U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-K





(Mark
One)





|X|
ANNUAL REPORT UNDER SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For
the fiscal year ended December 31, 2008





|_|
TRANSITION REPORT UNDER SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For
the transition period from ______________ to ______________





Commission File Number 000-53075


_______________________________________________





DATONE,
INC.


(Exact
name of registrant as specified in its charter)


______________________________________________





Delaware
                        
                        16-1591157(State
      or other jurisdiction of
                        
                        (I.R.S.
      Employerincorporation
      or organization)
                        
                        Identification
      No.)7325
      Oswego RoadLiverpool
      , N.Y.
                        
                        13090(Address
      of principal executive offices)
                        
                        (zip
      code)





Registrant's
      telephone number, including area code:(315)
      451-7515





_____________________________________________





Securities
registered under Section 12(b) of the Exchange Act: None.





Securities
registered under Section 12(g) of the Exchange Act:




Common
Stock, $.0001 par value per share




(Title
of Class)








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




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




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 (§229.405) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [  ]




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





Large
      accelerated filer [  ]
            Accelerated
      filer [  ]Non-accelerated
      filer [  ]
            Smaller
      reporting company [X](Do
      not check if a smaller reporting company)




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




The
Company has no non-voting common stock.  The aggregate market value of
the Company's voting common stock held by non-affiliates as of
December 31, 2008 could not be determined because there have been no
recent sales of such stock and there is no established public trading
market.




As
of December 31, 2008  4,963,226 shares of the Company's $.0001 par
value common stock were issued and outstanding.




State
issuer’s revenues for its most recent fiscal year: $142,602.




As
of December 31, 2008, there were  4,963,226 shares of common stock
outstanding.




Documents
incorporated by reference: None.




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





2


TABLE
OF CONTENTS




PagePART
      IItem
      1.
            Business
            4Item
      1A.
            Risk
      Factors
            8Item
      2.
            Properties
            11Item
      3.
            Legal
      Proceedings
            11Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            11PART
      IIItem
      5.
            Market
      for Registrant’s Related Stockholder Matters and Small Business Issuer
      Purchases of Equity Securities
            11Item
      6.
            Selected
      Financial Data
            12Item
      7.
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
            12Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market Risk
            15Item
      8.
            Financial
      Statements and Supplementary Data
            16Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
            30Item
      9A(T).
            Controls
      and Procedures
            30Item
      9B.
            Other
      Information
            30PART
      IIIItem
      10.
            Directors,
      Executive Officers and Corporate Governance
            30Item
      11.
            Executive
      Compensation
            31Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            33Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence
            33Item
      14.
            Principal
      Accountant Fees and Services
            33Item
      15.
            Exhibits
      and Financial Statement Schedules
            34Signatures
            35


3






PART
I




ITEM
1.   BUSINESS.




GENERAL
OVERVIEW




Datone,
Inc. was originally incorporated on August 9, 2000 under the laws of the State
of Delaware.  We operated as a wholly-owned subsidiary of USIP. On
August 24, 2006 USIP decided to spin-off it’s subsidiary companies one of which
was Datone Inc. On February 1,2008 Datone filed an 10-SB registration statement
.. On November 13, 2008  Datone went effective.




SMART
PAYPHONE TECHNOLOGY




Our
payphones utilize “smart” technology which provides oral calling instructions,
detects and counts coins deposited during each call, informs the caller at
certain intervals of the time remaining on each call, identifies the need for
and the amount of an additional deposit in order to continue the call, and
provides other functions associated with the completion of calls. Through the
use of programmable memory chips, the payphones can also be programmed and
reprogrammed from our central computer facilities to update rate information or
to direct different types of calls to particular carriers. Our payphones can
also distinguish coins by size and weight, report to our central host computer
the total amount of coin in the coin box, perform self-diagnosis and
automatically report problems to a pre-programmed service number.




CUSTOMER
SERVICE




The
technology we use enables us to (i) respond quickly to equipment malfunctions
and (ii) maintain accurate records of payphone activity, which can be verified
by customers. We strive to minimize “downtime” on our payphones by identifying
service problems as quickly as possible. We employ both advanced
telecommunications technology and trained field technicians as part of our
commitment to provide superior customer service. The records generated through
our technology also allow for more timely and accurate payment of commissions to
Location Owners.




OPERATIONS




As
of December 31, 2008, we owned and operated approximately 148 payphones in New
York.




COIN
CALLS




Our
payphones generate coin revenues primarily from local calls. Historically, the
maximum rate that could be charged for local calls was generally set by state
regulatory authorities and in most cases was $0.25 through October 6, 1997. We
charge $0.35, and $0.50. In ensuring “fair compensation” for all calls, the FCC
determined that local coin rates from payphones should be generally deregulated
by October 7, 1997, but provided for possible modifications or exemptions from
deregulation upon a detailed demonstration by an individual state that there are
market failures within the state that would not allow market-based rates to
develop. On July 1, 1997, a federal court issued an order that upheld the FCC's
authority to deregulate local coin call rates. In accordance with the FCC's
ruling and the court order, certain payphones owners, began to increase rates
for local coin calls from $0.25 to $0.35.




Long
distance carriers that have contracted to provide transmission services to our
payphones typically carry long distance coin calls. We pay a charge to the
long-distance carrier each time the carrier transports a long-distance call for
which we receive coin revenue from an end user.




NON-COIN
CALLS




We
also receive revenue from non-coin calls made from our payphones. Traditional
non-coin calls include credit card, calling card, prepaid calling card, collect
and third party billed calls where the caller dials “0” plus the number or
simply dials “0” for an operator. The services needed to complete a non-coin
call include providing an automated or live operator to answer the call,
verifying billing information, validating calling cards and credit cards,
routing and transmitting the call to its destination, monitoring the call's
duration and determining the charge for the call, and billing and collecting the
applicable charge. We have contracted with operator service providers to handle
these calls and perform all associated functions, while paying us a commission
on the revenues generated.


4




REGULATIONS
AND DIAL-AROUND COMPENSATION




On
September 20, 1996 the Federal Communications Commission (“FCC”) adopted rules,
which became effective November 7, 1996, initially mandating dial-around
compensation for both access code calls and 800 subscriber calls at a flat rate
of $45.85 per payphone per month. Commencing October 7, 1997 and ending October
6, 1998 the $45.85 per payphone per month rate was to transition to a per-call
system at the rate of $0.35 per call. Several parties challenged certain of the
FCC regulations including the dial-around compensation rate. On July 1, 1997 a
federal court vacated certain portions of the FCC's 1996 Payphone Order,
including the dial-around compensation rate.




In
accordance with the court's mandate, on October 9, 1997 the FCC adopted a second
order, establishing a rate of $0.284 per call for the first two years of
per-call compensation (October 7, 1997 through October 6, 1999). An
inter-exchange Carriers (“IXC”) is a common carrier providing long distance
connections between local telephone areas, and they include AT&T, MCI and
Sprint. Under the 1997 Payphone Order IXC's were required to make the per-call
payments to payphone service providers, beginning October 7, 1997. On May 15,
1998 the court again remanded the per-call compensation rate to the FCC for
further explanation without vacating the $0.284 default rate.




On
February 4, 1999 the FCC released a third order in which the FCC abandoned its
efforts to derive a “market based” default dial-around compensation rate and
instead adopted a “cost based” rate of $0.24 per dial-around call. This rate
became effective on April 21, 1999 and served as a default rate through January
31, 2002.




In
a decision released January 31, 2002 the FCC partially addressed the remaining
issues concerning the “true-up” required for interim and intermediate period
compensation. The FCC adjusted the per-call rate to $0.229, for the interim
period only, to reflect a different method of calculating the delay in IXC
payments to payphone services provider's (“PSPs”) for the interim period, and
determined that the total interim period compensation should be $33.89 per
payphone per month ($0.229 times an average of 148 calls per payphone per
month). A payphone service provider is a Company that installs and monitors
payphones. The 2002 Payphone Order deferred to a later order its determination
of the allocation of this total compensation rate among the various carriers
required to pay compensation for the interim period.




On
October 23, 2002 the FCC released its Fifth Order on Reconsideration and Order
on Remand, which resolved the remaining issues surrounding the
interim/intermediate period true-up and specifically how monthly per-phone
compensation owed to PSPs is to be allocated among the relevant dial-around
carriers. The Interim Order also resolves how certain offsets to such payments
will be handled and a host of other issues raised by parties in their remaining
FCC challenges to the 1999 Payphone Order and the 2002 Payphone Order. In the
Interim Order the FCC ordered a true up for the interim period and increased the
adjusted monthly rate to $35.22 per payphone per month, to compensate for the
three-month payment delay inherent in the dial-around payment system. The new
rate of $35.22 per payphone per month is a composite rate, allocated among
approximately five hundred carriers based on their estimated dial-around traffic
during the interim period. The FCC also ordered true-up requiring PSPs, to
refund an amount equal to $0.046 (the difference between the old $0.284 rate and
the current $0.238 rate) to each carrier that compensated the PSP on a per-call
basis during the intermediate period. Interest on additional payments and
refunds is to be computed from the original payment date, at the IRS prescribed
rate applicable to late tax payments. As of this date, dial around compensation
to PSP’s is $.49 per call. As a result of these dial around compensation rules,
we received approximately $59,052 in dial-around compensation during
2007.




Our
objectives are to continue to review our overall cost structure, improve route
density and service quality, monitor and take action on our under performing
telephones. We have implemented the following strategy to meet our
objectives.




CUSTOMERS,
SALES AND MARKETING




The
Location Owners with whom we contract are a diverse group of small and medium
sized businesses, which are frequented by individuals needing payphone access.
The majority of our payphones are located at convenience stores, truck stops,
service stations, grocery stores, colleges and hospitals.




Before
we install a phone, we search for, and utilize historical revenue information
about each payphone location. In locations where historical revenue information
is not available, we rely on our site survey to examine geographic factors,
population density, traffic patterns and other factors in determining whether to
install a payphone. We recognize, however, that recent changes in payphone
traffic volumes and usage patterns being experienced on an industry-wide basis
warrant a continued assessment of the location and deployment of our payphones.
Generally, we pay the Local Exchange Carrier (“LEC”)approximately $40 per month
per phone line.


5




SERVICE
AND EQUIPMENT SUPPLIERS




Our
primary suppliers provide payphone components, local line access, long-distance
transmission and operator services. To promote acceptance by end users
accustomed to using RBOC or Local Exchange Carrier (“LEC”) owned payphone
equipment, we utilize payphones designed to be similar in appearance and
operation to payphones owned by LEC. A LEC is a local phone company, which can
be either a call operating company or an integrated company which traditionally
had the exclusive franchise rights and responsibilities to provide local
transmission and switching services.




We
purchase circuit boards from various manufacturers for repair and installation
of our payphones. We primarily obtain local line access from various LECs,
including Verizon, Windstream. and various other incumbent and competitive
suppliers of local line access. Generally, we are charged approximately $40 per
month per payphone, on the average, for local line access. New sources of local
line access are expected to emerge as competition continues to develop in local
service markets. Long-distance services are provided to our company by various
long-distance and operator service providers, including AT&T,
Legacy,  and others.




We
expect the basic availability of such products and services to continue in the
future; however, the continuing availability of alternative sources cannot be
assured. Although we are not aware of any current circumstances that would
require us to seek alternative suppliers for any material portion of the
products or services used in the operation of our business, transition from our
existing suppliers, if necessary, could have a disruptive effect on our
operations and could give rise to unforeseen delays and/or
expenses.




ASSEMBLY
AND REPAIR OF PAYPHONES




We
assemble and repair payphone equipment for our use. The assembly of payphone
equipment provides us with technical expertise used in the operation, service,
maintenance and repair of our payphones. We assemble, refurbish or replace
payphones from standard payphone components either obtained from our inventory
or purchased from component manufacturers. These components include a metal
case, an integrated circuit board incorporating a microprocessor, a handset and
cord, and a coin box and lock. On the occasion when components are not available
from inventory, we can purchase the components from several suppliers. We do not
believe that the loss of any single supplier would have a material adverse
effect on our assembly operations.




Our
payphones comply with all material regulatory requirements regarding the
performance and quality of payphone equipment and have all of the operating
characteristics required by the applicable regulatory authorities, including
free access to local emergency (911) telephone numbers, dial-around access to
all available carriers, and automatic coin return capability for incomplete
calls.




TECHNOLOGY




The
payphone equipment we install makes use of microprocessors to provide voice
prompted calling instructions, detect and count coin deposits during each call,
inform the caller at certain intervals of the time remaining on each call,
identify the need for and the amount of an additional deposit and other
functions associated with completion of calls. Through the use of memory chips,
our payphones can also be programmed and reprogrammed from our central computer
facilities to update rate information or to direct different kinds of calls to
particular carriers.




Our
payphones can distinguish coins by size and weight, report to a remote location
the total coins in the coin box, perform self-diagnosis and automatically report
problems to a pre-programmed service number, and immediately report attempts at
vandalism or theft. Many of our payphones operate on power available from the
telephone lines, thereby avoiding the need for and reliance upon an additional
power source at the installation location.




We
provide all technical support required to operate the payphones, such as
computers and software at our headquarters in Liverpool , N.Y. Our assembly and
repair support provides materials, equipment, spare parts and accessories to
maintain our payphones.


6




MAJOR
CUSTOMERS




No
individual customer accounted for more than 5% of our consolidated revenues in
2006, 2007 and 2008.




COMPETITION




We
compete for payphone locations directly with RBOCs, LECs and other IPPs. We also
compete, indirectly, with long-distance companies, which can offer Location
Owners commissions on long-distance calls made from LEC-owned payphones. We
compete with LECs and long-distance companies who may have substantially greater
financial, marketing and other resources.




We
believe that our principal competition is from providers of wireless
communications services for both local and long distance traffic. Certain
providers of wireless communication services have introduced rate plans that are
competitively priced with certain of the products offered by us, and have
negatively impacted the usage of payphones throughout the nation.




We
believe that the competitive factors among payphone providers are (1) the
commission payments to a Location Owner, (2) the ability to serve accounts with
locations in several LATAs or states, (3) the quality of service and the
availability of specialized services provided to a Location Owner and payphone
users, and (4) responsiveness to customer service needs. We believe that we are
currently competitive in each of these areas.




Additionally,
a number of domestic IPPs continue to experience financial difficulties from
various competitive and regulatory factors impacting the pay telephone industry
generally, which may impair their ability to compete prospectively. We believe
that these circumstances create an opportunity for us to obtain new location
agreements and reduced site commissions going forward, however, this may not
occur. There are no guarantees that we will be able to obtain new location
agreements that are advantageous to our company. Also, in view of this
competitive environment, we will seek opportunities to maximize shareholder
value through acquisitions, and mergers with other companies and businesses that
present attractive opportunities for us.




We
compete with long-distance carriers that provide dial-around services that can
be accessed through our payphones. Certain national long-distance operator
service providers and prepaid calling card providers have implemented extensive
advertising promotions and distribution schemes which have increased dial-around
activity on payphones owned by LECs and IPPs, including our company, thereby
reducing traffic to our primary providers of long-distance service. While we do
receive compensation for dial-around calls placed from our payphones, regulatory
efforts are underway to improve the collection system and provide us with the
ability to collect that portion of dial-around calls that are owed.




OUR
EMPLOYEES




Our
President, Craig Burton, is our only full time employee. In addition, we also
hire advisers and temporary employees on an as needed basis. We may, from time
to time, supplement our regular work force as necessary with temporary and
contract personnel. We have no part-time employees at this time.  None
of our employees are represented by a labor union. We believe we have a good
relationship with our employees.




A
NOTE ABOUT FORWARD-LOOKING STATEMENTS




This
report (including the foregoing “Description of Business” and the section below
entitled “Management’s Discussion and Analysis of Financial Condition and
Results of Operations”) contains forward-looking statements that involve risks
and uncertainties. You should exercise extreme caution with respect to all
forward-looking statements contained in this report. Specifically, the following
statements are forward-looking:




•
            statements
      regarding our overall strategy for expansion of our company, including
      without limitation our intended markets and future
    products;




•
            statements
      regarding our research and development
efforts;




•
            statements
      regarding the plans and objectives of our management for future
      operations, including, without limitation, plans to explore other non
      telecommunication business along with the size and nature of the costs we
      expect to incur and the people and services we may
  employ;


7




•
            statements
      regarding the future of our company, our competition or regulations that
      may affect us;




•
            statements
      regarding our ability to compete with third
  parties;




•
            any
      statements using the words “anticipate,” “believe,” “estimate,” “expect,”
      “intend,” and similar words; and




•
            any
      statements other than historical
fact.




We
believe that it is important to communicate our future expectations to our
shareholders. Forward-looking statements reflect the current view of management
with respect to future events and are subject to numerous risks, uncertainties
and assumptions, including, without limitation, the factors listed in “Risks
Associated with Our Business.” Although we believe that the expectations
reflected in such forward-looking statements are reasonable, we can give no
assurance that such expectations will prove to be correct. Should any one or
more of these or other risks or uncertainties materialize or should any
underlying assumptions prove incorrect, actual results are likely to vary
materially from those described in this report. There can be no assurance that
the projected results will occur, that these judgments or assumptions will prove
correct or that unforeseen developments will not occur.




Any
person or entity may read and copy our reports filed with the Securities and
Exchange Commission at the SEC’s Public Reference Room at 100 F Street NE,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Room by calling the SEC toll free at 1-800-SEC-0330. The
SEC also maintains an Internet site at HTTP://WWW.SEC.GOV
where reports, proxies and informational statements on public companies may be
viewed by the public.






ITEM 1A.  RISK FACTORS




UNLESS
WE CAN REVERSE OUR HISTORY OF LOSSES, WE MAY HAVE TO DISCONTINUE
OPERATIONS.




If
we are unable to achieve or sustain profitability, or if operating losses
increase in the future, we may not be able to remain a viable company and may
have to discontinue operations. Our expenses have historically exceeded our
revenues and we have had losses in all fiscal years of operation, including
those in fiscal years 2007 through 2008, and the losses are projected to
continue in 2009. Our net losses were $ 76,756 and $ 98,719 for fiscal years
ended 2007 and 2008 respectively.




WE
MAY NOT SUCCEED OR BECOME PROFITABLE.




We
will need to generate significant revenues to achieve profitability and we may
be unable to do so. Even if we do achieve profitability, we may not be able to
sustain or increase profitability in the future. We expect that our expenses
will continue to increase and there is no guarantee that we will not experience
operating losses and negative cash flow from operations for this fiscal year or
for the foreseeable future. If we do not achieve or sustain profitability, then
we may be unable to continue our operations.




WE
WILL NEED ADDITIONAL CAPITAL FINANCING IN THE FUTURE.




We
may be required to seek additional financing in the future to respond to
increased expenses or shortfalls in anticipated revenues, accelerate product
development and deployment, respond to competitive pressures, develop new or
enhanced products, or take advantage of unanticipated acquisition opportunities.
We cannot be certain we will be able to find such additional financing on
reasonable terms, or at all. If we are unable to obtain additional financing
when needed, we could be required to modify our business plan in accordance with
the extent of available financing.


8




IF
WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND DIFFICULTY
ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED COMPANIES, WHICH COULD
THREATEN OUR FUTURE GROWTH.




If
we make any acquisitions, we could have difficulty assimilating the operations,
technologies and products acquired or integrating or retaining personnel of
acquired companies. In addition, acquisitions may involve entering markets in
which we have no or limited direct prior experience. The occurrence of any one
or more of these factors could disrupt our ongoing business, distract our
management and employees and increase our expenses. In addition, pursuing
acquisition opportunities could divert our management’s attention from our
ongoing business operations and result in decreased operating performance.
Moreover, our profitability may suffer because of acquisition-related costs or
amortization of acquired goodwill and other intangible assets. Furthermore, we
may have to incur debt or issue equity securities in future acquisitions. The
issuance of equity securities would dilute our existing
stockholders.




WE
MAY BE UNABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS OR MAY BE SUED BY
THIRD PARTIES FOR INFRINGEMENT OF THEIR PROPRIETARY RIGHTS.




The
telecommunications industry is characterized by the existence of a large number
of patents and frequent litigation based on allegations of trade secret,
copyright or patent infringement. We may inadvertently infringe a patent of
which we are unaware. In addition, because patent applications can take many
years to issue, there may be a patent application now pending of which we are
unaware that will cause us to be infringing when it is issued in the future. If
we make any acquisitions, we could have similar problems in those industries.
Although we are not currently involved in any intellectual property litigation,
we may be a party to litigation in the future to protect our intellectual
property or as a result of our alleged infringement of another’s intellectual
property, forcing us to do one or more of the following:




•
            Cease
      selling, incorporating or using products or services that incorporate the
      challenged intellectual property;




•
            Obtain
      from the holder of the infringed intellectual property right a license to
      sell or use the relevant technology, which license may not be available on
      reasonable terms; or




•
            Redesign
      those products or services that incorporate such
    technology.




A
successful claim of infringement against us, and our failure to license the same
or similar technology, could adversely affect our business, asset value or stock
value. Infringement claims, with or without merit, would be expensive to
litigate or settle, and would divert management resources.




BECAUSE
OUR OFFICERS AND DIRECTORS ARE INDEMNIFIED AGAINST CERTAIN LOSSES, WE MAY BE
EXPOSED TO COSTS ASSOCIATED WITH LITIGATION.




If
our directors or officers become exposed to liabilities invoking the
indemnification provisions, we could be exposed to additional unreimbursable
costs, including legal fees. Our articles of incorporation and bylaws provide
that our directors and officers will not be liable to us or to any shareholder
and will be indemnified and held harmless for any consequences of any act or
omission by the directors and officers unless the act or omission constitutes
gross negligence or willful misconduct. Extended or protracted litigation could
have a material adverse effect on our cash flow.




WE
WILL DEPEND ON OUTSIDE MANUFACTURING SOURCES AND SUPPLIERS.




We
may contract with third party manufacturers to produce our products and we will
depend on third party suppliers to obtain the raw materials necessary for the
production of our products. We do not know what type of contracts we will have
with such third party manufacturers and suppliers. In the event we outsource the
manufacture of our products, we will have limited control over the actual
production process. Moreover, difficulties encountered by any one of our third
party manufacturers, which result in product defects, delayed or reduced product
shipments, cost overruns or our inability to fill orders on a timely basis,
could have an adverse impact on our business. Even a short-term disruption in
our relationship with third party manufacturers or suppliers could have a
material adverse effect on our operations. We do not intend to maintain an
inventory of sufficient size to protect ourselves for any significant period of
time against supply interruptions, particularly if we are required to obtain
alternative sources of supply.


9




THE REPORT OF OUR INDEPENDENT
AUDITORS INDICATES UNCERTAINTY CONCERNING OUR ABILITY TO CONTINUE AS A GOING
CONCERN.




Our
independent auditors have raised substantial doubt about our ability to continue
as a going concern. This may impair our ability to implement our business plan,
and we may never achieve significant revenues and therefore remain a going
concern.




RISKS
ASSOCIATED WITH POTENTIAL ACQUISITIONS




As
part of our business strategy, we may make acquisitions of, or investments in,
companies, businesses, products or technologies. Any such future acquisitions
would be accompanied by the risks commonly encountered in such acquisitions.
Those risks include, among other things:




-
the difficulty of assimilating the operations and personnel of the acquired
companies,


-
the potential disruption of our business or business plan,


-
the diversion of resources from our existing businesses, and
products,


-
the inability of management to integrate acquired businesses or assets into our
business plan, and


-
additional expense associated with acquisitions.




We
may not be successful in overcoming these risks or any other problems
encountered with such acquisitions, and our inability to overcome such risks
could have a material adverse effect on our business, financial condition and
results of operations.




POSSIBLE
ISSUANCE OF ADDITIONAL SHARES WITHOUT STOCKHOLDER APPROVAL COULD DILUTE
STOCKHOLDERS




We
currently have approximately 4,963,226 Shares of common stock outstanding. There
are currently no other material plans, agreements, commitments or undertakings
with respect to the issuance of additional shares of common stock or securities
convertible into shares of our common stock. Additional shares could be issued
in the future, and the result of the issuance of additional shares would be to
further dilute the percentage ownership of our common stock held by our
stockholders.




IF
A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES.




There
is currently no market for our common stock and no market may develop. We
currently plan to apply for listing of our common stock on the OTC Bulletin
Board. However, our shares may not be traded on the bulletin board or, if
traded, a public market may not materialize. If no market is ever developed for
our shares, it will be difficult for shareholders to sell their stock. In such a
case, shareholders may find that they are unable to achieve benefits from their
investment.




THE
BOARD OF DIRECTORS POWER TO ISSUE PREFERRED STOCK, COULD DILUTE THE OWNERSHIP OF
EXISTING SHAREHOLDERS AND THIS MAY INHIBIT POTENTIAL ACQUIRES OF THE
COMPANY.




Our
articles of organization grant the board of directors the power to issue
preferred stock with terms and conditions, including voting rights that they
deem appropriate. The exercise of the discretion of the board to issue preferred
stock and/or common stock could dilute the ownership rights and the voting
rights of current shareholders. In addition, this power could be used by the
Board to inhibit potential acquisitions by a third party.




THE
ADVENT OF WIRELESS PHONES HAS LESSENED THE DEMAND FOR PAYPHONES.




The
proliferation of wireless phones has significantly reduced the demand for
payphones and we expect that trend to continue. Certain rate plans that provide
unlimited long distance service and calling fees that are fixed or minimal have
and are expected to continue to negatively affect our revenues and opportunity
for growth.


10




DIAL AROUND
SERVICES.




We
compete with long distance carriers that provide dial around services that can
be accessed through our payphones. The popularity of these services is
increasing, and the use of these services reduces the fees we receive for long
distance calls placed from our phones.




THERE
IS NO PUBLIC MARKET FOR OUR COMMON STOCK.




Our
common stock currently is not publicly traded. However, a trading market for the
shares may develop in the future. If a public market does develop the public
market will establish trading prices for our common stock. An active public
market for our common stock may not develop or be sustained.




WE
DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK.




We
have never declared or paid any cash dividend on our capital stock. We currently
intend to retain any future earnings and do not expect to pay any dividends in
the foreseeable future. Any determination to pay dividends in the future will be
made at the discretion of our board of directors and will depend on our results
of operations, financial conditions, contractual restrictions, restrictions
imposed by applicable law and other factors our board deems relevant.
Shareholders must be prepared to rely on sales of their common stock after price
appreciation to earn an investment return, which may never occur. If our common
stock does not appreciate in value, or if our common stock loses value, our
stockholder may lose some or all of their investment in our shares.




ITEM 2.
              PROPERTIES.


Our principal administrative, sales, marketing,
product development and support facilities are located at 7325 Oswego Road,
Liverpool. N.Y. and comprise approximately 3,000 square feet. We occupy these
premises to a three year lease, the term of which expires on December 31,2009.
The fixed rent is approximately $5,000 per month plus
utilities.




ITEM 3.
              LEGAL
      PROCEEDINGS.


Not
Applicable.




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




Not
Applicable.




PART II


ITEM
      5.
              MARKET FOR REGISTRANTS RELATED
      STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
      SECURITIES.


(a)
            MARKET
      INFORMATION. The Company's common stock is not trading on any public
      trading market or stock exchange.




(b)
            HOLDERS.
      As of December 31, 2008, there were approximately  257 record
      holders of  4,963,226 shares of the Company's common
      stock.




(c)
            DIVIDEND
      POLICY. We have not declared or paid any cash dividends on our common
      stock and we do not intend to declare or pay any cash dividend in the
      foreseeable future.  The payment of dividends, if any, is within
      the discretion of our Board of Directors and will depend on our earnings,
      if any, our capital requirements and financial condition and such other
      factors as our Board of Directors may
consider.


11




(d)
            SECURITIES
      AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS. We have not
      authorized the issuance of any of our securities in connection with any
      form of equity compensation plan.




(e)
            RECENT
      SALE OF UNREGISTERED SECURITIES.  During the year ended December
      31, 2008, we did not have any sales of securities that were not registered
      under the Securities Act of 1933, as
amended.




ITEM 6.
              SELECTED FINANCIAL
      DATA.


Not
Applicable.




ITEM 7.
              MANAGEMENT’S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION.


Forward
Looking Statements





Some
of the information in this section contains forward-looking statements that
involve substantial risks and uncertainties. You can identify these statements
by forward-looking words such as "may," "will," "expect," "anticipate,"
"believe," "estimate" and "continue," or similar words. You should read
statements that contain these words carefully because they:






            discuss
      our future expectations;






            contain
      projections of our future results of operations or of our financial
      condition; and






            state
      other "forward-looking"
information.





We
believe it is important to communicate our expectations. However, there may be
events in the future that we are not able to accurately predict or over which we
have no control. Our actual results and the timing of certain events could
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including those set forth under "Risk Factors,"
"Business" and elsewhere in this prospectus. See "Risk Factors."





Organization
and Basis of Presentation





Datone,
Inc. is currently a provider of both privately owned and company owned payphones
(COCOT’s) and stations in New York. The Company receives revenues from the
collection of the payphone coinage, a portion of usage of service from each
payphone and a percentage of long distance calls placed from each payphone from
the telecommunications service providers. In addition, the Company also receives
revenues from the service and repair of privately owned payphones, sales of
payphone units and the sales of prepaid phone cards.





Critical Accounting
Policies





The
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States of America
requires management to make judgments, assumptions and estimates that affect the
amounts reported in our consolidated financial statements and accompanying
notes. We base our estimates and judgments on historical experience and on
various other assumptions that we believe are reasonable under the
circumstances. However, future events are subject to change, and the best
estimates and judgments routinely require adjustment. The amounts of assets and
liabilities reported in our consolidated balance sheet, and the amounts of
revenues and expenses reported for each of our fiscal periods, are affected by
estimates and assumptions which are used for, but not limited to, the accounting
for allowance for doubtful accounts, goodwill and intangible asset impairments,
restructurings, inventory and income taxes. Actual results could differ from
these estimates. The following critical accounting policies are significantly
affected by judgments, assumptions and estimates used in the preparation of our
consolidated financial statements.





12


Revenue Recognition
Policies





The
Company derives its primary revenue from the sources described below, which
includes dial around revenues, coin collections, and telephone equipment repairs
and sales. Other revenues generated by the company include, phone card sales,
and commissions.




Dial
around revenues are generated from calls to gain access to a different long
distance carrier than is already programmed into the phone. Revenues from dial
around calls are recorded based upon estimates until the coin collection
revenues are generated when callers deposit coins into the phones to make calls.
Coin revenues are recorded in an amount equal to the coins
collected.  Revenues on commissions, phone card sales, and telephone
equipment repairs and sales are realized when the services are
provided.







TWELVE
MONTHS ENDED DECEMBER 31, 2008 COMPARED WITH TWELVE MONTHS ENDED DECEMBER 31,
2007





Revenue





Our
total revenue decreased by $12,691 or approximately 8.2%, from $155,293 in the
twelve months ended December 31, 2007 to $142,602 in the twelve months ended
December 31, 2008.  This decrease was primarily attributable to a
decrease in commission revenue. As well as a reduced number of payphones coupled
with increased competition from wireless communication service.





Our
commissions decreased by $1,196 or approximately 4.70%, from $25,422 in the
twelve months ended December 31, 2007 to $24,226 in the twelve months ended
December 31, 2008. This decrease was primarily attributable to a lower volume of
payphones in our network.





Our
coin call revenue increased by $1,121 or approximately 3.1%, from $36,200 in the
twelve months ended December 31, 2007 to $37, 321 in the twelve months ended
December 31, 2008. The increase in coin call
revenue was primarily attributable to an increase in number of phone calls
made.





Our
non-coin call revenue, which consists primarily of dial-around revenue decreased
$4,267 or approximately 6.74% from $63,319 in the twelve months ended December
31, 2007 to $59,052 in the twelve months ended December 31,
2008.  This decrease was primarily attributed to a lower volume of
toll free calling (ex. 1-800,1-888,1-877,1-866 calls in this
quarter.





Service
and Repair Sales decreased by $8,348 or approximately 27.5% to $22,003 for the
twelve months ended December 31, 2008 from $30,351 for the same period in 2007.
This decrease is due to less payphones to repair and service because the number
of payphones have decreased, the number of payphones breaking down and requiring
repair is consequently less.





For
the twelve months ended December 31, 2008, we have a total of 164 company-owned
payphones. We only receive service revenue for company-owned payphones and
repair revenue for privately-owned payphones. Some privately-owned payphones
represent unprofitable locations that we previously owned but have since sold to
the site owner.





Cost of
Revenue







Our
overall cost of sales decreased by $32,107 or approximately 44.44%, from
$72,252  in the twelve months ended December 31, 2007 to
$40,145  in the twelve months ended December 31, 2008.  This
decrease in our overall cost is primarily due to less depreciation being
recorded due to our assets being fully amortized.





Our
telecommunication costs decreasedby $28,899 or approximately
51.25% from $56,387 in the twelve months ending December 31, 2007 to $27,488 for
the twelve months ending December 31, 2008. This was due to some new payphones
being installed in new locations.  This increase has been offset
somewhat by our strategy to remove unprofitable payphones, resulting in lower
revenue and commissions and also, lower telecommunication costs.





13


Our
ongoing strategy is to identify and remove unprofitable payphones. Once a low
revenue payphone is identified, we offer the site owner an opportunity to
purchase the equipment. If the site owner does not purchase the payphone, we
remove it from the site





Our
contractor’s fees decreased by $2,234 or approximately 100% to $0 in the twelve
months ending December 31, 2008 from $2,234 for the twelve months ending
December 31, 2007. This decrease is due to the decrease in our use of outside
contractors.





Depreciation
expense decreased by $12,401or approximately 94.99% to $654 in the twelve months
ending December 31, 2008 from $13,055  for the twelve months ending
December 31, 2007. This decrease is due to certain assets being fully
depreciated and our on going strategy of identifying unprofitable payphones, and
selling them to the site owners.  Once a payphone is sold to the site
owner, it is removed from our assets and depreciation schedules.  We
own telephone equipment and motor vehicles, which provide a service for a number
of years.  The term of service is commonly referred to as the “useful
life” of the asset.  Because an asset such as telephone equipment or
motor vehicle is expected to provide service for many years, it is recorded as
an asset, rather than an expense, in the year acquired.  A portion of
the cost of the long-lived asset is reported as an expense during the cost of an
asset to expense over its life in a rational and systematic manner.





Our
cost of sales for repairs and service supplies decreased in the twelve months
ending December 31, 2008 by $242 or approximately 100% to $0 from $242 for the
twelve months ending December 31, 2007.  This decrease in repairs and
service cost is a direct result of using less material to repair
phones.





Our
cost of sales for travel decreased in the twelve months ending December 31, 2008
by $1,245or approximately 63.49% to $0 from $1,961 for the twelve months ending
December 31, 2007.  This decrease in travel cost is a direct result of
having to travel less to repair phones.





Operating
Expenses




Operating
expenses increased by $10,698 or approximately 6.17% to $184,049 for the twelve
months ended December 31, 2008 compared to $173,351 for the same period in 2007.
This was due to the fees we pay our accountants and attorneys for performing
they’re services.





Salaries
and related payroll taxes increased by $11,480 or approximately 0.37% to $49,284
for the twelve months ended December 31, 2008 compared to $37,804 for the same
period in 2007. This increase is due to employee taking payroll on a regular
basis.





Our
insurance expense decreased by $3,526 or approximately 34.43% to $6,715 for the
twelve months ended December 31, 2008 compared to $10,241 for the same period in
2007.  This decrease was due to decreases in premiums.





Rent
remained the same at $60,000 for the twelve months ended December 31, 2008
compared to $60,000 for the same period in 2007.





Professional
fees increased by $48,864 or approximately 584.47% to $48,864 for the twelve
months ended December 31, 2008 compared to $7,139 for the same period in
2007.  These are fees we pay to accountants and attorneys throughout
the year for performing various tasks.





Bad
debt expense decreased by $44,320 or approximately 100% to $0 for the twelve
months ended December 31, 2008 compared to $44,320 for the same period in
2007.  These were receivables written off that were deemed
uncollectible.





Our
telephone, utilities, office, and vehicle expenses, together account for a
increase of $5,759 or approximately 52% from $16,883 for the twelve months ended
December 31, 2008 compared to $11,124 for the same period in 2007.





14


Interest
Expense





Interest
expense, net, increased $982 or approximately 3.57% for the twelve months ended
December 31, 2008 to $28,511 from $27,529 for the twelve months ended December
31, 2007. This decrease was due to less interest-rate debt.





Net Loss from
Operations





We
had net loss of $98,719 for the twelve months ended December 31, 2008 as
compared to a net loss after taxes of $76,756 for the twelve months ended
December 31, 2007. This decrease was primarily due to a increase in operating
expenses for the year ended December 31, 2008. The increases were related to
rent and professional fees, this will remain consistent in future
years.





LIQUIDITY
AND CAPITAL RESOURCES





December
31, 2008 Compared with December 31, 2007





Our
primary liquidity and capital resource needs are to finance the costs of our
operations, to make capital expenditure.





As
of December 31, 2008, we had $0 cash on hand, compared to $0 as of December 31,
2007.





We
believe that we will continue to need investing and financing activities to fund
operations.





Net
cash used in operating activities was $121,559 during the twelve-month period
ended December 31, 2008, mainly representative of the net loss incurred during
2008.  Cash was used in operations. This compares to net cash used in
operating activities of $85,787 for the twelve-month period ended December 31,
2007 which resulted from a decrease in accounts payable and related party The
Company used cash to pay down AP and Related party payables.





Net
cash provided by investing activities was $0 during twelve-month period
ended  31, 2008. This compares to net cash provided by investing
activities of $34,233 for the twelve-month period ended December 31, 2007,
mainly representing the proceeds received from the sale of telephone
equipment.





Net
cash provided by financial activities was $21,559 during twelve-month period
ended December 31, 2008, mainly representing the proceeds from notes and related
party payables.  This compares to net cash used by financing
activities of $58,095 the twelve-month period ended December 31, 2007 due to
payments on notes and related party payables.





Our
expenses to date are largely due to rents for the office space and the cost of
sales for telephone communication costs.





We
believe that our results of financing activities will provide us with the
necessary funds to satisfy our liquidity needs for the next 6 months. To the
extent that such funds are insufficient, our principal stockholder has agreed to
fund our operations for the next twelve-month period and beyond in the form of a
loan or loans.  However, there is no formal agreement with our
principal stockholder, Greenwich Holdings LLC in writing or otherwise to do so
and accordingly may not be enforced against Greenwich Holdings, Inc. in the
event that it decides not to continue to fund the Company.





Working
Capital





As
of December 31, 2008, we had total assets of $47,596 and total liabilities of
$566,655, which result in working deficit of $(519,059) as compared to total
assets of $35,045 and total liabilities of $542,685 resulting in a working
deficit of $(507,640) as of December 31, 2007.




ITEM
    7A.
              QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET
RISK.




Not
Applicable.


15




ITEM
      8.
              FINANCIAL STATEMENTS AND
      SUPPLEMENTARY DATA.





Datone,
Inc.


-:-





FINANCIAL
STATEMENTS





DECEMBER
31, 2008 AND DECEMBER 31, 2007








16


CONTENTS











PageBalance
      SheetsDecember
      31, 2008 and December 31, 2007
            19Statements
      of OperationsFor
      the Years Ended December 31, 2008 and 2007
            20Statements
      of Cash FlowsFor
      the Years Ended December 31, 2008 and 2007
            22Notes
      to Financial Statements
            23






17




MOORE
      & ASSOCIATES, CHARTEREDACCOUNTANTS AND
      ADVISORSPCAOB
      REGISTERED
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors
 Datone,
Inc.
 
 
 We
have audited the accompanying balance sheets of Datone, Inc. as of December 31,
2008 and 2007, and the related statements of operations, stockholders’ equity
and cash flows for the years ended December 31, 2008 and 2007. These financial
statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In
our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Datone, Inc. as of December 31,
2008 and 2007, and the related statements of operations, stockholders’ equity
and cash flows for the years ended December 31, 2008 and 2007, in conformity
with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 10 to the
financial statements, the Company has sustained substantial losses in recent
years, which raises substantial doubt about its ability to continue as a going
concern.  Management’s plans concerning these matters are also
described in Note 10.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 /s/
Moore & Associates, Chartered
 
 Moore
& Associates Chartered
 Las
Vegas, Nevada
 March
31, 2009
 
 
 6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501





18


DATONE,
INC.


BALANCE
SHEETS





December
      31,2008
                  
                  
                  2007CURRENT
      ASSETSCash
                  
                  $
                  -
                  
                  
                  $
                  -Commissions
      and Sales Receivable, Net
                  
                  
                  30,503
                  
                  
                  
                  17,261Prepaid
      Expenses and Other Current Assets
                  
                  
                  -
                  
                  
                  
                  35TOTAL
      CURRENT ASSETS
                  
                  
                  30,503
                  
                  
                  
                  17,296EQUIPMENTTelephone
      and Office Equipment
                  
                  
                  1,459,765
                  
                  
                  
                  1,459,765Vehicle
                  
                  
                  71,274
                  
                  
                  
                  71,2741,531,039
                  
                  
                  
                  1,531,039Less:
      Accumulated Depreciation
                  
                  
                  (1,525,371
                  )
                  
                  
                  (1,524,716
                  )Net
      Equipment
                  
                  
                  5,668
                  
                  
                  
                  6,323Inventory
                  
                  
                  -
                  
                  
                  
                  11,425TOTAL
      ASSETS
                  
                  $
                  36,171
                  
                  
                  $
                  35,044LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      LiabilitiesAccounts
      Payable
                  
                  $
                  148,447
                  
                  
                  $
                  172,285Bank
      Overdraft
                  
                  
                  8,313
                  
                  
                  
                  3,540Current
      Portion of Long-Term Debt
                  
                  
                  2,245
                  
                  
                  
                  3,246Accrued
      Expenses
                  
                  
                  64,570
                  
                  
                  
                  51,019Related
      Party Notes
                  
                  
                  38,731
                  
                  
                  
                  66,000TOTAL
      CURRENT LIABILITIES
                  
                  
                  262,306
                  
                  
                  
                  296,090TOTAL
      LONG-TERM DEBT
                  
                  
                  304,349
                  
                  
                  
                  246,594TOTAL
      LIABILITIES
                  
                  
                  566,655
                  
                  
                  
                  542,684STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      Stock, .0001 par value 100,000,000 sharesauthorized,
      4,963,226 shares issued and outstanding atDecember
      31, 2008 and 2007
                  
                  
                  496
                  
                  
                  
                  496Additional
      Paid in Capital
                  
                  
                  1,727,460
                  
                  
                  
                  1,640,160Accumulated
      Deficit
                  
                  
                  (2,258,440
                  )
                  
                  
                  (2,148,296
                  )TOTAL
      STOCKHOLDERS' EQUITY
                  
                  
                  (530,484
                  )
                  
                  
                  (507,640
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                  
                  $
                  36,171
                  
                  
                  $
                  35,044








The
accompanying notes are an integral part of these statements.


19





DATONE,
INC.


STATEMENTS
OF OPERATIONS





For
      The Years EndedDecember
      31,2008
                  
                  
                  2007SALES
                  
                  $
                  142,602
                  
                  
                  $
                  155,293Cost
      of Sales
                  
                  
                  38,932
                  
                  
                  
                  60,843Depreciation
                  
                  
                  654
                  
                  
                  
                  13,055Total
      Cost of Sales
                  
                  
                  39,586
                  
                  
                  
                  73,898Gross
      Profit (Loss)
                  
                  
                  103,016
                  
                  
                  
                  81,395GENERAL
      AND ADMINISTRATIVE EXPENSES
                  
                  
                  184,649
                  
                  
                  
                  127,172Operating
      Loss
                  
                  
                  (81,633
                  )
                  
                  
                  (45,777
                  )OTHER
      INCOME (EXPENSE)Other
      Income
                  
                  
                  -
                  
                  
                  
                  6,911Gain
      (Loss) on Sale of Equipment
                  
                  
                  -
                  
                  
                  
                  34,233Bad
      Debt Expense
                  
                  
                  -
                  
                  
                  
                  (44,534
                  )Other
      Expense
                  
                  
                  -
                  
                  
                  
                  (60
                  )Interest
      Expense
                  
                  
                  (28,511
                  )
                  
                  
                  (27,529
                  )Total
      Other Income (Expense)
                  
                  
                  (28,511
                  )
                  
                  
                  (30,979
                  )NET
      LOSS
                  
                  $
                  (110,144
                  )
                  
                  $
                  (76,756
                  )Net
      Loss per Common Share
                  
                  $
                  (0.02
                  )
                  
                  $
                  (0.02
                  )Weighted
      Common Shares Outstanding
                  
                  
                  4,963,226
                  
                  
                  
                  4,963,226








The
accompanying notes are an integral part of these statements.





20





DATONE,
INC.


STATEMENTS
OF STOCKHOLDERS' EQUITY





Additional
                    
                    
                    
                    
                    
                    TotalCommon
      Stock
                    
                    
                    Paid
                    
                    
                    Retained
                    
                    
                    Stockholders'Shares
                    
                    
                    Amount
                    
                    
                    In
      Capital
                    
                    
                    Earnings
                    
                    
                    Equity
      (Deficit)Balance
      at December 31, 2006 , Restated
                    
                    
                    4,963,226
                    
                    
                    
                    496
                    
                    
                    
                    1,580,830
                    
                    
                    
                    (2,071,540
                    )
                    
                    
                    (490,214
                    )-Contributions
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    59,330
                    
                    
                    
                    -
                    
                    
                    
                    59,330Net
      Loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (76,756
                    )
                    
                    
                    (76,756
                    )Balance
      at December 31, 2007, Restated
                    
                    
                    4,963,226
                    
                    
                    
                    496
                    
                    
                    $
                    1,640,160
                    
                    
                    $
                    (2,148,296
                    )
                    
                    $
                    (507,640
                    )Contributions
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    87,300
                    
                    
                    
                    
                    
                    
                    $
                    87,300Net
      Loss
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    (110,144
                    )
                    
                    $
                    (110,144
                    )Balance
      at December 31, 2008
                    
                    
                    4,963,226
                    
                    
                    
                    496
                    
                    
                    $
                    1,727,460
                    
                    
                    $
                    (2,258,440
                    )
                    
                    $
                    (530,484
                    )








The
accompanying notes are an integral part of these statements.





21





DATONE,
INC.


STATEMENTS
OF CASH FLOWS





For
      The Years EndedDecember
      31,2008
                          
                          
                          2007Operating
      Activities:Net
      Loss
                          
                          $
                          (110,144
                          )
                          
                          $
                          (76,756
                          )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Depreciation
      Expense
                          
                          
                          654
                          
                          
                          
                          13,055(Gain)
      Loss on Sale of Equipment
                          
                          
                          -
                          
                          
                          
                          (34,233
                          )(Increase)
      Decrease in Commission and Sales Receivables
                          
                          
                          (13,242
                          )
                          
                          
                          29,795(Increase)
      Decrease in Inventory
                          
                          
                          11,425
                          
                          
                          
                          496(Increase)
      Decrease in Prepaid Expense
                          
                          
                          35
                          
                          
                          
                          4,906Increase
      (Decrease) in Accounts Payable
                          
                          
                          (23,838
                          )
                          
                          
                          (32,170
                          )Increase
      (Decrease) in Accrued Expenses
                          
                          
                          13,551
                          
                          
                          
                          26,483Increase
      (Decrease) in Related Party Payable
                          
                          
                          -
                          
                          
                          
                          (17,363
                          )Net
      cash used in operating activities
                          
                          
                          (121,559
                          )
                          
                          
                          (85,787
                          )Investing
      Activities:Purchase
      of Equipment
                          
                          
                          -
                          
                          
                          
                          (6,541
                          )Proceeds
      from Sale of Equipment
                          
                          
                          -
                          
                          
                          
                          34,233Net
      cash provided by investing activities
                          
                          
                          -
                          
                          
                          
                          27,692Financing
      Activities:Proceeds
      from Additional Paid in Capital
                          
                          
                          21,300
                          
                          
                          
                          59,330Proceeds
      from (Payments on) Bank Overdraft
                          
                          
                          4,773
                          
                          
                          
                          (395
                          )Proceeds
      from Long-Term Debt
                          
                          
                          60,000
                          
                          
                          
                          59,541Payments
      on Long-Term Debt
                          
                          
                          (3,245
                          )
                          
                          
                          (49,905
                          )Proceeds
      from (Payments on) Related Party Note
                          
                          
                          38,731
                          
                          
                          
                          (10,476
                          )Net
      cash provided by financing activities
                          
                          
                          121,559
                          
                          
                          
                          58,095Net
      Increase (Decrease)  in cash
                          
                          
                          -
                          
                          
                          
                          -Cash
      - Beginning of Period
                          
                          
                          0
                          
                          
                          
                          0Cash
      - End of Period
                          
                          $
                          -
                          
                          
                          $
                          -Supplemental
      Disclosures of Cash Flow Information:Cash
      Paid During The Period For:Interest
                          
                          $
                          6,798
                          
                          
                          $
                          5,242








The
accompanying notes are an integral part of these statements.





22


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007





Note
1.   Nature of Business and Summary of Significant Accounting
Policies





Nature
of Business





Datone,
Inc. is currently a provider of both privately owned and company owned payphones
(COCOT’s) and stations in New York. The Company receives revenues from the
collection of the payphone coinage, a portion of usage of service from each
payphone and a percentage of long distance calls placed from each payphone from
the telecommunications service providers. In addition, the Company also receives
revenues from the service and repair of privately owned payphones, sales of
payphone units and the sales of prepaid phone cards.





Summary
of Significant Accounting Policies





Management
Estimates





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





Concentrations
of Credit Risk





The
Company’s payphones are located primarily in New York and usage of those phones
may be affected by economic conditions in those areas.





The
Company maintains cash balances with a financial institution insured by the
Federal Deposit Insurance Corporation up to $250,000 and $100,000 for the years
ended December 31, 2008 and 2007, respectively. There are no uninsured balances
at December 31, 2008 and 2007.





Statement
of Cash Flows




The
Company considers all highly liquid instruments with a maturity of three months
or less when purchased to be cash equivalents for purposes of classification in
the balance sheets and statement of cash flows. Cash and Cash equivalents
consists of cash in bank (checking) accounts. Supplemental disclosures of cash
flow information are as follows:





Non-cash
transactions for the year ended December 31, 2008 include the
following:





The
Company converted a note payable of $66,000 to additional paid-in
capital.


23


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007





Note
1.   Nature of Business and Summary of Significant Accounting
Policies - Continued





Equipment
and Depreciation





Equipment
is stated at cost. Depreciation is calculated on a straight-line basis over the
useful lives of the related assets, which range from five to seven
years.





Income
Taxes





Income
taxes are accounted for in accordance with Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes”. Under SFAS No. 109, deferred
income taxes are recognized using the asset and liability method by applying tax
rates to cumulative temporary differences based on when and how they are
expected to affect the tax return. Deferred tax assets and liabilities are
adjusted for income tax rate changes.





Net
(Loss) per Common Share





Net
loss per common share has been calculated by taking the net loss for the current
period and dividing by the weighted average shares outstanding at the end of the
period.





Revenue
Recognition





The
Company derives its primary revenue from the sources described below, which
includes dial around revenues, coin collections, and telephone equipment repairs
and service. Other revenues generated by the Company include phone card sales,
and commissions.





Dial
around revenues are generated from calls to gain access to a different long
distance carrier than is already programmed into the phone. GAAP (SAB No. 101)
requires the Company to recognize revenue when earned. In the past, the Company
was recording the revenue when the money was wire deposited into the bank
account. The Company is now recording a monthly accrual and adjusting the
revenue to actual on a quarterly basis. The revenue is estimated monthly, based
on prior quarter’s actual receipts. The Company uses prior quarter receipts as
estimates because there has not been a significant change to total payphones in
the previous few quarters. Also, historical figures have shown the revenue
earned is not far different than estimates made.  Revenues on
commissions, phone card sales, and telephone equipment repairs and service are
recognized when the services are provided.





The
proceeds from the sales of pay telephones and other equipment are excluded from
revenues and reported as other income.





24


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007








Note
2.   Inventory





Inventory
is valued at the lower of cost, determined on the first-in, first-out basis
(FIFO), or market value. At December 31, 2008 and December 31, 2007 inventory
consists of the following:





2008
                    
                    
                    2007Parts and
      Accessories
                    
                    $
                    0
                    
                    
                    $
                    11,425





Note 3.   Commissions and Sales
Receivable





Commissions and Sales Receivable
consists of the following atDecember 31, 2008 and December 31, 2007:





2008
                
                
                2007Commissions
      Receivable
                
                $
                27,603
                
                
                $
                16,146Sales
      Receivable
                
                
                2,900
                
                
                
                1,115$
                30,503
                
                
                $
                17,261





Note
4.   Related Party Note





The
Company has five notes payable with Joseph Passalaqua.  The notes are
due on demand and carry interest ranging from 10% to 18%. The outstanding
principal on the notes are $36,000 at December 31, 2008.  The accrued
interest was approximately $2,700 as of December 31, 2008.





As
of December 31, 2007 the Company had payables due to USIP.Com, Inc., in the
amount of $66,000. As of December 31, 2008 the outstanding balance was converted
to additional paid-in capital.





The
Company has rents payable to a related party in the amount of $299,503 and
$239,503 as of December 31, 2008 and December 31, 2007,
respectively.





25


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007








Note
5.   Commitments





The Company leases office space under an
operating lease expiring in December 2009. Rent expense for the period ended
December 31, 2008 amounted to $60,000.





The minimum future rental payments under
the operating lease at December 31, 2008 are as follows:





2009
                
                $
                60,000





Note
6.   Major Dial Around Compensation Providers
(Commissions)





The
Company received approximately 95% of total dial around and zero-plus
compensation (commissions) from two providers.





Note
7.   Income Taxes





Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax basis. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates.





Net
deferred tax assets consist of the following components as of:





2008
                    
                    
                    2007Deferred tax
      assetsNOL
    Carryover
                    
                    (932,394
                    )
                    
                    (882,587
                    )Valuation
      Allowance
                    
                    932,394
                    
                    
                    828,587Net deferred tax
      assets
                    
                    -
                    
                    
                    -





The income tax provision differs from
the amount of income tax determined by applying the U.S. federal and state
income tax rates of 39% to pretax income from continuing
operations:





2008
                    
                    
                    2007Book Income
                    
                    (98,719
                    )
                    
                    (76,757
                    )Valuation
      Allowance
                    
                    98,719
                    
                    
                    76,757-
                    
                    
                    -





26


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007








Note
7.   Income Taxes - Continued





At December 31, 2008, the Company had
net operating loss carry forwards of approximately $2,110,047 that may be offset
against future taxable income through 2027. No tax benefit has been reported in
the December 31, 2008, financial statements since the potential tax benefit is
offset by a valuation allowance of the same amount.





Due to the change in ownership
provisions of the Tax Reform Act of 1986, net operating carryforwards for
Federal Income tax reporting purposes are subject to annual limitations. Should
a change in ownership occur, net operating loss carryforwards may be limited as
to use in future years.





Note
8.   Uncertain Tax Provisions





Effective
January 1, 2007, the Company adopted the provisions of FASB Interpretation No.
48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB
Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. The adoption of the provisions of FIN 48
did not have a material impact on the company’s financial position and results
of operations. At January 1, 2007, the company had no liability for unrecognized
tax benefits and no accrual for the payment of related interest.





Interest
costs related to unrecognized tax benefits are classified as “Interest expense,
net” in the accompanying statements of operations. Penalties, if any, would be
recognized as a component of “Selling, general and administrative expenses”. The
Company recognized $0 of interest expense related to unrecognized tax benefits
during 2007.  In many cases the company’s uncertain tax positions are
related to tax years that remain subject to examination by relevant tax
authorities.





With
few exceptions, the company is generally no longer subject to U.S. federal,
state, local or non-U.S. income tax examinations by tax authorities for years
before 2004. The following describes the open tax years, by major tax
jurisdiction, as of January 1, 2007:





United
      States (a)
                    2004–
      Present





(a) Includes federal as well as state
or similar local jurisdictions, as applicable.








27


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007








Note
9.   Long-Term Debt





Long-term
debt consists of the following at December 31,:





2008
                              
                              
                              2007Note
      Payable to bank in monthly installments of $261, including interest at
      4.5%, through August 2009.
                              
                              $
                              2,246
                              
                              
                              $
                              5,492Note
      payable to Calloway Properties bears interest at 10%
                              
                              
                              299,503
                              
                              
                              
                              239,503Note
      payable to Key Bank bears interest at 9.25% and is due on
      demand.
                              
                              
                              4,845
                              
                              
                              
                              4,845306,594
                              
                              
                              
                              249,840Less:  Current
      portion
                              
                              
                              (2,246
                              )
                              
                              
                              (3,246
                              )Total
                              
                              $
                              304,348
                              
                              
                              $
                              246,594





Note 10.Going Concern
Considerations





The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which
contemplates the Company as a going concern.  However, the Company has
sustained substantial operating losses in recent years.  The company
has a current ratio of .135 for the period ended December 31, 2008, and has a
deficit in stockholders’ equity.   The Companies ability to
continue as a going concern is dependent upon obtaining the additional capital
as well as additional revenue to be successful in its planned
activity.  The Company is actively pursuing alternative financing and
has had discussions with various third parties, although no firm commitments
have been obtained.  In the interim, shareholders of the Company have
committed to meeting its minimal operating expenses.  Management
believes that actions presently being taken to revise the Company’s operating
and financial requirements provide them with the opportunity to continue as a
going concern.





These
financial statements do not reflect adjustments that would be necessary if the
Company were unable to continue as a “going concern”. While management believes
that the actions already taken or planned, will mitigate the adverse conditions
and events which raise doubt about the validity of the “going concern”
assumption used in preparing these financial statements, there can be no
assurance that these actions will be successful.





If
the Company were unable to continue as a “going concern”, then substantial
adjustments would be necessary to the carrying values of assets, the reported
amounts of its liabilities, the reported revenues and expenses, and the balance
sheet classifications used.








28


DATONE,
INC.


NOTES TO THE FINANCIAL
STATEMENTS


DECEMBER 31, 2008 AND
DECEMBER 31, 2007







Note 11.   Pro Forma
Earnings Per Share





The following table outlines what the
pro forma earnings per share will be based on the shares of Datone, Inc. that
will be distributed in the spin-off transaction.





For the Year ended
                    December
      31,
                  
                  
                  For the Year ended
                    December
      31,2008
                  
                  
                  2007Net
      Income (Loss)
                  
                  $
                  (98,719
                  )
                  
                  $
                  (76,756
                  )Shares
                  
                  
                  4,963,226
                  
                  
                  
                  4,963,226EPS
                  
                  $
                  0.03
                  
                  
                  $
                  0.02








29


ITEM
      9.
              CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.


None.




ITEM
    9A(T).
            CONTROLS AND
      PROCEDURES.





This
annual report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of the
Company’s registered public accounting firm due to a transition period
established by Rules of the Securities and Exchange Commission for newly public
companies.




ITEM
      9B.
            OTHER
      INFORMATION.




None.




PART
III


ITEM
      10.
              DIRECTORS EXECUTIVE OFFICERS,
      AND CORPORATE
GOVERNANCE.


MANAGEMENT




The
following persons shall serve in the following capacities for one year or until
their respective successors are elected and qualified:





Name
              Age
              PositionCraig
      H. Burton
              46
              President
      and DirectorJoseph
      J. Passalaqua
              36
              Secretary
      and Director





Craig
Burton, is the Chief Executive Officer and a Director of Datone, Inc. He has
held these positions since August, 2000. Mr. Burton attended the University of
South Carolina-Coastal and was a licensed real estate agent in the State of New
York. He began working in marketing for a long distance carrier in 1996 and in
1999, Mr. Burton became Director of Marketing for Datone Communications, Inc.,
an owner of payphones and distributor of prepaid calling cards. Datone was
acquired by USIP in January, 2000. Mr. Burton served as President and a director
of USIP.Com from January 2000-2006. Additionally, Mr. Burton was secretary and
director of NB Telecom, Inc. from December 2005-2008.




Joseph
Passalaqua, is our secretary and director since August 2000. Since 1999, Mr.
Passalaqua has worked as a trainer at Sports Karate and fitness training company
located in Cicero, New York. Mr. Passalaqua is a high school
graduate.




Section
16(a) Beneficial Ownership Reporting Compliance.




Section 16(a)
of the Exchange Act requires the Company's directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company's equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company's securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file.




Based
solely on the Company's review of the copies of the forms received by it during
the fiscal year ended December 31, 2008 and representations that no
other reports were required, the Company believes that no persons who, at any
time during such fiscal year, was a director, officer or beneficial owner of
more than 10% of the Company's common stock failed to comply with all
Section 16(a) filing requirements during such fiscal year.




30


Code
of Ethics




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




Nominating
Committee




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




Audit
Committee




Our
Board of Directors acts as our audit committee. We do not have a qualified
financial expert at this time, because we have not been able to hire a qualified
candidate. Further, we believe that we have inadequate financial resources at
this time to hire such an expert.




ITEM
11.     EXECUTIVE
COMPENSATION




The
following is a summary of the compensation paid to our executive officers for
the two years ending December 31, 2008.




SUMMARY
      COMPENSATION TABLEName
      and
                    Principal
      Position
                  Year
                  Salary
                  Bonus
                  Stock
                    Awards
                  Option
                    Awards
                  Nonequity
                    Incentive
                    Plan
                    Compensation
                  Nonqualified
                    Deferred
                    Compensation
                    Earnings
                  All
      Other
                    Compensation
                  Total
      ($)Craig
      Burton
                  2007
                  $40,040
                  $0
                  $0
                  $0
                  0
                  $0
                  $0
                  $_______President
                  2008
                  $40,040
                  $0
                  $0
                  $0
                  0
                  $0
                  $0
                  $_______Joseph
      Passalaqua
                  2007
                  $0
                  $0
                  $0
                  $0
                  0
                  $0
                  $0
                  $0Secretary
                  2008
                  $0
                  $0
                  $0
                  $0
                  0
                  $0
                  $0
                  $0




(1)
            As
      of December 31,2008, we owe Mr. Burton approximately $56,346 in
      unpaid  and accrued
salary.




(2)
            As
      of January 2006, Mr. Passalaqua ceased working for us on a full-time basis
      despite retaining his position as secretary. He presently works for us on
      a as needed basis.




31




The
following is a summary of all options, unvested stock and equity incentive plans
for our Executive Officers for the year ending December 31, 2008.





OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOption
      Awards
              Stock
      AwardsName
              Number
      of Securities Underlying Unexercised Options Exercisable
              Number
      of Securities Underlying Un-Exercised Options
    Un-Exercisable
              Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
              Option
      Exercise Price
              Option
      Expiration Date
              Number
      of Shares or Units of Stock That Have Not Vested
              Market
      Value of Shares or Units of Stock That Have Not Vested
              Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
              Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not VestedCraig
      Burton
              0
              0
              0
              N/A
              N/A
              0
              0
              0
              0Joseph
      Passalaqua
              0
              0
              0
              N/A
              N/A
              0
              0
              0
              0




The
following is a summary of the compensation paid to our Directors for the period
ending December 31, 2008.





DIRECTOR
      COMPENSATIONName
              Fees
      Earned
                or
      Paid
                in
      Cash
              Stock
                Awards
              Option
                Awards
              Non-Equity
                Incentive
      Plan
                Compensation
              Nonqualified
                Deferred
                Compensation
                Earnings
              All
      Other
                Compensation
              TotalCraig
      Burton
              0
              0
              0
              0
              0
              0
              0Joseph
      Passalaqua
              0
              0
              0
              0
              0
              0
              00
              0
              0
              0
              0
              0
              0







32




ITEM
      12.
                SECURITY OWNERSHIP
      OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS.


The
following table sets forth information regarding the beneficial ownership of our
common stock as of December 31, 2008 by: (i) each person known by us to
beneficially own 5% or more of our outstanding shares of common stock, (ii) each
of our executive officers and directors, and (iii) all of our executive officers
and directors as a group. Except as otherwise indicated, all Shares are
beneficially owned, and investment and voting power is held by, the persons
named as owners.







Name and Address of Beneficial
      Owner
                  Amount
      and Nature of
                    Common
      StockBeneficially
                    OwnedBefore
      Spinoff
                  Percentage
      Ownership of
                    Common
      Stock(1)Craig
      Burton
                  115,000
                  2.3%Greenwich
      Holdings, LLC (2)
                  3,656,013
                  73.6%Joseph
      J. Passalaqua
                  120,000
                  2.4%All
      Officers and Directors as a Group (3 persons)
                  235,000
                  4.7%


____________________




(1)
            Based
      on 4,963,226 shares of common stock outstanding as of December 31,
      2008.




(2)
            Greenwich
      Holdings, LLC is a New York limited liability company that is owned by
      Joseph Passalaqua, a resident of Liverpool, New
  York.




ITEM
      13.
                  CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR
  INDEPDENCE.


None.


ITEM
      14.
                    PRINCIPAL ACCOUNTANT FEES AND
      SERVICES.


We
became a reporting Company when our registration statement became effective
on  November 13, 2008. Moore & Associates is the Company's
independent registered public accountant.




Audit
Fees




The
aggregate fees billed by Moore & Assoc. for professional services rendered
for the audits of our annual financial statements and reviews of financial
statements included in our quarterly reports on Form 10-Q or services that are
normally provided in connection with statutory and regulatory filings were
$15,000 for the fiscal year ended December 31, 2008.




Audit-Related
Fees




The
aggregate fees billed by Moore & Assoc. for assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's financial statements were $15,000  for the fiscal year ended
December 31, 2008.




Tax
Fees




The
aggregate fees billed  for professional services for tax compliance,
tax advice and tax planning were $0 for the fiscal year ended December 31,
2008.


33




All
Other Fees




The
aggregate fees billed by Moore & Assoc. for other products and services were
$0 for the fiscal year ending December 31, 2008.




Pre-approval Policy




We
do not currently have a standing audit committee. The services described above
were approved by our Board of Directors.




ITEM 15.EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES.





(a)
Exhibits





Exhibit
            Description*3.1
            Certificate
      of Incorporation*3.2
            Amended
      and Restated Certificate of Incorporation*3.3
            By-laws*4.0
            Stock
      Certificate31.1
            Certification
      of the Company's Principal Executive Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002, with respect to the registrant's Annual
      Report on Form 10-K for the year ended December 31,
  2008.31.2
            Certification
      of the Company's Principal Financial Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002, with respect to the registrant's Annual
      Report on Form 10-K for the year ended December 31,
  2008.32.1
            Certification
      of the Company's Principal Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
            Certification
      of the Company's Principal Financial Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.


______________________________________


*
            Filed
      as an exhibit to the Company's registration statement on Form 10- SB, as
      filed with the Securities and Exchange Commission on February 1, 2008, and
      incorporated herein by this
reference.





34


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, thereunto duly authorized.








DATONE
      , INC.Dated:
      April 3, 2009
                    By:
                    /s/
      Craig BurtonName:
                    Craig
      BurtonTitle:
                    President,
      Chief Executive Officer and Director





In
accordance with the 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.




Title
                                
                                Date/s/
      Craig Burton
                                
                                President,
      Chief Executive Officer and Director
                                
                                April
      3, 2009Craig
      Burton/s/
      Joseph J Passalaqua
                                
                                Secretary,
      Principal Financial Officer and Director
                                
                                April
      3, 2009Joseph
      J Passalaqua







35