes     No þ




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes   No þ




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 þ
     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 the 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 registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.  (Check one):




Large
      accelerated filer 
            Accelerated
      filer Non-accelerated
      filer  (Do not check if a smaller reporting company)
            Smaller
      reporting company þ




Indicate
by check mark whether the registrant is a shell company (as defined by Rule
12b-2 of the Act).  Yes þ
     No   




The
Company knows of no trading in its Common Stock since its
inception.  As of November 7, 2008, there were 1,775,880 shares of
stock held by non-affiliates.  As of November 7, 2008, 6,669,210
shares of the common stock of the registrant were outstanding.




DOCUMENTS
INCORPORATED BY REFERENCE




None.





-
1 -





FORWARD-LOOKING STATEMENTS





This report includes forward-looking
statements with-in the meaning of Section 27A of the Securities Act (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). We have based these statements on our beliefs
and assumptions, based on information currently available to us. These
forward-looking statements are subject to risks and uncertainties.
Forward-looking statements include the information concerning our possible or
assumed future results of operations, our total market opportunity and our
business plans and objectives set forth under the sections entitled "Business"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."





Forward-looking statements are not
guarantees of performance. Our future results and requirements may differ
materially from those described in the forward-looking statements. Many of the
factors that will determine these results and requirements are beyond our
control. In addition to the risks and uncertainties discussed in "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," investors should consider those discussed under "Risk Factors" and,
among others, the following:





We are a non-operating company and
are seeking a suitable transaction with a private company; however we may not
find a suitable candidate or transaction.  If we are unable to
consummate a suitable transaction we will be forced to liquidate and dissolve,
which may take three years to complete and may result in our distributing less
cash, if any, to our shareholders.  Additionally, we will be spending
cash during the winding down of the Company and may not have enough cash to
distribute to our shareholders.





These forward-looking statements
speak only as of the date of this report. We do not intend to update or revise
any forward-looking statements to reflect changes in our business anticipated
results of our operations, strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.




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.  Our business was the maintenance of our equity
interest in and note receivable from Comtex and equity interest in
Analex.  During September and October 2006, we liquidated our equity
interests in Comtex and Analex.





On July
2, 2001, we 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, we 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
our 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.  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.  The
Annual Report on Form 10-KSB for the year ended June 30, 2005 was filed on
September 28, 2005 and was amended on January 19, 2007 and March 22,
2007.  The Annual Report on Form 10-KSB for the year ended June 30,
2006 was filed on October 9, 2007.  The Annual Report on Form 10-KSB
for the year ended June 30, 2007 was filed on October 10, 2008.  All
of our subsequent quarterly reports through the March 31, 2008 reporting period
have been filed with the SEC.





-
2 -





Overview





AMASYS is
the successor to Infotech, pursuant to Infotech’s bankruptcy
proceeding.  Until September 25, 2006, AMASYS’ primary assets were its
equity interest in and note receivable (the “Note”) from Comtex and an equity
interest in Analex.  AMASYS owned 16% of the outstanding equity of
Comtex, while the remainder was publicly owned.





On
September 25, 2006, we exchanged the equity investment in Comtex common stock
and the Note Receivable from Comtex of $856,954, for 55,209 shares of the AMASYS
Series A Preferred stock.  We no longer have an equity interest in
either the common stock of Comtex or the Note from Comtex.





During
October 2006, we sold the remaining 21,000 shares of common stock of
publicly-held Analex, a defense contractor specializing in systems engineering
and developing innovative technical intelligence solutions in support of U.S.
national security.  We no longer have an equity interest in
Analex.





Since we
redeemed and converted all of our outstanding Series A Preferred Stock at the
end of September 2006, starting October 1, 2006 we have not conducted any
business operations.  All of our operating results and cash flows
reported in the accompanying financial statements from October 1, 2006 are
considered to be those related to development stage activities and represent the
'cumulative from entering developmental stage' amounts from its development
stage activities required to be reported pursuant to Statements of Financial
Accounting Standards (SFAS) No. 7, “Development Stage Enterprises”.





Employees





We use the services of two consultants,
both of whom serve as officers of the Company.  We have no
employees.








-
3 -


Item
1A.  Risk Factors





The
following important factors, and the important factors described elsewhere in
this report or in our other filings with the SEC, could affect (and in some
cases have affected) our results and could cause our results to be materially
different from estimates or expectations.  Other risks and
uncertainties may also affect our results or operations
adversely.  The following and these other risks could materially and
adversely affect our business, operations, results or financial
condition.





We
have a history of net losses and may never achieve or maintain
profitability.





We have a
history of incurring losses from operations. As of June 30, 2008, we had an
accumulated deficit of $458,166.   We are currently funding our
operations through loans. Our ability to continue may prove more expensive than
we currently anticipate and we may incur significant additional costs and
expenses.





We
are a non-operating company seeking a suitable transaction and may not find a
suitable candidate or transaction





We are a
non-operating company.  If we are unable to consummate a transaction
or become profitable we will be forced to liquidate and dissolve and may result
in our distributing less cash to our shareholders.  Additionally, we
will be spending cash during the winding down and may not have enough cash to
distribute to our shareholders.




We
are currently funding our operations through loans




There is
no assurance we will or can continue to obtain such financing.  We may
have to seek alternate financing which will likely dilute the existing
shareholders’ value.





We
will continue to incur claims, liabilities and expenses that will reduce the
amount available for distribution to stockholders.





Claims,
liabilities and expenses incurred while seeking a private company transaction or
any subsequent dissolution, such as legal, accounting and consulting fees and
miscellaneous office expenses, will reduce the amount of assets available for
future distribution to stockholders. If available cash and amounts received on
the sale of non-cash assets are not adequate to provide for our obligations,
liabilities, expenses and claims, we may not be able to distribute meaningful
cash, or any cash at all, to our stockholders.





We
will continue to incur the expenses of complying with public company reporting
requirements.




We have
an obligation to continue to comply with the applicable reporting requirements
of the Securities Exchange Act of 1934, as amended, even though compliance with
such reporting requirements is economically burdensome.





Our auditors have expressed a going
concern opinion.





Primarily
as a result of our recurring losses and our lack of liquidity, we received a
report from our independent auditors that includes an explanatory paragraph
describing the substantial uncertainty as to our ability to continue as a going
concern for the year ended June 30, 2008.




Any future sale
of a substantial number of shares of our common stock could depress the trading
price of our common stock.





Any
sale of a substantial number of shares of our common stock (or the prospect of
sales) may have the effect of depressing the trading price of our common stock.
In addition, these sales could lower our value.





-
4 -


Our
stock price is likely to be highly volatile because of several factors,
including a limited public float.





The
market price of our stock is likely to be highly volatile because there has been
no trading in the past and there may be relatively thin trading market for our
stock, which causes trades of small blocks of stock to have a significant impact
on our stock price. You may not be able to resell our common stock following
periods of volatility because of the market's adverse reaction to
volatility.





Other
factors that could cause such volatility may include, among other
things:





·
            announcements
      concerning our strategy;





·
            litigation;
      and





·
            general
      market conditions.





Because
our common stock is considered a "penny stock" any investment in our common
stock is considered to be a high-risk investment and is subject to restrictions
on marketability.





Our
common stock is currently listed on the Pink Sheets and is considered a "penny
stock." The Pink Sheets is generally regarded as a less efficient trading market
than the NASDAQ Capital Market.





The
SEC has adopted rules that regulate broker-dealer practices in connection with
transactions in "penny stocks." Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system). The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from those rules, to deliver a standardized risk disclosure document prepared by
the SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. The broker-dealer also must
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer and any salesperson in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the trading activity in the secondary market for our common
stock.





Since
our common stock is subject to the regulations applicable to penny stocks, the
market liquidity for our common stock could be adversely affected because the
regulations on penny stocks could limit the ability of broker-dealers to sell
our common stock and thus your ability to sell our common stock in the secondary
market.  There is no assurance our common stock will be quoted on
NASDAQ or the NYSE or listed on any exchange, even if eligible.




-
5 -


Item
1B.  Unresolved Staff Comments




None.




Item
2.  Properties.




We
own no real estate.  We lease certain space from Comtex on a
month-to-month basis.  Our corporate offices are located at 625 N.
Washington Street, Alexandria, Virginia.




Item
3.  Legal Proceedings.




We have
no outstanding, material legal proceedings.




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





None.


PART II




Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.




Public Market for Common
Stock





Our common stock is quoted on the Pink
Sheets under the symbol "AMAS.PK."  Our 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
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person’s account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person’s account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and
(ii) make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.





Shareholders





The approximate number of holders of
record of our Common Stock as of October 22, 2008 was 473.





Dividends





We have never declared or paid a cash
dividend on its Common Stock and do not anticipate the declaration or payment of
cash dividends to shareholders in the foreseeable future.





Equity Compensation Plan
Information





In accordance with our Stock Option
Plan, Dr. Gilluly received a grant of 350,000 options in November 1996, at an
exercise price of $0.01 per share.  On November 15, 2006, Dr. Gilluly
exercised his options to purchase 350,000 restricted shares (out of a total of
900,000 options) and we issued 350,000 restricted shares to him.  The
remaining 550,000 options expired on November 16, 2006.





Set forth below is certain information
as of June 30, 2008 regarding equity compensation to our directors and executive
officers that has been approved by stockholders.





Equity
      compensation plans approved by stockholders
            Number
      of securities to be issued upon exercise of outstanding options and
      rights
            Weighted
      average
              exercise
      price
            Number
      of securities remaining available for issuance under
  planStock Option Plan
            0
            $0.00
            0Total
            0
            $0.00
            0





Recent
Sale of Unregistered Securities.





On May
24, 2007, we executed a $10,000 note with Private Capital Group, LLC, pursuant
to which Private Capital Group, LLC advanced us $10,000 at a rate of 10% per
annum.  Additionally, we issued 1,000,000 shares of restricted common
stock and a warrant to issue an additional 1,000,000 shares of restricted common
stock at an exercise price of $0.01 per share as an inducement for Private
Capital Group, LLC to make the loan.  Private Capital Group, LLC is
affiliated with World Mineral Corporation, which signed the Agreement and Plan
of Share Exchange by and among AMASYS Corporation, World Mineral Corporation and
the shareholders of World Mineral Corporation, dated September 26,
2006.





Similarly,
we entered into a $10,000 note and warrant agreement with its Chairman and Chief
Executive Officer, C.W. Gilluly, on the same terms as described
above.





-
6 -





Item 6.  Selected Financial
Data.







The
following selected financial data should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and our audited financial statements and the accompanying notes
included elsewhere in this Annual Report on Form 10-K.





Year
      Ended June 30,2008
            
            
            2007
            
            
            2006
            
            
            2005
            
            
            2004Statement
      of Operations Data:Revenues
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Cost
      of revenues
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Gross
      profit (loss)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Other
      income (expense)
            
            
            (3,430)
            
            
            
            (317,618)
            
            
            
            491,417
            
            
            
            356,204
            
            
            
            27,635General
      and administrative expense
            
            
            44,756
            
            
            
            92,362
            
            
            
            209,886
            
            
            
            180,838
            
            
            
            246,437Net
      income (loss)
            
            
            (48,186)
            
            
            
            (409,980)
            
            
            
            281,531
            
            
            
            175,366
            
            
            
            (218,802)Net
      income (loss) per share:Basic
            
            $
            (0.01)
            
            
            
            (0.10)
            
            
            
            0.08
            
            
            
            0.04
            
            
            
            (0.14)Diluted
            
            $
            (0.01)
            
            
            
            (0.10)
            
            
            
            0.07
            
            
            
            0.04
            
            
            
            (0.14)As
      of June 30,2008
            
            
            2007
            
            
            2006
            
            
            2005
            
            
            2004Balance
      Sheet Data:Cash
      and cash equivalents
            
            $
            698
            
            
            
            7,862
            
            
            
            11,620
            
            
            
            1,024
            
            
            
            10,007Total
      assets
            
            $
            698
            
            
            
            8,562
            
            
            
            1,178,263
            
            
            
            1,007,121
            
            
            
            893,845Total
      long-term liabilities
            
            $
            --
            
            
            
            20,197
            
            
            
            --
            
            
            
            --
            
            
            
            --Stockholders’
      equity (deficit)
            
            $
            (74,429)
            
            
            
            (26,243)
            
            
            
            1,144,270
            
            
            
            1,003,440
            
            
            
            885,370





-
7 -


Item
7.   Management’s Discussion and Analysis of Financial Condition
and Results of Operations.




The
following  discussion  should be read in
conjunction  with the Financial  Statements  and
notes  thereto  included in Item 8 of Part II of this Annual
Report on Form 10-K.





FORWARD-LOOKING
STATEMENTS





All   statements   other  than   statements  of  historical   fact  included  in
"Management's  Discussion  and  Analysis of
Financial  Condition  and Results of
Operations"  which  follows,  are  forward-looking  statements.  Forward-looking
statements involve various important assumptions, risks, uncertainties and other
factors which could cause our actual results to
differ  materially  from those expressed in such
forward-looking statements. Forward-looking statements in this discussion can be
identified by words such as "anticipate,"  "believe," "could,"
"estimate," "expect," "plan," "intend," "may," "should" or the negative of these
terms  or  similar  expressions.  Although  we  believe  that  the  expectations
reflected in the forward-looking  statements are reasonable, we cannot
guarantee
future  results,  performance  or  achievement.   Actual  results  could  differ
materially from those contemplated by the forward-looking statements as a result
of certain factors including but not limited to, competitive factors and pricing
pressures,  changes  in  legal  and  regulatory  requirements,  cancellation  or
deferral of customer orders, technological change or
difficulties,  difficulties in
the  timely  development  of
new  products,  difficulties  in  manufacturing,
commercialization and trade difficulties and general economic conditions as well
as the factors set forth in our public  filings with the Securities
and Exchange Commission.





You are cautioned not to place undue
reliance on the forward-looking statements,
which  speak  only as of the  date  of
this  Annual  Report  or the  date of
any
document  incorporated  by  reference,  in
this Annual  Report.  We are under no
obligation,  and  expressly  disclaim  any  obligation,  to  update
or alter any
forward-looking  statements,  whether  as a
result  of new  information,  future events or
otherwise.





For these statements, we claim the
protection of the safe harbor for forward-looking statements contained in
Section 21E of the Securities Exchange Act of 1934.





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 had a Note from Comtex and 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 accounted for
this conversion option as an embedded derivative.  As a result, the
conversion option was being carried at fair value determined using a
Black-Scholes model with changes in the fair value being recognized currently in
earnings.  As previously reported, on September 25, 2006, we exchanged
the Note for shares of the AMASYS Series A Preferred stock. Therefore, at
the date of the exchange, the balance of the derivative asset was $-0- and we
recognized other expense of $419,907 due to the decrease in value of this
derivative.








-
8 -


Investment in Comtex





As
previously reported, on September 25, 2006, the Company exchanged the equity
investment in Comtex common for shares of the AMASYS Series A Preferred
stock.  Therefore, we no longer have an equity interest in the common
stock of Comtex.  At June 30, 2006, we had a 16% ownership interest in
Comtex.  Since we had the ability to significantly influence the
operations of Comtex, we accounted for our investment in Comtex under the equity
method of accounting.  We could significantly influence the operations
of Comtex since (i) if we converted our note receivable-related party into
shares of Comtex, we would have had a 21% ownership interest in Comtex, (ii) the
Company as well as our Chairman and CEO were Comtex’s largest individual
shareholders, (iii) the Company and our Chairman and CEO had a combined
ownership interest in Comtex of 36%, and (iv) our Chairman is the Chairman of
the Board of Comtex.  During the year ended June 30, 2007, we
recognized income of $9,127 for our share of Comtex income and during the year
ended June 30, 2006, we recognized losses of $71,934 for our share of Comtex
losses.





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, 2008 to the fiscal year ended June 30,
2007





We had a net loss of $48,186 for the
year ended June 30, 2008 compared to a net loss of $409,980 for the year ended
June 30, 2007.  The change is explained below.





Selling, general and administrative
costs:  SG&A expenses decreased approximately $(48,000) to
$44,756 in fiscal year 2008 primarily due to a decrease in all elements of
professional fees as the Company’s operations ceased and the Company entered
into development stage operations. General and administrative fees similarly
decreased in response to dwindling financial resources and cessation of current
operations.





Other income
(expense):  Other income (expense) decreased $(314,188) from
other expense of $(317,618) in fiscal year 2007 to other expense of $(3,430) in
fiscal year 2008, primarily due to the derivative asset, which was written off
as a result of the exchange of the Note and the Comtex common stock for our
Series A preferred stock.  We recorded the derivative asset as a
result of the conversion feature of the Note in 2001; with the Note no longer an
asset of the Company after the exchange for the preferred stock, the derivative
ceased to be an asset as well and we no longer received interest income from the
Note nor continued to accrete the discount into current income, further reducing
other income.





Liquidity and Capital
Resources





We have had minimal operating activity
since commencing operations in 1996 and are now relying on loans from related
parties as funding sources since we can no longer expect to meet our short-term
obligations.





Net cash used in operating activities
was $42,164 and $90,790 in the year ended June 30, 2008 and 2007,
respectively.





Net
cash provided by investing activities was zero and $63,532 in the year ended
June 30, 2008 and 2007, respectively.  The decrease of $63,532 in cash
provided by investing activities was primarily due to the net proceeds from the
sale of short term investments.





We
suffered recurring losses from operations and have an accumulated deficit of
$458,166 at June 30, 2008.  Currently, we are a non-operating public
company. We seek suitable candidates for a business combination with a private
company.  In the event we use all of our cash resources, C.W. Gilluly
has indicated the willingness to loan us funds at the prevailing market rate,
assuming we find a suitable candidate for a business combination, until such
business combination is consummated.  Even though this is Mr.
Gilluly's current intention, he has made no firm commitment and it is at his
sole discretion whether or not to fund us.  In the event Mr. Gilluly
does not fund us, we will not have the funds necessary to operate and will have
to dissolve.





-
9 -


Going Concern
Uncertainties





As of the date of this annual report,
there is doubt regarding our ability to continue as a going concern as we have
not generated sufficient cash flow to fund our business operations and loan
commitments.  Our future success and viability, therefore, are
dependent upon our ability to generate capital financing.  The failure
to generate sufficient revenues or raise additional capital may have a material
and adverse effect upon the Company and our shareholders.




Commitments and Contractual
Obligations




As of
June 30, 2008, we have no contractual obligations. We lease certain space from
Comtex on a month-to-month basis.  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.  To date the transaction has not been completed.  WMC
is managed by Private Capital Group, L.L.C., a significant shareholder of the
Company.




Off-Balance
Sheet Arrangements




As
of June 30, 2008, we did not have any off-balance sheet arrangements as defined
in Item 303(a)(4)(ii) of Regulation S-K. No unaudited quarterly operating data
is included in this Form 10-K as we conducted no operations from entering
development stage through June 30, 2008.





Item
7A.   Quantitative and Qualitative Disclosures about Market
Risk.




Market
risk represents the risk of loss arising from adverse changes in market rates
and foreign exchange rates. At June 30, 2008, we had outstanding notes payable
totaling $55,000 plus accrued interest to two related parties. The amount of our
outstanding debt at any time may fluctuate and we may from time to time be
subject to refinancing risk. A hypothetical 100 basis point increase in interest
rates would have a material effect on our annual interest expense, our results
of operations or financial condition as we relay on these notes to sustain our
operations.  Since we do not have transactions in foreign currencies,
we do not consider it necessary to hedge against currency risk.













-
10 -




Item
8.




Financial Statements and
Supplementary Data.




INDEX
TO FINANCIAL STATEMENTS AND SCHEDULES




AMASYS
CORPORATION


(a
development stage company)





Report
      of Independent Registered Public Accounting Firm.
            12Balance
      Sheets as of June 30, 2008 and 2007.
            13Statements
      of Operations for the years ended June 30, 2008 and 2007 and for the
      period October 1, 2006 (date of entering development stage) through June
      30, 2008.
            14Statements
      of Stockholders’ Equity (Deficit) for the years ended June 30, 2008 and
      2007 and for the period October 1, 2006 (date of entering development
      stage) through June 30, 2008.
            15-16Statements
      of Cash Flows for the years ended June 30, 2008 and 2007 and for the
      period October 1, 2006 (date of entering development stage) through June
      30, 2008.
            17Notes
      to Financial Statements.
            18-27















-
11 -









REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Shareholders


AMASYS
Corporation





We have
audited the accompanying balance sheets of AMASYS Corporation (a development
stage company) (the “Company”) as of June 30, 2008 and 2007, and the related
statements of operations, stockholders’ equity (deficit) and cash flows for the
years ended June 30, 2008 and 2007 and for the period October 1, 2006 through
June 30, 2008.  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 audits.





We
conducted our audits 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 statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of AMASYS Corporation as of June 30,
2008 and 2007, and the results of its operations and cash flows for each of the
years in the two year period ended June 30, 2008 and for the period October 1,
2006 through June 30, 2008, in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has no business operations and has a net
working capital deficiency, both of which raise substantial doubt about its
ability to continue as a going concern.  Management's plans in regard
to these matters are also described in Note 1.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.








/s/
Turner, Stone & Company, L.L.P.


Certified
Public Accountants


Dallas,
Texas


November
7, 2008



























-
12 -





AMASYS
Corporation


(a
development stage company)


Balance
Sheets











June
      30,
            
            
            June
      30,2008
            
            
            2007ASSETSCURRENT
      ASSETSCash
            
            $
            698
            
            
            $
            7,862Prepaid
      expenses
            
            
            —
            
            
            
            700TOTAL
      CURRENT ASSETS
            
            
            698
            
            
            
            8,562TOTAL
      ASSETS
            
            $
            698
            
            
            $
            8,562




LIABILITIES AND STOCKHOLDERS’
      DEFICITCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
            
            $
            1,000
            
            
            $
            6,585Accounts
      payable, related parties
            
            
            15,500
            
            
            
            8,023Notes
      payable, related parties
            
            
            58,627
            
            
            
            —TOTAL
      CURRENT LIABILITIES
            
            
            75,127
            
            
            
            14,608LONG
      TERM LIABILITIES:Notes
      payable, related parties
            
            
            —
            
            
            
            20,197TOTAL
      LIABILITIES
            
            
            75,127
            
            
            
            34,805COMMITMENTS AND CONTINGENCIES (Note
      8)STOCKHOLDERS’
      DEFICIT:Preferred
      stock, $.01 par value, 1,000,000 shares authorized, no shares issued and
      outstanding at June 30, 2008 and 2007, respectively
            
            
            —
            
            
            
            —Common
      stock, $.01 par value, 20,000,000 shares authorized, 6,669,210 shares
      issued and outstanding at June 30, 2008 and 2007,
    respectively
            
            
            66,692
            
            
            
            66,692Additional
      paid in capital
            
            
            317,045
            
            
            
            317,045Accumulated
      deficit (including $94,404 accumulated during development
      stage)
            
            
            (458,166)
            
            
            
            (409,980)Total
      stockholders’ deficit
            
            
            (74,429)
            
            
            
            (26,243)TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
            
            $
            698
            
            
            $
            8,562





See Notes
to Financial Statements.







-
13 -









AMASYS
Corporation


(a
development stage company)


Statements
of Operations







Year
      Ended
              June
      30,
            
            Period
      from October 1, 2006 (date of entering development stage) through June 30,
      20082008
            
            2007REVENUES
            
            
            $                   —
            
            $                   —
            
            $                      —COST
      OF SALES
            
            
            —
            
            —
            
            —GROSS
      PROFIT
            
            
            —
            
            —
            
            —OPERATING
      EXPENSESGeneral
      and administrative expenses
            
            
            44,756
            
            92,362
            
            83,370Total
      operating expenses
            
            
            44,756
            
            92,362
            
            83,370LOSS
      FROM OPERATIONS
            
            
            (44,756)
            
            (92,362)
            
            (83,370)OTHER
      INCOME (EXPENSE):Interest
      expense
            
            
            (3,430)
            
            —
            
            (3,768)Interest
      income
            
            
            —
            
            43,409
            
            —Stock
      issued for loans
            
            
            —
            
            (20,000)
            
            (20,000)Gain
      on sale of short term investment
            
            
            —
            
            26,905
            
            12,734Equity
      in earnings of Comtex
            
            
            —
            
            9,127
            
            —Loss
      on derivative asset
            
            
            —
            
            (377,059)
            
            —Total
      other expense
            
            
            (3,430)
            
            (317,618)
            
            (11,034)LOSS
      BEFORE PROVISION FOR INCOME TAXES
            
            
            (48,186)
            
            (409,980)
            
            (94,404)Provision
      for income taxes
            
            
            —
            
            —
            
            —NET
      LOSS APPLICABLE TO COMMON STOCKHOLDERS
            
            
            $
            (48,186)
            
            $
            (409,980)
            
            $                             
             (94,404)NET
      LOSS PER SHARE OF COMMON STOCK—Basic and diluted
            
            
            $
            (0.01)
            
            $
            (0.10)WEIGHTED
      AVERAGE SHARES OUTSTANDING—Basic and diluted
            
            
            6,669,210
            
            4,033,507


See Notes
to Financial Statements.











-
14 -


AMASYS
Corporation


(a
development stage company)


Statements
of Stockholders' Equity (Deficit)





Preferred Shares
            
            
            StockAmount
            CommonShares
            StockAmount
            Additional
              Paid-In
              Capital
            Accumulated
      Other Comprehensive Income
            
            
            (Accumulated
      Deficit) Retained Earnings
            
            Accumulated
      Deficit During Development Stage
            Total
              Stockholders’
              Equity ( Deficit)Balance
      – June 30, 2006
            
            
            196,000
            
            
            $
            1,960
            2,207,350
            $      22,073
            
            $
            799,485
            $         37,773
            
            $
            282,979
            
            $              --
            $
            1,144,270Issuance
      of common stock upon redemption of preferred stock
            
            
            (196,000)
            
            
            
            (1,960)
            2,111,860
            21,119
            
            
            (482,440)
            
            
            
            (282,979)
            
            
            
            (746,260)Issuance
      of restricted common stock upon exercise of options
            
            
            --
            
            
            
            --
            350,000
            3,500
            
            
            --
            --
            
            
            --
            
            --
            
            3,500Issuance
      of restricted common stock as inducement to make loans
            
            
            --
            
            
            
            --
            2,000,000
            20,000
            
            
            --
            --
            
            
            --
            
            --
            
            20,000Recognition
      of loss on sale of marketable equity securities
            
            
            --
            
            
            
            --
            --
            --
            
            
            --
            (37,773)
            
            
            --
            
            --
            
            (37,773)Net
      loss
            
            
            --
            
            
            
            --
            --
            --
            
            
            --
            --
            
            
            (363,762)
            
            (46,218)
            
            (409,980)Comprehensive
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (447,753)Balance
      – June 30, 2007
            
            
            --
            
            
            $
            --
            6,669,210
            $     66,692
            
            $
            317,045
            --
            
            $
            (363,762)
            $
            (46,218)
            $
            (26,243)Net
      loss
            
            
            --
            
            
            
            --
            --
            --
            
            
            --
            --
            
            
            --
            
            (48,186)
            
            (48,186)Balance
      – June 30, 2008
            
            
            --
            
            
            $
            --
            6,669,210
            $      66,692
            
            $
            317,045
            --
            
            $
            (363,762)
            $
            (94,404)
            $
            (74,429)




See Notes
to Financial Statements.




-
15 -









AMASYS
Corporation


(a
development stage company)


Statements
of Stockholders' Equity (Deficit)




2008
            
            
            2007
            
            
            Period
      from October 1, 2006 (date of entering development stage) through June 30,
      2008Disclosure
      of reclassification amount:Unrealized
      holding losses arising during period
            
            $
            --
            
            
            $
            (10,868
            )
            
            $
            (3,531
            )Less:  reclassification
      adjustment for realized gainsincluded
      in net loss
            
            
            --
            
            
            
            26,905
            
            
            
            12,734Net
      unrealized losses on securities
            
            $
            --
            
            
            $
            (37,773
            )
            
            $
            (
      16,265
            )









See Notes
to Financial Statements.









-
16 -









AMASYS
Corporation


(a
development stage company)


Statements
of Cash Flows




Year
      Ended
              June
      30,
            Period
      from October 1, 2006 (date of entering development stage) through June 30,
      20082008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (48,186)
            
            
            $
            (409,980)
            $         (94,404)Adjustments
      to reconcile net loss to net cash used in operating
      activities:Stock
      issued for loans
            
            
            —
            
            
            
            20,000
            20,000Amortization
      on note receivable discount
            
            
            —
            
            
            
            (21,949)
            —Loss
      on derivative asset
            
            
            —
            
            
            
            377,059
            —Gain
      on sale of short term investment
            
            
            —
            
            
            
            (26,905)
            (12,734)Equity
      in losses of Comtex
            
            
            —
            
            
            
            (9,127)
            —Changes
      in operating assets and liabilities:Prepaid
      expenses
            
            
            700
            
            
            
            (700)
            —Accounts
      payable, related parties
            
            
            7,477
            
            
            
            720
            7,972Accounts
      payable and accrued expenses
            
            
            (2,155)
            
            
            
            (19,908)
            (22,455)Net
      cash used in operating activities
            
            
            (42,164)
            
            
            
            (90,790)
            (101,621)CASH
      FLOWS FROM INVESTING ACTIVITIES:Proceeds
      from sale of short term investment
            
            
            —
            
            
            
            63,532
            40,570Net
      cash provided by investing activities
            
            
            —
            
            
            
            63,532
            40,570CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock
            
            
            --
            
            
            
            3,500
            3,500Proceeds
      from notes payable, related parties
            
            
            35,000
            
            
            
            20,000
            55,000Net
      cash provided by financing activities
            
            
            35,000
            
            
            
            23,500
            58,500NET
      DECREASE IN CASH
            
            
            (7,164)
            
            
            
            (3,758)
            (2,551)CASH
      Beginning of period
            
            
            7,862
            
            
            
            11,620
            3,249CASH
      End of period
            
            $
            698
            
            
            $
            7,862
            $               698





SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the period for:Interest
            
            $
            —
            
            
            $
            —
            $                   —Income
      taxes
            
            
            —
            
            
            
            —
            —





Non
cash transactions:




On September
25, 2006, AMASYS redeemed its Series A Preferred Stock in consideration of the
outstanding promissory note, its investment in common stock of Comtex News
Network, Inc. and the issuance of 2,111,860 shares of AMASYS Common
stock.  The following table illustrates the non-cash effect of the
above transaction.




Note
      receivable, net of discount of $148,478
            
            $
            703,412Issuance
      of 2,111,860 shares of common stock
            
            
            21,119Derivative
      asset
            
            
            42,848Retirement
      of preferred stock
            
            
            (1,960)Retained
      earnings
            
            
            (282,979)Paid
      in capital
            
            
            (482,440)$
            —











See Notes
to Financial Statements.


-
17 -




AMASYS
Corporation


(a
development stage company)


Notes
to Financial Statements





Note
1 – ORGANIZATION AND BASIS OF PRESENTATION





AMASYS
Corporation (the “Company”, “We” or “Our”) 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.





Basis of Presentation and
Going Concern Uncertainty





Our
financial statements have been prepared assuming that we will continue as a
going concern.  However, we have sustained losses and as of June 30,
2008, we have no business operations and have a net working capital
deficiency.  These conditions, among others, give rise to substantial
doubt about our ability to continue as a going concern.  Management is
continuing to seek additional equity capital to fund a merger or acquisition or
to purchase an ongoing business.  Until such time, we anticipate our
working capital needs will be funded through notes from our major
stockholders.  Management believes these steps will provide us with
adequate funds to sustain our continued existence.  There is, however,
no assurance that the steps taken by management will meet all of our needs or
that we will continue as a going concern.  The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.





Development Stage
Activities





Since we
redeemed and converted all of our outstanding Series A Preferred Stock at the
end of September 2006, starting October 1, 2006 we have not conducted any
business operations. All of our operating results and cash flows reported in the
accompanying financial statements from October 1, 2006 through June 30, 2008 are
considered to be those related to development stage activities and represent the
'cumulative from inception' amounts from our development stage activities
required to be reported pursuant to Statements of Financial Accounting Standards
(SFAS) No. 7, Development Stage Enterprises.




Note
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Use of
estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent 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.




Cash and cash
flows




We
consider all short-term securities purchased with a maturity of three months or
less to be cash equivalents.





Concentrations
of Credit Risk





Our
financial instruments that are subject to credit risk consist primarily of cash.
Cash is maintained with a financial institution, which has high credit
standing.





-
18 -


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, we had a note receivable–related party from
Comtex.  In August 2001, the Note was amended to include a provision
that allowed 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 accounted for this conversion option as an embedded
derivative.  As a result, the conversion option was carried at fair
value determined using a Black-Scholes model with changes in the fair value
recognized currently in earnings.





For the
past thirteen years, we have engaged the services of a CPA firm to prepare
derivative asset valuations.  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.





The Note
was exchanged for our Preferred Stock in September 2006, thus eliminating the
derivative.  As of June 30, 2008 and 2007 the balance of the
derivative asset was $-0- and for the fiscal years ended June 30, 2008 and 2007,
and for the period from October 1, 2006 through June 30, 2008, we recognized
other expense of $-0-, $(377,059) and $-0-, respectively, due to the change in
value of this derivative during the reporting periods.  The fair value
of the derivative instrument was estimated quarterly using the following
assumptions:








Quarter
      Ended (UNAUDITED)September
      30, 2005
            December
      31, 2005
            March
      31, 2006
            June
      30, 2006Risk
      free rate of interest
            4%
            4%
            4%
            4%Expected
      dividend rate
            0%
            0%
            0%
            0%Expected
      life in years
            2.75
            2.5
            2.25
            2.0Per
      share market price of Comtex stock
            $0.63
            $0.41
            $0.19
            $0.85Conversion
      factor
            $0.90
            $0.95
            $0.95
            $1.00Number
      of shares under option
            952,171
            902,057
            902,057
            856,954Volatility
      rate
            107.00%
            102.00%
            111.00%
            117.00%Derivative
      asset value
            $342,782
            $162,370
            $45,103
            $419,907





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





Short-Term
Investment





The
Analex common stock was fully liquidated during the first quarter of fiscal year
2007 and the proceeds used to fund continuing operations.  Under
Statement of Financial Accounting Standard No. 115, Accounting for Certain Investments
in Debt and Equity Securities, the Company had classified its investment
in Analex as an “available-for-sale” security.  As a result, the
investment was carried at fair value, with unrealized gains and losses, net of
tax, reported as a separate component of stockholders’
deficit.  Realized gains and losses on sales of securities were
included in earnings using the specific identification method.





During the fiscal years ended June 30,
2008 and 2007, and for the period from October 1, 2006 through June 30, 2008, we
reclassified unrealized gains to realized gains of $-0-, $26,905 and $12,734
respectively, on the available-for-sale security included as a separate
component of stockholders’ equity due to the sale of securities.





-
19 -


Investment in Common Stock –
Related Party





The
Comtex common stock was exchanged for our Preferred Stock in September 2006,
thus at June 30, 2008 and 2007, we no longer had an ownership interest in
Comtex. However, at June 30, 2006, we had a 16% ownership interest in Comtex. We
evaluated the applicability of the provisions of FASB Interpretation No. 46R,
Consolidation of Variable
Interest Entities (FIN 46R),to our equity investment in
Comtex.  Specifically, we determined that Comtex was not a variable
interest entity because the requirements of paragraphs 4(h) and 5 of FIN 46R
were not met:





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


2.
            Comtex’s
      activities neither involved nor were conducted on behalf of
      AMASYS


3.
            AMASYS’
      equity and subordinated debt were 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 were not primarily related to securitizations or other forms of
      asset-backed financing or single-lessee leasing
    arrangements





We did
have the ability to significantly influence the operations of Comtex and we
accounted for our investment in Comtex under the equity method of
accounting.  We could 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 had a 21% ownership interest in Comtex, (ii)
the Company as well as the Company’s Chairman and CEO were Comtex’s largest
individual shareholders, (iii) the Company and the Company’s Chairman and CEO
had a combined ownership interest in Comtex of 37% and (iv) the Company’s
Chairman and Chief Executive Officer was concurrently serving as Chairman of
Comtex.  During the year ended June 30, 2008 and 2007, we recognized
$-0- and $9,127, respectively for our share of Comtex earnings.





Income
Taxes





We
account for income taxes in accordance with SFAS 109, Accounting for Income
Taxes.  Under this standard, 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 we 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





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 fair value 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 standard
applies to option grants made after adoption, as well as options that have not
vested at the date of adoption.





Comprehensive Income
(Loss)





Comprehensive
income (loss) is defined as the change in equity of a business enterprise during
a period from non-owner sources. Our comprehensive income (loss) included
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 related
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 were,
therefore, deducted from Other Comprehensive Income to avoid including them
twice.





During
the year ended June 30, 2008 and 2007, and for the period from October 1, 2006
through June 30, 2008, we reclassified realized gains of $-0-, $26,905 and
$12,734, respectively.





Earnings per
Share




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




-
20 -


Fair Value of Financial
Instruments





Cash
accounts payable and other accrued expenses are carried at amounts which
reasonably approximate their fair values because of the relatively short
maturity of those instruments.




Comparative Financial
Statements





Certain
amounts in the comparative financial statements have been reclassified from
financial statements previously presented to conform to the 2008 financial
statements.





Adoption of New
Accounting Pronouncement




In
June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109 (“FIN 48”).” FIN 48 clarifies the
accounting for uncertainties in income taxes recognized in a company’s financial
statements in accordance with Statement 109 and prescribes a recognition
threshold and measurement attributable for financial disclosure of tax positions
taken or expected to be taken on a tax return.  Additionally, FIN 48
provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition.  We adopted
the provision of FIN 48 as of July 1, 2007.  The adoption of FIN 48
did not impact our financial position, results of operations or cash flows for
the twelve months ended June 30, 2008. Tax returns for the Company’s fiscal
years ended June 30, 2008, 2007, 2006 and 2005 are subject to examination by the
Internal Revenue Service.





Recently Issued Accounting
Pronouncements





In
March 2008, the FASB issuedSFAS No. 161, “Disclosures
about Derivative Instruments and Hedging Activities”, which amends SFAS 133,
Accounting for Derivative Instruments and Hedging Activities , and expands
disclosures to include information about the fair value of derivatives, related
credit risks and a company’s strategies and objectives for using
derivatives.SFAS No. 161 is effective for
fiscal periods beginning on or after November 15, 2008.  Based on
current conditions, we do not expect the adoption of SFAS 161 to have a
significant impact on our results of operations or financial
position.





In April
2008, the FASB issued FSP 142-3, “Determination of the Useful Life of Intangible
Assets”, (FSP 142-3). FSP 142-3 amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible
Assets”. FSP 142-3 is effective for fiscal years beginning after December 15,
2008.  We do not expect the FSP 142-3 to have a significant impact on
our results of operations or financial position.





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





In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions Are Participating Securities” (FSP EITF
03-6-1). FSP EITF 03-6-1 clarified that all outstanding unvested share-based
payment awards that contain rights to nonforfeitable dividends participate in
undistributed earnings with common shareholders. Awards of this nature are
considered participating securities and the two-class method of computing basic
and diluted earnings per share must be applied. FSP EITF 03-6-1 is effective for
fiscal years beginning after December 15, 2008. We are currently assessing the
impact of FSP EITF 03-6-1 on our financial position and results of
operations.





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





In June
2008, the FASB ratified EITF Issue No. 08-3, “Accounting for Lessees for
Maintenance Deposits Under Lease Arrangements” (EITF 08-3). EITF 08-3 provides
guidance for accounting for nonrefundable maintenance deposits. It also provides
revenue recognition accounting guidance for the lessor. EITF 08-3 is effective
for fiscal years beginning after December 15, 2008. We are currently assessing
the impact of EITF 08-3 on our financial position and results of
operations.





-
21 -


Note 3 - Related Party
Transactions




Leases




We lease certain space from Comtex on a
month-to-month basis.  For the years ended June 30, 2008 and 2007, and
for the period from October 1, 2006 through June 30, 2008, we incurred rent
expense of $600, $1,695, and $1,300, respectively, to Comtex which is included
in general and administrative expenses in our statements of
operations.  In addition, certain Comtex employees provide accounting
and corporate services to us.  For the years ended June 30, 2008 and
2007, and for the period from October 1, 2006 through June 30, 2008, we paid
consulting fees of $-0-, $18,000 and $4,500, respectively, which is included in
general and administrative expenses in our statements of
operations.





Notes
payable, related parties





During
the year ended June 30, 2007, we received $10,000 from Private Capital Group,
L.L.C., a shareholder of the Company.  This note has an interest rate
of 10% per annum, is unsecured and had an original due date of December 31,
2007.  The note was extended with the same terms and a due date of
December 31, 2008.  As of June 30, 2008, accrued interest payable
totaled $1,101 and is due at maturity.  Accrued interest is included
in the notes payable, related parties balance.  As an inducement to
make the loan, we issued 1,000,000 shares of restricted common stock with a fair
market value of $10,000 (par value) and issued a warrant for an additional
1,000,000 shares of restricted common stock with an exercise price of $.01 per
share.  The warrants have a fair market value of $0.





During
the year ended June 30, 2007, we received $10,000 from Dr. C.W. Gilluly, our
Chairman of the Board, President and Chief Executive Officer.  This
note has an interest rate of 10% per annum, is unsecured and had an original due
date of December 31, 2007.  The note was extended with the same terms
and a due date of December 31, 2008.  As of June 30, 2008, accrued
interest payable totaled $1,101 and is due at maturity.  Accrued
interest is included in the notes payable, related parties
balance.  As an inducement to make the loan, we issued 1,000,000
shares of restricted common stock with a fair market value of $10,000 (par
value) and issued a warrant for an additional 1,000,000 shares of restricted
common stock with an exercise price of $.01 per share.  The warrants
have a fair market value of $0.





During
the year ended June 30, 2008, we received an additional $15,000 from Dr. C.W.
Gilluly, our Chairman of the Board, President and Chief Executive
Officer.  This note has an interest rate of 12% per annum, is
unsecured and has a due date of December 31, 2008.  As of June 30,
2008, accrued interest payable totaled $1,124 and is due at
maturity.  Accrued interest is included in the notes payable, related
parties balance.





During
the year ended June 30, 2008, we received an additional $5,000 from Private
Capital Group, L.L.C., a shareholder of the Company.  This note has an
interest rate of 12% per annum, is unsecured and has a due date of December 31,
2008.  As of June 30, 2008, accrued interest payable totaled $261 and
is due at maturity.  Accrued interest is included in the notes
payable, related parties balance.





During
the year ended June 30, 2008, we received an additional $15,000 from Dr. C.W.
Gilluly, our Chairman of the Board, President and Chief Executive
Officer.  This note has an interest rate of 12% per annum, is
unsecured and has a due date of December 31, 2008.  As of June 30,
2008, accrued interest payable totaled $40 and is due at
maturity.  Accrued interest is included in the notes payable, related
parties balance.





Investment
in Common Stock, related party





On
September 25, 2006, the Company exchanged its equity investment in Comtex common
stock and the Note Receivable from Comtex of $856,954 for 55,209 shares of the
AMASYS Series A Preferred Stock.  Therefore, at June 30, 2008, the
Company no longer had an equity interest in either the common stock of Comtex or
the Note from Comtex.  However, at June 30, 2006, the Company had a
16% ownership interest in Comtex.  The following information presents
condensed balance sheet information as of June 30, 2006 and condensed income
statement information for the year ended June 30, 2006:





June
      30,2006
              (audited)Current
      assets
            
            $
            2,753,365Other
      assets
            
            
            215,299Current
      liabilities
            
            
            1,379,127Long-term
      liabilities
            
            
            858,968Revenues
            
            $
            7,676,524Gross
      profit
            
            
            4,001,153Net
      income (loss)
            
            
            (458,107
            )





-
22 -


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 include
outstanding interest of approximately $254,000 into the principal amount of the
note receivable, which was due July 1, 2002.  The note bore interest
at 10% and was collateralized by a continuing interest in all receivables,
purchase orders, and all patents and technology then or thereafter 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 was convertible at a price of $1.00
per share, which price increased 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 would reach $1.20 per share.  This was to be
the final increase before the Note matured on 1 July 2008.  At the
date of the amendment, the conversion price of the Amended Note was in excess of
the stock price.  In September 2006, the Company exchanged its
ownership interest in the Note for Preferred Stock of the
Company.  However, as of June 30, 2006 and just prior to the exchange,
the Amended Note had a principal balance of $856,954.  Interest paid
to AMASYS totaled approximately $-0- $21,424 and $86,000 for the years 2008,
2007 and 2006.  At June 30, 2006, the Company recognized losses in
excess of basis of the investment in Comtex stock as an adjustment to the basis
of the Note of $14,191.





Quarter
      Ended (UNAUDITED)September
      30,
              2005
            
            
            December
      31,
              2005
            
            
            March
      31,
              2006
            
            
            June
      30,
              2006Beginning
      balance Note Receivable-Related Party
            
            $
            856,954
            
            
            $
            856,954
            
            
            $
            856,954
            
            
            $
            856,954Equity
      in (earnings) losses allocated to the Note basis
            
            $
            0
            
            
            $
            0
            
            
            $
            0
            
            
            $
            (14,191
            )EITF
      98-10 Adjustment
            
            $
            0
            
            
            $
            0
            
            
            $
            0
            
            
            $
            0Discount
      on Note Receivable
            
            $
            (239,622
            )
            
            $
            (216,557
            )
            
            $
            (193,492
            )
            
            $
            (170,427
            )Ending
      balance of Note Receivable-Related Party
            
            $
            617,332
            
            
            $
            640,397
            
            
            $
            663,462
            
            
            $
            672,336





Since
Comtex had experienced prior year losses, the Company evaluated the Note for
collectibility.  As a result, the Company evaluated whether or not
there was 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 $672,336.  Since the fair value of
the collateral exceeded the carrying value of the Note, the Company did not
record an impairment charge at June 30, 2006.





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 represented a discount on the Amended Note, which
the Company was accreting into earnings over the life of the Amended Note under
the effective interest method.  For the years ended June 30, 2008 and
2007, and for the period from October 1, 2006 through June 30, 2008, the Company
recognized interest income of $-0-, $43,409, and $1, respectively, which
included $-0-, $21,949, and $-0-, respectively, related to accretion of the
discount.  The effective interest rate on the Amended Note was
21%.







-
23 -


Note
4 - Income Taxes









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









Year
      ended June 30,2008
            
            
            2007Tax
      benefit (expense) at statutory rate
            
            $
            16,000      
            34
            %
            
            $
            140,000          
      34
            %Reconciling
      items:State
      income taxes
            
            
            2,000              
      4
            %
            
            
            16,000            
       4
            %Expiration
      of NOL’s and other
            
            
            (56,500)        (118)
            %
            
            
            (166,100)            
      --Valuation
      allowance
            
            
            38,500              
      80
            %
            
            
            10,000           (38)
            %Effective
      tax rate
            
            $
            0              
      0.0
            %
            
            $
            0            
      0.0
            %







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, 2008 and 2007 are as follows:









June
      30,
              2008
            
            
            June
      30,
              2007Deferred
      tax assets:Net
      operating losses carryforwards
            
            $
            432,688
            
            
            $
            471,188Discount
      on note receivable- related party
            
            
            -0-
            
            
            
            -0-Equity
      method reporting
            
            
            -0-
            
            
            
            -0-Total
      deferred tax assets
            
            
            432,688
            
            
            
            471,188Deferred
      tax liabilities:
            
            
            ---0-Derivative
      asset
            
            
            -0-
            
            
            
            -0-Total
      deferred tax liabilities
            
            
            (-0-
            )
            
            
            (-0-
            )Net
      deferred tax asset
            
            
            432,688
            
            
            
            471,188Valuation
      allowance
            
            
            (432,688
            )
            
            
            (471,188
            )Deferred
      tax asset, net
            
            $
            —
            
            
            $
            —







A
reconciliation of net loss per books with net loss per return is as
follows:





June
      30,2008
            
            
            2007Net
      loss, per books
            
            $
            (48,186
            )
            
            $
            (409,980
            )Income
      subject to tax not recorded on the books:Non
      deductible items
            
            
            --
            
            
            
            100Gain
      on sale of short-term investment
            
            
            --
            
            
            
            15,299(Income)
      expense recorded on the books not included on the return:Amortization
      of discount on note receivable – related party
            
            
            --
            
            
            
            (21,949
            )Equity
      in losses (earnings) of Comtex
            
            
            --
            
            
            
            (9,127
            )(Gain)
      loss on derivative asset
            
            
            --
            
            
            
            377,059Net
      loss, per return
            
            $
            (48,186
            )
            
            $
            (48,598
            )





Income
      tax expense, per return
            
            $
            - 0
      -
            
            
            $
            - 0
      -Available
      net operating loss (NOL) carryover from prior tax years
            
            
            1,241,275
            
            
            
            1,329,574NOL
      generated
            
            
            48,186
            
            
            
            48,598Total
      NOL carryover to future years
            
            
            1,289,461
            
            
            
            1,378,172NOL
      expiring
            
            
            155,051
            
            
            
            136,897NOL
      available to future years
            
            $
            1,134,410
            
            
            $
            1,241,275







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, 2008.  The net change
in the valuation allowance during 2008 was a decrease of $38,500, due primarily
to the expiration of net operating loss carryovers.




As of
June 30, 2008 we had net operating loss carryforwards for federal income tax
purposes of approximately $1.1 million, which will expire through
2027.  Utilization of these net operating losses may be subject to
limitations under IRC Section 382, in the event of significant changes in our
stock ownership.  To the extent that we are able to utilize available
tax loss carryforwards that arose from operations in tax years prior to June 21,
1996, any benefit realized will be credited to additional paid in
capital.




-
24 -




Note
5 – Stockholders’ Equity




We had no
issuances of common stock or preferred stock during the year ended June 30,
2008.




Preferred
Stock





The
Company is authorized to issue 1,000,000 shares of preferred stock, of which
196,000 shares had been designated as Series A Preferred Stock (the “Preferred
Stock”) and were issued and outstanding at June 30, 2006.  The
Preferred Stock was originally issued to Pension Benefit Guaranty Corporation
(PBGC) in connection with the Assignment and Assumption
Agreement.  The Preferred Stock was 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 were 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 were 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
had been declared.  The holders of the Preferred Stock were 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 had 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, 2006, the
aggregate cumulative preferred dividends were $980,000.




On
September 25, 2006 AMASYS executed agreements 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 has issued and outstanding any
Series A Preferred Stock.




Note
6 - Stock Options




We
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 provided for grants of incentive stock options to
eligible employees, officers, and Directors of the Company.  Eligible
employees were 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 could
not exceed 10 years and the stock options granted were vested
immediately.




On
November 15, 2006, C.W. Gilluly, the president of the Company, exercised his
options to purchase 350,000 shares of common stock (out of a total of 900,000
options outstanding) and the Company issued 350,000 restricted shares to
him.  The remaining 550,000 options expired on November 16,
2006.





Information
with respect to stock options under the Plan is as follows:







2008
            
            
            2007Shares
            
            
            Price
            
            
            Total
            
            
            Shares
            
            
            Price
            
            
            TotalOutstanding,
      beginning of year
            
            
            -
            
            
            $
            -
            
            
            $
            -
            
            
            
            900,000
            
            
            $
            0.01
            
            
            $
            9,000Granted
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            0.01
            
            
            
            -Expired
      / Cancelled
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (550,000)
            
            
            
            0.01
            
            
            
            (5,500)Exercised
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (350,000)
            
            
            
            0.01
            
            
            
            (3,500)Outstanding,
      end of year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            0.01
            
            
            $
            --Exercisable
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            -





There
were no stock options outstanding at June 30, 2008 and 2007.





Note
7 - Stock Warrants





During
the year ended June 30, 2007, we issued two (2) warrants as part of an incentive
for two notes payable, related parties.  The warrants are for the
purchase of 2,000,000 shares of restricted common stock at an exercise price of
$.01.  The warrants have a fair market value of $-0- using the Black
Scholes method of calculation and the warrants expire in 2017.We did not issue
any warrants for the year ended June 30, 2008.








Note
8 – Commitments and Contingencies





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.  To date the transaction has not been
completed.  WMC is managed by Private Capital Group, L.L.C., a
significant shareholder of the Company.


-
25 -


Note
9 - Selected Quarterly Financial Information (Unaudited)







The
following is a summary of the quarterly results of operations for the years
ended June 30, 2008 and 2007.







Quarter
      EndedSeptember
      30, 2007
            
            
            December
      31, 2007
            
            
            March
      31, 2008
            
            
            June
      30,
              2008General
      and administrative expenses
            
            $
            20,126
            
            
            $
            11,856
            
            
            $
            8,511
            
            
            $
            4,263Other
      (expense) income
            
            
            (540
            )
            
            
            (695
            )
            
            
            (1,059
            )
            
            
            (1,136
            )Net
      loss applicable to common shareholders
            
            
            (20,666
            )
            
            
            (12,551
            )
            
            
            (9,570
            )
            
            
            (5,399
            )Net
      loss per share:Basic
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )Diluted
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )Weighted
      average
              number
      of shares:Basic
            
            
            6,669,210
            
            
            
            6,669,210
            
            
            
            6,669,210
            
            
            
            6,669,210Diluted
            
            
            6,669,210
            
            
            
            6,669,210
            
            
            
            6,669,210
            
            
            
            6,669,210


-
26 -





Quarter
      EndedSeptember
      30, 2006
            
            
            December
      31, 2006
            
            
            March
      31, 2007
            
            
            June
      30,
              2007General
      and administrative expenses
            
            $
            53,410
            
            
            $
            15,509
            
            
            $
            13,893
            
            
            $
            9,550Other
      (expense) income
            
            
            (330,352
            )
            
            
            12,734
            
            
            
            -0-
            
            
            
            -0-Net
      loss applicable to common shareholders’
            
            
            (383,762
            )
            
            
            (2,775
            )
            
            
            (13,893
            )
            
            
            (9,550
            )Net
      loss per share:Basic
            
            $
            (0.09
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )Diluted
            
            $
            (0.09
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )
            
            $
            (0.00
            )Weighted
      average
              number
      of shares:Basic
            
            
            4,319,210
            
            
            
            4,494,211
            
            
            
            4,669,210
            
            
            
            4,669,210Diluted
            
            
            4,319,210
            
            
            
            4,494,211
            
            
            
            4,669,210
            
            
            
            4,669,210







Note
10 – Subsequent Events





On September 16, 2008, we executed a
$25,000 note with C.W. Gilluly, pursuant to which C.W. Gilluly advanced us
$25,000 at a rate of 12% per annum.





-
27 -







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




Not
Applicable.




Item
9A(T).  Controls and Procedures.




(a)
Evaluation of Disclosure Controls and Procedures




The
Company’s management, with the participation of its President and Chief
Executive Officer, who is its principal executive officer, completed an
evaluation of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) as of the end of the period covered by this Form
10-K.  Disclosure controls and procedures are designed to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified by the SEC rules and forms, and that such
information is accumulated and communicated to management, including the
President and Chief Executive Officer, as appropriate, to allow timely
decisions regarding required disclosures.  Based on that evaluation,
the Company’s President and Chief Executive Officer concluded that the Company’s
disclosure controls and procedures, as of the end of the fiscal year covered by this Form 10-K, were
effective.




(b)
Management’s Annual Report on Internal Control over Financial
Reporting




The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act and for assessing the effectiveness of internal
control over financial reporting.




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




Management
has assessed the effectiveness of the Company’s internal control over financial
reporting as of June 30, 2008.  In making its assessment of internal
control over financial reporting, management used the criteria established in
Internal Control — Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission.  This assessment
included an evaluation of the design of the Company’s internal control over
financial reporting and testing of the operational effectiveness of those
controls.  Based on the results of this assessment, management has
concluded that the Company’s internal control over financial reporting was
effective as of June 30, 2008.




This
Annual Report on Form 10-K does not include an attestation report of the
Company’s registered public accounting firm regarding internal control over
financial reporting.  Management’s report was not subject to
attestation by the Company’s registered public accounting firm pursuant to rules
of the SEC that permit the Company to provide only management’s report in this
Annual Report on Form 10-K.




(c)
Changes in Internal Control over Financial Reporting




There
were no changes in the Company’s internal control over financial reporting that
occurred during the fourth quarter of the year ended June 30, 2008 that have
materially affected, or that are reasonably likely to materially affect, the
Company’s internal control over financial reporting.




Item
9B.  Other Information.




None.






-
28 -







PART
III




Item
10.  Directors, Executive Officers and Corporate
Governance.







Directors







The following table contains
information as of June 30, 2008 as to each Director of the Company:






Director


Name
            Since
            Age
            Office
      HeldC.W. Gilluly,
      Ed.D.
            1992
            62
            Chairman of
      the Board, President and Chief Executive OfficerRobert J.
      Lynch, Jr. (1, 2)
            1992
            75
            DirectorThomas E.
      McMahan (1, 2)
            1992
            65
            Director




(1)
            Member
      of the Audit Committee.


(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
Chairman of the Board 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 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-seven 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, 2008, 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 (53) 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.




-
29 -


Certain Legal
Proceedings




No
director, nominee for director, or executive officer of the Company has appeared
as a party in any legal proceeding material to an evaluation of his ability or
integrity during the past five years.





Section
16(a) Beneficial Ownership Reporting Compliance.





Section 16(a)
of the Exchange Act requires the Company's directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company's equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company's securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on the Company's review of the copies of the forms
received by it during the fiscal year ended June 30, 2008 and representations
that no other reports were required, the Company believes that no persons who,
at any time during such fiscal year, was a director, officer or beneficial owner
of more than 10% of the Company's common stock failed to comply with all
Section 16(a) filing requirements during such fiscal year.




Code
of Ethics




We have
not adopted a Code of Business Conduct and Ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions because we are not a member
of any exchange that would require such a code.




Nominating
Committee




We have
not adopted any procedures by which security holders may recommend nominees to
our Board of Directors.




Audit
Committee




Our Board
of Directors acts as our audit committee. Robert Lynch has been designated as
our qualified financial expert.





Item
11.  Executive Compensation





Summary
Compensation Table





The
following table sets forth information concerning all compensation paid or
accrued by us to our President and Chief Executive Officer, during the fiscal
year ended June 30, 2008.  Neither Dr. Gilluly nor any other officer
receives compensation in excess of $100,000 per year.





Annual
      Compensation
            
            Long-Term
              Compensation
      AwardsName
      and
              Principal Position
            Fiscal
              Year
            Salary
            Bonus
            
            Stock
      Options
              Granted
            All
      Other
              CompensationC.W.
      Gilluly (1)
              Chairman
            2008
              2007
              2006
            —
              $12,000
              $36,000
            —
              —
              —
            
            —
              —
              —
            —
              $487
              $6,805





(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, 2008.  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.  On November 15, 2006, Dr. Gilluly exercised his options to
purchase 350,000 restricted shares (out of a total of 900,000 options) and the
Company issued 350,000 restricted shares to him.  The remaining
550,000 options expired on November 16,
2006.





-
30 -




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,
2008.





Fiscal Year-End Option Values (1)


Name
            Shares
              Acquired
      upon
              Exercise
      of
              Options
            Value
      Realized
              From
      Exercise
              Of
      Options
            Number
      of Shares
              Underlying
      Unexercised
              Options
      at June 30, 2007
              Exercisable          Unexercisable
            Value
      of Unexercised
              In-the-Money
      Options
              at
      June 30, 2007
              Exercisable           UnexercisableC.W.
      Gilluly
            —
            —
            —                      —
            $—                           $—





(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; however, there can be no assurance that this
      is an accurate reflection of the market
value.







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 provided 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.  The Plan expired on November 16, 2006.





Compensation
of Directors





The Company pays non-employee members
of the Board $1,000 per quarter, $500 per board meeting, and $250 per audit
committee meeting, plus travel expenses incurred in connection with attendance
at Board meetings.  During fiscal year 2008, each of the Company’s
non-employee Directors received compensation as shown below for services
rendered to the Company.





Director
Compensation





Name
            Fees
      earned or paid in cash
              ($)(1)
            Stock
      awards
              ($)
            Option
      awards
              ($)
            Non-equity
      incentive plan compensation ($)
            Nonqualified
      deferred compensation earnings
              ($)
            All
      other compensation  ($)
            Total
              ($)Robert
      J. Lynch, Jr.
            $4,250
            --
            --
            ---
            ---
            ---
            $4,250Thomas
      E. McMahan
            $4,250
            --
            --
            ---
            ---
            ---
            $4,250





Fees
earned or paid in cash represents annual fees, annual retainer and committee
fees paid to Directors.








-
31 -


Employment
Agreements





We have 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, 2008, Dr. Gilluly
received payment of $-0- as compensation for his services as President and Chief
Executive Officer of the Company.





Submitted by the Compensation
Committee









Robert J.
Lynch, Jr.


Thomas E.
McMahan





Compensation
Committee Interlocks and Insider Participation





None




Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters





The
following table sets forth information as of June 30, 2007, 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 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
              Beneficial Owner
            Amount
      and Nature of
              Beneficial Ownership
            Percentage
              of Class (1)Tepco
      Ltd.
              The
      Continental Building
              25
      Church Street,
              Hamilton
      HM 12, Bermuda
            2,069,080
            23.87%Private
      Capital Group, LLC
              Two
      Grand Central Tower
              140
      E. 45th
      Street, Suite 15C
              New
      York, NY 10017
            2,000,000
            23.07C.W.
      Gilluly, Chairman and CEO
            2,427,048
            28.0Robert
      J. Lynch, Jr., Director
            6,245
      (2)
            *Thomas
      E. McMahan, Director
            27,043
            *Joshua
      Angel
              c/o
      Herrick, Feinstein LLP
              2
      Park Avenue
              New
      York, NY 10016
            191,578
            2.21Bruce
      Frankel Estate
              c/o
      Cole, Schotz PA
              900
      Third Ave, 16th
      Floor
              New
      York, NY 10022
            128,901
            1.49All
      Directors and Executive Officers as a group (4 persons)
            2,460,991
            28.39


* Less
than 1%





(1)
            Beneficial
      ownership is direct unless otherwise indicated and includes warrants 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
      warrants held by Directors and executive officers that are exercisable
      within 60 days.





(2)
            Includes
      245 shares held by Mr. Lynch’s
wife.




-
32 -


Item
13.   Certain Relationships and Related Transactions, and Director
Independence.





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




Item
14.  Principal Accountant Fees and Services




Audit
Fees




During
the fiscal year ended June 30, 2008 and 2007 , we paid our principal accountant
approximately $25,000 and $9,000, respectively for the services they performed
throughout those years, including in connection with audit work performed in the
preparation of our financial statements included in our Annual Report on Form
10-K.




Tax
Fees




During
2008, our principal accountant did not render services to us for tax compliance,
tax advice and tax planning.




All
Other Fees




During
2008, there were no fees billed for products and services provided by the
principal accountant other than those set forth above.




Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-audit Services of
Independent Auditors




Consistent
with SEC policies regarding auditor independence, the Audit Committee has
responsibility for appointing, setting compensation and overseeing the work of
the independent auditor.  In recognition of this responsibility, the
Audit Committee has established a policy to pre-approve all audit and
permissible non-audit services provided by the independent auditor.




1. Audit
services include audit work performed in the preparation of financial
statements, as well as work that generally only the independent auditor can
reasonably be expected to provide, including comfort letters, statutory audits,
and attest services and consultation regarding financial accounting and/or
reporting standards.




2. Audit-Related
services are for assurance and related services that are reasonably related to
the audit or review of our financial statements.




3. Tax
services include all services performed by the independent auditor’s tax
personnel except those services specifically related to the audit of the
financial statements, and includes fees in the areas of tax compliance, tax
planning, and tax advice.




4. Other Fees
are those associated with products or services not captured in the other
categories.




-
33 -





PART
IV




Item
15.  Exhibits and Financial Statement Schedules.




(a)
            The
      following documents are filed as a part of this
  Report:




1.
            Financial
      Statements. The following financial statements of
      AMASYS Corporation are included in
Item 8:




Report of
Independent Registered Public Accounting Firm.




Balance
Sheets as of June 30, 2008 and 2007.




Statements
of Operations for the year ended June 30, 2008, for the year ended June 30, 2007
and for the period October 1, 2006 (date of entering Development Stage) through
June 30, 2008.




Statements
of Stockholders’ Equity (Deficit) for the year ended June 30, 2008, for the year
ended June 30, 2007 and for the period October 1, 2006 (date of entering
Development Stage) through June 30, 2008.




Statements
of Cash Flows for the year ended June 30, 2008, for the year ended June 30, 2007
and for the period October 1,2006 (date of entering Development Stage) through
June 30, 2008.




Notes to
Financial Statements.









2.
            Financial
      Statement Schedule(s):




All
schedules are omitted for the reason that the information is included in the
financial statements or the notes thereto or that they are not required or are
not applicable.




3.
            Exhibits:







Number
            Description1.1
            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).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
  2002.32.1
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.











-
34 -


SIGNATURES




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





AMASYS
      CORPORATIONDate:
      November 7, 2008By:  /s/ C.W. GILLULYC.W.
      GillulyPresident and Chief Executive
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                      November
7, 2008


C.W.
Gilluly,
Ed.D.                           and Director





/s/ Robert J. Lynch,
Jr.                    Director                        November
7, 2008


Robert J.
Lynch, Jr.





/s/ Thomas E.
McMahan                Director                        November
7, 2008


Thomas E.
McMahan


-
35 -