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

FORM 10-K

[X]  15, ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: June 30, 2008
For the fiscal year ended June 30, 2007
For the fiscal year ended June 30, 2006
OR

[ ]  15, 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: 0-22965

Pinnacle Resources, Inc.
(Exact name of registrant as specified in its charter)

      WYOMING                                          84-1414869
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization                      Identification No.)

9600 E. Arapahoe Road, Suite 260,
Englewood, Colorado                      80112
(Address of principal executive offices)    (Zip Code)

Registrant's Telephone number, including area code:
(303) 705-8600

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  Common
Stock, $.00001 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 [  ] No [x]

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

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

Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained hereof, and will not be
contained, to will 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.
Yes [x] No [  ]


<PAGE>2

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

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] Smaller reporting company [x]

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

State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the
registrant's most recently completed second fiscal quarter. The market
value of the registrant's voting $.00001 par value common stock held by
non-affiliates of the Registrant was approximately $690,000.

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. The number
of shares outstanding of the registrant's only class of common stock, as
of December 31, 2008, 2007 and 2006 was 21,477,550, 21,477,550 and
20,377,550 shares of its $.00001 par value common stock, respectively.

No documents are incorporated into the text by reference.



<PAGE>3
Pinnacle Resources, Inc.
Form 10-K
For the Fiscal Year Ended June 30, 2008
For the Fiscal Year Ended June 30, 2007
For the Fiscal Year Ended June 30, 2006
Table of Contents

Part I

ITEM 1.  BUSINESS                                                   4
ITEM 1A. RISK FACTORS                                               7
ITEM 1B. UNRESOLVED STAFF COMMENTS                                  7
ITEM 2.  PROPERTIES                                                 7
ITEM 3.  LEGAL PROCEEDINGS                                          8
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS        8

Part II

ITEM 5.  MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS                                      9
ITEM 6.  SELECTED FINANCIAL DATA                                   10
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                     10
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
           RISK                                                    13
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA               14
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE                     45
ITEM 9A. CONTROLS AND PROCEDURES                                   45
ITEM 9B.  OTHER INFORMATION                                        45

Part III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL
           PERSONS AND CORPORATE GOVERANCE; COMPLIANCE WITH
           SECTION 16(a) OF THE EXCHANGE ACT                       46
ITEM 11.  EXECUTIVE COMPENSATION                                   49
ITEM 12.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT AND RELATED STOCKHOLDERS MATTERS             49
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
           DIRECTOR INDEPENDENCE                                   51
ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES                   51

Part IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES                  53



<PAGE>4
PART I

ITEM 1  BUSINESS

General
Pinnacle Resources, Inc. was incorporated under the laws of the State of
Wyoming on January 6, 1995 under the name of Claremont House, Corp. On
June 26, 1997, the Articles of Incorporation were amended to change the
name to Pinnacle Resources, Inc., to increase the authorized common to
875 million shares at a par value of $0.00001, and to authorize
2,000,000 Preferred Shares with a par value of $0.01 per share.

The registrant is a diversified natural resource company that has
operated principally in Africa.  Overall supervision, coordination and
financial control are maintained by its executive staff from its
corporate headquarters located at 9600 East Arapahoe Road, Suite 260,
Englewood, Colorado.  As of June 30, 2008, the registrant had two
employees.

During the past five years the registrant has explored a number of
prospects both in Africa, Mexico and the United States and has been
engaged in development, building and production on the following
projects:

1) a gold concession in Ghana, West Africa
2) a tantalum refinery in South Africa
3) a vanadium-bearing iron ore deposit in the Limpopo Province, South
Africa and
4) technology development for the mining of diamonds along the west
coast of South Africa.

Ghana Gold - In 2003, the registrant purchased a 20,000-acre gold
concession in the Ashanti Gold Belt of Ghana. After having completed a
limited exploration program, the registrant indicated the presence of
gold mineralization on the concession, but concluded that any possible
reserves that could be expected to be proven would not be large enough
to justify the building of a stand-alone mine and mill.  In 2005,
management decided to sell the project to a neighboring producer who had
an operating mill in place.  The total purchase price was $470,000.  The
registrant received the final payment for the sale in 2007.

Tantalum - In March 2002, the registrant had acquired certain
proprietary and patented know-how and technology that could separate
tantalum as high-purity tantalum pentoxide from complex tantalum ores.
Tantalum pentoxide is used to manufacture high-strength steel and
electronic components mainly for televisions and cell phones.  The
registrant formed Titan Processors (Pty) Ltd. (SA) and built a pilot
plant in Johannesburg, South Africa.  Initial success led the registrant
to expand the tantalum refinery and to begin processing tantalum ores
produced by artisanal miners from the Congo, Mozambique and Zimbabwe.

Problems arose in the control of product grade to meet specifications of
the buyers of the tantalum pentoxide, and the unavoidable decision was
made to halt production and further research and development of the
process.  In June 2006, the registrant sold all of the assets of Titan



<PAGE>5

Processors in consideration of the forgiveness of debts and payables it
had incurred during the building and operating of the plant valued at
$846,544.

Vanadium/Iron Ore - In June 2000, the registrant acquired 100 percent
ownership of Vanadium and Magnetite Exploration and Development (Pty)
Ltd., a South African corporation, which held a prospecting license to
explore a previously-drilled, vanadium-bearing iron ore (magnetite)
deposit located in the Limpopo Province of South Africa.  This property
had become available as a result of a divestment order by the new post-
apartheid government which forced the international major mining
companies to shed their excess ore reserves.

The prospecting license covers 17,188 acres within the Bushveld Complex,
a region that accounts for 50 percent of the world's vanadium supply.
They host a 6-meter thick main bed of magnetite, approximately 17
kilometers in strike length.  The drill-indicated resource contained in
the main magnetite layer to a depth of only 80 meters is estimated to be
100 million tons of magnetite containing 1.67 million tons of vanadium
pentoxide.  When the registrant's sampling and testing confirmed the
development results obtained by the previous owner, the registrant
decided to go forward and apply for a mining license.

In February 2003, the registrant sold 33 1/3 percent of VanMag to
Corridor Mining Resources, who represented themselves as a Black
Economic Empowerment (BEE) group.  Newly drafted South African mining
law requires that Previously Disadvantaged [blacks] Persons (PDPs) must
be given the right to participate in natural resource projects to the
minimum extent of 26 percent.  In April 2006, VanMag was granted an
"old-order" mining right under a mining license.  The "old-order" right
must be converted to a "new-order" mining right by May 2009 and the
Application for Conversion is currently being assembled by professional
consultants and mining services administrators in South Africa.

The registrant's management determined that their shareholders would be
better served if they could realize more immediate benefits than could
be anticipated if the registrant were to undertake the long-range
administrative and financial burdens that the building of a mine and
smelter would entail.  In December 2006, the registrant entered into a
Share Sale Agreement with an Australian mining house to sell the
registrant's 66 2/3 percent interest in VanMag.  The registrant received
$3.4 million in 2007, $845,200 in 2008 and expects to receive a final
installment payment of $3.75 million in February 2009.

Diamonds.  Since the beginning of 2003, the registrant has financed the
development and building of a new, patented ocean diamond recovery
technology called AquaWalker.  The equipment and technology are owned by
Diamonaire (Pty) Ltd., the registrant's wholly owned South African
subsidiary.

The AquaWalker and attending AquaSweepers were designed to recover
diamond-bearing gravels lying on the shallow ocean floor alongside the
west coast of South Africa.  These gravels have been known to be
diamondiferous, but had been inaccessible to the conventional boat and

<PAGE>6

diver method of recovery.  Turbulent wave action and strong currents in
this ocean surf zone have prevented boats and divers to operate in this
environment.

In July 2004, Diamonaire's contractor began applying the new mining
equipment and technology.  The operations continued intermittently until
the present.  The original equipment and technology required numerous
modifications which prevented the contractor from achieving continuous
operations.  Although some diamonds were recovered, Diamonaire had been
operating under increasing cost pressures.  Rising input costs, labor
and supplies, coupled with falling prices for raw diamonds led to the
registrant's decision in June 2008 to adopt a plan to discontinue the
Diamonaire operation.  This plan anticipates that the operations will be
sold within a one year period during which the activities of Diamonaire
will continue.

Operating Strategy
Going forward the registrant plans to continue to prospect for
opportunities in the natural resource business sector, but also to look
at opportunities in other industries.

In the past, the registrant's limited capital resources restricted the
registrant to looking to find and buy undervalued assets and limited the
registrant to spend relatively small amounts on development and then to
sell out to realize capital transaction gains._ In the future, the
registrant will seek operating-income producing properties to grow
shareholder value.

Subsidiaries
Vanadium and Magnetite Exploration and Development (Pty) Ltd. (VanMag),
a South African Corporation, is owned 66.7 percent by the registrant and
Diamonaire Pty Ltd., a South African Corporation, is owned 100 percent
by the registrant.

Other Information
Other than the registrant's normal office overhead, the registrant has
no plans, arrangements or pre-planned financing commitments for which it
is obligated

The registrant has no pre-arranged financing with any other prospects.
The registrant has not made any prior commitments, or any
understandings, with any third parties, or any of its affiliated
entities, such as Victory Minerals or Re-Group, Inc. for financing or
participation.  Additionally, the registrant does not have any plans,
arrangements, commitments or understandings to pay any finders' fees to
any person or entity.

The registrant does not have any plans, arrangements, commitments or
understandings to obtain an interest in an operating producing mine or
oil, gas or mineral property owned by a mining or energy-related
company.




<PAGE>7

Competition
The registrant is, and will remain for the foreseeable future, an
insignificant participant among those firms that are also engaged in the
business of the registrant.  There are many established entities and
financial concerns which have significantly greater financial and
personnel resources and technical expertise than the registrant.
Management will rely upon their own ability to generate potential
lending candidates through their own personal industries in which
management has had prior experience.  In view of the registrant's
extremely limited resources, we expect to continue to be at a
significant competitive disadvantage compared to our competitors.

Federal and/or State Regulation
The registrant is not subject to any U.S. federal and/or state
regulation.

Seasonal Nature of Business Activities
The registrant's business activities are not seasonal.


ITEM 1A.  RISK FACTORS

Not applicable


ITEM 1B.  UNRESOLVED STAFF COMMENTS

Not applicable


ITEM 2.  PROPERTIES

The registrant's executive officers are located at 9600 E. Arapahoe
Road, Suite 260, Englewood, Colorado 80112.  The registrant pays $2,900
rent per month for its office space and currently subleases two offices
for $3,000 per month including sublessees' use of the office copier,
fax, and telephone.  The registrant's offices consist of approximately
1,500 square feet of executive office space and secretarial area.
Management believes that this space will meet the registrant's needs for
the foreseeable future.

Through its 66 2/3 percent owned subsidiary, VanMag, the registrant
holds an exclusive 30-year mineral lease on five contiguous farms near
Potgietersrus, South Africa.  This property is currently under a sales
contract.

Through its 100 percent owned Diamonaire Pty Ltd, the registrant owns
certain intellectual property, tools and mining equipment.  Since these
assets are non-productive and impaired they have only salvage value, if
any.

Until April 20, 2007, Pinnacle, through its shareholding in Orovi Ghana
Ltd., held a gold prospecting license on the Riyadh concession in the
central district of the Republic of Ghana.

<PAGE>8

In August 2008, Pinnacle purchased two unpatented lode mining claims in
the Tomichi Mining District of Colorado for $21,000.


ITEM 3.  LEGAL PROCEEDINGS.

The registrant is party to an action before the High Court of South
Africa brought by Corridor Mining Resources.  Corridor asserts that the
registrant unlawfully reduced Corridor's share of the ownership of
VanMag to 7 1/3 percent when it made 26 percent Corridor's interest
available to a qualified Black Economic Empowerment partner, as required
by the law of the land.  The registrant's attorneys are confident that
the registrant will prevail at an eventual trial.  The registrant's
management is of the opinion that the dispute will be settled amicably
out of court.  In the pending share sale agreement of the VanMag asset,
the buyer has agreed to hold the registrant harmless.

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

None.




<PAGE>9
PART II

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

    Item 5(a)

a)  Market Information.  Registrant's common shares are listed in the
over-the-counter market in the "pink sheets" under the symbol PNRR.PK.
As of June 30, 2008, there was only a limited market for registrant's
common shares.

The following table sets forth the range of high and low bid quotations
for the registrant's common stock for each quarter of the last two
fiscal years.  The quotations represent inter-dealer prices without
retail markup, markdown or commission, and may not necessarily represent
actual transactions.
Quarter Ended                  High Bid     Low Bid
   9/30/05                       .14          .06
   12/31/05                      .25          .04
   3/31/06                       .16          .05
   6/30/06                       .14          .05
   9/30/06                       .10          .04
   12/31/06                      .09          .01
   3/31/07                       .07          .04
   6/30/07                       .16          .05
   9/30/07                       .16          .06
   12/31/07                      .12          .07
   3/31/08                       .08          .04
   6/30/08                       .08          .04

b)  Holders.  At June 30, 2006, 2007 and 2008, there were 183, 204 and
222 shareholders of the registrant, respectively.

c)  Dividends.  Holders of the registrant's common stock are entitled to
receive such dividends as may be declared by its board of directors.  No
dividends on the registrant's common stock have ever been paid, and the
registrant does not anticipate that dividends will be paid on its common
stock in the foreseeable future.

d)  Securities authorized for issuance under equity compensation plans.
No securities are authorized for issuance by the registrant under equity
compensation plans.

e)  Performance graph.  Not applicable.

f)  Sale of unregistered securities.  During the year ended June 30,
2006, we issued 1,292,500 shares of common stock to satisfy notes
payable outstanding to related parties.  The shares were valued at a
discount to market price since they were not free-trading shares.

During the year ended June 30, 2006, we issued 900,000 shares to a
consultant for services rendered.  The shares were valued at a discount
to market price since they were not free trading shares.



<PAGE>10

During the year ended June 30, 2007, we issued 1,100,000 shares to a
consultant for services rendered.  The shares were valued at a discount
to market price since they were not free trading shares.

In May 2004, we granted R. A. Hildebrand, an officer and director, an
option to purchase 1,000,000 shares of our common stock at $.13 per
share.  The options vested immediately and expire five years from the
grant date.  The fair value of the options were estimated at $22,000.

    Item 5(b)  Use of Proceeds.  Not applicable.

    Item 5(c)  Purchases of Equity Securities by the issuers and
affiliated purchasers.  None.


ITEM 6.  SELECTED FINANCIAL DATA

Not applicable to a smaller reporting company.


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

The following presentation of our management's discussion and analysis
should be read in conjunction with the financial statements and other
financial information included elsewhere in this report.

Basis of Presentation of the Financial Statements

Our financial statements include those of our parent company and our
wholly owned South African subsidiary; Diamonaire Exploration (Pty) Ltd.
and our 66 2/3% percent owned subsidiary, Vanadium and Magnetite
Exploration & Development Co. (Pty) Ltd (VanMag).  Our financial
statements also include the accounts of Titan Processors (Pty) Ltd),
also a South African company, which is controlled by members of our
board of directors.  Titan was abandoned as of June 30, 2006 and all
assets were written down to zero.  In November 2007, we paid $50,000 to
settle all remaining liabilities of Titan.  We sold our interest in
VanMag in July 2007.  In June 2008, we adopted a plan to discontinue the
operations of Diamonaire.  This plan anticipates that the operations
will be sold within a one year period during which the activities of
Diamonaire will continue.

Industry Outlook

The current global economic and financial crisis has severely hampered
our ability to obtain additional funds with which to seek additional
natural resource, or other types of business opportunities.  We are
uncertain what potential business ventures will be available to us in
the near future, or whether, if they are available, we will be able to
obtain debt or equity financing necessary to take advantage of those
opportunities.



<PAGE>11

Results of Operations

At June 30, 2008, we had sold or adopted a plan to discontinue all of
our natural resource operations.  Our activities during fiscal 2008 have
been limited to winding down the activities of our Diamonaire
subsidiary, searching for new business opportunities and collecting the
remaining receivable related to the sale of our VanMag subsidiary and
searching for new business opportunities.  In October 2008, we collected
$1,584,740 of this receivable and amended the terms to provide for the
balance to be paid in US dollars.  We expect to collect the $3.75
million balance of the sales price during fiscal 2009, although the
uncertain economic conditions may delay some or all of amounts that we
collect into future years.

Year ended June 30, 2008 compared to year ended June 30, 2007
Net (loss) for fiscal year 2008 totaled ($1,645,960) compared to net
income of $4,374,860 in fiscal year 2007.  This increase in loss
resulted mainly from the gain of $4,953,265 recorded in 2007 from the
sale of VanMag, and the gain of $362,855 from the sale of our investment
in Orovi Ghana.  The net gain on the sale of our interest in VanMag has
been recorded as gain on sale of discontinued operations.  Additionally,
we restructured the sale of VanMag in November 2008 which resulted in a
gain of $787,037.  The loss from our discontinued operations increased
from $760,149 in 2007 to $904,149 in 2008.

Operating expenses for the year ended June 30, 2008 were $493,520
compared to $268,138 for the year ended June 30, 2007.  Salaries
increased from $148,956 in 2007 to $242,000 in 2008 due to bonuses given
to executive management in 2008.

Professional fees increased from $22,618 for the year ended June 30,
2007 to $135,528 for the year ended June 30, 2008 due to audit fees in
2008.  We did not have an audit of our financial statements in the prior
year.

General and Administrative expense in 2008 was $115,992 compared to
$96,564 in 2007.  This increase was a result of an increase of $13,752
in public and investor relations activities in 2008, and an increase in
payroll taxes of $11,098 related to the increase in our salaries.  We
increased our investor and public relations activities after we received
a portion of the proceeds of the sale of VanMag.

Interest income decreased from $16,840 in 2007 to $6,057 in 2008 as a
result of the decrease in our cash deposits between the two years.

We had no interest expense, either to related and third parties in 2008
as we repaid our third and related parties debts in fiscal 2007.

For the year ended June 30, 2008, Pinnacle incurred related party
expenses of $32,500 compared to $268,370 for the year ended June 30,
2007.  These amounts were paid to affiliated companies for consulting
services.  Our CEO and CFO are executives with the affiliated companies.
The decrease in related party expenses was due to the sale


<PAGE>12

of VanMag and decrease in the need for consulting services relating to
its business.  These amounts are included in the loss from discontinued
operations.

We recorded a deferred tax benefit related to our net operating loss
carryforward and the loss on our investment in Diamonaire.  The next
deferred tax benefit that we recorded in 2008 was $856,283 compared to a
deferred tax liability in 2007 of $1,947,730.  These amounts are both
the result of deferred tax items, and therefore we did not have a
currently payable tax liability in 2007 nor will we receive a refund
related to our 2008 operations.

Inflation has not affected our operation.  However, the impact of a
weakening Rand compared to the US dollar has resulted in currency
translation effects of $130,332 for the year ended June 30, 2008.  This
amount is recorded as other comprehensive income.  We recorded no
similar amounts in prior years.

Year ended June 30, 2007 compared to year ended June 30, 2006
Net income for fiscal year 2007 totaled $4,374,860 compared to net
income of $366,600 in fiscal year 2006.  This increase of $4,008,260
resulted mainly from the gain of $4,953,265 in 2007 from the sale of our
interest in VanMag and the gain on the sale of our investment in Orovi
Ghana of $362,855, also in 2007.

We recorded a deferred tax benefit of $1,268,997 in 2006 related to the
2006 and prior years net operating loss carryforward that was used to
offset the tax gain that we recorded in 2007 on the sale of VanMag and
Ghana Orovi.  We recorded a deferred tax expense of $1,947,730 in 2007
related to the sale of VanMag which we are treating as an installment
sale for tax purposes.  We will recognize the gain on this transaction
for tax purposes as we receive payments on the note related to this
transaction.

Operating expenses for the year ended June 30, 2007 were $268,138
compared to $339,153 for the year ended June 30, 2006.  Salaries
increased from $89,980 in 2006 to $148,956 in 2007 due to salary
increases given to our executive management.

Professional fees decreased substantially from $199,615 for the year
ended June 30, 2006 to $22,618 for the year ended June 30, 2007 due to
engineering fees of $170,000 incurred in 2006 related to the evaluation
of a gasification project that was not consummated.  We incurred no
similar costs in 2007.

General and Administrative expense in 2007 was $96,564 compared to
$49,558 in 2006, an increase of 49%.  We commenced public and investor
relations activities in 2007 after we received a portion of the proceeds
of the sale of VanMag.  These costs in 2007 were $38,334.  The balance
of the increase in 2007 resulted in an increase in our rent expense.

For the year ended June 30, 2007, Pinnacle incurred related party
expenses of $268,370 compared to $44,200 for the year ended June 30,
2006.  These amounts were paid to affiliated companies for consulting

<PAGE>13

services.  Our CEO and CFO are executives with the affiliated companies.
The increase in related party expenses was due to the need for
consulting services relating to VanMag prior to its sale.  These amounts
are included in the loss from discontinued operations.

Liquidity

Year ended June 30, 2008 compared to year ended June 30, 2007
In fiscal 2007, our ability to generate adequate amounts of cash to meet
our needs came from the sale of our subsidiary, VanMag.  During fiscal
year 2008, we relied on cash reserves related to the sale of VanMag in
2007.  Our cash position decreased from $1,022,489 at June 30, 2007 to
$207,250 at June 30, 2008, primarily due to cash used in both our
continuing and discontinued operations of $833,496 during 2008.  We will
rely on our cash reserves, the collection of our receivable from the
sale of VanMag, the Company's bank line of credit, and advances from
principal shareholders to fund operations.

In October 2008, we collected $1,584,740 of the receivable related to
the sale of VanMag and restructured the balance to be paid in US
dollars.  We used $739,545 of this amount to satisfy the liabilities of
Diamonaire, which we elected to discontinue at June 30, 2008.  In
November 2008, we entered into a preliminary agreement to acquire
certain agricultural properties in New Zealand.  We advanced $400,000
which will be used as part of the purchase price of these properties if
the transaction is consummated.  This amount will be returned to us if
we do not consummate the acquisition.

For the year ended June 30, 2007, we had recorded OCI of $130,332 as a
result of the decrease of the value of the Rand compared to the U.S.
dollar.  We had no similar amounts in prior years.

As a result of the sales of investments in 2008, we had net cash
provided by investing activities of $18,257 for the year ended June 30,
2008, compared to cash used in investing activities of $129,866 for the
year ended June 30, 2007.

For the year ended June 30, 2008, we did not pursue any financing
activities.  Comparatively, for the year ended June 30, 2007, we made
payments on debt of $94,672 and payments on debt-related parties of
$168,000 resulting in net cash used by financing activities of $262,672.

Year ended June 30, 2007 compared to years ended June 30, 2006
In fiscal 2007, our ability to generate adequate amounts of cash to meet
our needs came from the sale of our subsidiary, VanMag.  During fiscal
year 2006, we relied on proceeds from loans and advances from officers
of Pinnacle.  Our cash position increased from $1,440 at June 30, 2006
to $1,022,489 at June 30, 2007.

For the year ended June 30, 2007, we had net cash used in investing
activities of $34,566 compared to $68,924 for the year ended June 30,
2006.



<PAGE>14

For the year ended June 30, 2007, we made payments on debt of $94,672
and payments on debt-related parties of $168,000 resulting in net cash
used by financing activities of $262,672.  Comparatively, for the year
ended June 30, 2006, we received proceeds from loans and loans-related
parties of $4,672 and $55,000, respectively and made payments on our
debt of $49,310.  As a result, we had net cash used by financing
activities of $19,638 for the year ended June 30, 2006.

Discontinued operations

Titan Processors (Pty) (Ltd)
In June 2006, we determined to abandon the Titan Processors subsidiary.
We decided to abandon the tantalum project undertaken by the subsidiary
because of poor results and unfeasibility of the process.  Titan's
pretax (loss) income, reported in discontinued operations, for the year
ended June 30, 2007 and 2006, was $(968,442) and $252,720, respectively.

Vanadium and Magnetite Exploration & Development Co. (Pty) (Ltd)
In January, 2007, we concluded a written share sale agreement with
Golden Fall Trading 565 Ltd to sell its 66 2/3% interest in the VanMag.
We decided to sell the subsidiary as we were able to realize a
substantial gain on original investment.  The original selling price was
$9,000,000, which was subsequently revised through a number of
addendums.  The assets sold consist primarily of prepaid royalties, and
the buyer also assumed intercompany loans, including accrued interest.
VanMag's pretax income (loss), reporting in discontinued operations, for
the years ended June 30, 2007 and 2006, was $294,064 and $(4,637),
respectively.  VanMag is classified as discontinued operations for the
years ending June 30, 2006 and 2007.

Diamonaire Exploration (Pty) (Ltd)
As of June 2008, we adopted a plan to discontinue operations the
operations of Diamonaire.  This plan anticipates that the operations
will be sold within a one year period during which the activities of
Diamonaire will continue.  Diamonaire's pretax (loss) income, reported
in discontinued operations, for the years ended June 30, 2008, 2007 and
2006, was $(1,460,879), $58,378 and $(602,466), respectively.  The
entity has been consolidated but classified as discontinued operations
for the years ending June 30, 2006, 2007, and 2008.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable



<PAGE>15

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Pinnacle Resources, Inc.
Index to the Financial Statements

As of June 30, 2008, 2007 and 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

Report of Independent Registered Public Accounting Firm          16
Financial Statements of Pinnacle Resources, Inc.:

  Balance Sheets as of June 30, 2008, 2007 and 2006              17
  Statements of Operations For Each of the Three Years
    in the Period Ended June 30, 2008                            19
  Statements of Stockholders' Equity (Deficit) For Each
    of the Three Years in the Period Ended June 30, 2008         20
  Statements of Cash Flows For Each of the Three Years
    in the Period Ended June 30, 2008                            22
  Notes to Financial Statements                                  24



<PAGE>16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Pinnacle Resources, Inc.

We have completed the audits of the accompanying balance sheets of
Pinnacle Resources, Inc. as of June 30, 2008, 2007, and 2006, and the
related statements of operations, stockholders' equity and comprehensive
income, and cash flows for each of the years in the three-year period
ended June 30, 2008.  Pinnacle Resource's management is responsible for
these financial statements.  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.  The company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial
reporting.  Accordingly, we express no such opinion.

An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, 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 Pinnacle
Resources, Inc. as of June 30, 2008, 2007 and 2006, and the results of
its operations and its cash flows for each of the years in the three-
year period ended June 30, 2008 in conformity with accounting principles
generally accepted in the United States of America.

As discussed in Note [8] to the financial statements, the Company will
require significant working capital to sustain current operations and to
fund new business opportunities.  The Company's need for working capital
raises substantial doubt about the entity's ability to continue as a
going concern.  The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Kelly & Company
Costa Mesa, California
February 13, 2009



<PAGE>17

Pinnacle Resources, Inc.
Balance Sheets

ASSETS
<TABLE>
                                                       As of June 30,
                                                --------------------------------
                                                2008           2007           2006
                                                ----           ----           ----

                                               <c>           <c>           <c>
Current Assets:
  Cash                                        $   207,250    $1,022,489    $    1,440
  Sublease rent receivable                         19,000        10,650         4,200
  Receivable from sale of subsidiary            4,869,610     5,600,000             -
  Investments                                      13,000       105,566        31,000
  Deferred tax asset - current                  1,033,754             -     1,033,067
  Current assets of discontinued operations        23,706        80,008        23,959
                                               ----------    ----------    ----------
Total current assets                            6,166,320     6,818,713     1,093,666
Equipment and leasehold improvements,
 net of accumulated depreciation and
  amortization of $10,242                               -             -             -
Deferred tax asset-long term                            -       177,417       235,930
                                               ----------    ----------    ----------
Total assets                                   $6,166,320    $6,996,130    $1,329,596
                                               ==========    ==========    ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
  Accounts payable and accrued liabilities     $  181,225    $   86,055    $   30,424
  Line of credit                                        -             -        54,672
  Related party notes payable
   and accrued interest                                 -             -       188,032
  Deposit                                               -             -       300,000
  Current portion of long term debt                     -             -       159,023
  Deferred tax liability - current              1,868,563             -        27,133
  Current liabilities of discontinued
   operations                                     734,176        64,361        55,521
                                               ----------    ----------    ----------
Total current liabilities                       2,783,964       150,416       814,805
                                               ----------    ----------    ----------
Long term debt, less current portion                    -             -        26,667
Deferred tax liability - long term                      -     1,947,730             -
                                               ----------    ----------    ----------
Total liabilities                               2,783,964     2,098,146       841,472
                                               ==========    ==========    ==========
Commitments and contingencies

  Stockholders' equity
  Preferred stock, $0.01 per share par value;
   authorized 2,000,000 shares, issued         $        -    $        -    $        -
   and outstanding -0- shares
   in 2008, 2007 and 2006



<PAGE>18

Common stock, $.00001 par value,
   875,000,000 shares authorized;
   issued and outstanding 21,477,550,
   21,477,550 and 20,377,550 shares
   in 2008, 2007 and 2006                             215           215           204
Additional paid-in capital                      3,620,514     3,620,514     3,585,525
Other comprehensive income                        130,332             -             -
Retained earnings (accumulated deficit)          (368,705)    1,277,255    (3,097,605)
                                               ----------    ----------    ----------
Total stockholder's equity                      3,382,356     4,897,984       488,124
                                               ----------    ----------    ----------
Total liabilities and stockholders'
 equity                                        $6,166,320    $6,996,130    $1,329,596
                                               ==========    ==========    ==========
</TABLE>
The accompanying notes are an integral part of the financial statements



<PAGE>19
Pinnacle Resources, Inc.
Statements of Operations
<TABLE>
                                                  For the Year Ended June 30,
                                                --------------------------------
                                                2008           2007           2006
                                                ----           ----           ----

                                               <c>           <c>           <c>
Operating expenses:
  Salaries                                    $  242,000    $  148,956    $   89,980
  Professional fees                              135,528        22,618       199,615
  General and administrative                     115,992        96,564        49,558
                                              ----------    ----------    ----------
      Total operating expenses                   493,520       268,138       339,153
                                              ----------    ----------    ----------
Total operating (loss)                          (493,520)     (268,138)     (339,153)
                                              ----------    ----------    ----------
Other income (expense):
  Interest income                                  6,057        16,840            41
  Interest expense                                     -       (11,372)      (26,688)
  Related party interest expense                       -       (12,220)       (1,295)
  Other income                                   (72,310)       55,231        27,957
  Sale of investment- Ghana Orovi                      -       362,855             -
  Restructuring of sale of subsidiary           (560,813)            -             -
                                              ----------    ----------    ----------
      Other income (loss)                       (627,066)      411,334            15
                                              ----------    ----------    ----------
Income (loss) from continuing operations      (1,120,586)      143,196      (339,138)
                                              ----------    ----------    ----------
Income tax (benefit)                            (379,533)      (38,548)   (1,033,067)
                                              ----------    ----------    ----------
Net income (loss) from continuing
 operations                                     (741,053)      181,744       693,929
                                              ----------    ----------    ----------

Discontinued operations:
  Loss on discontinued operations, net of
   taxes                                        (904,907)     (760,149)     (327,329)
  Gain on sale of discontinued operations,
   net of taxes                                        -     4,953,265             -
                                             -----------    ----------    ----------
Net income (loss)                            $(1,645,960)   $4,374,860    $  366,600
                                             ===========    ==========    ==========
Earnings per share - Basic:
  Income from continuing operations          $     (0.03)   $     0.01    $     0.04
  Discontinued operations                          (0.04)         0.20    $    (0.02)
                                             -----------    ----------    ----------
  Net income                                 $     (0.07    $     0.21    $     0.02
                                             ===========    ==========    ==========
Earnings per share - Diluted:
  Income from continuing operations          $     (0.03)   $     0.01    $     0.04
  Discontinued operations                          (0.04)         0.20    $    (0.02)
                                             -----------    ----------    ----------
  Net income                                 $     (0.07    $     0.21    $     0.02
                                             ===========    ==========    ==========



<PAGE>20

Weighted average number of shares outstanding:
 -Basic                                       21,477,550   20,639,638     19,408,367
                                             ===========    ==========    ==========
 -Diluted                                     21,477,550   20,717,358     19,617,873
                                             ===========    ==========    ==========
</TABLE>















The accompanying notes are an integral part of the financial statements


<PAGE>21
Pinnacle Resources, Inc.
Statement of Shareholders' Equity
<TABLE>
<CAPTION>
                                                       Common Stock         Additional
                                                   ------------------        Paid-In
                                                  Shares       Amount        capital
                                                ----------   ----------   ----------

                                                  <c>          <c>          <c>
Balance, June 30, 2005                           18,185,050   $      182   $3,448,717
  Common shares issued for services               1,200,000           12       59,988
  Common shares issued to satisfy notes
   payable and interest                             700,000            7       54,993
  Common shares issued to satisfy
   related party notes payable and
   interest                                         292,500            3       14,622
  Contribution of officer's payroll                       -            -        7,205
  Net income                                              -            -            -
                                                 ----------   ----------   ----------
Balance, June 30, 2006                           20,377,550          204    3,585,525
  Common shares issued for services               1,100,000           11       34,989
  Net income                                              -            -            -
                                                 ----------   ----------   ----------
Balance, June 30, 2007                           21,477,550          215    3,620,514
  Other comprehensive income                              -            -            -
  Net loss                                                -            -            -
                                                 ----------   ----------   ----------
Balance, June 30, 2008                           21,477,550   $      215   $3,620,514
                                                 ==========   ==========   ==========


<PAGE>22

PINNACLE RESOURCES, INC.
(Continued)   Statement of Shareholders' Equity


                                                                Retained       Total
                                                               Earnings   Stockholders
                                                 Accumulated  (Accumulated    Equity
                                                    OCI          Deficit)    (Deficit)
                                                  ----------   ----------   ----------
Balance, June 30, 2005                           $        -  $(3,464,205)  $  (15,306)
  Common shares issued for services                       -            -       60,000
  Common shares issued to satisfy notes
   payable and interest                                   -            -       55,000
  Common shares issued to satisfy
   related party notes payable and
   interest                                               -            -       14,625
  Contribution of officer's payroll                       -            -        7,205
  Net income                                              -      366,600      366,600
                                                 ----------   ----------   ----------
Balance, June 30, 2006                                    -   (3,097,605)     488,124
  Common shares issued for services                       -            -       35,000
  Net income                                              -    4,374,860    4,374,860
                                                 ----------   ----------   ----------
Balance, June 30, 2007                                    -    1,277,255    4,897,984
  Other comprehensive loss                          130,332            -      130,332
  Net loss                                                -   (1,645,960)  (1,645,960)
                                                 ----------   ----------   ----------
Balance, June 30, 2008                           $  130,332   $ (368,705)   3,382,356
                                                 ==========   ==========   ==========
</TABLE>




The accompanying notes are an integral part of the financial statements




<PAGE>23
Pinnacle Resources, Inc.
Statements of Cash Flows
<TABLE>
                                                   For the Year Ended June 30,
                                                 --------------------------------
                                                 2008           2007           2006
                                                 ----           ----           ----

                                                <c>           <c>           <c>
Cash flows provided by (used in) operating
 activities:
  Net income (loss)                          $(1,645,960)   $ 4,374,860   $  366,600
  Less:
    Net income (loss) from discontinued
     operations                                 (904,907)    (4,193,116)    (327,329)
                                             -----------    -----------   ----------
  Net income (loss) from continuing operations  (741,053)       181,744      693,929
    Adjustments to reconcile net income (loss)
     to net cash (used in) provided by operating
     activities:
      Shares issued for services                       -         35,000       60,000
      VanMag sale restructuring expense          560,813              -            -
      Note payable applied to the purchase
         price                                         -       (145,690)           -
     Impairment of investments                    74,310         55,300       27,999
     Tax expense (benefit) from deferred tax
      asset-current                           (1,033,754)     1,033,067   (1,005,934)
     Tax expense (benefit) from deferred tax
       asset-long term                                 -         58,513     (235,930)
     Tax expense (benefit) from deferred tax
       liability-current                         177,417        (27,133)           -
     Tax expense (benefit) from deferred tax
      liability - long term                      (79,167)     1,947,730            -
  Changes in operating assets and liabilities:
     Sublease rent receivable                     (8,350)        (6,450)       9,366
     Receivable from sale of subsidiary          299,909     (5,600,000)           -
     Other assets                                      -              -       70,099
     Accounts payable                             95,169         55,631        5,155
     Interest payable - related parties                -        (20,032)      21,481
     Other current liabilities                         -              -       (8,901)
     Deposit                                           -       (300,000)     300,000
                                             -----------    -----------   ----------
Net cash used in operating activities of
   continuing operations                      (1,559,613)     1,460,796     (390,065)
                                             -----------    -----------   ----------
   Net cash provided (used in) discontinued
      operations:
        Net current assets                        56,302        (56,049)      61,200
        Net current liabilities                  699,815          8,840      570,393
        Net long term liabilities                      -              -     (163,018)
                                             -----------    -----------   ----------
Net cash provided by (used in) operating
 activities                                     (833,496)     1,413,587       78,510
                                             -----------    -----------   ----------

The accompanying notes are an integral part of the financial statements



<PAGE>24
Pinnacle Resources, Inc.
Continued - Statements of Cash Flows

Cash flows provided by (used in) investing
 activities:
     Purchase of investments                    (114,309)      (132,866)     (69,999)
     Sale of investments                         132,566          3,000       11,000
                                             -----------    -----------   ----------
Net cash provided by (used in) investing
 activities                                       18,257       (129,866)     (58,999)
                                             -----------    -----------   ----------
Cash flows provided by (used in) financing
 activities:
     Payments on debt                                  -        (94,672)     (79,310)
     Proceeds from debt                                -              -        4,672
     Payments on debt- related parties                 -       (168,000)           -
     Proceeds from debt - related parties              -              -      (55,000)
                                             -----------    -----------   ----------
Net cash used in financing activities                  -       (262,672)     (19,638)
                                             -----------    -----------   ----------
Net increase (decrease) in cash                 (815,239)     1,021,049         (127)
Cash- beginning of period                      1,022,489          1,440        1,567
                                             -----------    -----------   ----------
Cash- end of period                          $   207,250     $1,022,489   $    1,440
                                             ===========    ===========   ==========
</TABLE>
Supplemental Cash Flow Information

<TABLE>
                                                   For the Year Ended June 30,
                                                 --------------------------------
                                                 2008           2007           2006
                                                 ----           ----           ----

                                                <c>           <c>           <c>
Cash paid for:
     Interest                                 $      861    $    39,461  $     6,351
     Taxes                                    $        -    $         -  $         -

Non-Cash Items

Shares issued to satisfy debt
     Common stock                             $         -   $         -  $         6
     Additional paid in capital               $         -   $         -  $    50,369
     Notes payable                            $         -   $         -  $   (50,375)
Shares issued to satisfy related party debt
     Common stock                             $         -   $         -  $         3
     Additional paid in capital               $         -   $         -  $    14,622
     Related party notes payable              $         -   $         -  $   (14,625)
Other comprehensive income
     Increase in receivable from sale of
      subsidiary due to currency translation
      effect                                  $   130,332   $         -  $         -
     Other comprehensive income               $  (130,332)  $         -  $         -
</TABLE>
The accompanying notes are an integral part of the financial statements

<PAGE>25
Pinnacle Resources, Inc.
Notes to the Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008


1. Description of the Company's Business

Pinnacle Resources, Inc. ("we" "our" "us" or the "Company") was
incorporated under the laws of Wyoming in January 1995. We engage in
exploring for and developing natural resources.

2. Summary of Significant Accounting Policies

Basis of presentation

Our financial statements include the accounts of the Company and our two
discontinued South African subsidiaries; wholly owned Diamonaire
Exploration (Pty) (Ltd) (for the years ended June 30, 2008, 2007 and
2006) ("Diamonaire") and 66.7% owned Vanadium and Magnetite Exploration
& Development Co. (Pty) (Ltd) ("VanMag") (for the years ended June 30,
2007 and 2006).  Our financial statements for the year ended June 30,
2006 include the discontinued accounts of Titan Processors (Pty) (Ltd)
("Titan"), a South African company, which is a variable interest entity
("VIE") for the year ended.  All significant intercompany balances and
transactions have been eliminated in combination.

In June 2006, the Company discontinued its controlling financial
interest in Titan.  When Titan was deconsolidated, the VIE had a
liability that was assumed by the Company.  Titan is recorded as a
discontinued operation as of and for the year ending June 30, 2006 (Note
9 - Discontinued Operations).  In November 2007, the Company settled the
Titan assumed liabilities for their fair value of $50,000.

In December 2006, the Company sold its subsidiary VanMag, and as a
result, its balance sheets and statements of operations are recorded as
discontinued operations as of and for the years ending June 30, 2007 and
2006 (Note 9 - Discontinued operations).

In June 2008, the Company adopted a plan to discontinue the operations
of Diamonaire.  This plan anticipates that the operations will be sold
within a one year period during which the activities of Diamonaire will
continue.  The Company has recorded Diamonaire's balance sheets and
statements of operations as discontinued operations as of and for the
years ending June 30, 2008, 2007 and 2006 (Note 9 - Discontinued
operations).

Preparing the Company's financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and the reported
amounts of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.

<PAGE>26
Pinnacle Resources, Inc.
Notes to the Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

Significant Estimates

The financial statements include some amounts that are based on
management's best estimates and judgments.  The most significant
estimates relate to the realization of the receivable from the sale of
the subsidiary, the allowance for uncollectible sublease rent
receivable, taxes and contingencies.  These estimates may be adjusted as
more current information becomes available, and any adjustment could be
significant.

Environmental Costs

Costs related to environmental remediation are charged to expense.
Other environmental costs are also charged to expense unless they
increase the value of the property and/or provide future economic
benefits, in which event they are capitalized.  Liabilities are
recognized when the expenditures are considered probable and can be
reasonably estimated.  Measurement of liabilities is based on currently
enacted laws and regulations, existing technology, and undiscounted
site-specific costs in the countries that we conduct our operations.

Comprehensive Income

Comprehensive income is calculated in accordance with SFAS No. 130,
Reporting Comprehensive Income.  SFAS No. 130 requires the disclosure of
all components of comprehensive income, including net income and changes
in equity during a period from transactions and other events and
circumstances generated from non-owner sources.

Cash and cash equivalents

For the purposes of the consolidated statements of cash flows, the
Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.  The
Company has no cash equivalents.

Concentration of Credit Risk

At June 30, 2008, the Company had $212,240 on deposit, of which we
exceeded United States FDIC federally insured limit of $100,000 per bank
by $110,856.

Equipment and depreciation

We carry property and equipment at historical cost.  Equipment is
depreciated on a straight-line basis over its estimated useful life
(generally 5 to 7 years).  Leasehold improvements are amortized over the
shorter of the estimated useful life or lease term.  Maintenance and
repairs are expensed as incurred.  Major renewals and improvements that



<PAGE>27
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

extend the life of the property are capitalized.  Expenditures for major
renewals and betterments, which extend the useful lives of existing
equipment, are capitalized and depreciated.

Upon retirement or disposition of property and equipment, the cost and
related accumulated depreciation are removed from the accounts and any
resulting gain or loss is recognized in the statements of operations.

We review long-lived assets, including property and equipment, for
impairment whenever events or changes in business circumstances indicate
that the carrying amount of the assets may not be fully recoverable.  If
impairment is indicated, we reduce the carrying value of the asset to
fair value.

Basic and Diluted Net Earnings per Share

Basic net earnings (loss) per common share is computed by dividing net
earnings (loss) applicable to common shareholders by the weighted-
average number of common shares outstanding during the period.  Diluted
net earnings (loss) per common share is determined using the weighted-
average number of common shares outstanding during the period, adjusted
for the dilutive effect of common stock equivalents, consisting of
shares that might be issued upon exercise of common stock options.  In
periods where losses are reported, the weighted-average number of common
shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.

Income taxes

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, including tax loss and credit
carryforwards, 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.  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.
Deferred income tax expense represents the change during the period in
the deferred tax assets and deferred tax liabilities.  The components of
the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics.  Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized.



<PAGE>28
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

Fair value of financial instruments

Our financial instruments, including cash, sublease rent receivable,
receivable from the sale of subsidiaries and investments, notes
receivable, accounts payable and accrued liabilities are carried at cost
as reported in the balance sheets, are considered to approximate fair
value due to the short-term maturity of these instruments.

Investments

Fair values of long-term investments are based on management's estimates
and pricing models using prevailing financial market information.  As
there is no quoted market price at December 31, 2008, 2007 and 2006,
fair value of such financial instruments is not necessarily
representative of the amount that could be realized or settled.

Concentrations of operations outside the home country

Substantially all of our past operations have been conducted in the
Republic of South Africa.  As such, we are subject to the South African
laws and regulations, including currency restrictions and tax laws.

Foreign currency adjustments

The financial position and operating results of all foreign operations
are measured using the local currencies of the countries in which the
Company operates as the functional currency.  Local currency assets and
liabilities are translated into U.S. dollars at the rates of exchange on
the balance sheet date, and local currency revenues and expenses are
translated at average rates of exchange during the period.  The
resulting translation adjustments are recorded directly into operating
results of the foreign subsidiaries and presented in the results of
discontinued operations.

New accounting pronouncements

In September 2006, FASB Statement No. 157 Fair Value Measurements, or
SFAS 157, was issued.  This Statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles, or GAAP, and expands disclosures about fair value
measurements.  The Statement is effective July 1, 2008.  This standard
will have little or no impact on our financial statements.

In February 2007, FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities, including an amendment of
FASB Statement No. 115, or SFAS 159, was issued.  This Statement permits
us to choose to measure many financial instruments and certain other
items at fair value. It also establishes presentation and



<PAGE>29
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

disclosure requirements.  This Statement is effective July 1, 2008.
This standard will have little or no impact on our financial statements.

In December 2007, the FASB ratified the final consensuses in Emerging
Issues Task Force, or EITF, Issue No. 07-1, "Accounting for
Collaborative Arrangements," or Issue 07-1, which requires certain
income statement presentation of transactions with third parties and of
payments between parties to the collaborative arrangement, along with
disclosure about the nature and purpose of the arrangement.  Issue 07-1
is effective for us beginning January 1, 2009.  We do not expect the
adoption of this accounting pronouncement to have a significant impact
on our financial statements.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations
(SFAS No. 141(R)), which replaces SFAS No. 141, Business Combinations
SFAS No. 141(R) requires an acquirer to recognize the assets acquired,
the liabilities assumed, and any non-controlling interest in the
acquiree at the acquisition date, measured at their fair values as of
that date, with limited exceptions.  This Statement also requires the
acquirer in a business combination achieved in stages to recognize the
identifiable assets and liabilities, as well as the noncontrolling
interest in the acquiree, at the full amounts of their fair values.
SFAS No. 141(R) makes various other amendments to authoritative
literature intended to provide additional guidance or to confirm the
guidance in that literature to that provided in this Statement.  This
Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008.  We do not
expect the adoption of this accounting pronouncement to have a
significant impact on our financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
in Consolidated Financial Statements (SFAS No. 160), which amends
Accounting Research Bulletin No. 51, Consolidated Financial Statements,
to improve the relevance, comparability, and transparency of the
financial information that a reporting entity provides in its
consolidated financial statements.  SFAS No. 160 establishes accounting
and reporting standards that require the ownership interests in
subsidiaries not held by the parent to be clearly identified, labeled
and presented in the consolidated statement of financial position within
equity, but separate from the parent's equity.  This statement also
requires the amount of consolidated net income attributable to the
parent and to the non-controlling interest to be clearly identified and
presented on the face of the consolidated statement of income.  Changes
in a parent's ownership interest while the parent retains its
controlling financial interest must be accounted for consistently, and
when a subsidiary is deconsolidated, any retained non-controlling equity
investment in the former subsidiary must be initially measured

<PAGE>30
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

at fair value.  The gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any non-controlling
equity investment.  The Statement also requires entities to provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners.
This Statement applies prospectively to all entities that prepare
consolidated financial statements and applies prospectively for fiscal
years, and interim periods within those fiscal years, beginning on or
after December 15, 2008.  We do not expect the adoption of this
accounting pronouncement to have a significant impact on our financial
statements.

In May 2008, the FASB issued SFAS No. 162 "The Hierarchy of Generally
Accepted Accounting Principles" ("SFAS 162"), which is effective 90 days
following the SEC's approval of the Public Company Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.  SFAS 162
identifies the sources of accounting principles and the framework for
selecting the principles to be 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 (the GAAP hierarchy).  We do not expect the adoption of this
accounting pronouncement to have a significant impact on our financial
statements.

3.  Related party transactions

Consulting Services
During the years ended June 30, 2008, 2007, and 2006, we paid affiliated
companies $32,500, $268,370, and $44,200, respectively, for consulting
services.  Our CEO and CFO are executives with the affiliated companies.
These amounts are included in the loss from discontinued operations.

Related Party Notes Payable
Related party notes payable consisted of the following:

                                   Amount Outstanding as of June 30,
                                    ---------------------------------
                                      2008            2007        2006
                                      ----            ----        ----
Notes from officers at 6% per annum,
 due on demand:
  March 2005 note for $53,000            -               -       53,000
  March 2005 note for $15,000            -               -       15,000
  April 2005 note for $10,000            -               -       10,000
  April 2005 note for $10,000            -               -       10,000
  May 2005 note for $15,000              -               -        5,000



<PAGE>31
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

Note from relative of officer at 13% per
 annum, due on demand with interest
 payable in shares of the Company's
 common stock:
  January 2005 note for $75,000          -               -      $75,000
                                   -------         -------     --------
Total related party notes payable        -               -     $168,000
                                   =======         =======     ========

Total related party interest expense for the years ended June 30, 2008,
2007 and 2006 was $0, $12,220, and $16,856 respectively.

4. Sale of Subsidiary - VanMag

In November 2006, the Company entered into an agreement with Golden
Falls Trading 565 LTD ("Golden Falls") (the "Buyer") to sell its 66.7%
share of VanMag (the "Initial Agreement").  The Initial Agreement called
for a purchase price of $9,000,000, in U.S. dollars with payments as
follows:

  -  $100,000 paid as a deposit in November 2006 to be applied as part
of the Agreement price
  -  $500,000 payable upon notice of acceptance of due diligence-
anticipated in December 2006
  -  $4,350,000 payable in February 2007
  -  $4,050,000 payable in May 2009 (when new mining rights were to be
issued)

The $100,000 payment was made in accordance with the Initial Agreement
in November 2006. In January 2007, the Buyer had not made the required
$500,000 payment according to the Initial Agreement.  As a result, the
Initial Agreement was revised as follows:

  -  The $100,000 deposit made in November 2006 was converted to a
forbearance fee and recognized as income by the Company in 2007. The
Buyer remitted a new initial payment of $200,000 upon the signing of the
revised Initial Agreement.
  -  $4,800,000 was payable by the Buyer in April 2007 or upon notice of
acceptance of the due diligence work that was still being performed.
  -  $4,000,000 was payable by the Buyer in April 2008.

In May 2007, after the Buyer failed to make its April 2007 agreed upon
payment of $4,800,000, the Company and the Buyer entered into a First
Addendum to the Initial Agreement (the "First Addendum").  The First
Addendum established a payment schedule whereby the Buyer received
credit for the $200,000 previously paid:




<PAGE>32
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

  -  $4,800,000 was due immediately upon the signing of the First
Addendum, with $3,200,000 paid to the Company and $1,600,000 to be held
in escrow pending resolution of an unrelated dispute amongst the other
33.3% shareholder group of VanMag.
  -  $4,000,000 was to be paid in May 2008, upon the issuance of new
mining rights.

The First Addendum provided for the termination of the transaction and
the Buyer's loss of all rights and claims to the property and prior
payments if all terms were not completed as agreed.  The Buyer made the
$3,200,000 payment to the Company in accordance with the First Addendum;
but the $1,600,000 was never deposited into the escrow. The Company has
not exercised its right to terminate the First Addendum agreement.

In May 2008, when the Buyer failed to make the required $4,000,000 First
Addendum payment, another modification to the agreement was entered into
(the Second Addendum).  The Second Addendum reduced the total
transaction price to $8,400,000, with a revised payment schedule as
follows:
  -  the $200,000 previously paid
  -  the $3,200,000 previously paid
  -  $2,000,000 to be paid upon signing of the Second Addendum
  -  $3,000,000 to be paid in July 2008

The Buyer paid the Company $50,000 as a forbearance fee related to
signing the Second Addendum and to not forfeit all previous payments.
This payment was recorded by the Company as other income from
restructuring the transaction.  The Company also recorded other expense
of $600,000 to reflect the reduction in the total sales price.

In June 2008, after the Buyer failed to make the $2,000,000 payment as
stipulated in the Second Addendum, the Company and the Buyer agreed to a
Revised Second Addendum. The Revised Second Addendum called for a
payment schedule that converted the remaining unpaid balance to be paid
in South African Rand at a fixed conversion rate of 1 U.S. dollar to 8
South African Rand:
     -the $200,000 previously paid
     -the $3,200,000 previously paid
     -$375,000 to be paid upon signing of the Revised Second Addendum in
the form of 3,000,000 South African Rand at a fixed conversion rate of
8:1




<PAGE>33
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

     -$1,500,000 to be paid 10 days following the signing of the Revised
Second Addendum in the form of 12,000,000 South African Rand at a fixed
conversion rate of 8:1
     -$3,125,000 to be paid in July 2008 in the form of 25,000,000 South
African Rand at a fixed conversion rate of 8:1

The Buyer paid $250,000 (2,000,000 South African Rand at an 8:1
conversion rate) upon signing of the Revised Second Addendum.  This
resulted in the Company recognizing a gain on currency conversion of
$546, which was recognized as other comprehensive income.  As a result
of the Revised Second Addendum converting the unpaid agreement amount to
South African Rand, the Company recognized a restructuring expense of
$10,723 based on the conversion rate at the signing date of the Revised
Second Addendum.

In July 2008, the Buyer had failed to make the payments as required by
the Revised Second Addendum, and a Third Addendum to the Initial
Agreement was entered into.  The Third Addendum superceded and cancelled
all previous agreements and understandings, increased the sales price to
$9,275,000, and re-modified the satisfaction of the unpaid balance
payable as follows:
  -  $200,000 previously paid
  -  $3,200,000 previously paid
  - $250,000 previously paid (as 2,000,000 SA Rand at 8:1)
  -  $5,625,000 to be paid to the Trust Account of Brink, Bonsma & De
Bruyn, within 3 days following the signing of the Third Addendum in the
form of 45,000,000 South African Rand at a fixed conversion rate of 8:1.

The Third Addendum resulted in the Company recognizing an immediate
restructuring gain in other income of $963,988 and realizing a gain on
currency conversion of $363,469 in other comprehensive income.  Golden
Falls failed to put any of the 45,000,000 South African Rand into the
trust account.  At September 30, 2008, the Company realized a loss on
currency conversion of $785,291 which is presented in other
comprehensive income.

In October 2008, Golden Falls made a payment to the Company of
15,000,000 South African Rand (at the agreed upon conversion rate of
8:1). The Company realized a loss on currency translation of $290,260,
shown as other comprehensive income.

In November 2008, after Golden Falls had failed to pay the remaining
30,000,000 South African Rand at the stipulated conversion rate of 8:1,
the Company and Golden Falls informally agreed that the remaining amount
payable of 30,000,000 Rand would be due and payable in the amount of
$3,750,000 (US$).



<PAGE>34
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

As of January 31, 2009, this amount is still due and payable and shown
as a receivable from sale of subsidiary on the face of the Company's
balance sheet.

5.  Investments

The Company has investments consisting of loans to various individuals
and entities of the following:

                               Amount Outstanding as of June 30,
                               ---------------------------------
                               2008          2007          2006
                               ----          ----          ----
Investments                  $130,010      $188,266      $62,500
                             ========      ========     ========

The Company assesses all investments for impairment on an annual basis.
Impairment losses related to these investments was $74,310, $55,300 and
$27,999 for the years ended June 30, 2008, 2007 and 2006, respectively.

6.  Property and equipment

Our office equipment and furniture, with a cost basis of $10,242, was
fully depreciated prior to the periods that are being reported upon.  As
the office equipment and furniture is still being used by the Company,
its fully depreciated costs are carried on its books at June 30, 2008

Accordingly, there was no depreciation expense recognized during the
three year period ended June 30, 2008.


7. Debt

Debt consisted of the following:

                                     Amount Outstanding as of June 30,
                                     ---------------------------------
                                     2008          2007          2006
                                     ----          ----          ----
Note payable to a private
 entity issued in March 2006,
 interest compounded quarterly
 at 12% per annum, principal
 installments due in six
 bi-annual installments
 from the date of the note                 -            -      $ 40,000



<PAGE>35
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

Note payable to Golden
 Star issued in March 2006, which
 held the option to purchase
 the Company's Orovi Ghana
 investment, due June 30, 2006
 at 0% interest, and the
 entity had the option to apply
 the note to the purchase price
 of the Orovi Ghana investment             -            -      $145,690
                                    --------     --------      --------
Total debt                                 -            -       185,690
  less current portion                     -            -     (159,023)
    Total debt, excluding
     current portion                       -            -      $ 26,667
                                    ========     ========      ========

Interest expense of $0, $5,845 and $0 was recorded on the notes above
for the years ending June 30, 2008, 2007 and 2006, respectively.

In June 2006, Golden Star Resources (LTV) ("Golden Star") agreed to
purchase the Orovi Ghana investment from the Company, at which time the
note payable of $145,690 was fully applied to the purchase price (Note
13 - Orovi Ghana Investment).

8. Commitments and Contingencies

Legal actions

Certain conditions may exist as of the date the combined financial
statements are issued, which may result in a loss to the Company, but
which will only be resolved when one or more future events occur or fail
to occur.  The Company's management and its legal counsel assess such
contingent liabilities, and such assessment inherently involves an
exercise of judgment. In assessing loss contingencies related to legal
proceedings that are pending against the Company or unasserted claims
that may result in such proceedings, the Company's legal counsel
evaluates the perceived merits of any legal proceedings or unasserted
claims as well as the perceived merits of the amount of relief sought or
expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a
material loss has been incurred and the amount of the liability can be
estimated, then the estimated liability would be accrued in the
Company's combined financial statements.  If the assessment indicates
that a potentially material loss contingency is not probable but is
reasonably possible, or is probable but cannot be estimated, then the
nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material, would be disclosed.



<PAGE>36
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

Loss contingencies considered remote are generally not disclosed unless
they involve guarantees, in which case the guarantees would be
disclosed.

On July 29, 2005, Riyadh Mining Company Limited filed a lawsuit against
us in the Ghana Superior Court to rescind a 10% royalty interest in the
undeveloped Orovi Ghana gold property.  They were awarded $22,145 in
legal fees as resolution to the matter.

Going Concern and Management's Plan

The Company has historically relied on its ability to raise money
through debt and the sales of investment equity interest to meet its
cash flow requirements.  The Company has cash available in the amount of
approximately $207,250 as of June 30, 2008.  However, the Company has
adopted a plan to discontinue all of its operating subsidiaries as of
June 30, 2008.  As a result, the Company will need additional funds to
meet the development and exploratory opportunities until sufficient cash
flows are generated to sustain the pursuit of operations.

Operating Leases

We lease office space and equipment under noncancelable operating leases
with terms of three years. The following is a schedule by years of
future minimum rentals under the leases for the 12 month periods ending
June 30:

Year                    Amount
----                    ------
2009                   $21,936
2010                    20,221
2011                    20,739
2012                    10,026
2013 and thereafter          -
                       -------
Total                  $72,922
                       =======

The Company recognized rental expense of $40,166, $46,537, and $39,625
for the years ended June 30, 2008, 2007, and 2006, respectively.  The
Company occupies its Englewood, Colorado facility under a rental
agreement that has a lease term that expires in December 2008.  On
October 1, 2008, the Company entered into an agreement to extend the
lease term for an additional 36 months ending December 2011.  On August
15, 2008, the Company entered into an operating lease agreement to lease
a copier for 39 months ending October 2011.



<PAGE>37
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

The Company subleases space in its office to two tenants.  Sublease
income for the years ended June 30, 2008, 2007 and 2006 were $28,300,
$23,190 and $41,282, respectively. All sublease income is treated as a
reduction in rent expense.

9. Discontinued operations

The following foreign subsidiaries have been abandoned or sold and are
classified as discontinued operations under the provisions of Statement
of Financial Accounting Standards No. 144, Accounting for the Impairment
or Disposal of Long-lived Assets as of June 30, 2008.

Titan Processors (Pty) (Ltd)

In June 2006, the company determined to abandon the Titan Processors
subsidiary. The Company has decided to abandon the Tantalum project
undertaken by the subsidiary as a result of poor results and
unfeasibility of the process. Titan's pretax income (loss), reported in
discontinued operations, for the years ended June 30, 2007 and 2006, was
$(1,015,529) and $70,976, respectively.

Vanadium and Magnetite Exploration & Development Co. (Pty) (Ltd)

In December 2006, the Company concluded a written share sale agreement
with Golden Falls Trading 565 Ltd to sell its 66.7% interest in the
VanMag consolidated entity to an unrelated third party. The Company
decided to sell the subsidiary as it was able to realize a substantial
gain on the original investment. The original selling price was
$9,000,000, which was subsequently revised through a number of
addendums. The assets sold consist primarily of prepaid royalties, and
the buyer also assumed accrued interest on intercompany loans. VanMag's
pretax income (loss), reported in discontinued operations, for the year
ended June 30, 2007 and 2006, was $294,064 and $(4,637), respectively.
The entity has been classified as discontinued operations for the years
ending June 30, 2007 and 2006.

Diamonaire Exploration (Pty) (Ltd)

As of June 2008, the Company adopted a plan to discontinue the
operations of Diamonaire.  This plan anticipates that the operations
will be sold within a one year period during which the activities of
Diamonaire will continue.  Diamonaire's pretax income (loss), reported
in discontinued operations, for the years ended June 30, 2008, 2007 and
2006 was $(1,460,879), $58,378 and $(602,466), respectively.  The entity
has been classified as discontinued operations for the years ending June
30, 2008, 2007, and 2006.



<PAGE>38
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

The assets and liabilities of the discontinued operations are presented
separately under the captions "Assets of discontinued operations" and
"Liabilities of discontinued operations" in the accompanying Balance
Sheets.

                                      As of June 30, 2008
                                      -------------------
Assets of discontinued operations:         Diamonaire
Current assets                              $23,706
Long term assets                                  -
                                            -------
Total assets                                $23,706
Liabilities of discontinued division:
Current liabilities                        $734,176
Long term liabilities                             -
                                           --------
Total liabilities                          $734,176
                                           ========

                                      As of June 30, 2007
                                      -------------------
Assets of discontinued operations:         Diamonaire
Current assets                              $80,008
Long term assets                                  -
                                            -------
Total assets                                $80,008
                                            =======
Liabilities of discontinued division:
Current liabilities                         $64,361
Long term liabilities                             -
                                            -------
Total liabilities                           $64,361
                                            =======

                                  As of June 30, 2006
                                  -------------------
Assets of               VanMag  Diamonaire  Titan     Total
Discontinued            -------  ----------  -----     -----
operations:
Current assets           $11,816    $148    $11,995    $23,959
Long term assets               -       -          -          -
                         -------    ----     ------    -------
Total assets             $11,816    $148    $11,995    $23,959
Liabilities of
 discontinued division:
Current liabilities      $47,628  $5,041     $2,852    $55,521
Long term liabilities          -       -          -          -
                         -------  ------     ------    -------
Total liabilities        $47,628  $5,041     $2,852    $55,521



<PAGE>39
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

The accompanying table illustrates the reporting of the discontinued
operations on the face of the Statements of Operations for the years
ended June 30, 2008, June 30, 2007, and June 30, 2006.

                                 For the Year Ending
                                    June 30, 2008
                                  -------------------
                                      Diamonaire
  Gain on sale of subsidiary                    -
  Provision for income taxes                    -
                                      -----------
  Gain on sale of subsidiary, net
   of taxes                                     -
Discontinued operations:
  Loss from operations of
  discontinued operations              (1,460,879)
  Income tax benefit                      555,971
                                       ----------
  Loss on discontinued operations      $ (904,908)

<TABLE>
                                             For the Year Ended June 30, 2007
                                             --------------------------------
                                      VanMag   Diamonaire     Titan        Total
                                      -------   ----------     -----        -----

                                     <c>         <c>         <c>            <c>
  Gain on sale of subsidiary         7,906,929            -            -   7,906,929
  Provision for income taxes        (2,953,664)           -            -  (2,953,664)
                                   -----------   ----------  -----------   ---------
  Gain on sale of subsidiary, net
   of taxes                          4,953,265            -            -   4,953,265
                                   -----------   ----------  -----------   ---------
Discontinued operations:
  Income (loss) from operations of
  discontinued operations           $  294,064   $   58,378  $(1,015,529)  $(663,087)
  Income tax benefit (expense)        (120,272)     (23,877)      47,087     (97,062)
                                   -----------   ----------  -----------   ---------
  Income (loss) on discontinued
   operations                      $   173,792   $   34,501  $  (968,442)  $(760,149)
                                   -----------   ----------  -----------   ---------

                                             For the Year Ended June 30, 2006
                                             --------------------------------
                                      VanMag   Diamonaire     Titan        Total
                                      -------   ----------     -----        -----
  Gain on sale of subsidiary                 -            -            -           -
  Provision for income taxes                 -            -            -           -
                                   -----------   ----------  -----------   ---------


<PAGE>40
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

  Gain on sale of subsidiary, net
   of taxes                                  -            -            -           -
                                   -----------   ----------  -----------   ---------
Discontinued operations:
  Income (loss) from operations of
  discontinued operations           $ (602,466)   $  (4,637)  $   70,976   $(536,127)
  Income tax benefit (expense)         235,930       (8,582)     (18,550)    208,798
                                   -----------   ----------  -----------   ---------
  Income (loss) on discontinued
   operations                      $   (366,536)  $ (13,219)  $  252,720   $(327,329)
                                   -----------   ----------  -----------   ---------
</TABLE>

10.  Income (Loss) Per Share

Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding during the period.
Diluted earnings per share is computed by dividing net income by the
weighted-average number of common shares and dilutive potential common
shares outstanding during the period.  The computation of basic earnings
per share and diluted earnings per share for "Income from continuing
operations" is as follows:

<TABLE>
                                            For the Year Ended June 30,
                                         --------------------------------
                                         2008          2007          2006
                                         ----          ----          ----

                                       <c>           <c>           <c>
  Income (loss) from continuing
   operations                         $ (741,053)   $  181,744   $  693,929
                                      ==========    ==========   ==========
  Weighted-average number of common
   shares outstanding - Basic         21,477,550    20,639,638   19,408,367
  Effect of dilutive securities-Stock
   options                 -                   -        77,720      209,506
                                      ----------   -----------   ----------
  Weighted-average number of common
   shares outstanding - Diluted       21,477,550    20,717,358   19,617,873
                                      ==========    ==========   ==========
  Net earnings per share from continuing
   operations
    Basic                             $    (0.03)   $     0.01   $     0.04
                                      ==========    ==========   ==========
    Diluted                           $    (0.03)   $     0.01   $     0.04
                                      ==========    ==========   ==========
</TABLE>


<PAGE>41
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

The following securities were not included in the computation of diluted
net loss per share as the effect would have been anti-dilutive.
<TABLE>
                                       2008          2007          2006
                                       ----          ----          ----

                                     <c>           <c>           <c>
  Options to purchase common stock  $1,000,000          -             -
</TABLE>
11.  Equity

During the year ended June 30, 2006, we issued 1,292,500 shares of
common stock to satisfy notes payable outstanding to related parties.
The shares were valued at a discount to market price since they were not
free-trading shares.  The fair value of the shares issued equaled the
fair value of the notes payable.

During the year ended June 30, 2006, we issued 900,000 shares to a
consultant for services rendered.  The shares were valued at a discount
to market price since they were not free-trading shares.

During the year ended June 30, 2007, we issued 1,100,000 shares to a
consultant for services rendered.  The shares were valued at a discount
to market price since they were not free-trading shares.

Stock options

In May 2004, we granted a Director an option to purchase 1,000,000
shares of our common stock at $.13 per share.  The options vest
immediately and expire five years from the grant date.  The fair value
of the options was estimated at $22,000.  The fair value for these
options was estimated at the date of grant using the Black-Scholes
option-pricing model with the following assumptions:

Risk free interest rate                   2.50%
Volatility                                 101%
Dividend                                    0
Weighted average expected life           5 years

The following schedule summarizes our stock option activity:
<TABLE>
                                                      Weighted   Weighted
                                                       Average    Average   Aggregate
                                                      Exercise   Remaining  Intrinsic
                                           Options      Price      Term       Value
                                           -------    --------   ---------  ----------

                                           <c>         <c>       <c>         <c>
Outstanding at June 30, 2005              $1,230,000     $0.13     $3.55     $      -
                                          ==========     =====     =====     ========
Options granted                                    -         -         -            -
Option exercised                                   -         -         -            -
Option expired                                     -         -         -            -

<PAGE>42
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008


Outstanding at June 30, 2006              $1,230,000     $0.13     $2.55      $     -
                                          ==========     =====     =====     ========
Options granted                                    -         -         -            -
Options exercised                                  -         -         -            -
Options expired                                    -         -         -            -
Outstanding at June 30, 2007              $1,230,000     $0.13     $1.55      $36,900
                                          ==========     =====     =====     ========
Options granted                                    -         -         -            -
Options exercised                                  -         -         -            -
Options expired                             (230,000)        -         -            -
                                           ---------      ----      -----    --------
Outstanding at June 30, 2008             $1,000,000     $0.13      $0.85     $      -
                                         ==========     =====      =====     ========
</TABLE>

12. Income taxes

At June 30, 2008, the Company has available unused net operating losses
carryforward that may be applied against future taxable income and that
expire as follows:

                           Net Operating Loss
Year of Expiration            Carryforwards
------------------         ------------------
2009                                     -
2010                                     -
2011                                     -
2012                                     -
2013 and thereafter             $1,022,205
                                ----------
Total                           $1,022,205
                                 =========

A reconciliation of the US statutory federal income tax rate to the
effective tax rate is as follows:

                                      For the year ended
                             June 30,    June 30,    June 30,
                               2008        2007        2006
                             --------    --------    --------
Tax expense at U.S.            40.9%       40.9%       40.9%
Statutory rate
Valuation allowance           (40.9)%     (40.9)%     (40.9)%
                               ----        ----        ----
Effective income tax rate         -%          -%          -%
                               ====        ====        ====



<PAGE>43
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

At June 30, 2008, 2007 and 2006, deferred tax assets consisted of the
benefit of loss carryforwards of $1,022,205, $94,253 and $2,525,836,
respectively.  The operating loss carryforward is expected to be 100%
utilized in fiscal 2009 when the remainder of the sales price of the
VanMag subsidiary is collected and recognized for tax purposes using the
installment method.  The tax expense (benefit) on continuing operations
totaled $(379,533), $(38,548) and $(1,033,067) for the years ended June
30, 2008, 2007 and 2006, respectively.  The net operating loss
carryforward expires through the year 2028.

13.  Orovi Ghana Investment

Orovi Ghana Ltd. ("OGL") had a license granted by the Republic of Ghana
to prospect for gold on certain land located in an undeveloped gold
property in the western region of Ghana.  In October 2004, Golden Star
advanced to us $200,000 to extend an existing option agreement to
acquire a 100 percent interest in the prospecting license held by OGL.
The $200,000 was to be applied to the purchase of the prospecting
license.  The purchase price was to be determined based on an
engineering reserve report.

On July 12, 2005, we agreed with Golden Star on a purchase price to sell
the prospecting license of $470,000, net of costs and expenses.  On July
12, 2005, Golden Star advanced an additional $145,690 to us as a note
payable, with the option of applying the amount towards the purchase of
the prospecting license.  As security for the advance, we gave Golden
Star a first lien on all of the issued and outstanding shares of Orovi
Ghana Ltd. held by the Company.  Upon execution of the agreement, we
gave Golden Star the share certificates of Orovi Ghana, (Pty) Ltd.
together with a deed of transfer and an undated stock transfer.  The
transaction closed on April 7, 2007, and the purchase price is organized
as follows:

Purchase price                                 $ 470,000
Deposits from the Buyer to the Company          (200,000)
Payments made directly by the Buyer             (107,145)
Note payable applied to purchase price          (145,690)
                                                --------
Final payment made to Pinnacle by the Buyer     $ 17,165
                                                ========

14.  Subsequent events

Collection of Receivable from Sale of Subsidiary
In October 2008, the Company collected 15,000,000 Rand (US $1,584,740)
of its outstanding receivable from sale of subsidiary.  7,000,000 Rand
(US $739,545) was sent to South Africa to satisfy the liabilities and
closing expenses of Diamonaire, which was discontinued as of June 30,
2008.



<PAGE>44
Pinnacle Resources, Inc.
Notes to Financial Statements

As of June 30, 2008, 2007, 2006 and
For Each of the Three Years in the Period Ended June 30, 2008

VanMag addendum
In November 2008, the Company entered into an informal agreement with
the purchaser of the VanMag subsidiary in which the purchaser agreed to
pay $3,750,000 (US$) in place of the outstanding balance of 30,000,000
South African Rand.  This amendment resulted in a restructuring gain of
$787,037.

Loans
In November 2008, the Company made loans to two companies totaling
$400,000.  One note in the principal amount of $250,000, has certain
financial assets as collateral, bears interest at 6.87% per annum,
principal and interest due in one year.  The second loan bears interest
at 10% per annum, is without collateral, and is due in one year.  The
two companies are assisting the Company in connection with additional
business opportunities.



<PAGE>45

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

None

ITEM 9A.  CONTROLS AND PROCEDURES

Controls and Procedures.

(a)  As of June 30 of each of the years 2008, 2007 and 2006, the Chief
Executive Officer and Chief Financial Officer of the registrant carried
out an evaluation of the effectiveness of the registrant's "disclosure
controls and procedures" as defined in Securities Exchange Act of 1934
Rule 13a-15 and 15d-15.  Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that, as of the end of
each period covered by this report, the registrant's disclosure controls
and procedures were adequate and effective in timely alerting them to
material information relating to the registrant required to be included
in the registrant's periodic SEC filings.

(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the periods ended June 30,
2008, 2007 and 2006 that materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.

ITEM 9B.  OTHER INFORMATION

None


<PAGE>46
PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Board of Directors

The following persons listed below have been retained to provide
services as director until the qualification and election of his
successor.  All holders of common stock will have the right to vote for
directors.

The Board of Directors has primary responsibility for adopting and
reviewing implementation of the business plan of Pinnacle, supervising
the development business plan, review of the officers' performance of
specific business functions.  The Board is responsible for monitoring
management, and from time to time, to revise the strategic and
operational plans of the Company.  A director shall be elected by the
shareholders to serve until the next annual meeting of shareholders, or
until his or her death, or resignation and his or her successor is
elected.  Presently, Directors receive no compensation or fees for their
services rendered in such capacity.

The Executive Officers and Directors are:

Name                            Position             Term(s) of Office
Glen R. Gamble, age 64      President, Director,       From Inception
                          Chief Executive Officer       to present

Robert A. Hildebrand, age 81 Vice President, Director  From Inception
                            Secretary/ Treasurer         to present
                          Chief Financial Officer,    From June 26, 2000
                                President                to present

Resumes:
Glen R. Gamble._ Chief Executive Officer and Director.  Mr. Gamble has
served as an officer and director of variety of companies engaged in the
fields of mining, oil and gas, cattle, real estate and resource
financing.  Currently, Mr. Gamble is the manager of Viatica Fund, LLC; a
director of Natural Buttes Gas Corp.; manager of Desert Flower Mining,
LLC; and president and chairman of Victory Minerals Corp. and Pinnacle.
Mr. Gamble serves on the board of directors of Vanadium and Magnetite
Exploration and Development (Pty) Ltd., both subsidiaries of Pinnacle.

Mr. Gamble graduated from Lakewood High School in 1962, performed three
years of military service in the U.S. Army from which he was Honorably
Discharged in May 1966.  Mr. Gamble attended the University of Colorado
and graduated with a Bachelor of Science degree in Accounting and
Finance in 1970.

In 1995, prior to his involvement with Pinnacle, Mr. Gamble, along with
another party, invested in discounted insurance policies called viatical
settlements.  Mr. Gamble headed up this two party investment in Viatica
Fund and Viatica Management, LLC. Viatica Fund was unable to become
liquid as only one of the fund's insurance policies matured, and even
today, eight years later the remaining insurance policies are



<PAGE>47

still in place.  Based on an allegation that the funds had not been
distributed as agreed, the Colorado Securities Commission alleged that
Mr. Gamble violated the anti-fraud provisions of the Colorado Securities
Act.  Upon appeal by the Colorado Securities Commission of a lower court
decision in favor of Mr. Gamble, the appellate court reversed the lower
court decision.  In order to avoid further litigation, Mr. Gamble
accepted, on April 16, 2003, an Order of Permanent Injunction and Other
Relief wherein Mr. Gamble neither admitted nor denied that the
allegations in the complaint were true.  Mr. Gamble did agree to be
restrained and enjoined from associating with anyone in the business of
viatical settlements; or to offer for sale any security in Colorado that
has not been registered; or is not exempt from registration; or from
engaging in Colorado as a securities broker, investment adviser or
investment adviser representative.  Additionally, Mr. Gamble is
prohibited, in connection with the offer, sale or purchase of any
security in the Colorado, directly or indirectly from violating the
anti-fraud provisions of the Colorado Securities Act.

Robert A. Hildebrand, Professional Engineer, B.Sc., -Vice President,
Chief Financial Officer and Director.  R.A. Hildebrand is a registered
professional mining engineer.  He holds a geological engineering degree
from the Colorado School of Mines and a completion certificate from
LaSalle University in business administration.  He has been active in
mineral exploration and production for 53 years having held operating
and executive positions with both major and junior, publicly-held mining
companies operating in Africa, South America, China and North America.

From 1996 to 1998, Mr. Hildebrand served as vice president and treasurer
for the Environmental Assurance Corporation, a private company engaged
in the reclamation and financing of contaminated real estate.  He also
acted for eleven years (1980 to 1991) as the Consul (Hon.) of the
Netherlands for Colorado, New Mexico and Wyoming.  In 1991, Her Majesty
Queen Beatrix appointed Mr. Hildebrand a knight in The Order of Oranje-
Nassau.

Mr. Hildebrand is, or was within the past years, an officer and/or
director of the following public companies: Anooraq Resources, General
Mining Company, Resource Finance Group Ltd., International Methane
Company and Polaris Resources, Inc.

Conflicts of Interest.  Pinnacle will be subject to various conflicts of
interest between Pinnacle and its Affiliates.  Since the executive
officers and directors will control the daily operations of Pinnacle and
its Affiliates, there may be occasions when the interests of Pinnacle's
Affiliates may be inconsistent with the interests of Pinnacle.

Allocation of Management Time.  Pinnacle will rely on its officers to
manage Pinnacle's business operations.  Currently, the officers are
devoting a minimal amount of their time for the operation of Pinnacle.
Pinnacle may obtain additional officers, as necessary.  As such, and
until all of their positions become "full time," there will be



<PAGE>48

conflicts of interest in allocating management time, services and
functions between Pinnacle and its Affiliates.  These individuals may
engage for their own account, or for the account of others in other
business ventures for which Pinnacle shall not be entitled to any
interest.

Pinnacle may, at some time in the future, compete with others for the
management services of the current and future officers of Pinnacle.  As
a result, these individuals may be placed in a position where their
decision to favor other operations in which they are associated over
those of Pinnacle will result in a conflict of interest.  It should also
be noted that it may be expedient for them to favor one operation over
another since their participation in such operations will vary.

In allocating their time, they will recognize their fiduciary
obligations to Pinnacle, the prevailing industry standards and the
financial situation of Pinnacle.

Conflicts of Interest Policy.  Pinnacle has adopted a policy that any
transactions with directors, officers or entities of which they are also
officers or directors or in which they have a financial interest, will
only be on terms consistent with industry standards and approved by a
majority of the disinterested directors of Pinnacle's board of
directors.  No such transactions by Pinnacle shall be either void or
voidable solely because of such relationship or interest of directors or
officers or solely because such directors are present at the meeting of
the board of directors of Pinnacle or a committee thereof which approves
such transactions, financial interest is disclosed or known by the Board
of Directors or committee and noted in the minutes, and the Board or
committee authorizes, approves or ratifies the contract or transaction
in good faith by a vote for that purpose without counting the vote or
votes of such interested directors; or (ii) the fact of such common
directorship or financial interest is disclosed to or known by the
shareholders entitled to vote and they approve or ratify the contract or
transaction in good faith by a majority vote or written consent of
shareholders holding a majority of the common shares entitled to vote
(the votes of the common or interested directors or officers shall be
counted in any such vote of shareholders), or (iii) the contract or
transaction is fair and reasonable to Pinnacle based on the material
similarity of terms to recent consulting agreements not involving
interested parties, or in all other agreements by competitive bids, at
the time it is authorized or approved.  In addition, interested
directors may be counted in determining the presence of a quorum at a
meeting of the board of directors of Pinnacle or a committee thereof
which approves such transactions.

Non-Qualified and Incentive Stock Option Plans

Pinnacle does not currently have any stock option plans.



<PAGE>49

Section 16(a) Beneficial Ownership Reporting Compliance

To the Company's knowledge, no director, officer or beneficial owner of
more than ten percent of any class of equity securities of the
Corporation failed to file on a timely basis reports required by Section
16(a) of the Exchange Act during the period July 2005 through June 2008.

Code of Ethics Policy

We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.

Corporate Governance

There have been no changes in any state law or other procedures by which
security holders may recommend nominees to our board of directors.  In
addition to having no nominating committee for this purpose, we
currently have no specific audit committee and no audit committee
financial expert.  Based on the fact that our current business affairs
are simple, any such committees are excessive and beyond the scope of
our business and needs.


ITEM 11. EXECUTIVE COMPENSATION

As operations increase, Pinnacle intends to enter into employment
agreements with its officers.  Upon funding, either through revenues
from operations, a private placement or initial public offering, should
the amount justify the salary demands, the key management of Pinnacle
would be compensated according to their duties.  No specific details
have been determined.

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

The following tabulates holdings of shares of Pinnacle by each person or
entity who, subject to the above, as of June 30, 2005, holds of record
or is known by management to own beneficially more than 5.0% of the
common shares and, in addition, by all directors and officers of
Pinnacle individually and as a group. Each named beneficial owner has
sole voting and investment power with respect to the shares set forth
opposite his name.

                                                    Percentage of
                              Number & Class (1)     Outstanding
Name and Address                 of Shares          Common Shares
Glen R. Gamble
12892 Sierra Circle
Parker, CO 80134                 200,000                 .93%

Robert A. Hildebrand
405 Detroit Street
Englewood, CO 80206              410,000                1.90%*

<PAGE>50

Beverly Jo Gamble
12892 Sierra Circle
Parker, CO 80134                 200,000                 .93%

Victory Minerals Corp.
7345 E. Peakview
Englewood, CO 80111            2,500,000               11.60%

Re-Group, Inc.
9600 E. Arapahoe Road #260
Englewood, Co 80112              942,500                4.40%

Gary E. Smolen
104 Pleasant Street
Meredith, NH 03253             1,200,000                5.50%

South Beach Ventures LLC
c/o Gary E. Smolen, Mgr
104 Pleasant Street
Meredith, NH 03253             1,000,000                4.60%

All Directors & Officers
as a group (2 persons)         4,252,500               19.80%

*Mr. R.A. Hildebrand has an option to acquire 1,000,000 common shares at
$.02 per share.

Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or
sole or shared investment power (including the power to dispose or
direct the disposition) with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.

Unless otherwise indicated, each person indicated above has sole power
to vote, or dispose or direct the disposition of all shares beneficially
owned, subject to applicable community property laws.

Beverly Jo Gamble is married to Glen R. Gamble, an officer and director
of Pinnacle.  As a result, Glen R. Gamble would be deemed to be a
beneficial owner of the Common Shares owned of record by Beverly Jo
Gamble.  Nevertheless, Glen R. Gamble disclaims any beneficial ownership
of the Common Shares owned of record by his wife.

Victory Minerals Corp. is a corporation controlled by Glen R. Gamble, an
officer and director of Pinnacle.  As a result, Glen R. Gamble would be
deemed to be a beneficial owner of the 2,500,000 common shares owned of
record by Victory Minerals Corp.

Daniel J. Boone and Jerry Welch are principals of Re-Group, Inc.



<PAGE>51

Gary E. Smolen is an individual who has performed IR/PR and other
services for the Company.  He has been appointed as the manager of South
Beach Ventures and as such the shares under his jurisdiction are subject
to influence from Pinnacle management.


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

Glen Gamble, president of Pinnacle, is also an officer and director of
Victory Minerals Corporation, a significant shareholder of Pinnacle's
common stock.

During the years ended June 30, 2006, 2007 and 2008, Pinnacle paid
Victory Minerals, an affiliated company, $41,000, $26,000 and $26,000,
respectively, for consulting services.  Mr. Gamble, the president of
Pinnacle controls the affiliate.

During the years ended June 30, 2006, 2007 and 2008, R.A. Hildebrand and
Glen Gamble, officers and director of Pinnacle were paid an aggregate of
$263,000 and $180,000, respectively, for consulting services.  The
consulting services were for due diligence investigations on potential
mining projects and other administrative services.

During the period from July 1, 2005 through June 30, 2008, Glen Gamble,
a principal shareholder, loaned us $95,000 for working capital. The loan
is due on demand and is non-interest bearing.  The loan was repaid in
fiscal year 2007. During the same period, R.A. Hildebrand lent the
Company $15,000 which was subsequently paid off as well.  Glen Gamble,
President and R.A. Hildebrand, Chief Financial Officer, jointly and
severally, guarantee a $50,000 line of credit on behalf of Company.

Glen Gamble, President, is personally responsible for the Company's
credit card issued by the Company's bank. During the fiscal years, 2007
and 2006, Glen Gamble personally guaranteed the office rental lease.
Director Independence

The Company's Board of Directors consists of Glen R. Gamble and Robert
A. Hildebrand.  Glen R. Gamble is not independent as such term is
defined by a national securities exchange or an inter-dealer quotation
system. During the fiscal years ended June 30, 2006, 2007 and 2008,
there were no transactions with related persons other than as described
in the section above.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees. In 2008, Pinnacle retained M & K CPAs PLLC for $37,000 to
prepare the audited statements. Subsequently, the Company released M and
K CPAs PLLC and engaged Kelly and Company to conduct our audits. As a
result, we incurred aggregate fees and expenses of $77,000 for the 2006,
2007 and 2008 audits. Such fees included work completed for our annual
audits and for the review of our financial statements included in our
Form 10-Q each quarter.



<PAGE>52

Tax Fees. We did not incur any aggregate tax fees and expenses M&K CPA's
or Kelly and Company for the 2006, 2007 and 2008 fiscal years for
professional services rendered for tax compliance, tax advice, and tax
planning.

All Other Fees. We did not incur any other fees Kelly and Company during
fiscal 2006, 2007 and 2008. The board of directors, acting as the Audit
Committee considered whether, and determined that, the auditor's
provision of non-audit services was compatible with maintaining the
auditor's independence.  All of the services described above for fiscal
year 2006, 2007 and 2008 were approved by the Board of Directors
pursuant to its policies and procedures.  We intend to continue using
Kelly and Company solely for audit and audit-related services, tax
consultation and tax compliance services, and, as needed, for due
diligence in acquisitions.



<PAGE>53
Part IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1)  List of Financial statements included in Part II hereof

Balance Sheets, June 30, 2008, 2007 and 2006
Statements of Operations for the years ended June 30, 2008, 2007 and
2006
Statements of Stockholders' Equity for the years ended June 30, 2008,
2007 and 2006
Statements of Cash Flows for the years ended June 30, 2008, 2007 and
2006
Notes to the Financial Statements

(a)(2) List of Financial Statement schedules included in Part IV hereof:
None

(a)(3) Exhibits

The following of exhibits are filed with this report:

(3.1) Articles of Incorporation incorporated by referenced to Form 10SB
filed August 7, 1997, File No. 0-22965

(3.2) Amendment to Articles of Incorporation incorporated by referenced
to Form 10SB filed August 7, 1997, File No. 0-22965

(3.3) Bylaws incorporated by reference to Form 10SB filed August 7,
1997, File No. 0-22965

(3.4) Amendment to Bylaws dated July 1, 1997 incorporated by reference
to Form 10SB filed October, 1997.

(4.1) Specimen Common Stock Certificate incorporated by reference to
Form 10SB filed August 7, 1997, File No. 0-22965

(31) 302 certification

(32) 906 certification



<PAGE>54

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, Pinnacle has duly caused this Report
to be signed on its behalf by the undersigned duly authorized person.

Date: February 13, 2009

Pinnacle Resources, Inc.

/s/ Glen R. Gamble
------------------------------------
By: Glen R. Gamble, President

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


/s/ Glen R. Gamble                  February 13, 2009
-----------------------
Glen R. Gamble
President and Director
(chief executive officer)

/s/ Robert A. Hildebrand            February 13, 2009
------------------------
Robert A. Hildebrand
Secretary/ Treasurer and Director
(Chief Financial Officer)