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

                                   FORM 10-KSB
(Mark One)


 X   Annual Report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
---  Act of 1934 For the fiscal year ended June 30, 2004; or

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

Commission file number  0-21555

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

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

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

Issuer's telephone number, including area code: (703) 797-8026
                                                ----------------

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

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

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

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

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


The Company knows of no trading in its Common Stock since its inception. As of
June 30, 2004, there were 1,775,880 shares of stock held by non-affiliates.

As of June 30, 2004, 2,207,350 shares of the Common Stock of the Registrant were
outstanding.

<PAGE>

                                     PART I

Item 1.  Business

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

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

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

Overview
--------

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


                                       2
<PAGE>


addition to its 16% equity ownership of Comtex, the Company also holds a note
receivable in the amount of $856,954 from Comtex (the "Note"). The carrying
value of the Note, net of a $354,947 discount is $426,720. As of June 30, 2004,
the Company has recognized losses in excess of basis as an adjustment to the
basis of the Note of $75,287. The Company also owns 95,239 shares of common
stock of publicly-held Analex, a defense contractor specializing in developing
innovative technical intelligence and biodefense solutions in support of U.S.
national security. As of June 30, 2004, Analex had 15,292,512 shares of common
stock outstanding. The Company believes that, by virtue of an exemption to the
Investment Company Act of 1940 ("1940 Act"), the Company should not be deemed to
be an "investment company" and, accordingly, should not be required to register
as such. The rules and interpretations of the SEC and the courts relating to the
1940 Act and to its exemptions are highly complex and uncertain in numerous
aspects. As a result, no assurance can be given that the Company will not be
deemed an "investment company" for purposes of the 1940 Act and be required to
register as an investment company, in which case the Company could be subject to
legal actions by regulatory authorities and others and could be forced to
suspend or terminate operations. The costs of defending any such action could
constitute a material part of the Company's assets.

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

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

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

         Comtex relies heavily on third-party information sources for the
content of its product offerings. Interruption in, or the termination of,
service from a significant number of its information sources would affect
Comtex's ability to offer products or maintain product quality. Accordingly, the
failure or inability to restore or replace such interrupted or terminated
services could have an adverse effect on Comtex's revenues.

         Comtex also relies heavily on third party providers for
telecommunications, electrical power, internet connectivity, and related or

                                       3
<PAGE>


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

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

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

         The Company owns 95,239 shares of the common stock of Analex (SEC File
No. 0-5404), which trades on the American Stock Exchange under the symbol ANLX.
Analex specializes in developing intelligence, systems engineering and
biodefense solutions in support of national security. Analex focuses on
designing, developing and testing aerospace products and systems; developing
innovative technical solutions for the intelligence community; developing
medical defenses and treatments for infectious agents used in biological warfare
and terrorism; and analyzing and supporting defense systems.

Employees
---------

         At June 30, 2004, the Company used the services of two consultants,
both of whom serve as officers of the Company. The Company has no employees.

Relationship With The Pension Benefit Guaranty Corporation ("PBGC")

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

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

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

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

                                       4
<PAGE>


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

Item 2.  Properties

         The Company owns no real estate. The Company leases certain space from
Comtex on a month-to-month basis. During fiscal 2004, the Company incurred
$3,600 to Comtex for the pro rata portion of its office and administrative
expenses to Comtex for its use of the facilities at 625 N. Washington Street,
Alexandria, Virginia.

Item 3.  Legal Proceedings

         AMASYS has no outstanding, material legal proceedings.

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

         None.


<PAGE>


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

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

         The approximate number of holders of record of the Company's Common
Stock as of June 30, 2004 was 669.

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

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

         Set forth below is certain information as of June 30, 2004 regarding
equity compensation to directors and executive officers of the Company that has
been approved by stockholders.

<TABLE>
<CAPTION>

====================================================================================================================
                               Number of securities to be
                                issued upon exercise of                                    Number of securities
  Equity compensation plans     outstanding options and         Weighted average         remaining available for
  approved by stockholders               rights                  exercise price            issuance under plan
--------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                             <C>                         <C>
     Stock Option Plan.....           900,000 (1)                     $0.01                       50,000
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
       Total.............             900,000                       $0.01                       50,000
====================================================================================================================
<FN>
 ___________________
(1)  Options to purchase  50,000  shares of common stock  expired  during fiscal
     year 2003 pursuant to their terms.
</FN>
</TABLE>

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

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

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

                                       6

<PAGE>

Critical Accounting Policies

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

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

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

        We have a Note from Comtex. In August 2001, the Note was amended to
include a provision that allows us to convert all or a portion of the
outstanding principal amount, plus accrued interest, into common stock of
Comtex. In accordance with SFAS 133, we have accounted for this conversion
option as an embedded derivative. As a result, the conversion option is being
carried at fair value determined using a Black-Scholes model with changes in the
fair value being recognized currently in earnings. As of June 30, 2004, the
balance of the derivative asset was $128,543 and for the fiscal year ended June
30, 2004, we recognized other expense of $3,895 due to the decline in value of
this derivative.

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

        At June 30, 2004 and 2003, we had a 16% ownership interest in Comtex.
Since we have the ability to significantly influence the operations of Comtex,
we account for our investment in Comtex under the equity method of accounting.
We can significantly influence the operations of Comtex since (i) if we
converted our note receivable-related party into shares of Comtex, we would have
a 22% ownership interest in Comtex, (ii) the Company as well as our Chairman and
CEO are Comtex's largest individual shareholders, (iii) the Company and our
Chairman and CEO have a combined ownership interest in Comtex of 32%, and (iv)
our Chairman is the Chairman of the Board and interim Chief Executive Officer of
Comtex. During the years ended June 30, 2004 and 2003, we recognized losses of
$216,350 and $217,682 for our share of Comtex losses, respectively.

        As of June 30, 2004, the basis of our investment in Comtex has been
reduced to $0 through the recognition of the Company's share of Comtex's losses.
Losses in excess of the investment basis adjust the basis of the Note, in
accordance with EITF 98-13, Accounting by an Equity Method Investor for Investee
Losses When the Investor Has Loans to and Investments in Other Securities of the
Investee. As of June 30, 2004, the Company has recognized losses in excess of
basis as an adjustment to the basis of the Note of $75,287.

                                       7
<PAGE>

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

        Statement of Financial Accounting Standards No. 114, Accounting by
Creditors for Impairment of a Loan ("SFAS 114"), suggests that when certain
indicators are present, a loan should be evaluated for collectibility. Since
Comtex has been experiencing financial difficulties, we evaluated the Note for
collectibility. As a result, we evaluated whether or not there is an impairment
loss by comparing the fair value of the collateral (including cash and security
interest in the accounts receivable of Comtex) to the carrying value of the Note
of $426,720. We believe that since the fair value of our collateral exceeds the
carrying value of the Note, we did not record an impairment charge at June 30,
2004.

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, 2004 to the fiscal year ended June
--------------------------------------------------------------------------------
30, 2003
--------

        The Company had a net loss of $218,802 in fiscal year 2004 compared to a
net loss of $156,144 in fiscal year 2003. The decrease is explained below.

        Operating costs and expenses. Operating costs and expenses increased
$122,307 to $246,437 in fiscal year 2004 due to an increase in auditing and
accounting related fees as a result of the restatement of the financial
statements for the year ended June 30, 2002 and the nine months ended March 31,
2003.

        Other income (expense): Other income (expense) increased $59,649 from
other expense of $32,014 in fiscal year 2003 to other income of $27,635 in
fiscal year 2004. Interest income decreased $53,589 principally due to a
decrease in the accretion of the discount on the Note using the effective
interest method. The gain on the sale of short-term investment increased $28,400
due to increased sales of shares of Analex in 2004 compared to 2003. During
fiscal year 2004, our equity in losses of Comtex decreased $1,332, which was
principally due to a decrease in net losses of Comtex during fiscal year 2004.
During fiscal year 2004, the loss on derivative asset decreased $83,256, which
was due to a greater number of shares into which the note receivable can be
converted.


                                       8
<PAGE>

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

        The Company had net working capital of $330,107 at June 30, 2004. The
Company has had minimal operating activity since commencing operations in 1996
and has not had any other uses of funds. Accordingly, the Company has not
required any funding sources. The Company expects to meet its short-term
obligations through payments of interest from the Note and from the sales of
equity interests in Analex.

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

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

Item 7.  Financial Statements

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

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

         None.

Item 8A. Controls and Procedures

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

         Prior to and during this evaluation, certain deficiencies in internal
controls were noted. The Company initiated corrective measures, including
researching accounting matters which resulted in the restatement described
elsewhere in this Form 10-KSB, and increasing reliance on the Company's outside
bookkeeper to assist in recording, processing and summarizing financial data on
a timely basis. Subsequent to the date of the evaluation, there were no
significant changes made in our internal controls during the period covered by


                                       9
<PAGE>

this report or, to our knowledge, in other factors that could significantly
affect these controls, including any corrective actions with regard to
significant deficiencies.

Item 8B. Other Information

        None.







                                       10
<PAGE>


                                    PART III

Item 9.  Directors and Executive Officers of the Registrant; Compliance with
         Section 16(a) of the Exchange Act.

Directors

        The following table contains information as of June 30, 2004 as to each
Director of the Company:

<TABLE>
<CAPTION>

                                                       Director        Office Held
Name                                    Since          Age             with the Company
----                                    -----          ---             ----------------

<S>                                     <C>            <C>             <C>
C.W. Gilluly, Ed.D.                     1992           58              Chairman of the Board, President
                                                                       and Chief Executive Officer

Robert F. Delaney (1,2)                 1992           79              Director

Robert J. Lynch, Jr. (1,2)              1992           71              Director

Thomas E. McMahan (1,2)                 1992           61              Director

<FN>
(1)  Member of the Audit Committee
(2)  Member of the Compensation Committee
</FN>

</TABLE>

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

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

        Robert J. Lynch, Jr. is the President of American & Foreign Enterprises,
Inc., a private corporation managing U.S. and international investments in
industrial and real estate opportunities, for whom he has worked for thirty-six


                                       11
<PAGE>

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, 2004, 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 (50) was appointed Corporate Secretary and Treasurer of
the Company in October 1996. Ms. Gordon also serves as the Corporate Secretary
of Comtex, a position she has held since May 1996. Ms. Gordon has been the
President of S.A. Gordon Enterprises, Inc., a financial relations and marketing
communications firm, since 1985. Ms. Gordon also served in senior management
positions, the most recent of which was Executive Vice President of Analex, an
information technology company serving the intelligence community, from June
1991 through August 2000.

Section 16(A) Beneficial Ownership Reporting Compliance

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

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



                                       12
<PAGE>


Item 10. Executive Compensation

Summary Compensation Table

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

<TABLE>
<CAPTION>

                                                                                        Long-Term
                                          Annual Compensation                      Compensation Awards
Name and                   Fiscal                                         Stock Options            All Other
Principal Position          Year         Salary          Bonus               Granted             Compensation
------------------          ----         ------          -----               -------             ------------
<S>                         <C>          <C>             <C>                   <C>                  <C>
C.W. Gilluly (1)            2004         $15,000           -                    -                   $6,805
Chairman                    2003            -              -                    -                   $6,805
                            2002            -              -                    -                   $6,805

<FN>
____________________
(1)  Dr. Gilluly did not receive any salary from 1992 through fiscal 2003. In
     1996, he received a grant of stock options, described below. In fiscal
     years 2003 and 2002, the only compensation Dr. Gilluly received was $6,805,
     paid by the Company for premiums on life insurance and disability policies.
</FN>
</TABLE>

Stock Option Grants

         No stock options were granted during the fiscal year ended June 30,
2004. In accordance with the Company's Stock Option Plan, Dr. Gilluly received a
grant of 350,000 options in November 1996, at an exercise price of $0.01 per
share. He has not received any further grants.

Options Exercised and Year-End Option Values

         The following table sets forth certain information regarding the value
of unexercised options held by the named executive officer as of June 30, 2004.

                        Fiscal Year-End Option Values (1)
<TABLE>
<CAPTION>

                Shares                                Number of Shares          Value of Unexercised
             Acquired Upon     Value Realized     Underlying Unexercised        In-the-Money Options
              Exercise of       From Exercise    Options at June 30, 2004         at June 30, 2004
Name            Options          of Options     Exercisable  Unexercisable   Exercisable  Unexercisable
----            -------          ----------     -----------  -------------   -----------  -------------

<S>               <C>                <C>           <C>              <C>          <C>            <C>
C.W. Gilluly       -                  -            350,000          -            $-             -

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


                                       13
<PAGE>

Stock Option Plan

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

        The Company pays non-employee members of the Board $625 per board
meeting, plus travel expenses incurred in connection with attendance at Board
meetings. During fiscal year 2004, each of the Company's non-employee Directors
received compensation of $2,500 for services rendered to the Company.

Employment Agreements

        The Company has no employment agreements.

             Compensation Committee Report on Executive Compensation

Compensation for the President and Chief Executive Officer

        The Committee reports that during the fiscal year ended June 30, 2004,
Dr. Gilluly received payment of $15,000 as compensation for his services as
President and Chief Executive Officer of the Company.

                                        Submitted by the Compensation Committee

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

Compensation Committee Interlocks and Insider Participation

        None

Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

        The following table sets forth information as of June 30, 2004,
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


                                       14
<PAGE>

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.

<TABLE>
<CAPTION>

Name and Address of                                    Amount and Nature of                 Percentage
 Beneficial Owner                                      Beneficial Ownership                of Class (1)
-------------------                                    --------------------                ------------

<S>                                                        <C>                                <C>
Pension Benefit Guaranty Corporation                       1,960,000(2)                        47.0%
1200 K Street, N.W.
Washington, D.C. 20005-4026

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

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

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

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

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


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

S. Amber Gordon                                              300,655 (6)                        12.0

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

<FN>
________________________
(1)  Each percentage of beneficial ownership is calculated using a different
     denominator, consisting of the total number of shares outstanding
     (2,207,350), increased by the number of options owned by the beneficial
     owner that are exercisable within 60 days. The percentage of beneficial
     ownership of all Directors and executive officers as a group is based on
     the sum of the total number of shares outstanding and all outstanding
     options held by Directors and executive officers that are exercisable
     within 60 days.
(2)  Includes 1,960,000 shares which may be acquired upon the conversion of
     AMASYS Preferred Shares held by the PBGC.
(3)  Includes 350,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.
(4)  Includes 50,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.
(5)  Includes 245 shares held by Mr. Lynch's wife.
(6)  Includes 300,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.
(7)  Includes 800,000 shares which may be acquired upon the exercise of vested
     options granted under the AMASYS Corporation Stock Option Plan.

</FN>
</TABLE>

                                       15

<PAGE>

Item 12. Certain Relationships and Related Transactions

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










                                       16
<PAGE>


                                     PART IV

Item 13.  Exhibits and Reports on Form 8-K

        (a) 1.  Financial Statements

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

                  Report of Independent Registered Public Accounting
                  Firm (Ernst & Young LLP)                                  F-2

                  Balance Sheet at June 30, 2004                            F-3

                  Statements of Operations for the fiscal
                  years ended June 30, 2004 and 2003                        F-4

                  Statements of Stockholders' Equity  (Deficit)
                  for the fiscal years ended June 30, 2004 and 2003         F-5

                  Statements of Cash Flows for the fiscal
                  years ended June 30, 2004 and 2003                        F-6

                  Notes to Financial Statements                             F-7

        2.  Financial Statement Schedules

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

        3.  Exhibits

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

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

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

                                       17
<PAGE>


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

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

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

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

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

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

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

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

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

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

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

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

                                       18
<PAGE>


                  (b).      Reports on Form 8-K

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

Item 14.  Principal Accountant Fees and Services

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

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

<TABLE>
<CAPTION>

                                                                                  Fiscal Years Ended June 30,
                                                                                   2004                  2003

<S>                                                                        <C>                   <C>
Audit Fees...........................................................      $          106,225    $          101,000
Audit-Related Fees...................................................                       --                     --
Tax Fees.............................................................                       --                     --
                                                                           -------------------    -------------------
All Other Fees.......................................................                       --                     --
                                                                           ===================    ===================
</TABLE>

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

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



                                       19
<PAGE>


                                   SIGNATURES


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

Date:  October 7, 2004


AMASYS CORPORATION


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



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

DIRECTORS:

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

/s/ C.W. Gilluly                    Chairman                  October 7, 2004
---------------------------
C.W. Gilluly, Ed.D.                 and Director

/s/ Robert F. Delaney               Director                  October 7, 2004
---------------------------
Robert F. Delaney

/s/ Robert J. Lynch, Jr.            Director                  October 7, 2004
---------------------------
Robert J. Lynch, Jr.

/s/ Thomas E. McMahan               Director                  October 7, 2004
---------------------------
Thomas E. McMahan


<PAGE>


             Report of Independent Registered Public Accounting Firm


Board of Directors
AMASYS Corporation

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

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

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





                                        /s/ Kaiser Scherer & Schlegel, PLLC
McLean, Virginia
October 5, 2004



                                      F-1
<PAGE>


             Report of Independent Registered Public Accounting Firm


Board of Directors
AMASYS Corporation

We have audited the accompanying statements of operations, stockholders' equity,
and cash flows for the year ended June 30, 2003. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations of AMASYS Corporation and its
cash flows for the year ended June 30, 2003, in conformity with U.S. generally
accepted accounting principles.




                                           /s/ Ernst & Young LLP

McLean, Virginia
October 24, 2003




                                      F-2
<PAGE>


                               AMASYS Corporation

                                  Balance Sheet

<TABLE>
<CAPTION>

                                                                                       June 30,
                                                                                       2004
                                                                                -------------------
Assets
Current assets:
<S>                                                                              <C>
    Cash and cash equivalents                                                    $        10,007
    Short-term investment                                                                328,575
                                                                                -------------------
Total current assets                                                                     338,582

Note receivable - related party, net of discount of
     $354,947 at June 30, 2004                                                           426,720
Derivative asset                                                                         128,543
                                                                                -------------------
Total assets                                                                      $      893,845
                                                                                ===================

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable and accrued expenses                                        $          8,475
                                                                                -------------------
Total current liabilities                                                                  8,475

Stockholders' equity
Preferred stock, $.01 par value; 1,000,000 shares authorized; 196,000 Series A
   shares issued and outstanding; liquidation value $1,960,000                             1,960
Common stock, $0.01 par value; 20,000,000 shares authorized; 2,207,350
   shares issued and outstanding                                                          22,073
Additional paid-in capital                                                               799,443
Accumulated other comprehensive income                                                   235,812
Retained earnings                                                                       (173,918)
                                                                                -------------------
Total stockholders' equity                                                               885,370
                                                                                -------------------

Total liabilities and stockholders' equity                                        $      893,845
                                                                                ===================
See accompanying notes.

</TABLE>


<PAGE>


                               AMASYS Corporation
                            Statements of Operations
<TABLE>
<CAPTION>

                                                                       Year Ended June 30,
                                                                    2004                  2003
                                                            --------------------- ---------------------

Operating costs and expenses:
<S>                                                          <C>                   <C>
  Professional services                                      $          220,992    $        95,949
  General and administrative                                             25,445             28,181
                                                            --------------------- ---------------------
Total operating costs and expenses                                      246,437            124,130


Other income (expense):
  Interest income                                                    177,955               231,544
  Equity in losses of Comtex                                        (216,350)             (217,682)
  Loss on derivative asset                                            (3,895)              (87,151)
  Gain on sale of short-term investment                               69,675                41,275
  Other income                                                           250                    --
Total other (expense) income                                          27,365               (32,014)
                                                            --------------------- ---------------------

Loss before income taxes                                            (218,802)             (156,144)
Provision for income taxes                                                --                     --
                                                            --------------------- ---------------------

Net loss                                                    $       (218,802)     $       (156,144)
                                                            ===================== =====================

Loss per share:
  Basic                                                     $        (0.14)            $    (0.12)
  Diluted                                                   $        (0.14)            $    (0.12)

Weighted average number of shares:
   Basic                                                         2,207,350              2,207,350
   Diluted                                                       2,207,350              2,207,350


See accompanying notes.
</TABLE>


                                      F-4
<PAGE>


                               AMASYS Corporation
                       Statements of Stockholders' Equity
                       Years Ended June 30, 2004 and 2003

<TABLE>
<CAPTION>

                                                                                      Accumulated
                                                                          Additional     Other       (Accumulated         Total
                                     Common Stock        Preferred Stock   Paid-In   Comprehensive      Deficit)       Stockholders'
                                     ------------        ---------------
                                   Shares     Amount     Shares   Amount   Capital      Income     Retained Earnings      Equity
                                   ------     ------     ------   ------   -------      ------     -----------------      ------

<S>                                <C>        <C>        <C>      <C>      <C>        <C>           <C>               <C>
Balance, June 30, 2002             2,207,350  $ 22,073   196,000  $ 1,960  $ 785,342  $ 248,492     $  201,028        $  1,258,895
 Increase in equity due to
  capital transactions of Comtex                                                 764                                           764
 Unrealized gain on
  short-term investment                                                                  24,378                             24,378
 Foreign currency translation
  adjustment                                                                                519                                519
 Net loss                                                                                             (156,144)           (156,144)
                                                                                                                      --------------
    Comprehensive loss                                                                                                    (131,247)
                                   -------------------------------------------------------------------------------------------------

Balance, June 30, 2003             2,207,350    22,073   196,000    1,960    786,106    273,389         44,884           1,128,412

 Increase in equity due to
  capital transactions of Comtex                                              13,337                                        13,337
 Unrealized loss on
  short-term investment                                                                 (37,577)                           (37,577)
 Net loss                                                                                             (218,802)           (218,802)
                                                                                                                      --------------
     Comprehensive loss                                                                                                   (256,379)
                                   -------------------------------------------------------------------------------------------------

Balance, June 30, 2004             2,207,350  $ 22,073   196,000  $ 1,960  $ 799,443  $ 235,812     $ (173,918)       $    885,370
                                   =================================================================================================

See accompanying notes.

</TABLE>

                                      F-5
<PAGE>


                               AMASYS Corporation
                            Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                                           Year ended June 30,
                                                                                         2004                2003
                                                                                  ------------------- -------------------

Operating activities
--------------------
<S>                                                                                  <C>                 <C>
Net loss                                                                             $  (218,802)        $  (156,144)
Adjustments to reconcile net loss to net cash used in operating activities:
     Amortization on note receivable discount                                            (92,261)           (143,214)
     Loss on derivative asset                                                              3,895              87,151
     Gain on sale of short-term investment                                               (69,675)            (41,275)
     Equity in losses                                                                    216,350             217,682
     Changes in operating assets and liabilities:
       Accounts payable and accrued expenses                                               4,587             (20,066)
                                                                                  ------------------- -------------------
Net cash used in operating activities                                                   (155,906)            (55,866)

Investing activities
--------------------
  Proceeds from notes receivable                                                              --              58,000
  Proceeds from sale of short-term investment                                             92,246              58,462
  Advances to Comtex                                                                          --             (10,000)
  Repayments from Comtex                                                                      --              10,000
                                                                                  ------------------- -------------------
Net cash provided by investing activities                                                 92,246             116,462

Net (decrease) increase in cash                                                          (63,660)             60,596
Cash at beginning of year                                                                 73,667              13,071
                                                                                  ------------------- -------------------
Cash at end of year                                                                 $     10,007        $     73,667
                                                                                  =================== ===================

See accompanying notes.
</TABLE>



                                      F-6
<PAGE>


                               AMASYS Corporation

                          Notes to Financial Statements

                                  June 30, 2004

1.  Organization and Basis of Presentation

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

2.  Summary of Significant Accounting Policies

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

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

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

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

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

The Company's financial instruments that are subject to credit risk consist
primarily of cash, note receivable-related party, short-term investment and
investment in common stock - related party. Cash is maintained with a financial
institution, which has high credit standings. The note receivable -related party
is secured by a continuing interest in all receivables, purchase orders and all
patents and technology now or hereafter held or received by Comtex and is
subordinated to both Comtex's note payable to its former landlord and to
Comtex's bank financing agreement. The Company considers the fair value of the
collateral on the Note when assessing credit risk. Management periodically
evaluates the carrying value of its short term investment and investment in
common stock - related party for impairment and recognizes an impairment charge
when a decline in the market value of its investments below the basis is judged
to be other-than-temporary.


                                      F-7

<PAGE>

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

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

As discussed in Note 4, the Company has a note receivable-related party from
Comtex. In August 2001, the parties amended the note receivable - related party
to include a provision that allows the Company to convert all or a portion of
the outstanding principal amount, plus accrued interest, into common stock of
Comtex. In accordance with SFAS 133, the Company has accounted for this
conversion option as an embedded derivative. As a result, the conversion option
is carried at fair value determined using a Black-Scholes model with changes in
the fair value recognized currently in earnings. As of June 30, 2004 the balance
of the derivative asset was $128,543 and for the fiscal years ended June 30,
2004 and 2003, the Company recognized other expense of $3,895 and $87,151,
respectively, due to the decline in value of this derivative.

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

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

During the fiscal years ended June 30, 2004 and 2003, the Company reclassified
an unrealized gain of $69,675 and $41,275, respectively, on the
available-for-sale security included as a separate component of stockholders'
equity due to the sale of securities to realized gains.

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

At June 30, 2004 and 2003, the Company had a 16% ownership interest in Comtex.
Since the Company has the ability to significantly influence the operations of
Comtex, the Company accounts for its investment in Comtex under the equity
method of accounting. The Company can significantly influence the operations of
Comtex since (i) if the Company converted its note receivable-related party into
shares of Comtex, the Company would have a 22% ownership interest in Comtex,
(ii) the Company as well as the Company's Chairman and CEO are Comtex's largest
individual shareholders, (iii) the Company and the Company's Chairman and CEO
have a combined ownership interest in Comtex of 32% and (iv) the Company's
Chairman and Chief Executive Officer is concurrently serving as Chairman and
interim Chief Executive Officer of Comtex. During the years ended June 30, 2004
and 2003, the Company recognized a loss of $216,350 and $217,682, respectively,
for the Company's share of Comtex losses.

                                      F-8
<PAGE>

As of June 30, 2004, the Company's equity share of Comtex losses has exceeded
the Company's basis in the investment in common stock - related party accounted
for under equity method accounting. Additional losses in excess of basis are
accounted for as an adjustment to the basis of other investments in the investee
(note receivable from Comtex) held by the Company in accordance with EITF 98-13
"Accounting by an Equity Method Investor for Investee Losses When the Investor
Has Loans to and Investments in Other Securities of the Investee." Subsequent
investee income will be recorded as adjustments to the adjusted basis of the
other investments in the reverse order of the application of the investor's
share of the investee's losses.

The Company increases (decreases) its equity investment in Comtex and its
stockholders' equity as a result of capital transactions by Comtex. For the
fiscal year ended June 30, 2004, the Company recognized an increase in
stockholders' equity of $13,337 and for the fiscal year ended June 30, 2003, the
Company recognized an increase in stockholders' equity of $1,283 related to
issuances by Comtex of its common stock or other equity transactions.

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

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

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

SFAS No. 123 ("SFAS 123"), Accounting for Stock-Based Compensation, requires
that companies either recognize compensation expense for grants of stock options
and other equity instruments based on fair value, or provide pro forma
disclosure of net income (loss) and net income (loss) per share in the notes to
the financial statements. At June 30, 2004, the Company has a stock-based
compensation plan, which is described more fully in Note 8. The Company accounts
for this plan under the recognition and measurement principles of Accounting
Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to
Employees, and related interpretations. Accordingly, no compensation cost has
been recognized under SFAS 123 for the Company's employee stock option plan. Due
to the fact that options granted in 1996 were immediately exercisable, net
income (loss) is the same under SFAS 123 and APB 25 for the fiscal years ended
June 30, 2004 and 2003.

SFAS No. 148 ("SFAS 148"), Accounting for Stock-Based Compensation-Transition
and Disclosure, amends SFAS 123. SFAS 148 provides alternative methods of

                                      F-9

<PAGE>

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

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

Comprehensive income (loss) is defined as the change in equity of a business
enterprise during a period from nonowner sources. The Company's comprehensive
income (loss) includes unrealized gains on its short-term investment and the
Company's portion of Comtex's foreign currency translation adjustment.
Accumulated other comprehensive income of $235,812 at June 30, 2004 represents
the Company's unrealized gain on its short-term investment.

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

Basic earnings per share ("EPS") is computed by dividing net income (loss)
available to common stockholders by weighted average common shares outstanding.
Diluted EPS is computed similarly, except that it includes the assumed exercise
of stock options and the conversion of Preferred Stock as long as the effect is
not anti-dilutive.

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

The Company considers cash, short-term investment, note receivable - related
party, investment in common stock - related party, derivative asset and accounts
payable to be financial instruments. The carrying amounts reported in the
balance sheet for cash, short-term investment and accounts payable and accrued
expenses equal or closely approximate their fair value due to the short-term
nature of these assets and liabilities. The fair value of the derivative asset
was determined using a Black-Scholes option pricing model. It is not practicable
to estimate the fair value of the Company's note receivable - related party due
to its unique nature. The trading value of the Company's investment in common
stock-related party was $430,687 as of June 30, 2004.


                                      F-10

<PAGE>


3.  Investment in Common Stock - Related Party

At June 30, 2004, the Company had a 16% ownership interest in Comtex. The
following information presents condensed balance sheet information as of June
30, 2004 and condensed income statement information for each of the years ended
June 30, 2004 and 2003 for Comtex:

<TABLE>
<CAPTION>


                                    June 30,
                                      2004
                                ----------------

<S>                                 <C>
Current assets                      $1,306,895
Other assets                         1,364,237
Current liabilities                  1,802,171
Long-term liabilities                1,191,599

</TABLE>


<TABLE>
<CAPTION>

                                                            Year Ended June 30,
                                                         2004                2003
                                                  -----------------------------------------

<S>                                                    <C>                   <C>
Revenues                                               $ 8,164,756           $9,268,404
Gross profit                                             4,557,015            5,381,236
Net loss                                               (1,212,287)          (1,336,860)
</TABLE>


4.  Note Receivable - Related Party

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

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

On December 9, 2003, the Company and Comtex executed an amendment to the Amended
Note for the purpose of reducing the price at which the Amended Note may be
converted into common stock of Comtex. Pursuant to the Third Amendment, the
Company agreed to subordinate the Amended Note to both Comtex's note payable to
its former landlord and pursuant to Comtex's financing agreement with a third

                                      F-11
<PAGE>

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. At the date of the amendment, the
conversion price of the Amended Note was in excess of the stock price. As of
June 30, 2004, the Amended Note had a principal balance of $856,954. Interest
paid to AMASYS totaled approximately $86,000 and $88,000 for the fiscal years
2004 and 2003, respectively. As of June 30, 2004, the Company recognized losses
in excess of basis of the investment in Comtex stock as an adjustment to the
basis of the Note of $75,287 (See Note 2).

Since Comtex has been experiencing financial difficulties, the Company evaluated
the Note for collectibility. As a result, the Company evaluated whether or not
there is an impairment loss by comparing the fair value of the collateral
(including cash and security interest in the accounts receivable of Comtex) to
the carrying value of the Note of $426,720. Since the fair value of the
collateral exceeds the carrying value of the Note, the Company did not record an
impairment charge at June 30, 2004.

The Company calculated the fair value of the conversion option to be $701,486 as
of the date of the amendment using a Black-Scholes option-pricing model. The
$701,486 represents a discount on the Amended Note which the Company is
accreting into earnings over the life of the Amended Note under the effective
interest method. For the fiscal years ended June 30, 2004 and 2003, the Company
recognized interest income of $177,955 and $231,544, respectively, which
included $92,261 and $143,214, respectively, related to accretion of the
discount. The effective interest rate on the Amended Note was 24%.

5.  Related Party Transactions

The Company leases certain space from Comtex on a month-to-month basis. For the
years ended June 30, 2004 and 2003, the Company incurred rent expense of $3,600
and $3,600, respectively, to Comtex which is included in general and
administrative expenses in the Company's statements of operations. In addition,
certain Comtex employees provide accounting and corporate services to the
Company. For the years ended June 30, 2004 and 2003, the Company paid consulting
fees of $35,000 and $38,000, respectively, which is included in professional
services and general and administrative expenses in the Company's statements of
operations.

In February 2003, the Company loaned Comtex $10,000 to assist Comtex in an
executive search process. Comtex repaid this loan in June 2003.

                                      F-12

<PAGE>


6.  Earnings Per Share

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

<TABLE>
<CAPTION>

                                                           Year Ended June 30,
                                                          2004             2003
                                                     --------------- -----------------
Numerator:
<S>                                                   <C>               <C>
         Net (loss) income                            $  (218,802)      $  (156,144)
         Preferred stock dividend                         (98,000)          (98,000)
                                                     --------------- -----------------
         Numerator  for basic  (loss)  earnings per      (316,802)         (254,144)
           share
         Effect of dilutive securities                     98,000
                                                     --------------- -----------------
         Numerator for diluted (loss)  earnings per   $  (218,802)      $  (254,144)
           share                                     =============== =================

Denominator:
         Denominator  for basic (loss) earnings per
           share -
         weighted average shares                        2,207,350         2,207,350
Effect of dilutive securities:
         Convertible preferred stock                           --
                                                     --------------- -----------------
         Denominator for diluted (loss) earnings         2,207,350        2,207,350
           per share                                 =============== =================

Basic (loss) earnings per share                          $   (0.14)       $   (0.12)
                                                     =============== =================
Diluted (loss) earnings per share                        $   (0.14)       $   (0.12)
                                                     =============== =================
</TABLE>

For the years ended June 30, 2004 and 2003, the shares issuable upon the
exercise of stock options and the conversion of the Series A Preferred Stock
have been excluded from the computation since their effect was not dilutive.

7.  Income Taxes

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

<TABLE>
<CAPTION>

                                                             Year ended June 30,
                                                          2004                2003
                                                    ------------------ --------------------

<S>                                                          <C>                  <C>
Tax benefit at statutory rate                                34.0%                34.0%
Reconciling items:
    Permanent items                                           0.0%                 0.0%
    State income taxes                                        4.8%                 5.5%
    Change in valuation allowance                           (38.8%)              (39.5%)
                                                    ------------------ --------------------

Effective tax rate                                            0.0%                 0.0%
                                                    ================== ====================

</TABLE>

                                      F-13
<PAGE>

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, 2004 are as follows:

<TABLE>
<CAPTION>

                                                                  June 30,
                                                                    2004
                                                            ---------------------

Deferred tax assets:
<S>                                                         <C>
Net operating losses carryforwards                          $      7,360,994
Discount on note receivable- related party                           147,108
Equity method reporting                                               52,221
                                                            ---------------------
  Total deferred tax assets                                        7,560,323

Deferred tax liabilities:
Derivative asset                                                     (49,875)
                                                            ---------------------
  Total deferred tax liabilities                                     (49,875)
                                                            ---------------------

Net deferred tax asset                                             7,510,448
Valuation allowance                                               (7,510,448)
                                                            ---------------------
Deferred tax asset, net                                     $             --
                                                            =====================
</TABLE>


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, 2004. The net change in the valuation allowance
during the fiscal year ended June 30, 2004 was a decrease of $77,169.

As of June 30, 2004 the Company had net operating loss carryforwards for federal
income tax purposes of approximately $19.0 million that will begin to expire in
2005. Utilization of these net operating losses may be subject to limitations
under IRC Section 382, in the event of significant changes in stock ownership of
the Company.


                                      F-14

<PAGE>

8.  Stockholders' Equity

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

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

At June 30, 2004, the aggregate cumulative preferred dividends were $784,000.

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

At June 30, 2004 and 2003, 900,000 stock options were outstanding and
exercisable, respectively. During the fiscal year ended June 30, 2003, 50,000
stock options were forfeited. The exercise price of all options is $0.01 per
share. The weighted average remaining contractual life of options outstanding at
June 30, 2004 and 2003 is 2.3 years and 3.3 years, respectively.


                                      F-15

<PAGE>


9. Selected Quarterly Financial Information (Unaudited)

The following is a summary of the quarterly results of operations for the years
ended June 30, 2004 and 2003.

<TABLE>
<CAPTION>

                                                                           Quarter Ended
                                         ----------------------------------------------------------------------------------
                                               September 30,          December 31,          March 31,            June 30,
                                                   2003                   2003                2004                 2004
                                         ----------------------------------------------------------------------------------

<S>                                       <C>                    <C>                   <C>                   <C>
Operating costs and expenses              $      (102,396)       $      (90,893)       $      (27,147)       $      (26,002)
Other (expense) income                             (6,522)              (23,311)                 (414)               57,883
Net (loss) income                                (108,918)             (114,204)              (27,561)               31,881

Net (loss) income per share:
   Basic                                  $         (0.06)       $        (0.06)       $        (0.02)       $        0.003
   Diluted                                $         (0.06)       $        (0.06)       $        (0.02)       $        0.01
Weighted average number of shares:
   Basic                                        2,207,350             2,207,350             2,207,350             2,207,350
   Diluted                                      2,207,350             2,207,350             2,207,350             4,167,350

</TABLE>

<TABLE>
<CAPTION>

                                                                           Quarter Ended
                                         ----------------------------------------------------------------------------------
                                               September 30,          December 31,          March 31,            June 30,
                                                   2003                   2003                2004                 2004
                                         ----------------------------------------------------------------------------------

<S>                                       <C>                    <C>                   <C>                   <C>
Operating costs and expenses              $       (50,793)       $      (29,856)       $      (32,324)       $      (11,157)
Other income (expense)                            (53,814)               62,439                64,419               (105,058)
Net income (loss)                                (104,607)               32,583                32,095               (116,215)

Net income (loss) per share:
   Basic                                  $         (0.06)       $        0.004        $        0.003        $         (0.06)
   Diluted                                $         (0.06)       $         0.01        $        0.01         $         (0.06)
Weighted average number of shares:
   Basic                                        2,207,350             2,207,350             2,207,350              2,207,350
   Diluted                                      2,207,350             4,167,350             4,167,350              2,207,350

</TABLE>