FILER:

      COMPANY DATA:
            COMPANY CONFORMED NAME:             ASI ENTERTAINMENT, INC.
            CENTRAL INDEX KEY:                  1067873
            STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY
                                                EQUIPMENT, NEC [3728]
            IRS NUMBER:                         522101695
            STATE OF INCORPORATION:             DE
            FISCAL YEAR END:                    0630

      FILING VALUES:
            FORM TYPE:                    10KSB
            SEC ACT:                      1934 Act
            SEC FILE NUMBER:              000-27881
            FILM NUMBER:                  544289

      BUSINESS ADDRESS:
            STREET 1:                     15200 EAST GIRARD
            STREET 2:                     SUITE 3000
            CITY:                         AURORA
            STATE:                        CO
            ZIP:                          80014
            BUSINESS PHONE:               970 881 3573

      MAIL ADDRESS:
            STREET 1:                     1/12 CANDLEBARK COURT
            STREET 2:
            CITY:                         RESEARCH
            STATE:                        VICTORIA
            ZIP:                          3095
            COUNTRY:                      AUSTRALIA

































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

                                  FORM 10-KSB
(Mark One)
[X]         ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
            ACT OF 1934

                                    For the fiscal period ended JUNE 30, 2005


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

                                    Commission file number 000-27881


ASI ENTERTAINMENT, INC.
(Exact name of small business issuer as specified in its charter)


Delaware                                  522101695
(State or other jurisdiction of           (IRS Employer Identification No.)
incorporation or organization)

"C/- ASIQ Pty. Ltd.
1/12 Candlebark Court
Research, Victoria, 3095, Australia"
 (Address of principal executive officers)

+61 3 9437 1233
(Issuer's telephone number)


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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the last 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent files in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure 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-
KSB or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year: 62,149













<PAGE>



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 sold, or the average bid and asked price of such common equity, as
of a specified date within the past 60 days.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

Class                                        Outstanding at June 30, 2005

Common Stock, par value $.0001 per share     14,719,652

Documents incorporated by reference          None

















































<PAGE>




10KSB
<TABLE>

<S>
<C>

PART I........................................................................2

ITEM 1. DESCRIPTION OF BUSINESS...............................................2

ITEM 2. DESCRIPTION OF PROPERTY...............................................8

ITEM 3. LEGAL PROCEEDINGS.....................................................8

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................8

PART II.......................................................................9

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.............9

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............10

ITEM 7. FINANCIAL STATEMENTS.................................................12

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.........................................................13

PART III.....................................................................14

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT............................14

ITEM 10. EXECUTIVE COMPENSATION..............................................16

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......17

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................19

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K....................................20

</TABLE>



















                                     - 1 -
<PAGE>




PART I.
ITEM 1. DESCRIPTION OF BUSINESS.

THE COMPANY

ASI Entertainment has an authorized capitalization of 100,000,000 shares of
Common Stock, par value of $.0001 per share (the "Common Stock") and 20,000,000
shares of preferred stock, par value $.0001 per share. The executive offices of
the Company are located at 1/12 Candlebark Court, Research, Victoria, 3095
Australia and its telephone number is +61-3-9437-1028 and fax number is +61-3-
9437-1299. The United States offices of the Company are located at 15200 East
Girard Avenue, Suite 3000 Aurora, Colorado 80014.

BUSINESS

1. Overview

ASI has spent over a decade developing its expertise and reputation in both
software development and airline industry technologies, as a pioneer of
passenger data communications.  The core of ASI's intellectual property is
software which has evolved over years of flight-testing and commercial
operation. The hardware platform is also unique as it enabled ASI to pioneer
the passenger data link with major international airlines and was used as the
development platform by INMARSAT, the monopoly satellite service provider for
aircraft.

Airline passengers identification of Email as a service they want to access
while in flight, created the opportunity for ASI to capitalize on the airline
communications and E Commerce markets with two unique software programs:

   1.  Inflight Email and Internet for airline passengers
   2.  Cockpit Crew Electronic flight log

In August 2001, ASI acquired the marketing and manufacturing rights of the
SecurEtag package tracking technology.  The rights cover both North and South
America and Europe.

Email

ASI's latest products, are based on ASI's existing flight proven hardware and
software platform, the ACAMS Server Interface Unit, which has been developed
and flight tested in conjunction with INMARSAT and SITA (the major providers of
satellite communications and ground based infrastructure for the airline
industry). ASI's software is unique as passengers can send an Email using their
existing Email software and access their Email while in-flight. The system is
designed to accommodate all laptops operating under Windows and Macintosh
platforms. To send an email is now affordable, as passengers will only be
charged for the actual amount of data transmitted and there are no subscription
fees. For as little as $1.00, passengers can send or receive email and with
ASI's latest service www.freemailconnection.com, they can now access their
inbox for free. The software displays the cost of the Email prior to sending,
and passengers have the option to decide which Emails should be delivered to
the aircraft. The central server automatically bills the transactions direct to
a credit card and a pre-paid account can also be established for frequent
flyers.

Internet



                                     - 2 -
<PAGE>




ASI's Internet program designated AirCommerce has evolved from the original
ASI-9000 concept into a web based application, offering in-flight E Commerce.

The AirCommerce system provides destination specific, cached web capable
content to passengers in their seats.  The passengers dial up the Network
Server Unit (NSU) from their laptop and can then navigate to pages of interest
using their web browser. Sponsors and advertisers underwrite the cost of the
program and the surplus revenue is shared between ASI and the airline. Air
Commerce is a template based software module that can be certified for
installation on an aircraft server. The software allows an airline to build a
database of products and services and incorporate destination based
entertainment and information in an interactive web presentation format.

Electronic Flight Log

With the evolution of Tablet PC's incorporating handwriting recognition
technology, combined with the new Global GPRS and G3 high-speed data
communications network, the process of manual reporting can now be eliminated.
G3CARS is an Electronic Crew Reporting and Information System, which replaces
the existing manual system by eliminating the requirement for paper. G3CARS
improves efficiency and generates cost savings by reducing double handling
associated with receiving, reviewing, entering and distributing paper
documents. Up until now, all operational data such as the aircraft Log Books
are submitted on paper and must be physically collected prior to the aircraft's
departure. The forms are then manually entered into the airline system.  This
process is time consuming, unreliable and can delay the aircraft's departure.

G3CARS provides aircrew with a fast and reliable way of submitting airline
operational documentation, while the aircraft is on the ground. It also
provides airline management with a low cost email link into the aircraft and a
fast reliable way to access important operational data in near real time.

SecurEtag

The SecurEtag system integrates radio frequency identification (RFID), global
positioning system (GPS) and cellular technologies (GSM/CDMA) to facilitate the
tracking and location of packages in either mobile or warehouse environments.
SecurEtag's unique beam steering technology enhances the latest generation RFID
tags.

2. Target Markets

ASI has developed a multi tiered marketing strategy for the Internet and Email
programs that provide the opportunity to generate revenue in three target
markets within the airline industry. Offering the program to small to medium
sized airlines creates revenue streams in the supply of relevant equipment, the
selling of advertising space and the commissions received from goods and
services ordered by passengers whilst in flight.

With the latest development of its cost efficient Email service, ASI is able to
market its services, through strategic alliances, to major airlines around the
world.  These major airlines, as well as some of the smaller airlines, possess
the ability through existing data ports, to allow ASI to deliver a simple and
cost efficient service.

ASI's competitors in this area, are promoting similar services that will entail
extensive, expensive installations for airlines and/or high service costs to
the passenger.


                                     - 3 -
<PAGE>




Once ASI has established the service onboard, there is the potential to provide
the AirCommerce Program to these major airlines, creating an additional revenue
stream for both ASI and the airline.  The AirCommerce program accommodates a
database of destination information and allows in-flight bookings and
reservations.  The Company will receive revenues from data communications and
from the sale of advertising space available on the AirCommerce programs. For
G3CARS, ASI's aim is to keep the hardware cost to an absolute minimum. ASI
provides the airline with a recommended list of Tablet PC's and licences
airline to use the G3CARS software. The airline is charged an initial fee to
customise the forms and is required to pay for the onsite training and system
setup. The airline pays all communications cost which are charged by the 3G
service providers at a low flat data rate per month

The target market for the SecurEtag program will be companies handling high
value and important parcels and are in markets where a premium price can be
charged for the SecurEtag service. As the market develops and the cost of the
components decreases, the broader freight market will be more viable for the
SecurEtag product.

CERTIFICATION PROCESS AND GOVERNMENT REGULATION

The installation and use of aircraft avionics requires prior certification and
approval by the Federal Aviation Administration ("FAA") and regulatory
authorities of foreign governments on each aircraft type and for each airline.
The certification process begins with the installation of the system on an
aircraft after which it is certified by an FAA accredited engineer. The
certification is then applicable to similar aircraft types and modified for
other aircraft type. In countries other than the United States, the equivalent
aviation authority procedures will apply to the certification of the system,
but the United States FAA is generally accepted by local certifying authorities
throughout the world.

Prior to certification and approval, the manufacturer must demonstrate that the
system has been designed and manufactured and complies with the appropriate
aviation standards, namely DO160 for hardware and DO178 for software.
Following this step, the system must be installed on an aircraft and tested,
including a ground and flight test.

The ACAMS has been flight tested and installed on Boeing 747-400 and Boeing
767-300 aircraft. The company has also certified programs on other hardware
platforms for Boeing 737-300, 757-200 and the McDonnell-Douglas DC-9-30 and MD-
82. The ACAMS has gained FAA approval for installation on Boeing 747-400 with
Saudis Airlines and Boeing 767-300 for Alitalia.

As the G3CARS systems primary function is to deliver data when the aircraft is
parked at the departure gate, the only certification required is on the
compartment to house and charge the system during flight, which is provided by
the airline. The G3CARS tablet PC can be operated in-flight under the
regulations governing use of personal electronic devices (PED'S) The company
will need to invest substantial funds to package and certify the SecurEtag
system to meet the requirements of the Federal Communications Commission
("FCC").  In the interim, a development platform can be established under FCC
approval which will facilitate the marketing program.

PRODUCT DEVELOPMENT

Prior to the company acquiring the intellectual property, ASIT Australia had
spent approximately A$5,000,000 developing the ASI program. The Company has
subsequently invested a further $4,000,000 in developing the latest product
offering. The technology behind the Company's Programs evolved from a data link
                                     - 4 -
<PAGE>




aviation communications system, designated the Airline Communications and
Management System ("ACAMS") developed by ASIT Australia in conjunction with
Qantas Airways and Swissair. The development of the technology was sponsored by
Qantas Airways which required both an interface which would allow the crew to
communicate through the aircraft's satellite and radio communications data link
and an interface between the ACAMS datalink and the aircraft's video systems.
This interface evolved into the ASI-9000 computer video.

The G3CARS system has been developed based on COTS technologies combining the
latest in TabletPC, handwriting recognition software and the 3G broadband
communications link. The software platform was developed using the .net
environment under the Microsoft development partner program.

The SecurEtag technology was developed to address the high rate of loss through
theft in the freight industry.  The license to the SecurEtag technology was
acquired to expand the operating base of ASI and to develop further in the area
of communications technologies.  Apart from the freight industry, ASI believes
there will be applications for the SecurEtag technology in the aviation
industry through the tracking of packages and other objects both in the
aircraft environment and the support services environment.

Over the past two years, a new global standard has been evolving for low-cost
RFID tags. The SecurEtag system has been designed to accommodate this new
standard. Integration of the SecurEtag system with the 2nd generation RFID tags
is anticipated in 2006 when full-scale production of the RFID tags is underway.

OPERATIONS TO DATE

The company has successfully completed flight testing with Alitalia and Saudi
Airlines and as a result, has signed a contract with Saudi Airlines. The
Alitalia program is on hold due to Alitalia undergoing financial restructure.
The company has signed a 5 year contract with AirOne for the G3CARS system. The
first stage of implementation is complete and the company expects to commence
commercial operation in the first half of 2006.

SALES AND PRICING

The Company sells both the Email and Internet system under Supply and License
Agreements under which ASI receives payment, plus a share of the revenue
generated from the programs. ASI supplies equipment on either a sale basis or
alternatively may negotiate to provide the equipment at a discounted price in
exchange for a larger revenue share. The AirCommerce marketing is based on
selling advertising on the programs run on ASI supplied equipment.  The Company
believes that the revenue can be enhanced when the communication link is
installed, allowing passengers to purchase goods and services being promoted
via the system.

ASI will generate revenue from email programs by charging passengers per
kilobyte of data transmitted over the air-to-ground link.

The Company will purchase hardware from appropriate suppliers, depending on the
specification requirements of each airline. The Company subcontracts the
production of the ACAMS integration technology. On G3CARS, airlines pay a fixed
fee per fight.

While the Company is still formulating the marketing plan for SecurEtag, it
expects to be able to generate revenue either from the sale of RFID tags or
through the management of a loss prevention or detection programs, or from a
combination of both.

                                     - 5 -
<PAGE>




OPERATIONS AND SUPPLIERS

The Company operates from premises in Australia, which houses management,
engineering, network services, gateway, and administration. The Company
recently opened an office in Malaysia to expand and support the marketing
operations throughout South-East Asia. The Company also has an office in
California to support the strategic alliances being forged with the major
aircraft systems manufacturers.

For those aircraft not equipped with an on-board server, the Company provides
for the Email/Internet programs the ACAMS server which has been manufactured to
date by ASIT Australia and Philips Defence Systems Group. In future, the
Company anticipates that it will outsource the production of its equipment or
will modify equipment from a suitable aviation certified manufacturer.

The Company has out-sourced all of its operations to companies and individuals
specializing in either the manufacture and installation of avionics or the
procurement of advertisement sponsors.   The Company will contract with an
installation company to install its equipment on the customer airline. Once
installed, the Company out-sources all of the hardware engineering and
technical support services to ASIT Australia and other suitably certified
organizations. On G3CARS the airline sources the hardware platform direct based
on a list of recommended system. ASI provides the software and assists the
airline with the installation contractors and training.

Similarly, the Company will outsource the manufacture and supply of all
equipment and components required for the SecurEtag program.

MARKETING

The Company researches the market and targets selected airlines based on a
commercial and technical evaluation. The Company has formed relationships with
other avionics manufacturers who sell complimentary products to the Company's.
The Company anticipates these strategic partners will introduce the Company to
airlines as such target airlines look for ways to enhance the products and
services they purchase from the alliance partner.

CUSTOMERS

The company signed its first contract with AirOne in May 2004 and its second
contract with Saudi Airlines in April 2005.

COMPETITION

The Company believes that it operates in a market niche offering the lowest
cost email solution for airlines where there are no other companies providing
both the same product with a similar price structure.  The Company believes,
however, that the market for technologically advanced in-flight entertainment
and communications systems is emerging and that competition to provide such
services to the airlines will be intense. The Company is aware of several other
companies that provide systems that compete with the Company's products, some
of which have been installed on aircraft.  Most of these competitors have
substantially greater financial and other resources than the Company and,
accordingly, may have a significant competitive advantage over the Company.

The effect of September 11 has reduced the Company's principal competitors to
only OnAir a new Airbus/SITA venture (previously known as Tenzing), and
Connexion by Boeing. Companies such as Panasonic Avionics Corporation
(previously known as Matsushita Avionics Systems Corporation), and Stratos also
offer a short message service (SMS) which could be perceived as a competitor to
                                     - 6 -
<PAGE>




Email.  The company is working with both these organizations to integrate the
ASI system.

The Company believes that it will be able to compete with other companies based
on the company's marketing plan that provides flexible terms on equipment and
revenue sharing.  The Company targets airlines that will be attracted to this
structure which allows the airline to provide more customized service at little
cost to the airline. The Company believes that although most of the Company's
competitors are marketing more technologically advanced communication and
entertainment systems, those competing services are offered at a far greater
expense to the airlines both in the capital cost and in the operating costs. On
G3CARS, ASI has no direct competitors as Boeing and Airbus have been focused on
meeting the demands of major airlines to provide what they have designated as
Electronic Flight bag ("EFB").  EFB is a flight certified system incorporated
into the existing cockpit avionics designed to provide the pilot with
navigational information. The system also provides electronic form storage and
is accessed from the keypad on the flight management computer display.  The
current Boeing offering has been selected by KLM, Pakistan Airways and Thai
Airways and costs approximately $250,000 but is only certified on the B777.
There are also programs in the USA based on wireless 802.11b called Gatelink.
With Gatelink, the airline installs a wireless system at each airport and
connects to a dedicated computer or a laptop in the cockpit. At this stage,
apart from Gatelink programs in the USA, Singapore Airlines has a wireless
system under test on Singapore airport.  Lufthansa tested an earlier wireless
version some years ago and rejected it.

The main competition for the SecurEtag technology will come from bar-coding
technologies as well as new developments in RFID technologies.  The increasing
rate of theft and the demand of freight customers to know the status of goods
they have shipped will increase demand for technology similar to and that would
compete with the SecurEtag technology.  Another competitive factor to determine
the success of SecurEtag will be the time it takes ASI to develop a market for
the product and the alternate products that are developed in that time. There
is no assurance that the Company's competitors will not offer services similar
to the Company's with a similar business plan. Nor is there an assurance that
customers will not demand more technologically advanced tagging products or
that the Company will be able to compete with other more established sources
for RFID technologies.  Similarly, there can be no assurances that other
tagging technologies will not be developed that will compete with the SecurEtag
technology.

EMPLOYEES

The Company is managed by Ronald Chapman in his capacity as President and Chief
Executive Officer and Philip Shiels in his capacity as Executive Director and
Chief Financial Officer. The Company's wholly-owned subsidiary, ASiQ Pty. Ltd.
employs a small team of engineering and administrative staff, and engages sub-
contractors when additional resources as required.

INDUSTRY OVERVIEW

The events on September 11, 2001 in the USA and the SARS virus had a
significant effect on the airline industry.  Despite this, the longer term
growth of the airline industry is expected to continue.  Boeing are predicting
airline passenger growth of 5.2% per annum over the period 2004 - 2023, 2%
above the predicted worldwide rate of economic growth of 3.1% for the same
period (Source Current Market Outlook 2004, - www.boeing.com/commercial).
Recent industry surveys have confirmed that Email/Internet is still a high
priority for airline passengers.

                                     - 7 -
<PAGE>




As G3CARS requires minimal financial outlay and its justification is based on
improving operational efficiencies, ASI believes their will be strong demand
for this type of product.

In regard to SecurEtag, security and tracking of packages is a higher priority
in the transport industry.  The company expects that the problems associated
with security will not change and that demand for new technologies will
increase as they evolve. Finally, the imminent production of the new low-cost
2nd generation RFID tags will ensure the acceptance of RFID as a long-term
track and trace solution.


ITEM 2. DESCRIPTION OF PROPERTY.

The Company does not own any property other than its inventory of equipment,
office equipment and fittings. The Company maintains its marketing,
engineering, customer support and corporate administration offices at 1/12
Candlebark Court.


ITEM 3. LEGAL PROCEEDINGS.

The Company is not a party to any litigation and management has no knowledge of
any threatened or pending litigation against the Company.

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

Not applicable.































                                     - 8 -
<PAGE>




PART II.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.

The Company has authorized capital of 100,000,000 shares of Common Stock,
$.0001 par value, and 20,000,000 shares of preferred stock, $.0001 par value.
As of the date hereof, the Company has 14,741,652 shares of Common Stock issued
and outstanding and no shares of Preferred Stock outstanding.

Since March, 2000 the Company's Common Stock has been quoted on the NASD OTC
Bulletin Board.  Prior to that date, there was no public market for the
Company's securities.  The following table sets out the range of the high and
low sales prices for the Company's securities.

<TABLE>
<CAPTION>
Quarter Ended                                              Common Stock
                                                           High      Low
<S>                                                        <C>       <C>
March 31, 2000                                             $1.25     $1.25
June 30, 2000                                              $1.81     $1.00
September 30,2000                                          $1.50     $0.63
December 31, 2000                                          $0.63     $0.28
March 31, 2001                                             $0.53     $0.50
June 30, 2001                                              $0.51     $0.51
September 30,2001                                          $0.51     $0.51
December 31, 2001                                          $0.51     $0.51
March 31, 2002                                             $0.51     $0.21
June 30, 2002                                              $0.35     $0.21
September 30,2002                                          $0.42     $0.20
December 31, 2002                                          $0.60     $0.34
March 31, 2003                                             $0.69     $0.34
June 30, 2003                                              $0.51     $0.72
September 30,2003                                          $0.55     $0.37
December 31, 2003                                          $0.51     $0.36
March 31, 2004                                             $0.51     $0.45
June 30, 2004                                              $0.55     $0.40
September 30, 2004                                         $0.55     $0.28
December 31, 2004                                          $0.36     $0.27
March 31, 2005                                             $0.32     $0.23
June 30, 2005                                              $0.31     $0.25
</TABLE>

The Company currently intends to retain substantially all of its earnings, if
any, to support the development of its business and has no present intention of
paying any dividends on its Common Stock in the foreseeable future. Any future
determination as to the payment of dividends will be at the discretion of the
Board, and will depend on the Company's financial condition, results of
operations and capital requirements, and such other factors as the Board deems
relevant.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

OVERVIEW

                                     - 9 -
<PAGE>




The Company has a very low cost structure as its engineering operations are
based in Australia compared to its competitors who are based in Seattle,
Washington, U.S.A. This allows the company to offer competitive pricing in US
Dollars while its cost structure is based on Australian Dollars.

The company focuses it resources on marketing and software engineering. The
hardware platform was designed to ensure that is could be supported and
manufactured by any aviation certified company. Under arrangements with ASIT
Australia, the Company maintains Australian aviation certification. This allows
the Company to subcontract the production and support of the hardware, which in
turn eliminates the cost of maintaining FAA manufacturing accreditation. The
company has an arrangement with an FAA certified facility to provide hardware
and installation support.

As the company is now entering an accelerated marketing phase, the marketing
costs are expected to increase. The company is progressively increasing its
operations in North America and Asia and anticipates establishing a marketing
presence in Europe.

Because of the low cost structure, the Company anticipates that the proceeds
from stock subscriptions, revenues from any exercise of the Options,
anticipated revenues from operations, and proceeds available from its suppliers
will be sufficient to meet the Company's contemplated operating and capital
requirements for approximately 12 months.

RESULTS AND PLAN OF OPERATIONS

The Company had accumulated losses from inception to June 30, 2005 of
$5,043,625. Major components of the loss include depreciation, amortisation,
stock impairment, consulting and management fees, and operations costs. The
Company may be required to make significant additional expenditures in
connection with the development of the Email/Internet, AirCommerce and
SecurEtag programs and their marketing. The Company's ability to continue its
operations is dependent upon its receiving funds through its anticipated
sources of financing including exercise of Options, revenues from operations,
and proceeds available from its suppliers. However, the Company may be required
to raise additional capital through debt or equity financing.

The Company intends to use future revenues, if any, for the purchase of
equipment for its Email, G3CARS, AirCommerce and SecurEtag programs and for
capital expenditures and working capital for its proposed operations, and
certain fees, costs and expenses associated with this offering.

YEAR ENDED JUNE 30, 2005 COMPARED WITH YEAR ENDED JUNE 30, 2004

The Company received revenue from government grants of $62,149 for the year
ending June 30, 2005, compared to revenue of $25,086 from software licenses for
the year ended June 30, 2004.

Net losses decreased from $1,488,562 in the twelve month period ending June 30,
2004, to $703,489 for the twelve month period ending June 30, 2005, as a result
of decreased stock impairment charges, consulting fees and a reduced cost taken
up for the issue of options. Expenses decreased from $1,506,070 for the twelve
month period ending June 30, 2004 to $759,986 for the twelve month period
ending June 30, 2005.

The Company had a foreign currency translation gain of $15,399 for the twelve
month period ending June 30, 2005, compared to a foreign currency translation
gain of $30,045 for the twelve month period ending June 30, 2004. As a result,
the Company recorded a comprehensive loss of $688,090 for the twelve months
                                    - 10 -
<PAGE>




ended June 30, 2005, compared to a comprehensive loss of $1,458,517 for the
twelve months ended June 30, 2004.

LIQUIDITY AND CAPITAL RESOURCES

The Company has used the proceeds from the sale of the securities for payment
of operating costs to date. The Company has received revenue totaling $62,149
during the fiscal year ended June 30, 2005.

The Company's cash and cash equivalents increased from $34,222 at June 30, 2004
to $106,416 at June 30, 2005 as a result of capital raising, but after
operating losses.

The Company had a net loss of $703,489 from operating activities for the period
July 1, 2004 to June 30, 2005, primarily consisting of management and directors
fees, engineering, stock impairment, and travel costs. The net loss from
operating activities for such period was less than the net loss from operating
activities for the period July 1, 2003 to June 30, 2004 primarily as a result
of increased revenue and decreased stock impairment, consulting fees, and the
cost of issuing stock options.  The Company's revenue for the twelve months
ending June 30, 2005 was $62,149, compared to $25,086 in the twelve month
period to June 30, 2004. The cash flow of the Company from financing activities
for the twelve months ending June 30, 2005 was from the proceeds from issue of
common stock and loans from related parties.

The Company's marketing plan anticipates that it will install and maintain the
Email/Internet and AirCommerce programs on commercial airlines. This plan may
require significant initial capital from the Company for the production,
acquisition, installation and maintenance of the Email/Internet and AirCommerce
programs possibly before any revenues are received.  Additional funding will
also be required for the certification of the SecurEtag system. The Company may
not have sufficient funds to purchase or install the equipment in which case
the Company will have to seek additional capital. The Company may raise
additional capital by the sale of its equity securities, through an offering of
debt securities, or from borrowing from a financial institution. The Company
does not have a policy on the amount of borrowing or debt that the Company can
incur. The Company may also attempt to negotiate with vendors or customer
airlines revenue sharing arrangements by which the Company will share the
advertising revenue if the vendor or customer airline provides capital for the
equipment.

The Company has no commitments for capital expenditures in the near future.


GOING CONCERN QUESTION

The financial statements appearing elsewhere in this report have been prepared
assuming that the Company will continue as a going concern. As such, they do
not include adjustments relating to the recoverability of recorded asset
amounts and classification of recorded assets and liabilities. On July 1, 1998,
the Company acquired 100% of ASI Entertainment Pty Ltd., ("ASIE") an Australian
corporation. ASIE had accumulated losses of approximately $2,404,000 at June
30, 2005 and will be required to make significant expenditures in connection
with continuing engineering and marketing efforts along with general and
administrative expenses. The Company's ability to continue its operations is
dependent upon its raising of capital through debt or equity financing in order
to meet its working needs. These conditions raise substantial doubt about the
Company's ability to continue as a going concern subsequent to the acquisition,
and if substantial additional funding is not acquired or alternative sources
developed, management will be required to curtail its operations.
                                    - 11 -
<PAGE>





The Company may raise additional capital by the sale of its equity securities,
through an offering of debt securities, or from borrowing from a financial
institution. The Company does not have a policy on the amount of borrowing or
debt that the Company can incur. The Company may also attempt to negotiate with
vendors or customers, revenue sharing arrangements by which the Company will
share the revenue if the vendor or customers provides capital for the
equipment. Management believes that actions presently being taken to obtain
additional funding provide the opportunity for the Company to continue as a
going concern.


ITEM 7. FINANCIAL STATEMENTS.

OVERVIEW













































                                    - 12 -
<PAGE>













                            ASI ENTERTAINMENT, INC.

                                 CONSOLIDATED
                             FINANCIAL STATEMENTS

                             June 30, 2004 & 2005














































<PAGE>





                            ASI ENTERTAINMENT, INC.
                       Consolidated Financial Statements



                               TABLE OF CONTENTS



                                                                    Page

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM                                               F-1

CONSOLIDATED FINANCIAL STATEMENTS

      Consolidated balance sheet                                     F-2
      Consolidated statement of income and comprehensive income      F-3
      Consolidated statement of stockholders' equity                 F-4
      Consolidated statement of cash flows                           F-5
      Notes to consolidated financial statements                     F-7







































<PAGE>




                           RONALD R. CHADWICK, P.C.
                          Certified Public Accountant
                       2851 South Parker Road, Suite 720
                            Aurora, Colorado  80014
                            Telephone (303)306-1967
                               Fax (303)306-1944


           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors
ASI Entertainment, Inc.
Melbourne, Australia

I  have  audited  the  accompanying  consolidated  balance  sheet  of  ASI
Entertainment, Inc. as of June 30, 2005 and the related consolidated statements
of income and comprehensive income, stockholders' equity and cash flows for the
years ended June 30, 2004 and 2005. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.

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

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ASI Entertainment,
Inc. as of June 30, 2005 and the results of its operations and its cash flows
for the years ended June 30, 2004 and 2005 in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Aurora, Colorado                                      Ronald R. Chadwick, P.C.
October 6, 2005                                       RONALD R. CHADWICK, P.C.












                                      F-1
<PAGE>






                            ASI ENTERTAINMENT, INC.
                          CONSOLIDATED BALANCE SHEET
                                 JUNE 30, 2005

                           ASSETS

Current Assets
      Cash and cash equivalents                                $      106,416
      Inventory                                                       571,500
      Other receivables                                                 4,298
                                                               --------------
            Total Current Assets                                     682,214
                                                               --------------
      Property and equipment, net                                      92,433
                                                               --------------
                                                                       92,433
                                                               --------------
Total Assets                                                        $774,647
                                                               ==============

            LIABILITIES AND SHARHOLDERS' EQUITY

Current Liabilities
      Accounts payable and accrued expenses                    $       52,056
      Due to related parties                                          319,238
                                                               --------------
            Total Current Liabilities                                371,294
                                                               --------------
Total Liabilities                                                    371,294
                                                               --------------

Stockholders' Equity
      Preferred stock $0.0001 par value;
            20,000,000 shares authorized;
            none issued and outstanding                        $            -

      Common stock, $0.0001 par value;
            100,000,000  shares authorized;
            14,719,652 shares issued and 14,669,652
            outstanding                                        $        1,472

      Additional paid-in capital                               $    5,628,235
      Treasury stock -
                     - par value (50,000 shares)               $           (5)
      Accumulated deficit                                      $   (5,043,626)
      Accumulated other comprehensive loss                     $     (182,723)
                                                               --------------
Total Stockholders' Equity                                    $      402,353
                                                               --------------
Total Liabilities and Stockholders' Equity                    $      774,647
                                                               ==============





The accompanying notes are an integral part of the consolidated financial
statements.

                                      F-2
<PAGE>




                            ASI ENTERTAINMENT, INC.
           CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
              For the Years Ended JUNE 30, 2004 and JUNE 30, 2005


                                                        2004          2005
                                                     -----------   -----------
Sales, net                                          $   25,072    $   62,149

Cost of Sales                                           (7,578)       (5,651)
                                                    -----------   -----------
Gross Margin                                            17,494        56,498

Selling, general and administrative expenses           993,165       723,108
Option expense                                         509,428        36,825
                                                    -----------   -----------

Loss from operations                                (1,485,099)     (703,435)

Other income (expense)
      Interest income                                       14
      Interest expense                                     (16)          (54)
      Loss on equipment disposal                         (3461)
                                                    -----------   -----------

Income (loss) before provision for income taxes     (1,488,562)     (703,489)

Provision for income tax                                     -             -

Net income (loss)                                   $(1,488,562)  $ (703,489)

Other comprehensive income (loss) -
                                  - net of tax
Foreign currency translation gains (losses)             30,045        15,399
                                                    -----------   -----------

Comprehensive profit (loss)                         $(1,458,517)  $ (688,090)
                                                    ===========   ===========

Net income (loss) per share
(Basic and fully diluted)                            $     (0.12)  $     (0.05)
                                                    ===========   ===========
Weighted average number of
common shares outstanding                           12,286,564    13,874,777
                                                    ===========   ===========













The accompanying notes are an integral part of the consolidated financial
statements.

                                      F-3
<PAGE>



                               ASI ENTERTAINMENT, INC.
                   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 For the Years Ended JUNE 30, 2004 and JUNE 30, 2005

<TABLE>
<CAPTION>
                                                                                     Accum.
                                                                                     Other          Stock-
                                Common Stock     Paid In     Treasury    Accum.     Compre.       holders
                             Shares      Amount  Capital     Stock      Deficit    Income/loss    Equity
                             ------      ------  -------     -----      -------    -----------    ------
<S>                          <C>         <C>     <C>         <C>     <C>           <C>            <C>

Balances at June 30, 2003    11,811,227  $1,181  $3,644,848  $  (5)  $(2,851,575)  $ (228,167)    $ 566,282

Exercise of stock options       830,674      83     415,254                                         415,337

Compensatory stock issuances    250,000      25     124,975                                         125,000

Issuance of stock for cash      100,000      10      49,990                                          50,000

Issuance of stock for debt
  retirement                    668,000      67     333,933                                         334,000

Compensatory option issuances                       509,428                                         509,428

Foreign currency
    translation gain (loss)                                                            30,045        30,045

Net gain (loss) for the year
    ended June 30, 2004                                               (1,488,562)                (1,488,562)
                             ----------  ------  ----------  ------   ------------  -----------  -----------
Balances at June 30, 2004    13,659,901  $1,366  $5,078,428  $  (5)  $(4,340,137)  $ (198,122)  $   541,530

Exercise of stock options       249,751      25     124,851                                         124,876

Issuance of stock for cash      763,725      76     364,999                                         365,075

Issuance of stock for debt
  retirement                   46,275         5      23,132                                          23,137

Compensatory option issuances                        36,825                                          36,825

Foreign currency
    translation gain (loss)                                                            15,399        15,399

Net gain (loss) for the year
    ended June 30, 2005                                                 (703,489)                  (703,489)
                             ----------  ------  ----------  ------  ------------  -----------  ------------
Balances at June 30, 2005    14,719,652  $1,472  $5,628,235  $  (5)  $(5,043,626)  $ (182,723)  $   403,353
                             ==========  ======  ==========  ======  ============  ===========  ============
The accompanying notes are an integral part of the consolidated financial statements.
                                                                F-4
</TABLE>
<PAGE>




                            ASI ENTERTAINMENT, INC.
                     CONSOLIDATED STATEMENT OF CASH FLOWS
              For the Years Ended JUNE 30, 2004 and JUNE 30, 2005

<TABLE>
<CAPTION>
                                                                               2004                 2005
                                                                        ------------------   ------------------
<S>                                                                     <C>                  <C>
Cash Flows from Operating Activities:
        Net income/(loss)                                                  $(1,488,562)          $ (703,489)

        Adjustments to reconcile net income to
        net cash provided by (used for)
        operating activities:
                 Depreciation                                                    1,731                2,600
                 Amortization                                                        -
                 Loss on equipment disposal                                      3,461
                 Compensatory stock issuances                                  155,000
                 Compensatory option issuances                                 509,428               36,825
                 Write down for stock impairment                               214,155              114,300
                 Trade accounts receivable                                      48,888
                 Other Receivables                                              46,524                3,668
                 Accounts payable and accrued expenses                          (3,306)              12,318
                                                                        --------------       --------------
                 Net cash provided by (used for) operating
                 activities                                                   (512,681)            (533,778)
                                                                        --------------       --------------

Cash Flows from investing activities:
        Purchase of fixed assets                                                (1,253)              (9,602)
        Sale of fixed assets                                                     6,490
                                                                        --------------       --------------
                 Net cash provided by (used in) investing
                 activities                                                      5,237               (9,602)
                                                                        --------------       --------------
</TABLE>


                         (Continued On Following Page)

















The accompanying notes are an integral part of the consolidated financial
statements.

                                      F-5
<PAGE>




                            ASI ENTERTAINMENT, INC.
                     CONSOLIDATED STATEMENT OF CASH FLOWS
              For the Years Ended JUNE 30, 2004 and JUNE 30, 2005

                        (Continued from Previous Page)


<TABLE>
<CAPTION>
                                                                               2004                 2005
                                                                        ------------------   ------------------
<S>                                                                     <C>                  <C>
Cash flow from financing activities:
        Increase/(decrease) in amount due to related parties                   130,807              164,174
        Issuance of common stock                                               435,337              489,951
        Common stock subscription payable                                      (12,959)              (8,926)
                                                                        --------------       --------------
                 Net cash provided by (used for)
                 financing activities                                         553,185              645,199
                                                                        --------------       --------------

Effect of exchange rate changes on cash                                        (8,607)             (32,537)
                                                                        --------------       --------------

Net Increase/(Decrease) in cash                                                37,134               69,282
CASH AT THE BEGINNING OF THE PERIOD                                                 -               37,134
                                                                        --------------       --------------

CASH AT THE END OF THE PERIOD                                          $       37,134       $      106,416
                                                                        ==============       ==============
</TABLE>

Schedule of Non-Cash Investing and Financing Activities

During 2004 the Company issued 770,674 shares of common stock to retire
$334,000 in debt to a related party.
During 2005 the Company issued 46,275 shares of common stock to retire $23,137
in debt to a related party.

                                                        2004           2005
                                                  ------------   ------------
Case paid for interest                            $         16   $         54
Cash paid for income taxes                        $          -   $          -














The accompanying notes are an integral part of the consolidated financial
statements.

                                      F-6
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1.  ORGANIZATION,  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES:

ASI Entertainment, Inc. ("ASI", the "Company"), was incorporated in the
State of Delaware on April 29, 1998. ASI provides Email and Ecommerce systems
for  airline  passengers  with  its  ASiQnet  and  AirCommerce  products.  ASI
Entertainment, Inc. and its subsidiary are hereinafter referred to as the
"Company".

Principles of consolidation

The accompanying consolidated financial statements include the accounts of ASI
Entertainment, Inc. and its wholly owned subsidiary, ASIQ Pty. Ltd. ("ASIQ").
All  intercompany  accounts  and  transactions  have  been  eliminated  in
consolidation.

Basis of Presentation

The financial statements are prepared in accordance with Generally Accepted
Accounting Principles in the United States of America. The basis of accounting
differs from that used in the Australian statutory financial statements of
ASIQ. Adjustments are made to translate the statutory financial statements of
ASIQ to United States Generally Accepted Accounting Principles. The financial
statements are expressed in United States dollars. The functional currency of
ASIQ is the Australian dollar.

Use of Estimates

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

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity
of three months or less as cash equivalents.

Accounts receivable

The Company reviews accounts receivable at each balance sheet date and makes
allowance  for  non-recoverability  the  Directors  and  Management  consider
appropriate. An allowance for doubtful accounts has been established, with
accounts over one year old from date of invoicing deemed uncollectible and
written off to bad debt expense. In 2004 $25,551 was written off to bad debt
expense, and none in 2005.






                                      F-7
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1.  ORGANIZATION,  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES (Continued):

Income tax

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 ("SFAS 109"). Under SFAS 109 deferred taxes are provided on
a liability method whereby deferred tax assets are recognized for deductible
temporary  differences  and  operating  loss  carryforwards  and  deferred  tax
liabilities  are  recognized  for  taxable  temporary  differences.  Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. 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. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

At June 30, 2004 and 2005 the Company had net operating loss carryforwards of
approximately $2,559,100 and $3,174,534 which expire under Australian tax law
at various dates through the year 2010, in addition to net operating loss
carryforwards of approximately $2,022,000 and $2,260,000 for U.S. tax purposes
at June 30, 2004 and 2005 which begin to expire in 2019. The deferred tax asset
created by the Australian and U.S. net operating losses ($882,235 for U.S. tax
purposes) has been offset by a 100% valuation allowance. The change in the
valuation allowance for U.S. tax purposes in 2005 was $93,501.

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss)
by the weighted average number of shares of common outstanding. Warrants, stock
options, and common stock issuable upon the conversion of the Company's
preferred stock (if any), are not included in the computation if the effect
would be anti-dilutive and would increase the earnings or decrease loss per
share. 5,274,072 shares in 2004 and 1,291,934 shares in 2005 potentially
issuable  from  stock  options  were  excluded  from  the  earnings  per  share
computations, as their inclusion would have lowered loss per share.

Property and equipment

Property and equipment are recorded at cost and depreciated under accelerated
methods over each item's estimated useful life.














                                      F-8
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1.  ORGANIZATION,  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES (Continued):

Foreign currency translation

The functional currency of ASIQ is the Australian dollar. Financial statements
for these entities are translated into United States dollars at year end
exchange rates as to assets and liabilities and weighted average exchange rates
as  to  revenues  and  expenses.  Capital  accounts  are  translated  at  their
historical exchange rates when capital transactions occurred.

Revenue recognition

Revenue is recognized on an accrual basis as earned under contract terms.
Specifically, revenue from the sale of equipment is recognized as equipment is
delivered and invoiced. Revenue from ongoing services is recognized when
invoiced monthly.

Comprehensive income (loss)

The Company accounts for comprehensive income (loss) under Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130"). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components. The foreign currency translation gains
(losses) resulting from the translation of the financial statements of ASIQ,
expressed in Australian dollars, to United States dollars are reported as Other
Comprehensive Income (Loss) in the Statement of Operations and as Accumulated
Other Comprehensive Income (Loss) in Stockholders' Equity.

Financial instruments

The carrying value of the Company's financial instruments, including cash and
cash equivalents, accounts payable, and due to related parties, as reported in
the accompanying balance sheet, approximates fair value.

Products and services, geographic areas and major customers

Company sales are derived from the sale of communications equipment and
services to the commercial airline industry, are to external customers, and
currently originate in and through the Company's Australian subsidiary ASIQ
Pty. Ltd. to non-domestic customers. The Company had one major customer
accounting for 100% of its sales in 2004, and no sales in 2005. In addition to
cost  of  goods  sold,  the  Company  incurred  direct  marketing  expenses  of
approximately 78% on its sales in 2004. The Company's long term assets are held
through ASIQ Pty. Ltd. in Australia.









                                      F-9
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1.  ORGANIZATION,  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES (Continued):

Stock Options

The Company applies APB Opinion 25 and Related Interpretations in accounting
for  employee  stock  options.  Accordingly,  no  compensation  cost  has  been
recognized for its employee stock options (833,333 employee stock options were
granted in 2004 and none were granted in 2005). Had compensation cost for the
Company's employee stock option awards and incentive stock option plan been
determined based on the fair value at the grant dates for awards under the
stock option grants and incentive stock option plan consistent with the method
of FASB Statement 123, the Company's net income and earnings per share would
have changed as indicated in the pro forma amounts below:

                                                       2004           2005
Net income (loss)                   As reported    $(1,488,562)     $(703,489)

Add: Stock-based employee compensation
expense included in reported net income, net
of related tax effects                                         -              -

Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects             (126,860)              -
                                                   ------------   ------------
                                    Pro forma      $(1,615,422)     $(703,489)
                                                   ============   ============
                                    As reported          $(.12)         $(.05)
Basic and fully diluted
   earnings per share               Pro forma            $(.13)         $(.05)























                                     F-10
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1.  ORGANIZATION,  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES (Continued):

Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs (An Amendment
of ARB No. 43, Chapter 4)". SFAS 151 amends and clarifies financial accounting
and reporting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). The Company has adopted the provisions
of SFAS No. 151 which are effective in general for inventory costs incurred
during fiscal years beginning after June 15, 2005. The adoption did not have a
material effect on the results of operations of the Company.

In December 2004, the FASB issued SFAS No. 152, "Accounting for Real Estate
Time-Sharing Transactions (An Amendment of FASB Statements No. 66 and 67)".
SFAS 152 amends FASB 66 and 67 to reference the accounting and reporting
guidance for real estate time-sharing transactions provided for in AICPA
Statement of Position 04-2. The Company has adopted the provisions of SFAS No.
152 which are effective for financial statements for fiscal years beginning
after June 15, 2005. The adoption did not have a material effect on the results
of operations of the Company.

In December 2004, the FASB issued SFAS No. 153, "Exchange of Nonmonetary
Assets (An Amendment of APB No. 29)". SFAS 153 amends Opinion 29 to eliminate
the fair value accounting exception for nonmonetary exchanges of similar
productive assets, and replaces that exception with a general exception for
nonmonetary assets that do not have commercial substance. The Company has
adopted the provisions of SFAS No. 153 which are effective in general for
nonmonetary asset exchanges occurring in fiscal years beginning after June 15,
2005. The adoption did not have a material effect on the results of operations
of the Company.

In August 2005, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 154, "Accounting
Changes and Error Corrections." SFAS 154 changes the requirements for the
accounting for and reporting of a change in accounting principle, requiring in
general retrospective application to prior periods' financial statements of
changes in accounting principle. The Company has adopted the provisions of SFAS
No. 154 which are effective for accounting changes and corrections of errors
beginning after December 15, 2005. The adoption did not have a material effect
on the results of operations of the Company.













                                     F-11
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1.  ORGANIZATION,  OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES (Continued):

Long-Lived Assets

In accordance with Statement of Financial Accounting Standard 144 "Accounting
for the Impairment or Disposal of Long-Lived Assets", the Company regularly
reviews the carrying value of intangible and other long-lived assets for the
existence of facts or circumstances, both internally and externally, that may
suggest impairment. If impairment testing indicates a lack of recoverability,
an impairment loss is recognized by the Company if the carrying amount of a
long-lived asset exceeds its fair value.


NOTE 2. RELATED PARTY TRANSACTIONS

As of June 30, 2005 the Company owed officers, directors, and related parties
$319,238, with $125,654 owed for management fees and $193,584 for directors'
fees.

The Company in 2004 and 2005 incurred expenses of approximately $173,000 and
$150,323 respectively to a company affiliated through common stockholders and
directors  for  management  expenses.  These  expenses  normally  remain  as  a
liability until paid, but in 2004 $334,000 of the debt was converted to equity
at $0.50 per share, resulting in the issuance of 668,000 shares, and in 2005
$23,137 of the debt was converted to equity at $0.50 per share, resulting in
the issuance of 46,275 shares.


NOTE 3. LEASE COMMITMENTS

The Company carries operating leases for office space and equipment in
Australia. The office lease expires in April 2006, and the equipment leases in
2007. The office lease expiring in 2006 is noncancellable, and carries an
option to renew. Combined payments under all leases are approximately $1,150
per month plus taxes. Rent expense incurred under the leases in 2004 and 2005
was approximately $21,000 and $16,700. Subsequent to June 30, 2005 future
minimum payments under the leases not including estimated costs for taxes are
approximately $18,950. Subsequent to June 30, 2005 minimum future lease
payments for each of the next three years are approximately $13,800, $4,500 and
$650.













                                     F-12
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4. INVENTORY

The  Company's  inventory  consists  of  its  Airline  Cabin  Management  and
Communications Systems ("ACAMS") hardware platform equipment. The ACAMS are
network servers that link passenger notebook computers with the satellite
communication system on an aircraft. The Company has conducted certification
and  flight  demonstrations  of  ACAMS,  and  has  received  Federal  Aviation
Administration approval for certain airlines and aircraft.

The Company tested its Airline Cabin Management and Communications Systems
("ACAMS") hardware platform equipment at the end of 2004 for impairment, as the
equipment had not yet been placed in service for several years. The cost basis
of the ACAMS equipment as translated was $1,035,450 at June 30, 2004. The
Company took an impairment write down on the equipment in 2004 of 20% ($214,155
as translated at June 30, 2004) as having not been placed in service for
several years, the equipment was vulnerable to technological changes and
airline industry economic downturns. In the first half of 2005 the Company took
an impairment write down on the ACAMS equipment of $113,028. In the second half
of 2005 the Company secured a contractual agreement with an airline to install
and use the ACAMS equipment, and therefore ceased impairment write downs. The
cost basis of the ACAMS equipment as translated was $1,143,000 at June 30,
2005, and $571,500 net of write downs. The write downs of $214,155 and $113,028
in  2004  and  2005  are  listed  under  the  caption  "selling,  general  and
administrative  expenses"  on  the  consolidated  statement  of  income  and
comprehensive income.


NOTE 5. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at June 30, 2005:

                                             Estimated
Asset                                        Useful Life      Cost

CMA platforms
   (computer hardware)                       5 yrs              $      402,321
Office equipment                             5 yrs                      17,772
Other                                        5 yrs                       2,667
                                                                --------------
Total                                                           $      422,760
Less: Accumulated depreciation                                       (330,327)
                                                                --------------
                                                                $       92,433
                                                                ==============

Depreciation expense for the years ended June 30, 2004 and 2005 was $1,731 and
$2,571 respectively.







                                     F-13
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.  STOCKHOLDERS' EQUITY

Common stock

The Company as of June 30, 2004 had 100,000,000 shares of authorized common
stock, $.0001 par value, with 13,709,901 shares issued, 13,659,901 outstanding,
and 50,000 shares in treasury. Treasury shares are accounted for by the par
value method. Of shares issued in 2004, 60,000 were issued to an investment
banking firm upon exercise of options at $0.50 per share for corporate advisory
and capital raising services, and 250,000 shares were issued at $0.50 per share
for legal services related to corporate issues regarding the Australian
subsidiary of the Company.

The Company as of June 30, 2005 had 100,000,000 shares of authorized common
stock, $.0001 par value, with 14,719,652 shares issued, 14,669,652 outstanding,
and 50,000 shares in treasury. Treasury shares are accounted for by the par
value method.

Preferred stock

The Company as of June 30, 2005 had 20,000,000 shares of authorized preferred
stock, $.0001 par value, with no shares issued and outstanding.

Stock options

At June 30, 2004 and 2005 the Company had stock options outstanding as
described below.

Non-employee stock options

The Company accounts for non-employee stock options under SFAS 123, whereby
option costs are recorded based on the fair value of the consideration received
or the fair value of the equity instruments issued, whichever is more reliably
measurable.

At the beginning of fiscal year 2004, the Company had 2,861,321 non-employee
stock options outstanding. During 2004 the Company issued 2,133,743 options,
830,674 options were exercised, and 31,984 options expired, leaving a 2004 year
end outstanding balance of 4,132,406 non-employee stock options.

As noted above, the Company in 2004 granted 2,133,743 stock options, allowing
the holder to purchase one share of common stock per option, exercisable
immediately at $0.50 per share with the option terms expiring in 2005 and 2006,
to individuals for consulting services and in connection with sales of common
stock. As of June 30, 2004, all of these options remained outstanding. The fair
value of these option grants were estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions: risk free
interest rate of 1 - 1.7%, dividend yield of 0%, expected lives ranging from
one to two years, volatility from 75 - 128%. Of the 2,133,743 stock






                                     F-14
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.  STOCKHOLDERS' EQUITY (Continued):

options issued in 2004, 756,074 were issued to investors as part of a unit of
which the investors purchased 756,074 shares of common stock at $0.50 per share
and received an option to purchase another share at $0.50. The Company incurred
and recorded compensation expense under all stock options of $509,428 in 2004,
including $193,490 recorded from the options issued in connection with the
units just described. Stock option expenses are listed as "option expense" in
the consolidated statement of income and comprehensive income.

At the beginning of fiscal year 2005, the Company had 4,132,406 non-employee
stock options outstanding. During 2005 the Company issued 4,941,649 options,
249,751 options were exercised, and 7514263 options expired, leaving a 2005
year end outstanding balance of 1,310,041 non-employee stock options. The
options have an exercise price of $0.50 and all expire in 2006.

As noted above, the Company in 2005 granted 4,941,649 stock options, allowing
the holder to purchase one share of common stock per option, exercisable
immediately at $0.50 per share with the option terms expiring in 2005 and 2006,
to individuals for consulting services and as other compensation. 4,313,121 of
these options expired in fiscal year 2005. As of June 30, 2005, 628,528 of
these options remained outstanding. The fair value of these option grants were
estimated on the date of grant using the Black-Scholes option pricing model
with the following assumptions: risk free interest rate of 1.9 - 3.2%, dividend
yield of 0%, expected lives ranging from one-half to one and one-half years,
volatility from 28 - 64%. The Company incurred and recorded compensation
expense under these stock options of $36,825 in 2005.

Employee stock options

A summary of the status of the Company's employee stock options as of June 30,
2004 and 2005 is presented below:

During 2004 the Company made one grant of 833,333 employee stock options. The
fair value of the option grant for pro forma purposes was estimated on the date
of grant using the Black-Scholes option pricing model with the following
assumptions: risk free interest rate of 1.7%, dividend yield of 0%, expected
life of one year, volatility of 116%.

During 2005 the Company issued no employee stock options.














                                     F-15
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.  STOCKHOLDERS' EQUITY (Continued):

Employee stock option activity for 2004 is summarized below:

                                                                Weighted Ave.
Options                                           Shares        Exercise Price

Outstanding at
   beginning of period                                333,333            $ 0.50
Granted                                               833,333            $ 0.50
Exercised                                                   -                 -
Forfeited                                            (25,000)            $ 0.50
Outstanding at
   end of period                                    1,141,666            $ 0.50
Options exercisable
   at period end                                    1,141,666
Weighted average fair
   value of options
   granted during the
   the period                                    $       0.15


Employee stock option activity for 2005 is summarized below:

                                                                Weighted Ave.
Options                                           Shares        Exercise Price

Outstanding at
   beginning of period                              1,141,666            $ 0.50
Granted                                                     -                 -
Exercised                                                   -                 -
Forfeited                                         (1,141,666)            $ 0.50
Outstanding at
   end of period                                            -                 -
Options exercisable
   at period end                                            -
Weighted average fair
   value of options
   granted during the
   the period                                   $           -














                                     F-16
<PAGE>






                            ASI ENTERTAINMENT, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.  STOCKHOLDERS' EQUITY (Continued):

The  following  table  summarizes  information  about  employee  stock  options
outstanding at June 30, 2004.

                     Options Outstanding            Options Exercisable
         -----------------------------------------  -------------------------
                      Weighted Ave.
Range of Number       Remaining      Weighted Ave.  Number       Weighted Ave.
Exercise Outstanding  Contractual    Exercise       Exercisable  Exercise
Price    at 6/30/04   Life           Price          at 6/30/04   Price
 -------  ----------- -----------    -------------  -----------  -------------
  $ 0.50    1,141,666 1 Year                $ 0.50    1,141,666         $ 0.50


No employee options were outstanding at June 30, 2005.


NOTE 7.  GOING CONCERN

The Company has suffered recurring losses from operations and in all likelihood
will be required to make significant future expenditures in connection with
continuing engineering, installation, maintenance and marketing efforts along
with general administrative expenses. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity
securities, through an offering of debt securities, or through borrowings from
financial institutions. In addition, the Company may also attempt to negotiate
revenue sharing arrangements with vendors or customer airlines whereby the
Company will share its advertising revenues in exchange for capital to cover
equipment or installation costs. The Company also expects additional contracts
with airlines to install its equipment in the near future. Management believes
that actions presently being taken to obtain additional funding provide the
opportunity for the Company to continue as a going concern.


















                                     F-17
<PAGE>




ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable
























































                                    - 13 -
<PAGE>




PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

The officers and directors of the Company are as follows:

Name:                          Title:
----                           -----
Richard Lukso                  Chairman and Director

Ronald J. Chapman              President and Director

Graham O. Chappell             Director

Philip A. Shiels               Chief Financial Officer and Director

Thomas D. Henderson            Director, Vice President Strategic Business
                               Development

Dr Elizabeth Young and Mr Richard Mason retired from the Board, effective June
30, 2005.

All directors of the Company hold office until the next annual meeting of
shareholders or until their successors are elected and qualified. At present,
the Company's Bylaws provide for not less than one nor more than seven
directors. Currently, there are seven directors of the Company. The Bylaws
permit the Board of Directors to fill any vacancy and such director may serve
until the next annual meeting of shareholders or until his successor is elected
and qualified. Officers serve at the discretion of the Board of Directors.

The principal occupation and business experience for each officer and director
of the Company, for at least the last five years are as follows:

RICHARD LUKSO, 72, is the Chairman and Director of the Company. Mr Lukso
commenced his career in aviation in 1953 at USMC in the Marine Air Wing.  His
career has included senior executive positions with Lear Inc., Garrett
Airesearch and Learjet. In 1988, Mr Lukso joined Securaplane Technologies Inc.
as President and General Manager and co-owner. The company has since grown from
5 employees and one product to 100 employees and five innovative products
serving airlines and general aviation. In 2000, Mr Lukso sold Securaplane
Technologies Inc. to Danaher Corporation and remains as President.

RONALD J. CHAPMAN, 53, serves as President and a director of the Company.
Commencing in 1985, Mr. Chapman founded and remains the managing director of
ASI Holdings Pty. Ltd., ASI Australia, ASI Entertainment Pty. Ltd., and ASI
Media Pty. Ltd. ASI Entertainment Pty. Ltd. and ASI Media Pty. Ltd. are
subsidiaries of the Company. Since inception, Mr Chapman has overseen the
product development and coordinated the marketing for ASIT Australia. Mr.
Chapman is also managing director and the beneficial owner of 100% of Chapman
International Pty Ltd., a shareholder of the Company.










                                    - 14 -
<PAGE>




GRAHAM O. CHAPPELL, 60, has been a director of the Company since its inception
and a director of ASIT Australia since 1987. Mr. Chappell has worked in the
aerospace industry for 30 years. Since 1985, Mr. Chappell has operated as the
principal of Chappell Salikin Weil Associates Pty. Ltd. ("Chappell Salikin"),
Victoria, Australia, a private aviation trading and aerospace, technology and
defence industries consultancy company. Chappell Salikin has served as a
consultant to ASIT Australia, ASI Holdings Pty. Ltd. and ASI Entertainment Pty.
Ltd. Mr. Chappell obtained a Diploma of Aeronautical Engineering degree from
the Royal Melbourne Institute of Technology in 1968 and a Masters of Science
(Air Transport Engineering) from Cranfield University in 1974.

PHILIP A. SHIELS, 53, has been a director of the Company since 1996. From 1992
to the present, Mr. Shiels has operated Shiels & Co., Victoria, Australia, a
private consulting practice providing management and corporate advisory
services. Shiels & Co. has served as a consultant to ASIT Australia, ASI
Holdings Pty. Ltd. and ASI Entertainment Pty. Ltd. since 1994. Mr Shiels has
served as the Director of Finance for ASI Holdings Pty. Ltd. Mr. Shiels
received a Bachelor of Business (Accountancy) Degree from the Royal Melbourne
Institute of Technology in 1976 and has been an Associate Member of the
Institute of Chartered Accountants in Australia since 1978.

THOMAS D. HENDERSON, 61, joined the Board in March, 2003 and assumed the role
of Vice President Strategic Business Development.  Mr Henderson has held senior
positions in the aerospace industry, most recently as Vice President, Business
Development with Thales In-Flight Systems. During his career, Mr Henderson has
successfully developed a number of avionic products including surveillance
systems for fire safety, security and entertainment applications and holds
patents for various imaging technologies.
































                                    - 15 -
<PAGE>




ITEM 10. EXECUTIVE COMPENSATION.

The Company has not entered into any employment agreements with its executive
officers or directors nor has it obtained any key-man life insurance.

Each director is entitled to receive reasonable expenses incurred in attending
meetings of the Board of Directors of the Company. The members of the Board of
Directors intend to meet at least quarterly during the Company's fiscal year,
and at such other times duly called. The Company presently has six directors.

The following table sets forth the total compensation paid or accrued by the
Company on behalf of the Chief Executive Officer and President of the Company
during 2005. No officer of the Company received a salary and bonus in excess of
$100,000 for services rendered during the fiscal year ended June 30, 2005:

SUMMARY COMPENSATION TABLE

NAME AND PRINCIPAL           FISCAL   ANNUAL    COMPENSATION       OTHER
POSITION                      YEAR    SALARY    BONUS/AWARDS    COMPENSATION
                                                                 ALL OTHER


Ronald Chapman,
President                     2005       0            0            $38,298 (1)

Philip Shiels,
Chief Financial Officer       2005       0            0            $29,043 (2)

Richard Mason
Director                      2005       0            0            $12,000 (1)

Thomas Henderson
Director                      2005       0            0            $24,000 (1)

Elizabeth Young
Director                      2005       0            0            $24,000 (1)


1. Directors fees

2. Management fees

3. The Company was invoiced $146,897 for management services rendered by
Research No.1 Trust.














                                    - 16 -
<PAGE>




ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information as of the date of this
Report regarding the beneficial ownership of the Company's Common Stock by
each officer and director of the Company and by each person who owns in excess
of five percent of the Company's Common Stock giving effect to the exercise of
warrants or options held by the named security holder.

                                         Shares of Common
                                         Stock Beneficially    Percentage of
Name, Position and Address               Owned                 Shares Owned

Ronald J. Chapman (3)                                3,174,618            17.7%
President and director
160 Silvan Road,
Wattle Glen
Victoria, 3096, Australia

Graham O. Chappell (4)                                 831,406             5.6%
Director
5 Marine Parade, Suite 2
St. Kilda,
Victoria, 3148, Australia

Philip A. Shiels (5)                                 1,198,522             8.1%
Chief Financial Officer and director
39 Alta Street
Canterbury, Victoria, 3126,
Australia

Thomas D. Henderson                                          0               0%
Director and Vice President
Strategic Development
1646 Bay Hill Drive
San Marcos, CA, 92069

Chapman International Pty. Ltd. (6)                    450,000             3.0%
160 Silvan Road
Wattle Glen, Victoria, 3096,
Australia

Research No. 1 Trust (7)                             2,548,422            17.3%
4th Floor
136 Broadway, Newmarket
Auckland 1 New Zealand

Research No. 2 Trust (8)                             1,198,522             8.1%
4th Floor
136 Broadway, Newmarket
Auckland 1 New Zealand

Glasser Limited. (9)                                   801,056             5.4%
Suite 803  Luk Yu Building
24 - 26 Stanley St.,
Central Hong Kong
                                    - 17 -
<PAGE>




Hong Kong

Chappell Salikin Weil
Associates Pty. Ltd.(10)                               788,006             5.4%
5 Marine Parade, Suite 2
St. Kilda,
Victoria, 3148, Australia

Richard Lukso                                          200,000             1.4%
Director
5610 Via Arbolado
Tucson, AZ, 85750

McBain & Co. Investment
Services Pty. Ltd. (11)                                771,316             5.2%
41 Lingwell Road
Hawthorn, Victoria, 3122
Australia

Cudd & Co. (12)                                      1,950,000            12.6%
C/- JPMorgan Chase
4 New York Plaza
New York, NY. 10004
U.S.A.

All the officers and directors
as a group (6 persons)                               5,404,546            36.7%


(1)  Assumes 14,741,652 shares of Common Stock outstanding and assumes
      exercise of options held by named security holder.
(2)  Assumes sale of all the Securities offered by the Selling
      Securityholders.
(3)  Ronald J. Chapman, President and a director of the Company, owns 125,006
      shares directly and is the managing director (president) and majority
      shareholder of Chapman International Pty. Ltd., and may be considered the
      beneficial owner of the 450,000 Shares owned by it. Chapman International
      Pty. Ltd. is the controlling shareholder of ASIT Australia through which
      Mr. Chapman is the beneficial owner of 51,190 Shares. Mr. Chapman holds
      the power of attorney for the trustee of the Research No. 1 Trust which
      holds 2,548,422 Shares.
(4)  Graham O. Chappell, a director of the Company, is the managing director
      (president) and sole shareholder of Chappell Salikin Weil Associates Pty.
      Ltd. and is considered the beneficial owner of the 788,006 Shares. Mr.
      Chappell is the sole shareholder of International Aviation Services Pty.
      Ltd. which owns 43,400 shares of which Mr. Chappell is considered the
      beneficial owner.
(5)  Philip A. Shiels, Chief Financial Officer and a director of the Company,
      holds the power of attorney for the trustee of the Research No. 2 Trust
      which holds 1,198,522 Shares.
(6)  Ronald J. Chapman, President and a director of the Company is the
      managing director (president) and majority shareholder of Chapman
      International Pty. Ltd. which holds 450,000 Shares.
(7)  Ronald J. Chapman, President and a director of the Company, holds the
      power of attorney for the trustee of the Research No. 1 Trust which holds
      2,548,522 Shares.


                                    - 18 -
<PAGE>




(8)  Philip A. Shiels, Chief Financial Officer and a director of the Company,
      is the trustee and beneficial shareholder of the 1,198,522 Shares owned
      by Research No. 2 Trust.
(9)  Ronald Charles Banks is the beneficial owner of Glasser Limited, an
      unrelated independent entity which holds 801,056 shares.
(10) Mr Graham O. Chappell is the managing director (president) and sole
      shareholder of Chappell Salikin Weil Associates Pty. Ltd. and is
      considered the beneficial owner of 788,006 Shares.
(11) Ian Frank McBain is the beneficial owner of McBain & Co Investment
      Services Pty. Ltd., an unrelated independent entity which holds 771,316
      Shares.
(12) Cudd & Co. is the trustee for LURF Pty. Ltd. and is considered the
      beneficial owner of 1,250,000 Shares and 700,000 Options.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company has purchased the intellectual property of the ACAMS/ASI-9000 from
ASI Australia and has contracted to purchase the ACAMS, when available, from
ASIT Australia. ASIT Australia provides maintenance and servicing of the ACAMS
Hardware. Ronald J. Chapman, President and a director of the Company, controls
Chapman International Pty. Ltd. which owns 55% of ASI Holdings Pty. Ltd. which,
in turn, owns 61.5% of ASIT Australia. Philip A. Shiels, Chief Financial
Officer and a director of the Company, is a 45% shareholder of ASI (Holdings)
Pty. Ltd.

Graham O. Chappell, a director of the Company, is the managing director
(president) and sole shareholder of Chappell Salikin Weil Associates Pty. Ltd.

Ronald Chapman, Graham Chappell, and Philip Shiels are directors of the Company
and directors of the Company's subsidiaries ASI Entertainment Pty. Ltd. ("ASIE
Australia") and ASI Media Pty. Ltd. Ronald Chapman and Philip Shiels are the
directors and officers of ASIT Australia.

Research Trust No, 1 will likely provide management services to the Company.
Ronald J. Chapman, President and a director of the Company, holds the power of
attorney for the trustee of the Research No. 1 Trust.

By an agreement of January 9, 1996, ASI Entertainment Pty. Ltd. (prior to
becoming a subsidiary of the Company) purchased from ASI Technologies Pty. Ltd.
("ASIT Australia") among other items, the intellectual property of the ASI-9000
Program, and all rights contained in the exclusive Reseller Agreement for the
ACAMS Cabin Management and Communications System. The exclusive Reseller
Agreement provides, among other matters, that ASI Entertainment Pty. Ltd. shall
have the sole and exclusive right on a world wide basis to purchase ACAMS
terminals from ASI Australia and that ASI Australia shall provide all necessary
technical support services. The Reseller Agreement was for a term of 5 years
from the date of execution (January 9, 1996) with an automatic 5 year renewal
at the option of ASI Entertainment Pty. Ltd.

By an agreement dated August 16, 2001, the Company purchased the marketing and
manufacturing rights to the SecurEtag technology from the Research Trust No. 1.
Mr Ron Chapman, the President and a director of the Company, holds a power of
attorney for the trustee of the Research No. 1 Trust.

The Company has in the past and plans to continue in the future to purchase
products and services from ASIT Australia.



                                    - 19 -
<PAGE>




ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

Nil

























































                                    - 20 -
<PAGE>




                                  SIGNATURES

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

                                    ASI ENTERTAINMENT, INC.


                                    By:   /s/ Ronald J. Chapman
                                          ------------------------------------
                                              Ronald J. Chapman, President

                                    By:   /s/ Philip A. Shiels
                                          ------------------------------------
                                              Principal Financial Officer

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

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


/s/ Richard Lukso                         Director                   10/25/05
- - - - --------------------------------
      Richard Lukso


/s/ Ronald J. Chapman                     Director                   10/25/05
- - - - --------------------------------
      Ronald J. Chapman


/s/ Graham O. Chappell                    Director                   10/25/05
- - - - --------------------------------
      Graham O. Chappell


/s/ Philip A. Shiels                      Director                   10/25/05
- - - - --------------------------------
      Philip A.  Shiels


/s/ Thomas D. Henderson                   Director                   10/25/05
- - - - --------------------------------
      Thomas D. Henderson











                                    - 21 -
<PAGE>




                                CERTIFICATIONS
EX-31.1   CERTIFICATIONS OF CEO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002

I, Ronald J. Chapman, certify that:

1. I have reviewed this annual report on Form 10-KSB of ASI Entertainment,
Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

Date: October 25, 2005

/s/ Ronald J. Chapman

Ronald J. Chapman
Chief Executive Officer
                                    - 22 -
<PAGE>




EX-31.2  CERTIFICATIONS OF CFO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002

I, Philip A. Shiels, certify that:

1. I have reviewed this annual report on Form 10-KSB of ASI Entertainment,
Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

Date: October 25, 2005

/s/ Philip A. Shiels

Philip A. Shiels
Chief Financial Officer


<PAGE>





                           CERTIFICATION PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
                           (18 U.S.C. SECTION 1350)


In connection with the Annual Report of ASI Entertainment, Inc., a Delaware
corporation (the "Company"), on Form 10-KSB for the period ending June 30,
2005, as filed with the Securities and Exchange Commission (the "Report"),
Ronald J. Chapman, Chief Executive Officer of the Company and Philip A. Shiels,
Chief Financial Officer of the Company, respectively, do each hereby certify,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section
1350), that to his knowledge:

      (1) The Report fully complies with the requirements of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

      (2) The information contained in the Report fairly presents, in all
          material respects, the financial condition and result of operations
          of the Company.


/s/    Ronald J. Chapman

Ronald J. Chapman
Chief Executive Officer
October 25, 2005


/s/    Philip A. Shiels

Philip A. Shiels
Chief Financial Officer
October 25, 2005

[A signed original of this written statement required by Section 906 has been
provided ASI Entertainment, Inc. and will be retained by ASI Entertainment,
Inc. and furnished to the Securities and Exchange Commission or its staff upon
request.]


</SEC-DOCUMENT>



















<PAGE>