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

                                   FORM 10-KSB

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007

                         Commission file number: 0-6428

                           ASI TECHNOLOGY CORPORATION
                 (Name of Small Business Issuer in its charter)

               Nevada                                          88-0105586
   (State or other jurisdiction of                          (I.R.S. Employer
   incorporation or organization)                        Identification Number)

                     980 American Pacific Drive, Suite #111
                             Henderson, Nevada 89014
                                 (702) 734-1888
          (Address and telephone number of principal executive offices)

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

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                          Common Stock, par value $0.02

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

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 is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                                          Yes [__] No   [ X ]
                                                                         ----

State issuer's revenues for its most recent fiscal year. $624,641

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of
October 31, 2007 (assuming for this purpose that only directors, officers and
10% or more shareholders of registrant are affiliates of registrant) was $
4,199,897.

As of December 12, 2007 there were 15,907,552 shares of ASI Technology
Corporation common stock, par value $0.02, outstanding.

================================================================================

<PAGE>

<TABLE>
<CAPTION>


                                                  TABLE OF CONTENTS
                                                                                                                 Page
                                                       PART I
<S>  <C>                                                                                                          <C>
ITEM 1.       Description of Business                                                                             3
ITEM 2.       Description of Property                                                                            11
ITEM 3.       Legal Proceedings                                                                                  11
ITEM 4.       Submission of Matters to a Vote of Security Holders                                                11

                                                       PART II
ITEM 5.       Market for Common Equity and Related Stockholder Matters and Small Issuer Purchase
                of Equity Securities                                                                             12
ITEM 6.       Management's Discussion and Analysis or Plan of Operation                                          13
ITEM 7.       Financial Statements                                                                               21
ITEM 8.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure               36
ITEM 8A.      Controls and Procedures                                                                            36
ITEM 8A(T)    Controls and Procedures                                                                            36
ITEM 8B.      Other Information                                                                                  36

                                                      PART III
ITEM 9.       Directors, Executive Officers, Promoters, Control Persons and Corporate Governance;
               Compliance with Section 16(a) of the Exchange Act                                                 37
ITEM 10.      Executive Compensation                                                                             39
ITEM 11.      Security Ownership of Certain Beneficial Owners and Management and
                Related Stockholder Matters                                                                      43
ITEM 12.      Certain Relationships and Related Transactions, and Director Independence                          44
ITEM 13.      Exhibits                                                                                           45
ITEM 14.      Principal Accountant Fees and Services                                                             46
              SIGNATURES                                                                                         47
</TABLE>


                           FORWARD-LOOKING STATEMENTS

IN ADDITION TO HISTORICAL INFORMATION, THIS ANNUAL REPORT CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND THE COMPANY DESIRES TO TAKE ADVANTAGE OF THE
"SAFE HARBOR" PROVISIONS THEREOF. THEREFORE, THE COMPANY IS INCLUDING THIS
STATEMENT FOR THE EXPRESS PURPOSE OF AVAILING ITSELF OF THE PROTECTIONS OF SUCH
SAFE HARBOR WITH RESPECT TO ALL OF SUCH FORWARD-LOOKING STATEMENTS. THE
FORWARD-LOOKING STATEMENTS IN THIS REPORT REFLECT THE COMPANY'S CURRENT VIEWS
WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. EXAMPLES OF FORWARD
LOOKING STATEMENTS INCLUDE THE EXPECTATIONS OF THE COMPANY WITH RESPECT TO ITS
STRATEGY. THERE CAN BE NO ASSURANCES THAT THE COMPANY'S FINANCIAL GOALS WILL BE
REALIZED. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES, INCLUDING THOSE DISCUSSED HEREIN, THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR THOSE ANTICIPATED. IN THIS
REPORT, THE WORDS "ANTICIPATES," "ESTIMATES," "BELIEVES," "EXPECTS," "INTENDS,"
"FUTURE," "GOAL," "OBJECTIVE" AND SIMILAR EXPRESSIONS GENERALLY IDENTIFY
FORWARD-LOOKING STATEMENTS. READERS ARE CAUTIONED TO CONSIDER THE SPECIFIC RISK
FACTORS DESCRIBED BELOW AND NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING
STATEMENTS CONTAINED HEREIN, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY
UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES THAT MAY ARISE AFTER THE DATE HEREOF.

In this report, the terms "ASI," "the Company," "we," "us," and "our" refer to
ASI Technology Corporation.


                                       2
<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

INTRODUCTION

ASI Technology Corporation ("ASI") is incorporated under the laws of the State
of Nevada. We are primarily a specialty finance company that provides financing
for commercial, residential and venture capital loans. During fiscal 2006, we
committed additional financial resources to our specialty finance activities. In
December 2006, we incorporated a wholly-owned subsidiary, ASI Capital
Corporation ("Subsidiary") and conduct specialty finance real estate loan
activities through this subsidiary. During the quarter ended March 31, 2007 we
completed the sale of $4 million of common stock to expand our specialty finance
business. Our limited other activity has been focused on the development of
plasma technology for sterilization and decontamination that we licensed in
January 2003. We have no current plans or commitments regarding any other
operating or development activities, however we have acquired other technologies
in the past and may pursue other technology or acquisitions or mergers in the
future.

From 1999 to 2005, we were considered a development stage enterprise. Our
specialty finance business commenced late in fiscal 2005 and we emerged from the
development stage in fiscal 2006. We have two reportable segments, specialty
finance and technology development.

Our specialty finance activities to date have focused on making real estate
loans and corporate and other loans. Real estate loans generally are advanced to
"bridge" finance projects during the development and permitting phase from land
acquisition to the start of construction. Our real estate notes are generally
receivable over a term of up to one-year with varying interest rates. Term
extensions are sometimes granted when additional time is required for
development and permitting. The notes are secured by deeds of trust or similar
legal liens such as mortgages on property but may be subordinate to a first deed
of trust or other obligations. Corporate and other loans are generally
collateralized by various corporate or other assets and are generally for terms
up to one year. These types of loans are considered high risk and are not
insured or guaranteed by any other party or any government agency.

Our Subsidiary was granted a Nevada Mortgage Banking license and a Nevada
Mortgage Broker license in February 2007.

Our investment in technology has focused on our licensed plasma sterilization
and decontamination technology. This patented generation method uses low voltage
to produce high volumes of atmospheric pressure plasma also known as room
temperature or "cold plasma". Cold plasma has been demonstrated in government
and university studies that we sponsored and in other published research to be
useful for sterilization and decontamination. This technology is in the early
stage of development and there can be no assurance that commercial viability
will be achieved. Our plan is to develop prototype devices to validate and
demonstrate this technology for commercial and government applications and
license the technology to others.

We were incorporated on January 9, 1931 and have evolved through a number of
name changes and equity reorganizations. We have 31,000,000 shares authorized,
$0.02 par value, of which 30,000,000 shares are designated common stock and
1,000,000 shares are designated preferred stock. As of the date of this annual
report, there were 15,907,552 shares of common stock issued and outstanding.
There are no shares of preferred stock issued or outstanding.

Our principal executive offices are located at 980 American Pacific Drive, Suite
#111, Henderson, Nevada 89014. Our telephone number is (702) 734-1888 and our
Internet Web site is www.asiplasma.com. The information on our Web site is not
part of this annual report.



                                       3
<PAGE>

SPECIALTY FINANCE BUSINESS

Strategy

The investment objective of our specialty finance activities is to generate
current income and cash flow from high-interest notes to real estate developers
and other commercial, residential and corporate borrowers. Our business strategy
is to grow our business from internally generated funds. We may in the future
seek additional equity or debt financing to grow our business. To date we have
not employed participating investor note financing or other institutional
financing. Our net income depends largely upon our net interest income, which is
the difference between interest and fee income from notes and investments,
referred to as interest-bearing assets, and interest expense on investor notes,
referred to as interest-bearing liabilities.

As a non-conventional lender, we are more willing to invest in real estate or
other commercial loans to borrowers that conventional lenders may not deem to be
creditworthy. Because of our increased willingness to fund higher risk loans,
borrowers are willing to pay us an interest rate that is five to twelve points
above the rates generally charged by conventional lenders. A significant amount
of our real estate loans relate to real property being developed and is not
generating any income to the borrower. These "balloon payment" loans and other
bridge loans are riskier because repayment depends on the borrower's ability to
refinance the loan as the property is developed.

We may seek to participate in other types of notes, loans or ventures in the
future. We may also participate in capital appreciation through various methods.
For example, we may formulate a capital appreciation strategy in connection with
real estate lending that may consist of revenue or project equity participation
in the underlying project. Capital appreciation with corporate loans or
investments may consist of stock, warrants, other equity or royalties. We have
no commitments in this regard as of the date of this report and there is no
assurance that such will materialize or that our current plans and objectives
might change.

Operations

Our corporate and finance offices are located in Henderson and Las Vegas,
Nevada. We operate as a direct lender and perform the record keeping, note
administration and servicing functions with regard to our note assets and
liabilities. Our real estate lending activity is conducted by our Subsidiary and
technology development through ASI.

Our business strategy is to grow and enhance our profitability by increasing our
portfolio of real estate loans by reinvesting profits in our business. We may
also expand our capacity in the future through additional placements of equity
or debt, through institutional or bank financing or through investor notes or
other sources. We intend to continue managing our assets and our collection
procedures for any problem assets. We do not expect that we will need to add
additional personnel or expanded facilities during the next twelve months.

Lending Activities

We do not advertise to the public or the commercial sector as being a buyer or
seller of notes secured by real property or as making loans secured by real
property or otherwise. We do not currently accept participations by others in
any loans and no other party has a beneficial interest in any of our notes. We
also do not solicit or accept loan applications.

Our outstanding notes are concentrated in Nevada with only one out-of-state note
($650,000) at September 30, 2007.

We rely primarily on our management's contacts and referrals from attorneys,
title companies and other industry professions to identify prospective
borrowers. Management selects the projects and loans and makes all investment
decisions. We have no formal policies for credit and collateral evaluation,
collections or foreclosure and recovery and management makes these decisions
based on experience on a case-by-case basis. However management generally
considers factors such as the following in evaluating potential loan recipients:

         o        Loan to property value, generally supported by property
                  appraisals
         o        Financial statements, background and experience of the
                  borrower
         o        Location and condition of the collateral

We deny or approve loans based on our capacity, the above factors and other
factors including negotiating interest rates on a case-by-case basis. Should our
originations increase, management expects to establish more formal procedures.

                                       4
<PAGE>

We may request corporate or personal guarantees, interest rates or repayment
terms from prospective borrowers which may result in that borrower electing to
take a loan from other lenders, including entities that are affiliated with our
president.

We evaluate loans for collectability at least monthly through a review of each
loan, its payment status, information from borrowers and any other available
information.


                                       5
<PAGE>

Our note receivable portfolio consisted of the following types of notes at the
dates indicated:

<TABLE>
<CAPTION>
                                                   RANGE OF
                                                    STATED                    SEPTEMBER 30,
                 DESCRIPTION                     INTEREST RATES           2007              2006
<S>                                                 <C>               <C>                <C>
Commercial real estate secured by trust deeds       15%-24%           $ 5,136,425        $1,785,000
Residential real estate second trust                  24%                  85,000                --
Corporate loans secured by asset liens              18%-24%               845,000                --
Other loans secured by various assets                 24%                  17,800                --
                                                                  ---------------  ----------------
    Total notes receivable, gross                                       6,084,225         1,785,000
Unearned fees and other                                                  (176,753)               --
Less allowance for losses                                                      --                --
                                                                  ---------------  ----------------
   Net notes receivable                                               $ 5,907,472        $1,785,000
                                                                  ===============  ================
</TABLE>

At September 30, 2007 a total of $5,902,225 of note maturities were within
twelve months and the balance of $182,000 within two years. Unearned fees and
other includes loan origination fees, points and prepaid interest from borrowers
that are amortized to interest income over the estimated average life of the
notes under a method which approximates the effective interest rate method.
Direct loan origination fees and costs have been immaterial to date.

The following table summarizes finance activity related to notes receivable for
the periods presented:

                                                YEAR ENDED
                                              SEPTEMBER 30,
                                          2007              2006

Balance, beginning of year            $ 1,785,000      $   755,000
Originations                            4,848,925        1,785,000
Note purchased from related party         760,000               --
Notes sold to related party              (148,083)              --
Deferred finance charges, net            (176,753)              --
Principal collected                    (1,161,617)        (755,000)
                                      -----------      -----------
Balance, end of year                  $ 5,907,472      $ 1,785,000
                                      ===========      ===========


Non-Performing Assets

We define non-performing assets as non-accrual notes and collateral (generally
real estate) owned and held for sale. Notes that are delinquent in payment for
more than 30 days are evaluated by management for collectibility and notes
delinquent more than 90 days will be considered in non-accrual status when
management determines that future earnings on the notes may be impaired. While
in non-accrual status, collections on loans, if any, are recorded as collection
of loan principal and no interest is recorded.

We have had no non-performing notes since the inception of our lending
activities and had no past due notes at September 30, 2007. In September 2007,
we sold two notes to a related party (see "Conflicts of Interest and Related
Party Note Transactions" below). These notes were 30 and 60 days past due in
principal and interest payment and the borrower was seeking amended terms that
were unacceptable to us. If we were unable to sell these notes to a related
party these notes may have become non-performing and we may have had to provide
an allowance for loan losses related thereto. There can be no assurance that if
we have non-performing notes in the future that we will be able to sell or
otherwise avoid a loss. We may be required to expend funds to foreclose on
problem notes in the future and we may be required to payoff superior loan
positions further increasing exposure to a particular project or collateral
position.


                                       6
<PAGE>

Allowance for Loan Losses

We have no allowance for losses as of September 30, 2007 or 2006. Should a
provision be required as an allowance for loan losses in the future, the
carrying value of notes would be adjusted. The need for and the adequacy of any
allowance is periodically reviewed by management based upon payment status, past
experience, the value of the underlying collateral for specific notes, known or
inherent risks in the note portfolio, and current economic conditions.

Market Area, Credit Risk Concentration and Competition

Our specialty finance business has been limited to a few notes to a few
customers. Three customers accounted for 81% (39%, 27% and 15%) of interest and
fees on notes for fiscal 2007 and one customer group accounted for 100% of
interest and fees on notes for fiscal 2006. A single customer includes
affiliated entities under common control. At September 30, 2007 two notes for
$1,303,000 were due by entities controlled by one residential developer and
three notes for $2,747,025 were due by one commercial/residential developer. Due
to the limited number of notes and the concentrated amounts, non-payment of
interest or a default on a note would have a material adverse impact on our
operations.

We do not believe competition is a factor affecting our business but may be so
in the future if we substantially increase our originations. At that time,
competition will be the providers of non-conventional real estate loans, that
is, lenders who offer short-term high-interest, or short-term high-interest and
equity-based loans on an expedited basis for higher fees and rates than those
charged by conventional lenders. Also conventional lenders may from time to time
make riskier high-interest loans thus being competitive. These conventional
lenders include commercial banks, thrifts, conduit lenders, insurance companies,
mortgage brokers, pension funds and other financial institutions. No particular
competitor dominates the market but they have substantially greater financial
and other resources than us. Our venture capital type loans that are unrelated
to real estate, face a similar competitive environment.

Conflicts of Interest and Related Party Note Transactions

Our officers and directors and consulting personnel devote only part-time
services to our company and have other employment and business interests to
which they devote attention and will continue to do so, resulting in potential
conflicts of interest.

Our president and other directors and officers, in addition to being part-time
and having other business interests, also invest in real estate and venture
loans through other entities. There is a risk that management may select a loan
that has different returns or risk profile than loans not so selected and funded
through other entities. There are no restrictions or guidelines on how
management will determine which loans are appropriate for us and which are
appropriate for other entities in which management may have an interest.
Management has no obligation to provide us with any particular opportunities.

In March 2007, we purchased from an entity owned by our president a 15% note
secured by a deed of trust payable by an unaffiliated borrower with a stated
principal of $760,000 with an original issue date of December 28, 2006, and a
due date of December 28, 2007. The purchase price paid represented the cash
advanced under the note adjusted only for the pro rata interest and finance
charges to the purchase date. Management determined this note met our
underwriting requirements and the purchase allowed us to deploy new equity funds
more rapidly than seeking a new loan.

Effective September 21, 2007, we sold two 24% notes receivable from an
unaffiliated borrower with aggregate outstanding principal of $148,083 to an
entity owned by our president. The cash price received for the notes was
$155,362 representing the outstanding principal and accrued unpaid interest at
the stated rate of 24% per annum through the date of sale. We waived late fees
of $2,809 owing by the unaffiliated borrower. This borrower was in arrears on
payments and seeking amended terms that did not meet our underwriting
objectives.

We have no plans or commitments to purchase or sell notes to related parties but
may do so on a case by case basis in the future.


                                       7
<PAGE>

Regulation

We are not a real estate investment trust ("REIT"), a mutual fund or an
investment company within the meaning of the Investment Company Act of 1940, and
we do not believe we are subject to any regulation thereunder.

Even though our lending activities are limited, we believe we are subject to
licensing by the State of Nevada Mortgage Lending Division and accordingly, we
applied for and in February 2007 our Subsidiary was granted a Nevada Mortgage
Banking license and a Nevada Mortgage Broker license. The status of both
licenses is current. Under applicable Nevada law, the Nevada Mortgage Lending
Division has broad discretionary authority over lending activities, including
the authority to conduct periodic regulatory audits of a lender's operations. We
may also become subject to the Equal Credit Opportunity Act of 1974, which
prohibits creditors from discriminating against loan applicants on the basis of
race, color, sex, age or marital status, and the Fair Credit Reporting Act of
1970, which requires lenders to supply applicants with the name and address of
the reporting agency if the applicant is denied credit.

There can be no assurance that laws, rules or regulations will not be adopted in
the future that could make compliance much more difficult or expensive, restrict
our ability to make loans, limit or restrict the amount of interest and other
charges earned on loans by us, or otherwise adversely affect our business or
prospects.

Management and Personnel

We have one full-time employee in our specialty finance business and our two
executive officers provide only part-time services to our company. Our current
executive officers are not compensated for their services other than for
attendance at board and committee meetings, equity participation and the
possibility of future bonuses. We employ technical consultants and others on a
contract or project-by-project basis. We have not experienced any work stoppages
and are not a party to a collective bargaining agreement.

PLASMA STERILIZATION AND DECONTAMINATION

Effective January 1, 2003, we entered into an exclusive license agreement with
the inventor of U.S. Patent #6,232,723 granting us worldwide exclusive rights to
the patent and related technology for sterilization, decontamination and
industrial processing for a minimum term of 15 years, subject to certain
commercialization performance requirements after the third year. We believe we
meet the commercialization requirements to maintain the exclusive license. If we
do not meet the commercialization requirements, our license would revert to
non-exclusive. The agreement also provides for future royalty payments to the
licensor based on product sales or sublicense fees. The inventor has been a
consultant to us from time to time on various plasma technologies. The licensed
technology was independently developed by the inventor prior to any of his work
for us.

Plasma Overview

The different states of matter generally found on earth are solid, liquid, and
gas. Sir William Crookes, an English physicist, identified a fourth state of
matter, now called plasma, in 1879. Plasma is by far the most common form of
matter. Plasma in the stars and in the tenuous space between them makes up over
99% of the visible universe and perhaps most of that which is not visible.
Plasmas are created each time a fluorescent light is turned on. Jets of plasma
spin and maneuver orbiting satellites. Important to our technology, plasmas are
conductive assemblies of charged and neutral particles and fields that exhibit
collective effects. Plasmas carry electrical currents and generate magnetic
fields.

Plasma Sterilization and Decontamination

Atmospheric pressure plasmas or room temperature, non-thermal plasmas generated
at relatively low energy levels are known as cold plasmas. Cold plasmas have
demonstrated effectiveness in rapid sterilization, decontamination and
industrial processing. When generated, cold plasma is a bluish substance that
resembles a fog like gas.

The plasma process produces a sterilization effect using lower concentrations of
sterilant but with a higher reactivity than is possible with normal gases. This
activity disappears quickly when power is removed, thereby dissipating the
toxicity of the sterilant rapidly. Atmospheric pressure plasmas allow for rapid
decontamination of clothing, equipment



                                       8
<PAGE>

and personal gear in military settings, and for sterilization of medical
equipment, food and packaging in commercial settings. Present methods of
sterilization and decontamination often require hours and may generate damaging
heat or other toxic side effects or require a vacuum; cold plasma can sanitize
often in mere minutes without toxic byproducts and at atmospheric pressure.

Cold plasmas generated using high power are also employed in industry, in
semiconductor manufacturing and flat screen televisions. Historically, such
plasmas have been generated in vacuum conditions with other gases or chemicals
or with very high power, making them cost, weight and size prohibitive for
broader or portable applications.

The licensor, Dr. Igor Alexeff, developed, tested and patented a low power
plasma discharge apparatus that operates at atmospheric pressure to generate a
plasma cloud of activated oxygen in air. It produces a cloud of ionized gas at
atmospheric pressure and at low temperatures. The novel technique employs a
resistive barrier discharge by using ceramics to prevent unwanted arcing and
achieve an even, broad, high volume and efficient discharge. The generated cold
plasma cells destroy molecules using highly reactive free oxygen radicals -
atoms or molecules that have unpaired electrons that when paired with bacteria,
rapidly destroy the targeted organism. The cold plasma also contains a large
volume of hydroxyl ions, ozone and atomic oxygen to rapidly oxidize most
unwanted bacteria. We believe cold plasma treatment does not harm the skin or
body and has no effect on fragile plastic or steel instruments or devices.

The U.S. Air Force has been a leading sponsor of cold plasma research. The
Persian Gulf War in 1991 accelerated the need for rapid means of sterilization
and decontamination. By disrupting the integrity of cell membranes, cold plasma
offers a rapid, simple and economical means of destroying even the hardiest
bacterial spores in minutes compared to the hours required by alternative
methods. Independent research by others has demonstrated that cold plasma can
rapidly break down complex chemicals found in nerve gas and deadly biological
agents like anthrax.

We tested our technology under contract for the U.S. Air Force in 2003 targeting
a use to decontaminate forward deployed equipment and facilities. We are
expanding our knowledge of how our cold plasma method kills viruses and
bacteria, measuring its efficacy in controlled studies sponsored by us and
others, evaluating commercial application and developing prototypes for
demonstration to prospective licensees and as a test platform for testing with
bacteria and other agents.

We have sponsored Dr. Alexeff and students at the University of Tennessee,
Knoxville to test our method of sterilization and decontamination. Dr. Alexeff
has also performed his own continuing research. During the last three years,
important published and unpublished scientific reports on these experimental
results evidence to us that:

         o        Concentrations of E. Coli bacteria can be effectively killed
                  in 4-10 minutes with the plasma discharge.
         o        The plasma discharge works away from the generating surface
                  indicating the possibility of circulating the plasma away from
                  the generating source.
         o        The plasma discharge is capable of penetrating a sealed
                  standard business envelope and kill E. Coli bacteria in a
                  short time without any application of heat to the envelope.
         o        The charged particles created in the process have separate
                  biological killing properties distinct from the ozone also
                  included in the discharge (ozone, is a primary commercial
                  decontamination method).
         o        The plasma kill effect is accelerated in combination with
                  hydrogen peroxide.
         o        The discharge is effective in not only rapidly killing
                  bacteria but also inactivating resistant spores, a major goal
                  of food sterilization.

There are competing methods to generate cold plasmas including using electron
beams, corona discharges, dielectric barrier discharges, pin array discharges
and others. Often RF (radio frequency) power supplies are employed to create
atmospheric gaseous discharges requiring high power and emitting high electro
magnetic radiation. Our plasma is generated with low non-RF power supplies.
Another important distinguishing feature of our method is the use of ceramic
discharge electrodes that produce an even diffuse discharge in the intended
area, whereas traditional materials often result in a small arc greatly
minimizing the discharge area. Our recent research supports that cold plasma is
an effective bacteria sterilizer and that our method produces bacteria killing
agents distinct from ozone generated in the process. Our recent research efforts
have focused on building and testing prototypes with a focus on selecting,
sourcing and evaluating various critical component options.


                                       9
<PAGE>

While research activity was limited in fiscal 2007 as we expanded our specialty
finance business, management intends to expend additional resources on plasma
development in fiscal 2008, although the timing of expenditures will vary as we
evaluate projects, progress and achievements with this technology.

Plasma Market Opportunities and Strategy

Some known applications of cold plasma that we believe we can target include:

         o        Combating bacteria warfare
         o        Sterilization of medical instruments
         o        Rapid room temperature sterilization of food, including
                  protection from Salmonella bacteria
         o        Destroying allergens or decontaminating homes, packages,
                  ships, businesses or other environments
         o        Surface modification of materials, e.g. to cause water or
                  paint to stick to plastics

We expect to explore commercial markets focusing primarily on medical, food and
package sterilization. We believe portability and efficiency are key advantages,
but the lack of heat or steam or toxic side effects offers additional advantages
over some existing methods of sterilization and decontamination. We also believe
our methods could be adapted to decontaminate buildings, homes, cruise ships and
other facilities.

We are in early stages of testing our method and evaluating opportunities. Our
goal is to prove our method in military and commercial applications. Management
believes the next major development milestone is to demonstrate and test
improved prototypes. Our strategy is to license others to manufacture devices.
Our efforts are at a early stage and we do not have a timetable or an estimate
of the cost of developing these applications and obtaining the necessary
approvals for sale or use of any devices. There can be no assurance we can
develop the plasma sterilization and decontamination technology successfully or
that this technology can be commercialized.

Plasma Sound Reduction

We purchased certain sound reduction technology in 2000. We are obligated to pay
royalties on product sales, license revenues and any sale proceeds from the
further sale of the technology for the term of the patent expiring in 2017. We
are not currently developing this technology and have no present plans to do so.

Competition

Our current technology investment and development business is limited to one
technology. The market for sterilization and decontamination is highly
competitive, with many companies supplying equipment for food and facility
decontamination and medical sterilization. Steam, chemicals and acids, radiation
and ultraviolet light are just some of the methods employed for sterilization
and decontamination. One example is a plasma system using hydrogen peroxide that
has been used for a number of years by a division of Johnson & Johnson Medical,
Inc. Another example is TSO3, Inc., a Canadian company that recently obtained
approval for an ozone medical sterilizer. The many companies engaged in these
activities are larger and have substantially greater resources than we do. We
may not be able to compete successfully in this market. The U.S. government is
also sponsoring cold plasma research by universities and others. Others have
developed cold plasma generation methods and systems. It is possible that such
organizations have developed or may develop in the future plasma generation
methods and systems superior to those envisioned by us.

Regulation

Medical facilities, medical equipment and food processing and distribution are
all highly regulated. It is likely that any equipment developed for
sterilization or decontamination will be subject to existing government
regulations and require advance approval prior to sale or use. This could
increase the costs of development and commercialization and extend the time to
market for any devices developed with our plasma sterilization or
decontamination technology.

Intellectual Property Rights

Dr. Alexeff owns one U.S. patent on the plasma sterilization and decontamination
technology we have licensed. We may file additional patents on this technology
as we progress with development. No foreign rights have been applied for to date
and we may therefore be unable to protect any rights outside of the United
States. We purchased and own one U.S. patent on our plasma sound reduction
technology.


                                       10
<PAGE>

We have an ongoing policy of filing patent applications to seek protection for
novel features of our technologies. There can be no assurance that any
additional patents on our technology will be granted.

We believe that a strong patent position is important to compete effectively if
we license our plasma technology. The technology industry is characterized by
frequent litigation regarding patent and other intellectual property rights.
Others, including academic institutions and competitors, may hold patents in
competing areas. Although we do not believe any existing patents would inhibit
our ability to license our plasma technology, there can be no assurance that
others will not assert claims in the future. There can be no assurance that such
claims, with or without merit, would not have a material adverse effect on our
financial condition or results of operations.

The validity of our existing patent, or that licensed by us, has not been
adjudicated by any court. Competitors may bring legal action to challenge the
validity of our existing or future patents or may attempt to circumvent the
protection provided by such patents. There can be no assurance that either of
such activities by competitors would not be successful. The failure to obtain
patent protection or the loss of patent protection on our technologies or the
circumvention of our patents, by competitors could have a material adverse
effect on our ability to compete successfully.




Research and Development

For the year ended September 30, 2007 and 2006 we expended $5,465 and $35,910,
respectively, on research and development. Future levels of research and
development expenditures will vary depending on the timing of further technology
development and the availability of funds to carry on additional research and
development on currently owned technologies or in other areas. We currently have
no sources of sponsored research and development.

ITEM 2. DESCRIPTION OF PROPERTY

Our principal executive offices are located at 980 American Pacific Drive, Suite
#111, Henderson, Nevada 89014, which is the principal business office of our
President, Jerry E. Polis, who has other business operations at this location.
We share approximately 2,600 square feet with other businesses affiliated with
Mr. Polis. We pay a company affiliated with Mr. Jerry Polis, our President and a
director, a month-to-month fee for office rent and accounting and administrative
services. Since July 2002 the rate has been an aggregate of $1,000 per month. We
believe these terms are no less favorable than what could be obtained from
outside providers.

Effective in June 2007, our Subsidiary subleased and occupied approximately
3,750 square feet of office space at 9121 W. Russell Rd., Suite 110, Las Vegas,
Nevada within space leased by our president and an unrelated individual. The
rate paid pursuant to the sublease is the same monthly rate as charged by the
unrelated primary landlord. We received a gross cash leasehold improvement
incentive as a pass-through from the primary landlord of $136,224 of which
$32,800 relates to space not subleased or improved by the Subsidiary. The
$32,800 is included in accrued liabilities and according to the terms of the
sublease is payable at the direction of the sublessor. The current monthly
payment of $7,869 is subject to future cost of living and operating expense
adjustments, through March 2012.

ITEM 3. LEGAL PROCEEDINGS

We are not involved in any threatened or pending legal proceedings.

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

No matter was submitted to a vote of security holders during the last quarter of
the fiscal period covered by this report.


                                       11
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

On April 4, 2002, our shares of common stock commenced quotation on the OTC
Electronic Bulletin Board (OTCBB) under the symbol ASIT. Prior to that date
there had been no public trading market for our securities since 1982. The
market for our common stock has been sporadic and very limited.

The following table sets forth the high and low bid quotations for our common
stock for the years ended September 30, 2007 and 2006:

                                                    Bid Quotations
                                                 High             Low
                                                 ----             ---
Year Ended September 30, 2007
         First Quarter                           $0.35            $0.20
         Second Quarter                          $0.59            $0.30
         Third Quarter                           $0.59            $0.35
         Fourth Quarter                          $0.45            $0.35

Year Ended September 30, 2006
           First Quarter                         $0.45            $0.22
           Second Quarter                        $0.43            $0.20
           Third Quarter                         $0.31            $0.30
           Fourth Quarter                        $0.30            $0.20

These quotations reflect inter-dealer prices, without retail mark-up, markdown
or commission, and may not represent actual transactions.

We had 1,083 holders of record of our 15,907,552 shares of common stock at
September 30, 2007, which we believe approximates the number of beneficial
owners. We have never paid a cash dividend on our common stock and do not expect
to pay cash dividends in the foreseeable future. At September 30, 2007 we had an
accumulated deficit of approximately $3.7 million and until this deficit is
eliminated, we will be prohibited from paying dividends except out of net
profits.

EQUITY COMPENSATION PLAN INFORMATION

At September 30, 2007, we had one equity incentive plan under which equity
securities are or have been authorized for issuance to our employees,
consultants or directors: the 2000 Equity Incentive Plan approved by our
stockholders. On May 1, 2006 our stockholders approved an increase in the
authorized shares pursuant to the 2000 Equity Incentive Plan from 250,000 common
shares to 950,000 common shares. The following table gives information as of
September 30, 2007:

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                                             Number of securities
                                                                                            remaining available for
                                Number of securities to be    Weighted-average exercise      future issuance under
                                  issued upon exercise of       price of outstanding       equity compensation plans
                                   outstanding options,         options, warrants and        (excluding securities
        Plan Category               warrants and rights                rights              reflected in column (a))
                                            (a)                          (b)                          (c)
------------------------------  ---------------------------  -------------------------     --------------------------
<S>                                       <C>                           <C>                         <C>
Equity compensation plans
approved by security holders              285,000                       $0.41                       665,000

Equity compensation plans not
approved by security holders                   --                          --                            --
------------------------------  ---------------------------  -------------------------     --------------------------
Total                                     285,000                       $0.41                       665,000
==============================  ===========================  =========================     ==========================
</TABLE>

Other than the 2000 Equity Incentive Plan, we do not have any stock appreciation
rights plans in effect, outstanding warrants or rights and have no long-term
incentive plans, as those terms are defined in Securities and Exchange
Commission regulations.

RECENT SALES OF UNREGISTERED SECURITIES

No securities were sold within the past three years that were not registered
under the Securities Act that were not previously reported in prior quarterly,
annual or 8-K filings.

PURCHASES OF EQUITY SECURITIES

None during the fiscal year ended September 30, 2007.


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

EXCEPT FOR THE HISTORICAL INFORMATION, THE FOLLOWING DISCUSSION CONTAINS
FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES. ACTUAL
RESULTS MAY DIFFER SUBSTANTIALLY FROM THOSE REFERRED TO HEREIN DUE TO A NUMBER
OF FACTORS, INCLUDING BUT NOT LIMITED TO RISKS DESCRIBED IN THE SECTION ENTITLED
RISK FACTORS AND ELSEWHERE IN THIS ANNUAL REPORT.

OVERVIEW

During fiscal 2007 and 2006, we committed additional financial resources to our
specialty finance activities. During the quarter ended March 31, 2007, we
completed the sale of $4 million of common stock to further expand our specialty
finance business. Our other activity has been focused on the development of
plasma technology for sterilization and decontamination.

The objective of our specialty finance activities is to generate current income
and cash flow from high-interest notes to commercial, residential and corporate
borrowers. Our business strategy is to grow our business from internally
generated funds and, from time to time, sales of equity or debt securities. To
date we have not employed participating investor note financing or other
institutional financing. Our operating income depends largely upon net interest
income, which is the difference between interest income from notes and
investments and interest expense on notes payable. Our net interest income is
affected by the performance of our note portfolio and may be affected by general
economic conditions, policies of regulatory authorities, competition and other
factors many beyond our control.

The mortgage banking environment has been experiencing considerable strain from
rising delinquencies and liquidity pressures. The current environment appears to
be affecting real estate values and the volume of real estate activities. We
believe our management's experience in the Nevada market, the limited number of
real estate projects financed and management's personal underwriting of each
loan limits our exposure from industry problems. However, a major



                                       13
<PAGE>

or prolonged downturn in real estate values and activity could affect the
ability of our borrowers to refinance or otherwise repay outstanding notes and
therefore have an adverse affect on our financial condition or results of
operations.

We reported net income of $53,261 for fiscal 2007 primarily as a result of the
operation of our specialty finance business and net income of $76,058 in the
fourth fiscal quarter after absorbing Subsidiary startup costs during the
earlier portion of the fiscal year. There can be no assurance, however, that we
will report positive income in future quarters as operations are dependent on a
variety of factors some outside the control of management. We may incur
additional costs during fiscal 2008 to comply with the requirements of the
Sarbanes-Oxley Act of 2002 and we may elect to incur additional costs to develop
our plasma or other technologies.

Our financial statements require the measurement of financial position and
operating results in terms of historical dollars without considering the change
in the relative purchasing power of money over time and due to inflation. The
impact of inflation is generally to increase the value of underlying collateral
for the loans. Unlike typical industrial companies, nearly all our assets and
liabilities are monetary in nature. As a result, interest rates have over time a
more direct impact on our financial performance than the effects of inflation
may generally have on the typical industrial company.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We have identified the policies below as critical to our business operations and
the understandings of our results of operations. Our accounting policies are
more fully described in our financial statements located in Item 7 of Part II,
"Financial Statements." The impact and any associated risks related to these
policies on our business operations is discussed throughout "Management's
Discussion and Analysis or Plan of Operation" when such policies affect our
reported and expected financial results.

The methods, estimates and judgments we use in applying our accounting policies,
in conformity with generally accepted accounting principles in the United
States, have a significant impact on the results we report in our financial
statements. We base our estimates on historical experience and on various other
assumptions that we believe to be reasonable under the circumstances. The
estimates affect the carrying values of assets and liabilities. Actual results
may differ from these estimates under different assumptions or conditions. We
believe that the following discussion addresses our most critical accounting
policies, which are those that are most important to the portrayal of our
financial condition and results of operations and require our most difficult,
subjective, and complex judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain.

     Revenue Recognition - Interest income is recorded on an accrual basis to
     the extent that such amounts are reasonably expected to be collected. Loan
     origination fees received from borrowers are deferred and amortized to
     income over the established life of the related note under a method that
     approximates the effective interest rate method. Should a note become
     nonperforming or if we otherwise do not expect the debtor to be able to
     service its debt, we will cease recognizing income until and unless paid.

     Notes Receivable and Allowance for Losses - Notes receivable are stated as
     the unpaid principal balance net of any deferred fees and any allowance for
     loan losses. All notes are current in their payment status. We review the
     need for an allowance for loan losses based on a specific review of each
     note pursuant to either Statement of Financial Accounting Standards
     ("SFAS") No. 5, ACCOUNTING FOR CONTINGENCIES, or SFAS No. 114, ACCOUNTING
     BY CREDITORS FOR IMPAIRMENT OF A LOAN. We have no loan loss allowance as of
     September 30, 2007. Should a provision be required as an allowance for loan
     losses the carrying value would be adjusted. Loan origination costs are
     immaterial.

     Concentration of Credit Risk - Our notes receivable are limited to a small
     number of borrowers. We manage credit risk by evaluating the credit
     worthiness of the borrower prior to loan origination and by perfecting
     liens on the underlying real estate or other assets as appropriate. As of
     September 30, 2007, our gross amount of notes receivable of $6,084,225 are
     comprised of twelve notes advanced to various entities including two notes
     for $1,303,000 by entities controlled by one residential developer and
     three notes for $2,747,025 by one commercial/residential developer. We
     believe our notes are collectible, and therefore we have not established an
     allowance for estimated uncollectible accounts. However, due to the limited
     number of notes and the concentrated amounts, non-payment of interest or a
     default on a note would have a material adverse impact on operations and




                                       14
<PAGE>

     could jeopardize our ability to repay $1,000,000 of subordinated notes due
     July 2008 (see Note 5 to consolidated financial statements).

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006

Assets

Total assets increased $4,427,080 from September 30, 2006 to September 30, 2007.
The size of our note portfolio (net) increased $4,122,472 from $1,785,000 at
September 30, 2006 to $5,907,472 at September 30, 2007. The increase in assets
and notes was primarily the result of our raising $4 million in new equity
during the period.
See "Liquidity and Capital Resources."

At September 30, 2007 we had twelve notes outstanding with aggregate stated
principal of $6,084,225 compared to two notes with aggregate stated principal of
$1,785,000 at September 30, 2006. We have no past due loans and all loans have
stated maturities within twelve months.

Liabilities

Total liabilities of $1,270,720 represented an increase of $329,715 from
September 30, 2006. The increase was primarily due to increased borrowing of
$150,000 pursuant to shareholder notes and the incurrence of deferred rent of
$96,291 in the current year. We have $1,000,000 of 7% subordinated notes due
July 31, 2008.

Equity

Stockholders' equity increased to $5,236,655 at September 30, 2007. The
$4,097,365 increase from September 30, 2006 was primarily the result of our
raising $4 million in new equity during the period.

SEGMENT REPORTING AND SELECTED FINANCIAL DATA

Our operations are organized into two reportable segments based upon their
distinct operating characteristics. The specialty finance segment includes all
lending activities and the technology development segment includes all
technology research and development activities. We allocate identified
collection, general and administrative costs between segments. All assets are
considered as employed in specialty finance. Although the segments became
separately managed in late fiscal 2006, we have segmented historical operations
for the periods presented. This summary also provides key summary financial
information summarized from the more detailed financial statements included
elsewhere in this report.

<TABLE>
<CAPTION>
                                                  SPECIALTY       TECHNOLOGY
                                                   FINANCE        DEVELOPMENT      UNALLOCATED        TOTAL
<S>                                             <C>              <C>              <C>              <C>
     YEAR ENDED SEPTEMBER 30, 2007
     Interest, fee and investment income        $   624,641      $        --      $        --      $   624,641
     Interest expense                              (139,187)              --               --         (139,187)
     Research and development                          --             (5,465)              --           (5,465)
     Collection, general and administrative        (286,856)              --         (139,872)        (426,728)
     Segment profit (loss), pre tax             $   198,598      $    (5,465)     $  (139,872)     $    53,261
     Assets                                     $ 6,507,375      $        --      $        --      $ 6,507,375

     YEAR ENDED SEPTEMBER 30, 2006
     Interest, fee and investment income        $   261,612      $        --      $        --      $   261,612
     Interest expense                              (114,397)              --               --         (114,397)
     Research and development                            --          (35,910)              --          (35,910)
     Collection, general and administrative         (12,000)             --          (113,272)        (125,272)
     Segment profit (loss), pre tax             $   135,215      $   (35,910)     $  (113,272)     $   (13,967)
     Assets                                     $ 2,080,295      $        --               --      $ 2,080,295
</TABLE>


                                       15
<PAGE>

COMPARISON OF OPERATING RESULTS -FISCAL 2007 VS. FISCAL 2006

We reported net income of $53,261 for fiscal 2007 primarily as a result of the
operation of our specialty finance business. This is an improvement over the net
loss of $13,967 for fiscal 2006. Our financial results improved after increasing
our note portfolio following our $4 million equity financing completed in March
2007. Our current loan capacity is over $6 million and to the extent we can
continue to place funds on comparable terms, we believe we can generate
sufficient income to offset our interest and operating costs.

Income. Interest and fee income from notes was $559,118 for the year ended
September 30, 2007, compared to $252,881 for the comparable period in 2006.

Other investment income for the year ended September 30, 2007, was $62,273
consisting primarily of earnings from cash balances not invested in notes. We
earned $8,731 of other interest for the same period in 2006. Other interest
income may decline as we place funds in our specialty finance operation.

Interest Expense. Interest expense was $139,187 for the year ended September 30,
2007 compared to $114,397 for the comparable period in 2006. The 2007 total
included interest on shareholder notes, interest on our $1,000,000 of 7%
subordinated notes and $44,396 for non-cash interest from the amortization of
the value of warrants issued in 2005 in connection with the subordinated notes.

During the years ended September 30, 2007 and, 2006, we incurred interest
expense of $37,472 and $36,925, respectively, related to notes with officers and
directors.

Research and Development. We incurred $5,465 of research and development costs
during the year ended September 30, 2007 consisting of prototype and consulting
costs related to our technology. Research and development costs for the year
ended September 30, 2006 totaled $35,910 including $18,500 of outside research
grant costs.

Collection, General and Administrative. Collection, general and administrative
costs were $429,728 for the year ended September 30, 2007, compared to $125,272
for the comparable period of 2006. Fiscal 2007 expenses included $286,856
related to our specialty finance subsidiary operations and $139,872 of corporate
expenses not allocated to a particular segment. Subsidiary costs consisted
primarily of salaries and occupancy costs related to specialty finance
operations.

We incurred $27,979 of non-cash stock-based compensation expense during the year
ended September 30, 2007 related to options granted to officers, directors and
consultants. We incurred $30,042 of start-up costs related to the development,
formation, licensing and operations of our specialty finance subsidiary during
the second quarter and third quarter. We incurred $24,000 for non-cash
contributed services of our executive officers during the year.

Income Taxes - Due to our history of losses, and the fact that our specialty
finance business is still in an early operating stage with limited history, a
100% valuation allowance has been provided for deferred tax assets (primarily
tax loss carryforwards) and accordingly, there was no tax provision for either
period.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2007, we had cash and cash equivalents of $280,311 compared to
$285,631 at September 30, 2006. Net cash provided by operating activities was
$81,678 during fiscal 2007, primarily consisting of the collection of a lease
inducement and related matters offset by an increase in prepaid expenses. Net
cash provided by operating activities in fiscal 2006 was $52,848 resulting
primarily from the small net loss adjusted for non-cash expenses.

We purchased $249,490 of equipment and leasehold improvements related to our
specialty finance operations in fiscal 2007 of which $103,424 was refunded to us
by the primary landlord as a lease inducement, deferred rent that is being
amortized over the sublease term. During fiscal 2007, we expended $4,565,030 on
note originations and purchased one note from an officer/director for $725,800.
We collected $1,161,617 on notes and sold two notes to the same officer/director
for cash of $148,083.

We obtained net proceeds of $3,993,622 from the sale of common stock during the
year ended September 30, 2007 and $250,000 from shareholder notes of which
$100,000 was subsequently repaid.


                                       16
<PAGE>

The equity proceeds resulted from the sale of 8,888,888 shares of common stock
for cash at $0.45 per share for gross proceeds of $4,000,000. Three directors,
directly or through affiliated entities, purchased 4,143,888 of these shares for
cash of $1,864,750. Two other shareholders, each owning more than five percent
of our common stock at the time, purchased an aggregate of 200,000 shares for
cash of $45,000.

The $250,000 of proceeds from shareholder notes was applied towards a venture
capital loan totaling $750,000. These two notes payable were issued to two
shareholders one, that at the time of purchase, was the beneficial owner of more
than 5% of our common stock.

Our principal source of liquidity at September 30, 2007 consisted of cash and
cash equivalents of $280,311. We also have notes receivable with stated
principal balances aggregating $6,084,225 due within twelve months. We have no
other unused sources of liquidity at this time.

We are committed to pay 7% interest on our subordinated notes payable quarterly
or $17,500 per quarter. We are also obligated to pay the interest and principal
on the $150,000 shareholder notes which were further reduced by $100,000 in
October 2007. Our current notes receivable are expected to produce quarterly
income of approximately $245,000 supplemented by investment income on cash and
cash equivalents. A default on the interest or principal due us on any note
would have a material adverse impact on our operations, liquidity and cash flow.

Based on current expectations and business conditions, and assuming note income
due us, we believe we have sufficient financial resources to meet our cash
requirements for the next twelve months.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, FAIR VALUE
MEASUREMENTS. This standard defines fair value, establishes a framework for
measuring fair value in accounting principles generally accepted in the United
States of America, and expands disclosure about fair value measurements. 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, which will permit the option of choosing to measure certain eligible items
at fair value at specified election dates and report unrealized gains and losses
in earnings. SFAS Nos. 157 and 159 will become effective for us for fiscal year
2009, and interim periods within those fiscal years. We are currently evaluating
the requirements of SFAS Nos. 157 and 159, and have not yet determined the
likely, if any, impact on our future financial statements.

In June 2006, the FASB issued Interpretation No. 48 (FIN 48) ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES AN INTERPRETATION OF FASB STATEMENT NO. 109. FIN 48
clarifies the accounting for income taxes by prescribing the minimum recognition
threshold a tax position is required to meet before being recognized in the
financial statements. It also provides guidance on derecognition, measurement,
classification, interest and penalties, accounting in interim periods,
disclosure and transition and clearly scopes income taxes out of SFAS 5,
ACCOUNTING FOR CONTINGENCIES. FIN 48 is effective for fiscal years beginning
after December 15, 2006. We do not expect that the adoption of FIN 48 will have
a significant impact on our on our consolidated financial position, results of
operations and cash flows. However, we are evaluating the impact that FIN 48
will have on the amount, reporting and disclosures of our fully reserved
deferred tax assets resulting primarily from tax loss carryforwards.

TAX LOSS CARRYFORWARDS

As of September 30, 2007, we had approximately $152,000 of federal tax loss
carryforwards. These losses create a deferred tax asset. We maintain a valuation
allowance where it is more likely than not that all or a portion of deferred tax
assets will not be realized. We determined that factors such as the history of
losses and the uncertainty of future net income was not offset by the net income
arising in the last quarter of fiscal 2007. Accordingly, we have recorded a
valuation allowance to reduce the net deferred tax asset to zero because, in our
assessment, it is more likely than not that the deferred tax asset will not be
realized. There may also be limitations on the utilization of tax loss
carryforwards to offset any future taxes.


                                       17
<PAGE>

BUSINESS RISKS

This report contains a number of forward-looking statements that reflect our
current views with respect to future events and financial performance. These
forward-looking statements are subject to certain risks and uncertainties,
including those discussed below, that could cause actual results to differ
materially from historical results or those anticipated. In this report, the
words "anticipates," "believes," "expects," "intends," "future," "goal,"
"objective" and similar expressions identify forward-looking statements. Readers
are cautioned to consider the specific risk factors described below and not to
place undue reliance on the forward-looking statements contained herein, which
speak only as of the date hereof. We undertake no obligation to publicly revise
these forward-looking statements, to reflect events or circumstances that may
arise after the date hereof.

             A. RISKS RELATED TO OUR BUSINESS AND FINANCIAL RESULTS

         OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT.
Until we began investing in new technology in August 1999, we were inactive. Our
specialty finance activities only commenced in August 2005. As a result, we have
limited operating history with which you may evaluate our business. Our
operations are subject to all of the risks inherent in an early stage business
enterprise. The likelihood of our success must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the growth of new business, as well as the
competitive and regulatory environments in which we operate. There can be no
assurance that our recent profitability can be sustained.

         OUR REVENUES WOULD BE ADVERSELY AFFECTED BY NON-PAYMENT OR DEFAULT ON
NOTES RECEIVABLE. We expect interest from high-interest notes due to us to
provide substantially all our revenues during the next twelve months.
Non-payment of interest or a default on the notes would adversely affect our
operations and cash flow. Foreclosure or other actions required by us or any
default may require time and may be costly and there is no assurance of adequate
recovery from any such actions. We may not be able to act on our security and
the value of such security, if any, may not be sufficient to protect us from
loss. Our notes are not guaranteed by any government agency. There is no
secondary market for the notes we hold.

         OUR NOTE PORTFOLIO CONSISTS OF A LIMITED NUMBER OF NOTES CONCENTRATED
GEOGRAPHICALLY AND FROM A LIMITED NUMBER OF BORROWERS SUBJECTING US TO A RISK OF
SIGNIFICANT LOSS FROM ANY DEFAULT. Our notes receivable are concentrated in
Clark County, Nevada with a limited number of borrowers, subjecting us to
material risks from any nonpayment. Due to this lack of diversification,
non-payment of interest or a default on any one or more notes or one or more
borrowers would have a material adverse impact on operations and could
jeopardize our ability to repay our subordinated notes in July 2008.

         OUR RESULTS OF OPERATIONS DEPEND SIGNIFICANTLY ON ECONOMIC AND REAL
ESTATE CONDITIONS IN THE CLARK COUNTY, NEVADA AREA. Our specialty finance
operations depend primarily upon the general economic and real estate conditions
of the Clark County, Nevada area. The local economic and real estate conditions
in the area have a significant impact on the demand for the our loans as well as
the ability of our customers to repay loans, the value of the collateral
securing loans and the stability of our funding sources. Although local economic
conditions remain relatively good, increased foreclosures and reduced volume of
real estate activity may increase the risks of our lending operations. A
significant decline in general economic conditions, caused by inflation,
recession, acts of terrorism, outbreak of hostilities or other international or
domestic occurrences, unemployment, changes in securities markets or other
factors could impact these local economic conditions and, in turn, have a
material adverse effect on our financial condition and results of operations.

         WE CURRENTLY HAVE NO ALLOWANCE FOR LOAN LOSSES AND THIS MAY PROVE
INSUFFICIENT. We review the need for an allowance for loan losses based on a
specific review of each note and at September 30, 2007 had no provision for loan
losses based on this review which is based on management's evaluation of
concentrations, specific credit risks, individual loan quality and present
economic, political and regulatory conditions. The determination of an
appropriate level of the allowance for loan losses inherently involves a high
degree of subjectivity and requires management to make significant estimates of
current credit risks and future trends all of which may undergo material
changes. Changes in economic conditions affecting borrowers, new information
regarding existing loans, identification of additional problem loans and other
factors, both within and outside of our control, may require an increase in the
allowance for possible loan losses or charge-offs in future periods that may
have a material adverse effect on the our financial condition and results of
operations.



                                       18
<PAGE>


         IF WE ARE UNABLE TO SUSTAIN LOAN ORIGINATIONS ON COMPARABLE TERMS TO
THE PAST, OUR FUTURE OPERATING RESULTS COULD BE ADVERSELY AFFECTED. It is
necessary for us to continue to add new loans to reinvest proceeds from note
payoffs. The ability to continue to successfully originate high interest loans
depends on a variety of factors outside our control including interest rates,
economic and political conditions, regulations, changes in real estate values
and competition. Our interest income may decline if we are unable to reinvest
proceeds at comparable rates adversely affecting our results of operations.

         OUR TECHNOLOGY IS IN AN EARLY STAGE OF DEVELOPMENT AND MAY NOT BE
SUCCESSFUL. Our plasma technology is still in the early stage of development. In
order to attract commercial interest, we believe we must develop additional
prototypes in order to demonstrate commercial viability. Our objective is to
sell or license our technology to companies that then must incorporate our
technologies into products (we do not presently intend to manufacture products
ourselves). Even if more prototypes can be developed successfully, we cannot
provide any assurance that commercially viable technology or products
incorporating our technology can be completed, developed, manufactured or sold
due to the inherent risks of technology development, limitations on financing,
competition, obsolescence, loss of key personnel and other factors. We cannot
assure that there will be future revenues. The development of new technology is
subject to significant delays and cost overruns from unforeseen technical
hurdles and other factors. In addition, as discussed below, we rely on outside
consultants to provide us with the necessary expertise to develop our technology
rather than an in-house staff of technology developers, thereby possibly
increasing the costs and risks of technology development.

         IF WE FAIL TO ESTABLISH AND MAINTAIN PERSONNEL AND STRATEGIC
RELATIONSHIPS, OUR ABILITY TO DEVELOP OUR TECHNOLOGY WILL SUFFER. We currently
rely on management for the operation of our specialty finance business and
consultants for the development of our plasma sterilization and decontamination
technology. Although we believe that there are other personnel or consultants
capable of working managing our finance business or consult regarding our
technology, the loss or unavailability of any individual could result in delays
or added costs, impede development or adversely affect our results of
operations.

         We also believe that our success will depend, in part, on our ability
to establish additional personnel or strategic relationships to develop, produce
and market our technology. Our success will also depend on our ability to
develop and maintain strategic development and marketing relationships with
producers, distributors, end-users and manufacturers or entities engaged in
supplying or servicing targeted markets. If we are unable to develop such
relationships, our chances for future success will be substantially diminished.

         OUR OFFICERS, DIRECTORS AND CONSULTING PERSONNEL DEVOTE ONLY PART-TIME
TO OUR BUSINESS RESULTING IN POSSIBLE CONFLICTS. Our officers, directors and
consulting personnel devote only part-time services to our company and have
other employment and business interests to which they devote attention and will
continue to do so, resulting in potential conflicts of interest. There can be no
assurance these conflicts or the unavailability of full-time management will not
adversely impact our operations and chances for success.

         OUR MANAGEMENT MAY FACE CONFLICTS OF INTEREST RELATING TO OTHER
INVESTMENTS IN REAL ESTATE LOANS. Our president and other directors and
officers, in addition to being part-time and having other business interests,
also invest in real estate loans through other entities. There is a risk that
management may select a real estate loan that has different returns or risk
profile than loans not so selected and funded through other entities. There are
no restrictions or guidelines on how management will determine which loans are
appropriate for us and which are appropriate for other entities in which
management may have an interest. Management has no obligation to provide us with
any particular opportunities.

         WE HAVE NOTES PAYABLE TO CERTAIN OF OUR OFFICERS, DIRECTORS AND
SHAREHOLDERS AND HAVE PURCHASED AND SOLD LOANS TO AN ENTITY CONTROLLED BY OUR
PRESIDENT. THIS MIGHT CAUSE SUCH PERSONS TO HAVE A CONFLICT OF INTEREST. At
September 30, 2007 we had 7% subordinated notes payable of $510,000 to officers
and directors and $150,000 of shareholder notes. During fiscal 2007 we purchased
one note for $760,000 and sold two notes for $155,362 to an entity owned by our
president and chairman. Although the equity ownership of these individuals tends
to encourage them to act in the best interests of all stockholders,
circumstances could arise in which such persons, particularly those that are
members of our Board of Directors, will be in a position of allocating available
cash and our resources in a manner that may not be in the best interests of
other stockholders. Although we believe that these transactions were made on
terms as favorable to us as could have been obtained from an unrelated party,
the outstanding notes and purchase and sale of notes receivable could create, or
appear to create, potential conflicts of interest which may not necessarily be
resolved in our favor and adversely affect our business, operating results and
financial condition.


                                       19
<PAGE>

      B. RISKS RELATED TO INDUSTRIES AND REGULATIONS AFFECTING OUR BUSINESS

         THE SPECIALTY FINANCE INDUSTRY IS HIGHLY REGULATED REQUIRING LICENSING
IN MULTIPLE JURISDICTIONS FOR MOST TYPES OF LOANS; WE MAY BE SUBJECT TO
REGULATIONS AND COSTS THAT ADVERSELY IMPACT OR RESTRICT OUR BUSINESS. Most
finance activities wherein an active business is conducted require some form of
registration and licensing. We believe we may be subject to licensing by the
State of Nevada Mortgage Lending Division and accordingly in February 2007 we
were granted a Nevada Mortgage Banking license and a Nevada Mortgage Broker
license. The status of both licenses are current. Under applicable Nevada law,
the Nevada Mortgage Lending Division has broad discretionary authority over
lending activities, including the authority to conduct periodic regulatory
audits of a lender's operations. We may also become subject to the Equal Credit
Opportunity Act of 1974, which prohibits creditors from discriminating against
loan applicants on the basis of race, color, sex, age or marital status, and the
Fair Credit Reporting Act of 1970, which requires lenders to supply applicants
with the name and address of the reporting agency if the applicant is denied
credit.
         If it were determined we don't have the proper licensing for any
lending activity or are in violation of any regulations of any jurisdiction we
could incur costs or restrictions that adversely affect our operations and
business.

         OUR TECHNOLOGY MARKETS ARE HIGHLY REGULATED AND WE MAY BE SUBJECT TO
ENVIRONMENTAL REGULATIONS. The sterilization of medical devices and food, and
the decontamination of items are highly regulated and controlled in most major
markets throughout the world. Sterilization and decontamination devices,
including our proposed products, must be manufactured and tested to meet strict
standards and often must be certified for use. These factors increase the time
and risk of introducing new technology. We may not be able to obtain timely
regulatory approvals for future products. The failure to obtain any necessary
approvals would adversely impact our business.

         Federal, state and local regulations impose various controls on the
storage, handling, discharge and disposal of certain substances that may be used
in anticipated plasma sterilizer manufacturing processes or used as ingredients
in decontamination or sterilization equipment. We intend to conform and expect
any contractors or licensees to conform to governmental regulations applicable
to operations and facilities, including those related to environmental, land
use, public utility utilization and fire code matters. There can be no assurance
that such governmental regulations will not impose the need for additional
capital equipment or other process requirements or restrict our ability to
continue or expand our operations.

         COMPETITION AND OBSOLESCENCE COULD PRECLUDE US FROM REALIZING REVENUES.
The markets for our plasma technologies are extremely competitive. Many
companies already produce sterilization and decontamination equipment that are
competitive to the products or systems we intend to develop. These companies are
larger and have substantially greater resources than we do. We may not be able
to compete successfully in any of these markets. In addition, these companies
expend significant funds on research and development. They or others may have
developed or may succeed in developing technology and products that are more
effective than those proposed by us. There can be no assurance that we will be
able to compete successfully with such competitors or that additional
competition will not have a material adverse effect on our business.

         FAILURE TO MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE WITH
SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 COULD HAVE A MATERIAL ADVERSE
EFFECT ON THE MARKET'S PERCEPTION OF OUR BUSINESS AND OUR ABILITY TO RAISE
CAPITAL. We are in the process of documenting and testing our internal control
procedures in order to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act, which will require annual management assessments of the
effectiveness of our internal controls over financial reporting and a report by
our Independent Auditors addressing these assessments. If we fail to maintain
the adequacy of our internal controls, as such standards are modified,
supplemented, or amended from time to time, we may not be able to ensure that we
can conclude on an ongoing basis that we have effective internal controls over
financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.
While we dedicate resources and management time to ensuring that we have
effective controls over financial reporting, failure to achieve and maintain an
effective internal control environment could have a material adverse effect on
the market's perception of our business and our ability to raise capital.

                  C. RISKS RELATED TO OUR INTELLECTUAL PROPERTY

         OUR PLASMA STERILIZATION AND DECONTAMINATION TECHNOLOGY IS OWNED BY US
PURSUANT TO AN EXCLUSIVE LICENSE; THE LOSS OF WHICH COULD ADVERSELY IMPACT OUR
OPERATIONS. Our plasma sterilization and decontamination technology is owned
pursuant to a license agreement providing us exclusive rights to the technology
through 2018



                                       20
<PAGE>

subject to certain exclusivity termination rights of the licensor after January
1, 2006. Should the licensor notify us of intended termination of exclusivity,
we would have 90 days to provide reasonably satisfactory evidence that we have
attempted to sell licensed products as defined in the agreement. Should we not
prevail, then we could lose exclusivity and our license could become
nonexclusive which may reduce the value of this technology to us and affect
future operations should commercialization be successful and we face direct
competition from other licensees, if any.

         OUR ABILITY TO PROTECT OUR INTELLECTUAL PROPERTY AND TECHNOLOGY IS
UNCERTAIN. Our success depends, and will continue to depend, on our ability to
maintain patent protection for our technology and to preserve our trade secrets
and to operate without infringing the property rights of third parties. We
cannot guarantee that existing patents will be of sufficient scope or strength
to give us competitive advantages or that any patents that may be issued to us
will not be challenged or invalidated. We have not performed any analysis of
patents of others that may limit our ability to do business. We are aware of
other parties that are currently conducting research in the area of plasma
sterilization and decontamination. We cannot guarantee that our technologies or
products do not and will not infringe the patents or proprietary rights of third
parties.
         Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our technology or proposed products or to
obtain and use information that we consider proprietary. The available means of
protecting our proprietary rights may not be adequate and our competitors may
independently develop similar technology, duplicate our products or design
around patents issued to us or our other intellectual property. We cannot
guarantee our intellectual property will provide us meaningful protection or any
commercial advantage.

                    D. RISKS OF OWNERSHIP OF OUR COMMON STOCK

         WE MAY ISSUE ADDITIONAL SHARES OF AUTHORIZED COMMON STOCK AND FUTURE
PREFERRED STOCK. Our Articles of Incorporation authorize up to 31,000,000 shares
of stock, par value of $0.02 per share, of which 30,000,000 shares are
designated common stock and 1,000,000 shares are designated preferred stock. The
Board of Directors has the power without prior stockholder approval to issue
additional shares of previously authorized and unissued common stock and one or
more series of preferred stock with such rates of dividends, redemption
provisions, liquidation preferences, voting rights, conversion privileges and
any other characteristics as the Board may deem necessary. This power would
include the right to issue preferred stock with rights to receive dividends,
liquidating distributions and other benefits that may be superior to the rights
of holders of common stock. If any subsequent issuance of preferred stock is
approved, such preferred stock could adversely affect the holders of outstanding
common stock. In addition, the authority to issue additional shares of common
stock and preferred stock could discourage, delay or prevent a takeover of us
and could have a depressive effect on the market price for our securities.

         THERE IS A VERY LIMITED PUBLIC MARKET FOR OUR COMMON STOCK. There is a
very limited public market for our common stock as trading has been sporadic and
of low volume. There is no assurance that there will be any market liquidity or
that we can maintain a trading market in the future.

ITEM 7. FINANCIAL STATEMENTS

Our financial statements follow.


                                       21
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
ASI Technology Corporation
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheet of ASI Technology
Corporation and subsidiary (the "Company") as of September 30, 2007, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years ended September 30, 2007 and 2006. These financial
statements are the responsibility of the Company's management.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ASI Technology
Corporation as of September 30, 2007, and the results of its operations and its
cash flows for the years ended September 30, 2007 and 2006, in accordance with
accounting principles generally accepted in the United States.


/s/ PIERCY BOWLER TAYLOR & KERN
Certified Public Accountants and Business Advisors, a Professional Corporation


Las Vegas, Nevada
December 12, 2007



                                       22

<PAGE>

ASI TECHNOLOGY CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2007
<TABLE>
<CAPTION>

<S>                                                                          <C>
     ASSETS
     Cash  and cash equivalents                                              $   280,311
     Marketable securities                                                        13,503
     Notes receivable, net                                                     5,907,472
     Interest receivable                                                          48,885
     Property and equipment, net                                                 232,345
     Prepaid expenses                                                             24,859
                                                                             -----------

                                                                             $ 6,507,375
                                                                             ===========

     LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities
     Shareholder notes and accrued interest                                  $   150,518
     Subordinated notes and accrued interest, net of discount of $37,099         980,401
     Accounts payable and accrued expenses                                        43,510
     Deferred rent                                                                96,291
                                                                             -----------
                                                                               1,270,720
                                                                             -----------

     Stockholders' equity
     Preferred stock, 1,000,000 shares authorized,
     none issued and outstanding
     Common stock, $.02 par value; 30,000,000 shares authorized,
     15,907,552 issued and outstanding                                           318,171
     Additional paid-in capital                                                8,664,532
     Treasury shares at cost, 1,000 shares                                          (442)
     Deficit                                                                  (3,744,109)
     Accumulated other comprehensive loss                                         (1,497)
                                                                             -----------
                                                                               5,236,655
                                                                             -----------

                                                                             $ 6,507,375
                                                                             ===========

See notes to consolidated financial statements.
</TABLE>


                                       23
<PAGE>

ASI TECHNOLOGY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                             YEAR ENDED SEPTEMBER 30,
                                                               2007             2006
---------------------------------------------------------------------------------------
<S>                                                      <C>               <C>
Income:
Interest and fees on notes                               $    559,118      $    252,881
Other investment income                                        62,273             8,731
Broker and related fees                                         3,250                --
                                                         ------------      ------------
                                                              624,641           261,612
                                                         ------------      ------------
Expenses:
Interest                                                      139,187           114,397
Research and development                                        5,465            35,910
Collection, general and administrative                        426,728           125,272
                                                         ------------      ------------
                                                              571,380           275,579
                                                         ------------      ------------

Income (loss) before income taxes                              53,261           (13,967)
Income tax                                                         --                --
                                                         ------------      ------------
Net income (loss)                                        $     53,261      $    (13,967)
                                                         ============      ============

Basic and diluted income (loss) per common share         $      (0.00)     $       0.00
                                                         ============      ============

Weighted average number of common shares outstanding       12,015,443         7,019,557
                                                         ============      ============
</TABLE>

See notes to consolidated financial statements.

                                       24
<PAGE>

ASI TECHNOLOGY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) AND STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2006 AND 2007

<TABLE>
<CAPTION>


                                               Comprehensive        Common Stock
                                                  Income      --------------------------      Additional     Treasury
                                                  (Loss)        Shares        Dollars      Paid-In Capital    Shares
                                              -------------------------------------------------------------------------
<S>                                                           <C>           <C>            <C>             <C>
BALANCES, OCTOBER 1, 2005                                      7,019,664    $    140,393   $  4,766,051    $      --

Purchase of treasury shares                                       (1,000)             --             --         (442)

Contributed services                                                  --              --         24,000           --

Stock-based compensation                                              --              --          6,658           --

Net loss and comprehensive loss              $    (13,967)            --              --             --           --
                                             ============

                                                              ---------------------------------------------------------
BALANCES, SEPTEMBER 30, 2006                                   7,018,664         140,393      4,796,709         (442)

Contributed services                                                  --              --         24,000           --

Stock-based compensation                                              --              --         27,979           --

Sale of stock at $.45 per share (net of
  offering costs of $6,378)                                    8,888,888         177,778      3,815,844           --

Comprehensive loss:
Net income                                   $     53,261           --             --             --              --
Unrealized loss on marketable
   securities                                      (1,497)          --             --             --              --
                                             ------------
Total comprehensive income for the period    $     51,764
                                             ============

                                                            -----------------------------------------------------------
BALANCES, SEPTEMBER 30, 2007                                  15,907,552    $    318,171   $  8,664,532    $    (442)
                                                            ===========================================================
</TABLE>



[table continued]


<TABLE>
<CAPTION>

                                                                Accumulated
                                                                    Other
                                              Accumulated        Comprehensive
                                                Deficit           Income (Loss)         Total
                                            ----------------------------------------------------
<S>                                          <C>               <C>               <C>
BALANCES, OCTOBER 1, 2005                    $ (3,783,403)     $       --        $  1,123,041

Purchase of treasury shares                            --              --                (442)

Contributed services                                   --              --              24,000

Stock-based compensation                               --              --               6,658

Net loss and comprehensive loss                   (13,967)             --             (13,967)

                                             --------------------------------------------------
BALANCES, SEPTEMBER 30, 2006                   (3,797,370)             --           1,139,290

Contributed services                                   --              --              24,000

Stock-based compensation                               --              --              27,979

Sale of stock at $.45 per share (net of
  offering costs of $6,378)                            --              --           3,993,622

Comprehensive loss:
Net income                                         53,261              --              53,261
Unrealized loss on marketable
   securities                                          --          (1,497)             (1,497)

                                             -------------------------------------------------
BALANCES, SEPTEMBER 30, 2007                 $ (3,744,109)     $   (1,497)       $  5,236,655
                                             =================================================
</TABLE>

See notes to consolidated financial statements.

                                       25
<PAGE>

ASI TECHNOLOGY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                  YEAR ENDED SEPTEMBER 30,
                                                                                                   2007             2006
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>              <C>
Operating activities
Net income (loss)                                                                             $    53,261      $   (13,967)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization                                                                      17,145               --
Amortization of loan fees and prepaid interest                                                   (156,342)              --
Cash leasehold incentive received from sublessor's landlord                                       136,224               --
Incentive applicable to non-subleased space, repayable pursuant to sublease terms                 (32,800)              --
Amortization of deferred rent                                                                      (7,133)              --
Contributed services                                                                               24,000           24,000
Stock-based compensation                                                                           27,979            6,658
Non-cash interest expense                                                                          44,914           44,397
Non-cash interest income                                                                          (39,221)          (3,372)
Increase in prepaid expenses                                                                      (24,859)              --
Increase (decrease) in accounts payable                                                            38,510           (4,868)
                                                                                              -----------      -----------
Net cash provided by operating activities                                                          81,678           52,848
                                                                                              -----------      -----------

INVESTING ACTIVITIES
Purchase of equipment and improvements                                                           (249,490)              --
Loans originated                                                                               (4,565,030)      (1,785,000)
Collections from borrowers                                                                      1,161,617          755,000
Notes sold to related party                                                                       148,083               --
Note purchased from related party                                                                (725,800)              --
                                                                                              -----------      -----------
Net cash used by investing activities                                                          (4,230,620)      (1,030,000)
                                                                                              -----------      -----------

FINANCING ACTIVITIES
Net proceeds from sale of common stock                                                          3,993,622               --
Proceeds from shareholder notes                                                                   250,000               --
Repayments of shareholder notes                                                                  (100,000)              --
Proceeds from related party borrowings                                                            245,000               --
Repayments of  related party borrowings                                                          (245,000)              --
Purchase of treasury shares                                                                            --             (442)
                                                                                              -----------      -----------
Net cash provided (used) by financing activities                                                4,143,622             (442)
                                                                                              -----------      -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                          (5,320)        (977,594)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                      285,631        1,263,225
                                                                                              -----------      -----------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                        $   280,311      $   285,631
                                                                                              ===========      ===========

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest                                                      $    94,273      $    70,000
Loan origination fee received in investment securities                                        $    15,000      $        --
</TABLE>


See notes to consolidated financial statements.

                                       26
<PAGE>


ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1.       NATURE OF OPERATIONS

The Company, ASI Technology Corporation ("ASI") and its wholly-owned subsidiary,
ASI Capital Corporation (the "Subsidiary") is primarily a specialty finance
company and the consolidated financial statements include the accounts of ASI
and the Subsidiary after elimination of intercompany transactions and balances.
The Company's specialty lending activities include commercial, residential and
venture capital loans. As of September 30, 2007, the Company's gross amount of
notes receivable of $6,084,225 are comprised of twelve notes advanced to various
entities including two notes ($1,303,000) from entities controlled by one
developer and three notes ($2,747,025) from another developer. Management
believes that the Company's notes are collectible, and therefore has not
established an allowance for estimated uncollectible accounts. However, due to
the limited number of notes and the concentrated amounts, non-payment of
interest or a default on a note would have a material adverse impact on
operations and could jeopardize the Company's ability to repay its obligations
when due (Notes 5 and 6). The Company manages its credit risk by evaluating each
borrower's credit worthiness and the value of collateral before money is lent.
The Company's limited other activity has been focused on plasma technology for
sterilization and decontamination licensed in January 2003.

NOTE 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES - Timely preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
that affect reported amounts, some of which may require revision in future
periods.

CASH EQUIVALENTS - The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents.

MARKETABLE SECURITIES - Marketable securities, all of which are classified as
available-for-sale, are stated at fair value based on market quotes. Unrealized
gains and losses, net of deferred taxes, are recorded as a component of other
comprehensive income.

NOTES RECEIVABLE - Notes receivable are stated as the unpaid principal balance
net of any deferred fees and any allowance for loan losses. All notes are
current in their payment status. The Company reviews the need for an allowance
for loan losses based on a specific review of each note pursuant to either
Statement of Financial Accounting Standards ("SFAS") No. 5, ACCOUNTING FOR
CONTINGENCIES, or SFAS No. 114, ACCOUNTING BY CREDITORS FOR IMPAIRMENT OF A
LOAN.

FINANCIAL INSTRUMENTS - The carrying values of financial instruments including
cash, notes receivable, accounts payable and accrued liabilities and notes
payable approximated fair market value because of the short-term maturity of
these instruments.

REVENUE RECOGNITION - Interest income is recorded on an accrual basis to the
extent that such amounts are expected to be collected. Loan origination fees
received from borrowers are deferred and amortized to income over the
established life of the related note under a method that approximates the
effective interest rate method. Should a note become past due or if the Company
otherwise does not expect the debtor to be able to service its debt, the Company
will cease recognizing income until and unless paid.


                                       27
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SEGMENT INFORMATION - The Company's operations are organized into two reportable
segments based upon their distinct operating characteristics. The specialty
finance segment includes all lending activities and the technology development
segment includes all technology research and development activities. The Company
allocates identified collection, general and administrative costs between
segments. All assets are considered as employed in specialty finance.

PROPERTY AND EQUIPMENT - Leasehold improvements and equipment are stated at cost
and depreciated over the estimated useful lives of three to five years using the
straight-line method.

RESEARCH AND DEVELOPMENT COSTS - Research and development costs, including
patent costs related to acquired, licensed and developed technology, are
expensed as incurred because the technology being developed has not yet reached
technological feasibility and requires further development, refinement and
testing.

EMPLOYEE STOCK OPTIONS - The Company has one stock plan, the 2000 Equity
Incentive Plan, as amended (the "Plan") and is authorized to grant incentive and
nonstatutory stock options to acquire up to 950,000 shares of the Company's
common stock to employees and consultants. The Company granted options on
115,000 shares in December 2006 (10,000 shares to consultants and 105,000 to
directors and employees). At September 30, 2007, there were options outstanding
for 285,000 common shares exercisable at prices ranging from $0.35 to $0.45 per
share through 2011. All outstanding options are vested and exercisable.

The Company adopted SFAS No. 123 (Revised 2004), SHARE-BASED PAYMENT, (SFAS
123R) effective October 1, 2006. The effect of adopting SFAS 123R for the year
ended September 30, 2007 was to increase the net loss by $25,546 ($nil per
share).

The Company's employee stock options have various restrictions that reduce
option value, including restrictions on transfer, among others, and may be
exercised prior to their contractual maturity. The Company plans to issue shares
on each option exercise and has no plans to repurchase option shares. The
Company recorded $27,979 of stock compensation expense in its Consolidated
Statement of Operations for the year ended September 30, 2007. The
weighted-average estimated fair value of the 115,000 options granted during the
year ended September 30, 2007 to employees and consultants was $0.24 per share,
using the Black-Scholes option pricing model with the following weighted average
assumptions (annualized percentages):

                                                           YEAR ENDED
                                                        SEPTEMBER 30, 2007
           Volatility                                         131.0%
           Risk-free interest rate                              3.9%
           Dividend yield                                       0.0%
           Expected life in years                               5.0

The dividend yield of zero is based on the fact that the Company has never paid
cash dividends and has no present intention to pay cash dividends. Expected
volatility is based on the historical volatility of the common stock over the
period commensurate with the expected life of the options. The expected life is
based on observed and expected time to post-vesting exercise. The expected
forfeiture rate is not relevant as options were fully vested at grant.

Since the Company has an unrecognized net operating loss carryforward as of
September 30, 2007 (Note 9), no excess tax benefit for the tax deductions
related to stock-based awards was recognized for the years ended September 30,
2007 or 2006. No options were exercised during the years ended September 30,
2007 or 2006.

As of September 30, 2007, total estimated compensation cost of options granted
but not yet vested was nil as all options had vested. SFAS 123R requires the
Company to present pro forma information for the comparative period prior to the
adoption as if the Company had accounted for all employee stock options under
the fair value method of SFAS 123. For the year ended September 30, 2006 had
compensation cost for the Company's stock-based compensation plans been recorded
based on the fair value at the grant dates for awards, the Company's net loss
would have been increased to the pro forma amount indicated below:


                                       28
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2.C SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                                                            YEAR ENDED
                                                           SEPTEMBER 30,
                                                               2006
                                                             --------
Net loss
      As reported                                            $(13,967)
                        Less: Total employee stock-based
                        compensation expense determined
                        under fair value based method         (23,306)
                                                             --------
      Pro forma                                              $(37,273)
                                                             ========

Basic and diluted loss per share:
      As reported                                            $  (0.00)
                                                             ========
      Pro forma                                              $  (0.01)
                                                             ========

INCOME (LOSS) PER COMMON SHARE - Basic income (loss) per share is computed by
dividing income (loss) available to common stockholders, by the weighted average
number of common shares outstanding for the year. Diluted income (loss) per
share reflects the potential dilution of securities that could share in the
income of an entity. The Company has no dilutive securities other than stock
options and warrants which had an immaterial or anti-dilutive effect for the
years ended September 30, 2007 and 2006.

COMPREHENSIVE INCOME (LOSS) - Comprehensive income (loss) includes all changes
in stockholders' equity during a period, except those relating to investments by
and distributions to stockholders. The Company's comprehensive income (loss)
consists of net earnings and unrealized gains and losses on investments
available-for-sale. Accumulated other comprehensive income is displayed as a
separate component of stockholders' equity.

RECLASSIFICATIONS - As substantially all of the Company's assets are being
applied to its specialty finance business, the accompanying consolidated balance
sheet is presented on an unclassified basis as is customary in the finance
industry. The prior year's consolidated balance sheet was reported on a
classified basis. Certain other minor reclassifications to previously reported
amounts have been made for consistency with the current period presentation.
Such reclassifications had no effect on net income (loss).

NEW ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, FAIR VALUE
MEASUREMENTS. This standard defines fair value, establishes a framework for
measuring fair value in accounting principles generally accepted in the United
States of America, and expands disclosure about fair value measurements. 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, which will permit the option of choosing to measure certain eligible items
at fair value at specified election dates and report unrealized gains and losses
in earnings. SFAS Nos. 157 and 159 will become effective for the Company for
fiscal year 2009, and interim periods within that fiscal year. The Company is
currently evaluating the requirements of SFAS Nos. 157 and 159, and has not yet
determined the likely, if any, impact on its future financial statements.

In June 2006, the FASB issued Interpretation No. 48 (FIN 48) ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES AN INTERPRETATION OF FASB STATEMENT NO. 109. FIN 48
clarifies the accounting for income taxes by prescribing the minimum recognition
threshold a tax position is required to meet before being recognized in the
financial statements. It also provides guidance on derecognition, measurement,
classification, interest and penalties, accounting in interim periods,
disclosure and transition and clearly scopes income taxes out of SFAS 5,
ACCOUNTING FOR CONTINGENCIES. FIN 48 is effective for fiscal years beginning
after December 15, 2006. The Company does not expect that the adoption of FIN 48
will have a significant impact on its consolidated financial position, results
of operations and cash flows. However, the Company is evaluating the impact that
FIN 48 will have on the amount, reporting and disclosures of fully reserved
deferred tax assets resulting primarily from tax loss and capital loss
carryforwards.


                                       29
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 3.       NOTES RECEIVABLE

Loan origination fees, points and prepaid interest from borrowers are deferred
and amortized to interest income over the estimated average life of the notes
under a method which approximates the effective interest rate method. Direct
loan origination fees and costs have been immaterial to date.

The Company's note receivable portfolio consisted of the following types of
loans:
<TABLE>
<CAPTION>
                                                    RANGE OF
                                                     STATED                 SEPTEMBER 30,
                     DESCRIPTION                  INTEREST RATES        2007           2006

<S>                                                   <C> <C>       <C>             <C>
Commercial real estate secured by trust deeds         15%-24%       $ 5,136,425     $ 1,785,000
Residential real estate second trust                    24%              85,000              --
Corporate loans secured by asset liens                18%-24%           845,000              --
Other loans secured by various assets                   24%              17,800              --
                                                                    -----------     -----------
    Total notes receivable, gross                                     6,084,225       1,785,000
Unearned fees and other                                                (176,753)             --
Less allowance for losses                                                    --              --
                                                                    -----------     -----------
   Net notes receivable                                             $ 5,907,472     $ 1,785,000
                                                                    ===========     ===========
</TABLE>

At September 30, 2007 a total of $5,902,225 of note maturities were within
twelve months and the balance of $182,000 within two years

Three customers accounted for 39%, 27% and 15% of interest and fees on notes for
fiscal 2007 and one customer accounted for 100% of interest and fees on notes
for fiscal 2006. A single customer for this disclosure includes affiliated
entities under common control. All notes are current in payment status and
management believes that all outstanding notes are collectible, and therefore
has not established an allowance for estimated uncollectible accounts.

The following table summarizes finance activity related to notes receivable for
the periods presented:

                                                YEAR ENDED
                                              SEPTEMBER 30,
                                         2007             2006
                                      -----------      -----------
Balance, beginning of year            $ 1,785,000      $   755,000
Originations                            4,848,925        1,785,000
Note purchased from related party         760,000               --
Notes sold to related party              (148,083)              --
Deferred finance charges, net            (176,753)              --
Principal collected                    (1,161,617)        (755,000)
                                      -----------      -----------
Balance, end of year                  $ 5,907,472      $ 1,785,000
                                      ===========      ===========

                                       30
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4.       PROPERTY AND EQUIPMENT

Property and equipment are as follows:

                                                       SEPTEMBER 30,
                                                      2007       2006

Leasehold improvements                              $229,955     $  --
Furniture and equipment                               19,535        --
                                                    --------     -----
                                                     249,490        --
Less: Accumulated depreciation and amortization       17,145        --
                                                    --------     -----
  Property and equipment - net                      $232,345     $  --
                                                    ========     =====


Pursuant to the terms of its sublease, the Subsidiary received a net cash
leasehold improvement incentive of $103,424 as a pass-through from the primary
landlord. This amount has been recorded as deferred rent and is being amortized
over the term of the sublease (Note 10). The Company amortized $7,133 of
deferred rent as a reduction of rent expense for the period ended September 30,
2007.

NOTE 5.       SUBORDINATED NOTES AND WARRANTS

In August and September 2005, the Company sold $1,000,000 of 7% subordinated
notes ("Subordinated Notes") due July 31, 2008, interest payable quarterly, as a
unit with $1,000,000 (2,857,142 shares) of common stock at $0.35 per share with
warrants to purchase 1,428,571 shares of common stock at $0.50 per share
exercisable until July 31, 2008 ("Warrants"). Two officers/directors purchased
$422,500 of the Subordinated Notes, 1,207,142 shares of the common stock and
603,571 Warrants.

The Company determined that 50% of the Warrants were associated with the
Subordinated Notes and recorded the value of 50% of the Warrants ($128,300) as a
debt discount and paid-in-capital. The debt discount is being amortized as
additional non-cash interest over the terms of the Subordinated Notes.
Unamortized note discount at September 30, 2007 and 2006 was $37,099 and
$81,495, respectively and non-cash interest amortized for the years ended
September 30, 2007 and 2006 was $44,396 and $44,397 respectively.


                                       31
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 6.       SHAREHOLDER NOTES

On October 31, 2006, the Company received $245,000 subject to a Promissory Note
payable to a company owned by the Company's President. The Promissory Note bore
monthly interest at 6% per annum and was due on or before October 31, 2007. The
proceeds of the note were used to partially fund a $485,000 note receivable
origination. This Promissory Note was repaid in full in December 2006.

On March 23, 2007, the Company issued two promissory notes for $125,000 each for
aggregate cash of $250,000 with the proceeds applied towards a venture capital
loan totaling $750,000. These two notes payable were issued to two shareholders,
one that at the time of purchase was the beneficial owner of more than 5% of the
Company's common stock. The notes bear interest at 18% per annum and were due
September 23, 2007. In September 2007 the Company reduced the principal amount
of each note by $50,000 and the parties extended the maturity dates to December
23, 2007. In October 2007 the Company further reduced the principal balance of
each note by $50,000.

NOTE 7.       STOCKHOLDERS' EQUITY

Common Stock
------------
The Company has 31,000,000 shares authorized, $0.02 par value, of which
30,000,000 are designated common stock and 1,000,000 shares are designated
preferred stock. No shares of preferred stock have been issued.

During 2007, the Company sold 8,888,888 shares of common stock for cash at $0.45
per share for gross proceeds of $4,000,000. Three directors, directly or through
affiliated entities, purchased 4,143,888 of these shares for cash of $1,864,750.
Two other stockholders, each owning more than 5% of the Company's common stock
at the time of purchase, purchased an aggregate of 200,000 shares for cash of
$90,000.

During the years ended September 30, 2007 and 2006, officers contributed
services to the Company without compensation. These services, valued at $24,000
each period, have been expensed and treated as capital contributions.

Stock Option Plan
-----------------
Under the 2000 Equity Incentive Plan, as amended (the "Plan") the Company is
authorized to grant incentive and nonstatutory stock options to acquire up to
950,000 shares of the Company's common stock to employees and consultants. The
term of the Plan is ten years and the term of options granted may not exceed ten
years from the date of grant. Options may be granted at a price no less than
100% of the fair market value on the grant date and typically vest immediately.

The following table summarizes option activity for the years ended September 30,
2007 and 2006:

<TABLE>
<CAPTION>
                                                         2007                                2006
                                        -----------------------------------  -----------------------------------------
                                        Shares        Weighted-                            Weighted-
                                                     Average    Aggregate                    Average    Aggregate
                                                     Exercise   Intrinsic                   Exercise    Intrinsic
                                                      Price      Value         Shares         Price       Value

<S>                                     <C>          <C>                      <C>           <C>
Outstanding at beginning of year        240,000      $   0.41                 160,000       $  0.43
Granted                                 115,000          0.45   $     --       90,000          0.40       $  --
Exercised                                    --                                    --            --          --
Cancelled                               (70,000)         0.50   $     --      (10,000)         0.50       $  --
                                       --------                              --------
Outstanding at end of year              285,000          0.41   $ 12,500      240,000          0.41       $  --
                                       ========                              ========
Options exercisable at year-end         285,000          0.41   $ 12,500      240,000          0.41
                                       ========                              ========
Weighted-average fair value of
options granted during the period     $    0.24                              $  0.33
                                       ========                              ========
</TABLE>


At September 30, 2007, the weighted average life of options outstanding was 3.4
years and 665,000 shares were available for option grants under the Plan.
Intrinsic value is computed based on closing bid prices.



                                       32
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 7.       STOCKHOLDERS' EQUITY (CONTINUED)

Stock Purchase Warrants
At September 30, 2007 and 2006, the Company had 1,428,571 stock purchase
warrants outstanding exercisable into an equal number of shares of common stock
at $0.50 per share until July 31, 2008.

NOTE 8.  RELATED PARTY TRANSACTIONS

The Company pays a company owned by its President an aggregate of $1,000 per
month for office rent, bookkeeping and administrative services. Such payments
aggregated $12,000 for each year ended September 30, 2007 and 2006. Also in 2007
the Company reimbursed such company $32,397 for direct out-of-pocket costs
associated with the formation and startup of the Subsidiary. During the same
period the Company received a broker loan referral fee of $1,950 from such
company for referring a loan not meeting its credit standards.

During the years ended September 30, 2007 and, 2006, the Company incurred
interest expense of $37,472 and $36,925, respectively, related to notes held by
officers and directors and their affiliated entities.

During 2007, the Subsidiary purchased from an entity owned by its President a
15% note secured by a deed of trust payable by an unaffiliated borrower with a
stated principal of $760,000 with an original issue date of December 28, 2006,
and a due date of December 28, 2007. The net cash price for the note was
$725,800 representing the discounted value of the note computed at the stated
annual rate of 15% and the pro rata share of an initial 3% finance charge.
Interest on the note was prepaid by the borrower through June 28, 2007, when
monthly interest payments commenced at the annual rate of 15%. The purchase
price paid represented the cash advanced under the note adjusted only for the
pro rata interest and finance charges retained for the term from December 28,
2006, to the purchase date of March 28, 2007.

During 2007 the Subsidiary sold two 24% Term Notes payable by an unaffiliated
borrower with aggregate outstanding principal of $148,083 to an entity owned by
the Company's President and Chairman. The cash price received for the notes was
$155,362 representing the outstanding principal and accrued unpaid interest at
the stated rate of 24% per annum through September 21, 2007. The Subsidiary
waived late fees of $2,809 owing by the unaffiliated borrower.

See Notes 3, 5, 6, 7 and 10 for additional related party disclosures.

NOTE 9.  INCOME TAXES

Net deferred tax assets at September 30, 2007 and 2006 were $275,000 and
$314,000, respectively. The types of temporary differences between the tax basis
of assets and liabilities and their approximate tax effects that give rise to
such net deferred tax assets are as follows:

                                                               SEPTEMBER 30,
                                                           2007         2006
Deferred income tax assets:
          Federal net operating loss carryforwards     $  52,000      $ 125,000
          Federal capital loss carryforwards             189,000        189,000
          Stock compensation                              12,000             --
          Deferred rent                                   33,000             --
                                                       ---------      ---------
                                                         286,000        314,000
Deferred income tax liabilities:
          Depreciation and amortization                  (11,000)            --
                                                       ---------      ---------
                                                       $ 275,000      $ 314,000
Valuation allowance                                     (275,000)      (314,000)
                                                       ---------      ---------
Net deferred income taxes recognized in
          the consolidated balance sheet               $      --      $      --
                                                       =========      =========


                                       33
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 9.  INCOME TAXES  (CONTINUED)

A valuation allowance is required for those deferred tax assets that are not
likely to be realized. Realization is dependent upon continued future earnings
during the period loss carryforwards are expected to be available. Because the
Company has a history of net losses, only recently generated net income with
future income uncertain and because capital loss carryforwards can only be used
to offset future capital gains, if any, realization of the net deferred tax
asset is not considered to be more likely than not and, accordingly, a 100%
valuation allowance has been provided.

The Company has net operating and capital loss carryforwards available to reduce
future tax income, if any, of approximately $152,000 and $556,000, respectively,
as of September 30, 2007 that expire between December 31, 2021 and September 30,
2025. The Company's utilization of its available net operating loss
carryforwards against future taxable income may be restricted pursuant to the
"change in ownership" rules in Section 382 of the Internal Revenue Code. These
rules require certain business continuity and in general provide that an
ownership change occurs when the percentage shareholdings of 5% direct or
indirect shareholders of a loss corporation have in aggregate increased by more
than 50% during the testing period.

The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate to pretax income (loss) for the years
ended September 30, 2007 and 2006 as follows:

<TABLE>
<CAPTION>
                                                  2007             %            2006            %
                                               -------------------------     -------------------------
<S>                                             <C>                <C>       <C>                <C>
Computed "expected" tax provision (benefit)     $ 18,000           (34%)     $ (5,000)          (34%)
Increase (decrease) in income taxes
resulting from:
Increase (decrease) in valuation allowance       (39,000)         (100%)      (81,000)         (581%)
Nondeductible compensation and other              21,000            66%        86,000           615%
                                                -----------------------      ------------------------
                                                $     --            --       $     --             --
                                                =======================      ========================
</TABLE>

NOTE 10.      COMMITMENTS

Operating Lease
---------------
Effective in June 2007, the Subsidiary subleased and occupied approximately
3,750 square feet of office space within space leased by the Company's President
and an unrelated individual. The rate paid pursuant to the sublease is the same
rate as charged by the unrelated primary landlord. The Subsidiary received a
gross cash leasehold improvement incentive as a pass-through from the primary
landlord of $136,224 of which $32,800 relates to space not subleased or improved
by the Subsidiary. The $32,800 is included in accrued liabilities and according
to the terms of the sublease is payable at the direction of the sublessor. The
current monthly payment of $7,869 is subject to future cost of living and
operating expense adjustments, through March 2012. Aggregate lease expense, net
of deferred rent amortization, for the years ended September 30, 2007 and 2006
was $24,343 and $-0-, respectively. The remaining obligation under this
operating sublease is estimated as follows:

YEAR ENDING SEPTEMBER 30:
        2008                                    $ 96,080
        2009                                      99,443
        2010                                     102,924
        2011                                     106,526
        2012                                      47,214



Technology
----------
In 2003, the Company entered into a license agreement with a minimum term of 15
years subject to certain commercialization performance requirements after the
third year that management believes the Company has satisfied. This agreement
granted the Company worldwide exclusive rights to one patent and related
technology for a certain plasma sterilization and decontamination method.


                                       34
<PAGE>

ASI TECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------



NOTE 10.      COMMITMENTS (CONTINUED)

The agreement provides for future royalty payments to the licensor based on
product sales or sublicense fees with no minimum royalties.

In 2000, the Company acquired sound reduction technology for jet engines. The
Company is obligated to pay certain royalties on product revenues or license
revenues, if any, to be received by the Company and a fee on sale proceeds due
in the event of any further sale of the technology. There are no minimum
royalties. The Company is not presently developing this technology.

NOTE 11.      SEGMENT REPORTING

The Company has two reportable segments, specialty finance and technology
development. The Company allocates identified collection, general and
administrative costs between segments. Although the segments became separately
managed only in late fiscal 2006, the Company has segmented historical
operations for the periods presented.

<TABLE>
<CAPTION>

                                             SPECIALTY         TECHNOLOGY
                                              FINANCE         DEVELOPMENT      UNALLOCATED       TOTAL
<S>                                        <C>              <C>              <C>              <C>
YEAR ENDED SEPTEMBER 30, 2007
Interest, fee and investment income        $   624,641      $        --      $        --      $   624,641
Interest expense                              (139,187)              --               --         (139,187)
Research and development                            --           (5,465)              --           (5,465)
Collection, general and administrative        (286,856)            --           (139,872)        (426,728)
Segment profit (loss), pre tax             $   198,598      $    (5,465)     $  (139,872)     $    53,261
Assets                                     $ 6,507,375      $        --      $        --      $ 6,507,375

YEAR ENDED SEPTEMBER 30, 2006
Interest, fee and investment income        $   261,612      $        --      $        --      $   261,612
Interest expense                              (114,397)              --               --         (114,397)
Research and development                            --          (35,910)              --          (35,910)
Collection, general and administrative         (12,000)              --         (113,272)        (125,272)
Segment profit (loss), pre tax             $   135,215      $   (35,910)     $  (113,272)     $   (13,967)
Assets                                     $ 2,080,295      $        --               --      $ 2,080,295
</TABLE>



                                       35
<PAGE>


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

None

ITEM 8A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.
In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"), an evaluation was carried out by the Company's Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures (as defined in
Rule 13a-14(c) and 15d-14(c) under the Exchange Act) as of the end of the period
covered by this report.

Management is aware that there is a lack of segregation of duties due to the
limited number of Company employees engaged in the authorization, recording,
processing and reporting of transactions. The Company has assessed the cost
versus benefit of adding the resources that would remedy or mitigate this
situation and currently, does not consider the benefits to outweigh the costs of
adding additional staff in light of the limited number of transactions related
to the Company's operations. Executive officers will continue to review and
monitor transactions and financial reports to mitigate this weakness.

Our Chief Executive Officer and Chief Financial Officer have concluded that the
disclosure controls and procedures were effective as of the end of the period
covered by this report, to ensure that material information relating to the
Company was made known to them particularly during the period for which this
report on Form 10KSB was being prepared.

(b) Changes in internal controls over financial reporting.
There was not any change in the Company's internal controls over financial
reporting that occurred during the period to which this report relates that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

ITEM 8A(T). CONTROLS AND PROCEDURES

Not applicable.

ITEM 8B. OTHER INFORMATION

None.


                                       36
<PAGE>


                                    PART III

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

Directors and Officers

The following table sets forth information with respect to each director and
executive officer of ASI as of November 30, 2007:

         Name                  Age    Position
         Jerry E. Polis        75     President and Director since 1973
         Eric M. Polis         37     Secretary, Treasurer and Director since
                                      August 2000
         Gerald L. Ehrens      68     Director since September 2005
         Richard A. Fait       69     Director since January 2006

There is no arrangement between any of the directors or executive officers and
any other person or persons, pursuant to which he was or is to be selected as a
director or executive officer. Jerry E. Polis is the father of Eric M. Polis.
There is no other blood relationship between or among the directors or executive
officers.

Each director serves until the next annual meeting or until their successor is
elected or appointed.

         JERRY E. POLIS has been President and a director since 1973. Since 1963
         he has been self-employed primarily in real estate investment, from
         1964 to 2002 he owned and operated Polis Realty and since 1973 has been
         President and Director of Davric Corporation, a private investment
         company. From 1968 to the sale of his ownership in January 1997, he was
         active as a co-owner of the Taco Bell franchises for the State of
         Nevada (operated under privately owned Las Cal Corporation). In 1994,
         he co-founded Commercial Bank of Nevada, an unlisted publicly owned
         bank located in Las Vegas, Nevada, which was sold through a merger to a
         NYSE bank group in June 1998. He was a director of Commercial Bank from
         1994 and Chairman from May 1996 until its sale. He also served as a
         director of SouthwestUSA Bank and its parent SouthwestUSA Corporation
         from March 2004 to February 2006. Mr. Polis graduated from Penn State
         University with a B.A. Degree in Commerce in 1953.

         ERIC M. POLIS has been Secretary and Treasurer of the Company since
         July 2000. He served as property manager and leasing agent for Polis
         Realty from 1993 to 2002 and has been employed as an investment manager
         for Davric Corporation since 1997. Mr. Polis is also a private investor
         and serves on the board of several Las Vegas non-profit organizations.
         He obtained a B.S. in Business Administration from the University of
         Arizona in 1993.

         GERALD L. EHRENS has been a self-employed private investor since 1994.
         From 1992 to 1994 he was Chief Operating Officer of Inamed Corp., a
         Nasdaq medical device company. Previously he held senior executive
         positions at E.I. Dupont and Union Carbide with his last position at
         Union Carbide in 1992 being Vice President of New Business Development.
         In 1996, he was appointed as a director of unlisted publicly owned
         Commercial Bank of Nevada and served until its sale through merger to a
         NYSE bank group in June 1998. He also served as a director of
         SouthwestUSA Bank and its parent SouthwestUSA Corporation from June
         2003 to February 2006. Mr. Ehrens received a BS in Chemical Engineering
         from Princeton University in 1961 and a MS in Industrial Administration
         from George Washington University in 1965.

         RICHARD A. FAIT has been a self-employed investor since 2001. From 1966
         to January 2001 he served as President of the Peoples Bank of Aberdeen,
         South Dakota and Chairman and President of its holding company,
         Investment Corporation of America. From the mid-1960's to 2001 he was
         an owner, officer and director of ten community banks in the Midwest.
         From 1972 to 2000 he was a practicing certified public accountant in
         South Dakota and Minnesota. Mr. Fait received a degree in Accounting
         from Nettleton College in 1958.


                                       37
<PAGE>

Conflicts of Interest

Certain conflicts of interest now exist and will continue to exist between us
and certain of our officers, directors and consultants due to the fact that they
have other employment or business interests to which they devote some attention
and they are expected to continue to do so. We have not established policies or
procedures for the resolution of current or potential conflicts of interest
between us and management, consultants or affiliated entities. There can be no
assurance that members of management will resolve all conflicts of interest in
our favor. Our officers and directors are accountable to us as fiduciaries and
are required to adhere to our Code of Business Conduct and Ethics, which means
that they are legally obligated to exercise good faith and integrity in handling
our affairs. Failure by them to conduct our business in our best interests may
result in liability to them.

Our president and certain other directors and officers, in addition to being
part-time and having other business interests, also invest in real estate loans
through other entities. There is a risk that management may select a real estate
loan that has different returns or risk profile than loans not so selected and
funded through other entities. There are no restrictions or guidelines on how
management will determine which loans are appropriate for us and which are
appropriate for other entities in which management may have an interest.
Management has no obligation to provide us with any particular opportunities.

At September 30, 2007 we had 7% subordinated notes payable of $510,000 to
officers and directors. During fiscal 2007 we purchased one note for $760,000
and sold two notes for $155,362 to an entity owned by our president and
chairman. Although the equity ownership of these individuals tends to encourage
them to act in the best interests of all stockholders, circumstances could arise
in which such persons, particularly those that are members of our Board of
Directors, will be in a position of allocating available cash and our resources
in a manner that may not be in the best interests of other stockholders.
Although we believe that these transactions were made on terms as favorable to
us as could have been obtained from an unrelated party, the outstanding notes
and purchase and sale of notes receivable could create, or appear to create,
potential conflicts of interest which may not necessarily be resolved in our
favor and adversely affect our business, operating results and financial
condition.

It is conceivable then that our areas of interest could overlap or conflict with
other business interests of our management, shareholders or our consultants. Any
such conflicts, should they arise, will be addressed at the appropriate time.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer and principal accounting officer or persons
performing similar functions (as well as its other employees and directors). A
copy of the Code Ethics for Senior Officers is posted on our Internet site at
www.asiplasma.com. In addition, a copy will be provided without charge to any
person upon request. Requests for copies of our Code of Ethics should be sent by
mail to Corporate Secretary at ASI Technology Corporation, 980 American Pacific
Drive, Suite #111, Henderson, Nevada 89014. Requests may also be made by calling
the Company at (702) 734-1888. In the event we make any amendments to, or grant
any waivers of, a provision of the Code Ethics for Senior Officers that applies
to the principal executive officer, principal financial officer, or principal
accounting officer that requires disclosure under applicable SEC rules, we
intend to disclose such amendment or waiver and the reasons therefore on a Form
8-K or on our next periodic report.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires the
Company's officers, directors and persons who own more than 10% of a class of
the Company's securities registered under Section 12(g) of the Act to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.

Based solely on a review of copies of such reports furnished to the Company and
written representations that no other reports were required during the year
ended September 30, 2007, the Company believes that all persons subject to the
reporting requirements pursuant to Section 16(a) filed the required reports on a
timely basis with the SEC.


                                       38
<PAGE>

Committees

The Company has no formal or separate nominating or compensation committee with
the board of directors as a whole serving in such capacities due to the size of
the Company. On September 17, 2007, the Board of Directors established an Audit
Committee consisting of two members, Richard A. Fait and Gerald L. Ehrens. The
Board determined that Mr. Fait and Mr. Ehrens are "independent directors" as
that term is defined in NASDAQ National Stock Market rules and Rule 10A-3 of the
Securities Exchange Act of 1934 and that Mr. Fait is an "audit committee
financial expert" as that term is defined in Item 407 of Regulation S-B
promulgated by the SEC. Mr. Fait was appointed as the chair of the Audit
Committee. The Board also adopted an audit committee charter.

ITEM 10. EXECUTIVE COMPENSATION

OVERVIEW

We have a limited number of employees and currently only two executive officers.
In March 2007 we appointed John R. Blackmon as President of our Subsidiary, an
executive officer position. Mr. Blackmon resigned effective September 30, 2007
and Mr. Jerry E. Polis assumed his duties. There were no other changes in
executive officers during fiscal 2007.

Other than the salary paid to Mr. Blackmon during fiscal 2007, none of the other
two executive officers (Jerry E. Polis, our PEO (Principal Executive Officer)
and Eric M. Polis, our PFO (Principal Financial Officer)) received cash
compensation for their services as executive officers. The Board of Directors
has not established a base salary for our current two executive officers who
only provide part-time services to our company. There were no cash bonuses paid
or accrued during the year pursuant to our Executive Bonus Plan ("Bonus Plan").

Our two executive officers received compensation during fiscal 2007 for
attendance at Board of Director meetings. The rate paid during fiscal 2007 was
$200 per meeting for directors (employee and non-employee) and $400 per meeting
for the Chairman.

Our long-term incentive program consists of the Bonus Plan and a stock option
plan pursuant to which the PEO and other executive officers (as well as other
employees and consultants) are periodically granted stock options at the then
fair market value (or higher prices) of our common stock and are eligible for
bonus participation. Options are granted pursuant to the 2000 Equity Incentive
Plan and are designed to provide such persons with compensation based on overall
company performance as reflected in the stock price and to help align employees'
and shareholders' interests. Under the 2000 Equity Incentive Plan, we are
authorized to grant incentive and nonstatutory stock options to acquire up to
950,000 shares of the Company's common stock to employees and consultants. The
term of the Plan is ten years and the term of options granted may not exceed ten
years from the date of grant. Options may be granted at a price no less than
100% of the fair market value on the grant date. Stock options are typically
granted periodically to a group of existing employees, consultants and executive
officers.

On March 13, 2007, the Board of Directors ("Board") approved an Executive Bonus
Plan. The Bonus Plan is designed to align the interests of our executive
officers and eligible employees with the interests of stockholders by linking
bonus amounts directly to Company performance. Executive officers and eligible
employees (so designated from time to time by the Board) (the "Participants")
are eligible to receive cash bonuses under the Plan based on the Company's
consolidated net income before tax plus any depreciation, amortization and
non-cash interest or non-cash derivative expenses ("Adjusted Pre-Tax Income").
The bonus pool available for all executive officers and key employees shall be
equal to 10% of Adjusted Pre-Tax Income of $500,000 to a maximum $5,000,000 for
each fiscal year commencing with fiscal 2007 until the Plan is terminated or
amended by the Board. No bonus pool shall be allocated if Adjusted Pre-Tax
Income is less than $500,000 in a fiscal year.

To be eligible for participation in the Plan's bonus pool Participants must be
employed at fiscal year end. The Board has discretion to allocate the bonus pool
among Participants and may designate in advance for individual Participants the
minimum portion of the bonus pool that may be allocated to them based on their
performance in such fiscal year(s). Actual bonus payments, if any, will
therefore vary based on the Company's financial performance and individual
Participant bonuses will vary on allocation of the bonus pool among Participants
each year. In addition the Board has the discretion to award cash bonuses
outside the Plan or otherwise increase, reduce or eliminate cash bonuses that
would otherwise be payable under the Plan in its sole discretion. Even if the
financial performance is not achieved, the Board may award certain Participants
cash performance bonuses outside the Plan and may award other performance-based
compensation based on fees generated from brokered loans or as the result of
other fees.


                                       39
<PAGE>

Our Board of Directors serves as the compensation committee and has not adopted
a formal charter. The Board currently performs the following functions regarding
compensation for the named executive officers ("NEOs"):

         o        Sets Board of Director and committee compensation to which
                  NEOs are eligible.
         o        Evaluates NEO performance in light of goals and determines
                  equity awards.
         o        Annually reviews the status of the Bonus Plan and any NEO
                  special benefits.

In the future the Board of Directors in their role as compensation committee
may:

         o        Establish base salaries to existing or future executive
                  officers.
         o        Authorize bonus participation within or outside the Bonus Plan
                  or modify the plan or plan parameters.
         o        Establish employee benefits.

PEO COMPENSATION. During fiscal 2007, no base salary was paid or accrued to our
PEO, Jerry E. Polis. The Board believes this is a level below the range of base
salaries for Principal Executive Officers at similarly situated companies, even
for part-time services. The non-payment of salaries reflects an effort to
contain costs during the development and growth of our business. The Board
believes Mr. Jerry E. Polis has long-term stock incentives through his
significant personal stock ownership, equity incentives and eligibility to
participate in the Bonus Plan. Mr. Polis is an employee at will.

                           SUMMARY COMPENSATION TABLE

The following table shows for the year ended September 30, 2007 certain
compensation information for our PEO, PFO and Subsidiary President (each a
"Named Executive Officer" and collectively, the "Named Executive Officers"). We
had no other reportable executive officers for fiscal 2007. Certain columns have
been omitted as they were not applicable for the Named Executive Officers for
the period presented.

<TABLE>
<CAPTION>
                                                                                                OPTION      ALL OTHER
                                                                        SALARY (1)   BONUS    AWARDS (2)  COMPENSATION (3)   TOTAL
                   Name and Principal Position                 Year        ($)        ($)        ($)           ($)            ($)
<S>                                                            <C>      <C>         <C>       <C>           <C>            <C>
Jerry E. Polis, President and Chairman (PEO)                   2007     $     --    $  --     $  4,866      $  1,200       $  6,066

Eric M. Polis,  Director, Secretary and Treasurer (PFO) (3)    2007     $     --    $  --     $  4,866      $    600       $  5,466

John R. Blackmon, President of ASI Capital Corporation (4)     2007     $105,000    $  --     $  4,866      $ 10,408       $120,274
</TABLE>


(1)      Represents actual cash compensation.
(2)      Represents the amount of compensation cost recognized by us in fiscal
         2007 related to stock option awards granted and vested during fiscal
         2007, as described in Statement of Financial Accounting Standards No.
         123R (SFAS 123R). For a discussion of valuation assumptions, see Note 1
         to our 2007 Consolidated Financial Statements included in our Annual
         Report on Form 10-KSB for the year ended September 30, 2007. Each named
         executive officer was granted an option on 20,000 shares exercisable
         and vesting on the grant date of December 12, 2006 at $0.45 per share
         and expiring on December 11, 2011 or earlier pursuant to the terms of
         the 2000 Equity Incentive Plan and individual option agreement.
(3)      Represents director fees paid for attendance at director meetings.
(4)      Mr. Blackmon resigned effective September 30, 2007 and was not
         considered to be an executive officer at the end of our fiscal year.
         Salary includes $15,000 of consulting during the organization of our
         Subsidiary prior to employment. Other compensation consists of health
         insurance premiums paid by the Company.


                                       40
<PAGE>

                      OUTSTANDING EQUITY AWARDS AT YEAR END

The following table shows the number of shares covered by exercisable and
unexercisable options held by the Named Executive Officers on September 30,
2007. There were no other outstanding equity awards as of September 30, 2007.


                                       41
<PAGE>

<TABLE>
<CAPTION>
                                                                      Equity
                                                                    Incentive
                                                                   Plan Awards:
                         Number of            Number of             Number of
                        Securities            Securities            Securities
                        Underlying            Underlying            Underlying
                        Unexercised          Unexercised           Unexercised        Option
                          Options              Options               Unearned        Exercise          Option
                            (#)                  (#)                 Options           Price          Expiration
        Name            Exercisable         Unexercisable              (#)              ($)              Date
<S>                          <C>            <C>                       <C>             <C>             <C>
Jerry E. Polis               10,000               --                    --            $0.35           12/6/2009
                             10,000               --                    --            $0.40            1/8/2011
                             20,000               --                    --            $0.45          12/11/2011

Eric M. Polis                10,000               --                    --            $0.35           12/6/2009
                             10,000               --                    --            $0.40            1/8/2011
                             20,000               --                    --            $0.45          12/11/2011

John R. Blackmon             20,000               --                    --            $0.45          12/11/2011

</TABLE>

There were no options exercised by the Named Executive Officers during fiscal
2007.

There are no pension benefits for any Named Executive Officer.

No named executive officer has any employment agreement, termination of
employment or change in control arrangement.

DIRECTOR COMPENSATION

Our directors are reimbursed for reasonable out-of-pocket expenses incurred in
attending meetings of the board of directors and committee meetings. Members of
the board of directors receive equity compensation grants as consideration for
board and committee service from time to time. There is no established policy as
to frequency or amount of equity compensation grants for non directors. During
fiscal 2007 we paid $200 for each director meeting ($400 for the Chairman) and
$50 for each audit committee meeting and no fees for loan committee meetings of
our Subsidiary. The following meeting payment rates are currently in effect for
fiscal 2008: $200 for each director meeting ($400 for the Chairman) and $100 for
each committee meeting (the only current committee is the audit committee of
which Mssrs. Fait and Ehrens are the members) including the loan committee of
the Subsidiary (current members are Jerry E. Polis and Eric M. Polis). These
meeting fees apply to both employee and non-employee directors.

The following table sets forth the compensation paid to our non-employee
directors in 2007. Employee director compensation is described above.

<TABLE>
<CAPTION>


                               FEES
                              EARNED
                             OR PAID           OPTION           ALL OTHER
                             IN CASH       AWARDS (2) (3)      COMPENSATION          TOTAL
         Name                  ($)               ($)               ($)                ($)
<S>                            <C>             <C>                                  <C>
Gerald L. Ehrens               $650            $2,433                --             $3,083

Richard A. Fait                $650            $2,433                --             $3,083

Dawayne R. Jacobs (1)          $200            $2,433                --             $2,633
</TABLE>


                                       42
<PAGE>


         (1)      Mr. Jacobs resigned during fiscal 2007 and was not a director
                  at the end of our fiscal year.

         (2)      Represents the amount of compensation cost recognized by us in
                  fiscal 2007 related to stock option awards on 10,000 shares
                  granted and fully vested for each listed non-employee director
                  as described in Statement of Financial Accounting Standards
                  No. 123R (SFAS 123R). For a discussion of valuation
                  assumptions, see Note 1 to our 2007 Consolidated Financial
                  Statements included in our Annual Report on Form 10-KSB for
                  the year ended September 30, 2007.

         (3)      The following are the aggregate number of option awards
                  outstanding for each of our non-employee directors or former
                  director (Jacobs) at September 30, 2007 - Ehrens: 30,000,
                  Fait: 20,000, and Jacobs: 30,000.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

Common Stock Ownership

The following table sets forth, as of November 30, 2007, the Common Stock
ownership of each of our directors and officers, all of our executive officers
and directors as a group, and each person known by us to be a beneficial owner
of 5% or more of our Common Stock. Except as otherwise noted, each person listed
below is the sole beneficial owner of the shares and has sole investment and
voting power as to such shares.

<TABLE>
<CAPTION>
                  NAME AND ADDRESS                                AMOUNT & NATURE
                  OF BENEFICIAL                                     OF BENEFICIAL               PERCENT
                    OWNER                                             OWNERSHIP                 OF CLASS
                    -----                                             ---------                 --------

<S>                                                                <C>                           <C>
                  Jerry E. Polis                                   6,774,912 (1)                 41.0%
                  President and Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  Eric M. Polis                                      366,000 (2)                  2.3%
                  Secretary, Treasurer and Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  Gerald L. Ehrens                                   425,000 (3)                  2.7%
                  Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  Richard A. Fait                                    170,000 (4)                  1.1%
                  Director
                  980 American Pacific Drive, #111
                  Henderson, Nevada 89014

                  All directors and officers as a group            7,635,912 (5)                 45.5%
                    (4 persons)
</TABLE>


----------------------------
(1)      Includes 2,784,156 shares held by the Polis Family Trust, 100,000
         shares held by Polis Family LLC and 3,141,888 shares held by Davric
         Corporation, a company controlled by Mr. Polis. Mr. Polis shares
         investment and voting power over the shares held by Polis Family LLC
         with Eric M. Polis and other family members. Also includes currently
         exercisable options on 40,000 shares of common stock and warrants on
         578,571 shares of common stock.
(2)      Includes 201,000 shares held by family trust and 100,000 shares held by
         the Polis Family LLC. Mr. Polis shares investment and voting power over
         the shares held by Polis Family LLC with Jerry E. Polis and other
         family members. Also includes currently exercisable options on 40,000
         shares of common stock and warrants on 25,000 shares of common stock.
(3)      Consists of 320,000 shares held by family limited partnership. Also
         includes currently exercisable options on 30,000 shares of common stock
         and warrants on 75,000 shares of common stock.


                                       43
<PAGE>

(4)      Includes currently exercisable options on 20,000 shares of common stock
         and warrants on 50,000 shares of common stock.
(5)      Includes currently exercisable options on 130,000 shares of common
         stock and warrants on 728,571 shares of common stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

We currently share office space with Davric Corporation ("Davric"), an entity
controlled by our President and Chairman Jerry E. Polis. We are paying Davric
Corporation $1,000 per month for use of this space and associated administrative
costs. We paid $12,000 in 2007 in such costs. On October 31, 2006 we obtained
$245,000 pursuant to a Promissory Note payable to Davric. The Promissory Note
had monthly interest at 6% per annum and was due October 31, 2007. The proceeds
of the note were used to partially fund a $485,000 one-year specialty finance
loan. This note was repaid with interest of $1,772 in December 2006. Also
effective March 31, 2007 we reimbursed Davric $32,397 for direct out-of-pocket
costs associated with the formation and startup of our specialty finance
Subsidiary. During the same period we received a broker loan referral fee of
$1,950 from Davric for referring a loan not meeting our credit standards.

Effective March 28, 2007, our Subsidiary purchased a 15% note secured by a deed
of trust payable by an unaffiliated borrower with a stated principal of $760,000
with an original issue date of December 28, 2006, and a due date of December 28,
2007 from Davric. The net cash price for the note was $725,800 representing the
discounted value of the note computed at the stated annual rate of 15% and the
pro rata share of an initial 3% finance charge. Interest on the note was prepaid
by the borrower through June 28, 2007, when monthly interest payments commenced
at the annual rate of 15%. The purchase price paid represented the cash advanced
under the note adjusted only for the pro rata interest and finance charges
retained for the term from December 28, 2006, to the purchase date of March 28,
2007.

Effective on September 21, 2007 our Subsidiary sold two 24% Term Notes payable
by an unaffiliated borrower with aggregate outstanding principal of $148,083 to
Davric. The cash price received for the notes was $155,362 representing the
outstanding principal and accrued unpaid interest at the stated rate of 24% per
annum through September 21, 2007. The Subsidiary waived late fees of $2,809
owing by the unaffiliated borrower.

During the year ended September 30, 2007 we incurred interest expense of $35,700
and $36,925, related to $510,000 of 7% subordinated notes held by our current
officers and directors and their affiliated entities.

On March 23, 2007, we issued two promissory notes for $125,000 each for
aggregate cash of $250,000 with the proceeds applied towards a venture capital
loan totaling $750,000 to e.Digital Corporation ("e.Digital"). These two notes
payable were issued to entities controlled by two shareholders, one, James A.
Barnes, that at the time of purchase was the beneficial owner of more than 5% of
our common stock. The notes bear interest at 18% per annum and were due
September 23, 2007. In September 2007 we reduced the principal amount of each
note by $50,000 and extended the maturity dates to December 23, 2007. In October
2007 we further reduced the principal balance of each note by $50,000.

Our Chairman and President and greater than 10% shareholder, Jerry E. Polis, is
a 4.9% shareholder of e.Digital and is also a debtor, through an entity
controlled by him, of e.Digital pursuant to an unrelated convertible term note
in the principal of amount of $897,848 at September 30, 2007. None of the
proceeds of the venture capital loan were applied by e.Digital to pay the term
note. Mr. Polis is not an officer or director of e.Digital and the financing was
negotiated in the normal course of both companies business. We do not consider
e.Digital as a related party.

During the quarter ended March 31, 2007, we sold 8,888,888 shares of common
stock for cash at $0.45 per share for gross proceeds of $4,000,000. Three
directors, directly or through affiliated entities, purchased 4,143,888 of these
shares for cash of $1,864,750. Mr. Jerry E. Polis purchased 3,873,888 shares for
$1,743,250, Eric M. Polis purchased 100,000 shares of $45,000 and Gerald E.
Ehrens purchased 170,000 shares for $76,500. Two other stockholders, each owning
more than 5% of the Company's common stock at the time of purchase, purchased an
aggregate of 200,000 shares for cash of $90,000 through entities controlled by
them. James A. Barnes purchased 100,000 shares for $45,000 and Elwood G. Norris
purchased 100,000 shares for $45,000. After completion of the sale these two
shareholders were no longer 5% shareholders of our company.


                                       44
<PAGE>

Effective in June 2007, our Subsidiary subleased and occupied approximately
3,750 square feet of office space at 9121 W. Russell Rd., Suite 110, Las Vegas,
Nevada within space leased by our President, Jerry E. Polis, and an unrelated
individual. The rate paid pursuant to the sublease is a pass-through of the same
monthly rate as charged by the unrelated primary landlord. The Subsidiary
received a gross cash leasehold improvement incentive as a pass-through from the
primary landlord of $136,224 of which $32,800 relates to space not subleased or
improved by the Subsidiary. According to the terms of the sublease the $32,800
is payable at the direction of the sublessor. The current monthly payment of
$7,869 is subject to future cost of living and operating expense adjustments,
through March 2012.

We recorded $24,000 in 2007 and 2006 as contributed services for officers
including Jerry E. Polis. No common stock or other value is due for these
contributed services.

DIRECTOR INDEPENDENCE

Our Board of Directors is comprised of four individuals, two of whom (Messrs.
Ehrens and Fait) we have determined are independent under SEC rules. We consider
Mr. Jerry E. Polis as our PEO (principal executive officer). Mr. Dawayne Jacobs
who was a director during the year but not at year end was also determined to be
independent.

ITEM 13. EXHIBITS

         Exhibit
         Number                     Description of Exhibit
         ------                     ----------------------

         3.1      Restated Articles of Incorporation of ASI Technology
                  Corporation as filed with the Secretary of State of Nevada on
                  September 1, 2000. Incorporated by reference to Exhibit 3.1 on
                  Form 10-KSB for the year ended December 31, 2000, dated March
                  23, 2001.

         3.1.1    Amendment to the Restated Articles of Incorporation of ASI
                  Technology Corporation as filed with the Secretary of State of
                  Nevada on May 3, 2006. Incorporated by reference to Exhibit
                  3.1.1 on Form 10-QSB/A dated November 2, 2006.

         3.2      Bylaws of the Company. Incorporated by reference to Exhibit
                  3.2 on Form 10-KSB for the year ended December 31, 2000, dated
                  March 23, 2001.

         4.1      Form of Certificate evidencing common stock of the Company.
                  Incorporated by reference to Exhibit 4.1 on Form 10-KSB for
                  the year ended December 31, 2000, dated March 23, 2001.

         4.2      Form of Securities Purchase Agreement between the Company and
                  private placees. Incorporated by reference to Exhibit 10.6 on
                  Form 8-K dated August 31, 2005.

         4.3      Form of 7% Subordinated Promissory Note issued by the Company
                  to noteholders. Incorporated by reference to Exhibit 10.7 on
                  Form 8-K dated August 31, 2005.

         4.4      Form of Stock Purchase Warrant for Common Stock Exercisable at
                  $0.50 per share until July 31, 2008. Incorporated by reference
                  to Exhibit 10.8 on Form 8-K dated August 31, 2005.

         4.5      Form of Securities Purchase Agreement dated January 26, 2007
                  (each individual agreement differs as to investor, amount and
                  shares purchased). Incorporated by reference to Exhibit 99.1
                  on Form 8-K dated January 29, 2007.

         10.1     2000 Equity Incentive Plan ratified by the shareholders on
                  August 1, 2000. Incorporated by reference to Exhibit 10.1 on
                  Form 10-KSB for the year ended December 31, 2000, dated March
                  23, 2001.

         10.1.1   Standard form of stock option agreement under the 2000 Equity
                  Incentive Plan. Incorporated by reference to Exhibit 10.1.1 on
                  Form 10-KSB for the year ended December 31, 2000, dated March
                  23, 2001.

         10.2     Purchase Agreement dated August 20, 1999 between the Company
                  and Patriot Scientific Corporation. Incorporated by reference
                  to Exhibit 10.2 on Form 10-KSB for the year ended December 31,
                  2000, dated March 23, 2001.

         10.3     Purchase Agreement dated December 29, 2000 between the Company
                  and American Technology Corporation. Incorporated by reference
                  to Exhibit 10.3 on Form 10-KSB for the year ended December 31,
                  2000, dated March 23, 2001.

         10.4     Patent License Agreement effective January 1, 2003 between the
                  Company and Igor Alexeff. Portions of this exhibit (indicated
                  by asterisks) have been omitted pursuant to a request for
                  confidential treatment pursuant to Rule 24b-2 of the
                  Securities Exchange Act of 1934. Incorporated by reference to
                  Exhibit 10.4 on Form 8-K dated February 11, 2003.


                                       45
<PAGE>

         10.5     Technology Purchase Agreement dated March 19, 2003 between the
                  Company and Markland Technologies, Inc. Incorporated by
                  reference to the Exhibit 2.1 on Form 8-K dated March 25, 2003.

         10.6     Promissory Note between the Company and Concordia Homes for
                  $755,000 dated August 10, 2005. Incorporated by reference to
                  Exhibit 99.1 on Form 8-K dated August 16, 2005.

         10.7     Promissory Note between the Company and Concordia Land, LLC
                  dated October 12, 2005. Incorporated by reference to Exhibit
                  99.1 on Form 8-K dated October 14, 2005.

         10.7.1   Promissory Note Extension between the Company and Concordia
                  Land, LLC dated October 12, 2006. Incorporated by reference to
                  Exhibit 10.7.1 to Form 10-KSB dated December 19, 2006.

         10.7.2   Payment Guarantee by Concordia Homes of Nevada, Inc. to the
                  Company dated as of October 12, 2005. Incorporated by
                  reference to Exhibit 10.7.2 to Form 10-KSB dated December 19,
                  2006.

         10.8     Promissory Note between the Company and Aviano, LLC dated
                  April 25, 2006. Incorporated by reference to Exhibit 99.1 on
                  Form 8-K dated May 1, 2006.

         10.8.1   Payment Guarantee by Concordia Homes of Nevada, Inc. to the
                  Company dated as of April 25, 2006. Incorporated by reference
                  to Exhibit 10.8.1 to Form 10-KSB dated December 19, 2006.

         10.9     Promissory Note payable to Davric Corporation dated October
                  31, 2006. Incorporated by reference to Exhibit 99.1 on Form
                  8-K dated November 3, 2006.

         10.10    Promissory Note payable to Sunrise Management, Inc. Profit
                  Sharing Plan dated March 23, 2007. Incorporated by reference
                  to Exhibit 99.2 on Form 8-K dated March 29, 2007.

         10.11    Purchase Agreement By and Between Davric Corporation and ASI
                  Capital Corporation dated effective March 28, 2007.
                  Incorporated by reference to Exhibit 99.3 on Form 8-K dated
                  March 29, 2007.

         10.11.1  Note Endorsement to ASI Capital Corporation by Davric
                  Corporation dated March 27, 2007. Incorporated by reference to
                  Exhibit 99.4 on Form 8-K dated March 29, 2007.

         10.11.2  Assignment of Deed of Trust to ASI Capital Corporation by
                  Davric Corporation dated March 27, 2007. Incorporated by
                  reference to Exhibit 99.5 on Form 8-K dated March 29, 2007.

         10.12    Purchase Agreements By and Between ASI Capital Corporation and
                  Davric Corporation and related Note Endorsements dated
                  effective September 21, 2007. Incorporated by reference to
                  Exhibit 99.1 on Form 8-K dated September 21, 2007.


         10.13    Audit Committee Charter adopted September 17, 2007.
                  Incorporated by reference to Exhibit 99.2 on Form 8-K dated
                  September 21, 2007.

         10.14    Sublease dated as of October 11, 2007 between ASI Capital
                  Corporation and Joseph L. Lamarca and Jerry E. Polis.
                  Incorporated by reference to Exhibit 99.1 on Form 8-K dated
                  November 9, 2007.

         31.1*    Certification of Principal Executive Officer, Pursuant to
                  Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

         31.2*    Certification of Principal Financial Officer, Pursuant to
                  Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

         32.1*    Certification of Principal Executive Officer, Pursuant to 18
                  U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

         32.2*    Certification of Principal Financial Officer, Pursuant to 18
                  U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

*  Filed herewith.
-----------------------------------------------


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Audit Committee (and previously the entire Board of Directors) pre-approved
all audit, audit-related and non-audit services performed by our independent
registered public accounting firm and subsequently reviewed the actual fees and
expenses paid to Piercy Bowler Taylor & Kern. The Audit Committee has determined
that the fees paid to Piercy Bowler Taylor & Kern for non-audit services are
compatible with maintaining Piercy Bowler Taylor & Kern's independence as our
independent registered public accounting firm.


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<PAGE>

AUDIT FEES. The aggregate fees billed by Piercy Bowler Taylor & Kern to the date
of this report for professional services for the audit of the financial
statements of the Company and the reviews of the financial statements included
in the Company's quarterly reports on Form 10-QSB for 2007 and 2006 were $48,370
and $32,397 including expenses, respectively.

AUDIT-RELATED FEES. There were no other fees billed by the Company's principal
accountants during the fiscal years ended September 30, 2007 or 2006 for
assurance and related services that were reasonably related to the performance
of the audit or review of the Company's financial statements and not reported
under "Audit Fees" above.

TAX FEES. There were no fees billed by the Company's principal accountant during
the last two fiscal periods for professional services rendered for tax
compliance, tax advice and tax planning.

ALL OTHER FEES FOR PRODUCTS AND SERVICES. There were no other fees billed by the
Company's principal accountants during the fiscal years ended September 30, 2007
or 2006 for professional services rendered for other products or services.


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                             ASI TECHNOLOGY CORPORATION

                                             By:       /s/ JERRY E. POLIS
                                                       ------------------
                                                      Jerry E. Polis
                                                      President

Date: December 18, 2007

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

         Name                Position                           Date
         ----                --------                           ----


/s/ JERRY E. POLIS      President                              December 18, 2007
    --------------      and Chairman
    Jerry E. Polis      (principal executive officer)

/s/ ERIC M. POLIS       Secretary, Treasurer and Director      December 18, 2007
    -------------       (principal financial and accounting
    Eric M. Polis       officer)


/s/ GERALD L. EHRENS    Director                               December 18, 2007
    ----------------
    Gerald L. Ehrens

/s/ RICHARD A. FAIT     Director                               December 18, 2007
    ---------------
    Richard A. Fait


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