FORM
10-K





UNITED
STATES
  SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549






x ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 EXCHANGE ACT of
1934
  For
the fiscal year ended June 30, 2008
  o 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 000-09283
  Aperture
      Health, Inc.(Exact name of
      Registrant as specified in its
charter)




Nevada
            20-8085447(State
      or other jurisdiction of incorporation or
    organization)
            (IRS
      Employer Identification No.)






27201 Puerta Real, Suite 350,
      Mission Viejo, California 92691(Address of
      Principal Executive Offices)  (Zip Code)949-609-1966(Registrant's
      telephone number, including area
code)






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




Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $.001
par value





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





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





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





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





Large
      Accelerated filer o
            Accelerated
      filer o





Non-accelerated
      filer o
            Smaller
      Reporting Company x


(Do not
check if a smaller reporting company)





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





The
aggregate market value of the voting stock held by non-affiliates of the
registrant computed by reference to the closing sale price on September 5, 2008
was approximately $1,072,064, and as of the end of the registrant's most
recently completed second fiscal quarter was
approximately $2,412,144.





The
number of shares of the registrant common stock issued and outstanding as of
September 5, 2008 was 81,103,455, $0.01 par value.







TABLE
OF CONTENTS








PagePART
      IItem
      1.
            Business
            1Item
      1A.
            Risk
      Factors
            7Item
      1B.
            Unresolved
      Staff Comments
            14Item
      2.
            Properties
            14Item
      3.
            Legal
      Proceedings
            14Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            14PART
      IIItem
      5.
            Market
      Price for the Registrant's Common Equity, Related Stockholders Matters and
      Issuer Purchases of Equity Securities
            14Item
      6.
            Selected
      Financial Data
            16Item
      7.
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operation
            16Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market Risk
            20Item
      8.
            Financial
      Statements and Supplementary Data
            20Item
      9.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
            20Item
      9A.
            Controls
      and Procedures
            21Item
      9B.
            Other
      Information
            21PART
      IIIItem
      10.
            Directors
      and Executive Officers, Promoters and Control Persons
            21Item
      11.
            Executive
      Compensation
            24Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management
            25Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence
            26Item
      14.
            Principal
      Accounting Fees and Services
            26PART
      IVItem
      15.
            Exhibits
      and Financial Statement Schedules
            26









SPECIAL
NOTE REGARDING FORWARD LOOKING STATEMENTS





Statements
contained in this Report that are not historical facts or that discuss our
expectations or beliefs regarding our future operations or future financial
performance, or financial or other trends in our business, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the 1933 Act) and Section 21E of the Securities
Exchange Act of 1934, as amended (the 1934 Act). Forward-looking statements can
be identified by the fact that they do not relate strictly to historical or
current facts. Often, they include the words "believe," "expect," "anticipate,"
"intend," "plan," "estimate," "project," or words of similar meaning, or future
or conditional verbs such as "will," "would," "should," "could," or "may." The
achievement or realization of the expectations or beliefs set forth in
forward-looking statements are subject to a number of risks and uncertainties
that could cause our financial condition or operating results in the future to
differ significantly from those expected at the current time. Those risks and
uncertainties are described in this Item 1 "Business," Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operation" as well
as those discussed in any documents incorporated by reference herein or therein.
Due to these uncertainties and risks, readers are cautioned not to place undue
reliance on forward-looking statements contained in the Report, which speak only
as of the date of this Annual Report. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.







PART
I





ITEM
1. BUSINESS




Background




In August
2005, Aperture Health, Inc. (“we”, “us”, “Aperture Health”, or the “Company”),
formerly known as flexSCAN, Inc., effected a reverse merger with Fuel
Corporation of America, Inc. where the Company was the surviving entity.
Consistent with the Company’s commitment to virtualize its business model to
minimize the investment in “brick and mortar”, management discontinued the
delivery of full body diagnostic imaging in favor of the more lucrative,
affordable, and manageable on-line business model presented in the sections
below. Finally, in March 2008 the Company’s name was changed from flexSCAN, Inc.
to Aperture Health, Inc. consistent with its refined focus on health related
services -- “aperture on health is wellness.”




Aperture
Health is a healthcare information and services organization focusing on
providing high technology medical information management to the healthcare
consumer, along with a unique incentive program designed to abate the rising
costs of healthcare to both employers and employees. We believe that our
patent-pending and proprietary program wellness360 is an industry-first for
corporate health and wellness management. wellness360 packages advertising and
marketing research opportunities with 'no-cost' corporate health and wellness
services, then rewards employers and employees for using the services. The
program is also available to prospective members who are drawn to our website
through our “Refer-A-Friend” initiative or through viral marketing. The program
leverages innovative technology to provide participants with free comprehensive
health and wellness services, an online personal health record system, online
lifestyle guides for fitness and nutrition, and online progress tracking.
Employers and employees receive economic rewards for using the free services and
for participating in advertiser-sponsored activities.




Another
component of our wellness360 program that differentiates us from the competition
is the ability of our members’ healthcare professionals to quickly and easily
upload copies of their “paper” records by simply using their office fax machine.
In turn, wellness360’s software identifies the patient and provider though a
simple and reliable character recognition strategy and automatically updates the
individual’s medical record. Aperture Health’s online medical record not only
provides a workable solution to the pressing need for access to a patient’s
medical information, it does so at no cost to the participants. Our solution is
provided free of charge to both healthcare providers and our wellness360
members.




All
information provided to us by our members is aggregated into an electronic
medical record system, which allows us to develop a Member Profile for each
member based on every element of their life including diet, exercise, medical
records, ethnicity, socioeconomic status, risky behaviors, medications, family
history, diseases, and interests. In exchange for allowing wellness360 members
to participate in our program free of charge, we allow marketers, advertisers
and researchers to submit information in the form of advertisements, surveys,
questionnaires, educational material and offers, collectively referred to as
Messages, to a specified Member Profile. The Messages are submitted to us and
upon review and acceptance by us are made available to members matching the
specified Member Profile once the member logs into the wellness360 portal. All
identifying member information is completely confidential and Health Insurance
Portability and Accountability Act (“HIPAA”). Fundamental to our business model
is our mission to contribute to the reduction and overall control of healthcare
costs. In this spirit, we used the revenues received from marketers, advertisers
and researchers to fund our economic rewards programs for members and their
employers in an attempt to offset burdensome healthcare costs, such as premiums,
co-payments and deductibles. For a detailed description on how our wellness360
program works please see the section below entitled “The Wellness360
Process”




1


The
Healthcare Problem





The
problems plaguing healthcare are numerous and well appreciated by civic leaders,
corporate executives and most importantly, every American. Costs are spiraling
out of control and equal-access is currently only a dream, and difficult to
imagine. The answer, however, cannot be found in Congress and, unfortunately,
will not be revealed by the winner of our upcoming presidential election. The
good news is, an answer is within reach and it lies in the hands of free
enterprise -- not because capitalists long for more money but because private
enterprise has been and continues to be the engine for change and innovation. An
alliance between wellness360 and a major national or multinational business
(from healthcare, dot com realm, non-government organizations) is fundamental to
establishing just such a foundation for change, a foundation upon which a new
perspective on health and wellness can be forged ensuring equal access to
healthcare and a legacy we will be honored to leave for our
children.





The
Wellness360TM Solution






wellness360 is an
      Internet-based business model. However, unlike traditional Internet
      offerings, Aperture Health employs a proven distribution strategy for
      developing Sponsor organizations. Membership development is accomplished
      by engaging independent agents (e.g. insurance brokers, benefits
      consultants, etc.) to present wellness360 to their client base as a unique
      and free solution to their wellness needs. Additionally, Sponsors benefit
      from additional revenues derived from wellness360 to help offset rising
      insurance costs.
              
              As
      illustrated in the graphic to the right, Sponsors (e.g. Employers)
      encourage employee participation, which further yields enrollment of
      family members as well as friends.
              
              Revenue
      Sharing
                
                The
      economic engine underlying wellness360 is its revenue sharing
      model.  As illustrated by the pie-chart, 45% of online
      advertising dollars are allocated to rewards as displayed in the following
      table:
            picture






Member
              Sponsor
              Agent
      of Record
                Master
      Agent
            
            33%
      of Advertising Revenue
              25%
      Matching of Member Rewards
              40%
      Matching of Sponsor Rewards
                25%
      Matching of Agent of Record Rewards
            picture


The
Agent




Agents
enjoy the opportunity to deploy a free wellness solution to their client base
and benefit from the long-term cash rewards developed by the participating
members.  Agents are paid a commission equal to 40% of the cash
rewards paid to Sponsors.




The
Sponsor




Aperture
Health provides organizations (e.g. employers, charities, associations, unions,
etc.) (“Sponsors”) access to a highly integrated on-line wellness portal for the
benefit of their affiliates (e.g. employees, members, associates, etc.)
(“Affiliates”) which is free of charge to both the Sponsor and
Affiliates.  In addition to being a free service, wellness360 is an "I
Care" benefit that; a) Facilitates recruitment, b) Ensures a healthy and
prosperous life, c) Reduces absenteeism,  d) Contributes to reducing
workers compensation claims, and d) Demonstrates the organization’s
appreciation.  Sponsors are paid a commission equal to 25% of cash
rewards paid to Members.




2




The
Member




In the
wellness360 model, Members are the obvious driving force and as such, enjoy a
substantial portion of the shared revenue, or 33% of online advertising revenue
received by Aperture Health. Each member is encouraged to participate in
developing linkage among their real and virtual friends by inviting them to join
wellness360. In doing so, they establish a unique relationship hierarchy that
not only enables correspondence and social network, but yields cash rewards as
well. Members are paid a commission equal to 25% of cash rewards paid to their
Member Friends.




Friends




In
general, Friends are Members that were cultivated by another Member. Friends
enjoy all the benefits of wellness360 including the earning of cash rewards.
Structurally, unlike a wellness360 Member, a Friend is not directly affiliated
with a Sponsor but rather a Member. Like Members, however, if Friends invite
their friends, they too are paid a commission equal to 25% of cash rewards paid
to their Member Friends.




The
Services




wellness360.com,
Aperture Health’s core suite of services is delivered via its personalized,
secure and HIPAA compliant online experience. Services include:




·
            DIET:A
      robust and highly interactive component of Aperture Health's fitness
      oriented services enabling members to design meal plans to meet their
      specific dietary and weight loss
needs.




·
            FITNESS: A unique
      on-line fitness service providing customized exercise and fitness programs
      designed to meet a specific patient's needs based on medical history,
      physical condition and personal
objectives.




·
            PERSONAL HEALTH
      RECORD:Comprehensive repository available online; answering the need to
      store and manage the full spectrum of personal health information
      including blood chemistry, laboratory results, insurance information,
      medications, physician information, etc.·
            EMERGENCY MEDICAL
      RECORD:wellness360 Emergency Medical Record is a synopsis of critical
      information in a member’s Personal Health Record that can be quickly
      retrieved by emergency responders or emergency personnel maximizing the
      highest quality of care possible.·
            RESOURCE LIBRARY:wellness360 provides
      its members access to a comprehensive database of health and medical
      information as well as breaking news that is kept up-to-date
      daily.  Information in gathered and filtered based on a member’s
      needs (as defined by their Personal Health Record content) or topics of
      interest.·
            HEALTH RISK
      ASSESSMENT:Each wellness360
      member is administered a concise 40-question online health risk assessment
      designed to identify areas of interest or risk including, genetic
      propensities, diseases processes, activity level and social risks (e.g.
      alcohol consumption, seatbelt utilization, etc.).·
            PAPER MEDICAL RECORDS
      STORAGE:wellness360 members
      are welcome to store all their “paper” medical records and supporting
      documentation in their online document files.  Members can
      either scan their paper documents or issue a “Fax Request” to their
      providers or laboratories which in turn are faxed directly to wellness360
      and stored in their online file
cabinet.




·
            SOCIAL NETWORK:wellness360 members enjoy the benefits of social network paired
      with the ability to develop connections with individuals like
      themselves.  wellness360 Community members may create any number
      of channels (or forums) defined by an infinite variety of variables
      including, lifestyle, medications, disease state, diet profiles,
      descriptive statistics (e.g. weight, blood pressure, etc.) and exercise
      strategies.




·
            EXPERT BLOGS:Blogging is a
      fundamental component of social networking.  Aperture’s
      strategy, however, is to punctuate the benefits of generic blogging with
      the addition of a new domain specifically for wellness360 experts (e.g.
      health care professionals, lifestyle coaches, pharmaceutical
      professionals, etc.) each contributing content specific to their area of
      interest and providing a venue for sharing and gaining of
      knowledge.




3




The
Advertising Model




Aperture
Health’s online structure provides a valuable platform for advertisers by
allowing them to target messages based on a variety of filters including:
demographics, psychographics, health history, diet and fitness activities, and
member’s personal interests. Overall, the Aperture Health believes advertisers
will be drawn to wellness360 because of its unique and highly differentiated
user base. Aperture Health's ability to reach users overtly interested in their
personal wellness makes the Aperture Health advertising proposition attractive
to healthcare, as well as traditional consumer product and service companies.
Online advertising is one fo the most explosive growth industries in America.
According to the Center of the Digital Future at the USC Annenberg School,
online advertising revenues hit $3.9 billion in the first quarter of 2006 – up
38% over the same period in 2005 and 6% over the last quarter 2005.




Today,
88% of web users consider the Internet to be an important source of information
for them – a substantial increase from the 66% in 2006 – and substantially
higher than television (68 percent), radio (63 percent), and newspapers (63
percent).




Internet
      advertising
      for the first half of 2007 hit $10 billion – up 27% from the same period
      last year, according to the Internet Advertising Bureau (“IAB”). Even
      though the various types of Internet advertising still make up only a
      small percentage of the overall ad industry (about 9.5%), the growth of
      Internet advertising is predicted to be 85% between 2006 and 2009. 85%.
      According to Forrester Research’s U.S. Interactive Marketing Forecast
      2007-2012: marketing spending will grow to $61 billion by 2012, an
      increase driven by marketers who intend to leverage distribution of
      channels rather than pour new spending into a single place. Forester
      Research predicts that interactive marketing will top $61 billion by 2012;
      Search marketing will triple in five years; Social networking based media
      will drive emerging channels to $10.6 billion by 2012.
              
              Online advertising will not only be the driving
      force behind Internet economics, it will clearly result in a shift away
      from generic channels (e.g. television, radio and print) toward the
      powerful targeting capacity offered by Internet web sites, with
      wellness360 providing unprecedented granularity and message
      targeting.
              
              Market
            Picture


Aperture
Health believes that the market opportunity for “Online Health Information and
Services” is substantial and clearly driven by consumer needs and desires.
According to the 2006 Pew Internet & American Life Project
(“IALP”):




·
            One
      Hundred Thirteen (113) million Internet users sought health information
      online




·
            IALP
      results translate to 80% of American internet users in 2006 actively
      searched for information on at least one health topic which is consistent
      with the statistics for 2002 and
2004.




·
            Eight
      (8) million adults search for a health topic daily, which is about the
      same frequency with which Internet Users pay bills online, read blogs, or
      look up phone numbers.




4




According
to IALP polling, over the last seven years health information gathering remained
a consistent and popular activity amongst most Internet
users.  Additionally, these results are corroborated by similar
surveys conducted by Harris Interactive, the Digital Future Project, and the
Kaiser Family Foundation.




Of equal
importance is the trend toward organizational wellness.  Employers
more specifically understand that preventing chronic conditions in the workplace
is far less costly than treating and managing disease as it
occurs.  Consistent with this understanding, a survey conducted by the
DMAA: The Care Continuum Alliance, 91% of employers and health plans intend to
implement a wellness program within the next year.  According to the
American Journal of Health Promotion, annually physically active employees are
$391 less expensive than inactive workers.  As such, employee oriented
wellness and fitness programs commonly yield a 100% to 300% return on investment
in as little as five years.


As in the
old adage of “describing an elephant is all a matter of your point of view” the
market potential for wellness varies dramatically – from $5 Billion to $260
Billion annually.  Of importance, however, is the growing interest in
health and wellness by substantial players committed to carve out their portion
of what is clearly an untapped market.




Online
Communities: The Social Effects Grow





Center of
the Digital Future at the USC Annenberg found profound social impact produced by
growing participation in online communities. The Digital Future Project found
that membership in online communities has more than doubled in only three years.
More than half of online community members (54 percent) log into their community
at least once a day, and 71 percent of members said their community is very
important or extremely important to them. Of interest, 56 percent of members
reported meeting their online counterparts in person.




The study
found that participation in online community membership has particularly
dramatic effects on participation in social causes. Three-quarters of online
community members said they use the Internet to participate in communities
related to social causes, with 40 percent saying that they use the Internet at
least monthly to participate in such communities. Eighty-seven percent of online
community members are participating in social causes that are new to them since
their involvement in online communities began. And, a large and growing
percentage of members -- now 55 percent -- say they feel as strongly about their
online communities as they do about their real-world communities.




Clearly,
the growth of online communities is opening a range of opportunities for social
connection, involvement and communication that could not have been anticipated
even five years ago. The emergence of online communities is demonstrating that
opportunities to be involved in common projects and idea sharing about any
subject we choose and with people anywhere on Earth is possible and
practical.




Competition




The
market potential of health and wellness will prove simply to alluring to a great
many organizations, large and small alike. Interest in the health and wellness
information marketplace is punctuated by commitments from Microsoft, Google,
WellPoint, WebMD and upstarts such as Revolution Health.




SWOT
Analysis





STRENGTHS


·
            Comprehensive
      suite of wellness, health, lifestyle
serves


·
            Innovative
      cash rewards program


·
            Tested
      and proven software


·
            Robust
      data storage: elect. Medical records, emergency record, HRA,
      etc.


·
            Time
      advantage


·
            Health
      monitoring technologies and data
analytics




5




·
            Unparalleled
      advertising granularity/targeting


·
            Seasoned
      management team


·
            Innovative
      in “in place” distribution strategy


·
            Experiencing
      dramatic growth trajectory


·
            Relationships
      – especially in hospital industry


·
            Integrated
      cell / SMS with website


·
            Demonstrated
      member adoption


·
            Extensive
      content – proprietary and third
party


·
            Social
      network feature – in process


·
            Advertiser
      adoption


·
            Independent
      from the evil masters





WEAKNESSES


·
            Capital


·
            Limited
      market share


·
            Low
      barriers to entry


·
            Limited
      “expert” content





OPPORTUNITIES


·
            Unlimited
      alliance partnerships


·
            Vacuum
      of market leadership


·
            Viral
      expansion opportunities


·
            Health
      care costs spiraling out of control with no apparent
    solutions


·
            Partnership
      synergies – community sponsorship, product
  tie-in


·
            Burgeoning
      markets – 91% of enterprises in US either seeking or have a wellness
      program


·
            Expansive
      market – the sick, the well, and everyone
  in-between




THREATS


·
            Large
      potential competitors – insurance co’s, Google,
  Microsoft


·
            Consumer
      apathy




Member
Retention


Aperture
Health’s strategy to maximize member retention and utilization is firmly rooted
in four fundamental objectives:





·
            Promote
      cultural support via Sponsor support and
  encouragement


·
            Provide
      valuable and useful services


·
            Rewards
      paid in proportion to the value of member
  activities


·
            Encourage
      integration of wellness360 into their social
  fabric




Sponsor Support: Key to fostering an
effective health and wellness attitude among a Sponsor’s Affiliates is
integration of the wellness message into the Sponsor’s culture. It is the
development of Strategic Alliances with Sponsors and distribution agents (e.g.
insurance brokers) that differentiates wellness360 from the average wellness
offering available to corporate America.




6




Useful Services: Recognizing that Internet
users have access to thousands of sites offering similar services, wellness360
is committed to offering a variety of services addressing the wide spectrum of
member needs.  It is this unique “Full Service/Integrated” approach
that makes wellness360 the member’s one-stop shop for health, wellness, and
lifestyle issues.




Valuable Rewards:According to a recent study
by PriceWaterhouseCoopers, 80% of CEOs from 150 large employers believed the
most promising option for reducing corporate health care cost increases is to
provide incentives to employees. Unfortunately, under the typical wellness
offering, added incentives increase the cost of delivering wellness and
healthcare services. In contrast, wellness360 incorporates a highly lucrative
rewards program that is fully funded by third-party advertisers. In doing so,
members enjoy unlimited and much needed cash rewards for visiting and utilizing
wellness360. Aperture Health constantly reminds our members that “It Pays to be
Healthy®”.




Social Fabric/Online
Community:
According to the Center of the Digital Future at the USC Annenberg School, 45
percent of Internet users consider “social networking” very important in helping
them to maintain social relationships. On average, Internet users represent
having 5.2 friends online whom they have never met in person. Aperture Health
incorporates social networking as a fundamental support element of wellness360.
In doing so, not only is wellness360 a conduit for social interaction, it
becomes a vehicle for support of a member’s wellness initiatives.




Intellectual
Property




Aperture
Health has applied for a patent of the wellness360 economic
model.  The patent is currently pending approval. The Company has also
submitted trademark applications for “It Pays to be Healthy”, and
“wellness360”.




Government
Regulation




We are
subject to federal, state and local regulations concerning the environment and
occupational safety and health standards. We have not experienced significant
difficulty in complying with such regulations and compliance has not had a
material effect on our business or our financial results.




Research
and Development




We have
focused primarily on developing foundational and core technologies. We have
spent a substantial amount of time developing our core web-based technologies,
advertising management and tracking system, member activity and rewards tracking
and accounting system, integrated electronic health risk assessment system, and
optical character recognition technology for processing health records, a
multifaceted Client Management System, and systems for internal
controls.




Employees




As of
June 30, 2008, we had ten (10) full-time employees and one part-time employee.
Of these employees, three were engaged in providing business development
services, two were engaged in information technology, and five were engaged in
general and administrative activities. None of our employees are represented by
a labor union or a collective bargaining agreement. We have not experienced any
work stoppages and have positive employee relationships.





ITEM
1A.RISK
FACTORS





The
following risk factors should be considered carefully in addition to the other
information presented in this report. This report contains forward looking
statements that involve risks and uncertainties. Our actual results may differ
significantly from the results discussed in the forward looking statements.
Factors that might cause such differences include but are not limited to, the
following:




7




We
are an early stage company and have a limited operating history





We have a
limited operating history upon which you can base an evaluation of our business
and prospects. As a start-up company in the early stage of development, there
are substantial risks, uncertainties, expenses and difficulties that we are
subject to. You should consider an investment in the Company in light of these
risks, uncertainties, expenses and difficulties. To address these risks and
uncertainties, the Company must do the following:





·
            Successfully
      execute its business strategy;


·
            Continue
      to enhance its services to meet the needs of a changing
      market;


·
            Continue
      to raise debt and equity to fund working
  capital;


·
            Respond
      to competitive developments; and


·
            Attract,
      integrate, retain and motivate qualified
  personnel





We may be
unable to accomplish one or more of these objectives, which could cause the
business to suffer. In addition, accomplishing one or more of these objectives
might be very costly, which could harm our financial results.





We
have incurred significant losses since inception and anticipate that we will
continue to incur losses for the foreseeable future





As of
June 30, 2008, the Company had an accumulated deficit of $27,169,545. We plan to
maintain or increase our marketing expenses and general overhead, subject to
meeting certain funding goals. We believe that our business proposition will be
appealing to both the healthcare and corporate benefits communities. There is no
assurance, however, that we will be able to successfully market our services in
a profitable manner. If the market acceptance for our services slows, its
margins and profitability will suffer. The Company is unable to predict whether
its operating results will be profitable. Management believes that long-term
profitability and growth will depend on its ability to:





·
            Develop
      brand name awareness;


·
            Successfully
      identify viable market
opportunities;


·
            Provide
      healthcare consumers with valuable and interesting
    services;


·
            Develop
      viable strategic alliances; and


·
            Maintainsufficient
      transaction volume.





We
will need to raise substantial additional capital to fund our operations, and
failure to obtain funding when needed may force us to delay, reduce or eliminate
its products and services





Our
operations have consumed substantial amounts of cash since inception. We
anticipate having to make significant capital expenditures in the future
to:





·
            Increase
      marketing and promotion of our products and
  services;


·
            Increase
      staffing;


·
            Increase
      IT technology research and development;
and


·
            Explorenew
      markets for our products and
services.





We expect
that the amount of cash used in our operations will increase significantly over
the next several years. If we are unable to fund these increased expenditures
through increased revenues we will be required to raise additional capital. Our
future funding requirements will depend on many factors, including, but not
limited to:




8




·
            Market
      acceptance of our products and
services;


·
            Research
      and development costs;


·
            Marketing
      costs; and,


·
            Costs
      of increased staffing.





To date,
our sources of cash have been primarily limited to the sale of equity and
convertible debt securities. We cannot be certain that additional funding will
be available on acceptable terms, or at all. To the extent we raise additional
funds by issuing equity securities, our stockholders may experience significant
dilution. Any debt financing, if available, may involve restrictive covenants
that impact our ability to conduct its business. If we are unable to raise
additional capital, when required, or on acceptable terms, we may have to
significantly delay, scale back or discontinue certain products and
services.




We
may be subject to professional liability risks which could be costly and
negatively impact our business and financial results




We may be
subject to professional liability claims. To protect against possible
professional liability, our vendors maintain professional liability insurance
with coverage that is consistent and appropriate for industry risks. However, if
the our vendors are unable to maintain insurance in the future at an acceptable
cost or if our vendors’ insurance coverage does not fully cover a potential
liability, and a successful claim was made against us and/or a vendor we could
be exposed to liability. Any claim made against us that is not fully covered by
insurance could be costly to defend against, and divert the attention from our
operations.





Loss
of key executives and failure to attract qualified managers, technologists and
sales persons could limit our growth and negatively impact our
operations





We depend
upon our management team to a substantial extent. In particular, we depend upon
Mr. Thomas Banks, Chief Executive Officer and Chairman of the Board of
Directors, for his skills, experience, and knowledge of the company and industry
contacts. Currently, we do not have an employment agreement with Mr. Banks. The
loss of Mr. Banks, or other members of our management team, could have a
material adverse effect on our business, results of operations or financial
condition.





Complying
with federal and state regulations is an expensive and time-consuming process,
and any failure to comply could result in substantial penalties





We are
directly or indirectly subject to extensive regulation by both the federal
government and the states in which it conducts its business, including the
federal Anti-Kickback Law and similar state anti-kickback laws, the Stark Law
and similar state laws affecting physician referrals, the federal False Claims
Act, the Health Insurance Portability and Accountability Act of 1996 and similar
state laws addressing privacy and security, state unlawful practice of medicine
and fee splitting laws, state certificate of need laws, the Medicare and
Medicaid regulations, the Medicare Prescription Drug, Improvement and
Modernization Act of 2003, and requirements for handling bio-hazardous and
radioactive materials and wastes.




If our
operations are found to be in violation of any of the laws and regulations to
which it or its clients are subject, it may be subject to the applicable penalty
associated with the violation, including civil and criminal penalties, damages,
fines and the curtailment of its operations. Any penalties, damages, fines or
curtailment of the Company’s operations, individually or in the aggregate, could
adversely affect its ability to operate its business and its financial results.
The risk of us being found in violation of these laws and regulations is
increased by the fact that many of these laws have not been fully interpreted by
the regulatory authorities or the courts, and their provisions are open to a
variety of interpretations. Any action against us for violation of these laws or
regulations, even if we successfully defend against it, could cause us to incur
significant legal expenses and divert management’s attention from the operation
of its business.




9


If
we are unable to protect our intellectual property effectively, we may be unable
to prevent third parties from using our technologies, which would impair our
competitive advantage





We
possess a broad range of propriety technologies and processes which may or may
not be subject to protection under copyright, trademark and or patent law. We
intend to make every effort to protect its proprietary technologies with all
applicable copyright, trademark and patent law available at that
time.




We do not
believe that our operations or products infringe on the intellectual property
rights of others. However, there can be no assurance that others will not assert
infringement or trade secret claims against us with respect to our current or
future products or that any such assertion will not require us to enter into a
license agreement or royalty arrangement with the party asserting the claim.
Responding to and defending any such claims may distract the attention of our
management and have an adverse effect on our business, financial condition and
results of operations.




Others
may claim in the future that we have infringed their past, current or future
technologies. We expect that participants in its markets increasingly will be
subject to infringement claims as the number of services and competitors grow.
Any claim like this, whether meritorious or not, could be time-consuming, and
result in costly litigation and possibly result in royalty or licensing
agreements. These royalty or licensing agreements might not be available on
acceptable terms or at all. As a result, any claim like this could harm our
business.




We regard
the protection of our copyrights, service marks, trademarks, and trade secrets
as critical to our success. We rely on a combination of patent, copyright,
trademark, service mark and trade secret laws and contractual restrictions to
protect its proprietary rights in products and services. When applicable, we
will enter into confidentiality and invention assignment agreements with
employees and contractors, and nondisclosure agreements with parties we conducts
business with in order to limit access to and disclosure of our proprietary
information. These contractual arrangements and the other steps taken to protect
our intellectual property may not prevent misappropriation of our technology or
deter independent third-party development of similar technologies. We intend to
pursue the registration of trademarks and service marks in the U.S. and
internationally. Effective trademark, service mark, copyright and trade secret
protection may not be available in every country in which its services are made
available.





We
will need to increase the size of its organization, and may experience
difficulties in managing growth





We are a
small company with ten (10) full-time employees and one part-time employee as of
June 30, 2008. We expect to experience a period of significant expansion in
headcount, facilities and infrastructure and anticipate that further expansion
will be required to address potential growth in customers and market
opportunities. Future growth will impose significant added responsibilities on
members of management, including the need to identify, recruit, maintain and
integrate additional employees. Our future financial performance and our ability
to compete effectively will depend, in part, on our ability to manage any future
growth effectively.





The
ownership interests of our officers and directors could conflict with the
interests of our other stockholders





As of
June 30, 2008, our officers and directors beneficially owned approximately
36.3% of its common stock. As a result, these stockholders, acting together,
will be able to significantly influence all matters requiring approval by our
stockholders, including the election of directors and the approval of mergers or
other business combination transactions. The interests of this group of
stockholders may not always coincide with our interests or the interests of
other stockholders.




10


It
may be difficult for a third party to acquire us even if doing so would be
beneficial to our shareholders





Some
provisions of our Articles of Incorporation, as amended, and Bylaws, as well as
some provisions of Nevada or California law, may discourage, delay or prevent
third parties from acquiring us, even if doing so would be beneficial to our
shareholders.





There
is no existing market for our common stock





Our
common stock is quoted on the Over the Counter Bulletin Board under the symbol
"APRE." The volume of trading of our common stock and the number of shares in
the public float are small. Sales of a substantial number of shares of common
stock into the public market in the future could materially adversely affect the
prevailing market price of our common stock





The
market price of our common stock may be adversely affected by several
factors





The
market price of our common stock could fluctuate significantly in response to
various factors and events, including:





·
            Our
      ability to execute our business
plan,


·
            Operating
      results below expectations;


·
            Announcements
      of technological innovations or new products by us or our
      competitors;


·
            Loss
      of any strategic relationship;


·
            Industry
      developments;


·
            Economic
      and other external factors; and


·
            Period-to-period
      fluctuations in financial results.





In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock.





Our
common stock may be deemed a penny stock with a limited trading
market





Our
common stock is currently listed for trading on the OTC Bulletin Board which is
generally considered to be a less efficient market than markets such as NASDAQ
or other national exchanges, and which may cause difficulty in obtaining future
financing. Further, our securities are subject to the "penny stock rules"
adopted pursuant to Section 15(g) of the Securities Exchange Act of the 1934, as
amended, or Exchange Act. The penny stock rules apply to Non-NASDAQ companies
whose common stock trades at less than $5.00 per share or which have a tangible
net worth less than $5,000,000 ($2,000,000 if the company has been operating for
three or more years). Such rules require, among other things, that brokers who
trade "penny stock" to persons other than "established customers" complete
certain documentation, make suitable inquiries of investors and provide
investors with certain information concerning trading in the security, including
a risk disclosure document and quote information under certain circumstances.
Many brokers have decided not to trade "penny stock" because of the requirements
of the penny stock rules and, as a result, the number of broker-dealers willing
to act as market makers in such securities is limited. In the event that we
remain subject to the "penny stock rules" for any significant period of time,
there may develop an adverse impact on the market, if any, for our securities.
Because our securities are subject to the "penny stock rules", investors will
find it more difficult to dispose of our securities. Further, for companies
whose securities are traded on the OTC Bulletin Board, it is more difficult: (1)
to obtain accurate quotations, (ii) to obtain coverage for significant new
events because major wire services, such as the Dow Jones News Service,
generally do not publish press releases about such companies, and (iii) to
obtain needed capital.




11


We
do not expect to pay dividends in the foreseeable future. Any return on
investment may be limited to the value of the Company’s stock





We do not
anticipate paying cash dividends on our stock in the foreseeable future. The
payment of dividends on shares of common stock will depend on our earnings,
financial condition and other business and economic factors affecting us at such
time as the board of directors may consider relevant. If we do not pay
dividends, our common stock may be less valuable because a return on your
investment will only occur if our stock price appreciates.





A
sale of a substantial number of shares of the Company’s common stock may cause
the price of our common stock to decline





If
stockholders sell substantial amounts of our common stock in the public market,
including shares issued upon the exercise of outstanding options or warrants,
the market price of its common stock could fall. These sales also may make it
more difficult for us to sell equity or equity-related securities in the future
at a time and price that we deem reasonable or appropriate. Stockholders who
have been issued shares in the Merger will be able to sell their shares pursuant
to Rule 144 under the Securities Act of 1933, beginning one year after the
stockholders acquired their shares.





If
we fail to manage our growth effectively, we may not be able to take advantage
of market opportunities




We must
continue to expand our operations to meet the demands of our advertisers,
members, and other constituents. To accommodate our growth, we anticipate that
we will need to implement a variety of new and upgraded operational and
financial systems, procedures and controls, including the improvement of our
accounting and other internal management systems, all of which require
substantial management efforts.




We also
will need to continue to expand, train, manage, and motivate our workforce as
well as manage our relationships. We will likely need to add sales and marketing
offices and personnel to service sponsor and agent relationships. As we add
membership, we incur greater costs and expenses to maintain our software and IT
infrastructure.




All of
these endeavors will require substantial managerial efforts and skill, as well
as the incurrence of additional expenditures. We can provide no assurance that
we will be able to manage our growth effectively, and we may not be able to take
advantage of market opportunities, execute our expansion strategies, or meet the
demands of our advertising clients.




Future
acquisitions may have an adverse effect on our ability to manage our
business




We may
acquire businesses, technologies, services, or products which are complementary
to our core business. Future acquisitions may expose us to potential risks,
including risks associated with:




·
            The
      integration of new operations, services and
  personnel;


·
            Unforeseen
      or hidden liabilities;


·
            The
      diversion of resources from our existing business and
      technology;


·
            Our
      potential inability to generate sufficient revenue to offset the new
      expenses of the acquisition(s); or,


·
            The
      potential loss of or harm to relationships with both employees and
      advertising clients resulting from our integration of new
      businesses




12




Any of
the potential risks listed above could have a material and adverse effect on our
ability to manage our business, our revenues, and our ability to generate net
income.




We may
need to raise additional debt funding or sell additional equity securities to
make such acquisitions. The raising of additional debt funding by us, if
required, would result in increased debt service obligations and could result in
additional operating and financing covenants, or liens on our assets that would
restrict our operations. The sale of additional equity securities would result
in additional dilution to our shareholders.





Our
internal controls over financial reporting and our controls and procedures may
in the future be inadequate




Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. We maintain a system of internal control over
financial reporting, which is defined as a process designed by, or under the
supervision of, our principal executive officer and principal financial officer,
or persons performing similar functions, and effected by our board of directors,
management and other personnel, 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.




As a
public reporting company in an era of increasing regulation, our requirements
for enhanced financial reporting and internal controls are expanding. We have
strengthened our controls substantially over the past year as a result of
meeting our obligation to document and test our internal control procedures
pursuant to the requirements of the Sarbanes-Oxley Act of 2002, which requires
annual management’s assessment of the effectiveness of its internal controls. We
recognize that the process of designing and implementing effective internal
controls is a continuous effort that requires us to anticipate and react to
changes in our business and the economic and regulatory environments and to
expend significant resources to maintain a system of internal controls that is
adequate to satisfy our reporting obligations as a public company.




Notwithstanding
the strides we have made, we cannot assure you that we will not, in the future,
identify areas requiring improvement in our internal control over financial
reporting. We cannot assure you that the measures we will take to remediate any
areas in need of improvement will be successful or that we will implement and
maintain adequate controls over our financial processes and reporting in the
future as we continue our growth. If we are unable to establish appropriate
internal financial reporting controls and procedures, it could cause us to fail
to meet our reporting obligations, result in the restatement of our financial
statements, harm our operating results, subject us to regulatory scrutiny and
sanction, cause investors to lose confidence in our reported financial
information and have a negative effect on the market price for shares of our
common stock.





We
may be subject to intellectual property infringement claims, which may force us
to incur substantial legal expenses and, if determined adversely against us, may
materially disrupt our business




There is
no assurance that our proprietary software, our business model, or other aspects
of our business do not or will not infringe upon trademarks or other
intellectual property rights held by third parties. Although we are not aware of
any such claims, we may become subject to legal proceedings and claims from time
to time relating to the intellectual property of others in the ordinary course
of our business. If we are found to have violated the intellectual property
rights of others, we may be enjoined from using such intellectual property, and
we may incur licensing fees or be forced to develop alternatives. In addition,
we may incur substantial expenses and diversion of management time in defending
against these third-party infringement claims, regardless of their merit.
Successful infringement or licensing claims against us may result in substantial
monetary liabilities, which may materially and adversely disrupt our
business.




13





ITEM
1B.   UNRESOLVED STAFF COMMENTS.





Not
applicable.





ITEM
2. DESCRIPTION
OF PROPERTY




We
currently lease approximately 7,297 square feet of office space in one building
located in Mission Viejo, California. The lease terminates on June 30, 2009. The
Company expects that the current leased premises will be satisfactory until the
future growth of its business operations necessitates an increase in office
space.  There is an ample supply of office space in the Orange County,
California area and we do not anticipate a problem in securing additional space
if necessary.




ITEM
3.LEGAL
PROCEEDINGS




We are
not presently a party to any material litigation.  From time to time, we may become involved in
litigation relating to claims arising from our ordinary course of business. We
are aware of no claims or actions pending or threatened against us, the ultimate
disposition of which would have a material adverse effect on
us.




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




During
the third fiscal quarter of fiscal year 2008, the Company filed an Information
Statement with the Securities and Exchange Commission. On January, 11, 2008, the
company obtained the written consent of the holders of a majority of the common
stock to elect a slate of directors put forward by management. The same written
consent approved an amendment to the Company’s Articles of Incorporation that
would change our name from flexSCAN, Inc. to Aperture Health, Inc.




PART
II




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




Market
Prices of Common Stock





The
Company’s common stock currently trades on the Over-the-Counter Bulletin Board,
under the trading symbol of “APRE”. Because we are listed on the
Over-the-Counter Bulletin Board, our securities may be less liquid, receive less
coverage by security analysts and news media, and generate lower prices than
might otherwise be obtained if they were listed on a NASDAQ market or other
exchange.




14




The
following table sets forth for each the high and low bid quotations for the
common stock as reported by OTC Bulletin Board.





Fiscal
      2007
            
            Low
            
            
            HighJuly 1, 2006 through October
      31, 2006
            
            $
            0.13
            
            
            $
            1.70November
      1, 2006 through December 31, 2006
            
            $
            0.12
            
            
            $
            0.40January
      1, 2006 through March 31, 2007
            
            $
            0.11
            
            
            $
            0.16April
      1, 2007 through June 30, 2007
            
            $
            0.08
            
            
            $
            0.25





Fiscal
      2008 to present
            
            Low
            
            
            HighJuly 1, 2007 through September
      30, 2007
            
            $
            0.08
            
            
            $
            0.20October
      1, 2007 through December 31, 2007
            
            $
            0.08
            
            
            $
            0.15January
      1, 2008 through March 31, 2008
            
            $
            0.05
            
            
            $
            0.14April
      1, 2008 through June 30, 2008
            
            $
            0.02
            
            
            $
            0.10July
      1, 2008 through September 30, 2008
            
            $
            0.01
            
            
            $
            0.05Source:
      Yahoo Finance





Holders




On
September 28, 2008, the Company had approximately 895 stockholders of record of
our common stock.





Dividends





The
Company has not paid any dividends on its Common Stock and does not expect to do
so in the foreseeable future. The Company intends to apply its earnings, if any,
in expanding its operations and related activities. The payment of cash
dividends in the future will be at the discretion of the Board of Directors and
will depend upon such factors as earnings levels, capital requirements, the
Company's financial condition and other factors deemed relevant by the Board of
Directors. In addition, the Company's ability to pay dividends may be limited
under future loan agreements of the Company which restrict or prohibit the
payment of dividends.





Equity
Compensation Plan Information





The
following table sets forth information concerning options to purchase shares of
our common stock granted to our named executive officers in the fiscal year
ended June 30, 2008.





Executive
      Officer
            Shares
      of Common
              Stock
      Underlying
              Warrants
            Shares
      of Common
              Stock
      Underlying
              Stock
      Options
            %
      of Total
              Options
      and Warrants Granted
              to
      Company Employees
            Exercise
      Price
              Per
      Share
            Expiration
              Date
            Grant
      Date Present Value (3)Harry
      Stavrou
            --
            1,500,012
      (1)
            30%
            $0.40
            10/5/2011
            $142,964Thomas
      Banks
            1,250,000
      (2)
            --
            25%
            $0.20
            10/16/2018
            $124,985





(1)
            Option
      has a term of three years, subject to earlier termination in certain
      events related to termination of employment. The option begins to vest on
      the first month subsequent to the grant date. To the extent not already
      exercisable, the warrants shall become exercisable in full in connection
      with, and immediately prior to the consummation of any liquidity
      event. This option was granted at a value determined by the Chief
      Executive Officer




(2)
            Warrant
      was granted to Mr. Banks pursuant to a board resolution which effected a
      “replacement” of personal shares for certain qualifying stock
      transactions.




(3)
            As
      suggested by the SEC’s rules on executive compensation disclosure, the
      Company used the Black-Scholes model of option valuation to determine
      grant date pre-tax present value. There can be no assurance that the
      amounts reflected in this column will be
  achieved.




15





Recent Sales of Unregistered
Securities





All
information regarding the sale of any unregistered securities in fiscal year
2008 has been previously disclosed in the Company’s Form 10-Q and Form 8-K
filings.




ITEM
6. SELECTED
FINANCIAL DATA




Not
applicable.





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





This discussion contains statements regarding
operating trends and our beliefs and expectations regarding our future financial
performance and future financial condition (which are referred to as "forward
looking statements"). The consequences of those operating trends on our business
and the realization of our expected future financial results, which are
discussed in those statements, are subject to the uncertainties and risks
described below in this Section of this Report under the caption "Factors That
May Affect Future Results." Due to those uncertainties and risks, the duration
and effects of those operating trends on our business and our future financial
performance may differ, possibly significantly, from those that are currently
expected as set forth in the forward looking statements. As a result, you should
not place undue reliance on those forward looking statements.





Introduction




The
following discussion presents information about our results of operations,
financial condition, liquidity and capital resources and should be read in
conjunction with our financial statements and the notes thereto included
elsewhere in this Report.




Overview




Aperture
Health is a healthcare information and services organization focusing on
providing high technology medical information management to the healthcare
consumer, along with a unique incentive program designed to abate the rising
costs of healthcare to both employers and employees. We believe that our
patent-pending and proprietary program wellness360TM is an industry-first for
corporate health and wellness management. wellness360TM packages advertising and
marketing research opportunities with 'no-cost' corporate health and wellness
services, then rewards agents, sponsors, employers, employees, and general
membership for using the services. The program leverages innovative technology
to provide participants with free comprehensive health and wellness services, an
online personal health record system, online lifestyle guides for fitness and
nutrition, and online progress tracking. Members and their sponsors receive
economic rewards for using the free services and for participating in
advertiser-sponsored activities.




We have a
limited operating history and as a start-up company in the early stage of
development, there are substantial risks, uncertainties, expenses and
difficulties that we are subject to. The market for wellness programs is
generally highly competitive. Our ability to compete depends on many factors,
many of which are outside of our control. These factors include: timing and
market acceptance, introduction of competitive services, price and customer’s
interest in incorporating mywellness360 into its suite of employee benefits. For
additional uncertainties and risks that may affect our business please see the
section entitled "Factors That May Affect Future Results" at the end of this
Item.




16




Application
of Critical Accounting Policies




The
Company’s financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires the Company to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. The Company bases its
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis of making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.




The
Company believes the following critical accounting policies, among others,
affect more significant judgments and estimates used in the preparation of the
financial statements:




Allowance for Doubtful
Accounts. The Company does not maintain allowances for doubtful accounts
for estimated losses resulting from the inability of customers to make required
payments as the company has not experienced any material credit losses through
June 30, 2008. The allowance for doubtful accounts, when necessary, will be
based on specific identification of customer accounts and a best estimate of the
likelihood of potential loss, taking into account such factors as the financial
condition and payment history of major customers. The Company evaluates the
collectability of receivables at least quarterly. If the financial condition of
the customers were to deteriorate, resulting in an impairment of their ability
to make payments, an allowance may be required. The differences could be
material and could significantly impact cash flows from operating
activities.




Revenue Recognition.
The Company’s advertising revenue is generally recognized when the
advertisements are displayed to Aperture Health’s online members. Monies
collected in advance of the service being provided are recorded as deferred
revenue




Derivative
Instruments. From time to time, the Company issues debt securities that
contain features that are considered embedded derivative instruments pursuant to
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended. The accounting treatment of
these derivative financial instruments requires that the Company record the
derivatives and related warrants at their fair values as of the inception date
of the debt agreements and at fair value as of each subsequent balance sheet
date. The Company also issues warrants from time to time as incentive
compensation for employees, officers, members of the board of directors, and
consultants. In the event of issuing a warrant for this purpose, derivative
accounting applies. Accordingly, the Company conducts a Black Scholes
calculation to determine the fair value of the warrant instrument. If the
warrants are fully vested at issuance, then the full expense (fair value) is
booked at issuance. However, if the warrants vest over time, then the expense
associated with the warrant instrument is amortized on a pro-rata basis over the
vesting period. Another scenario adopted periodically by the Company is the
issuance of a debt instrument with attached warrants. In this final scenario,
the Company accounts for the expense following a two step process as prescribed
under APB14: First, we adjust the carrying value of the debt and reflect the
value calculation under Black Scholes as interest expense, with a debit to
interest expense and a credit to debt discount. Secondly, pursuant to the rules
under APB14, a debit entry is made to debt discount and credited to additional
paid in capital. All of our warrants, which are attached to debt, fully vest at
issuance. Accordingly, the debt discount entries described above offset one
another and the net entry is a charge to interest expense for the derivative
cost and a credit to additional paid in capital. Should the warrants vest over
time, then the interest expense and credit to debt discount would follow an
amortization schedule. In this event, the debt discount entries would not offset
and there would be a debit balance for the debt discount account, which reduces
over time in a direct relationship with the amortization of the interest
expense.




17




Results
of Operations




Year Ended June 30, 2008
Compared to the Year Ended June 30, 2007




Sales




Sales for
the twelve months ended June 30, 2008 and 2007 were $67,868 and $57,178
respectively. The increase of $10,690 resulted from greater advertising sales.
The improvement was possible because on-line traffic and exposures were greater
in the current fiscal year than in the previous year. The wellness360 suite of
services has not generated a material level of revenues to date. Management
expects to significantly increase its membership base during fiscal year ending
June 30, 2009 and it further anticipates that the website will become a much
more attractive venue for marketers, advertisers and researchers.




Cost
of Sales




Cost of
sales consists of printing costs associated with enrollment forms that have
embedded physical advertisements. Cost of sales decreased from $24,670 during
the year ended June 30, 2007 to $13,411 for the year ending June 30, 2008. This
decrease of $11,259 is due to a reduced emphasis in distributing paper
enrollment forms in favor of promoting online membership and
advertising.




Selling,
general and administrative expenses




Selling,
general and administrative expenses, which include personnel costs for
administration, information systems, and general management, as well as facility
expenses, professional fees, legal expenses, and other administrative costs,
decreased to $3,223,957 during the twelve months ended June 30, 2008 from
$5,771,501 for the same period in 2007. This decrease of $2,547,544 is
attributed to the overall reduction in fair value of incentive warrants and
warrants issued in exchange for services, all of which are non-cash expenses.
For the fiscal year ended June 30, 2008, derivative warrant were equal to
$974,075 compared to $3,941,777 for the same period in 2007, representing an
expense reduction of $2,967,702. Disregarding warrant related expenses, there
was an increase in selling, general and administrative expenses of $420,158 for
the fiscal year ended June 30, 2008 versus the prior year period.




The
largest “increase” in selling, general and administrative expense was attributed
to forgiveness of payables from vendors. For the fiscal year ended June 30,
2007, the forgiveness, a credit to the statement of operations, was $399,586 as
the Company was aggressively settling vendor accounts associated with the
discontinued diagnostic screening operations. In the current fiscal year, there
were non-cash settlements representing forgiveness of approximately $75,000, for
a net increase to this expense line of approximately $325,000. Payroll expenses,
included payroll taxes, increased from $996,135 in fiscal year ended June 30,
2007 to $1,259,245 in the current fiscal year, representing an increase of
$263,110. This increase is attributed to the increase in headcount, especially
in the information technology department.




Interest
Expense




Interest
expense for the year ended June 30, 2008 was $356,687 compared to $662,413
during the year ended June 30, 2007. The decrease of $305,726 was primarily due
to reduced amortization of the debt discount charged against notes issued during
the year. Debt discount amortization in the current fiscal year was $122,135,
which represented a reduction of $229,662 compared with the $351,797 of debt
discount amortization recorded during the fiscal year ended June 30,
2007.




Net
Loss




Net
losses for the years ended June 30, 2008 and 2007 were $3,524,426 and
$6,017,273, respectively. The decrease in net losses is primarily due to a
decrease in non-cash expenses from warrant issuances.




18




Liquidity
and Capital Resources




During
the year ended June 30, 2008, the Company issued an aggregate of $520,000 in
unsecured notes payable to officers, directors, and large shareholders of the
Company and no unsecured notes to third parties. The proceeds were used for
working capital purposes. In addition, the Company issued $1,110,000 in
convertible debentures to related parties and third parties.




During
the year ended June 30, 2008, the Company issued an aggregate of 8,143,615
shares of common stock in exchange for the conversion of debentures, conversion
of other debts, and in exchange for services as detailed in NOTE 7. In addition,
the Company cancelled and reversed a stock subscription of 10,000,000 shares
because the investor forfeited the transaction by failing to fund the
transaction within the required period of time. Overall, there was a net
reduction in shares issued and outstanding of 1,856,385. The issuances of common
stock, except for the exercising of warrants, were all non-cash transactions
and, therefore, did not generate any direct liquidity for the Company during the
year ended June 30, 2008. On January 11, 2008, two investors exercised 437,500
warrants at a strike price of $0.20, which generated a cash infusion of $175,000
for the Company. The collection of accounts receivable and miscellaneous
receipts generated a relatively immaterial level of cash flow.




The
Company also strengthened its balance sheet through forgiveness of indebtedness
transactions during the year ended June 30, 2008 in the amount of approximately
$75,000. Moreover, the Company ran a promotional campaign in the form of a
raffle, which wrote off a motor vehicle, valued on the books at $60,000, against
advertising and promotion expenses.




At June
30, 2008, the Company had total assets of $315,467 compared to total assets of
$597,907 at June 30, 2007. Cash was $3,124 as of June 30, 2008, a decrease of
$178,755 from the $181,879 cash on hand as of June 30, 2007.




Accounts
receivable was $8,351 at June 30, 2008 compared to a balance of zero June 30,
2007. In the prior year, all advertising sales were paid in advance. For the
year ended June 30, 2008, there were no credit losses and the year-end balance
of $8,351 was subsequently collected.




Net fixed
assets totaled $14,487 at June 30, 2008 compared to $58,759 at June 30, 2007, a
decrease of $44,272. The decrease in net fixed assets is attributed to
depreciation and amortization.




Total
liabilities at June 30, 2008 were $2,429,129, an increase of $697,570 (40%) from
the $1,731,559 at June 30, 2007. Accounts payable and accrued expenses were
$458,002 as of June 30, 2008, reflecting a nominal increase of $5,454 (1%) from
the 452,548 balance as of June 30, 2007. Although the Company reduced its
payroll tax obligation to the IRS from $128,484 as of June 30, 2007 to $51,127
as of June 30, 2008, there were significant increases in the accruals for
employee items and interest.




The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has not
generated significant revenues from operations and has no assurance of any
future revenues. The Company incurred a net loss of $3,524,426 during the year
ended June 30, 2008. Also, the Company has a working capital deficit of
$1,617,315 and a stockholders’ deficit of $2,113,662 at June 30, 2008. These
factors, among others, raise substantial doubt about the Company’s ability to
continue as a going concern.




The
Company’s working capital requirements will depend upon numerous factors
including but not limited to the nature, cost and timing of: product
distribution and sales; technological advances and the Company’s ability to
establish collaborative arrangements with potential distribution and service
relationships to expand Aperture Health’s market reach. The Company’s capital
resources will be focused primarily on the marketing of its wellness360 services
and development of revenue relationships with sponsors (e.g., large employers),
advertisers, clinical researchers and marketers. Currently the Company’s
existing capital resources are insufficient to fund operations for the next 12
months. The Company is currently working to raise additional capital to finance
operations until the Company achieves breakeven operations.




19




To date,
the Company’s sources of cash have been primarily limited to the sale of
promissory notes and convertible debenture securities, issuance of convertible
debt, and borrowing. The Company cannot guarantee that revenue from wellness360
activities will increase adequately to sustain operations in the near term, nor
can the Company be certain that additional funding will be available on
acceptable terms, or at all. Any debt financing, if available, may involve
restrictive covenants that could impact the Company’s ability to conduct
business. If the Company is unable to raise additional capital when required or
on acceptable terms, the Company may have to significantly delay, scale back or
discontinue the development and/or commercialization of one or more of the
Company’s products and or services.




Contractual
Obligations and Contingent Liabilities and Commitments





The
Company leases its facility and certain equipment under non-cancelable operating
lease arrangements that expire at various dates through 2011. The following
table summarizes future minimum payments for these leases as of June 30,
2008:




FY
      2009
            FY
      2010
            FY
      2011
            Total
      Due over next 3 YearsOperating
      Leases
            $226,903
            $8,500
            $8,500
            $243,903




Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the small business issuer’s financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.




Recent
Accounting Pronouncements





Reference
is made to the Recent Accounting Pronouncements included in the Notes to the
Financial Statements for a discussion and analysis of recently issued accounting
pronouncements and their impact on the Company.





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





Not applicable.




ITEM
8. FINANCIAL
STATEMENTS AND SUPPLEMETARY DATA




The
information required by this item appears following Item 15 of this report and
is incorporated herein by reference.





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




None.




20


ITEM
9A. CONTROLS
AND PROCEDURES





The
management of Aperture Health is responsible for establishing and maintaining
adequate internal control over financial reporting. Aperture Health’s internal
control system was designed to provide reasonable assurance to the company’s
management and board of directors regarding the preparation and fair
presentation of published financial statements.




All
internal control systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.




Aperture
Health management assessed the effectiveness of the company’s internal control
over financial reporting as of June 30, 2008. In making this assessment, it used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control Integrated
Framework. Based on our assessment we believe that, as of June 30, 2008,
the company’s internal control over financial reporting is effective based on
those criteria.




ITEM
9B. OTHER
INFORMATION





None.





ITEM
10. DIRECTORS
AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS





The
following table sets forth the name, age and position of each of our directors
and executive officers. Directors as of June 30, 2008:





Name
            Age
            Position
      with the CompanyThomas
      Banks
            56
            Chief
      Executive Officer, Director and Chairman of the BoardKenneth
      Westbrook
            58
            President
      and DirectorFrancis
      X. Pisano
            53
            Chief
      Financial Officer, Director, Member of Compensation
    CommitteeHarry
      Stavrou
            46
            Chief
      Technology OfficerMaurice
      J. DeWald
            68
            Director
      and Chairman of the Audit CommitteeHeidi
      Patterson
            54
            Director,
      Member of the Audit Committee and Compensation Committee
      ChairpersonJohn
      M. Word, III
            59
            DirectorEdward
      J. Brown, Jr.
            60
            DirectorJames
      Brakke
            59
            Director





All
directors are elected annually by the Company’s shareholders and hold office
until their successors are elected and assume their respective positions.
Executive officers of the Company are elected by the board of Directors to serve
at the pleasure of the board of Directors. Additional information regarding the
company’s directors and executive officers is set forth below. The company’s
board is comprised of the following persons:




Thomas
Banks is Aperture Health’s founder and is in charge of the day-to-day operations
of the Company. Prior to the founding of Aperture Health Mr. Banks founded
guideSMART.com, a world class Internet portal and business-2-business Web
community and Application Service Provider employing a franchise distribution
model.  Before guideSMART, Mr. Banks was the founder of Santiago Data
Systems, Inc., which he ran from February 1980 until March 1997. While
Santiago’s CEO, Mr. Banks specialized in the development, sales and marketing of
health care practice management software. Before Santiago, Mr. Banks was with
the Radio Shack division of Tandy Corporation where he was integral in the
training and coordinating of the Radio Shack’s Computer Center retail
operations.




21




Kenneth
Westbrook joined Aperture Health as its President and Director in July, 2006.
Mr. Westbrook is responsible for marketing, distribution, and operations at
Aperture Health. He has held senior executive positions with many well-known
names in healthcare. While at Tenet from 1997 to 2004, he was the senior vice
president of operations responsible for up to 16 acute care hospitals in the
Southwest generating in excess of $130 million EBITDA annually. In 1996, he was
the senior vice president of operations for over a third of OrNda Healthcorp's
hospitals generating $1 billion in gross revenues. From 1988 to 1995 he also
served as the chief operating officer for HCA Healthcare Corporation's Pacific
Division as well as previously the CEO for four other California community
hospitals. Most recently, Westbrook retired from his role as chief executive
officer of CareMore Medical Enterprises, where he oversaw three divisions and
led the management team increasing CareMore’s HMO enrollments from 250 a month
to 1,800. EBITDA rose from $19 million in 2004 to $39 million in 2005. CareMore
was recently sold to JPMorgan Partners for $235 million. Mr. Westbrook has an
MBA and an MA in Healthcare Management from University of Redlands and was
honored with a Legacy of Life Award from the American Heart
Association.




Francis
X. Pisano has served as the Company’s principal accounting and finance
professional since the Company’s listing on the OTCBB. He is a founding partner
and currently heads the Marketing and Financial and Business Services
Departments of Hoffski Pisano. Mr. Pisano earned a Bachelor of Science in
both Accounting and Marketing at Fordham University. He earned his Juris
Doctor Degree at Western State University. Mr. Pisano is a Certified Public
Accountant, attorney, and a registered representative with the NASD with over 25
years of professional experience. Prior to co-founding the firm, Mr. Pisano held
positions at national firms in Orange County and was an instructor in taxation
at Orange Coast College. He presently lectures on tax planning, financial
planning and estate planning.




Mr.
Stavrou Joined the Company in October of 1997 and leads all aspects of IT and
software development. He is a seasoned IT professional receiving a degree in
computer information systems from California State Polytechnic Institute Pomona.
His career focus for the past fifteen years has been technology for the
laboratory industry specifically focusing on information integration and
clinical trials. Mr. Stavrou has held executive level positions at numerous
laboratories (including Specialty Laboratories, US Labs, Clarient, and Quest)
addressing the IT demands of infectious disease detection and management of
anatomical pathology services.




John M.
Word III, CLU, RHU, REBC, was elected to the board in January, 2008. He is
renowned for transforming the California insurance broker's role in the small
group health benefits marketplace through his pioneering technological and
marketing advances since 1972. Together with Edward J. "Rusty" Brown, Jr., Word
founded the Word & Brown General Agency to market and distribute health
plans through California's huge brokerage community; and by 1986, the company
was recognized as the largest independent small group health distributor in the
nation. Sensing that employers needed assistance and qualified service with
Federal COBRA laws, the company launched the nation's first COBRA administration
operation.




Maurice
DeWald brings 30-years of audit experience to Aperture Health having been the
managing partner of KPMG’s Los Angeles, Orange County and Chicago offices. He is
currently the CEO of Verity Financial Group, Inc., a private equity firm, and
serves on the board of Integrated Healthcare Holding, Inc., Advanced Materials
Group, Inc. and Clearant, Inc. Mr. DeWald holds a BBA degree from the University
of Notre Dame.




Edward J.
"Rusty" Brown, Jr., CLU, was elected to the board in January, 2008. He is highly
respected throughout the healthcare insurance industry for establishing and
delivering standards of performance and service designed to exceed all
customers' expectations, and for enhancing the California health insurance
brokers' ability to serve their client's needs and best interests.  Brown
began his career in the early 1970's as an agent for the John Hancock Mutual
Life Insurance Company in upstate New York, where he was the youngest producer
to be honored with entry in the 119-year-old company's President's Honors
Club.




22




Heidi
Patterson, formerly the Chief Executive Officer of the Pacific Northwest Region
of the American Red Cross from 1994 through 1999 and recently retired as the
National Director of the Red Cross Umbilical Cord Blood Banking program. 
Ms. Patterson holds degrees in both Biology and Medical Technology. Ms.
Patterson’s executive experience with the Red Cross makes Ms. Patterson a
uniquely gifted member of Aperture Health’s board of directors and is committed
to fulfilling Aperture Health’s charter to be a fundamentally sound and
responsible member of the healthcare community.




James
Brakke was elected to the board in January, 2008. He is a resident of San Juan
Capistrano, California and is an insurance and financial services executive with
thirty-five years of experience. With extensive experience in insurance services
and corporate governance, Mr. Brakke served on many committees including loan
and compensation committees.




Mr.
Brakke is currently the president of Brakke-Schafnitz Insurance Brokers, a firm
he co-founded in 1971. The commercial insurance brokerage and consulting firm
manages in excess of $180 million of insurance premiums with both domestic and
international insurers.




There are
no family relationships between any of our directors or executive
officers.





Corporate
Governance





We seek
to follow best practices in corporate governance in a manner that is in the best
interests of our business and stockholders. Our current corporate governance
principles, including the Code of Ethics and the charters of each of the
committees of our Board of Directors are all available upon request. We believe
we are in compliance with the corporate governance requirements imposed by the
Sarbanes-Oxley Act and the Securities and Exchange Commission. We will continue
to modify our policies and practices to meet ongoing developments in this
area.





Board
Committees





Our board
of Directors has two structured standing committees: Audit Committee and
Compensation Committee. Members of the individual committees are named
below:





Audit
      Committee
            
            Compensation
      CommitteeMaury
      J. DeWald (Chairman)
            
            Heidi
      Patterson (Chairperson)Heidi
      Patterson
            
            Maury
      J. DeWald





Audit
Committee




The
Company has a standing Audit Committee established in accordance with section
3(a)(58)(A) of the Exchange Act. The permanent members are Maurice J. DeWald and
Heidi Patterson, both directors. Mr. DeWald fulfills the function of financial
expert and is independent pursuant to Item 402 (a) of Reg. S-B. The Audit
Committee has responsibility for, among other things: monitoring the integrity
of our accounts, ensuring that they meet statutory and associated legal and
regulatory requirements and reviewing significant financial reporting judgments
contained; monitoring announcements relating to our financial performance;
monitoring the effectiveness of internal financial controls; making
recommendations to the Board, regarding the appointment, re-appointment and
removal of the external auditors, as appropriate; approving the remuneration and
terms of engagement of the external auditors; monitoring and reviewing the
external auditors’ independence and effectiveness of the audit process;
developing policy for an pre-approval of the external auditors to supply
non-audit services; reviewing the operation of the risk management process; and
reviewing arrangements by which staff may raise complaints regarding financial
reporting or other matters.




23




The board
of Directors has determined that both of the members of the Audit Committee meet
the independence criteria for audit committees and have the qualifications set
forth in Rule 10A-3 under the Exchange Act.




The Audit
Committee held seven meetings during the year ended June 30, 2008.





Compensation
Committee




The
Compensation Committee, which is composed of two independent directors, consults
generally with management on matters concerning executive compensation. It makes
recommendations on compensation generally, CEO salary, bonus awards, and
supplemental compensation.





Directors’
Fees




Aperture
Health does not currently compensate its non-employee directors for their
services on the Board of Directors with a standard option to purchase shares of
common stock. Each outside director receives stock options for services on a
case-by-case basis to be determined by the Company’s Chief Executive Officer and
the board of directors.





Code
of Ethics




On
September 12, 2005, the board of directors adopted a code of business conduct
and ethics. The Company has posted the code of ethics on its internet website
www.wellness360.com/codeofconduct.aspx.





ITEM
11. EXECUTIVE
COMPENSATION




Summary
Executive Compensation Table




The
following table sets forth the annual and long-term compensation received in
each of the last three fiscal years by (i) our Chief Executive Officer, (ii) the
Company’s most highly compensated executive officers, in addition to the Chief
Executive Officer, serving at the end of the last fiscal year whose salary and
incentive compensation exceeded $100,000 in the last fiscal year, and
(iii)  any executive officer of the Company who resigned during the last
fiscal year whose salary and incentive compensation exceeded $100,000 in the
last fiscal year.





Annual
      Compensation
            Long
      Term CompensationName
      and Principal Executive Officer Position
            Fiscal
              Year
            Salary
            Bonus
            Shares
      of Common
              Stock
      Underlying
              Stock
      Options and Warrants
            Non-equity
      Incentive Plan Compensation
            Non
      qualified deferred compensation Earnings
            (5)
      All Other
              Compensation
            Total
      ($)Thomas
      Banks (1)
              Chairman
      and Chief Executive Officer
            2008
              2007
              2006
            $182,083
              $245,000
              $240,000
            $  --
              $  --
              $  --
            --
              --
              --
            --
              --
              --
            $67,917
              --
              --
            --
              --
              --
            $250,000
              $245,000
              $240,000Kenneth
      Westbrook (2)
              Director,
      President
            2008
              2007
            $158,330
              $100,000
            $  --
              $  --
            --
              1,900,002
            --
              --
            $41,667
              --
            --
              --
            $200,000
              $100,000Jeff
      Reynolds (3)
              Controller
            2008
            $
      99,100
            $  --
            --
            --
            $23,400
            --
            $122,500Harry
      Stavrou (4)
              Chief
      Technology Officer
            2008
            $94,950
            $  --
            1,500,012
            --
            $17,550
            --
            $112,500(1)Mr.
      Banks founded the Company in February 2001 as Chief Executive
      Officer.
              (2)Mr.
      Westbrook joined the Company on July 1, 2006. Mr. Westbrook converted his
      deferred compensation to equity during the year ended June 30,
      2008.
              (3)Mr.
      Reynolds joined the Company May 1, 2007.
              (4)Mr.
      Stavrou joined the Company October 1,
2007.




24


Change
of Control




Our Stock
Warrants issued for employment and director services provide that all
outstanding options will become vested and immediately exercisable in the event
of a change of control or other Liquidity Events as defined in the warrant
agreements.




The
tables entitles “Outstanding Equity Awards at fiscal Year-End” and “Director
Compensation” and the discussion related to those tables have been omitted
because no compensation required to be reported in those tables was awarded to,
earned by or paid to any of the officers or directors in any of the covered
fiscal years.




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





The
following table sets forth, as of September 30, 2008, certain information
concerning the beneficial ownership of common stock by (i) each person known by
the Company to be the owner of more than 5% of the outstanding common stock,
(ii) each director, (iii) each Named Executive Officer, and (iv) all directors
and executive officers as a group. In general, “beneficial ownership” includes
those shares a director or executive officer has the power to vote or the power
to transfer, and stock options and other rights to acquire common stock that are
exercisable currently or become exercisable within 60 days. Except as indicated
otherwise, the persons named in the table below have sole voting and investment
power with respect to all shares shown as beneficially owned by them. The
calculation of the percentage owned is based on 81,103,455 shares outstanding
(plus, with respect only to each holder of securities that are exercisable for
or convertible into common stock within 60 days, shares underlying such
securities).




Securities
      Exercisable or Convertible Within 60 Days into Common
StockName
            Common
      Stock
            Shares
      issuable through Debentures
            Shares
      issuable through Options/Warrants
            Total
      Beneficial Ownership
            Outstanding
      Shares OwnedThomas
      Banks
            19,544,486
            -
            4,295,000
            23,839,486
            22.7%Kenneth
      Westbrook
            1,920,860
            -
            1,725,002
            3,645,862
            4.3%Jeff
      Reynolds
            -
            -
            532,000
            532,000
            0.7%Harry
      Stavrou
            33,634
            -
            583,338
            616,972
            0.8%Jeffrey
      Barbakow
            10,000,000
            -
            10,000,000
            20,000,000
            19.8%Jerome
      D. Nourse
            5,017,500
            -
            25,000
            5,042,500
            5.9%William
      Lane
            4,987,500
            -
            -
            4,987,500
            5.8%Heidi
      Patterson
            5,587,159
            400,000
            9,276,666
            15,263,825
            15.8%Maury
      J. DeWald
            125,000
            -
            1,106,334
            1,231,334
            1.5%John
      Word
            -
            125,000
            288,000
            413,000
            0.5%Edward
      Brown
            -
            125,000
            288,000
            413,000
            0.5%James
      Brakke
            -
            125,000
            152,778
            277,778
            0.3%All
      Directors and Exec. Officers (9 persons)
            27,211,139
            775,000
            18,247,118
            46,233,257
            36.3%





25


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





Certain
legal, tax and accounting services are provided by Hoffski and Pisano, a
professional corporation. Francis X. Pisano is a partner in the firm and is both
an officer and director in the Company. The firm prepares the Company’s tax
forms and provides periodic reviews of the Company’s accounting controls and
procedures. The firm charges the Company at standard and customary billing
rates. Hoffski and Pisano charged the Company $11,425 during the year ended June
30, 2008.




Messrs.
Word, Brown, and Brakke are managers and principals in insurance agencies that
promote wellness360 to their clients. Their respective firms are sponsors and/or
agents and would potentially receive substantial benefits from the adoption of
wellness360. The amounts paid by the Company to the related insurance firms
during the fiscal year ended June 30, 2008 was not material.




During
the year ended June 30, 2008, the Company issued an aggregate of $520,000 in
unsecured promissory notes to related parties and no unsecured notes to third
parties. In addition, the Company issued $1,000,000 in convertible debentures to
related parties. In connection with the convertible debentures, the Company
issued a total of 1,250,000 warrants to purchase common shares at an exercise
price of $0.20, which exceeded the market price of the Company’s common
stock.





Director
Independence




We follow the Nasdaq guidelines to
Director Independence. Namely, that there cannot be factors involved that
interfere with independent judgment. Nasdaq's rules provide that an independent
director is a person other than an officer or employee of the company or its
subsidiaries or any other individual having a relationship that, in the opinion
of the company's board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director.





ITEM
14. PRINCIPAL
ACCOUNTING FEES AND SERVICES





Following
is a summary of the aggregate fees billed for professional services by the
Company’s principal accountants for the audits of our annual financial
statements and reviews of the quarterly financial statements:





2008
            
            
            2007Audit
      fees
            
            $
            66,027
            
            
            $
            73,750Audit
      related fees
            
            
            --
            
            
            $
            34,813Tax
      fees
            
            
            --
            
            
            
            --All
      other fees
            
            
            --
            
            
            
            --Total
            
            $
            66,027
            
            
            $
            108,563





PART
IV





ITEM
15. EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES





Our
financial statements for the fiscal years ended June 30, 2008 and 2007 are filed
with this report.




26


EXHIBIT
INDEX




2.1
            Agreement
      and Plan of Merger by and among Fuel Corporation of America, flexSCAN,
      Inc. and FCA Acquisition Corp., dated as of July 15, 2005 (incorporated by
      reference to Exhibit 2.1 to the Registrant’s Form 8-K, filed on July 19,
      2005)




3.1
            Articles
      of Incorporation of flexSCAN, Inc. (incorporated by reference to Exhibit 2
      to the Registrant’s Form 8-K, filed on May 23,
  2005.)




3.2
            Bylaws
      of the flexSCAN, Inc. (incorporated by reference to Exhibit 3 to the
      Registrant’s Form 8-K, filed on August 1,
2005)




3.3
            Certificate
      of Amendment to the Articles of Incorporation of flexSCAN, Inc.
      (incorporated by reference to Exhibit A to the Registrant’s Form DEF 14-C,
      filed on February 2, 2006)




10.1
            flexSCAN,
      Inc. 2005 Equity Compensation Incentive Plan (incorporated by reference to
      Exhibit 4.1 to the Registrant’s Form 8-K, filed on August 18,
      2005)




10.2
            Convertible
      Promissory Note of Fuel Corporation of America dated August 12, 2005
      (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K,
      filed on August 18, 2005)




10.3
            Common
      Stock Warrant of Fuel Corporation of America dated August 12, 2005
      (incorporated by reference to Exhibit 4.3 to the Registrant’s Form 8-K,
      filed on August 18, 2005)




10.4
            Lock-Up/Leak-Out
      and Registration Rights Agreement between Fuel Corporation of America and
      Tryant, LLC., dated August 12, 2005 (incorporated by reference to Exhibit
      10.1 to the Registrant’s Form 8-K, filed on August 18,
    2005)




10.5
            Indemnity
      Agreement among Fuel Corporation of America, Tryant, LLC., and flexSCAN,
      Inc., dated as of August 12, 2005 (incorporated by reference to Exhibit
      10.2 to the Registrant’s Form 8-K, filed on August 18,
    2005)




10.6
            Amendment
      to the Convertible Promissory Note by and between flexSCAN, Inc. and
      Tryant, LLC., (incorporated by reference to Exhibit 4.1 to the
      Registrant’s Form 8-K, filed on November 22,
  2005)




10.7
            Amendment
      No. 2 to the Convertible Promissory Note by and between flexSCAN, Inc. and
      Tryant, LLC., dated November 15, 2005 (incorporated by reference to
      Exhibit 10.1 to the Registrant’s Form 8-K, filed on March 29,
      2006)




10.8
            Amendment
      to Warrant dated March 23, 2006 (incorporated by reference to Exhibit 10.2
      to the Registrant’s Form 8-K, filed on March 29,
  2006)




10.9
            Amendment
      No. 3 to the Convertible Promissory Note by and between flexSCAN, Inc. and
      Tryant, LLC., dated April 30, 2006 (incorporated by reference to Exhibit
      10.1 to the Registrant’s Form 8-K, filed on May 4,
  2006)




31.1
            Certification
      of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under
      the Exchange Act.




31.2
            Certification
      of Principle Financial Officer required under Rule 13a-14(a)/15d-14(a)
      under the Exchange Act.




32.1
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxely Act of
  2002.




32.2
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxely Act of 2002.




27




APERTURE
HEALTH, INC.




FINANCIAL
STATEMENTS




JUNE 30,
2008 AND 2007






CONTENTS








PageReport
      of Independent Registered Public Accounting Firm
            F-1FINANCIAL
      STATEMENTSBalance
      Sheets
            F-2Statements
      of Operations
            F-3Statements
      of Changes in Stockholders’ Deficit
            F-4Statements
      of Cash Flows
            F-5Notes
      to Financial Statements
            F-6
      to F-17








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














To the
Board of Directors


and Stockholders


Aperture
Health, Inc.


Nevada








We have
audited the accompanying balance sheets of Aperture Health, Inc. as of June 30,
2008 and 2007 and the related statements of operations, changes in stockholders'
equity (deficit), and cash flows for the years then ended.  These
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.




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




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Aperture Health, Inc as of June 30,
2008 and 2007, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.




The
accompanying financial statements have been prepared assuming Aperture Health,
Inc. will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has incurred losses that have resulted in an
accumulated deficit.  This condition raises substantial doubt about
the Company’s ability to continue as a going concern.  Management’s
plans regarding this matter are described in Note 1.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.







/s/
Rotenberg & Co., llp





Rotenberg
& Co., llp


Rochester,
New York


October
13, 2008




F-1


APERTURE
HEALTH, INC.


BALANCE
SHEETS








June 30, 2008
            
            
            June 30, 2007AssetsCurrent
      AssetsCash
            
            $
            3,124
            
            
            $
            181,879Accounts
      receivable
            
            
            8,351
            
            
            
            --Prepaid
      expenses and other
            
            
            --
            
            
            
            7,926Total
      current assets
            
            
            11,475
            
            
            
            189,805Fixed
      assets, net
            
            
            14,884
            
            
            
            58,759Other
      assets held for investment
            
            
            251,358
            
            
            
            311,358Deposits,
      net
            
            
            37,750
            
            
            
            37,985Total
      assets
            
            $
            315,467
            
            
            $
            597,907Liabilities
      and Stockholder's DeficitCurrent
      LiabilitiesAccounts
      payable
            
            $
            166,963
            
            
            $
            184,756Accrued
      expenses
            
            
            291,039
            
            
            
            262,792Deferred
      compensation
            
            
            278,153
            
            
            
            255,511Deferred
      revenue
            
            
            --
            
            
            
            49,980Current
      portion of related party notes
            
            
            708,131
            
            
            
            306,000Short
      term notes and current portion of long term notes
            
            
            153,260
            
            
            
            165,353Deferred
      rent
            
            
            31,244
            
            
            
            23,273Total
      current liabilities
            
            
            1,628,790
            
            
            
            1,252,665Related
      party notes, net of current portion
            
            
            350,000
            
            
            
            50,000Long
      term notes
            
            
            450,339
            
            
            
            396,099Deferred
      rent, net of current portion
            
            
            --
            
            
            
            32,7952,429,129
            
            
            
            1,731,559Stockholders'
      DeficitPreferred
      stock, $0.001 par value, 10,000,000 shares authorized, none
      issued
            
            
            --
            
            
            
            --Common
      stock - $0.001 par value; 150,000,000 shares authorized;80,861,723
      and 82,718,108 shares issued and outstanding in 2008 and 2007,
      respectively
            
            
            80,862
            
            
            
            72,719Additional
      paid in capital
            
            
            24,975,021
            
            
            
            22,438,748Accumulated
      deficit
            
            
            (27,169,545
            )
            
            
            (23,645,119
            )Total
      stockholders' deficit
            
            
            (2,113,662
            )
            
            _(1,133,652)Total
      liabilities and stockholders' deficit
            
            $
            315,467
            
            
            $
            597,907








The
accompanying notes are an integral part of these financial
statements




F-2


APERTURE
HEALTH, INC


STATEMENTS
OF OPERATIONS


YEARS
ENDED JUNE 30








2008
            
            
            2007Sales
            
            $
            67,868
            
            
            $
            57,178Cost
      of sales
            
            
            13,411
            
            
            
            24,670Gross
      profit
            
            
            54,457
            
            
            
            32,508Selling,
      general and administrative
            
            
            3,223,957
            
            
            
            5,771,501Loss
      from operations
            
            
            (3,169,500
            )
            
            
            (5,738,993
            )Other
      income (expense)Interest
      expense
            
            
            (356,687
            )
            
            
            (662,413
            )Reversal
      of contingent liability
            
            
            --
            
            
            
            360,833forgiveness
      of indebtedness
            
            
            2,800
            
            
            
            38,754Other
      expense
            
            
            (1,039
            )
            
            
            (15,454
            )Total
      other income (expense)
            
            
            (354,926
            )
            
            
            (278,280
            )Loss
      before income taxes
            
            
            (3,524,426
            )
            
            
            (6,017,273
            )Income
      tax expense
            
            
            --
            
            
            
            --Net
      loss
            
            $
            (3,524,426
            )
            
            $
            (6,017,273
            )Basic
      and diluted loss per share:Loss
      per common share
            
            $
            (0.05
            )
            
            $
            (0.11
            )Weighted
      average shares outstanding
            
            
            76,400,562
            
            
            
            53,334,439







The accompanying notes are an integral part of these financial
statements




F-3


APERTURE
HEALTH, INC


STATEMENTS
OF CHANGES IN STOCKHOLDERS’ DEFICIT


FOR
THE YEARS ENDED JUNE 30, 2008 AND 2007






Preferred Series A
            
            
            Preferred Series B
            
            
            Common Stock
            
            
            Additional
              Paid in
            
            
            Accumulated
            
            
            Stockholders'Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            DeficitBalance,
      June 30, 2006
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            $
            --
            
            
            
            47,641,284
            
            
            $
            47,642
            
            
            $
            15,780,356
            
            
            $
            (17,627,846
            )
            
            $
            (1,799,848
            )Common
      shares issued for:Cash
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            21,262,500
            
            
            
            11,262
            
            
            
            1,013,737
            
            
            
            
            
            
            
            1,025,000Debt
      and interest conversions
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            6,795,371
            
            
            
            6,795
            
            
            
            931,141
            
            
            
            
            
            
            
            937,936Warrants
      exercised
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            169,792
            
            
            
            170
            
            
            
            12,388
            
            
            
            
            
            
            
            12,558Services
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,934,536
            
            
            
            1,935
            
            
            
            203,208
            
            
            
            
            
            
            
            205,142Deferred
      compensation conversions
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            3,712,500
            
            
            
            3,713
            
            
            
            367,538
            
            
            
            
            
            
            
            371,250Assets
      held for sale
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,300,000
            
            
            
            1,300
            
            
            
            153,700
            
            
            
            
            
            
            
            155,000Estimated
      fair value of warrants:Granted
      to employees
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            2,147,729
            
            
            
            
            
            
            
            2,147,729Issued
      for consulting services
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,681,462
            
            
            
            
            
            
            
            1,681,462Debt
      discount adjustments
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            177,392
            
            
            
            
            
            
            
            177,392Tryant
      default adjustment
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            (30,000
            )
            
            
            
            
            
            
            (30,000
            )Corrections
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            (97,875
            )
            
            
            (98
            )
            
            
            98
            
            
            
            
            
            
            
            --NET
      LOSS
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            (6,017,273
            )
            
            
            (6,017,273
            )Balance,
      June 30, 2007
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            $
            --
            
            
            
            82,718,108
            
            
            $
            72,719
            
            
            $
            22,438,748
            
            
            $
            (23,645,119
            )
            
            $
            (1,133,652
            )Common
      shares issued for:Services
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            500,000
            
            
            
            500
            
            
            
            54,500
            
            
            
            
            
            
            
            55,000Debt
      and interest conversions
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            4,468,904
            
            
            
            4,469
            
            
            
            928,070
            
            
            
            
            
            
            
            932,539Warrants
      exercised
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            875,000
            
            
            
            875
            
            
            
            174,125
            
            
            
            
            
            
            
            175,000Deferred
      compensation conversions
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            1,904,667
            
            
            
            1,905
            
            
            
            283,763
            
            
            
            
            
            
            
            285,667Estimated
      fair value of warrants:Granted
      to employees
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            582,274
            
            
            
            
            
            
            
            582,274Issued
      for services
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            391,801
            
            
            
            
            
            
            
            391,801Debt
      discount adjustments
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            122,135
            
            
            
            
            
            
            
            122,135Cashless
      exercise of warrants
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            395,044
            
            
            
            395
            
            
            
            (395
            )
            
            
            
            
            
            
            --Forfeiture
      of subscription - Reverse PY entry
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            (10,000,000
            )
            
            
            --
            
            
            
            --
            
            
            
            
            
            
            
            --NET
      LOSS
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            (3,524,426
            )
            
            
            (3,524,426
            )Balance,
      June 30, 2008
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            $
            --
            
            
            
            80,861,723
            
            
            $
            80,862
            
            
            $
            24,975,021
            
            
            $
            (27,169,545
            )
            
            $
            (2,113,662
            )






The
accompanying notes are an integral part of these financial
statements




F-4


APERTURE HEALTH, INC.


STATEMENTS
OF CASH FLOWS


YEARS
ENDED JUNE 30






June
      30, 2008
            
            
            June
      30, 2007Cash
      from operating activitiesNet
      loss
            
            $
            (3,524,426
            )
            
            $
            (6,017,273
            )Adjustments
      to reconcile net loss to net cash from operating
activitiesDepreciation
      and amortization
            
            
            44,219
            
            
            
            45,321Amortization
      of debt discount
            
            
            122,135
            
            
            
            351,797Estimated
      fair value of common stock issued for services
            
            
            55,000
            
            
            
            245,689Estimated
      fair value of common stock issued for assets held for
      investment
            
            
            --
            
            
            
            155,000Estimated
      fair value of common stock issued to employees
            
            
            --
            
            
            
            417,364Estimated
      fair value of warrants issued for services
            
            
            391,801
            
            
            
            1,672,114Estimated
      fair value of warrants issued to employees
            
            
            582,274
            
            
            
            2,269,663Forgiveness
      of debt and accounts payable
            
            
            (75,000
            )
            
            
            (399,586
            )Changes
      in operating assets and liabilities:Accounts
      receivable, net
            
            
            (8,351
            )
            
            
            9,588Prepaid
      expenses and other assets
            
            
            67,817
            
            
            
            292Accounts
      payable
            
            
            57,208
            
            
            
            (62,595
            )Accrued
      expenses and deferred
            
            
            389,552
            
            
            
            (127,691
            )Registration
      rights obligation
            
            
            --
            
            
            
            171,875Net
      cash flows from operating activities
            
            
            (1,897,771
            )
            
            
            (1,268,442
            )Cash
      from investing activitiesOther
      assets held for investment
            
            
            --
            
            
            
            (311,358
            )Purchases
      of fixed assets
            
            
            --
            
            
            
            (5,292
            )Net
      cash flows from investing activities
            
            
            --
            
            
            
            (316,650
            )Cash
      from financing activitiesProceeds
      for issuing common stock
            
            
            --
            
            
            
            1,025,000Proceeds
      from exercise of common stock warrants
            
            
            175,000
            
            
            
            12,557Additional
      loan obligations
            
            
            1,680,000
            
            
            
            847,383Repayment
      of notes
            
            
            (85,984
            )
            
            
            (210,931
            )Repayment
      of capital lease obligations
            
            
            --
            
            
            
            (59,335
            )Net
      cash flows from financing activities
            
            
            1,719,016
            
            
            
            1,614,674Net
      change in cash for the year
            
            
            (178,755
            )
            
            
            29,582Cash,
      beginning of year
            
            
            181,879
            
            
            
            152,297Cash,
      end of year
            
            $
            3,124
            
            
            $
            181,879Supplemental
      disclosures:Cash
      paid for interest
            
            $
            37,477
            
            
            $
            9,495Cash
      paid for income taxes
            
            
            --
            
            
            
            --Non-cash
      investing and financing activities:Debt
      and deferred compensation converted to equity
            
            
            932,539
            
            
            
            1,207,725Debt
      discount recorded for warrants and beneficial conversions
            
            
            122,135
            
            
            
            158,652






The accompanying notes are an integral part of these financial
statements




F-5




APERTURE
HEALTH, INC.


NOTES
TO FINANCIAL STATEMENTS


FOR
THE YEARS ENDED JUNE 30, 2008 AND 2007






NOTE 1
- NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




Nature of the
Business





Since its
original incorporation on February 13, 2001, Aperture Health, Inc. (“Company” or
“Aperture Health”), formerly known as flexSCAN, Inc., has been principally
devoted to research and development, software development, securing and
protecting its intellectual property, and raising capital. From inception
through June 30, 2008, Aperture Health has established its marketing strategy,
developed its foundation technology, established a scalable infrastructure,
defined its products and services, established its brand identity, and assembled
its executive team. Aperture Health’s business model is designed to provide
access to leading-edge medical technology and services to the largest number of
individuals in a unique and unprecedented corporate benefit program known as
wellness360. wellness360 is a health, wellness and lifestyle program enabling
employers the ability to lower their cost of health insurance by: (i) working to
improve the general health and wellness of their employees, and (ii) enjoying
tangible economic rewards as a result of their employees participation in
Aperture Health’s online diet, fitness, online medical records, health risk
assessment and internet health, wellness and lifestyle online
services.




On
January 11, 2008, the Company obtained the written consent of the holders of a
majority of the common stock to approve an amendment to the Company’s Articles
of Incorporation to change the name of the company from flexSCAN, Inc. to
Aperture Health, Inc. On February 28, 2008, the name change was certified by the
Secretary of State of the State of Nevada. The Board of Directors believes that
the new name is an ideal fit for the business because it captures the notion
that its members are able to inspect, view, and manage many areas of their
lifestyle and medical information. Similarly, advertisers and medical clinicians
are able to direct their promotions and offers to prospective buyers or
enrollees on the basis of very specific medical and lifestyle
criteria.




Basis of
Presentation




The
accompanying financial statements include the results of Aperture Health, Inc.
and are presented in compliance with US GAAP.




Liquidity and Management’s
Plan




The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has not
generated significant revenues from operations and has no assurance of any
future revenues. The Company incurred a net loss of $3,524,426 during the year
ended June 30, 2008. Also, the Company has a cash balance of $3,124, a working
capital deficit of $1,617,315 and a stockholders’ deficit of $2,113,662 at June
30, 2008. These factors, among others, raise substantial doubt about the
Company’s ability to continue as a going concern.




The
Company’s success is dependent upon numerous items, certain of which are the
successful growth of revenues from its services, its ability to obtain new
customers in order to achieve levels of revenue adequate to support the
Company’s current and future cost structure, and its success in obtaining
financing for operations, for which there is no assurance. Unanticipated
problems, expenses, and delays are frequently encountered in establishing and
maintaining profitable operations. These include, but are not limited to,
technical difficulties, market acceptance, and sales and marketing. The failure
of the Company to meet any of these conditions could have a materially adverse
effect on the Company and may force the Company to reduce or curtail operations.
No assurance can be given that the Company can achieve or maintain profitable
operations. The Company’s management recognizes that the Company must obtain
additional capital for the eventual achievement of sustained profitable
operations. Management’s plans include obtaining additional capital through
equity financing sources. However, no assurance can be given that additional
capital, if needed, will be available when required or upon terms acceptable to
the Company or that the Company will be successful in its efforts to negotiate
the extension of its existing debt. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.




F-6




Use of
Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Significant estimates made by management include,
among others, realization of accounts receivable, recoverability of long-lived
assets, deferred tax asset valuations and valuation of derivative instruments.
Actual results could differ from those estimates.




Cash




The
Company maintains its cash accounts in financial institutions. Accounts at these
financial institutions are insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $100,000. At June 30, 2008, the Company had no deposits which
were in excess of the FDIC insurance limit. The Company performs ongoing
evaluations of its banking institution to manage its concentration risk
exposure.




Customers




The
Company performs ongoing credit evaluations of its customers and generally does
not require collateral. The Company regularly monitors its customer collections
and payments and will record a provision for estimated credit losses based upon
the Company’s historical experience and any specific customer collection issues
that have been identified. At June 30, 2008, there were accounts receivable in
the amount of $8,351 and, since these receivables were collected in full, no
reserve against accounts receivable was required.




Fair Value of Financial
Instruments




The
Company’s financial instruments consist of cash, accounts receivable, accounts
payable and accrued expenses, and related party notes payable. The carrying
values for all such instruments, except the related party notes payable,
approximate fair value at June 30, 2008 due to the short maturities of such
financial instruments. The fair value of related party notes payable
approximates their carrying value and was determined based on the current rates
at which similar loans would be made to borrowers with similar credit ratings
and for the same remaining maturities.




Fixed
Assets




Fixed
assets are stated at cost, net of accumulated depreciation and amortization.
Depreciation and amortization of fixed assets are provided using the
straight-line method over estimated useful lives ranging from three to five
years. Betterments, renewals and extraordinary repairs that extend the lives of
the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization
applicable to assets retired are removed from the accounts, and the gain or loss
on disposition is recognized in current operations.




Other Assets Held for
Investment




This item
is comprised of non-operating assets that were acquired with the intention to
sell for a gain. As of June 30, 2008, the only asset is a parcel of unimproved
land in Apple Valley, California. The asset is stated at cost.




Intangible
Asset




The
intangible asset is computer software, which is amortized using the
straight-line method over its estimated useful life of three years. This asset
had a nominal value of $397 as of June 30, 2008.




F-7




Long-Lived
Assets




The
Company’s management assesses the recoverability of its long-lived assets upon
the occurrence of a triggering event by determining whether the depreciation and
amortization of long-lived assets over their remaining useful lives can be
recovered through projected undiscounted future cash flows. The amount of
long-lived asset impairment, if any, is measured based on fair value and is
charged to operations in the period in which long-lived asset impairment is
determined by management. At June 30, 2008, the Company’s management believes
there is no impairment of its long-lived assets. There can be no assurance,
however, that market conditions will not change or that demand for the Company’s
services will continue, which could result in impairment of its long-lived
assets in the future.




Derivative Financial
Instruments




From time
to time, the Company issues debt securities that contain features that are
considered embedded derivative instruments pursuant to Statement of Financial
Accounting Standards (“SFAS”) No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended.The accounting treatment
of these derivative financial instruments requires that the Company record the
derivatives and related warrants at their fair values as of the inception date
of the debt agreements and at fair value as of each subsequent balance sheet
date.




Convertible
Debentures




The
convertible feature of certain of the Company’s notes payable provides for a
rate of conversion that is above market value and, therefore, not characterized
as a beneficial conversion feature (“BCF”). The debentures are booked at their
fair value and remain outstanding until repaid, converted, or otherwise
settled.




Revenue
Recognition




The
Company’s advertising revenue is recognized when the service is provided. Monies
collected in advance of the service being provided are recorded as deferred
revenue.




Advertising
Costs




The
Company expenses advertising costs when incurred. Advertising costs for the
years ended June 30, 2008 and 2007 were $71,691 and $4,023,
respectively.




Accounting for Stock-Based
Compensation




Our share-based employee compensation
arrangements are described in Note 7. Effective April 1, 2006, we adopted
the fair value recognition provisions of SFAS 123(R),“Share-Based
Payment,”using the
modified prospective transition method. For warrants granted before April 1,
2006, we amortize the fair value on a straight-line basis. This is the same
basis on which we amortized warrants granted before April 1, 2006 for our pro
forma disclosures under SFAS 123. For warrants granted on or after April 1,
2006, we amortize the fair value on a straight-line basis. All warrants are
amortized over the requisite service periods of the awards, which are generally
the vesting periods. Because we used the modified prospective transition method,
results for prior periods have not been restated. In March 2005 the
Securities and Exchange Commission issued Staff Accounting Bulletin
(SAB) No. 107, which provides supplemental implementation guidance for
SFAS 123(R). We have applied the provisions of SAB 107 in our adoption of SFAS
123(R).




Income
Taxes




The
Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes.
Under the asset and liability method of SFAS No. 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under SFAS No. 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. A valuation allowance is provided for certain
deferred tax assets if it is more likely than not that the Company will not
realize tax assets through future operations.




F-8




Basic and Diluted Loss per
Share




Basic
loss per common share is computed based on the weighted average number of shares
outstanding for the period. Diluted loss per share is computed by dividing net
loss by the weighted average shares outstanding assuming all potential dilutive
common shares were issued. Basic and diluted loss per share are the same as the
effect of convertible notes, stock options and warrants on loss per share are
anti-dilutive and thus not included in the diluted loss per share
calculation.





Reclassifications




Certain
amounts in the prior year financial statements have been reclassified to conform
to the current year presentation.




Recent Accounting
Pronouncements




In May
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standard (“SFAS”) No. 163, "Accounting for Financial Guarantee
Insurance Contracts—an interpretation of FASB Statement No. 60" (“SFAS
163”). SFAS 163 interprets Statement 60 and amends existing accounting
pronouncements to clarify their application to the financial guarantee insurance
contracts included within the scope of that Statement. SFAS 163 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and all interim periods within those fiscal years. As such, the Company is
required to adopt these provisions at the beginning of the fiscal year ended
December 31, 2009. The Company is currently evaluating the impact of SFAS 163 on
its financial statements but does not expect it to have a material
effect.




In May
2008, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standard (“SFAS”) No. 162, "The Hierarchy of Generally Accepted
Accounting Principles”. SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States. SFAS 162 is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. The Company is currently evaluating the impact of SFAS 162 on its
financial statements but does not expect it to have a material
effect.




In March
2008, FASB issued Statement No. 161, Disclosure about
Derivative Instruments and Hedging Activities ("SFAS 161"), which is
effective for fiscal years beginning after November 15, 2008. SFAS 161
requires enhanced disclosures about derivative instruments and hedging
activities to allow for a better understanding of their effects on an
entity's financial position, financial performance and cash flows. Among
other things, SFAS 161 requires disclosures of the fair values of
derivative instruments and associated gains and losses in a tabular
formant. The Company has not yet determined the impact of the adoption of SFAS
161 on its financial statements and footnote disclosures.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations ("SFAS 141R"), which establishes principles and requirements for
how an acquirer recognizes and measures in its  financial statements
the identifiable assets acquired, the liabilities assumed, any on controlling
interest in the acquiree and the goodwill acquired. SFAS 141R also establishes
disclosure requirements for users of financial statements to evaluate the nature
and financial effects of the business combination. SFAS 141R is effective for
the Company starting January 1, 2009 and will change the accounting for business
combinations on a prospective basis.




F-9




In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interest
in Consolidated Financial Statements - an amendment of Accounting Research
Bulletin No. 51 ("SFAS 160"). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other
than the parent,  the amount of consolidated net income
attributable to the parent and to the non-controlling interest, changes in
a  parent's ownership interest, and the valuation of retained
non-controlling equity investments when a subsidiary is deconsolidated.
SFAS 160 also establishes disclosure requirements that clearly identify and
distinguish between the interests of the parent and the interests of the
non-controlling owners. This statement is effective for the
Company beginning March 1, 2009. This statement is not currently applicable
since it has no subsidiaries.




FASB 159
- In February 2007, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities, including an
amendmentof FASB Statement
No. 115".  SFAS 159 permits entities to choose to measure many
financial instruments and certain other items at fair value at specified
election dates. This Statement applies to all entities, including
not-for-profit organizations. SFAS 159 is effective as of the beginning of an
entity's first fiscal year that begins after November 15, 2007. As such, the
Company is required to adopt these provisions at the beginning of the fiscal
year ended June 30, 2009. The Company is currently evaluating the impact of SFAS
159 on its consolidated financial statements.




FASB 158
- In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standard (“SFAS”) No. 158, "Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R)" (“SFAS 158”). SFAS 158
requires an employer to recognize the over-funded or under-funded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income. SFAS 158 is effective for an employer with publicly traded
equity securities as of the end of the first fiscal year ending after December
15, 2006.  SFAS 158 also requires an employer to measure the funded status
of a plan as of the date of its year-end statement of financial position,
effective for fiscal years ending after December 15, 2008. As such, the Company
is required to recognize the funded status of its defined benefit postretirement
plan and to provide the required disclosures at the beginning of the fiscal year
ended June 30, 2009. The Company is currently evaluating the impact of SFAS 158
on its consolidated financial statements.




In
September 2006, the Financial Accounting Standards Board, ("FASB") issued FAS
157 (SFAS 157), Fair Value Measurements. This standard defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
This statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007. Earlier application is encouraged. The
adoption of this accounting pronouncement is not expected to have a material
effect on the consolidated financial statements.




NOTE 2 – RELATED PARTY
TRANSACTIONS





Certain
legal, tax and accounting services are provided by Hoffski and Pisano, a
professional corporation. Francis X. Pisano is a partner in the firm and is both
an officer and director in the Company. The firm prepares the Company’s tax
forms and provides periodic reviews of the Company’s accounting controls and
procedures. The firm charges the Company at standard and customary billing
rates. Hoffski and Pisano charged the Company $11,425 during the year ended June
30, 2008.




The
Company also has received loans and notes from related parties, which are more
fully described at Note 5 – Notes Payable, below.





F-10




NOTE 3 - FIXED
ASSETS




Property
and equipment consisted of the following at June 30, 2008 and 2007:





2008
            
            
            2007Furniture
      and fixtures
            
            $
            59,317
            
            
            $
            59,317Computer
      hardware
            
            
            100,402
            
            
            
            100,402Telephone
      system
            
            
            11,549
            
            
            
            11,549Computer
      software
            
            
            7,513
            
            
            
            7,513Total
      fixed assets
            
            
            178,781
            
            
            
            178,781Accumulated
      depreciation
            
            
            (163,897
            )
            
            
            (120,022
            )Total
      fixed assets, net
            
            $
            14,884
            
            
            $
            58,759





Depreciation
of fixed assets was $42,630 and $42,510 the years ended June 30, 2008 and 2007,
respectively.




NOTE 4 – OTHER ASSETS HELD
FOR INVESTMENT




The other
assets held for investment were $251,348 and $311,348 at June 30, 2008 and 2007,
respectively. The value at June 30, 2008 represented the cost of vacant land
located in Apple Valley, CA. At June 30, 2007, other assets held for investment
also included a decommissioned van that had been used to administer diagnostic
screening services. The Company has listed the land with a real estate broker in
the Apple Valley area with a hope of divesting the asset during the current
fiscal year. The van was raffled in a sweepstakes contest among its members in a
promotional campaign that took place in the fourth quarter of fiscal year ending
June 30, 2008.




NOTE 5 – NOTES
PAYABLE




Unsecured
Promissory Notes and Convertible Debentures




During
the year ended June 30, 2008, the Company issued an aggregate of $520,000 in
unsecured promissory notes to related parties and no unsecured notes to third
parties. In addition, the Company issued $1,110,000 in convertible debentures to
related parties and third parties. In connection with the convertible
debentures, the Company issued a total of 1,387,500 warrants to purchase common
shares at an exercise price of $0.20, which exceeded the market price of the
Company’s common stock. The warrants vest upon issuance of the debt and were
valued using the Black-Scholes valuation model using the assumptions listed in
Note 7 below. In connection with these warrants, the Company recorded a debt
discount of $122,135, the full amount of which was amortized to interest expense
during the year ended June 30, 2008.




F-11


Related
party notes payable consist of the following at June 30, 2008 and
2007:




2008
            
            
            200710%
      unsecured convertible note payable to shareholder, issued August 12, 2005
      and due August 31, 2008.
            
            $
            13,131
            
            
            $
            75,00010%
      unsecured notes payable to prior officer, issued from May 12, 2005 through
      December 28, 2005, matured September 20, 2006.
            
            
            --
            
            
            
            31,00010%
      unsecured notes payable to a company director; issued on Nov. 9, 2005 and
      due June 30, 2007.
            
            
            150,000
            
            
            
            150,00010%
      unsecured notes payable to company controlled by company director; issued
      on January 30, 2006; matured November 30, 2007
            
            
            --
            
            
            
            50,00010%
      unsecured convertible debenture payable to shareholder; issued Feb. 1,
      2007 and due Jan. 31, 2010.
            
            
            50,000
            
            
            
            50,00010%
      unsecured notes payable to a company director; issued on June 29, 2007 and
      due Nov. 30, 2007.
            
            
            25,000
            
            
            
            --10%
      unsecured promissory notes payable to shareholder; issued between August
      27, 2007 and October 9, 2007 with due dates from September 20, 2007 and
      November 9, 2007.
            
            
            250,000
            
            
            
            --10%
      convertible debenture payable to director; issued December 28, 2007 and
      due December 28, 2010.
            
            
            200,000
            
            
            
            --10%
      convertible debenture payable to director; issued December 28, 2007 and
      due December 28, 2010.
            
            
            100,000
            
            
            
            --10%
      unsecured promissory note payable to officer / director; issued May 4,
      2008 and due August 4, 2008.
            
            
            35,000
            
            
            
            --10%
      unsecured promissory notes payable to officer and director; issued between
      May 16, 2008 and June 13, 2008 and due from Aug. 16, 2008 to Sept. 13,
      2008.
            
            
            185,000
            
            
            
            --10%
      unsecured promissory notes payable to shareholder; issued June 20, 2008
      and due September 20, 2008.
            
            
            50,000
            
            
            
            --Related
      party notes payable
            
            
            1,058,131
            
            
            
            356,000Less:
      current portion
            
            
            (708,131
            )
            
            
            (306,000
            )Long
      term portion
            
            $
            350,000
            
            
            $
            50,000





Annual
maturities of related party debt are $708,131, $50,000, and $300,000 for the
fiscal years ending June 30, 2009, 2010, and 2011, respectively. Total interest expense on related party
notes payable was $163,491 and $257,228 for the years ended June 30, 2008 and
2007, respectively.




Notes
payable to third parties consist of the following at June 30, 2008 and
2007:




9%
      mortgage secured by First Deed of Trust; issued October 19, 2006 due Oct.
      16, 2021
            
            $
            146,599
            
            
            $
            151,86512%
      secured notes payable; issued November 21, 2006 due May 21,
      2007.
            
            
            100,000
            
            
            
            100,0005%
      secured promissory note for accounting services, issued September 20, 2006
      with no stated due date.
            
            
            47,000
            
            
            
            47,00010%
      convertible debenture issued March 19, 2007 and due March 19,
      2010.
            
            
            25,000
            
            
            
            25,00010%
      convertible debenture issued March 8, 2007 and due March 8,
      2010.
            
            
            100,000
            
            
            
            100,00010%
      convertible debenture issued April 9, 2007 and due April 9,
      2010.
            
            
            25,000
            
            
            
            25,000Short-term
      promissory note having a capitalized finance charge of $733; matured
      January 25, 2008
            
            
            --
            
            
            
            12,58710%
      convertible debenture issued June 25, 2007 and due June 25,
      2010.
            
            
            100,000
            
            
            
            100,00010%
      convertible debenture issued November 1, 2007 and due Nov. 1,
      2010.
            
            
            25,000
            
            
            
            --10%
      convertible debenture issued November 2, 2007 and due Nov. 2,
      2010.
            
            
            25,000
            
            
            
            --10%
      convertible debenture issued December 6, 2007 and due Dec. 6,
      2010.
            
            
            10,000
            
            
            
            --Total
      third party notes payable
            
            
            603,599
            
            
            
            561,452Current
      portion and short-term
            
            
            (153,260
            )
            
            
            (165,353
            )Long
      term portion
            
            $
            450,339
            
            
            $
            396,099




F-12




Annual
maturities of third party notes are shown in the table, below:





Fiscal
      Year Ending
            
            Amount
      of MaturitiesJune
      30, 2009
            
            $153,260June
      30, 2010
            
            $256,260June
      30, 2011
            
            $67,197June
      30, 2012
            
            $8,277June
      30, 2013
            
            $9,519Beyond
      June 30, 2013
            
            $109,086





NOTE 6 – COMMITMENTS AND
CONTINGENCIES




Operating
Leases




The
Company leases its office facilities under a non-cancelable operating lease
which requires initial base monthly rent of $16,345 and provides for fixed based
rent escalations over the term of the lease which expires in June 2009. Future
annual minimum rents under non-cancelable operating leases at June 30, 2008 are
as follows:




FY
      2009
            FY
      2010
            FY
      2011
            Total
      Due over next 3 YearsOffice
      Facilities
            $226,903
            $8,500
            $8,500
            $243,903





Rent
expense was $215,820 and $214,640 for the years ended June 30, 2008 and 2007,
respectively.





Indemnities
and Guarantees




The
Company has made certain indemnities and guarantees, under which it may be
required to make payments to a guaranteed or indemnified party, in relation to
certain transactions. The Company indemnifies its directors, officers, employees
and agents to the maximum extent permitted under the laws of the State of
Nevada. In connection with its office facility lease, the Company has
indemnified its lessor for certain claims arising from the use of the
facilities. The duration of the guarantees and indemnities varies, and in many
cases is indefinite. These guarantees and indemnities do not provide for any
limitation of the maximum potential future payments the Company could be
obligated to make. Historically, the Company has not been obligated to make any
payments for these obligations and no liabilities have been recorded for these
indemnities and guarantees in the accompanying balance sheet.




F-13




NOTE 7 – STOCKHOLDERS'
DEFICIT




Preferred
Stock




On
January 24, 2006, the Company’s Board of Directors approved an increase in the
authorized capital stock of the Company to 160,000,000 shares, of which
150,000,000 will be common stock, par value $0.001, and 10,000,000 will be
preferred stock, par value $0.001. The authorized shares of Preferred Stock
issued will be available for issuance for those purposes as the board of
directors may deem advisable without further action by the stockholders, except
as may be required by the Company’s Articles of Incorporation and applicable
laws and regulations. At June 30, 2008 and 2007, the Company has no outstanding
Preferred Stock.





Common
Stock




During the
year ended June 30, 2007, the Company issued an aggregate of 1,934,536 shares of
common stock for services rendered with a fair value of $205,142.


During
the year ended June 30, 2007, the Company issued an aggregate of 21,262,500
shares of common stock for $1,025,000 in cash.


During
the year ended June 30, 2007, the Company issued an aggregate of 6,795,371
shares of common stock for $937,936 in the conversion of interest and debt
conversions to equity.


During
the year ended June 30, 2007, the Company issued an aggregate of 169,792 shares
of common stock related to the exercise of warrants for total proceeds of
$12,558.


During
the year ended June 30, 2007, the Company issued an aggregate of 3,712,500
shares for $371,251 in the conversion of deferred compensation liabilities to
equity.


During
the year ended June 30, 2007, the Company issued an aggregate of 1,300,000
shares of common stock in respect of assets held for investment. This was
comprised of an acquisition of a mobile van that was valued at $60,000 and as a
component of the consideration for the acquisition of vacant land.


Finally,
during the year ended June 30, 2007, there were various corrections made, which
had a net impact of reducing total shares outstanding by 97,875.


During
the year ended June 30, 2008, the Company entered into the following
transactions involving the issuance of common stock:


The
Company issued 500,000 shares for public relations services having a fair value
of $55,000.


The
Company issued 4,468,904 shares of common stock in connection with the
conversion of debt and interest representing a fair value of
$932,539.


Two of
the Company’s investors exercised warrants for 875,000 shares of common stock
for total proceeds to the Company of $175,000.


A current
and a former employee converted deferred compensation in the amount of $285,667
for 1,904,667 shares of common stock.


In
connection with default provisions of a loan agreement and the settlement of
debt, the Company issued 395,044 shares of common stock.


During
the year ended June 30, 2007, an investor executed a subscription agreement for
10,000,000 shares of common. The terms of the agreement provided that the
investor could fund the investment at any time within one year from the date of
execution. The investor failed to fund the subscription within the allotted
period and forfeited the common shares. The Company is not pursuing the
investor.




F-14


Warrants




For share
awards granted April 1, 2006 and later, the associated expenses are amortized
under the straight-line method as prescribed by SFAS 123(R).




Total
estimated share-based compensation expense, related to all of our share-based
awards, recognized for the year ended June 30, 2008 and 2007 was comprised of
the following:





2008
            
            
            2007Fair
      value of warrants issued for services
            
            $
            391,801
            
            
            $
            1,672,114Fair
      value of warrants issued to employees
            
            
            582,274
            
            
            
            2,269,663Share-based
      compensation expense before taxes
            
            
            974,075
            
            
            
            3,941,777Related
      income tax benefits
            
            
            --
            
            
            
            --Share-based
      compensation expense
            
            $
            974,075
            
            
            $
            3,941,777Net
      share-based compensation expense per basic and diluted common
      share
            
            $
            0.01
            
            
            $
            0.07





Share-based
compensation expense recognized under SFAS 123(R) for the year ended June 30,
2008 included $974,075 from the issuance of stock warrants. Since the Company
had a net operating loss carry-forward as of June 30, 2008, it did not recognize
excess tax benefits for the tax deductions related to share-based awards in the
statement of operations. Additionally, no incremental tax benefits were
recognized from stock warrants exercised in the year ended June 30, 2008 which
would have resulted in a reclassification to reduce net cash provided by
operating activities with an offsetting increase in net cash provided by
financing activities. As of June 30, 2008, there is no unrecognized compensation
costs related to non-vested awards.




The
Company grants employee warrants from authorized and un-issued shares of common
stock. Employee warrants are granted by the Company subject to terms and
conditions established by the Chief Executive Officer. Warrants generally have
term of three to five years and vest over three years. At the present time, we
intend to issue restricted common shares upon the exercise of stock
warrants.




The fair
value of each warrant award is estimated on the date of grant using a
Black-Scholes-Merton option pricing model (“Black-Scholes model”) that uses the
assumptions noted in the following table. Expected volatilities are based on
historical volatility of our common stock and other factors. The expected term
of warrants granted is equal to the full term of the warrant without considering
historical employee termination rates and warrant exercising propensities. The
risk-free interest rates are based on the U.S. Treasury yield for a period
consistent with the expected term of the option in effect at the time of the
grant. Assumptions used in the Black-Scholes model for the year ended June 30,
2008 and 2007, were as follows:


2008
              
              
              2007Expected
      volatility
              
              245%
      to 261%
              
              
              235%
      to 309%Average
      expected term in years
              
              
              3.0
              
              
              
              3.0Risk-free
      interest rate
              
              1.76%
      to 4.0%
              
              
              4.606%
      to 5.0%Expected
      dividend yield
              
              
              0%
              
              
              
              0%
  F-15




A summary
of outstanding warrants as of June 30, 2008 and 2007 along with an analysis of
the changes for the two latest years is presented below.




Number
      of Warrants with Post-Merger Conversion Applied
            
            
            Weighted
      Average Exercise Price Per ShareWarrants
      outstanding, June 30, 2006
            
            
            16,798,114
            
            
            $
            0.27Granted
            
            
            24,215,376
            
            
            
            0.37Cancelled
            
            
            (4,954,883
            )
            
            
            0.35Exercised
            
            
            (1,004,437
            )
            
            $
            0.16Warrants
      outstanding, June 30, 2007
            
            
            35,054,170
            
            
            $
            0.33Granted
            
            
            8,580,940
            
            
            
            0.34Cancelled
            
            
            (6,086,587
            )
            
            
            0.29Exercised
            
            
            (1,319,444
            )
            
            
            0.14Warrants
      outstanding, June 30, 2008
            
            
            36,229,079
            
            
            $
            0.35Warrants
      exercisable, June 30, 2007
            
            
            30,648,180
            
            
            $
            0.32Warrants
      exercisable, June 30, 2008
            
            
            27,849,932
            
            
            $
            0.31





The
following table summarizes information about warrants outstanding at June 30,
2008:





Number
      of Warrants O/S
            
            Number
      of Warrants Exercisable
            
            Wtd.
      Avg. Remaining Contractual Life (Years)$0.01-$0.10
            
            13,030,002
            
            12,705,002
            
            .9$0.15-$0.35
            
            5,924,562
            
            2,697,227
            
            4.22$0.40-$0.60
            
            16,399,031
            
            11,572,219
            
            6.63$1.00-$1.50
            
            875,484
            
            875,484
            
            1.98TOTALS
            
            36,229,079
            
            27,849,932





We
account for stock options granted to non-employees in accordance with Emerging
Issues Task Force No. 96-18, “Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services,” (“EITF 96-18”). Under EITF 96-18, we determine the fair
value of the stock options granted as either the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more
reliably measurable.




NOTE 8 - INCOME
TAXES




As of
June 30, 2008, the Company had net operating loss carry-forwards of
approximately $10,166,538 for federal and $8,102,350 for state income tax
reporting purposes, which expire at various dates through 2027 and 2017,
respectively. The utilization of the net operating loss carry forwards might be
limited due to restrictions imposed under federal and state laws upon a change
in ownership. The amount of the limitation, if any, has not been determined at
this time. No current provision for income taxes for the year ended June 30,
2007 is required, except for minimum state taxes, since the Company incurred
taxable losses during such year. There was no provision for income taxes in
fiscal 2008 or 2007.





F-16




NOTE 9 - SUBSEQUENT
EVENTS




On July
10, 2008, the Company issued a 10% Convertible Debenture in the amount of
$100,000 to a company controlled by a Director. The debenture was pursuant to an
unregistered private placement dated March 1, 2008 and had attached warrants.
Principal and unpaid interest is due July 10, 2011.




On July
14, 2008, the Company issued a 10% Convertible Debenture in the amount of
$100,000 to a qualified investor. The debenture was pursuant to an unregistered
private placement dated March 1, 2008 and had attached warrants. Principal and
unpaid interest is due July 14, 2011.




On July
30, 2008, the Company issued a 10% Convertible Debenture in the amount of
$100,000 to a company controlled by a Director. The debenture was pursuant to an
unregistered private placement dated March 1, 2008 and had attached warrants.
Principal and unpaid interest is due July 30, 2011.




On August
18, 2008, the Company issued a 10% Convertible Debenture in the amount of
$100,000 to a qualified investor. The debenture was pursuant to an unregistered
private placement dated March 1, 2008 and had attached warrants. Principal and
unpaid interest is due August 18, 2011.




On August
27, 2008, the Company issued a 10% Convertible Debenture in the amount of
$75,000 to a qualified investor. The debenture was pursuant to an unregistered
private placement dated March 1, 2008 and had attached warrants. Principal and
unpaid interest is due August 27, 2011.




F-17




SIGNATURES




In
accordance with section 13 or 15(d) with the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 13th day of October,
2008.







Aperture
Health, Inc.





By:
      /s/ Thomas
      Banks
              Thomas
      Banks
              Chief
      Executive Officer
              
              By:
      /s/ Francis X.
      Pisano
              Francis
      X. Pisano
              Chief
      Financial Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Company and in the capacities and on the
dates indicated.





SIGNATURE
            DATE
            
            SIGNATURE
            DATE/s/
      Thomas Banks
            October
      13, 2008
            
            /s/
      Francis X. Pisano
            October
      13, 2008Thomas
      Banks
            
            
            Francis
      X. PisanoPrincipal
      Executive Officer and Director
            
            
            Principal
      Financial Officer and Director/s/
      Kenneth Westbrook
            October
      13, 2008
            
            /s/
      Edward J. “Rusty” Brown
            October
      13, 2008Kenneth
      Westbrook
            
            
            Edward
      J. “Rusty” BrownDirector,
      President
            
            
            Director/s/
      Maurice J. DeWald
            October
      13, 2008
            
            /s/
      John M. Word
            October
      13, 2008Maurice
      J. DeWald
            
            
            John
      M. WordDirector
            
            
            Director/s/
      Heidi A. Patterson
            October
      13, 2008
            
            /s/
      James Brakke
            October
      13, 2008Heidi
      A. Patterson
            
            
            James
      BrakkeDirector
            
            
            Director








APERTURE
HEALTH, INC


FORM
10K


FOR
THE FISCAL YEAR ENDED JUNE 30, 2008


EXHIBIT
INDEX




Exhibit
      No.
            Description




2.1
            Agreement
      and Plan of Merger by and among Fuel Corporation of America, flexSCAN,
      Inc. and FCA Acquisition Corp., dated as of July 15, 2005 (incorporated by
      reference to Exhibit 2.1 to the Registrant’s Form 8-K, filed on July 19,
      2005)




3.1
            Articles
      of Incorporation of flexSCAN, Inc. (incorporated by reference to Exhibit 2
      to the Registrant’s Form 8-K, filed on May 23,
  2005.)




3.2
            Bylaws
      of the flexSCAN, Inc. (incorporated by reference to Exhibit 3 to the
      Registrant’s Form 8-K, filed on August 1,
2005)




3.3
            Certificate
      of Amendment to the Articles of Incorporation of flexSCAN, Inc.
      (incorporated by reference to Exhibit A to the Registrant’s Form DEF 14-C,
      filed on February 2, 2006)




10.10
            flexSCAN,
      Inc. 2005 Equity Compensation Incentive Plan (incorporated by reference to
      Exhibit 4.1 to the Registrant’s Form 8-K, filed on August 18,
      2005)




10.11
            Convertible
      Promissory Note of Fuel Corporation of America dated August 12, 2005
      (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K,
      filed on August 18, 2005)




10.12
            Common
      Stock Warrant of Fuel Corporation of America dated August 12, 2005
      (incorporated by reference to Exhibit 4.3 to the Registrant’s Form 8-K,
      filed on August 18, 2005)




10.13
            Lock-Up/Leak-Out
      and Registration Rights Agreement between Fuel Corporation of America and
      Tryant, LLC., dated August 12, 2005 (incorporated by reference to Exhibit
      10.1 to the Registrant’s Form 8-K, filed on August 18,
    2005)




10.14
            Indemnity
      Agreement among Fuel Corporation of America, Tryant, LLC., and flexSCAN,
      Inc., dated as of August 12, 2005 (incorporated by reference to Exhibit
      10.2 to the Registrant’s Form 8-K, filed on August 18,
    2005)




10.15
            Amendment
      to the Convertible Promissory Note by and between flexSCAN, Inc. and
      Tryant, LLC., (incorporated by reference to Exhibit 4.1 to the
      Registrant’s Form 8-K, filed on November 22,
  2005)




10.16
            Amendment
      No. 2 to the Convertible Promissory Note by and between flexSCAN, Inc. and
      Tryant, LLC., dated November 15, 2005 (incorporated by reference to
      Exhibit 10.1 to the Registrant’s Form 8-K, filed on March 29,
      2006)




10.17
            Amendment
      to Warrant dated March 23, 2006 (incorporated by reference to Exhibit 10.2
      to the Registrant’s Form 8-K, filed on March 29,
  2006)




10.18
            Amendment
      No. 3 to the Convertible Promissory Note by and between flexSCAN, Inc. and
      Tryant, LLC., dated April 30, 2006 (incorporated by reference to Exhibit
      10.1 to the Registrant’s Form 8-K, filed on May 4,
  2006)




31.3
            Certification
      of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under
      the Exchange Act. – Filed herewith




31.4
            Certification
      of Principle Financial Officer required under Rule 13a-14(a)/15d-14(a)
      under the Exchange Act. – Filed
herewith




32.3
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. – Filed
      herewith




32.4
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. - Filed
      herewith






29