UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549




FORM
10-K





(Mark
One)


[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
fiscal year ended December 31, 2008





[   ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from ________ to __________





Commission
File Number: 000-30872





Trycera
Financial, Inc.


(Exact
name of Registrant as specified in its charter)




Nevada
                          
                          33-0910363(State
      or other jurisdiction of incorporation or organization)
                          
                          (I.R.S. Employer Identification No.)1656
      Reunion Avenue, Suite 250, South Jordan, Utah
                          
                          84095(Addres of principal executive offices)
                          
                          (Zip
Code)




Issuer’s
telephone number, including area code:  (801) 446-8802





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





Securities
registered pursuant to Section 12(g) of the Act:  Common Stock, Par Value
$0.001





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 15(d) of the Act.  [  ]





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.  (1)  Yes [X]    No
[   ]       (2)  Yes  [X]    No  [   ]





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) 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.[X]








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 definitions of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.





Large
Accelerated
Filer  [   ]                                                      Accelerated
Filer  [   ]


Non-accelerated
Filer  [   ]                                                         Smaller
reporting company  [X]





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





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant was $324,005, computed by reference to the
average bid and asked price of the Common Stock as of the last business day of
the registrant’s most recently completed second fiscal quarter.





At April
6, 2009, there were 9,679,302 shares of the registrant’s Common Stock
outstanding.





DOCUMENTS
INCORPORATED BY REFERENCE





None









2


Table
      of Contents
                          PagePARTI
                          
                          4ITEM
      1
                          BUSINESS
                          4ITEM
      1A
                          RISK FACTORS
                          9ITEM
      1B
                          UNRESOLVED STAFF COMMENTS
                          9ITEM
      2
                          PROPERTIES
                          9ITEM
      3
                          LEGAL PROCEEDSINGS
                          10ITEM
      4
                          SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                          10PART
      II
                          
                          10ITEM
      5
                          MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
      ISSUER PURCHASES OF EQUITY SECURITIES
                          10ITEM
      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
                          14ITEM
      8
                          FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                          14ITEM
      9
                          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                          14ITEM
      9A
                          CONTROLS AND PROCEDURES
                          14ITEM
      9A(T)
                          CONTROLS AND PROVEDURES
                          15PART
      III
                          
                          16ITEM
      10
                          DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
                          16ITEM
      11
                          EXECUTIVE COMPENSATION
                          17ITEM
      12
                          SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHODLERS' MATTERS
                          19ITEM
      13
                          CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
                          21ITEM
      14
                          PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                          22PART
      IV
                          
                          23ITEM
      15
                          EXHIBITS,
      FINANCIAL STATEMENTS SCHEDULES
                          23
  3


Forward
Looking Statements





The
statements contained in this report that are not historical facts are
forward-looking statements that represent management’s beliefs and assumptions
based on currently available information.  Forward-looking statements
include the information concerning our search for an operating company, possible
or assumed future operations, business strategies, need for financing,
competitive position, potential growth opportunities, ability to retain and
recruit personnel, the effects of competition and the effects of future
legislation or regulations.  Forward-looking statements include all
statements that are not historical facts and can be identified by the use of
forward-looking terminology such as the words “believes,” “intends,” “may,”
“will,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable
terminology or by discussions of strategy or trends.  Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we cannot give any assurances that these expectations will prove to
be correct.  Such statements by their nature involve risks and
uncertainties that could significantly affect expected results, and actual
future results could differ materially from those described in such
forward-looking statements.





Among the
factors that could cause actual future results to differ materially are the
risks and uncertainties discussed in this report.  While it is not
possible to identify all factors, we continue to face many risks and
uncertainties including, but not limited to, changes in regulation of shell or
blank check companies; the general economic downturn; a further downturn in the
securities markets; our ability to raised needed operating funds and continue as
a going concern; and other risks and uncertainties.  Should one or
more of these risks materialize (or the consequences of such a development
worsen), or should the underlying assumptions prove incorrect, actual results
could differ materially from those expected.  We disclaim any
intention or obligation to update publicly or revise such statements whether as
a result of new information, future events or otherwise.





There may
also be other risks and uncertainties that we are unable to identify and/or
predict at this time or that we do not now expect to have a material adverse
impact on our business.





Introductory
Comment




Throughout
this Annual Report on Form 10-K, unless otherwise designated, the terms
“we,” “us,” “our,” “the Company,” “our Company,” and “Trycera” refer to Trycera
Financial, Inc., a Nevada corporation.




PART
I





ITEM
1.  BUSINESS





Overview
and Development Since the Beginning of 2008





Since
2004 the Company had been in the business of developing, deploying and marketing
semi-custom and customized branded prepaid and prepaid card
solutions.  Because of continued losses from operations during 2008
the Company began winding down its principal business operations and commenced a
search for a new business venture.  The Company has no material assets
and significant liabilities.  Former management was unsuccessful in
securing a new business venture for the Company and on January 22, 2009,
transferred control of the Company to Ronald N. Vance, former company counsel,
to seek for and, if possible, locate a suitable operating business venture
willing to take control of the Company.  During 2008 all officers and
directors of the Company, except Alan Knitowski and Luan Dang, had
resigned.





On
January 22, 2009, Mr. Vance accepted appointment as a director and as the
President, Chief Executive Officer, Secretary, and Treasurer of
Trycera.  Effective January 22, 2009, Mr. Knitowski resigned as a
director and as Chairman of the Company, and Mr. Dang resigned as a
director.  Mr. Vance became the sole officer and director of the
Company.  Messrs Knitowski and Dang also granted Mr. Vance proxies to
vote the shares beneficially owned by them and by certain affiliated or
associated entities and individuals.  Mr. Vance also received a proxy
to vote shares held by Matthew Kerper, the former President of the
Company.  As a result, Mr. Vance received proxies to vote 4,250,585
shares and directly owned 85,000 shares, which in the aggregate represent
4,335,585 shares beneficially owned by Mr. Vance and which further represented
approximately 44.7% of the voting control of the Company.  As a result
of this transaction, Mr. Vance assumed control of the Company from Messrs
Knitowski and Dang.





4


Mr. Vance
agreed to assume control of the Company to assist in the settlement of
outstanding liabilities and to seek a new operating business.  Prior
to this change of control the Company essentially ceased its business operations
and may be deemed a shell company as defined in Rule 405 promulgated by the
Securities and Exchange Commission (the “SEC”) under the Securities Act by
virtue of its nominal operations.  As a condition to the change of
control, former management agreed to provide proxies to vote the stock
beneficially owned by them or their related entities and associated
parties.  They also agreed to settle certain debt owed by the Company
to them and their affiliated entities, including all outstanding 10% Senior
Secured Promissory Notes, and to cancel any outstanding common stock purchase
options held by them.  They further agreed to cancel any outstanding
contracts or agreements between them, or entities controlled by them, and the
Company.  Also, they agreed, if requested as a condition of the
acquisition of a new operating business, that they would cancel any warrants
held by them or any related entity.  Finally, Mr. Dang agreed to act
as an advisor to the Board to review any proposed acquisition
transaction.  Mr. Vance agreed, subject to his fiduciary duty as a
director, not to finalize any such acquisition transaction if in the good faith
opinion of Mr. Dang, the transaction would not be in the best interests of the
Company.





Each of
the proxies granted to Mr. Vance is irrevocable and will expire either on
December 31, 2009, the date Mr. Vance resigns as a director, or the date upon
which Mr. Vance ceases to control the Company, whichever first
occurs.  Sale or transfer of the shares is conditioned upon the
purchaser or transferee agreeing in writing to be bound by the terms of the
proxy.  Mr. Vance, acting as proxy, may vote the shares at any meeting
of the shareholders or may execute any written consent evidencing action by the
shareholders.  The proxies are not limited in the matters upon which
the shares may be voted.





On or
about January 2, 2007, the Company entered into an agreement with Curo Capital,
LLC (“Curo Capital”), an entity controlled jointly by Mr. Knitowski and Mr.
Dang, (the “Curo Capital Agreement”) whereby the Company agreed to pay $1,000
per month towards the Company’s office lease activities associated with the
office of the Chairman.  Pursuant to the terms of the Curo Capital
Agreement, the Company owed approximately $12,000 to Curo Capital as of January
22, 2009.  Also, on or about January 3, 2006, the Company entered into
an agreement with Ecewa Capital Group, LLC (“Ecewa Capital”), an entity
controlled by Mr. Knitowski (the “Ecewa Capital Agreement”) whereby Ecewa
Capital provided certain consulting services to the Company.  Pursuant
to the terms of the Ecewa Capital Agreement, the Company owed approximately
$60,000 to Ecewa Capital at January 22, 2009.  In a settlement
agreement dated January 22, 2009, Curo Capital agreed to settle all amounts owed
to it under the Curo Capital Agreement for $4,000, and Ecewa Capital agreed to
settle all amounts owed to it under the Ecewa Capital Agreement for
$20,000.  Payment of the settlement amounts is due prior to December
31, 2009, or upon closing of a corporate transaction, whichever shall first
occur.  If the Company fails to pay the settlement amounts, Curo
Capital and Ecewa will have the option to rescind the settlement
agreement.  The Curo Capital Agreement and the Ecewa Capital Agreement
were also cancelled effective December 31, 2008.





The
Company had previously agreed to reimburse Mr. Dang for the cost of health
insurance during the period he served as a director of the
Company.  At the time of his resignation on January 22, 2009, the
Company owed approximately $14,950.83 to Mr. Dang for these health insurance
costs (the “Health Insurance Payable”).  On or about May 14, 2008,
Sagoso Capital (“Sagoso”), a company controlled by Mr. Dang, loaned $5,000 to
the Company and the company issued a 10% Senior Promissory Note representing the
loan (the “Sagoso Note”) which was due and payable upon a change of control of
the Company.  On or about December 29, 2008, Sagoso Capital acquired
the 10% Senior Promissory Notes issued by the Company to Ecewa Capital in the
principal amount of $67,500 (the “Ecewa Notes”).  In a settlement
agreement dated January 22, 2009, Mr. Dang agreed to settle all amounts owed to
him for the Health Insurance Payable for $5,000, and Sagoso agreed to settle all
amounts owed to it under the Sagoso Note and the Ecewa Notes for
$38,994.18.  Payment of the settlement amounts is due prior to
December 31, 2009, or upon closing of a corporate transaction, whichever shall
first occur.  If the Company fails to pay the settlement amounts, Mr.
Dang and Sagoso will have the option to rescind the settlement
agreement.





On or
about May 14, 2008, Hang Dang loaned $5,000 to the Company and the company
issued a 10% Senior Promissory Note representing the loan (the “Note”) which was
due and payable upon a change of control of the Company.  In a
settlement agreement dated January 22, 2009, Ms. Dang agreed to settle all
amounts owed to her for the Note for $2,661.82.  Payment of the
settlement amount is due prior to December 31, 2009, or upon closing of a
corporate transaction, whichever shall first occur.  If the Company
fails to pay the settlement amounts, Ms. Dang will have the option to rescind
the settlement agreement.





5


In
connection with the change of control, Mr. Knitowski cancelled 106,250 common
stock purchase options held by him and Mr. Dang cancelled 200,000 common stock
purchase options held by him.  These options represented all of the
options held by these parties.





Upon the
change of control, Mr. Dang was appointed as an advisor to the Board to review
and make recommendations to the Board on any proposed transaction whereby any
third party would assume control of the Company by means of a reverse
acquisition transaction.  The Board agreed to furnish to Mr. Dang for
review on a confidential basis any such proposed transaction.  Mr.
Dang agreed to serve at no cost to the Company as an advisor to the Board until
the Company acquires a new business or until the resignation of Mr. Vance as a
director, whichever occurs first.





On
February 6, 2009, Mr. Vance resigned as President of the Company and Ray A.
Smith was appointed as President and Chief Executive Officer and is the
Company’s principal executive officer.





Business
of the Company





Selection of a
Business





The
Company intends to either seek an outside business venture or to raise funds to
recommence operations.  The Company anticipates that businesses for
possible acquisition will be referred by various sources, including its sole
officer and director, shareholders, professional advisors, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals.  The Company will not
engage in any general solicitation or advertising for a business opportunity,
and will rely on personal contacts of its sole officer and director and his
affiliates, as well as indirect associations between him and other business and
professional people.  By relying on “word of mouth,” the Company may
be limited in the number of potential acquisitions it can
identify.  While it is not presently anticipated that the Company will
engage unaffiliated professional firms specializing in business acquisitions or
reorganizations, such firms may be retained if management deems it in the best
interest of the Company.  The Company has had preliminary discussions
with Mr. Smith to implement a business plan aligned with his existing business,
CRS Corporation, but no agreement or binding arrangement has been entered
into.  CRS Corporation is engaged in the business of tracking and
reporting nontraditional payment history to national credit reporting
agencies.





The
Company will not restrict its search to any particular business, industry, or
geographical location, and management may evaluate and enter into any type of
business in any location.  The Company may participate in a newly
organized business venture or a more established company entering a new phase of
growth or in need of additional capital to overcome existing financial
problems.  Participation in a new business venture entails greater
risks since in many instances management of such a venture will not have proved
its ability, the eventual market of such venture’s product or services will
likely not be established, and the profitability of the venture will be unproved
and cannot be predicted accurately.  If the Company participates in a
more established firm with existing financial problems, it may be subjected to
risk because the financial resources of the Company may not be adequate to
eliminate or reverse the circumstances leading to such financial
problems.





In
seeking a business venture, the decision of management will not be controlled by
an attempt to take advantage of any anticipated or perceived appeal of a
specific industry, management group, product, or industry, but will be based on
the business objective of seeking long-term capital appreciation in the real
value of the Company.





The
analysis of new businesses will be undertaken by or under the supervision of
management of the Company and reviewed by Mr. Dang as an advisor to the Board of
Directors.  In analyzing prospective businesses, management will
consider, to the extent applicable, the following: the available technical,
financial, and managerial resources, working capital and other prospects for the
future, the nature of present and expected competition, the quality and
experience of management services which may be available and the depth of that
management, the potential for further research, development, or exploration, the
potential for growth and expansion, the potential for profit, the perceived
public recognition or acceptance of products, services, or trade or service
marks, name identification and other relevant factors.





6


The
decision to participate in a specific business may be based on management’s
analysis of the quality of the other firm’s management and personnel, the
anticipated acceptability of new products or marketing concepts, the merit of
technological changes, and other factors which are difficult, if not impossible,
to analyze through any objective criteria.  It is anticipated that the
results of operations of a specific firm may not necessarily be indicative of
the potential for the future because of the requirement to substantially shift
marketing approaches, expand significantly, change product emphasis, change or
substantially augment management, and other factors.





The
Company will analyze all available factors and make a determination based on a
composite of available facts, without reliance on any single
factor.  The period within which the Company may participate in a
business cannot be predicted and will depend on circumstances beyond the
Company’s control, including the availability of businesses, the time required
for the Company to complete its investigation and analysis of prospective
businesses, the time required to prepare appropriate documents and agreements
providing for the Company’s participation, and other circumstances.





Acquisition of an Outside
Business





In
implementing a structure for a particular business acquisition, the Company may
become a party to a merger, consolidation, or other reorganization with another
corporation or entity; joint venture; license; purchase and sale of assets; or
purchase and sale of stock, the exact nature of which cannot now be
predicted.  The structure of the particular business acquisition will
be approved by the Board of Directors and may not require the approval of the
Company’s shareholders.  Notwithstanding the above, the Company does
not intend to participate in a business through the purchase of minority stock
positions.  Upon the consummation of a transaction, it is likely that
the present management and shareholders of the Company will not be in control of
the Company.  In addition, it is anticipated that the current sole
officer and director would resign in favor of new management designated by the
target company without a vote of the Company’s stockholders.





In the
event the Company enters into an acquisition transaction with another entity,
the Company will be required to report the transaction in a Current Report on
Form 8-K within four business days following the execution of the agreement, and
any amendment thereto, and within four business days following the closing of
the transaction.  In addition, because the Company is a shell company,
if the transaction results in the Company no longer being a shell company, it
will be required to file within four business days a Current Report on Form 8-K
which includes the information that would be required if the Company were filing
a general form for registration of securities on Form 10 reflecting the Company
and its securities upon consummation of the transaction, including information
on the new business and management of the Company after closing.





In
connection with the Company’s acquisition of a business, the present
shareholders of the Company, including current management, may, as a negotiated
element of the acquisition, sell a portion or all of the Company’s Common Stock
held by them at a significant premium over their original investment in the
Company.  It is not unusual for affiliates of the entity participating
in the reorganization to negotiate to purchase shares held by the present
shareholders in order to reduce the number of “restricted securities” held by
persons no longer affiliated with the Company and thereby reduce the potential
adverse impact on the public market in the Company’s Common Stock that could
result from substantial sales of such shares after the restrictions no longer
apply.  As a result of such sales, affiliates of the entity
participating in the business reorganization with the Company would acquire a
higher percentage of equity ownership in the Company.  Public
investors will not receive any portion of the premium that may be paid in the
foregoing circumstances.  Furthermore, the Company’s shareholders may
not be afforded an opportunity to approve or consent to any particular stock
buy-out transaction.





In the
event sales of shares by present stockholders of the Company, including current
management, is a negotiated element of a future acquisition, a conflict of
interest may arise because our sole director will be negotiating for the
acquisition on behalf of the Company and for sale of his or shareholders’ shares
for his own or the shareholders’ respective accounts.  Where a
business opportunity is well suited for acquisition by the Company, but
affiliates of the business opportunity impose a condition that management sell
shares at a price which is unacceptable to our sole director, management may not
sacrifice his or the shareholders’ financial interest for the Company to
complete the transaction.  Where the business opportunity is not well
suited, but the price offered management for the shares is high, management will
be tempted to effect the acquisition to realize a substantial gain on the shares
in the Company.  Management has not adopted any policy for resolving
the foregoing potential conflicts, should they arise, and does not intend to
obtain an independent appraisal to determine whether any price that may be
offered for their shares is fair.  Stockholders must rely, instead, on
the obligation of management to fulfill its fiduciary duty under state law to
act in the best interests of the Company and its stockholders.





7


It is
anticipated that any securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws.  Securities, including shares of the Company’s
Common Stock, issued by the Company in such a transaction would be “restricted
securities” as defined in Rule 144 promulgated by the Securities and Exchange
Commission.  Under amendments to Rule 144 recently adopted by the
Commission, and which take effect on February 15, 2008, these restricted
securities could not be resold under Rule 144 until the following conditions
were met:  the Company ceased to be a shell company; it remained
subject to the Exchange Act reporting obligations; filed all required Exchange
Act reports during the preceding 12 months; and at least one year had elapsed
from the time the Company filed “Form 10 information” reflecting the fact that
it had ceased to be a shell company.  In some circumstances, however,
as a negotiated element of the transaction, the Company may agree to register
such securities either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter.  Although the terms of
such registration rights and the number of securities, if any, which may be
registered cannot be predicted, it may be expected that registration of
securities by the Company in these circumstances would entail substantial
expense to the Company.  The issuance of substantial additional
securities and their potential sale into any trading market that may develop in
the Company’s securities may have a depressive effect on such
market.





While the
actual terms of a transaction to which the Company may be a party cannot be
predicted, it may be expected that the parties to the business transaction will
find it desirable to structure the acquisition as a so-called “tax-free” event
under sections 351 or 368(a) of the Internal Revenue Code of 1986, (the
“Code”).  In order to obtain tax-free treatment under section 351 of
the Code, it would be necessary for the owners of the acquired business to own
80% or more of the voting stock of the surviving entity.  In such
event, the shareholders of the Company would retain less than 20% of the issued
and outstanding shares of the surviving entity.  Section 368(a)(1) of
the Code provides for tax-free treatment of certain business reorganizations
between corporate entities where one corporation is merged with or acquires the
securities or assets of another corporation.  Generally, the Company
will be the acquiring corporation in such a business reorganization, and the
tax-free status of the transaction will not depend on the issuance of any
specific amount of the Company’s voting securities.  It is not
uncommon, however, that as a negotiated element of a transaction completed in
reliance on section 368, the acquiring corporation issue securities in such an
amount that the shareholders of the acquired corporation will hold 50% or more
of the voting stock of the surviving entity.  Consequently, there is a
substantial possibility that the shareholders of the Company immediately prior
to the transaction would retain substantially less than 50% of the issued and
outstanding shares of the surviving entity.  It is anticipated that
these shareholders would in fact retain less than 5% control of the Company
after a reverse acquisition.





Therefore,
regardless of the form of the business acquisition, it may be anticipated that
stockholders immediately prior to the transaction will experience a significant
reduction in their percentage of ownership in the Company.





Notwithstanding
the fact that the Company is technically the acquiring entity in the foregoing
circumstances, generally accepted accounting principles will ordinarily require
that such transaction be accounted for as if the Company had been acquired by
the other entity owning the business and, therefore, will not permit a write-up
in the carrying value of the assets of the other company.





The
manner in which the Company participates in a business will depend on the nature
of the business, the respective needs and desires of the Company and other
parties, the management of the business, and the relative negotiating strength
of the Company and such other management.





The
Company will participate in a business only after the negotiation and execution
of appropriate written agreements.  Although the terms of such
agreements cannot be predicted, generally such agreements will require specific
representations and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to such closing, will
outline the manner of bearing costs if the transaction is not closed, will set
forth remedies on default, and will include miscellaneous other
terms.





8


Operation of Business After
Acquisition





The
Company’s operation following internal generation of a business model or its
acquisition of a business will be dependent on the nature of the business and
the interest acquired.  If an outside business is acquired, it is
unlikely that current shareholders would be in control of the Company or that
present management would be in control of the Company following the
acquisition.  It may be expected that the business will present
various risks, which cannot be predicted at the present time.





Governmental
Regulation





It is
impossible to predict the government regulation, if any, to which the Company
may be subject until it has acquired an interest in a business.  The
use of assets and/or conduct of businesses that the Company may acquire could
subject it to environmental, public health and safety, land use, trade, or other
governmental regulations and state or local taxation.  In selecting a
business in which to acquire an interest, management will endeavor to ascertain,
to the extent of the limited resources of the Company, the effects of such
government regulation on the prospective business of the Company.  In
certain circumstances, however, such as the acquisition of an interest in a new
or start-up business activity, it may not be possible to predict with any degree
of accuracy the impact of government regulation.  The inability to
ascertain the effect of government regulation on a prospective business activity
will make the acquisition of an interest in such business a higher
risk.





Competition





The
Company will be involved in intense competition with other business entities,
many of which will have a competitive edge over the Company by virtue of their
stronger financial resources and prior experience in business.  There
is no assurance that the Company will be successful in obtaining suitable
investments.





Employees





The
Company currently has only one employee, namely its President, Ray
Smith.  Management of the Company expects to use consultants,
attorneys, and accountants as necessary, and does not anticipate a need to
engage any full- time employees so long as it is seeking and evaluating
businesses.  The future need for employees and their availability will
be addressed in connection with a decision whether or not to acquire or
participate in a specific business industry.





ITEM
1A.  RISK FACTORS





As a
smaller reporting company, we have elected not to provide the information
required by this item.





ITEM
1B.  UNRESOLVED STAFF COMMENTS





Because
we are neither an accelerated filer or a large accelerated filer, nor a
well-known seasoned issuer, we have elected not to provide the information
required by this item.





ITEM
2.  PROPERTIES





The
Company has no office facilities and does not presently anticipate the need to
lease commercial office space or facilities.  For now the business
address of the sole director is being used as the Company
address.  The Company may lease commercial office facilities in the
future at such time as operations have developed to the point where the
facilities are needed, but has no commitments or arrangements for any
facilities.  There is no assurance regarding the future availability
of commercial office facilities or terms on which the Company may be able to
lease facilities in the future, nor any assurance regarding the length of time
the present arrangement may continue.





9


ITEM
3.  LEGAL PROCEEDINGS





On
September 30, 2008 we were notified of an arbitration claim filed by
Transfers4Less against the Company for $75,000.  The claim alleges
breach of contract which the Company refutes and plans to vigorously
defend.  Judgment was granted on January 27, 2009, to Transfers4Less
in the amount of $40,000 in the arbitration hearing held on January 15,
2009.





In April
2008 we received service of process for a complaint filed by Airport Industrial
Complex, our former landlord. The complaint has been filed in the Orange
Superior Court (Case No. 30-2008 00104277).  Management has received
and reviewed a copy of the complaint.  On April 1, 2009 the Company
represented by counsel appeared in Superior Court in a pre-trial effort to
resolve the matter.  The Company has negotiated a settlement, which
remains unpaid at April 14, 2009.  The next scheduled court appearance
is May 1, 2009, with a trial date set for June 1, 2009.





On April
24, 2008, we received correspondence from Hill Ward Henderson, a law firm
representing interests on behalf of a card marketer program, the Plan First
Financial Prepaid MasterCard Card.  The Plan First Prepaid MasterCard
Card was the flagship program under the IMG card marketer
umbrella.  The correspondence contains assertions related to monies
owed to both cardholders and Plan First Financial Solutions, both of which the
Company refutes. As of March 31, 2009 the Company has received no further
correspondence from either Hill Ward Henderson or Plan First Financial
Solutions.





On May 1,
2008, we received a demand for payment letter filed by American Alarm Systems,
our former security system provider for contracted services through
2010.  The Company and American Alarm Systems appeared in small claims
court and settled the matter for $900 on March 24, 2009.  The Company
has until June 30, 2009 to make payment on the settled amount.





The
Company continues to receive demands for payments from creditors.  The
Company has no funds to defend these actions or to pay the
creditors.  However, management has been proactive to reach out
to most creditors in an attempt to negotiate or resolve outstanding
debt.  Management anticipates that if the Company is unable to settle
these claims, the Company will be dissolved.





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





No
matters were submitted to a vote of shareholders of the Company during the
fourth quarter of the fiscal year ended December 31, 2008.




PART
II





ITEM
5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES





Market
Information





The
Company’s Common Stock is quoted on both the OTC Bulletin Board and the Pink
Sheets.  The Common Stock is currently traded with the trading symbol
of “TRYF.”  The table below sets forth for the periods indicated the
quarterly high and low bid prices as reported by the Pink
Sheets.  These quotations reflect inter-dealer prices, without retail
mark-up, mark-down, or commission and may not necessarily represent actual
transactions.





Quarter
                                        
                                        High
                                        
                                        
                                        LowFISCAL
      YEAR ENDEDDECEMBER
      31, 2007
                                        First
                                        
                                        $
                                        1.70
                                        
                                        
                                        $
                                        1.25Second
                                        
                                        $
                                        1.07
                                        
                                        
                                        $
                                        0.55Third
                                        
                                        $
                                        1.01
                                        
                                        
                                        $
                                        0.36Fourth
                                        
                                        $
                                        0.36
                                        
                                        
                                        $
                                        0.13





10





Quarter
                            
                            High
                            
                            
                            LowFISCAL
      YEAR ENDEDDECEMBER
      31, 2008
                            First
                            
                            $
                            0.13
                            
                            
                            $
                            0.13Second
                            
                            $
                            0.08
                            
                            
                            $
                            0.08Third
                            
                            $
                            0.07
                            
                            
                            $
                            0.07Fourth
                            
                            $
                            0.06
                            
                            
                            $
                            0.06





Quarter
                      
                      High
                      
                      
                      LowFISCAL
      YEAR ENDINGDECEMBER
      31, 2009
                      First
                      
                      $
                      0.06
                      
                      
                      $
                      0.02





The
Company’s Common Stock is considered to be penny stock under rules promulgated
by the Securities and Exchange Commission. Under these rules, broker-dealers
participating in transactions in these securities must first deliver a risk
disclosure document which describes risks associated with these stocks,
broker-dealers’ duties, customers’ rights and remedies, market and
other  information, and make suitability determinations approving the
customers for these stock transactions based on financial situation, investment
experience and objectives.  Broker-dealers must also disclose these
restrictions in writing, provide monthly account statements to customers, and
obtain specific written consent of each customer.  With these
restrictions, the likely effect of designation as a penny stock is to decrease
the willingness of broker- dealers to make a market for the stock, to decrease
the liquidity of the stock and increase the transaction cost of sales and
purchases of these stocks compared to other securities.





Holders





At April
6, 2009, the Company had 115 shareholders of record.  The number of
record holders was determined from the records of the Company’s transfer agent
and does not include beneficial owners of Common Stock whose shares are held in
the names of various security brokers, dealers, and registered clearing
agencies.  The Company has appointed Interwest Transfer Co., Inc.,
Salt Lake City, Utah, to act as its transfer agent for the Common
Stock.





Dividends





The
Company has not declared or paid any cash dividends on its Common Stock during
the two fiscal years ended December 31, 2008, or in any subsequent
period.  The Company does not anticipate or contemplate paying
dividends on its Common Stock in the foreseeable future.  The only
restrictions that limit the ability to pay dividends on common equity, or that
are likely to do so in the future, are those restrictions imposed by
law.





Purchases
of Equity Securities





There
were no purchases made during the fourth quarter of the fiscal year ended
December 31, 2008, by or on behalf of our Company or any affiliated purchaser of
shares or other units of any class of our equity securities registered pursuant
to Section 12 of the Exchange Act.





11


ITEM
6.  SELECTED FINANCIAL DATA





As a
smaller reporting company, we have elected not to provide the information
required by this item.





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





The
following discussion should be read in conjunction with our financial statements
and related notes thereto as included with this report.




Overview





Prior to
May 2004, we had no operating history.  From May 2004 until early in
the first quarter in 2008, the Company operated and marketed a suite of prepaid
and stored value and financial products and services.  Prepaid and
stored value products are broadly defined as financial instruments where the
value on the card has been prepaid, and where subsequent transactions decrease
the value against the balance originally loaded onto the
instrument.  Based in South Jordan, Utah, the Company discontinued all
operations during the fiscal year 2008.  The core operating business
has been curtailed to refocus efforts on developing strategic alternatives while
transitioning all platform stored value products and services to other willing
program managers, card marketers or third party providers such as banks,
processors or marketers in the prepaid industry.  The primary banking
partner elected to close down all remaining card portfolios in October 2008, so
no programs were extended beyond that timeframe.





As
previously and continually stressed, the Company does not have sufficient cash
to meet its working capital needs while it pursues its strategic alternatives
beyond April 2009 and has not had sufficient cash balances since early in
2008.





Critical
Accounting Policies





Critical
accounting policies are defined as those that are reflective of significant
judgments and uncertainties that could cause materially different results under
different estimates and assumptions.  We believe our critical
accounting policies relate to accounts receivable, goodwill and intangible
assets and related impairment assessments, and stock-option compensation because
they are important to the portrayal of our financial condition or results of
operations and they require critical management estimates and judgments about
matters that are uncertain.  There were no changes to our critical
accounting policies during the year ended December 31, 2008.





Results of
Operations--Year Ended December 31, 2008, versus the Year Ended December 31,
2007





In 2008,
we saw revenues drop 93% over the prior year.  The decline of revenue
was attributed to the exiting of the underlying business in all
channels.  The primary effort throughout the 2008 fiscal year was to
wind up the business and seek a strategic alternative.  Near the end
of the first quarter 2008, we had begun in earnest shuttering in house prepaid
card programs and moving towards discontinuing all operations.





Revenue





Revenue
was $151,619 and $2,215,369 for the years ended December 31, 2008 and 2007,
respectively, representing a decrease of $2,063,750 or 93%.  Our 2008
results reflect the winding up of the operations and lay out a stark contrast to
the 2007 product launches and marketing efforts.  Management expects a
strategic alternative to favorably impact the underlying revenue.





Cost of Sales and Gross
Profit





Cost of
sales was $123,029 and $1,895,910 for the years ended December 31, 2008 and
2007, respectively, representing a decrease of $1,772,881or 94%.  The
decrease was attributed to the exiting of the business operations.





The
resulting gross profit was 18.9% and 14.4% for the years ended December 31, 2008
and 2007, respectively.





Operating
expenses





Operating
expenses were $755,271 and $1,401,063 for the years ended December 31, 2008 and
2007, respectively, representing a decrease of $645,792 or 46%.  The
major components of operating expense were salaries and wages (4%) general and
administrative (45%) professional fees (21%) and stock based compensation
(20%).





Salaries
and wages expense was $32,354 and $362,208 for the years ended December 31, 2008
and 2007, respectively, representing a decrease of $329,854 or
91.1%.  The decrease resulted from resignation of all employees in and
around March 31, 2008.  Former employees were paid on an as-needed
basis as independent contractors subsequent to their resignation.





12


General
and administrative expense was $336,639 and $238,152 for the years ended
December 31, 2008 and 2007, respectively, representing an increase of $98,487 or
41.4%.  The increase resulted from the inclusion of costs of former
employees that were subsequently paid on a contract basis.





Professional
fees and expenses were $157,868 and $375,846 for the years ended December 31,
2008 and 2007, respectively, representing a decrease of $217,978 or
58.0%.   The decrease resulted from the expenses associated with
a third party accounting service provider which were paid in part with stock
grants.  Included in this number is $28,680 in the form of non cash
compensation resulting from the issue of stock grants for services compared to
$107,650 for the prior year.





Stock
based compensation was $148,168 and $152,741 for the years ended December 31,
2008 and 2007, respectively, representing a decrease of $4,573 or
3.0%.  The net decrease is due to the reduced number of options
vesting in 2008.





Other income
(expense)





Other
income (expense) was ($5,098) and ($318,392) for the years ended December 31,
2008 and 2007, respectively.  The main component of other expense is
the financing costs which resulted from the issuance of warrants attached to the
shares offered in the Company’s last private placements.  The
financing costs are calculated using the number of warrants and the
Black-Scholes model.  Financing costs were $0 and $342,925 for the
years ended December 31, 2008 and 2007 respectively.





Discontinued
Operations





The
Company sold its isleCore operations effective March 31, 2007.  The
total loss resulting from these operations were $0 and $20,809 for the periods
ended December 31 2008 and 2007 respectively.





Net loss





We
incurred net losses of $723,579 and $1,421,605 for the years ended December 31,
2008 and 2007, respectively.





Liquidity
and Capital Resources





As of
December 31, 2008, cash totaled $263 as compared with $72,625 cash or cash
equivalents at December 31, 2007.  Cash used in operations was
$149,862 and was offset by $77,500 of cash from the issuance of the 10% secured
notes.  Cash used by operations was $149,862 and decreased by $484,706
from the comparative prior year period.  The decrease resulted from a
smaller net loss for the year ended December 31, 2008. Cash provided by
financing was $77,500 and decreased by $512,500 from the comparative prior year
period.  The decrease resulted from the additional funds raised in
private placements throughout 2007.





Working
capital was $(589,145) at December 31, 2008, as compared with working capital of
$(137,300) at December 31, 2007.  This decrease in working capital was
a result primarily of using cash balances and creditors to support the
Company.





All
primary and ongoing operational efforts are prioritized on seeking a strategic
alternative for the public Company moving forward beyond the end of the second
quarter 2009.  The Company is currently insolvent unless there is a
short-term capital infusion, a material change through new revenue sources, or
an executed LOI tied to a strategic alternative.  We do not currently
have sufficient cash on hand to satisfy existing operating cash needs, reduce or
pay key outstanding vendor invoices or service working capital requirements on a
sustained basis.  As previously disclosed in the Company’s annual
report on Form 10-KSB for the year ending December 31, 2007 (the “2007 Annual
Report”), quarterly report on Form 10-QSB for the third quarter of the Company’s
2007 fiscal year (the “Third Quarter 10-QSB 2007”) and quarterly report on Form
10-Q for the first quarter of the Company’s 2008 fiscal year (the “First Quarter
10-Q 2008”), ongoing program and approval delays, non-payment for services,
operational challenges and an inability to raise capital have all contributed to
the failure of the underlying business model and the resulting insolvency and
lack of viability of the business.  Aside from monies received from
senior secured notes in the second quarter of 2008, all other recent individual
and institutional efforts to raise additional new capital have been unsuccessful
and there can be no assurances that this will change in the short term due to
the challenging market conditions for both private and public financing and the
current state of the Company’s business and operations.





13


At this
time, the Company’s Board, a single individual, is actively exploring strategic
alternatives that would preserve its public vehicle status and is also
considering options associated with the pursuit of a reverse acquisition should
no other strategic alternatives present themselves that would preserve the
Company’s current public vehicle.  Should a reverse acquisition
ultimately be pursued or executed, it would likely result in a change to the
Company’s underlying business model, a change in control, a change in
management, a sale of assets, a merger with another entity or some other
combination.  Should the pursuit of strategic alternatives fail to
deliver a viable migration strategy to the Company or its stakeholders, then the
Board and management may seek to initiate an orderly liquidation of the Company,
some combination of these transactions or other legal options that may be
available.  In addition, should alternatives fail to deliver a viable
strategy, the Board and management will attempt to contact vendors to reduce or
eliminate any and all contracted service costs or otherwise negotiate or settle
outstanding debts or obligations using non-cash instruments such as
stock.





On April
4, 2008, the Company received $77,500 of financing in the form of senior bridge
notes, including the $37,500 related to the performance on the Letter of Intent
executed by and between U.S. Social Scene (USSS) and Trycera as disclosed under
Form 8-K on April 4, 2008 and later terminated by the Company for failure to
perform.





The
Company does not have sufficient cash to meet its working capital needs while it
pursues its strategic alternatives beyond April 2009 and has not had sufficient
cash balances since early in 2008.  Should any efforts by the Board
and management not prove successful, the Board and management will explore any
and all remaining alternatives for the Company, whatever they may
be.





Off-Balance
Sheet Arrangements





During
the years ended December 31, 2008 and 2007, we did not engage in any off-balance
sheet arrangements.





ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





As a
smaller reporting company, we have elected not to provide the disclosure
required by this item.





ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





The
financial statements required pursuant to this item are included immediately
following the signature page of this report.





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





There
have been no changes in or disagreements with accountants reportable pursuant to
this item.






ITEM
9A.  CONTROLS AND PROCEDURES





As a smaller reporting
company, we have elected not to provide the information required by this
item.  Rather, we have provided the information set forth in Item
9A(T) below.





14


ITEM
9A(T).  CONTROLS AND PROCEDURES





Evaluation
of disclosure controls and procedures





Our
President, who serves as our principal executive officer and our principal
financial officer, after evaluating the effectiveness of our “disclosure
controls and procedures” (as defined in the Securities Exchange Act of 1934 Rule
13a-15(e)) as of the end of the period covered by this Annual Report on Form
10-K (the “Evaluation Date”), has concluded that as of the Evaluation Date, our
disclosure controls and procedures were not effective to provide reasonable
assurance that information we are required to disclose in reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission
rules and forms, and that such information is accumulated and communicated to
our management, including our principal executive and financial officer, as
appropriate, to allow timely decisions regarding required disclosure.  A
discussion of the material weaknesses in our disclosure controls and procedures
is set forth below.





Changes
in internal control over financial reporting





There
were no changes in our internal control over financial reporting during our most
recent fiscal quarter that materially affected, or were reasonably likely to
materially affect, our internal control over financial reporting.





Management’s
report on internal control over financial reporting





Our
management consists of Ray A. Smith, our Chief Executive Officer (“CEO”), and
Bryan Kenyon, our Principal Financial Officer (“PFO”), who are responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Rule 13a-15(f) of the Exchange
Act.  As a result, our internal control system is limited in its scope
and capabilities, although, based on our CEO and PFO’s general business
experience, is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes, in accordance with generally accepted accounting
principles.





Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting.  Based on his evaluation, they concluded
that there are material weaknesses in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the Company’s annual or
interim financial statements will not be prevented or detected on a timely
basis.





All of
our financial reporting is carried out by our CEO and  PFO, and we do
not have an audit committee.  This lack of accounting staff results in a
lack of segregation of duties and accounting technical expertise necessary for
an effective system of internal control.





Since our
Company has no ongoing operations and may, at this time, be considered a “blank
check” or “shell” company, as defined in the Securities Act, we are
making an effort to mitigate this material weakness to the fullest extent
possible.  This is done by having our CEO and our PFO review all our
financial reporting requirements for reasonableness.  All unexpected
results are investigated.  At any time, if it appears that any control can
be implemented to continue to mitigate such weaknesses, it will be immediately
implemented.  As soon as our finances allow, we plan to hire sufficient
accounting staff and implement appropriate procedures for monitoring and review
of work performed by our CEO and  PFO.





Based on
our evaluation our management has concluded that our internal control over
financial reporting was not effective as of December 31, 2008.





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





15


ITEM
9B.  OTHER INFORMATION





The
Company did not fail to file any information required to be filed in a report on
Form 8-K during the fourth quarter of the fiscal year ended December 31,
2008.




PART
III





ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE





Current
Management





The
following table sets forth the name and ages of, and position or positions held
by, our executive officers and directors:





Name
            Age
            Position(s)
            Director
      Since
            Employment
      BackgroundRonald
      N. Vance
            56
            Chairman
            2009
            Since
      1984 Mr. Vance has been self-employed as an attorney practicing in the
      State of Utah.Ray
      A. Smith
            36
            President
      and Chief Executive Officer
            --
            Since
      April 2006 Mr. Smith has been the President and a director of CRS
      Corporation, a company offering credit enhancement, credit education, and
      consumer financial assistance services.  From February 2002
      until April 2006, he as the President and CEO of Comm 2020 which operated
      a call center marketing credit services and a credit card application
      processing center for Visa and MasterCard.  Mr. Smith has served
      as President of and been employed by Trycera since February
      2009.Bryan
      Kenyon
            37
            Chief
      Financial Officer
            --
            Mr.
      Kenyon was our Chief Financial Officer from May 2004 until October 2008
      and our Chief Operating Officer from April 2007 until October
      2008.  He was reappointed as our CFO in April
      2009.  From May 2002 until February 2004, he was Director of
      Financial Planning and Analysis for Next Estate Communications, a provider
      of prepaid MasterCard® cards and stored value
      solutions.





On April
14, 2008, the California Department of Corporations issued a desist and refrain
order against Mr. Smith, CRS Corporation and others alleging that the parties
had violated Section 25110 of the California Securities Act of 1968 by making
general solicitations in connection with the sale of the common stock by CRS
Corporation.  The alleged violation took place in or about September
2006.





Directors
are elected for a term of one year and until their successors are elected and
qualified. Annual meetings of the stockholders, for the selection of directors
to succeed those whose terms expire, are to be held at such time each year as
designated by the Board of Directors.  The Board of Directors has not
selected a date for the next annual meeting of shareholders.  Officers
are elected by the Board of Directors, which is required to consider that
subject at its first meeting after every annual meeting of
stockholders.  Each officer holds his office until his successor is
elected and qualified or until his earlier resignation or removal.





16


Section
16(a) Beneficial Ownership Reporting Compliance




According
to our records, no director, officer, or beneficial owner of more than 10% of
our Common Stock failed to file on a timely basis reports required by Section
16(a) of the Exchange Act during the fiscal year ended December 31,
2008.





Code
of Ethics





On August
25, 2004, the Board of Directors adopted a Code of Ethics.  The purpose of
the Code of is to set the expectations of the highest standards of ethical
conduct and fair dealings.  The Code of Ethics applies to our
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions.





Overview
of Director Nominating Process





The Board
of Directors does not have a standing nominating committee or committee
performing similar functions. The Board of Directors also does not currently
have a policy for the qualification, identification, evaluation or consideration
of director candidates. The Board of Directors does not believe that a defined
policy with regard to the qualification, identification, evaluation or
consideration of candidates recommended by stockholders is necessary at this
time due to the lack of operations and the fact that we have not received
any stockholder recommendations in the past.  Director nominees are
considered solely by our current sole director.





Audit
Committee Financial Expert





Our Board
of Directors performs the duties that would normally be performed by an audit
committee.  Given our lack of operations prior to any merger, our
Board of Directors believes that its current member has sufficient knowledge and
experience necessary to fulfill the duties and obligations of the audit
committee for our Company. The Board of Directors has determined that [*Mr.
White is an audit committee financial expert, but he is not an independent
director] the Company does not have an audit committee financial expert, due to
lack of funds.





ITEM
11.  EXECUTIVE COMPENSATION





Executive
Compensation





During
2008 Bryan Kenyon served as our principal executive officer until October 2008,
at which time Alan Knitowski assumed the position until January
2009.  The following table sets forth the compensation of the named
executive officer for each of the two fiscal years ended December 31, 2008 and
2007:





Name
      &
                                        Principal
      Position
                                      
                                      Year
                                      
                                      Salary
      ($)
                                      
                                      
                                      Bonus
                                        ($)
                                      
                                      
                                      Stock
      Awards
                                        ($)
                                      
                                      
                                      Option
      Awards
                                        ($)
                                      
                                      
                                      All
      Other Compensation
                                        ($)
                                      
                                      
                                      Total
                                        ($)Bryan
      W. Kenyon, CFO/COO
                                      
                                      2008
                                      
                                      $
                                      14,968
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      $
                                      51,205
                                      (1)
                                      
                                      $
                                      66,1732007
                                      
                                      $
                                      120,000
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      88,312
                                      (2)
                                      
                                      
                                      181,750
                                      (2)
                                      
                                      $
                                      8,898
                                      (1)
                                      
                                      $
                                      898,960Alan
      S. Knitowski, Chairman
                                      
                                      2008
                                      
                                      $
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      $72,000
                                      (5)
                                      
                                      
                                      $72,0002007
                                      
                                      $
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      0
                                      
                                      
                                      
                                      24,000
                                      (3)
                                      
                                      
                                      $60,000
                                      (4)
                                      
                                      
                                      $84,000








(1)
            Mr.
      Kenyon’s other annual compensation consisted of amounts paid to him as an
      independent contractor in 2008 after his employment was
      terminated.  It also consisted of a $307 per pay period
      adjustment for healthcare in 2007 of $342 per pay
  period.(2)
            On
      May 26, 2007, our Compensation Committee granted 100,000 shares and
      200,000 stock purchase options to Mr. Kenyon pursuant to the new
      employment agreement entered into by and between Mr. Kenyon and the
      Company.  The grant and options vest at a rate of 1/16th
      per quarter for four years and the options are exercisable at $1.00 per
      share. The value of the shares and options was determined in accordance
      with FAS 123R.(3)
            The
      grants and options vest at a rate of 1/4th of the total options granted at
      the end of each three-month period, which initial period shall commence on
      the day of the grant, and immediately in the event of a Corporate
      Transaction, as defined in the Plan. The value of the shares and options
      was determined in accordance with FAS 123R.(4)
            We
      paid $5,000 per month to Ecewa Capital Group LLC, a company of which Mr.
      Knitowski is the managing director, pursuant to an agreement whereby Ecewa
      provides to us general business and corporate strategy consulting
      services.(5)
            We
      paid $5,000 per month to Ecewa Capital Group LLC, a company of which Mr.
      Knitowski is the managing director, pursuant to an agreement whereby Ecewa
      provides to us general business and corporate strategy consulting services
      and we paid an additional $12,000 to the Office of the Chairman for
      corporate office space.





Equity
Awards





The
following table sets forth certain information concerning unexercised options
for the named parties that were outstanding as of December 31, 2008, all of
which had expired or were cancelled as of April 6, 2009:





Name
                              
                              Number
      of securities underlying unexercised options
                                (#)
                                Exercisable
                              
                              
                              Number
      of securities underlying unexercised options
                                (#)
                                unexercisable
                              
                              
                              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
                                ($)Bryan
      W. Kenyon
                              
                              
                              750,000
                              
                              
                              
                              0
                              
                              
                              
                              (1)
                              
                              May
      27, 2014
                              
                              
                              0
                              
                              
                              
                              037,500
                              
                              
                              
                              0
                              
                              
                              $
                              1.00
                              
                              December
      30, 2015
                              
                              
                              0
                              
                              
                              
                              0200,000
                              
                              
                              
                              0
                              
                              
                              $
                              1.01
                              
                              June
      7, 2017
                              
                              
                              125,000
                              
                              
                              $
                              7,500Alan
      S. Knitowski
                              
                              
                              31,250
                              
                              
                              
                              0
                              
                              
                              $
                              0.25
                              
                              May
      27, 2014
                              
                              
                              0
                              
                              
                              
                              025,000
                              
                              
                              
                              0
                              
                              
                              $
                              0.75
                              
                              May
      27, 2015
                              
                              
                              0
                              
                              
                              
                              025,000
                              
                              
                              
                              0
                              
                              
                              $
                              1.00
                              
                              May
      27, 2016
                              
                              
                              0
                              
                              
                              
                              025,000
                              
                              
                              
                              0
                              
                              
                              $
                              1.03
                              
                              May
      29, 2017
                              
                              
                              0
                              
                              
                              
                              0


(1) The
exercise prices of these options are as follows:  $0.25 first 1/4 of
options granted; $0.45 second 1/4 of options granted; $0.65 for third 1/4
options granted; and $0.85 final 1/4 of options granted.








On May
11, 2004, our Board of Directors adopted the 2004 Stock Option/Stock Issuance
Plan.  Our shareholders approved the plan effective June 14,
2004.  The purpose of the plan is to provide eligible persons an
opportunity to acquire a proprietary interest in our company and as an incentive
to remain in the service of the company.  The Plan was updated on Jun
7, 2007 to include more shares of common stock.





There
were 10,000,000 shares of common stock initially authorized for nonstatutory and
incentive stock options and stock grants under the plan, which are subject to
adjustment in the event of stock splits, stock dividends, and other
situations.





The plan
is administered by our Board of Directors.  Participants in the plan
are to be selected by the plan administrator which is currently our Compensation
Committee.  The persons eligible to participate in the plan are as
follows:  (a) employees of our company and any of its
subsidiaries; (b) non-employee members of the board or non-employee members of
the Board of Directors of any of its subsidiaries; and (c) consultants and
other independent advisors who provide services to our company or any of its
subsidiaries.  Options may be granted, or shares issued, only to
consultants or advisors who are natural persons and who provide bona fide
services to our company or one of its subsidiaries, provided that the services
are not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
our securities.





17


The plan
will continue in effect until all of the stock available for grant or issuance
has been acquired through exercise of options or grants of shares, or until May
1, 2014, whichever is earlier.  The plan may also be terminated in the
event of certain corporate transactions such as a merger or consolidation or the
sale, transfer or other disposition of all or substantially all of our
assets.




Stock
option awards under the plan consist of nonstatutory stock options (NSOs) and
incentive stock options (ISOs).  ISOs may be granted only to employees
of our company or one of its subsidiaries.





The
purchase price under each option is established by the plan administrator, but
in no event will it be less than 100% of the fair market value of our common
stock for ISOs and 85% for NSOs.  The price applicable to any option
holder who holds more than 10 percent of our outstanding common stock will be
110% percent of fair market value. The aggregate exercise price, plus applicable
taxes, are due and payable in cash or check on the date of the exercise of an
option.  However, the plan administrator may permit payment of the
total amount due by a full-recourse, interest-bearing promissory note; payroll
deductions in installments; shares of common stock valued at fair market value
on the date of exercise of the option; or through a special sale and remittance
procedure through a designated brokerage firm.





The plan
administrator will fix the terms of each option, but no option can be granted
for a term in excess of 10 years.  The term of such an option will not
be longer than five years in the case of any option holder who holds, on the
date of the grant of an ISO, more than 10% of our outstanding common stock. Upon
termination of services, the option holder will have a limited time in which to
exercise vested options.  The plan administrator will not impose a
vesting schedule upon any options granted which provides for exercise of an
option for less than 20 percent of the shares subject to the option and with an
initial installment for vesting which is fixed for a longer period than one year
from the date of grant of the option.





During
the lifetime of the person to whom an option has been granted, only that person
has the right to exercise the option and that person cannot assign, encumber or
transfer any right to the option.  Upon the death of the person to
whom an option has been granted, the option may be exercised only by those
persons who inherit from the holder of the option by will or under the
applicable laws of descent and distribution.





The plan
administrator has the authority, with the consent of the option holder affected,
to cancel outstanding options and to grant in substitution therefore new options
covering the same or a different number of shares of common stock at an exercise
price per share based upon the fair market value per share of such stock on the
date of the grant of a new option.





At the
discretion of the plan administrator, the consideration provided for the
issuance of shares of common stock under the stock issuance plan will be
satisfied in one or more of the following ways, or combinations
thereof:  (a) in cash or check payable to us; (b) issuing of a
full-recourse promissory note; (c) payroll deductions in installments; (d) past
services rendered to us or one of our subsidiaries; or (e) the agreement of a
participant to accept employment and the undertaking and performance of services
with or to us or one of our subsidiaries.





Stock
issued under the stock issuance plan may vest immediately or upon terms
established by the plan administrator, provided that at least 20 percent of the
total shares subject to a vesting schedule will fully vest in each calendar year
on the anniversary date of the issuance of the shares.





Irrespective
of whether a participant’s shares are vested or are held in escrow, a
participant to whom shares under the stock issuance plan have been issued will
have the right to vote those shares and to receive any regular cash dividends
paid on those shares.





If
employment with or service to us terminates for whatever cause at a time when
the participant holds unvested shares issued under the stock issuance plan,
those shares will be immediately surrendered to us and cancelled.  In
the event the participant paid for the shares surrendered in cash or cash
equivalent, the amount of that consideration will be repaid.  In the
event that the participant furnished a promissory note in payment of shares
surrendered, the remaining balance of that note attributable to the surrendered
shares will be cancelled.  In the sole discretion of the plan
administrator, the surrender and cancellation of any unvested shares issued
under the stock issuance plan may be waived at any time by the plan
administrator subject to such terms and conditions or on no terms and conditions
as the plan administrator may determine.





18


Director
Compensation





The
following table sets forth certain information concerning the compensation of
our directors, excluding Messrs Kenyon and Knitowski, whose total compensation
is set forth in the Summary Compensation Table above, for the last fiscal year
ended December 31, 2008:





Name
                        
                        
                        
                        All
      other compensation
                          ($)
                        
                        
                        Total
                          ($)Luan
      Dang (2)
                        
                        
                        
                        
                        14,951
                        (1)
                        
                        
                        14,951Randolph
      Cherkas (2)
                        
                        
                        
                        
                        0
                        
                        
                        
                        0Robert
      Lang(2)
                        
                        
                        
                        
                        0
                        
                        
                        
                        0











(1)
            This
      amount represents reimbursement incurred by Mr. Dang for medical and
      dental insurance premiums for him and his
  family.





(2)
            Mr.
      Dang resigned as a director on January 16, 2009, Mr. Cherkas resigned as a
      director on October 2, 2008, and Mr. Lang  resigned as a
      director on January 16, 2008.




Standard Arrangements for Outside
Directors.  Directors are permitted to receive fixed fees and
other compensation for their services as directors, as determined by our board
of directors.  The board has adopted a policy to compensate
non-employee directors.  Each such director receives options for each
year of service.  At the commencement of each year of service as a
non-employee director, the person receives options to purchase 25,000
shares.  The options are exercisable at market value on the date of
grant based upon the average closing bid price for the ten trading days
immediately preceding appointment or the anniversary date.  The board
also grants annual options to purchase 10,000 shares for these directors to
serve on a committee of the board, and 5,000 shares to chair the
committee.  These options vest as to 25% of the options per quarter,
starting on the date of grant.  They expire five years from the date
of grant.





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





Beneficial
Owners of More than Five Percent, Directors, and Management





19


The
following table sets forth certain information from reports filed by the named
parties, or furnished by current management, concerning the ownership of our
Common Stock as of April 6, 2009, of (i) each person who is known to us to be
the beneficial owner of more than 5 percent of our Common Stock; (ii) all
directors and executive officers; and (iii) our directors and executive officers
as a group:





Name
      and Address of Beneficial Owner
              
              Amount
      and Nature of Beneficial Ownership(1)
              
              
              Percentage
      of Class(2)Ronald
      N. Vance
                1656
      Reunion Ave., Suite 250
                South
      Jordan, UT 84095
              
              
              4,335,585
              (3)
              
              
              44.7
              %Ray
      A. Smith
                1317
      S. Westgate Ave, Suite 205
                Los
      Angeles, CA 90025
              
              
              0
              
              
              
              --Bryan
      Kenyon
                2560
      E. Chapman Ave
                Suite
      404
                Orange,
      CA. 92689
              
              
              715,080
              (4)
              
              
              7.4
              %Executive
      Officers and
                Directors
      as a Group
                (3
      Person)
              
              
              5,050,665
              
              
              
              52.1Alan
      S. Knitowski
                2560
      E. Chapman Ave
                Suite
      404
                Orange,
      CA. 92689
              
              
              729,802
              (5)
              
              
              7.5
              %Luan
      Dang
                2560
      E. Chapman Ave
                Suite
      404
                Orange,
      CA. 92689
              
              
              3,789,500
              (6)
              
              
              36.3
              %Matthew
      S. Kerper
                P.O.
      Box 3599
                Coppell,
      TX 75019
              
              
              992,085
              
              
              
              10.3
              %


(1)  This table is based upon
information supplied by officers, directors and principal stockholders and
Schedules 13D and 13G filed with the Securities and Exchange
Commission.  Unless otherwise indicated in the footnotes to this
table, and subject to community property laws where applicable, we believe that
each of the stockholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially
owned.  Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally includes voting or
investment power with respect to securities.  Beneficial ownership
also includes shares of stock subject to options and warrants currently
exercisable or exercisable within 60 days of the date of this
table.  As of the date of this table, there are no outstanding options
or warrants.


(2)  Applicable
percentages are based on 9,679,302 shares of our Common Stock outstanding on
April 6, 2009.


(3)  Includes
4,250,585 shares for which Mr. Vance holds proxies.  Of these proxy
shares, 67,500 are beneficially owned by Alan S. Knitowski, 2,430,000 are
beneficially owned by Luan Dang, and 992,085 are beneficially owned by Matthew
S. Kerper.


(4)  Includes
190,000 shares owned by a family trust and 80 shares owned with his
wife.


(5)  Consists
of 67,500 shares owned by Mr. Knitowski’s IRA, 140,000 shares and 70,000
warrants owned by Curo Capital, LLC, an entity controlled jointly by Mr.
Knitowski and Mr. Dang, and 452,302 shares owned by Trymetris Capital Fund I,
LLC, an entity managed by Curo Capital, LLC.


(6)  Includes
1,710,000 shares owned by Sagoso Capital, LLC, an entity controlled by Mr. Dang,
140,000 shares and 70,000 warrants owned by Curo Capital, LLC, an entity
controlled jointly by Mr. Dang and Mr. Knitowski, 85,000 shares owned by a trust
for the children of Mr. Knitowski for which Mr. Dang is trustee, and 452,302
shares owned by Trymetris Capital Fund I, LLC, an entity managed by Curo
Capital, LLC.  Also includes 697,500 shares issuable upon exercise of
warrants.





20


Change
of Control





We
anticipate that a change of control will occur when a new business venture is
acquired.  Our business plan is to either reestablish business
operations internally or seek and, if possible, acquire an operating entity
through a reverse acquisition transaction with the operating
entity.  By its nature, a reverse acquisition generally entails a
change in management and principal shareholders of the surviving
entity.   While management cannot predict the specific nature of
the form of the reverse acquisition, it is anticipated that at the closing of
the process, the current sole officer and director would resign in favor of
persons designated by the operating company and that the shareholders of the
operating entity would receive a controlling number of shares in our company,
thus effecting a change in control of the company.





Equity
Compensation Plan Information





The
following table sets forth as of the most recent fiscal year ended December 31,
2008, certain information with respect to compensation plans (including
individual compensation arrangements) under which our common stock is authorized
for issuance:





Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
                      (a)
                    
                    
                    Weighted-average
      exercise price of outstanding options, warrants and rights
                      (b)
                    
                    
                    Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column (a) and
      (b))
                      (c)Equity
      compensation plans approved by security holders
                    
                    
                    1,979,500
                    
                    
                    $0.98
                    
                    
                    
                    7,176,500Equity
      compensation plans not approved by security holders
                    
                    
                    1,250,250
                    
                    
                    
                    $0.83
                    
                    
                    
                    -0-Total
                    
                    
                    3,229,750
                    
                    
                    
                    
                    
                    
                    
                    7,176,500





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





Certain
Relationships and Related Transactions





In
connection with the change of control at January 22, 2009, all outstanding 10%
Senior Secured Promissory Notes, including notes issued to Messrs Knitowski and
Dang, former directors of the Company, were cancelled.  These notes
were in the principal amount of $77,500.  Also in connection with the
change of control, the consulting agreement with Ecewa Capital Group, LLC and
the rental agreement with Curo Capital, LLC, entities controlled by Mr.
Knitowski, were cancelled.





Mr.
Vance’s law firm served as legal counsel for the Company since its inception in
2000 until November 14, 2008, at which time Mr. Vance terminated the
representation of the Company.   At the time of the termination,
the Company owed Mr. Vance’s firm $23,762 for past services, none of which has
been paid.  Mr. Vance also served as Secretary for the Company from
May 2004 until November 14, 2008.  Mr. Vance currently owns 85,000
shares of the Company’s common stock which he received for past
services.  Mr. Vance’s law firm had represented the Company since its
inception in 2000 through November 2009.  Prior to their resignations,
Messrs Knitowski and Dang, as the sole directors, approved a new engagement
agreement with Mr. Vance’s law firm.  Under the agreement the Company
will pay Mr. Vance’s firm an hourly fee for services performed by him or his
legal assistants in connection with the settlement of the outstanding debts,
review of any potential reverse acquisition transaction, and ongoing reporting
obligations with the SEC.  The engagement agreement may be terminated
by the Company at any time.





In
connection with the change of control at January 22, 2009, Messrs. Knitowski and
Dang provided to Mr. Vance irrevocable proxies to vote 3,258,500
shares.  Each of the proxies granted to Mr. Vance is irrevocable and
will expire either on December 31, 2009, the date Mr. Vance resigns as a
director, or the date upon which Mr. Vance ceases to control the Company,
whichever first occurs.  Sale or transfer of the shares is conditioned
upon the purchaser or transferee agreeing in writing to be bound by the terms of
the proxy.  Mr. Vance, acting as proxy, may vote the shares at any
meeting of the shareholders or may execute any written consent evidencing action
by the shareholders.  The proxies are not limited in the matters upon
which the shares may be voted.





21


In
connection with the appointment of Mr. Smith as President and CEO, the Board
approved a one-year, full-time employment agreement with Mr. Smith effective
February 6, 2009.  The agreement will be extended for additional
one-year periods unless it is terminated by the Company at least 90 days before
its expiration.  The base salary to be paid to Mr. Smith is $10,000
per month beginning when the Company raises a minimum of $300,000.  In
addition, Mr. Smith shall be entitled to a signing bonus of stock of the Company
when all of the existing liabilities of the Company are satisfied and the
Company completes a reverse acquisition or merger transaction.  Also,
when the payment of salary commences, the Company has agreed to provide Mr.
Smith an expense allowance of $2,000 per month.  The employment
agreement is terminable upon the death or disability of Mr. Smith, or for cause,
and may be terminated by the Company without cause which would require the
Company to pay a severance benefit in an amount equal to 90 days’
salary.




On
January 29, 2009, the Company entered into a consulting agreement with Balius
Consulting Group, LLC, an entity controlled by Bryan Kenyon, a former director
and officer of the Company, and Steven Murphy, a former accounting consultant to
the Company.  Balius has agreed to assist in the negotiation of
outstanding liabilities of the Company and to gather and organize the corporate
and financial records of the Company.  The Company has agreed to pay
any hourly fee for work performed by Balius and to pay a bonus based upon the
settlement amount of the outstanding payables.  The consulting
agreement will terminate on December 31, 2009, unless terminated by the Company
earlier for cause or if Messrs Kenyon or Murphy shall cease to provide the
services for Balius.





Director
Independence





Our
securities are not listed on a national securities exchange or in an
inter-dealer quotation system which has requirements that directors be
independent.  As a result, we have adopted the independence standards
of the American Stock Exchange to determine the independence of our directors
and those directors serving on our committees.  These standards
provide that a person will be considered an independent director if he or she is
not an officer of the Company and is, in the view of the Company’s Board of
Directors, free of any relationship that would interfere with the exercise of
independent judgment.  Our Board of Directors has determined that our
sole director is not independent.  We have no audit
committee.





ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES





Fees
Paid





Chisholm,
Bierwolf, Nilson & Morrill, LLC served as our independent registered public
accounting firm for the fiscal years ended December 31, 2008 and
2007.  The following fees were paid to our independent registered
public accounting firm for services rendered during our last two fiscal
years:





Audit
Fees





The
aggregate fees billed for professional services rendered by our principal
accountant for the audit of our annual financial statements, review of financial
statements included in the quarterly reports and other fees that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for the fiscal years ended December 31, 2008 and 2007 were
$25,000 and $28,265, respectively.





Audit-Related
Fees





There
were no fees billed for assurance and related services by our principal
accountant that are reasonably related to the performance of the audit or review
of the financial statements, other than those previously reported above, for the
fiscal years ended December 31, 2008 and 2007.





Tax Fees





There
were no fees billed for professional services rendered by our principal
accountant for tax compliance, tax advice and tax planning in the fiscal years
ended December 31, 2008 and 2007, respectively.





All Other
Fees





There
were no other fees billed for products or services provided by the principal
accountant, other than those previously reported above, for the fiscal years
ended December 31, 2008 and 2007.





Audit
Committee





Our Board
of Directors, which functions in the capacity of an audit committee, has
considered whether the non-audit services provided by our auditors to us are
compatible with maintaining the independence of our auditors and concluded that
the independence of our auditors is not compromised by the provision of such
services.  Our Board of Directors pre-approves all auditing services
and permitted non-audit services, including the fees and terms of those
services, to be performed for us by our independent auditor prior to
engagement.





22


PART
IV





ITEM
15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES





Financial
Statements





The
following financial statements are filed with this report:




Report of
Independent Registered Public Accounting Firm




Consolidated
Balance Sheets at December 31, 2008 and 2007




Consolidated
Statements of Operations for the years ended December 31, 2008 and
2007





Consolidated
Statements of Stockholders’ Equity for the years ended December 31, 2008
and 2007




Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and
2007




Notes to
ConsolidatedFinancial Statements





Exhibits





The
following exhibits are filed with this report:





Incorporated by ReferenceExhibitNumber
                                                        
                                                        Exhibit Description
                                                        
                                                        Form
                                                        
                                                        
                                                        File No.
                                                        
                                                        
                                                        Exhibit
                                                        
                                                        Filing Date
                                                        
                                                        Filed Here-with3.1
                                                        
                                                        Articles
      of Incorporation
                                                        
                                                        
                                                        8-K
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        3.1
                                                        
                                                        6/15/043.2
                                                        
                                                        Current
      Bylaws
                                                        
                                                        10-QSB
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        3.2
                                                        
                                                        8/16/044.1
                                                        
                                                        Form
      of Common Stock Certificate
                                                        
                                                        10-SB
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        4.1
                                                        
                                                        7/
      21/004.2
                                                        
                                                        2004
      Stock Option/Stock Issuance Plan *
                                                        
                                                        
                                                        8-K
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        4.2
                                                        
                                                        5/
      13/044.3
                                                        
                                                        Grant
      of Stock Option Form used pursuant to the 2004 Stock Option/Stock Issuance
      Plan
                                                        
                                                        10-KSB
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        4.3
                                                        
                                                        4/
      7/064.4
                                                        
                                                        Form
      of Series A Common Stock Purchase Warrant, as amended
                                                        
                                                        10-KSB
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        4.6
                                                        
                                                        4/
      7/064.5
                                                        
                                                        Form
      of Series B Common Stock Purchase Warrant
                                                        
                                                        10-KSB
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        4.7
                                                        
                                                        4/
      7/06
                                                        
                                                        
                                                        X4.6
                                                        
                                                        Description
      of Registration Rights for investors in offerings dated September 20,
      2005, and January 3, 2006
                                                        
                                                        10-KSB
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        4.8
                                                        
                                                        4/
      7/0610.1
                                                        
                                                        Employment
      Agreement with Ray A. Smith
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X10.2
                                                        
                                                        Consulting
      agreement with Balius Consulting Group, LLC
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X10.3
                                                        
                                                        Engagement
      Agreement with Ronald N. Vance
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X10.4
                                                        
                                                        Agreement
      with CRS Corporation14.1
                                                        
                                                        Code
      of Ethics
                                                        
                                                        
                                                        8-K
                                                        
                                                        
                                                        
                                                        000-30872
                                                        
                                                        
                                                        
                                                        14.1
                                                        
                                                        8/
      26/0431.1
                                                        
                                                        Rule
      13a-14(a) Certification by Principal Executive Officer
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X31.2
                                                        
                                                        Rule
      13a-14(a) Certification by Principal Financial Officer
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X32.1
                                                        
                                                        Section
      1350 Certification of Principal Executive Officer
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X32.2
                                                        
                                                        Section
      1350 Certification of Principal Financial Officer
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        X


*Management
contract, or compensatory plan or arrangement required to be filed as an
exhibit.











Signature
Page Follows


23





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.


Trycera Financial,
      Inc.Date:
      April 15, 2009
              By:
              /s/ Ray
      A. SmithRay
      A. SmithPresident








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










Date:  April
      15, 2009
            /S/ Ronald N.
      VanceRonald
      N. Vance, DirectorDate:  April
      15, 2009
            /S/ Ray A.
      SmithRay
      A. Smith, President (Principal Executive Officer)Date:  April
      15, 2009
            /S/ Bryan
      KenyonBryan
      Kenyon, CFO (Principal Financial and Accounting Officer)




24


Consolidated
Financial Statements



































TRYCERA
FINANCIAL, INC
































For
the years ended December 31, 2008 and 2007





25


Table
of Contents





For
the years ended December 31, 2008 and 2007





PageFinancial
      StatementsReport
      of Independent Registered Public Accounting Firm
                
                
                3Consolidated
      Balance Sheets
                
                
                4Consolidated
      Statements of Operations
                
                
                5Consolidated
      Statements of Cash Flows
                
                
                6Consolidated
      Statements of Stockholders' Deficit
                
                
                7Notes
      to Consoldiated Financial Statements
                
                
                8






REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors and Shareholders
 Trycera
Financial, Inc.
 Santa
Monica, California
 
 We have
audited the accompanying consolidated balance sheets of Trycera Financial, Inc.
as of December 31, 2008 and 2007, and the related consolidated statements of
operations, stockholders' deficit and cash flows for the years ended December
31, 2008 and 2007.  These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatements. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall consolidated financial statements
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Trycera
Financial, Inc. as of December 31, 2008 and 2007, and the consolidated results
of its operations and its 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 consolidated financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note 12 to
the consolidated financial statements, the Company has a working capital
deficit, continued operating losses, and negative cash flows from operations,
which raises substantial doubt about its ability to continue as a going
concern.  Management’s plans in those matters are also described in
Note 12.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 Chisholm,
Bierwolf, Nilson & Morrill LLC
 Chisholm,
Bierwolf, Nilson & Morrill LLC
 Bountiful,
Utah
 April 10,
2009





3




Trycera
      Financial, Inc.Consolidated
      Balance SheetsDecember
                                                
                                                
                                                December31,
      2008
                                                
                                                
                                                
                                                31,
      2007AssetsCurrent AssetsCash
                                                
                                                $
                                                263
                                                
                                                
                                                $
                                                72,625Accounts
      receivable, net
                                                
                                                
                                                -
                                                
                                                
                                                
                                                30,931Prepaid
      expenses and other current assets
                                                
                                                
                                                -
                                                
                                                
                                                
                                                29,853Client
      ACH reserves
                                                
                                                
                                                -
                                                
                                                
                                                
                                                5,000Total
      Current Assets
                                                
                                                
                                                263
                                                
                                                
                                                
                                                138,409Property
      & Equipment, net
                                                
                                                
                                                -
                                                
                                                
                                                
                                                9,751Other AssetsDefinite
      life intangible assets, net
                                                
                                                
                                                -
                                                
                                                
                                                
                                                2,159Total
      Other Assets
                                                
                                                
                                                -
                                                
                                                
                                                
                                                2,159Total
      Assets
                                                
                                                $
                                                263
                                                
                                                
                                                $
                                                150,319Liabilities
      & Stockholders’ DeficitCurrent LiabilitiesAccounts
      payable
                                                
                                                $
                                                340,089
                                                
                                                
                                                $
                                                126,629Portfolio
      reserves
                                                
                                                
                                                34,774
                                                
                                                
                                                
                                                34,202Accrued
      expenses
                                                
                                                
                                                137,045
                                                
                                                
                                                
                                                114,87810%
      senior secured notes
                                                
                                                
                                                77,500
                                                
                                                
                                                
                                                -Total
      Current Liabilities
                                                
                                                
                                                589,408
                                                
                                                
                                                
                                                275,709Total
      Liabilities
                                                
                                                
                                                589,408
                                                
                                                
                                                
                                                275,709Commitments
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Stockholders’ DeficitPreferred
      stock, 20,000,000 shares authorized,$.001
      par value; none issued and outstanding
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Common
      stock, 100,000,000 shares authorized at$.001
      par value; 9,694,302 and 9,250,302 sharesissued
      and outstanding, respectively
                                                
                                                
                                                9,694
                                                
                                                
                                                
                                                9,250Additional
      paid in capital
                                                
                                                
                                                5,364,504
                                                
                                                
                                                
                                                5,184,500Prepaid
      stock compensation
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (88,376
                                                )Accumulated
      deficit
                                                
                                                
                                                (5,963,343
                                                )
                                                
                                                
                                                (5,230,764
                                                )Total
      Stockholders’ Deficit
                                                
                                                
                                                (589,145
                                                )
                                                
                                                
                                                (125,390
                                                )Total
      Liabilities & Stockholders’ Deficit
                                                
                                                $
                                                263
                                                
                                                
                                                $
                                                150,319





The
accompanying notes are an integral part of these consoldiated financial
statements.
 4




Trycera
      Financial, Inc.Consolidated
      Statement of OperationsFor
      the Years EndedDecember
      31,
                                                                                                              2008
                                                                                                            
                                                                                                            
                                                                                                            December
      31,
                                                                                                              2007RevenuesStored
      value
                                                                                                            
                                                                                                            $
                                                                                                            151,619
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            2,215,369151,619
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            2,215,369Cost
      of sales
                                                                                                            
                                                                                                            
                                                                                                            123,029
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            1,895,910Gross
      Profit (Loss)
                                                                                                            
                                                                                                            
                                                                                                            28,590
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            319,459ExpensesDepreciation
      and amortization
                                                                                                            
                                                                                                            
                                                                                                            2,159
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            10,911Salaries
      and wages
                                                                                                            
                                                                                                            
                                                                                                            32,354
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            362,208Stock
      based compensation
                                                                                                            
                                                                                                            
                                                                                                            148,168
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            152,741Professional
      fees
                                                                                                            
                                                                                                            
                                                                                                            157,868
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            375,846Bad
      debt expense
                                                                                                            
                                                                                                            
                                                                                                            8,083
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            261,205Contract
      termination costs
                                                                                                            
                                                                                                            
                                                                                                            70,000
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            -General
      & adminstrative
                                                                                                            
                                                                                                            
                                                                                                            336,639
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            238,152Total
      Expenses
                                                                                                            
                                                                                                            
                                                                                                            755,271
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            1,401,063Loss
      from Operations
                                                                                                            
                                                                                                            
                                                                                                            (726,681
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (1,081,604
                                                                                                            )Other
      Income (Expenses)Interest,
      income
                                                                                                            
                                                                                                            
                                                                                                            174
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            1,094Interest,
      expense
                                                                                                            
                                                                                                            
                                                                                                            (2,996
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (878
                                                                                                            )Financing
      costs
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            (342,925
                                                                                                            )Other
      income (expense)
                                                                                                            
                                                                                                            
                                                                                                            (2,276
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            24,317Total
      Other Income (Expense)
                                                                                                            
                                                                                                            
                                                                                                            (5,098
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (318,392
                                                                                                            )Loss
      from continuing operations before tax
                                                                                                            
                                                                                                            
                                                                                                            (731,779
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (1,399,996
                                                                                                            )Income
      tax
                                                                                                            
                                                                                                            
                                                                                                            800
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            800Loss
      from Continuing Operations
                                                                                                            
                                                                                                            
                                                                                                            (732,579
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (1,400,796
                                                                                                            )Discontinued
      OperationsLoss
      on disposal of discontinued operations
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            (27,852
                                                                                                            )Gain
      (loss) from discontinued operations
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            7,043Total
      Gain (loss) from Discontinued Operations
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            (20,809
                                                                                                            )Net
      Loss
                                                                                                            
                                                                                                            $
                                                                                                            (732,579
                                                                                                            )
                                                                                                            
                                                                                                            $
                                                                                                            (1,421,605
                                                                                                            )Basic
      loss Per ShareLoss
      per share continuing operations
                                                                                                            
                                                                                                            $
                                                                                                            (0.08
                                                                                                            )
                                                                                                            
                                                                                                            $
                                                                                                            (0.17
                                                                                                            )Loss
      per share discontinued operations
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            (0.00
                                                                                                            )Net Loss Per Share
                                                                                                            
                                                                                                            $
                                                                                                            (0.08
                                                                                                            )
                                                                                                            
                                                                                                            $
                                                                                                            (0.17
                                                                                                            )Weighted
      Average Shares
                                                                                                            
                                                                                                            
                                                                                                            9,375,891
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            8,266,850
  The
accompanying notes are an integral part of these consoldiated financial
statements.
 5


Trycera
      Financial, Inc.Consolidated
      Statements of Stockholder’s DeficitFrom
      the Years Ended December 31, 2008 and 2007Preferred
      Stock
                                                                                      
                                                                                      
                                                                                      Common
      Stock
                                                                                      
                                                                                      
                                                                                      Paid-In
                                                                                      
                                                                                      
                                                                                      AccumulatedShares
                                                                                      
                                                                                      
                                                                                      Amount
                                                                                      
                                                                                      
                                                                                      Shares
                                                                                      
                                                                                      
                                                                                      Amount
                                                                                      
                                                                                      
                                                                                      Capital
                                                                                      
                                                                                      
                                                                                      DeficitBalance,
      at January 1, 2007
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      7,582,302
                                                                                      
                                                                                      
                                                                                      $
                                                                                      7,582
                                                                                      
                                                                                      
                                                                                      $
                                                                                      3,886,852
                                                                                      
                                                                                      
                                                                                      $
                                                                                      (3,809,159
                                                                                      )Shares
      issued for cash pursuant toprivate
      placement memorandumat
      $1.00 per share
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      315,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      315
                                                                                      
                                                                                      
                                                                                      
                                                                                      314,685
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Shares
      issued for cash pursuant toprivate
      placement memorandumat
      $0.25 per share
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,100,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,100
                                                                                      
                                                                                      
                                                                                      
                                                                                      273,900
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Shares
      issued for services atat
      $0.13 - $3.25 per share
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      143,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      143
                                                                                      
                                                                                      
                                                                                      
                                                                                      107,507
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Shares
      granted in connectionwith
      employment agreementat
      $1.01 per share
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      100,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      100
                                                                                      
                                                                                      
                                                                                      
                                                                                      100,900
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Shares
      issued for accounts payable atat
      $0.50 per share
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      10,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      10
                                                                                      
                                                                                      
                                                                                      
                                                                                      4,990Valuation
      of stock options
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      152,741
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Valuation
      of stock warrants
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      
                                                                                      342,925Net
      loss for the period endedDecember
      31, 2007
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      (1,421,605
                                                                                      )Balance,  at
      December 31, 2007
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      9,250,302
                                                                                      
                                                                                      
                                                                                      
                                                                                      9,250
                                                                                      
                                                                                      
                                                                                      
                                                                                      5,184,500
                                                                                      
                                                                                      
                                                                                      
                                                                                      (5,230,764
                                                                                      )Shares
      issued for services atat
      $0.06 - $0.15 per share
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      444,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      444
                                                                                      
                                                                                      
                                                                                      
                                                                                      31,836
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Valuation
      of stock options
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      148,168
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Net
      loss for the period endedDecember
      31, 2008
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      (732,579
                                                                                      )Balance,  at
      December 31, 2008
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      9,694,302
                                                                                      
                                                                                      
                                                                                      $
                                                                                      9,694
                                                                                      
                                                                                      
                                                                                      $
                                                                                      5,364,504
                                                                                      
                                                                                      
                                                                                      $
                                                                                      (5,963,343
                                                                                      )
   The
accompanying notes are an integral part of these consoldiated financial
statements.
 6
  Trycera
      Financial, Inc.Consolidated
      Statements of Cash FlowsFor
      the Years EndedDecember
                                                
                                                
                                                December31,
      2008
                                                
                                                
                                                
                                                31,
      2007Cash Flows from Operating
      ActivitiesNet
      Loss
                                                
                                                $
                                                (732,579
                                                )
                                                
                                                $
                                                (1,421,605
                                                )Adjustments
      to reconcile net loss to net cashused
      by operations;Depreciation
      and amortization
                                                
                                                
                                                2,159
                                                
                                                
                                                
                                                23,535Depreciation
      and amortization on discontinued operation
                                                
                                                
                                                -
                                                
                                                
                                                
                                                581Amortization
      of prepaid stock compensation
                                                
                                                
                                                88,376
                                                
                                                
                                                
                                                -Loss
      on sale of discontinued operations
                                                
                                                
                                                -
                                                
                                                
                                                
                                                27,852(Gain)
      loss on sale of assets
                                                
                                                
                                                9,751
                                                
                                                
                                                
                                                (24,317
                                                )Stock
      issued for services
                                                
                                                
                                                32,280
                                                
                                                
                                                
                                                112,650Stock
      options and warrants
                                                
                                                
                                                148,168
                                                
                                                
                                                
                                                495,666(Increase)
      decrease in accounts receivable
                                                
                                                
                                                30,931
                                                
                                                
                                                
                                                55,697(Increase)
      decrease in prepaid and other current assets
                                                
                                                
                                                29,853
                                                
                                                
                                                
                                                (17,424
                                                )(Increase)
      decrease in deposits/reserves
                                                
                                                
                                                5,000
                                                
                                                
                                                
                                                12,507Increase
      (decrease) in accounts payable
                                                
                                                
                                                213,460
                                                
                                                
                                                
                                                55,177Increase
      (decrease) in portfolio reserves
                                                
                                                
                                                572
                                                
                                                
                                                
                                                8,777Increase
      (decrease) in accrued expenses
                                                
                                                
                                                22,167
                                                
                                                
                                                
                                                36,336Net
      Cash Used by Operating Activities
                                                
                                                
                                                (149,862
                                                )
                                                
                                                
                                                (634,568
                                                )Cash Flows from Investing
      ActivitiesProceeds
      from sale of assets
                                                
                                                
                                                -
                                                
                                                
                                                
                                                25,000Proceeds
      from disposal of discontinued operations
                                                
                                                
                                                -
                                                
                                                
                                                
                                                5,000Net
      Cash Provided by Investing Activities
                                                
                                                
                                                -
                                                
                                                
                                                
                                                30,000Cash Flows from Financing
      ActivitiesProceeds
      from issuance of 10% Secured Notes
                                                
                                                
                                                77,500
                                                
                                                
                                                
                                                -Proceeds
      from issuance of common stock
                                                
                                                
                                                -
                                                
                                                
                                                
                                                590,000Net
      Cash Provided by Financing Activities
                                                
                                                
                                                77,500
                                                
                                                
                                                
                                                590,000Net
      Decrease in Cash and Cash Equivalents
                                                
                                                
                                                (72,362
                                                )
                                                
                                                
                                                (14,568
                                                )Cash
      and Cash Equivalents at Beginning of Period
                                                
                                                
                                                72,625
                                                
                                                
                                                
                                                87,193Cash
      and Cash Equivalents at End of Period
                                                
                                                $
                                                263
                                                
                                                
                                                $
                                                72,625Cash Paid For:Interest
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                878Income
      Taxes
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                800Non-Cash Financing
    Activities:Common
      stock issued for services and deferred compensation
                                                
                                                $
                                                268,824
                                                
                                                
                                                $
                                                208,579
  The
accompanying notes are an integral part of these consoldiated financial
statements.
 7
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008
  NOTE
1 - CORPORATE HISTORY




Trycera
Financial, Inc., (the "Company") was incorporated in Nevada on May 10, 2000,
under the name Whitelight Technologies, Inc., for the purpose of seeking and
consummating a merger or acquisition with a business entity organized as a
private corporation, partnership, or sole proprietorship.





On July
16, 2004, the Company filed a certificate of amendment with the


state of
Nevada changing the name to Trycera Financial Inc.





Since
2004 the Company had been in the business of developing, deploying and marketing
semi-custom and customized branded prepaid and prepaid card
solutions.  Because of continued losses from operations during 2008
the Company began winding down its principal business operations and commenced a
search for a new business venture.  The Company has no material assets
and significant liabilities.





NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES




A.   Basis of Accounting




The
Company uses the accrual method of accounting.





B.  Revenue Recognition




The
Company applies the provisions of SEC Staff Accounting Bulletin("SAB") No. 104,
Revenue Recognition in Financial Statements ("SAB 104"), which provides guidance
on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC.  SAB 104 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosure
related to revenue recognition policies.  In general, the Company
recognizes revenue related to monthly contracted amounts for services provided
when (i) persuasive evidence of an arrangement exists, (ii) delivery has
occurred or services have been rendered, (iii) the fee is fixed or determinable
and (iv) collectibility is reasonably assured.








With
regard to events related to purchases of stored value or prepaid card products,
the Company has sold no such goods at this time.  When the Company
begins to sell such stored value products, a customer who purchases a prepaid
card product will pay an upfront acceptance fee in addition to paying some
incremental value to add to the stored value card. The Company recognizes only
the acceptance fee revenues, as the actual pre-funded load value is
electronically transferred from our partner processor to an FDIC-insured account
at our partner bank.  The Company never possesses the actual
pre-funded load value, which resides in a secure account at our processor before
being sent to a non-Company accessible customer funding account at our
bank.  As a result, there is no general accounting treatment for the
amounts pre-funded on the stored value cards.  With respect to the
acceptance fee, the Company will collect the acceptance fee from the customer,
satisfying criteria (i) under SAB 104 with a persuasive evidence of an
arrangement.  The company does not realize the revenue from the
acceptance income until the customer has activated their card. The activation of
their card requires that they have passed the legal requirements of identity
verification and an embossed card in their name has been mailed to their
physical address and lastly the client with the card in their physical
possession has called to activate their card. Moreover, the funds have been
prepaid by the customer and thus as outlined in criteria (iv) the collectibility
is reasonably assured. In both instances, the Company simply supplies a product
or financial tool to a customer.  There are no unearned income
ramifications since the funds are held in an FDIC-insured account by our partner
Bank and not under the control of the Company. The consumer may choose to spend
or not spend the money on the stored value card, but the Company after the
initial transaction has no obligation to provide future products.  The
Company does host a customer service center to receive and resolve any issues
that may arise out of the use of the prepaid card product.





8
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008


The
consulting revenue the Company receives is billed after satisfying the
customers' requirement and which follows the criteria of SAB 104 more
specifically relating to the delivery of services rendered as outlined in
criteria (ii).








C.  Cash Equivalents




The
Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash equivalents.
The Company currently has no cash equivalents.





D.   Property and Equipment




Property
and equipment as of December 31, 2008 and 2007 consists of the following and are
recorded at cost:




2008
                                
                                
                                2007Furniture
      & Fixtures
                                
                                $
                                -
                                
                                
                                $
                                10,533Computer
      equipment
                                
                                
                                -
                                
                                
                                
                                12,437-
                                
                                
                                
                                22,970Accumulated
      depreciation
                                
                                
                                -
                                
                                
                                
                                (13,219
                                )Net
      Fixed Assets
                                
                                $
                                -
                                
                                
                                $
                                9,751
 
 Provision
for depreciation of equipment is computed on the straight-line method for
financial reporting purposes. Depreciation is based upon estimated useful lives
as follows:







D.   Property and Equipment
(continued)




Computer
      equipment
                2-3
      YearsFurniture
      & fixtures
                7
      Years


Maintenance,
repairs, and renewals which neither materially add to the value of
the equipment nor appreciably prolong its life are charged to e xpense as
incurred.





9
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008


Depreciation
charged to operations was $2,159 and $4,165 for the years ended
December 31 2008 and 2007, respectively.





As the
Company vacated the leased office space in Irvine, California, all remaining
fixtures, fittings were either sold or abandoned. The Company, therefore, has no
fixed assets at the December 31 2008.










E.   Earnings (Loss) Per Share of Common
Stock






The
computation of earnings (loss) per share of common stock is
based o n the
weighted average number of shares outstanding at the date of  t he
financial statements. Outstanding employee stock options of -0- and 2,815,040,
and outstanding warrants of -0- and 820,372 have not been considered in the
fully diluted earnings per share calculation in 2008 and 2007, due to their
anti-dilutive effect.




For
      the Years EndedDecember
      31,
                                    2008
                                  
                                  
                                  December
      31,
                                    2007Basic
      loss per share
                                  
                                  $
                                  (732,579
                                  )
                                  
                                  $
                                  (1,421,605
                                  )Net
      loss (numerator)
                                  
                                  
                                  9,375,891
                                  
                                  
                                  
                                  8,266,850Weighted
      average shares (denominator)Per
      share amount
                                  
                                  $
                                  (0.08
                                  )
                                  
                                  $
                                  (0.17
                                  )
  F.   Stock Options




The
Company has elected to measure and record compensation cost relative
to stock option costs in accordance with SFAS 123R, "ACCOUNTING
FOR STOCK-BASED COMPENSATION," which requires the Company to use
the Black-Scholes pricing model to estimate the fair value of the
options at the option grant date.








G.   Use of Estimates




The
preparation of the financial statements in conformity with generally
accepted accounting principles, in the United States of America,
require management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying
notes.  Actual results could differ from those estimates.





H.   Fair Value of Financial
Instruments




The fair
value of the Company's cash and cash equivalents, receivables, accounts payable
and accrued liabilities approximate carrying value based on their effective
interest rates compared to current market prices.





I.   Selling, General and Administrative
Costs




Selling,
general and administrative expenses included the following for the
years ended December 31, 2008 and 2007.







2008
                        
                        
                        2007Insurance
                        
                        $
                        53,399
                        
                        
                        $
                        55,934Rent
                        
                        
                        42,785
                        
                        
                        
                        52,546Travel
      and entertainment
                        
                        
                        4,684
                        
                        
                        
                        14,379Sales
      and marketing
                        
                        
                        2,528
                        
                        
                        
                        1,378Technology
      costs
                        
                        
                        1,164
                        
                        
                        
                        33,827Outside
      services
                        
                        
                        207,555
                        
                        
                        
                        9,655General
      and administrative
                        
                        
                        9,574
                        
                        
                        
                        70,433$
                        321,689
                        
                        
                        $
                        238,152





J.   Prepaid Expenses and other Current
Assets




Prepaid
expenses and other current assets included the following for the years
ended December 31, 2008 and 2007.




2008
                        
                        
                        2007Prepaid
      expenses
                        
                        $
                        -
                        
                        
                        $
                        17,424Prepaid
      marketing costs
                        
                        
                        -
                        
                        
                        
                        12,500Total
      Prepaid & Other
                        
                        $
                        -
                        
                        
                        $
                        29,853
  K.   Accrued Expenses
 10
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008




Accrued
expenses included the following for the years ended December 31, 2008
and 2007.




2008
                        
                        
                        2007Accrued
      payroll and Compensated absences
                        
                        $
                        39,137
                        
                        
                        $
                        32,435Interest
      payable
                        
                        
                        2,908
                        
                        
                        
                        -Interchange
      and fees payable
                        
                        
                        -
                        
                        
                        
                        57,443Program
      termination costs
                        
                        
                        95,000
                        
                        
                        
                        25,000$
                        137,035
                        
                        
                        $
                        114,878


L.   Lines of Credit




he
Company had maintained and utilized one open line of credit for $25,000 with
Wells Fargo Bank.  This account had been closed prior to the end of
the 2007 fiscal year, in part because the line of credit has been personally
guaranteed by a former employee and director of the Company. Repayment terms on
any borrowings adjusted quarterly at the then current prime rate plus
1%.





M.   Trade Receivables and
Collections




n the
collection of payments, loans or receivables, the Company applies a
range of collection techniques to manage delinquent accounts.
In instances where balances exceed baseline levels a third party collection
agency is selected to perform a collection service.  The service fees
may cost the Company 25% to 40% of the face value of the debt owed and result in
receiving only a small portion of monies owed.  With the stored value
portfolio, the Company has not implemented a specific policy. Since a majority
of the transaction activity is prepaid, the Company does not often provide
services and load product until funds have been provided in advance. In cases
where the funds are not provided in advance, the Company will carry an open
receivable balance and does reserve the right to reduce the client reserve
account in lieu of payment.





11
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008




NOTE
2   SIGNIFICANT ACCOUNTING POLICIES (continued)





N.   Income Taxes




The
Company utilizes the liability method of accounting for income taxes.  Under
the liability method, deferred income tax assets and liabilities
are provided based on the difference between the financial


statements
and tax basis of assets and liabilities measured by the currently
enacted tax rates in effect for the years in which these differences
are expected to reverse.  Deferred tax expense or benefit


is the
result of changes in deferred tax assets and liabilities.





O.   Concentrations




Financial
instruments that potentially subject Trycera Financial, Inc. (the
Company) to concentrations of credit risk consist of cash and cash
equivalents.  The Company places its cash and cash equivalents
at


well-known,
quality financial institutions.  At times, such cash
and cash
equivalents may be in excess of the FDIC insurance limit.





P.   Capital Structure and Security
Rights




Common
Stock - The Company is authorized to issue 100,000,000 shares of common
stock, par value $.001 per share. All common shares are equal to
each other with respect to voting, and dividend rights, and are equal
to each other with respect to liquidations rights.





Preferred
Stock - The Company has authorization to issue 20,000,000 shares of
preferred stock, par value $.001 per share. The Board of  D irectors
will be authorized to establish the rights and preferences of any
series of the preferred shares without shareholder approval.
At this
time, the Board has not established a series of the preferred shares
and no preferred shares have been issued.








12
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008








NOTE
2 - NEW TECHNICAL PRONOUNCEMENTS








In
December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. FAS
No. 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. FAS No. 160 is effective for the
Company in its fiscal year beginning January 1, 2009. The Company is
currently evaluating the impact of FAS No. 160 on its consolidated
financial position and results of operations.





In
December 2007, the FASB issued FAS No. 141 R “Business Combinations”. FAS
No. 141R establishes principles and requirements for how the acquirer of a
business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed and any noncontrolling interest in the
acquiree. FAS No. 141R also provides guidance for recognizing and measuring
the goodwill acquired in a business combination and determines what information
to disclose to enable users of the financial statements to evaluate the nature
and financial effects of a business combination. FAS No. 141R is effective
for the Company in its fiscal year beginning January 1, 2009. While the
Company has not yet evaluated this statement for the impact, if any, that FAS
No. 141R will have on its consolidated financial position and results of
operations, the Company will be required to expense costs related to any
acquisitions after September 30, 2009.





In March
2008, the FASB issued Statement No. 161, Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement No. 133(SFAS 161). This statement requires enhanced disclosures about an
entity’s derivative and hedging activities and is effective for financial
statements issued for fiscal years and interim periods beginning after
November 15, 2008, with earlier application encouraged. The Company will
adopt SFAS 161 in the first quarter of 2009. Since SFAS 161 requires additional
disclosures concerning derivatives and hedging activities,
adoption of SFAS 161 will not have an impact on the Company’s consolidated
financial condition, results of operations or cash flows. The adoption of
SFAS 161 will change the Company’s disclosures for derivative instruments
and hedging activities beginning in the first quarter of fiscal year
2009.




13
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008


In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets(FSP 142-3), which amends the factors considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS 142. FSP 142-3 requires a consistent
approach between the useful life of a recognized intangible asset under SFAS 142
and the period of expected cash flows used to measure the fair value of an asset
under SFAS 141 (R). The FSP also requires enhanced disclosures when an
intangible asset’s expected future cash flows are affected by an entity’s intent
and/or ability to renew or extend the arrangement. FSP 142-3 is effective for
financial statements issued for fiscal years beginning after December 15,
2008 and is applied prospectively. Early adoption is prohibited. The Company
does not expect the adoption of FSP 142-3 to have a material impact on its
consolidated results of operations or financial condition.




In May
2008, the FASB issued FSP APB No. 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)(FSP APB 14-1 ). This FSP requires the
issuer of certain convertible debt instruments that may be settled in cash (or
other assets) on conversion to separately account for the liability (debt) and
equity (conversion option) components of the instrument in a manner that
reflects the issuer’s nonconvertible debt borrowing rate. The effective date of
this FSP is for financial statements issued for fiscal years beginning after
December 15, 2008 and interim periods within those fiscal years and it does
not permit earlier application. However, the transition guidance requires
retroactive application to all periods presented. The Company does not expect
the adoption of FSP 142-3 to have a material impact on its consolidated results
of operations or financial condition




In
October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active. (FSP FAS
157-3) This FSP
clarifies the application of SFAS 157 in a market that is not active and
provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not
active. In particular, it provides additional guidance on (a) how the
reporting entity’s own assumptions (that is, expected cash flows and
appropriately risk-adjusted discount rates) should be considered when measuring
fair value when relevant observable inputs do not exist, (b) how available
observable inputs in a market that is not active should be considered when
measuring fair value, and (c) how the use of market quotes (for example,
broker quotes or pricing services for the same or similar financial assets)
should be considered when assessing the relevance of observable and unobservable
inputs available to measure fair value. This FSP is effective upon issuance,
including prior periods for which financial statements have not been issued. The
Company evaluated the impact of this FSP and concluded that its considerations
in determining the fair value of its financial assets when the market for them
is not active are consistent with the FSP’s guidance








14
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008





NOTE 3 – DISCONTINUED
OPERATIONS





In March,
2007, the Company completed the sale of its IsleCore subsidiary. In accordance
with Statement of Financial Accounting Standards (“SFAS”) 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, the financial results of the Company’s
IsleCore operations are reported as discontinued operations for all periods
presented.








The
financial results included in discontinued operations are:




For
      the Year EndedDecember
      31,
                                2008
                              
                              
                              December
      31,
                                2007Basic
      earnings per shareRevenue
                              
                              $
                              -
                              
                              
                              $
                              65,293Income
      (loss) from discontinued operations
                              
                              $
                              -
                              
                              
                              $
                              7,043


NOTE 4 –
RECLASSIFICATION





We have
reclassified our Statement of Operations for the year ended December 31, 2007,
to reflect the sale of our IsleCore subsidiary. Our management and our board of
directors have concluded this reclassification is necessary to reflect the
changes described above in Note 3.








NOTE
5   INTANGIBLE ASSETS




On June
13, 2005 the Company issued 40,000 shares of common stock valued at $40,000
and paid cash in the amount of $30,000 for the net operating assets of Hawaii
Direct Telephone that were merged into the  operations of Trycera as a
wholly-owned Hawaiian subsidiary corporation, isleCORE Systems, Inc., valued at
$70,000.  The Company paid $70,000 for the fixed assets including,
key operating contracts valued at $53,955, and office equipment and
supplies were valued at $16,045.  There was no intellectual property received
and the existing accounts receivable was zero at the time of the asset
purchase. At December 31, 2007 there was no impairment to the intangible
assets. However, an impairment of $25,000 was charged to the statement
of operations during the year ended December 31, 2007. As previously stated at
the end of the first quarter, our wholly owned subsidiary, isleCORE Systems,
located in Honolulu, Hawaii, was disposed.  The sale was completed in
March 2007 and effective immediately at the close of the first
quarter.








15
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008


On
November 2, 2004 the Company issued 150,000 shares of common stock valued at
$112,500 and paid cash in the amount of $100,000 for the net operating
assets of Signature Credit Corporation that were merged into the operations
of Trycera, valued at $212,500.  The Company paid $112,500 for the fixed
assets including, a Signature Credit customized software database system
valued at $75,000, office equipment and supplies valued at $24,775, five
existing domain names valued at $5,000 and existing accounts receivable
valued at $7,725.  The remainder of the consideration, $100,000 was
allocated to intangible assets in the form of the existing Signature customer
base. As a result of the asset acquisition, the value of the Signature
Credit customized software database system was booked as a definite
life intangible asset. The Signature customer base was booked as a separate
definite life intangible asset. Management derived such value of the
Signature Credit customer base by evaluating the assets to be acquired and
assigning a value to those assets.  The hard assets were valued at
fair market
value and the balance of the purchase price was assigned to the customer
base, which management felt was reasonable for our use. The remaining Signature
assets were sold in October 2007 for a sum of $25,000.





We
account for goodwill and other intangible assets in accordance with SFAS No. 142,
which requires that goodwill and other intangible assets that have indefinite
lives not be amortized but instead be tested at least annually for
impairment, or more frequently when events or a change in circumstances indicate
that the asset might be impaired.  For indefinite lived intangible assets,
impairment is tested by comparing the carrying value of the asset to its
fair value and assessing the ongoing appropriateness of the indefinite
life classification.  For goodwill, a two-step test is used to identify
the potential impairment and to measure the amount of impairment, if
any.  The first step is to compare the fair value of a reporting unit with its
carrying amount, including goodwill.  If the fair value of a
reporting unit exceeds its carrying amount, goodwill is considered not impaired,
otherwise goodwill is impaired and the loss is measured by performing
step two.  Under step two, the impairment loss is measured by comparing
the implied fair value of the reporting unit with the carrying amount of
goodwill. At December 31, 2008 there was no impairment to the intangible
assets. However, an impairment of $60,000 was charged to the


statement
of operations during the year ended December 31, 2004.





Total
amortization in 2008 and 2007, respectively was $2,159 and $6,745. The
amortization period for the intangible assets is 3 years and the accumulated
amortization and intangible asset values are set forth as


follows:




Year
                    
                    Accumulated
      Amortization
                    
                    
                    Asset
      Value2008
                    
                    $
                    -
                    
                    
                    $
                    -2007
                    
                    $
                    110,789
                    
                    
                    $
                    2,159
   In
accordance with Financial Accounting Standards Board Statement No. 144, the
Company records impairment of long-lived assets to be held and used or to be
disposed of when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the
carrying amount.





The
remaining intangible assets owned by the Company were disposed in the first
quarter of 2008. Together with some equipment the assets were sold at a loss of
$9,751. At December 31, 2008 the Company no longer has any amortizable
assets.





16
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008





NOTE
6 - RELATED PARTY TRANSACTIONS





Also, on
or about January 3, 2006, the Company entered into an agreement with Ecewa
Capital Group, LLC (“Ecewa Capital”), an entity controlled by Mr. Knitowski (the
“Ecewa Capital Agreement”) whereby Ecewa Capital provided certain consulting
services to the Company.  Pursuant to the terms of the Ecewa Capital
Agreement, the Company owed approximately $60,000 to Ecewa Capital at December
31, 2008. The amount incurred in respect of this agreement amounted to $60,000
for the years ended December 31, 2008 and December 31, 2007.
Ecewa  Capital was paid an additional $0 and $22,000 respectively, for
additional consulting services during the years ended December 31, 2008 and
December 31, 2007.





On or
about January 2, 2007, the Company entered into an agreement with Curo Capital,
LLC (“Curo Capital”), an entity controlled jointly by Mr. Knitowski and Mr.
Dang, (the “Curo Capital Agreement”) whereby the Company agreed to pay $1,000
per month towards the Company’s office lease activities associated with the
office of the Chairman.  Pursuant to the terms of the Curo Capital
Agreement, the Company owed approximately $12,000 to Curo Capital as of December
31, 2009. Expenses incurred under this agreement amounted to $12,000 and $12,000
respectively, during the years ended December 31, 2008 and December 31,
2007.





The
Company had previously agreed to reimburse Mr. Dang for the cost of health
insurance during the period he served as a director of the
Company.  At the time of his resignation on December 31, 2008, the
Company owed approximately $14,950.83 to Mr. Dang for these health insurance
costs.





On or
about May 14, 2008, Sagoso Capital (“Sagoso”), a company controlled by Mr. Dang,
loaned $5,000 to the Company and the company issued a 10% Senior Promissory Note
representing the loan (the “Sagoso Note”) which was due and payable upon a
change of control of the Company.  On or about December 29, 2008,
Sagoso Capital acquired the 10% Senior Promissory Notes issued by the Company to
Ecewa Capital in the principal amount of $67,500 (the “Ecewa
Notes”).





On or
about May 14, 2008, Hang Dang loaned $5,000 to the Company and the company
issued a 10% Senior Promissory Note representing the loan (the “Note”) which was
due and payable upon a change of control of the Company.





NOTE
7   INCOME TAXES




The
Company has adopted FASB 109 to account for income taxes. The Company currently
has no issues that create timing differences that would mandate deferred
tax expense. Net operating losses would create possible tax assets in future
years. Due to the uncertainty as to the utilization of net operating
loss carry forwards an evaluation allowance has been made to the extent of
any tax benefit that net operating losses may generate.   No provision
for income taxes has been recorded due to net operating losses of
$5,954,144 as of December 31, 2008 that may be offset against further taxable
income.  No tax benefit has been reported in the financial
statements.





17
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008


Deferred
tax assets and the valuation account as of December 31, 2008 and 2007 are
as follows:




2008
                        
                        
                        2007Deferred
      tax asset
                        
                        $
                        1,887,463
                        
                        
                        $
                        1,661,865Net
      operating loss carryforward
                        
                        
                        (1,887,463
                        )
                        
                        
                        (1,661,865
                        )Valuation
      allowance
                        
                        $
                        -
                        
                        
                        $
                        -
  The
components of income tax expense are as follows:




2008
                        
                        
                        2007Current
      Federal Tax
                        
                        $
                        -
                        
                        
                        $
                        -Current
      State Tax
                        
                        
                        800
                        
                        
                        
                        800Change
      in NOL benefit
                        
                        
                        (225,598
                        )
                        
                        
                        (366,751
                        )Change
      in allowance
                        
                        
                        225,598
                        
                        
                        
                        366,751$
                        800
                        
                        
                        $
                        800
  The
Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses
may be offset against future taxable income through 2028.





Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss 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 future use.





NOTE
8   OPERATING LEASES





The
Company exited the leased space for its administrative and headquarters
effective February 29, 2008.  The former space, occupied the entire
2007 fiscal year consisted of approximately 2,150 square feet of office space,
and was located at 18023 East Sky Park Circle, Suite G, Irvine,
California.  Monthly lease payments were $3,500 with a lease
expiration on October 31, 2009.  The Company had not been able to
continue payments and subsequently vacated the space.





The
Company’s wholly owned subsidiary, isleCORE Systems, was sold. The office space
was located at 7 Waterfront Plaza, 500 Ala Moana Blvd, Honolulu, Hawaii, 96813.
The total cost of the location was approximately $3,500, for 600 square
feet.  The lease expired on March 31, 2007 and the Company no longer
has a committment.








18
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008





NOTE
9 - STOCKHOLDERS' EQUITY




During
the year ended December 31, 2008, the Company issued an aggregate 444,000
shares of common stock for accounting and administrative services. The price
of the stock at the time of issue was between $0.06 and $0.15. Accordingly,
common stock and additional paid in capital have been charged $444 and
$28,236 respectively.








During
the year ended December 31, 2007, the Company issued an aggregate of
315,000 shares of common stock pursuant to private offerings at $1.00 per share.
Accordingly, common stock and additional paid in capital have been charged $315
and $314,685 respectively. Each investor also received stock purchase warrants
at a rate of 50% of the shares purchased.  The warrants are
exercisable through February 28, 2014, at $1.25 with certain incentive discounts
to the exercise price available through February 28, 2011. As of December 31,
2007, 170,000 warrants were outstanding related to this offering.





During
the year ended December 31, 2007, the Company issued an aggregate of
1,100,000 shares of common stock pursuant to private offerings at $0.25 per
share. Accordingly, common stock and additional paid in capital have been
charged $1,100 and $273,900 respectively. Each investor also received stock
purchase warrants at a rate of 50% of the shares purchased. The warrants are
exercisable through October 31, 2014, at $.3125 with certain incentive discounts
to the exercise price available through February 28, 2011. As of December 31,
2007, 550,000 warrants were outstanding related to this offering.





During
the year ended December 31, 2007, the Company issued an aggregate 143,000
shares of common stock for accounting and administrative services. The price
of the stock at the time of issue was between $0.13 and $3.25. Accordingly,
common stock and additional paid in capital have been charged $143 and
$107,507 respectively.





During
the year ended December 31, 2007, the Company issued an aggregate 100,000
shares of common stock in connection with an employment agreement. The price of
the stock at the time of issue was $1.01. Common stock and additional paid in
capital have been charged $100 and $100,900 respectively. The value of the
employment agreement has been set up as a contra equity account and the amount
is being amortized over the life of the employment agreement.





During
the year ended December 31, 2007 the Company also issued 10,000 shares of common
stock to settle accounts payable. Common stock and additional paid in capital
have been charged $10 and $4,990 respectively.





NOTE
10   STOCK OPTION PLAN






On May 4,
2004, the Company approved and adopted the 2004 Stock Option/Stock
Issuance Plan, which allows for the Company to issue stock or grant
options to purchase or receive shares of the Company's common stock. The
maximum number of shares that may be optioned and sold under the plan is
5,000,000.  The plan became effective with its adoption and remains in effect
for ten years, however, options expire five years from grant, unless terminated
earlier.  Options granted under the plan vest according to terms imposed
by the Plan Administrator.  The Administrator may not impose a vesting
schedule upon any option grant which is more restrictive than twenty
percent (20%) per year vesting with the initial vesting to occur not later
than one (1) year after the option grant date.  The following schedule
summarizes the activity during the periods ending December 31, 2008 and
2007:





2004
      Stock PlanAmount
                                      of
                                      Shares
                                    
                                    
                                    Weighted
                                      average
                                      exercise
                                      priceOutstanding
      at January 1, 2008
                                    
                                    
                                    2,379,500
                                    
                                    
                                    $
                                    0.73Options
      Granted
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Options
      Exercised
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Options
      Canceled
                                    
                                    
                                    (400,000
                                    )
                                    
                                    
                                    0.84Options
      Outstanding at December 31, 2008
                                    
                                    
                                    1,979,500
                                    
                                    
                                    $
                                    0.71Options
      Outstanding at December 31, 2007
                                    
                                    
                                    1,754,496
                                    
                                    
                                    $
                                    0.67






2004
      Stock PlanAmount
                                        of
                                        Shares
                                      
                                      
                                      Weighted
                                        average
                                        exercise
                                        priceOutstanding
      at January 1, 2008
                                      
                                      
                                      2,874,750
                                      
                                      
                                      $
                                      0.63Options
      Granted
                                      
                                      
                                      528,250
                                      
                                      
                                      
                                      0.96Options
      Exercised
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Options
      Canceled
                                      
                                      
                                      (1,023,500
                                      )
                                      
                                      
                                      0.56Options
      Outstanding at December 31, 2008
                                      
                                      
                                      2,379,500
                                      
                                      
                                      $
                                      0.73Options
      Outstanding at December 31, 2007
                                      
                                      
                                      1,815,040
                                      
                                      
                                      $
                                      0.65


The
Company has elected to measure and record compensation cost relative to performance
stock option costs in accordance with Statement of Financial Accounting
Standards No. 123R, "Accounting for Stock-Based Compensation", which
requires the Company to use the Black-Scholes pricing model to estimate
the fair value of options at the option date grant, $152,741 and $148,168 was
recognized for the years ended December 31, 2007 and 2008,
respectively.  The fair value of the option grant was established at
the date of grant using the Black-Scholes option pricing model with the
following assumptions:





For
      the Twelve Months EndedDecember
      31,
                            2008
                          
                          
                          December
      31,
                            2007Five
      Year Risk Free Interest Rate
                          
                          
                          N/A
                          
                          
                          
                          4.56%
      - 5.1
                          %Dividend
      Yield
                          
                          
                          
                          
                          
                          
                          -Volatility
                          
                          
                          N/A
                          
                          
                          
                          61%
      - 244
                          %Average
      Expected Term (Years to exercise)
                          
                          
                          N/A
                          
                          
                          
                          5
 Employee
stock options outstanding and exercisable under this plan as of
December 31, 2008 are:




Range
      of
                    Exercise
      Price
                  
                  
                  Number
      of
                    Options
      Granted
                  
                  
                  Weighted
      Average
                    Exercise
      Price
                  
                  
                  Average
      Remaining Contractual Life (Years)
                  
                  
                  Weighted
      Number
                    of
      Options Vested
                  
                  
                  Average
                    Exercise
      Price$
                  .001
      - $0.99
                  
                  
                  
                  1,321,250
                  
                  
                  $
                  0.54
                  
                  
                  
                  0.8
                  
                  
                  
                  1,321,247
                  
                  
                  $
                  0.54$
                  1.00
      - $2.00
                  
                  
                  
                  658,250
                  
                  
                  $
                  1.04
                  
                  
                  
                  2.2
                  
                  
                  
                  433,250
                  
                  
                  $
                  1.05




The
following represents the key vesting time frames and general terms included
in the stock option plans for the Company Executives:





For the
initial key personnel, employment agreements outlined provisions for the
performance-based vesting terms. The exercise price of the options granted
to the employees is $0.25 of the first quarter of the options granted;
$0.45 for the next quarter; $0.65 for the next quarter; and $0.85 for the
final quarter granted.  The options granted to the employees shall vest as
follows: 1/12th per quarter for each quarter of company revenue exceeding
the previous quarter of revenue since his date of hire, independent
of whether the revenue is generated from acquisition or non-acquisition
business activities, 1/12th for each $250K in aggregate gross
revenue growth from the day he commences work at the company, and/or at the
three year six month anniversary of his employment with the
company.





For the
subsequent option grants for all other Company associates, refer to the 2004
Stock Option /Stock Issuance Plan, whereby the exercise price of the
options granted was determined to be the $0.75 per share price and vests
according to 1/4 of the options vesting after the first 12 months and then 1/36
of the options vesting each month, where all options are vested after 48
continuous months of service.





19
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008





The
Company has issued warrants as part of its private placements.  The
warrants are exercisable through February 28, 2014, at various prices with
certain incentive discounts to the exercise price available through February 28,
2011.  These shares were sold without registration under the
Securities Act by reason of the exemption from registration afforded by the
provisions of Section 4(2) thereof, and Rule 506 promulgated thereunder, as a
transaction by an issuer not involving any public offering. The amount
subscribed prior to December 31, 2008 was:




Date
                    
                    Number
      of Warrants
                    
                    
                    Average
      ExerciseDecember
      31, 2008
                    
                    
                    1,250,250
                    
                    
                    $
                    0.83





The
Company uses the Black-Scholes pricing model to estimate the fair value of
warrants issued. The resulting cost is expensed as a cost of
financing.  $342,925 was recognized for the year ended December 31,
2007 for the cost of such warrants.














NOTE
11 SUBSEQUENT EVENTS





Legal
Matters





In April
2008 we received service of process for a complaint filed by Airport Industrial
Complex, our former landlord. The complaint has been filed in the Orange
Superior Court (Case No. 30-2008 00104277).  Management has received
and reviewed a copy of the complaint.  On April 1, 2009 the Company
represented by counsel appeared in Superior Court in a pre-trial effort to
resolve the matter.  The Company has negotiated a settlement, which
remains unpaid at April 14, 2009.  The next scheduled court appearance
is May 1, 2009 with a trial date set for June 1, 2009.








Operations





Since
2004 the Company had been in the business of developing, deploying and marketing
semi-custom and customized branded prepaid and prepaid card
solutions.  Because of continued losses from operations during 2008
the Company began winding down its principal business operations and commenced a
search for a new business venture.  The Company has no material assets
and significant liabilities.  Former management was unsuccessful in
securing a new business venture for the Company and on January 22, 2009,
transferred control of the Company to Ronald N. Vance, former company counsel,
to seek for and, if possible, locate a suitable operating business venture
willing to take control of the Company.  During 2008 all officers and
directors of the Company, except Alan Knitowski and Luan Dang, had
resigned.








20
 TRYCERA
FINANCIAL, INC.
 Notes
to Consolidated Financial Statements
 December
31, 2008


In a
settlement agreement dated January 22, 2009, Curo Capital agreed to settle all
amounts owed to it under the Curo Capital Agreement for $4,000, and Ecewa
Capital agreed to settle all amounts owed to it under the Ecewa Capital
Agreement for $20,000.  Payment of the settlement amounts is due prior
to December 31, 2009, or upon closing of a corporate transaction, whichever
shall first occur.  If the Company fails to pay the settlement
amounts, Curo Capital and Ecewa will have the option to rescind the settlement
agreement.  The Curo Capital Agreement and the Ecewa Capital Agreement
were also cancelled effective December 31, 2008.





In a
settlement agreement dated January 22, 2009, Mr. Dang agreed to settle all
amounts owed to him for the Health Insurance Payable for $5,000, and Sagoso
agreed to settle all amounts owed to it under the Sagoso Note and the Ecewa
Notes for $38,994.18.  Payment of the settlement amounts is due prior
to December 31, 2009, or upon closing of a corporate transaction, whichever
shall first occur.  If the Company fails to pay the settlement
amounts, Mr. Dang and Sagoso will have the option to rescind the settlement
agreement.





In
connection with the change of control of the Company, Mr. Knitowski cancelled
106,250 common stock purchase options held by him and Mr. Dang cancelled 200,000
common stock purchase options held by him.  These options represented
all of the options held by these parties.





Upon the
change of control, Mr. Dang was appointed as an advisor to the Board to review
and make recommendations to the Board on any proposed transaction whereby any
third party would assume control of the Company by means of a reverse
acquisition transaction.  The Board agreed to furnish to Mr. Dang for
review on a confidential basis any such proposed transaction.  Mr.
Dang agreed to serve at no cost to the Company as an advisor to the Board until
the Company acquires a new business or until the resignation of Mr. Vance as a
director, whichever occurs first.





On
February 6, 2009, Mr. Vance resigned as President of the Company and Ray A.
Smith was appointed as President and Chief Executive Officer and is the
Company’s principal executive officer.











NOTE
12 – COMMITMENTS AND CONTINGENCIES





We
account for commitments and contingencies in accordance with SFAS No. 5, where a
loss contingency exists and the likelihood that the future event or events will
confirm the loss or impairment of an asset or the incurrence of a liability
against the Company.





At
December 31, 2008, a contingency for losses related to business interruption and
litigation amounted to $95,000.  Under the circumstances, the amount
accrued met the criteria of probable outcomes as well as being reasonable to
estimate.  The $95,000 amount is comprised of three specific items,
$40,000 for the contingency for an arbitration settlement with Transfers4Less,
$40,000 for the contingency for probable litigation with a card program that was
terminated by the bank due to the Company’s business interruption and $15,000
for a disputed item with a card marketer.  The $40,000 contingency
assigned to Transfers4Less was realized as an arbitration settlement on January
27, 2009.  The remaining $55,000 represents adequate accruals for all
contingencies, both probable and unforeseen.








NOTE 13– GOING
CONCERN





The
Company has had recurring operating losses since inception and is dependent upon
financing to continue operations.  These factors indicate that the Company
may be unable to continue in existence should immediate and short term financing
options not be available.  These financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue its existence.  These financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.  Currently the Company has nearly zero cash on hand and
few material assets.  In addition, the Company has not established nor
maintained a recurring source of revenues to sufficiently cover or offset any
current, anticipated or planned operating costs to allow it to continue as a
going concern.  It is the intent of the Company to find additional capital
funding and/or a profitable business venture to acquire or merge.







21