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

                                   FORM 10-KSB

[X}  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                     FOR THE FISCAL YEAR ENDED JUNE 30, 2007

                                       OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
                  FOR THE TRANSITION FROM _______ TO ________.

                       COMMISSION FILE NUMBER: 000-52458

                           ARKSON NUTRACEUTICALS CORP.
        (Exact Name of Small Business Issuer as Specified in its Charter)

          DELAWARE                                               51-0383940
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

4653 Carmel Mountain Road, Ste. 308-129, San Diego, California        92130
     (Address of principal executive offices)                      (Zip code)

                     Issuer's telephone number: 858-523-1177

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

      Title of each class:          Name of exchange on which registered:
      --------------------          -------------------------------------
             None                                    None

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

               Title of each class: Common Stock, par value $.0001

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 filers in response to Item 405 of
Regulation S-B 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. [ ]

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

The registrant's revenues for the year ended June 30, 2007 were $0 (zero).

The aggregate market value of the Common Stock held by non-affiliates of the
Registrant, based upon the average of the closing bid and ask price of the
Common Stock on the OTC Pink Sheets on August 10, 2007 of $.07, was
approximately $134,245. Shares of Common Stock held by each officer and director
and by each person who may be deemed to be an affiliate have been excluded.

The number of shares of common stock outstanding as of June 30, 2007 was
10,917,780.

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

DOCUMENTS INCORPORATED BY REFERENCE: None.
<PAGE>
           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-KSB includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The Registrant has based
these forward-looking statements on its current expectations and projections
about future events. These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions about the Registrant that may cause
its actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in this Annual Report on Form
10-KSB and in the Registrant's other Securities and Exchange Commission filings.

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION

Arkson Nutraceuticals, Inc. (herein referred to as "we," "our," "us," the
"Company," or the "Registrant") was incorporated on October 2, 1998 under the
laws of the State of Delaware. The Company intended to engage in the manufacture
and sale of a broad range of proprietary natural health food supplement
products. The Company began to negotiate licenses with developers of natural
health food supplements approximately one month after incorporation. The Company
also entered negotiations with various wholesale buyers of such products and
with finance organizations. These explorations and negotiations continued at a
high level for a period of approximately two years after incorporation, and at a
slower pace for one additional year. However, no such licenses or contracts
materialized.

As a result of the Company's failure to generate licenses, contracts, or sales
it operated at a loss. By June 2001 virtually all funds raised by the sale of
shares had been expended, and the Company thereafter became dormant. From July
1, 2001 until the present, it was inactive and could be deemed to be a so-called
"shell" company, an entity which is generally described as having no or nominal
operations and with no or nominal assets or assets consisting solely of cash and
cash equivalents.

BUSINESS OBJECTIVES OF THE REGISTRANT

As a shell, the Company has no present operations. Management has determined to
direct its efforts and limited resources to pursue and effect a business
combination.

CURRENT TRENDS

Management believes that as a result of the relative uncertainty in the United
States equity markets over the past years, many privately-held companies have
been closed off from the public market and traditional IPOs. Therefore,
Management believes that there are substantial business opportunities to effect
attractive acquisitions. As a public entity with its shares of common stock
registered under the Exchange Act and publicly trading, Management believes it
is well positioned to identify target acquisitions and to effect a business
combination in order to take advantage of these current trends.

EFFECTING A BUSINESS COMBINATION

Prospective purchasers of the Registrant's common stock will invest in the
Company without an opportunity to evaluate the specific merits or risks of any
one or more business combinations. A business combination may involve the
acquisition of, or merger with, a company which needs to raise substantial
additional capital by means of being a publicly traded company, while avoiding
what it may deem to be the adverse consequences of undertaking an initial public
offering itself. These include time delays, significant expense, loss of voting
control and compliance with various Federal and state securities laws. A

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potential business combination may involve a company which may be financially
unstable or in its early stages of development or growth.

THE REGISTRANT HAS NOT IDENTIFIED A TARGET BUSINESS OR TARGET INDUSTRY

The Registrant's effort in identifying a prospective target business will not be
limited to a particular industry and the Company may ultimately acquire a
business in any industry Management deems appropriate. To date, the Registrant
has not selected any target business or industry on which to concentrate its
search for a business combination. While the Registrant intends to focus on
target businesses in the United States, we are not limited to those entities and
may consummate a business combination with a target business outside of the
United States. Accordingly, there is no basis for investors in the Registrant's
common stock to evaluate the possible merits or risks of the target business or
the particular industry in which we may ultimately operate. To the extent we
effect a business combination with a financially unstable company or an entity
in its early stage of development or growth, including entities without
established records of sales or earnings, we may be affected by numerous risks
inherent in the business and operations of financially unstable and early stage
or potential emerging growth companies. In addition, to the extent that we
effect a business combination with an entity in an industry characterized by a
high level of risk, we may be affected by the currently unascertainable risks of
that industry. An extremely high level of risk frequently characterizes many
industries which experience rapid growth. In addition, although the Company's
Management will endeavor to evaluate the risks inherent in a particular industry
or target business, we cannot assure you that we will properly ascertain or
assess all significant risk factors.

SOURCES OF TARGET BUSINESSES

The Registrant anticipates that target business candidates will be brought to
our attention from various sources, including broker-dealers, investment
bankers, venture capitalists, bankers and other members of the financial
community who may present solicited or unsolicited proposals. While we do not
presently anticipate engaging the services of professional firms that specialize
in business acquisitions on any formal basis, we may engage these firms in the
future, in which event we may pay a finder's fee or other compensation. In no
event, however, will we pay Management any finder's fee or other compensation
for services rendered to us prior to or in connection with the consummation of a
business combination.

SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS COMBINATION

Management has voting control of 41% of our issued and outstanding stock, and
one former director owns an additional 41% of our outstanding stock. Assuming
that these shareholders vote together, they will have virtually unrestricted
flexibility in identifying and selecting a prospective target business. In
evaluating a prospective target business, our Management will consider, among
other factors, the following:

     -    financial condition and results of operation of the target company;
     -    growth potential;
     -    experience and skill of management and availability of additional
          personnel;

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     -    capital requirements;
     -    competitive position;
     -    stage of development of the products, processes or services;
     -    degree of current or potential market acceptance of the products,
          processes or services;
     -    proprietary features and degree of intellectual property or other
          protection of the products, processes or services;
     -    regulatory environment of the industry; and
     -    costs associated with effecting the business combination.

These criteria are not intended to be exhaustive. Any evaluation relating to the
merits of a particular business combination will be based, to the extent
relevant, on the above factors as well as other considerations deemed relevant
by our Management in effecting a business combination consistent with our
business objective. In evaluating a prospective target business, we will conduct
a due diligence review which may encompass, among other things, meetings with
incumbent management and inspection of facilities, as well as review of
financial and other information which will be made available to us.

The time and costs required to select and evaluate a target business and to
structure and complete the business combination cannot presently be ascertained
with any degree of certainty. Any costs incurred with respect to the
identification and evaluation of a prospective target business with which a
business combination is not ultimately completed will result in a loss to us.

PROBABLE LACK OF BUSINESS DIVERSIFICATION

We may seek to effect business combinations with more than one target business,
however it is probable that we will have the ability to effect only a single
business combination. Accordingly, the prospects for our success may be entirely
dependent upon the future performance of a single business. Unlike other
entities which may have the resources to complete several business combinations
with entities operating in multiple industries or multiple areas of a single
industry, it is probable that we will not have the resources to diversify our
operations or benefit from the possible spreading of risks or offsetting of
losses. By consummating a business combination with only a single entity, our
lack of diversification may:

- subject us to numerous economic, competitive and regulatory developments, any
or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to a business combination; and -
result in our dependency upon the development or market acceptance of a single
or limited number of products, processes or services.

LIMITED ABILITY TO EVALUATE THE TARGET BUSINESS' MANAGEMENT

Although we intend to closely scrutinize the management of a prospective target
business when evaluating the desirability of effecting a business combination,
we cannot assure you that our assessment of the target business' management will
prove to be correct. We cannot assure you that the future management will have
the necessary skills, qualifications or abilities to manage a public company
intending to embark on a program of business development. In addition, it is the

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intention of our current directors to resign once a business combination has
been effected, and therefore they will not be able to monitor the future
management of the business.

COMPETITION

In identifying, evaluating and selecting a target business, we expect to
encounter intense competition from other entities having a business objective
similar to ours. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater technical, human and other
resources than the Registrant and our financial resources will be relatively
limited when contrasted with those of many of these competitors. While we
believe there are numerous potential target businesses that may be interested in
effecting a business combination with a current, reporting public company,
Management believes that we may have only very limited ability to compete in
acquiring certain sizable target businesses because of our limited available
financial resources. This inherent competitive limitation gives others an
advantage in pursuing the acquisition of a target business. Further, any of
these obligations may place us at a competitive disadvantage in successfully
negotiating a business combination. Our management believes, however, that our
status as a public entity and potential access to the United States public
equity markets may give us a competitive advantage over privately-held entities
having a similar business objective as our in acquiring a target business with
significant growth potential on favorable terms.

If we succeed in effecting a business combination, there will be, in all
likelihood, intense competition from competitors of the target business. In
particular, certain industries which experience rapid growth frequently attract
an increasingly larger number of competitors, including competitors with
increasingly greater financial, marketing, technical and other resources than
the initial competitors in the industry. The degree of competition
characterizing the industry of any prospective target business cannot presently
be ascertained. We cannot assure you that, subsequent to a business combination,
we will have the resources to compete effectively, especially to the extent that
the target business is in a high-growth industry.

EMPLOYEES

Robert Auduon is our chief executive officer and Agatha Auduon is our chief
financial officer. Neither officer is obligated to contribute any specific
number of hours per week and both intend to devote only as much time as they
deem necessary to the Company's affairs. The amount of time they will devote in
any time period will vary based on the availability of suitable target
businesses to investigate. We do not intend to have any full time employees
prior to the consummation of a business combination.

CONFLICTS OF INTEREST

The Company's Management is not required to commit its full time to the
Company's affairs. As a result, pursuing new business opportunities may require
a greater period of time than if Management would devote full time to the
Company's affairs. Management is not precluded from serving as officer or
director of any other entity that is engaged in business activities similar to
those of the Registrant, however management is not currently involved with any

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such companies. In the future, Management may become associated or affiliated
with entities engaged in business activities similar to those we intend to
conduct. In such event, Management may have conflicts of interest in determining
to which entity a particular business opportunity should be presented. In the
event that the Company's Management has multiple business affiliations, it may
have legal obligations to present certain business opportunities to multiple
entities. In the event that a conflict of interest shall arise, Management will
consider factors such as reporting status, availability of audited financial
statements, current capitalization and the laws of the jurisdictions of the
target entities. If several business opportunities or operating entities
approach Management with respect to a business combination, Management will
consider the foregoing factors as well as the preferences of the incumbent
management of the operating company. However, Management will act in what it
believes will be the best interests of the shareholders of the Registrant. The
Registrant shall not enter into a transaction with a target business that is
affiliated with Management.

PERIODIC REPORTING AND AUDITED FINANCIAL STATEMENTS

We have registered our securities under the Securities Exchange Act of 1934 and
have reporting obligations, including the requirement that we file annual and
quarterly reports with the SEC. In accordance with the requirements of the
Exchange Act, our annual reports will contain financial statements audited and
reported on by our independent public accountants.

We will not acquire a target business if audited financial statements cannot be
obtained for the target business. Our Management believes that the requirement
of having available audited financial statements for the target business will
limit the pool of potential target businesses available for acquisition.

ITEM 1-A. RISKS ASSOCIATED WITH THE COMPANY'S BUSINESS

In addition to other information included in this annual report, the following
factors should be considered in evaluating the Company's business plan and
future prospects.

THE COMPANY HAS VERY LIMITED OPERATIONS AND RESOURCES.

In the past year the Company's operations have been limited to seeking a
potential business combination. The Company has no revenues from operations. Our
investors will have no basis upon which to evaluate the Company's ability to
achieve the Company's business objective, which is to effect a merger or
business combination with an operating business. The Company will not generate
any revenues until, at the earliest, after the consummation of a business
combination.

SINCE THE COMPANY HAS NOT CURRENTLY SELECTED A PARTICULAR TARGET INDUSTRY OR
TARGET BUSINESS WITH WHICH TO COMPLETE A BUSINESS COMBINATION, THE COMPANY IS
UNABLE TO CURRENTLY ASCERTAIN THE MERITS OR RISKS OF THE BUSINESS' OPERATIONS.

Since the Company has not yet identified a particular industry or prospective
target business, there is no basis for investors to evaluate the possible merits
or risks of the particular industry in which the Company may ultimately operate

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or the target business which the Company may ultimately acquire. To the extent
the Company completes a business combination with a financially unstable company
or an entity in its development stage, the Company may be affected by numerous
risks inherent in the business operations of those entities. Although the
Company's Management will endeavor to evaluate the risks inherent in a
particular industry or target business, the Company cannot assure you that it
will properly ascertain or assess all of the significant risk factors. There can
be no assurance that any prospective business combination will benefit
shareholders or prove to be more favorable to shareholders than any other
investment that may be made by shareholders and investors.

UNSPECIFIED AND UNASCERTAINABLE RISKS.

There is no basis for shareholders to evaluate the possible merits or risks of
potential business combination or the particular industry in which the Company
may ultimately operate. To the extent that the Company effects a business
combination with a financially unstable operating company or an entity that is
in its early stage of development or growth, including entities without
established records of revenues or income, the Company will become subject to
numerous risks inherent in the business and operations of that financially
unstable company. In addition, to the extent that the Company effects a business
combination with an entity in an industry characterized by a high degree of
risk, the Company will become subject to the currently unascertainable risks of
that industry. An extremely high level of risk frequently characterizes certain
industries that experience rapid growth. Although Management will endeavor to
evaluate the risks inherent in a particular business or industry, there can be
no assurance that Management will properly ascertain or assess all such risks or
that subsequent events may not alter the risks that the Company perceived at the
time of the consummation of a business combination.

THE COMPANY MAY ISSUE SHARES OF THE COMPANY'S COMMON STOCK TO COMPLETE A
BUSINESS COMBINATION, WHICH WOULD REDUCE THE EQUITY INTEREST OF THE COMPANY'S
STOCKHOLDERS AND LIKELY CAUSE A CHANGE IN CONTROL OF THE COMPANY'S OWNERSHIP.

The Company's certificate of incorporation authorizes the issuance of up to
50,000,000 shares of common stock, par value $0.0001 per share. The Company
currently has 39,082,220 authorized but unissued shares of the Company's common
stock available for issuance. Although the Company currently has no commitments
to issue any securities, the Company will, in all likelihood, issue a
substantial number of additional shares of its common stock in connection with a
business combination. To the extent that additional shares of common stock are
issued, the Company's shareholders would experience dilution of their respective
ownership interests in the Company. The issuance of additional shares of common
stock may adversely affect the market price of the Company's common stock, in
the event that an active trading market commences, of which there can be no
assurance. The issuance of additional shares of the Company's common stock:

     -    may significantly reduce the equity interest of current stockholders;
     -    will likely cause a change in control if a substantial number of the
          Company's shares of common stock are issued and result in the
          resignation of the Company's present officers and directors; and
     -    may adversely affect prevailing market price for the Company's common
          stock.

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Similarly, if the Company issues debt securities, it could result in:

     -    default and foreclosure on the Company's assets if the Company's
          operating revenues after a business combination were insufficient to
          pay the Company's debt obligations;
     -    acceleration of the Company's obligations to repay the indebtedness
          even if the Company has made all principal and interest payments when
          due if the debt security contains covenants that require the
          maintenance of certain financial ratios or reserves and any such
          covenant is breached without a waiver or renegotiation of that
          covenant;
     -    the Company's immediate payment of all principal and accrued interest,
          if any, if the debt security is payable on demand; and
     -    the Company's inability to obtain additional financing, if necessary,
          if the debt security contains covenants restricting the Company's
          ability to obtain additional financing while such security is
          outstanding.

IT IS LIKELY THAT THE COMPANY'S CURRENT OFFICERS AND DIRECTORS WILL RESIGN UPON
CONSUMMATION OF A BUSINESS COMBINATION AND THE COMPANY WILL HAVE ONLY LIMITED
ABILITY TO EVALUATE THE MANAGEMENT OF THE TARGET BUSINESS.

The Company's ability to successfully effect a business combination will be
dependent upon the efforts of the Company's Management. The future role of the
Company's key personnel in the target business, however, cannot presently be
ascertained. Although it is possible that Management will remain associated in
some capacity with the target business following a business combination, it is
more likely that the management of the target business at the time of the
business combination will replace current Management of the Registrant. Although
the Company intends to closely scrutinize the management of a prospective target
business in connection with evaluating the desirability of effecting a business
combination, the Company cannot assure you that the Company's assessment of
management will prove to be correct.

DEPENDENCE ON KEY PERSONNEL

The Company is dependent upon the continued services of its officers and
directors. To the extent that their services become unavailable, the Company
will be required to obtain other qualified personnel and there can be no
assurance that it will be able to recruit and hire qualified persons at
acceptable terms.

THE COMPANY'S OFFICERS AND DIRECTORS MAY ALLOCATE THEIR TIME TO OTHER BUSINESSES
THEREBY CAUSING CONFLICTS OF INTEREST IN THEIR DETERMINATION AS TO HOW MUCH TIME
TO DEVOTE TO THE COMPANY'S AFFAIRS. THIS COULD HAVE A NEGATIVE IMPACT ON THE
COMPANY'S ABILITY TO CONSUMMATE A BUSINESS COMBINATION.

The Company's officers and directors are not required to commit their full time
to the Company's affairs, which may result in a conflict of interest in
allocating their time between the Company's plan of operations and other
businesses. The Company does not intend to have any full time employees prior to
the consummation of a business combination. Management of the Company is engaged
in other business endeavors and is not obligated to contribute any specific
number of hours per week to the Company's affairs. If Management's other
business affairs require them to devote more substantial amounts of time to such
affairs, it could limit their ability to devote time to the Company's affairs
and could have a negative impact on the Company's ability to consummate a
business combination.

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THE COMPANY'S OFFICERS AND DIRECTORS ARE NOT NOW, BUT MAY IN THE FUTURE BECOME,
AFFILIATED WITH ENTITIES ENGAGED IN BUSINESS ACTIVITIES SIMILAR TO THOSE
INTENDED TO BE CONDUCTED BY THE COMPANY AND, ACCORDINGLY, MAY HAVE CONFLICTS OF
INTEREST IN DETERMINING WHICH ENTITY A PARTICULAR BUSINESS OPPORTUNITY SHOULD BE
PRESENTED TO.

The Company's officers and directors are not now, but may in the future become,
affiliated with entities, including other companies engaged in business
activities similar to those intended to be conducted by this Company.
Additionally, the Company's officers and directors may become aware of business
opportunities which may be appropriate for presentation to this Company as well
as other entities with which they may become affiliated. If the Company's
officers and directors become affiliated with other similar entities in the
future, they may have a fiduciary obligation to present potential business
opportunities to those entities in addition to presenting them to us which could
cause additional conflicts of interest. Accordingly, Management may have
conflicts of interest in determining to which entity a particular business
opportunity should be presented.

IT IS PROBABLE THAT THE COMPANY WILL ONLY BE ABLE TO ENTER INTO ONE BUSINESS
COMBINATION, WHICH WILL CAUSE US TO BE SOLELY DEPENDENT ON SUCH SINGLE BUSINESS
AND A LIMITED NUMBER OF PRODUCTS, PROCESSES OR SERVICES.

It is probable that the Company will enter into a business combination with a
single operating business. Accordingly, the prospects for the Company's success
may be:

     -    solely dependent upon the performance of a single operating business;
          or
     -    dependent upon the development or market acceptance of a single or
          limited number of products, processes or services.

In this case, the Company will not be able to diversify the Company's operations
or benefit from the possible spreading of risks or offsetting of losses, unlike
other entities which may have the resources to complete several business
combinations in different industries or different areas of a single industry.

THE COMPANY HAS LIMITED RESOURCES AND THERE IS SIGNIFICANT COMPETITION FOR
BUSINESS COMBINATION OPPORTUNITIES. THEREFORE, THE COMPANY MAY NOT BE ABLE TO
ENTER INTO OR CONSUMMATE AN ATTRACTIVE BUSINESS COMBINATION.

The Company expects to encounter intense competition from other entities having
a business objective similar to the Company's, including venture capital funds,
leveraged buyout funds and operating businesses competing for acquisitions. Many
of these entities are well established and have extensive experience in
identifying and effecting business combinations directly or through affiliates.
Many of these competitors possess far greater technical, human and other
resources than does the Company and the Company's financial resources are very
limited when contrasted with those of many of these competitors. While the
Company believes that there are numerous potential target businesses that it
could acquire, the Company's ability to compete in acquiring certain sizable
target businesses will be limited by the Company's limited financial resources
and the fact that the Company will use its common stock to acquire an operating

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business. This inherent competitive limitation gives others an advantage in
pursuing the acquisition of far more target businesses than the Company.

THE COMPANY MAY BE UNABLE TO OBTAIN ADDITIONAL FINANCING, IF REQUIRED, TO
COMPLETE A BUSINESS COMBINATION OR TO FUND THE OPERATIONS AND GROWTH OF THE
TARGET BUSINESS, WHICH COULD COMPEL THE COMPANY TO RESTRUCTURE A POTENTIAL
BUSINESS TRANSACTION OR ABANDON A PARTICULAR BUSINESS COMBINATION.

The Company has not yet identified any prospective target business. If we
require funds because of the size of the business combination, we will be
required to seek additional financing. We cannot assure you that such financing
would be available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to consummate a particular
business combination, we would be compelled to restructure the transaction or
abandon that particular business combination and seek an alternative target
business candidate. In addition, if we consummate a business combination, we may
require additional financing to fund the operations or growth of the target
business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business.
None of the Company's officers, directors or stockholders is required to provide
any financing to us in connection with or after a business combination.

ADDITIONAL FINANCING REQUIREMENTS ASSOCIATED WITH COMPLIANCE WITH REPORTING
REQUIREMENTS UNDER THE EXCHANGE ACT.

The Company has no revenues and is dependent upon the willingness of the
Company's Management to fund the costs associated with the reporting obligations
under the Exchange Act, other administrative costs associated with the Company's
corporate existence and expenses related to the Company's business objective.
Robert Auduon, an officer and director of the Company, has agreed to provide the
necessary funds, without interest, for the Company to comply with the 1934 Act
reporting requirements, provided that he is an officer and director of the
Company when the obligation is incurred. It is our present intent to continue to
comply with all of the reporting requirements under the 1934 Act.

THE COMPANY'S OFFICERS AND DIRECTORS OWN 41% OF ISSUED SHARES OF COMMON STOCK,
AND THUS MAY INFLUENCE CERTAIN ACTIONS REQUIRING STOCKHOLDER VOTE.

It is unlikely that there will be an annual meeting of stockholders to elect new
directors prior to the consummation of a business combination, in which case all
of the current directors will continue in office at least until the consummation
of the business combination. If there is an annual meeting, as a consequence of
the 41% interest of the Company's management, current management will continue
to exert substantial influence or control, at least until the consummation of a
business combination.

BROAD DISCRETION OF MANAGEMENT

Any person who invests in the Company's common stock will do so without an
opportunity to evaluate the specific merits or risks of any prospective business
combination. As a result, investors will be entirely dependent on the broad
discretion and judgment of Management in connection with the selection of a
prospective business combination. There can be no assurance that determinations

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made by the Company's Management will permit us to achieve the Company's
business objectives.

REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE A BUSINESS COMBINATION

Pursuant to the requirements of Section 13 of the Exchange Act, the Company is
required to provide certain information about significant acquisitions and other
material events. The Company will continue to be required to file quarterly
reports on Form 10-QSB and annual reports on Form 10-KSB, which annual report
must contain the Company's audited financial statements. As a reporting company
under the Exchange Act, following any business combination, we will be required
to file a report on Form 8-K, which report contains audited financial statements
of the acquired entity. These audited financial statements must be filed with
the SEC within 4 days following the transaction. While obtaining audited
financial statements is typically the responsibility of the acquired company, it
is possible that a potential target company may be a non-reporting company with
unaudited financial statements. The time and costs that may be incurred by some
potential target companies to prepare such audited financial statements may
significantly delay or may even preclude consummation of an otherwise desirable
business combination. Acquisition prospects that do not have or are unable to
obtain the required audited statements may not be appropriate for acquisition
because we are subject to the reporting requirements of the Exchange Act.

THE COMPANY'S SHARES OF COMMON STOCK ARE QUOTED ON THE PINKSHEETS, WHICH LIMITS
THE LIQUIDITY AND PRICE OF THE COMPANY'S COMMON STOCK.

The Company's shares of common stock are traded on the Pinksheets. Quotation of
the Company's securities on the Pinksheets limits the liquidity and price of the
Company's common stock more than if the Company's shares of common stock were
listed on The NASDAQ Stock Market or a national exchange. There is currently no
active trading market in the Company's common stock. There can be no assurance
that there will be an active trading market for the Company's common stock
following a business combination. In the event that an active trading market
commences, there can be no assurance as to the market price of the Company's
shares of common stock, whether any trading market will provide liquidity to
investors, or whether any trading market will be sustained.

IF THE COMPANY IS DEEMED TO BE AN INVESTMENT COMPANY, THE COMPANY MAY BE
REQUIRED TO INSTITUTE BURDENSOME COMPLIANCE REQUIREMENTS AND THE COMPANY'S
ACTIVITIES MAY BE RESTRICTED, WHICH MAY MAKE IT DIFFICULT FOR THE COMPANY TO
ENTER INTO A BUSINESS COMBINATION.

If we are deemed to be an investment company under the Investment Company Act of
1940, our activities may be restricted, including:

     -    restrictions on the nature of the Company's investments; and
     -    restrictions on the issuance of securities, which may make it
          difficult for us to complete a business combination.

In addition, we may have imposed upon us burdensome requirements, including:

     -    registration as an investment company;
     -    adoption of a specific form of corporate structure; and
     -    reporting, record keeping, voting, proxy and disclosure requirements
          and other rules and regulations.

                                       12
<PAGE>
The Company does not believe that its anticipated activities will subject it to
the Investment Company Act of 1940.

THE COMPANY MAY BE DEEMED TO HAVE NO "INDEPENDENT DIRECTORS", ACTIONS TAKEN AND
EXPENSES INCURRED BY OUR OFFICERS AND DIRECTORS ON BEHALF OF THE COMPANY WILL
GENERALLY NOT BE SUBJECT TO "INDEPENDENT REVIEW".

Our two officers and directors are married to each other and between them they
own 41% of our issued shares of common stock. They also may be reimbursed for
out-of-pocket expenses incurred by them in connection with activities on the
Company's behalf such as identifying potential target businesses and performing
due diligence on suitable business combinations. There is no limit on the amount
of these out-of-pocket expenses and there will be no review of the
reasonableness of the expenses by anyone other than our board of directors, who,
as noted above are married to each other. Our directors will not be deemed
"independent," and will generally not have the benefit of independent directors
examining the propriety of expenses incurred on our behalf and the sums subject
to reimbursement. Although the Company believes that all actions taken by our
directors on the Company's behalf will be in the Company's best interests, the
Company cannot assure our shareholders or investors that this will actually be
the case. If actions are taken, or expenses are incurred, that are actually not
in the Company's best interests, it could have a material adverse effect on our
business and plan of operations and adversely effect the price of our stock held
by the public stockholders.

STATE BLUE SKY REGISTRATION; POTENTIAL LIMITATIONS ON RESALE OF THE COMPANY'S
COMMON STOCK

The holders of the Company's shares of common stock registered under the
Exchange Act and those persons who desire to purchase them in any trading market
that may develop in the future, should be aware that there may be state blue-sky
law restrictions upon the ability of investors to resell the Company's
securities. Accordingly, investors should consider the secondary market for the
Registrant's securities to be a limited one.

It is the intention of the Registrant's Management following the consummation of
a business combination to seek coverage and publication of information regarding
the Registrant in an accepted publication manual which permits a manual
exemption. The manual exemption permits a security to be distributed in a
particular state without being registered if the Registrant issuing the security
has a listing for that security in a securities manual recognized by the state.
However, it is not enough for the security to be listed in a recognized manual.
The listing entry must contain (1) the names of issuers, officers, and
directors, (2) an issuer's balance sheet, and (3) a profit and loss statement
for either the fiscal year preceding the balance sheet or for the most recent
fiscal year of operations. Furthermore, the manual exemption is a non-issuer
exemption restricted to secondary trading transactions, making it unavailable
for issuers selling newly issued securities.

Most of the accepted manuals are those published by Standard and Poor's, Moody's
Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and
many states expressly recognize these manuals. A smaller number of states
declare that they "recognize securities manuals" but do not specify the
recognized manuals. The following states do not have any provisions and

                                       13
<PAGE>
therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.

DIVIDENDS UNLIKELY

The Company does not expect to pay dividends for the foreseeable future because
it has no revenues and no cash. The payment of dividends will be contingent upon
the Company's future revenues and earnings, if any, capital requirements and
overall financial conditions. The payment of any future dividends will be within
the discretion of the Company's board of directors as then constituted. It is
the Company's expectation that future management following a business
combination will determine to retain any earnings for use in its business
operations and accordingly, the Company does not anticipate declaring any
dividends in the foreseeable future.

OUR COMMON STOCK IS SUBJECT TO THE PENNY STOCK RULES OF THE SEC AND THE TRADING
MARKET IN OUR COMMON STOCK IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR COMMON
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR COMMON STOCK

The Company's common stock is considered a Penny Stock, as defined in the
Exchange Act and the rules thereunder, unless and until the price of the
Company's shares of common stock is at least $5.00. The Company's share price
presently is, and prior to any business combination, the share price is expected
to be, less than $5.00. Unless the Company's common stock is otherwise excluded
from the definition of Penny Stock, the Penny Stock rules apply. The Penny Stock
rules require a Broker-Dealer prior to a transaction in a Penny Stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document prepared by the SEC that provides information about the Penny Stock and
the nature and level of risks in the Penny Stock market. The Broker-Dealer also
must provide the customer with current bid and offer quotations for the Penny
Stock, the compensation of the Broker-Dealer and its sales person in the
transaction, and monthly account statements showing the market value of each
Penny Stock held in the customer's account. In addition, the Penny Stock rules
require that the Broker-Dealer, not otherwise exempt from such rules, must make
a special written determination that the Penny Stock is suitable for the
purchaser and receive the purchaser's written agreement prior to the
transaction. These disclosure rules have the effect of reducing the level of
trading activity in the secondary market for a stock that is subject to the
Penny Stock rules. So long as the common stock is subject to the Penny Stock
rules, it may become more difficult to sell such securities. Such requirements
could result in reduction in the level of trading activity for the Company's
common stock and could make it more difficult for investors to sell the
Company's common stock.

GENERAL ECONOMIC RISKS

The Company's current and future business plans are dependent, in large part, on
the state of the general economy. Adverse changes in economic conditions may
adversely affect the Company's plan of operation and business objective. These
conditions and other factors beyond the Company's control include, but are not
limited to regulatory changes.

                                       14
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTIES

We have no properties and at this time have no agreements to acquire any
properties.

We presently occupy office space at 4653 Carmel Mountain Road, Suite 308-129,
San Diego, CA 92130. This space is provided to the Company by our president on a
rent free basis, and it is anticipated that this arrangement will remain until
such time as the Company successfully consummates a merger or acquisition.
Management believes that this arrangement will meet the Company's needs until we
consummate a business combination.

ITEM 3. LEGAL PROCEEDINGS

None.

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

During the years ended June 30, 2007 and 2006, no matters were submitted to a
vote of the Company's security holders.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTER

(a) Market Price Information

The Registrant's common stock is quoted from time to time on the Pinksheets
under the symbol AKNC. The last reported trade took place more than two years
ago. The following table shows the high and low bid prices for the Registrant's
common stock during the fiscal years 2007 and 2006. These prices reflect
inter-dealer quotations without adjustments for retail markup, markdown or
commission, and do not necessarily represent actual transactions.

                                             High            Low
                                             ----            ---
     YEAR ENDED JUNE 30, 2007
       Quarter ended June 30,               $ 0.05          $0.001
       Quarter ended March 31,               0.001           0.001
       Quarter ended December 31,            0.001           0.001
       Quarter ended September 30,           0.001           0.001

     YEAR ENDED JUNE 30, 2006
       Quarter ended June 30,               $0.001          $0.001
       Quarter ended March 31,               0.001           0.001
       Quarter ended December 31,            0.001           0.001
       Quarter ended September 30,           0.001           0.001

(b) Approximate Number of Holders of Common Stock

On June 30, 2007, there were 86 shareholders of record of the Company's common
stock.

                                       15
<PAGE>
(c) Dividends

We currently do not pay cash dividends on the Company's common stock and have no
plans to instate a dividend on the Company's common stock.

(d) Recent Sales of Unregistered Securities

During the three month period ended June 30, 2007, the Registrant did not issue
any restricted securities. In February 2007 the Company agreed to issue
39,000,000 shares of its common stock to its then president, Kim Zilke, in
exchange for services. The ministerial aspects of this issuance were not
completed by our transfer agent before Ms. Zilke determined that she would leave
the Company to pursue opportunities in another area. Therefore, in the period
ended June 30, 2007, the issuance was rescinded. Ms. Zilke subsequently resigned
her positions as an officer and director. The resignation was not motivated by
any disagreement with the Company on any matter relating to the Company's plans,
operations, policies or practices, but rather by Ms. Zilke's decision to pursue
opportunities which involved a move to another state.

(e) Equity Compensation Plans

We have no equity compensation plans at June 30, 2007.

ITEM 6. SELECTED FINANCIAL DATA

     The following balance sheet data and statement of operations data for the
fiscal years ended June 30, 2007, 2006, 2005, 2004, and 2003 were derived from
our audited consolidated financial statements. Consolidated balance sheets at
June 30, 2007 and June 30, 2006 and the related consolidated statements of
operations and cash flows for fiscal 2007 and 2006 and notes thereto appear
elsewhere herein. The data should be read in conjunction with the annual
consolidated financial statements, related notes and other financial information
appearing elsewhere herein.

<TABLE>
<CAPTION>
                                  2007           2006          2005          2004          2003
                               ----------     ----------    ----------    ----------    ----------
<S>                            <C>            <C>           <C>           <C>           <C>
BALANCE SHEET DATA
Assets                                 --             --         2,585         2,585         2,585
Debt                               12,606          7,606        10,191        10,191        10,191
Equity                            (12,606)        (7,606)       (7,606)       (7,606)       (7,606)

STATEMENT OF OPERATIONS DATA
Revenues                               --             --            --            --            --
Loss                                5,000             --            --            --            --
Loss per Share                      .0003             --            --            --            --
No Shares                      17,417,780     10,917,780    10,917,780    10,917,780    10,917,780
</TABLE>

                                       16
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
        OPERATION

OVERVIEW

The Company discontinued its former business operations on July 1, 2001. The
Company's current business objective is to seek a business combination with an
operating company. We intend to use the Company's limited personnel and
financial resources in connection with such activities. The Company will utilize
its capital stock, debt or a combination of capital stock and debt, in effecting
a business combination. It may be expected that entering into a business
combination will involve the issuance of restricted shares of capital stock. The
issuance of additional shares of our capital stock:

     -    may significantly reduce the equity interest of our current
          stockholders;
     -    will likely cause a change in control if a substantial number of our
          shares are issued, and most likely will also result in the resignation
          of our present officers and directors; and
     -    may adversely affect the prevailing market price for our common stock.

Similarly, if we issued debt securities, it could result in:

     -    default and foreclosure on our assets if our operating revenues after
          a business combination were insufficient to pay our debt obligations;
     -    acceleration of our obligations to repay the indebtedness even if we
          have made all principal and interest payments when due if the debt
          security contained covenants that required the maintenance of certain
          financial ratios or reserves and any such covenants were breached
          without a waiver or renegotiation of such covenants;
     -    our immediate payment of all principal and accrued interest, if any,
          if the debt security was payable on demand; and
     -    our inability to obtain additional financing, if necessary, if the
          debt security contained covenants restricting our ability to obtain
          additional financing while such security was outstanding.

LIQUIDITY AND CAPITAL RESOURCES

Since discontinuing its former business operations on July 1, 2001, the
Registrant has neither engaged in any operations nor generated any revenues.
While we are dependent upon interim funding provided by Management to pay
professional fees and expenses, we have no written finance agreement with
Management to provide any continued funding. However, we may need to raise
additional funds through a private offering of debt or equity securities if
additional administrative funds are required to consummate a business
combination that is presented to us. We have no agreements to issue any debt or
equity securities and cannot predict whether equity or debt financing will
become available at terms acceptable to us, if at all.

At June 30, 2007, we had no assets and had liabilities of $12,606.

There are no limitations in the Company's articles of incorporation on the
Company's ability to borrow funds or raise funds through the issuance of
restricted common stock to effect a business combination. The Company's limited
resources and lack of having cash-generating business operations may make it
difficult to borrow funds or raise capital. The Company's inability to borrow
funds or raise funds through the issuance of restricted capital stock required

                                       17
<PAGE>
to effect or facilitate a business combination may have a material adverse
effect on the Company's financial condition and future prospects, including the
ability to complete a business combination. To the extent that debt financing
ultimately proves to be available, any borrowing will subject us to various
risks traditionally associated with indebtedness, including the risks of
interest rate fluctuations and insufficiency of any future cash flow to pay
principal and interest, including debt of an acquired business.

OFF-BALANCE SHEET ARRANGEMENTS

As of June 30, 2007, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities
Exchange Act of 1934.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

As of June 30, 2007 we did not have any contractual obligations.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in the notes to our financial
statements included elsewhere in this annual report.

ITEM 8. FINANCIAL STATEMENTS

The Registrant's audited financial statements for the fiscal years ended June
30, 2007 and 2006 are attached to this annual report and incorporated herein by
reference.

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

None.

ITEM 9-A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. As of June 30, 2007, the
Company's chief executive officer and chief financial officer conducted an
evaluation regarding the effectiveness of the Company's disclosure controls and
procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act.
Based upon the evaluation of these controls and procedures, our chief executive
officer and our chief financial officer concluded that our disclosure controls
and procedures were effective as of the date of filing this annual report.

CHANGES IN INTERNAL CONTROLS. No changes occurred in our internal control over
financial reporting that materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

ITEM 9-B. OTHER INFORMATION

None.

                                       18
<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, COMPLIANCE WITH
         SECTION 16(A)

     Robert Auduon,      age 64,   President, CEO and Director
     Agatha Auduon,      age 62,   Secretary, Treasurer, and Director

DR. ROBERT AUDUON was born in Saigon, Vietnam and educated in France. He holds a
Doctorate in Medicine, a degree in tropical diseases and a degree in Psychiatry.
During the years 1975 to 1979 he was employed as a staff Doctor at the
Psychiatric Institution of the Rhone Alpes (France). From 1980 to 1995 he owned
and operated a private psychiatry and psychotherapy practice in Valence, France
and also during the same period was employed as the Medical Director for the
Center for Children with Learning and Psychological Disabilities. In 1995, Dr.
Auduon immigrated to the United States to open a business in California
specializing in the formulation, manufacture and export of Health Food
Supplements. In 1998 this business was incorporated into Arkson Nutraceuticals,
Inc., the Registrant. Robert Auduon is married to Agatha Auduon.

AGATHA AUDUON, was born and received her early education in Saigon, Vietnam. She
holds a Bachelor of Arts degree from FuJen Catholic University in Taipei, Taiwan
and a Master of Arts degree from the University of Oregon, Eugene Oregon. During
the years 1976 to 1994 she held Financial Officer positions with Canadian and
American financial institutions. Since 1995 she has acted as Chief Financial
Officer of the Registrant and its predecessor. Agatha Auduon is married to
Robert Auduon.

ITEM 11. EXECUTIVE COMPENSATION

                      Annual Compensation            Long Term Compensation
                  --------------------------    -------------------------------
    Name          Salary     Bonus     Other    Stock Award    Options    Other
    ----          ------     -----     -----    -----------    -------    -----
Robert Auduon       0          0         0           0            0         0
Agatha Auduon       0          0         0           0            0         0

The Company has no employment agreement with either Robert Auduon, its CEO, or
Agatha Auduon, its CFO.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below discloses any person (including any "group") who is known to the
Registrant to be the beneficial owner of more than five (5%) percent of the
Registrant's voting securities. As of June 30, 2007, the Registrant had
10,917,780 shares of common stock issued and outstanding.

                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                            Amount and Nature of       Percent of
Title of Class    Name and Address of Beneficial Owner        Beneficial Owner          Class(1)
--------------    ------------------------------------        ----------------          --------
<S>              <C>                                         <C>                         <C>
Common Stock     Robert Auduon                               2,575,000 shares            23.59%
                 4653 Carmel Mountain Rd., Ste 308-129
                 San Diego, CA 92130

Common Stock     Robert Auduon                               1,925,000 shares            17.63%
                 4653 Carmel Mountain Rd., Ste 308-129
                 San Diego, CA 92130

Common Stock     David Lo                                    4,500,000 shares            41.22%
                 1205-7331 Westminster Highway
                 Richmond, BC,  V6X 4J4,  Canada
</TABLE>

The percentage and ownership is based on 10,917,780 issued and outstanding
shares as of June 30, 2007.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the last two fiscal years, to the knowledge of the Registrant, there was
no person who had or has a direct or indirect material interest in any
transaction or proposed transaction to which the Registrant was or is a party.

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K

a)   The following documents are filed as exhibits to this report on Form 10-KSB
     or incorporated by reference herein. Any document incorporated by reference
     is identified by a parenthetical reference to the SEC filing that included
     such document.

Exhibit
  No.                             Description
-------                           -----------

 31.1     Certification of CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the
          Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of
          2002.

 31.2     Certification of CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the
          Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of
          2002.

 32.1     Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350 as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b)   Reports on Form 8-K During the Last Quarter of the Fiscal Year Covered by
     this Report:

The Registrant did not file a current report on Form 8-K during the last quarter
of the fiscal year covered by this annual report.

The Registrant did file a current report on Form 8-K, covering items 5.02
(resignation of officer) and 5.03 (change in Registrant's fiscal year) on July
25, 2007.

                                       20
<PAGE>
ITEM 15. PRINCIPAL ACCOUNTING FEES AND SERVICES

INDEPENDENT PUBLIC ACCOUNTANTS

The Registrant's Board of Directors has appointed Stan J.H. Lee, CPA as
independent public accountant for the fiscal year ended June 30, 2007.

PRINCIPAL ACCOUNTING FEES

The following table presents the fees billed to us for professional audit
services rendered by Stan J. H. Lee, CPA for the audit of the Registrant's
annual financial statements for the year ended June 30, 2007, and fees billed
for other services rendered by Stan J. H. Lee, CPA during this period.

                                    Year Ended               Year Ended
                                  June 30, 2007            June 30, 2006
                                  -------------            -------------
     Audit Fees                      $5,000                    None
     Tax Fees                          None                    None
     All Other Fees                    None                    None

SECTION 16(A) COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934 requires the
Registrant's directors and executive officers, and persons who own beneficially
more than ten percent (10%) of the Registrant's Common Stock, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission.
Copies of all filed reports are required to be furnished to the Registrant
pursuant to Section 16(a). Based solely on the reports received by the
Registrant and on written representations from reporting persons, the Registrant
was informed that its two officers and directors, and its largest shareholder,
have not filed reports required under Section 16(a).

                                   SIGNATURES

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


Dated: August 13, 2007            /s/ Robert Auduon
                                  ------------------------------------
                                  Robert Auduon
                                  President, CEO and Director
                                  (Principal Executive Officer)


Dated: August 13, 2007            /s/ Agatha Auduon
                                  ------------------------------------
                                  Agatha Auduon
                                  Treasurer, Secretary and Director
                                  (Principal Financial Officer)

                                       21
<PAGE>
                               Stan J.H. Lee, CPA
         REGISTERED WITH THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD
             2160 North Central Rd. Suite 203 * Fort Lee * NJ 07024
                     794 Broadway * Chula Vista * CA 91910
             619-623-7799 Fax 619-564-3408 E-mail) stan2u@gmail.com


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Arkson Nutraceuticals Corp.

We have audited the accompanying  balance sheets of Arkson  Nutraceuticals Corp.
as of June 30, 2007 and 2006 and the related  statements of operations,  changes
in  shareholders'  equity and cash flows for the fiscal years then ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Arkson Nutraceuticals Corp. as
of December 31, 2006 and 2005, and the results of their  operations and its cash
flows for the years  then  ended in  conformity  with  U.S.  generally  accepted
accounting principles.

The  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's results of operations raise substantial doubt about its ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.


/s/ Stan J.H. Lee, CPA
----------------------------------
Stan J.H. Lee, CPA

August 2, 2007
Chula Vista, CA 91910

                                      F-1
<PAGE>
                           ARKSON NUTRACEUTICALS CORP.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             As of               As of
                                                         June 30, 2007       June 30, 2006
                                                         -------------       -------------
<S>                                                         <C>                 <C>
ASSETS

Current Assets
  Cash                                                      $      --           $      --
                                                            ---------           ---------

      Total Assets                                          $      --           $      --

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

  Loan from an officer and shareholder                         12,606               7,606
                                                            ---------           ---------
      TOTAL LIABILITIES                                     $  12,606           $   7,606

Stockholders' Equity (Deficit)
  Common stock, $.0001 par value:
   50,000,000 shares authorized,
   10,917,780 shares issued and outstanding
   as of 6/30/2007 and 2006, respectively                       1,092               1,092
  Additional paid in capital                                  122,688             122,688
  Deficit accumulated during the development stage           (136,386)           (131,386)
                                                            ---------           ---------
      Total Shareholders' Equity (Deficit)                    (12,606)             (7,606)
                                                            ---------           ---------

      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY              $      --           $      --
                                                            =========           =========
</TABLE>


                        See Notes to Financial Statements

                                      F-2
<PAGE>
                           ARKSON NUTRACEUTICALS CORP.

                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                  Oct. 2, 1998
                                                       Year Ended June 30,       (inception) to
                                                 ----------------------------       June 30,
                                                    2007             2006             2007
                                                 -----------      -----------      -----------
<S>                                              <C>              <C>              <C>
OPERATING REVENUE                                $        --      $        --      $        --
                                                 -----------      -----------      -----------
OPERATING COSTS
  Advertising                                                                            2,198
  Bank charges and expense                                                               1,102
  Dues, subscriptions, membership                                                        1,005
  Miscellaneous expenses                                                                    52
  Office expenses                                                                        1,416
  Professional Expenses                                5,000                            87,148
  Rent                                                                                  27,796
  Travel and entertainment                                                              15,893
                                                 -----------      -----------      -----------
TOTAL OPERATING COSTS                                  5,000               --          136,610
                                                 -----------      -----------      -----------

OPERATING NET INCOME (LOSS)                      $    (5,000)     $        --      $  (136,610)
                                                 -----------      -----------      -----------
OTHER INCOME (EXPENSE)
  Interest income                                                                          290
  Other income                                                                             194
                                                 -----------      -----------      -----------
                                                                                           484
NET INCOME (LOSS) BEFORE INCOME TAX BENEFIT

INCOME TAX
  Current income tax                                                                      (260)
  Income tax benefit                                                                        --
                                                 -----------      -----------      -----------

NET INCOME (LOSS)                                     (5,000)                         (136,386)
                                                 ===========      ===========      ===========
NET INCOME PER SHARE
  Basic and diluted earnings
   (Loss) per Share                                  (0.0003)              --
                                                 ===========      ===========      ===========
  Weighted average number of
   Common shares outstanding                      17,417,780       10,917,780
</TABLE>


                        See Notes to Financial Statements

                                      F-3
<PAGE>
                           ARKSON NUTRACEUTICALS CORP.

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                     Accumulated
                                Common Stock           Additional       During         Total
                            ---------------------       Paid in      Development    Stockholders
                            Shares         Amount       Capital         Stage          Equity
                            ------         ------       -------         -----          ------
<S>                       <C>             <C>          <C>            <C>            <C>
Balance, July 1, 2005     10,917,780      $ 1,092      $ 122,688      $(131,386)     $  (7,606)
                          ----------      -------      ---------      ---------      ---------
Net loss for year
 Ended June 30, 2006                                                                        --
                          ----------      -------      ---------      ---------      ---------
Balance, June 30, 2006    10,917,780        1,092        122,688       (131,386)        (7,606)
                          ----------      -------      ---------      ---------      ---------
Common stock issued
 for services             39,000,000        3,900         (3,900)
Common stock cancelled    39,000,000)      (3,900)         3,900
Net loss for year
 Ended June 30, 2007                                                     (5,000)        (5,000)
                          ----------      -------      ---------      ---------      ---------

Balance, June 30, 2007    10,917,780      $ 1,092      $ 122,688      $(136,386)     $ (12,606)
                          ==========      =======      =========      =========      =========
</TABLE>


                        See Notes to Financial Statements

                                      F-4
<PAGE>
                           ARKSON NUTRACEUTICALS CORP.

                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      Oct. 2, 1998
                                                    Year Ended        Year Ended     (inception) to
                                                  June 30, 2007     June 30, 2006     June 30, 2007
                                                  -------------     -------------     -------------
<S>                                                <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income (Loss) for period                     $   (5,000)       $       --        $(136,386)
  Adjustments to reconcile net income to
   net cash provided by operating activities:
  Changes in operating assets and liabilities:             --                --               --
                                                   ----------        ----------        ---------
Net Cash provided by (used in)
 operating activities:                                 (5,000)               --         (136,386)
                                                   ----------        ----------        ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by (used in)
 investing activities:                                     --                --               --
                                                   ----------        ----------        ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Loan from officers & shareholders                     5,000            (2,585)         (42,384)
  Loan from related party                              54,990
  Common stock issuance                               123,780
                                                   ----------        ----------        ---------
Net cash provided by (used in)
 financing activities                                   5,000            (2,585)         136,386
                                                   ----------        ----------        ---------
Net increase (decrease) in cash                            --            (2,585)              --
                                                   ----------        ----------        ---------
Cash beginning of period                                   --             2,585               --
                                                   ----------        ----------        ---------
Cash end of period                                 $       --        $       --        $      --
                                                   ==========        ==========        =========
SUPPLEMENTAL DISCLOSURES OF INTEREST
& INCOME TAXES PAID
  Interest paid                                    $       --        $       --        $      --
                                                   ----------        ----------        ---------
  Income taxes paid                                $       --        $       --        $     260
                                                   ----------        ----------        ---------
</TABLE>


                        See Notes to Financial Statements

                                      F-5
<PAGE>
                           ARKSON NUTRACEUTICALS CORP.
                          (A Development Stage Company)
                          Notes to Financial Statements
                               As of June 30, 2007


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY

Arkson  Nutraceuticals  Corp. (the "Company"),  was incorporated in the state of
Delaware on October 2, 1998. The Company was organized to manufacture and sell a
broad range of natural  health food  supplements.  The Company  currently has no
operations  and, in accordance with Statement of Financial  Accounting  Standard
(SFAS) No. 7,  "ACCOUNTING AND REPORTING BY DEVELOPMENT  STAGE  ENTERPRISES," is
considered a development stage enterprise.

Its  activities  to date have been limited to capital  formation,  organization,
development  of its business  plan,  and  discussions  with  representatives  of
private label manufacturers and wholesale buyers of natural supplements.

Company adopted June 30 as its accounting fiscal year.

CASH AND CASH EQUIVALENTS

For  purposes of the  statements  of cash  flows,  the  Company  considers  cash
instruments  with  original  maturities  of less  than  three  months to be cash
equivalents.

START-UP COSTS

Costs of start-up  activities,  including  organization  costs,  are expensed as
incurred, in accordance with Statement of Position (SOP) 98-5.

INCOME TAXES

The Company accounts for income taxes under SFAS No. 109, "Accounting for Income
Taxes." This statement  requires an asset and liability  approach to account for
income  taxes.  The  Company  provides   deferred  income  taxes  for  temporary
differences  that will result in taxable or  deductible  amounts in future years
based on the reporting of certain  costs in different  periods for financial and
income tax purposes.  There is no income tax for the periods ended June 30, 2007
or 2006.  The Company has net operating loss carry forward from prior years that
may be used to reduce future taxable income for income tax purposes.

USE OF ESTIMATES

The presentation of financial  statements in conformity with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities,  disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses  during the periods  presented.  Actual results
may differ significantly from those estimates.

FAIR VALUES OF FINANCIAL INSTRUMENTS

Statement of Financial  Accounting  Standards  No. 107,  DISCLOSURES  ABOUT FAIR
VALUE OF FINANCIAL  INSTRUMENTS,  requires  disclosure of fair value information
about financial instruments,  whether or not recognized in the balance sheet. In
cases where quoted  market  prices are not  available,  fair values are based on

                                      F-6
<PAGE>
estimates using present value or other valuation  techniques.  Those  techniques
are significantly  affected by the assumptions used, including the discount rate
and estimates of future cash flows.

In that regard,  the derived fair value  estimates  cannot be  substantiated  by
comparison to independent markets and, in many cases, could not be realized in
immediate settlement of the instruments. Statement No. 107 excludes certain
financial instruments and all non-financial instruments from its disclosure
requirements.

STOCK-BASED COMPENSATION

In accordance with the provisions of SFAS 123, the Company follows the intrinsic
value based method of accounting as prescribed by APB 25,  ACCOUNTING  FOR STOCK
ISSUED TO EMPLOYEES, for its stock-based compensation.

NEW ACCOUNTING PRONOUNCEMENTS

In February  2006, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standard  ("SFAS") No. 155,  "Accounting for
Certain Hybrid  Financial  Instruments--an  amendment of FASB Statements No. 133
and 140" ("SFAS No. 155").  The provisions of SFAS No. 155 will be effective for
all financial instruments acquired,  issued, or subject to a re-measurement (new
basis) event occurring after the beginning of an entity's first fiscal year that
begins  after  September  15,  2006.  The fair value  election  provided  for in
paragraph  4(c) of this  Statement  may also be applied  upon  adoption  of this
Statement  for  hybrid  financial  instruments  that had been  bifurcated  under
paragraph 12 of Statement 133 prior to the adoption of this  Statement.  Earlier
adoption is permitted as of the beginning of an entity's  fiscal year,  provided
the  entity  has  not  yet  issued  financial  statements,  including  financial
statements  for any interim  period,  for that fiscal year.  SFAS No. 155 amends
FASB  SFAS  No.  133,   "Accounting  for  Derivative   Instruments  and  Hedging
Activities"  ("SFAS No. 133"),  and SFAS No. 140,  "Accounting for Transfers and
Servicing of Financial  Assets and  Extinguishments  of Liabilities"  ("SFAS No.
140").  SFAS No. 155 resolves  issues  addressed in SFAS No. 133  Implementation
Issue  No.  D1,  "Application  of  Statement  133  to  Beneficial  Interests  in
Securitized   Financial   Assets".   This  Statement:   a)  permits  fair  value
re-measurement  for any hybrid  financial  instrument  that contains an embedded
derivative  that  otherwise  would  require  bifurcation,   b)  clarifies  which
interest-only   strips  and  principal-only   strips  are  not  subject  to  the
requirements of SFAS No.133, c) establishes a requirement to evaluate  interests
in securitized  financial  assets to identify  interests  that are  freestanding
derivatives or that are hybrid  financial  instruments  that contain an embedded
derivative  requiring  bifurcation,  d) clarifies that  concentrations of credit
risk in the form of subordination  are not embedded  derivatives,  and e) amends
SFAS No.140 to eliminate the prohibition on a qualifying  special purpose entity
from holding a derivative  financial  instrument  that  pertains to a beneficial
interest  other than another  derivative  financial  instrument.  The Company is
currently evaluating the impact of adopting SFAS No. 155.

In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial  Assets--an  amendment of FASB Statement No. 140" ("SFAS No. 156"). An
entity shall adopt this  Statement as of the  beginning of its first fiscal year
that begins after  September 15, 2006.  Earlier  adoption is permitted as of the
beginning  of an entity's  fiscal  year,  provided the entity has not yet issued
financial statements,  including interim financial statements, for any period of
that fiscal  year.  The  effective  date of this  Statement  is the date that an
entity adopts the  requirements of this Statement.  SFAS No. 156 amends SFAS No.
140,   "Accounting   for  Transfers  and  Servicing  of  Financial   Assets  and
Extinguishments  of Liabilities",  with respect to the accounting for separately
recognized  servicing  assets and  servicing  liabilities.  This  Statement:  a)
requires an entity to recognize a servicing  asset or servicing  liability  each
time it undertakes an obligation to service a financial asset by entering into a
servicing  contract  in  any  of  the  following  situations,  b)  requires  all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if  practicable,  c) permits an entity to choose between
two  subsequent  measurement  methods  for each class of  separately  recognized
servicing assets and servicing liabilities,  d) at its initial adoption, permits

                                      F-7
<PAGE>
a  one-time   reclassification  of  available-for-sale   securities  to  trading
securities by entities with recognized  servicing  rights,  without calling into
question the  treatment of other  available-for-sale  securities  under SFAS No.
115,  provided that the  available-for-sale  securities  are  identified in some
manner as offsetting the entity's exposure to changes in fair value of servicing
assets or servicing  liabilities that a servicer elects to subsequently  measure
at fair value,  and e) requires  separate  presentation of servicing  assets and
servicing  liabilities  subsequently  measured at fair value in the statement of
financial  position and additional  disclosures  for all  separately  recognized
servicing assets and servicing liabilities.  The Company is currently evaluating
the impact of adopting SFAS No. 156.

In July 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an  interpretation of FASB Statement No. 109".
FIN 48  requires  that  the  Company  recognize  in the  consolidated  financial
statements  the  impact of a tax  position  that is more  likely  than not to be
sustained upon examination  based on the technical  merits of the position.  The
provisions  of FIN No. 48 will be  effective  for the Company  beginning  in the
March 2007  quarter,  with the  cumulative  effect of the  change in  accounting
principle recorded as an adjustment to opening retained earnings. The Company is
currently evaluating the impact of adopting FIN No. 48.

In  September  2006,  the FASB issued SFAS No.  157,  "Fair Value  Measurements"
("SFAS No. 157"). SFAS No. 157 is effective for financial  statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years.  Earlier  application is  encouraged,  provided that the reporting
entity has not yet issued financial  statements for that fiscal year,  including
any financial  statements  for an interim  period  within that fiscal year.  The
Company is currently evaluating the impact of adopting SFAS No. 157.

In September  2006,  the FASB issued SFAS No. 158,  "Employers'  Accounting  for
Defined Benefit Pension and Other  Postretirement  Plans" ("SFAS No. 158"). SFAS
No. 158  provides  different  effective  dates for the  recognition  and related
disclosure  provisions  and  for  the  required  change  to  a  fiscal  year-end
measurement  date.  Also, the effective date of the  recognition  and disclosure
provisions  differs for an employer that is an issuer of publicly  traded equity
securities from one that is not. For purposes of this Statement,  an employer is
deemed  to  have  publicly  traded  equity  securities  if any of the  following
conditions is met: a) the employer has issued equity  securities that trade in a
public market,  which may be either a stock exchange (domestic or foreign) or an
over-the-counter market, including securities quoted only locally or regionally,
b) the employer has made a filing with a regulatory  agency in  preparation  for
the sale of any  class  of  equity  securities  in a  public  market,  or c) the
employer is  controlled  by an entity  covered by (a) or (b).  An employer  with
publicly  traded equity  securities  shall  initially  apply the  requirement to
recognize the funded status of a benefit plan and the disclosure requirements as
of the end of the fiscal year ending after December 15, 2006.  Application as of
the end of an earlier  fiscal year is  encouraged;  however,  early  application
shall be for all of an employer's benefit plans. The requirement to measure plan
assets and benefit  obligations as of the date of the employer's fiscal year-end
statement of financial position  (paragraphs 5, 6, and 9) shall be effective for
fiscal  years  ending  after  December  15,  2008,  and  shall  not  be  applied
retrospectively.  Earlier application is encouraged;  however, early application
shall be for all of an  employer's  benefit  plans.  An employer  with  publicly
traded equity  securities shall initially apply the requirement to recognize the
funded status of a benefit plan  (paragraph 4) and the  disclosure  requirements
(paragraph  7) as of the end of the fiscal year ending after  December 15, 2006.
The Company is currently evaluating the impact of adopting SFAS No. 158.

                                      F-8
<PAGE>
In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial  Assets and  Financial  Liabilities--Including  an  amendment  of FASB
Statement No. 115.

This Statement is effective as of the beginning of an entity's first fiscal year
that begins  after  November  15,  2007.  Early  adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,  provided
the entity also elects to apply the  provisions of FASB  Statement No. 157, Fair
Value Measurements

This Statement applies to all entities, including not-for-profit  organizations.
Most of the provisions of this  Statement  apply only to entities that elect the
fair value option.  However, the amendment to FASB Statement No. 115, Accounting
for Certain  Investments in Debt and Equity Securities,  applies to all entities
with   available-for-sale  and  trading  securities.   Some  requirements  apply
differently to entities that do not report net income.

IMPACT OF NEW ACCOUNTING STANDARDS

The  Company  does  not  expect  the  adoption  of  recently  issued  accounting
pronouncements  to  have a  significant  impact  on  the  Company's  results  of
operations, financial position, or cash flow.

NOTE 2 - STOCKHOLDERS' EQUITY

COMMON STOCK

The Company has authorized  fifty million  (50,000,000)  shares of common stock,
having one hundredth of a cent ($0.0001) par value per share.

On October 2, 1998 the Company  issued a total of 9,250,000  shares to its three
founders  for  services  rendered in  connection  with the  organization  of the
Company.  Also in 1998 the Company  issued  600,000  shares of common  stock for
cash, net of offering costs,  in the amount of $6,000.  Also in 1998 the Company
issued  1,000,000 shares of common stock for cash, net of offering costs, in the
amount of $50,000.

In 1999 the  Company  issued  16,000  shares  of common  stock for cash,  net of
offering costs, in the amount of $16,000.

In 2000 the  Company  issued  50,000  shares  of common  stock for cash,  net of
offering  costs,  in the amount of  $50,000,  and also issued  1,780  shares for
services  valued  at  $1,780.  As a result  of  these  and the  above  described
issuances,  there were a total of  10,917,780  shares of common stock issued and
outstanding at the end of 2000.

From 2000 through the fiscal year ended June 30, 2006, the Company did not issue
or cancel any stock.  There were  10,917,780  shares of common  stock issued and
outstanding at June 30, 2006.

During  the  fiscal  year  ending  June  30,  2007  the  Company  voted to issue
39,000,000 shares of common stock to an officer for services,  and then voted to
rescind  that  issuance.  As a result  of these  two  transactions,  there  were
10,917,780 shares of common stock issued and outstanding at June 30, 2007.

NOTE 3 - EARNINGS PER SHARE

The  computations  of  earnings  per share for the years ended June 30, 2007 and
2006 and the  period  October  2,  1998  (inception)  to June 30,  2007  were as
follows:

                                      F-9
<PAGE>
                                                                 October 2, 1998
                                         Year Ended June 30,      (Inception) to
                                      ------------------------       June 30,
                                         2007          2006            2007
                                      ----------    ----------      ----------
Loss per common share, basic
 Numerator Net Loss                       (5,000)           (0)       (136,386)

Denominator Weighted-average shares   17,417,780    10,917,780      11,669,462

Loss per common share                    (0.0003)           --         (0.0117)

For the years ended June 30, 2007 and 2006,  and for the period  October 2, 1998
(inception) to June 30, 2007 there were no shares  issuable under stock options,
warrants,  or rights.  Therefore,  diluted  earnings  per share were the same as
basic earnings per share at all times.

NOTE 4 - INCOME TAXES

At June 30, 2007,  the Company has a net  operating  loss  carryforward  for tax
purpose of  approximately  $136,386  which  expires  through the year 2018.  The
Internal Revenue Code contains  provisions which may limit the loss carryforward
available if significant changes in stockholder ownership of the Company occur.

There was no income and no provisions  for income taxes for the years ended June
30, 2007 and 2006.

NOTE 5 - RELATED PARTY TRANSACTIONS

LOANS PAYABLE

Between October 2, 1998  (Inception) and December 31, 2003 certain  officers and
shareholders made a number of non-interest bearing loans to the Company totaling
$54,990 and received principal repayments of those loans totaling $44,800. As of
December  31,  2003,  2004,  and 2005 one officer and  shareholder  was owed the
principal sum of $10,190.  On February 6, 2006 that officer and  shareholder was
repaid  $2,585 of the sum owing to him. As a result,  there was a  liability  of
$7,606 owed to an officer and  shareholder  as of June 30, 2006.  On February 8,
2007 that officer and shareholder  loaned the Company an additional $5,000. As a
result,  there was a liability of $12,606 owed to an officer and  shareholder as
of June 30, 2007.

NOTE 6 - GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  The Company's  financial position and
operating  results  raise  substantial  doubt  about the  Company's  ability  to
continue.  The Company  has had no  operating  revenue  since  inception  and is
currently not operating.

The ability of the Company to continue as a going concern is dependent upon
developing sales and obtaining additional capital and financing. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.

                                      F-10
<PAGE>
NOTE 7- SUBSEQUENT EVENT

There is no  subsequent  event to disclose  during the years ended June 30, 2007
and 2006.

NOTE 8 - COMMITMENT AND CONTIGENTCY

There is no commitment or  contingency  to disclose  during the years ended June
30, 2007 and 2006.

                                      F-11