**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-KSB/A**


**Amendment
      No. 1**





(Mark
      One)





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





For
      the
      fiscal year ended November 30, 2007





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





For
      the
      transition period from ______________to ____________





Commission
      File Number 000-52789





**APC
      GROUP, INC.**


(Name
      of
      small business issuer in its charter)





**Nevada**
            
            **20-1069585**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**3526
                Industrial Ave, Fairbanks, AK**
            
            **99701**(Address
                of principal executive offices)
            
            (Zip
                Code)





Issuer’s
      telephone number **(907)
      457-2501**





Securities
      registered under Section 12(b) of the Exchange Act: **None**





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





**Common
      Stock, $.001 par value per share**


(Title
      of
      class)





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





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 o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the 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. o





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


Yes
o
      No x





The
      issuer’s revenue for the most recent fiscal year ended November 30, 2007 was
      $191,763.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates was $2,506,804 as of April 27, 2008, based upon the last
      third-party sale of our common stock for cash which was at $0.20 per share
      on
      March 6, 2007. We have not sold our common stock within the last 60 days, and
      there is no established public trading market for our common stock.





As
      of
      April 27, 2008, there were outstanding 22,845,746 shares of the registrant’s
      common stock, $.001 par value per share. Of the shares outstanding, 1,334,524
      shares had not been issued by our transfer agent as of April 27,
      2008.





Transitional
      Small Business Disclosure Format: Yes o No x





**EXPLANATORY
      NOTE**





APC
      Group, Inc. ("APC") is amending its Annual Report on Form 10-KSB for the fiscal
      year ended November 30, 2007 (the "Annual Report") which was originally filed
      with the Securities and Exchange Commission (the “SEC”) on May 16, 2008, in
      response to comments that the SEC had on APC’s filings. Changes have been made
      to the following sections:





·
            “Item
                1. Description of Business” under the heading “Marketing and
                Distribution”;


·
            “Item
                6. Management Discussion and Analysis” under the headings “Results of
                Operations, Fiscal Year Ended November 30, 2007”, “Liquidity and Capital
                Resources” and “Risk Factors, Risk Related To Ownership of Our Common
                Stock”;


·
            “Item
                9. Directors, Executive Officers, Promoters, Control Persons and
                Corporate
                Governance; Compliance With Section 16(a) of the Exchange Act” under the
                heading “Executive Officers and Directors”;
                and


·
            “Item
                11. Security Ownership of Certain Beneficial Owners and Management
                and
                Related Stockholder Matters” under the heading “Series A Preferred Stock”.





Although
      this Form 10-KSB/A contains all of the items required to be included in an
      Annual Report on Form 10-KSB, no other information in the original filing is
      amended hereby. The items have not been updated to reflect other events
      occurring after the original filing or to modify or update those disclosures
      affected by subsequent events. In addition, pursuant to the rules of the SEC,
      this Form 10-KSB/A contains currently dated certifications from APC’s Chief
      Executive Officer and Principal Financial Officer, as required by Sections
      302
      and 906 of the Sarbanes-Oxley Act of 2002.





Except
      for the foregoing amended information, this Form 10-KSB/A continues to speak
      as
      of the date of the original filing, and APC has not updated the disclosures
      contained herein to reflect events that occurred at a later date unless
      otherwise noted.








**Form
      10-KSB**


**For
      the Fiscal Year Ended November 30, 2007**





**TABLE
      OF CONTENTS**


PagePART
                  IItem
                  1.
              Description
                  of Business.
              1Item
                  2.
              Description
                  of Property.
              5Item
                  3.
              Legal
                  Proceedings.
              5Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders.
              5PART
                  IIItem
                  5.
              Market
                  for Common Equity and Related Stockholder Matters.
              5Item
                  6.
              Management’s
                  Discussion and Analysis.
              6Item
                  7.
              Financial
                  Statements.
              17Item
                  8.
              Changes
                  In and Disagreements With Accountants on Accounting and Financial
                  Disclosure.
              27Item
                  8A.
              Controls
                  and Procedures.
              27Item
                  8A(T).
              Controls
                  and Procedures
              27Item
                  8B.
              Other
                  Information.
              27PART
                  IIIItem
                  9.
              Directors,
                  Executive Officers, Promoters, Control Persons and Corporate Governance;
                  Compliance With Section 16(a) of the Exchange Act.
              27Item
                  10.
              Executive
                  Compensation.
              29Item
                  11.
              Security
                  Ownership of Certain Benenficial Owners and Management and Related
                  Stockholder Matters.
              30Item
                12.
              Certain
                  Relationships and Related Transactions, and Director
                  Independence.
              32Item
                13.
              Exhibits.
              32Item
                  14.
              Principal
                  Accountant Fees and Services.
              33





**Form
      10-KSB**


**For
      the Fiscal Year Ended November 30, 2007**





**PART
      I**





**Item
                1.**
            **Description
                of Business****.**





**Organization**





APC
      Group, Inc. was originally formed in April 1, 2003 as Alaskan Products Company
      Partnership, a general partnership in Alaska. Initially, there were two general
      partners.





On
      October 20, 2003, the State of Alaska approved our Certificate of Conversion
      allowing us to convert us to an Alaska limited liability company, under the
      name
      Alaskan Products Company, LLC.





On
      April
      28, 2004 we became APC Group, Inc., a Nevada corporation, through the adoption
      of a Plan of Conversion and the filing of Articles of Incorporation with
      Nevada.





Alaskan
      Products Company LLC, one of our predecessor entities, entered a contract to
      purchase all of the assets of Reel-Thing Innovations Inc., a product development
      company, on July 10, 2003. Under the terms of the contract, as amended, the
      assets include the patents, molds, blueprints, design drawings, websites,
      instructional manuals, promotional materials and trade names for MedReel and
      Reel-Thing, in exchange for installment payments totaling $508,000. In the
      event
      that any of the installment payments is past due, Reel-Thing has the right
      to
      assess interest on the past due amounts at a rate of 1.5% per month. In the
      event that any of the installment payments is ninety (90) days past due, the
      assets revert back to Reel-Thing unless they provide their written consent
      waiving their right to the reversion. As of November 30, 2007, we had paid
      $75,000 to Reel-Thing for the assets, missed eight (8) installment payments
      totaling $213,000 and accrued $46,928 in late payment interest on the past
      due
      amounts.





On
      February 21, 2008, Reel-Thing and we amended the contract to revise the
      repayment schedule so we are no longer past due on our installment payments.
      In
      addition, Reel-Thing provided a waiver of their right to reversion of the assets
      during the period we were past due. Under the amendment, Reel-Thing converted
      $291,811, which consisted of $238,000 of past due installment payments on the
      purchase price and $53,811 of accrued late payment interest, into 1,209,524
      restricted shares of our common stock. Reel-Thing also agreed to modify the
      payment schedule for $195,000 of the purchase price which remained unpaid.
      We
      paid $5,000 of the purchase price to Reel-Thing in finalizing the amendment,
      and
      we are scheduled to pay twenty-four (24) installment payments of $7,916 on
      the
      first business day of each month beginning on August 1, 2008.





**Our
      Business and Products**





We
      market
      numerous **** watertight
      retractable 110v power cord products for use in different industries. We also
      manufacture proprietary Arctic Leash extension cords in various lengths and
      gages.





·
            **Arctic
                LeashTM (“Arctic Leash”)**:
                Vehicle mount retractable polar extension cord reel for motor
                vehicles.


·
            **Boom
                LeashTM:**Retractable
                polar cord reel for use with “Boom” trucks and high reach
                equipment.


·
            **Wall
                LeashTM:**Outdoor, wall or pole mountable retractable polar cord reel for homes,
                business, and general use in all climates for homes, business, and
                industry.


·
            **MedReel®
                (“MedReel”)**:
                Retractable green dot cord reel for operating rooms, crash carts,
                IV
                poles, computer carts, and hospital beds in health care
                facilities.


·
            **Arctic
                Leash Extension Cords**:
                Proprietary extension cords in all lengths and
                gauges.


·
            **Marine
                LeashTM**:
                Retractable watertight cord reels for boats, yachts, sailboats, and
                ships.





The
      18
      Ft. Arctic Leash





The
      Arctic Leash is designed for motorists that commonly use extension cords, and
      it
      allows them to easily implement and store the cord for future and continuous
      use. Many motorists in arctic environments carry an extension cord around to
      plug-in their vehicle, as it is common practice in Alaska, Canada, and other
      cold climates in keeping vehicle engines heated that most of the world is
      unaware exists. The uniqueness of this product as well the concept of plugging
      your car into an electrical outlet caught the eye of a major cable TV network
      channel and appeared in a program about sub-arctic technology. Typically,
      motorists coil an extension cord around their side-view mirror. The Arctic
      Leash
      installs an extension cord inside a vehicle’s wheel well or behind the bumper,
      and it retracts into its confined case when not in use to remain out of view
      and
      secure when driving. When extended, the cord locks in place and with a slight
      tug it retracts into its watertight case when not in use. Although this is
      not a
      seasonal product, it has limited geographical appeal, primarily in colder
      climates. Dealerships install these units on selected models year round as
      part
      of their package, similar to fog lights.


-1-


Current
      wholesale prices are $84.84 with discounts based upon sales volumes. Current
      suggested retail price is $119.00 for all models





The
      20/30 ft. Boom Leash





The
      Boom
      Leash is designed for boom truck manufactures where the Occupational Safety
      and
      health Administration, or OSHA, requires a cut off switch. This unit is
      non-ratcheting and is used as a closure only to signal the operator that the
      boom is over loaded. These units are original equipment manufacturer, or OEM,
      devices and can be engineered in different lengths and gauges. We believe that
      prior to the Boom Leash, there were no extension cord reels with a watertight
      case that could be used in the warmest and coldest climates.





Current
      OEM prices are $84.84 based upon sales volumes.





The
      30
      Ft. Wall Leash





The
      Wall
      Leash is designed to provide outside/inside retractable power in a watertight
      case for all climates, environments and applications. The wall leash differs
      from the Arctic Leash in the sense that it brings power to a device and
      equipment such as power tools, electric gardening equipment, or as a convenience
      on decks and patios, were the Arctic Leash is intended to plug into a power
      source. This removes the need to locate, carry, and connect traditional
      extension cords when needed power is required outside the house, business,
      or
      industry. The wall leash comes with mounting brackets to attach to most any
      surface, location, or device.





Current
      wholesale prices are $84.84 with discounts based upon sales volumes. Current
      suggested retail price is $119.00 for all models.





Arctic
      Leash Brand Extension Cords





We
      manufacture and distribute all weather extension cords in various length and
      gauges that are of the highest quality. Arctic Leash brand extension cords
      are
      all weather indoor/outdoor extension cords for use in all climates. Arctic
      Leash
      extension cords have lighted plugs on both ends, additional stress relief on
      plugs, solid stainless steel prongs and are warranted for life.





The
      MedReel





The
      MedReel is a retractable extension cord reel developed for use in health care
      facilities. The National Electric Code published by the National Fire Protection
      Association specifies that receptacles that are used in hospitals and may be
      wired to an emergency power supply be designated with a distinguishing feature
      which is commonly met by marking the receptacles with a distinctive green dot.
      Hospital grade receptacles are made to the highest and most rigid mechanical
      and
      electrical standards. MedReel is designed to provide green dot retractable
      power
      for various applications in the medical industry.





The
      MedReel has a wide range of uses and applications for a medical setting. It
      can
      be mounted on electric beds, operating theatre beds, portable testing equipment,
      dialysis machines, and other electrical medical equipment. It can also be
      ceiling mounted in operating theatres and critical care areas. The extension
      cord retracts and stores in a waterproof durable case when it is not in
      use.





MedReel’s
      market consists of hospitals and healthcare facilities, and is intended for
      applications that are mainly employed indoors. The sales potential of the
      MedReel are expected to be consistent throughout all periods of the year, and
      the success of the MedReel product will depend on our ability to market and
      produce it.





The
      MedReel is available in four models, made to meet a variety of applications
      used
      by health care facilities. Based on the selected models, MedReel products are
      priced from $199.00 to $269.00. Individual brackets, sold separately, are priced
      ranging from $39.00 to $99.00.


-2-


We
      believe that the patented, retractable extension cords, in all their forms
      and
      applications, may become a product line that can be marketed and sold anywhere
      in the world, regardless of temperature, climate, or equipment
      type.





**Our
      Market**





We
      operate in the wire and cable manufacturing market. The wire and cable market
      is
      fragmented and characterized by a large number of public companies and privately
      owned companies throughout the U.S. The industry has been undergoing
      consolidation, and over the past few years some large market participants have
      been willing to divest businesses that are underperforming or not perceived
      as
      good growth opportunities. This current market environment has caused a ripple
      effect in the market, disrupting many customer relationships, which we believe
      will benefit us as a direct provider of high quality, low cost
      products.





Copper
      comprises one of the major cost components for cable and wire products. Cable
      and wire manufacturers are typically able to pass through the changes in the
      cost of copper to the customer. However, there can be timing delays for pricing
      implementations of varying lengths depending on the type of product, competitive
      conditions, particular customer arrangements and inventory
      management.





**Marketing
      and Distribution**





We
      sell
      our products through direct marketing to independent store owners (or
      retailers), independent chain retailers (or franchisees), hospitals, electrical
      contractors, corporate chain stores and corporate end users. We provide product
      samples, price sheets, brochures, pictures, DVD’s and other materials to attract
      potential customers and introduce new applications for use of our products.
      Our
      niche in the extension cord market can be defined as eliminating corporate
      chain
      store purchasers and selling directly to the independent store owner at a
      substantial discount. Many automotive chain stores own a small portion of there
      stores and franchise the name to independent store owners. These independent
      store owners are our principal customers, and we are not dependent on any one
      or
      more customers.





Corporate
      chain stores have multi-tiered distribution systems in place with generally
      one
      large distribution center that purchases product from the corporation and
      resells at a mark up to a smaller localized distribution center that resells
      at
      a mark up to even smaller distribution centers or in some cases the independent
      store owner. In many cases, these independent store owners are not bound to
      buy
      products only from the corporation or distribution centers, but are able to
      buy
      directly from the manufacturer. Knowing this, we market directly to the
      independent store owner, removing the corporate and distribution center mark
      ups
      and providing the independent store owner better pricing and other benefits
      such
      as higher quality products, free shipping, and lifetime warranties. With this
      in
      mind, we also leverage other products outside of our current product lines
      to
      these independent store owners. We believe that by selling directly to
      independent store owners we are able to provide better pricing which reduces
      our
      reliance on key customer accounts.





We
      plan
      to engage up to fifty (50) independent sales representatives in fiscal 2008
      to
      sell our products. The independent representatives will use our web-based data
      program which has 3,500 potential customers to market our products. They will
      also use our existing data base to generate sales, but more importantly
      inputting an expediential amount potential customers into our data base creating
      a value all of its own. We plan to use the program to manage our inventory
      levels by controlling what products are available in what industries for sale
      by
      the independent representatives and to monitor their performance.





There
      are
      currently no material seasonal factors that impact our operations, such as
      greater demand during or in anticipation of colder weather. We have a mix of
      large and small retailers, including independent store owners and corporate
      chain stores, which prevents seasonality. Small retailers tend to purchase
      our
      products on an as needed basis during the Fall and Winter months, whereas large
      retailers purchase our products during the Spring and Summer months in
      anticipation of colder weather. As our business grows with independent store
      owners, there may be seasonality.





We
      distribute our products directly to independent store owners in most cases.
      We
      also use a fulfillment house in Toronto, Canada. We have a few distributors
      who
      market our products; however, this accounts for less the 5% of our total
      sales.





**Competition**





We
      face
      intense competition from other manufacturers of extension cords and cord
      reels.


-3-


We
      compete based on the following basis:





·
            *Brand
                Recognition*.
                We market watertight retractable extension cord reels under several
                brands
                and trademarks, including Arctic Leash, Boom LeashTM, Wall LeashTM, Marine
                LeashTM and MedReel. We believe that the Arctic Leash is the only
                retractable extension cord that can be mounted on a vehicle. Although
                this
                product has one of our lowest gross margins, its uniqueness allows
                us to
                attract customers and introduce them to our line of Arctic Leash
                branded,
                all weather, indoor/outdoor extension cords which have a much higher
                gross
                margin.


·
            *Low
                Cost*.
                As discussed above under the heading “Marketing and Distribution”, we
                market our products primarily to independent store owners. By doing
                so, we
                remove corporate and distribution center mark ups that are typical
                in our
                industry.


·
            *High
                Quality*.
                Our products meet or exceed the requirements of well recognized industry
                standard-setting authorities in the U.S. and Canada such as Underwriters
                Laboratories and the Canadian Standards
                Association.





We
      believe that we compete favorably on the factors described above. However,
      our
      industry is becoming increasingly competitive. Larger, more established
      companies than us may be able to compete more efficiently or
      effectively.





We
      face
      pricing pressure from various manufacturers and distributors that sell lower
      quality extension cords. The average end consumer generally is not aware of
      the
      differences in quality among the various brands of extension cords in the
      market. They are heavily persuaded by price. We handle this pressure by
      marketing high quality extension cords directly to independent store owners
      who
      typically are aware of differences in quality. By removing the corporate and
      distribution center mark ups, we are able to offer high quality extension cords
      at a low cost to combat pricing pressure.





**Intellectual
      Property and Other Proprietary Rights**





We
      rely
      on a combination of patent, trademark, copyright and trade secret laws in the
      U.S. and other jurisdictions as well as confidentiality procedures and
      contractual provisions to protect our intellectual property and other
      proprietary rights.





We
      rely
      on three (3) U.S patents which expire in 2012, 2015 and 2016 and a Canadian
      patent which expires in 2016 for the primary design of the Arctic Leash and
      the
      MedReel. The patents were granted for the concept of a water resistant
      retractable cord reel case that can be sealed by means of a fitted rubber sleeve
      on the cord. The tension of the retraction mechanism holds the specially
      designed sleeve firmly within the mouth of the case, creating a water tight
      seal
      for the case. The case is also designed with an integral inner water tight
      compartment for the mounting of a circuit breaker. The entire unit is designed
      to be rugged and capable of exterior mounting on a building or in the wheel
      well
      or engine compartment of an automobile, yet still protect all of the internal
      mechanisms and wiring from water, dampness and exposure to the
      elements.





MedReel
      is a registered trademark in the U.S. Our trademarks which are not federally
      registered include: Arctic LeashTM, Boom LeashTM, Wall LeashTM and Marine
      LeashTM.





**Contract
      Manufacturing**





We
      outsource the manufacture of our extension cords to a contract manufacturer
      in
      the U.S. and one in China. We rely on a single Ohio-based manufacturer for
      both
      the MedReel and Arctic Leash cord reels. The manufacturer also warehouses our
      products and ships them to our customers. We have relied on a China-based
      manufacturer since 2004, for our other extension cord products. We plan to
      continue using the Ohio-based manufacturer for our patented watertight
      retractable, extension cord reels that could be jeopardized if they were
      manufactured offshore. We plan to continue using the Chinese-based manufacturer
      for our other extension cord products.





We
      do not
      have written contracts with either of our manufacturers; however, we have
      developed a course of dealing with them.





We
      negotiate pricing for each purchase order of our patented watertight
      retractable, extension cord reels based on the current cost of copper. We
      periodically schedule shipping of these products to us in Fairbanks, Alaska
      and
      pay 100% of the purchase order upon receipt of these products, except that
      we
      pay 100% of the purchase order of the MedReel and the manufacturer ships the
      MedReel directly to our customers. The risk of loss of these products passes
      to
      us in Ohio when the goods are shipped.





We
      also
      negotiate pricing for each purchase order of our other products based on the
      current cost of copper. We provide a 30% deposit on the goods, which are
      delivered to Seattle, Washington where they are held in U.S. customs while
      our
      customs broker prepares documentation for them to clear customs. We pay the
      balance of the purchase order when the goods clear customs. The risk of loss
      of
      the goods passes to us when the goods arrive in Seattle. The manufacturer
      authorizes release of the goods to our shipping company which transports the
      goods to Anchorage, Alaska and then to us in Fairbanks.


-4-


We
      chose
      contract manufacturing because we have limited human and capital resources
      to
      manufacture our products ourselves. We believe that contract manufacturing
      provides us with the flexibility to better control the costs, inventory levels
      and quality of our products given our resources. We plan to continue using
      contract manufacturers for the foreseeable future.





**Employees**





We
      have
      two full-time employees. We believe that we have a good relationship with all
      of
      our employees.





We
      plan
      to engage up to fifty (50) independent sales representatives in fiscal 2008
      to
      grow our business. We plan for them to sell our products directly to customers
      on a local level.





**Regulation**





Our
      electrical products are subject to product safety standards in the U.S. and
      Canada. To sell our products in these jurisdictions, we are required to have
      a
      government recognized, private-sector, third-party organization provide
      independent evaluations, product safety testing and certifications of our
      products. We have chosen Intertek, which issues the Electrical Testing Labs
      certification (or “ETL Listed Mark”) that is recognized and accepted in both
      jurisdictions, to perform these functions for the MedReel and Arctic Leash
      cord
      reels which are manufactured in the U.S. Our Chinese manufacturer delivers
      products to us with an Underwriters Laboratories (or UL) certification for
      both
      jurisdictions.





Intertek
      evaluates, tests and certifies our products under standards developed by
      Underwriters Laboratories in the United States and the Canadian Standards
      Association in Canada. Intertek performs quarterly audits of our MedReel and
      Arctic Leash cord reels. During fiscal 2007, we incurred $1,659 for Intertek’s
      services.





**Item
                2.**
            **Description
                of Property.**





Our
      corporate headquarters are located at 3526 Industrial Avenue, Fairbanks, Alaska
      99701 and consist of approximately 2,100 square feet of office space and 1,500
      square feet of warehouse space. We rent the premises for $1,200 per month under
      a month-to-month operating lease that is cancelable with thirty (30) days
      written notice.





**Item
                3.**
            **Legal
                Proceedings.**





In
      April
      2006, Adrian Marangoni, a former executive officer, filed a lawsuit against
      us
      in the District Court for the State of Alaska, Fourth Judicial District at
      Fairbanks seeking the payment of $21,407, which he claims he loaned to us,
      along
      with post judgment interest, costs and attorney’s fees. On June 11, 2007, we
      made an Offer of Judgment to Mr. Marangoni in the amount of $21,407 which was
      accepted. Mr. Marangoni has yet to file a form of final judgment computing
      interest, costs and attorney’s fees. As of November 30, 2007, we had accrued
      $28,755 consisting of the judgment amount, interest from April 1, 2006 to
      November 30, 2007 at the rate of 9.25% per annum, attorney fees at 18% of the
      judgment amount and filing fees.





From
      time
      to time, we may be a party to, and our properties may be the subject of, routine
      legal proceedings or threats of legal proceedings which we do not believe are
      material.





**Item
                4.**
            **Submission
                of Matters to a Vote of Security
                Holders.**





There
      were no matters submitted to a vote of security holders during the fourth
      quarter of the fiscal year covered by this report.





**PART
      II**





**Item
                5.**
            **Market
                for Common Equity and Related Stockholder
                Matters.**





**Market
      Information**





There
      is
      no established public trading market for our common stock and a regular trading
      market may not develop, or if developed, may not be sustained. Therefore,
      persons who acquire our common stock in all likelihood will not be able to
      resell our common stock should they desire to do so when our common stock is
      eligible for public resell. Furthermore, it is unlikely that a lending
      institution will accept our common stock as pledged collateral for loans unless
      a regular trading market develops. We have no plans, proposals, arrangements,
      or
      understandings with any person with regard to the development of a trading
      market in any of our common stock.


-5-


Our
      common stock is not subject to any outstanding options or warrants to purchase,
      or securities convertible into, our common stock.





All
      of
      our shares of common stock were issued as “restricted securities” as that term
      is defined by Rule 144 of the Securities Act of 1933, as amended (the
“Securities Act”) and bore appropriate legends, restricting their
      transferability. Restricted securities may not be sold except pursuant to an
      effective registration statement filed by us or an applicable exemption from
      registration, including an exemption under Rule 144 promulgated under the
      Securities Act. In general, under Rule 144 as currently in effect, a person
      (or
      persons whose shares are aggregated) who is not our affiliate at the time of
      sale and has not been deemed to have been our affiliate at any time during
      the
      three months preceding a sale who owns shares that were purchased from us (or
      any affiliate) after a minimum of one year passes will be entitled to freely
      sell their shares without any federal limitations. Provided there is current
      public information about us, after a minimum of six months passes, such
      non-affiliates will be entitled to freely sell their shares without additional
      federal limitations. Sales by affiliates under Rule 144 are also subject to
      certain volume limitations, manner of sale provisions, notice requirements
      and
      also the availability of current public information about us. As of April 27,
      2008, we had eighty-eight (88) shareholders of record, and we had been subject
      to the reporting requirements of the Exchange Act for at least ninety (90)
      days.
      There were 10,670,748 shares of our common stock that had been held by
      non-affiliates for a minimum of one year which could be freely resold under
      Rule
      144, and 75,000 shares of our common stock that had been held by such persons
      for a minimum of six months which could be resold under Rule 144 subject to
      the
      public information requirements for reporting issuers. There were 10,765,474
      shares of our common stock that had been held by affiliates for a minimum of
      six
      months which could be resold under Rule 144 subject to the volume limitations,
      manner of sale provisions, public information requirements for reporting issuers
      and notice requirements. There were 1,334,524 shares of our common stock that
      had been held by non-affiliates for less than six months and could not be resold
      under Rule 144.





**Holders
      of Record**





As
      of
      April 27, 2008, we had eighty-eight (88) holders of record of our common
      stock.





**Dividend
      Policy**





We
      have
      never declared or paid dividends on our common stock. We do not anticipate
      paying dividends on our common stock in the near future. We intend to reinvest
      in our business operations any funds that could be used to pay dividends. Our
      common stock is junior in priority to our preferred stock with respect to
      dividends.





**Unregistered
      Sales of Equity Securities**





None.





**Item
                6.**
            **Management’s
                Discussion and Analysis.**





The
      following discussion may contain “forward-looking statements” within the meaning
      of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
      and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), which can be identified by the use of forward-looking
      terminology such as, “may,” “believe,” “expect,” “intend,” “anticipate”,
“estimate,” or “continue” or the negative thereof or other variations thereon or
      comparable terminology. Although we believe that the expectations reflected
      in
      such forward-looking statements are reasonable, we can give no assurance that
      such expectations will prove to have been correct. Our operations involve a
      number of risks and uncertainties, including those described in the Description
      of the Business of this Annual Report on Form 10-KSB and other documents filed
      with the Securities and Exchange Commission. Therefore, these types of
      statements may prove to be incorrect.





**Overview**





We
      market
      a number of patented watertight retractable power cord products for use in
      different industries. We also market our proprietary Arctic Leash brand polar
      extension cords.





·
            **Arctic
                Leash:**Vehicle mount retractable polar extension cord reel for motor
                vehicles.


-6-


·
            **Boom
                Leash:**Retractable polar cord reel for use with “Boom”
                trucks.


·
            **Wall
                Leash:**Outdoor wall or pole mountable retractable polar cord reel for homes,
                business, and general use in all climates for homes, business, and
                industry.


·
            **MedReel:**Retractable green dot cord reel for operating rooms, crash carts,
                IV
                poles, computer carts, and hospital beds in health care
                facilities.


·
            **Arctic
                Leash Extension Cords:**Proprietary polar cords in all lengths and
                gauges.





**Results
      of Operations**





*Fiscal
      Year Ended November 30, 2007*





Revenue
      decreased $73,204, or 28%, to $191,763 for the fiscal year ended November 30,
      2007, compared to revenue of $264,967 for the fiscal year ended November 30,
      2006. The decrease in revenue was due to the following factors: 1) much of
      the
      attention of our sole executive officer was diverted from generating sales
      to
      managing the going public process; 2) we had fewer sales representatives; and
      3)
      we spent less on advertising in fiscal 2006. We plan to engage up to fifty
      (50)
      independent sales representatives in fiscal 2008 to generate sales.





Cost
      of
      revenues decreased $61,704, or 44%, to $77,700 for the fiscal year ended
      November 30, 2007, compared to cost of revenues of $139,404 for the fiscal
      year
      ended November 30, 2006. The decrease in cost of revenues was primarily due
      to
      the decrease in revenue along with a difference in the mix of products sold
      which resulted in a higher gross margin (discussed below).





Gross
      profit decreased $11,500, or 9%, to $114,063 for the fiscal year ended November
      30, 2007, compared to gross profit of $125,563 for the fiscal year ended
      November 30, 2006. The decrease in gross profit was primarily due to the
      decrease in revenue.





Our
      gross
      margin was 59% for the fiscal year ended November 30, 2007, as compared to
      47%
      for the fiscal year ended November 30, 2006. The gross margin on the Arctic
      Leash watertight retractable extension cord reel is approximately 30% while
      the
      gross margin on some of our Arctic Leash brand, all weather, indoor/outdoor
      extension cords is as high as 200%. Although this product has one of our lowest
      gross margins, its uniqueness allows us to attract customers and introduce
      them
      to our line of higher margin Arctic Leash branded extension cords. Sometimes
      we
      price the Arctic Leash at cost to build relationships so that we can introduce
      our other products. Our overall gross margin for any period is directly affected
      by the mix of products that we sell during the period. We generated revenue
      of
      $42,933, or 22% of sales, and $134,984, or 51% of sales, from the sale of Arctic
      Leash watertight retractable extension cord reels for the fiscal years ended
      November 30, 2007 and 2006, respectively, as compared to revenue of $148,830,
      or
      78% of sales, and $129,983, or 49% of sales, from the sale of Arctic Leash
      brand, all weather, indoor/outdoor extension cords and the MedReel for those
      same periods. The significant increase in gross margin was due to an increase
      in
      sales of higher margin Arctic Leash brand, all weather, indoor/outdoor extension
      cords and the MedReel.





Selling,
      general and administrative expenses increased $164,272, or 23%, to $892,638
      for
      the fiscal year ended November 30, 2007, compared to selling, general and
      administrative expenses of $728,366 for the fiscal year ended November 30,
      2006.
      The increase in selling, general and administrative expenses was primarily
      due
      to an increase in common stock issued for professional and other services.
      In
      addition to issuances of our common stock for professional services during
      the
      fiscal year ended November 30, 2007, we also issued 1,937,202 shares valued
      at
      $387,440 to Ken Forster for his services as our sole executive officer and
      200,000 shares to Matthew Meyer for taking over as Chairman of our board of
      directors. The significant components of selling, general and administrative
      expenses for the fiscal year ended November 30, 2006 and 2007, the percentage
      change over 2006 and the expense level as a percentage of revenues are set
      forth
      in the table below:





**Fiscal 2006**
            
            **Fiscal 2007**Compensation
            
            $
            171,573
            
            $
            508,537Percentage
                change over 2006
            
            
            
            
            
            196
            %As
                a percentage of revenues
            
            
            65
            %
            
            265
            %Professional
                fees
            
            $
            439,142
            
            $
            255,092Percentage
                change over 2006
            
            
            
            
            
            (42
            )%As
                a percentage of revenues
            
            
            166
            %
            
            133
            %Other
                expenses
            
            $
            117,651
            
            $
            129,009Percentage
                change over 2006
            
            
            
            
            
            10
            %As
                a percentage of revenues
            
            
            44
            %
            
            67
            %


-7-


During
      fiscal 2007, compensation included $387,440 due to 1,937,202 shares of our
      common stock valued at $0.20 that we issued to Kenneth S. Forster, our only
      executive officer, for compensation, and $40,000 due to 200,000 shares valued
      at
      $0.20 that we issued to Matthew Meyer for taking over as Chairman of our board
      of directors. During fiscal 2007, professional fees included $114,303 due to
      500,000 shares of common stock valued at $0.15 that we issued to Public Company
      Management Services, Inc. (“PCMS”) for additional management consulting services
      beyond the hours contemplated under our agreement (See the discussion, below,
      under the heading “Contractual Obligations”), 200,000 shares of common stock
      valued at $0.15 per share that we issued to an existing shareholder who provided
      us with a $100,000 certificate of deposit to use as collateral for a $100,000
      line of credit that we secured and an aggregate of 62,020 shares valued at
      $0.15
      that we issued to consultants for accounting and administrative services. There
      is no market for our common stock; however, we have filed a registration
      statement, and are taking other steps so that a market can develop. We valued
      the shares based upon the last third-party sale of our common stock at that
      time. Our expense level was disproportionate to our revenues because of these
      stock issuances and valuations. We have a limited amount of cash and will likely
      be required to issue additional shares for services in the future. We expect
      our
      disproportionate expense level to persist until we can increase our revenue
      of
      which there can be no assurance. In addition, we believe that if there was
      a
      market for our common stock, people providing services to our company would
      consider it less risky and be willing to accept fewer shares at the market
      price.





Depreciation
      expenses decreased $250, or 2%, to $11,626 for the fiscal year ended November
      30, 2007, compared to depreciation expense of $11,876 for the fiscal year ended
      November 30, 2006. The decrease in depreciation expense was primarily a result
      the disposal of assets.





We
      incurred a loss on sale of assets of $911 for the fiscal year ended November
      30,
      2006 as a result of the sale of a company vehicle. We did not sell any assets
      during for the fiscal year ended November 30, 2007, and, as a result we did
      not
      have any related gains or losses.





Net
      operating loss increased $174,611, or 28%, to $790,201 for the fiscal year
      ended
      November 30, 2007, compared to net operating loss of $615,590 for the fiscal
      year ended November 30, 2006.





We
      had
      loan costs of $30,000 for the fiscal year ended November 30, 2007 due to 200,000
      shares of common stock valued at $0.15 per share that we issued to an existing
      shareholder who provided us with a $100,000 certificate of deposit to use as
      collateral for a $100,000 line of credit that we secured.





Interest
      expense increased $9,363, or 16%, to $69,261 for the fiscal year ended November
      30, 2007, compared to interest expense of $59,898 for the fiscal year ended
      November 30, 2006. The increase in interest expense was due to an increase
      in
      past due payments to Reel-Thing which resulted in additional late payment
      interest. Reel-Thing and we revised our repayment schedule so we do not continue
      to incur late payment interest, but there can be no assurance; however, we
      expect our interest expense to continue to increase as we may be required to
      incur higher debt levels to fund operations.





We
      had
      net loss of $889,462 (or basic and diluted net loss per share of $0.04) for
      the
      fiscal year ended November 30, 2007, compared to net loss of $675,488 (or basic
      and diluted net loss per share of $0.04) for the fiscal year ended November
      30,
      2006. The increase in net loss was primarily attributable to the decrease in
      gross profit and the increases in net operating loss and interest
      expense.





**Liquidity
      and Capital Resources**





Total
      current assets were $130,252 as of November 30, 2007, consisting of cash and
      cash equivalents of $3,796, net accounts receivable of $25,483, inventory of
      $87,865 and prepaid expenses of $13,108.





Total
      current liabilities were $526,909 as of November 30, 2007, consisting of current
      maturities of long-term debt of $241,596, line of credit of $99,975, trade
      accounts payable of $86,218, accrued expenses of $57,179, accounts payable
      to
      related party of $31,941 and a note payable to related party of $10,000.





As
      of
      November 30, 2007, we had a working capital deficit of $396,657. The ratio
      of
      current assets to current liabilities was 22% as of November 30, 2007. We plan
      to resolve our working capital deficit by converting our debt into equity and
      expending our operations. For example, in February 2008, Reel-Thing agreed
      to
      convert approximately $291,811 into 1,209,524 restricted shares of our common
      stock. As a result, our current maturities of long-term debt significantly
      decreased which decreased our working capital deficit. As of November 30, 2007,
      we had creditors that we plan to offer conversion on aggregate debt of $139,916
      consisting of accounts payable to related parties of $31,941, a line of credit
      of $99,975 and $8,000 of trade accounts payable. The creditors are also current
      shareholders, persons who have previously provided services to us for shares
      of
      our common stock or persons who have previously converted amounts owed to them,
      so we believe that they may accept our offer, but there can be no
      assurance.


-8-


We
      believe that if we can generate annual revenue of $500,000, then we would have
      positive cash flow from operations. We plan to increase our revenue by engaging
      up to fifty (50) independent sales representatives to generate sales. The sales
      representatives will receive commissions based on their sales volume and mix
      of
      products sold, which would give us flexibility because of the large variance
      in
      the gross margin on the Arctic Leash, which is 30%, compared to some of our
      Arctic Leash private label extension cords, which is as high as 200%. We believe
      that we can attract sales representatives without a significant amount of
      additional capital.





During
      the fiscal year ended November 30, 2007, we had a net decrease in cash and
      cash
      equivalents of $9,841 consisting of net cash used in operating activities of
      $291,143 which was offset by net cash provided by financing activities of
      $281,302.





Net
      cash
      used in operating activities was $291,143 during the fiscal year ended November
      30, 2007, consisting of net loss of $889,462, increases in inventory of $34,535
      and prepaid expenses of $11,032 which were offset by adjustments for stock
      issued for services of $511,743, stock issued for loan costs of $30,000,
      depreciation expense of $11,626, accretion of discount on notes payable of
      $28,250 and bad debt recovery of $3,390, a decrease in accounts receivable
      of
      $25,459 and increases in trade accounts payable of $7,616, accounts payable
      to
      related parties of $14,558 and accrued liabilities of $18,024.





We
      did
      not have cash flows from investing activities during the fiscal year ended
      November 30, 2007.





Net
      cash
      provided by financing activities was $281,302 for the fiscal year ended November
      30, 2007, consisting of proceeds from sale of common stock of $215,000, proceeds
      from the issuance of debt of $10,000 and net borrowings under revolving line
      of
      credit of $99,975 which were offset by payments of $13,673 and $30,000 made
      on
      long-term debt and debt to related parties, respectively.





On
      November 30, 2006, we obtained a $100,000 line of credit which originally
      matured on November 30, 2007, but was extended to November 30, 2008. The
      original annual interest rate was 6.25% with accrued interest paid monthly
      beginning December 30, 2006. The interest rate was reduced to 5.95% with the
      extension. A certificate of deposit in the amount of $100,000 was assigned
      by an
      APC Group shareholder as collateral for which APC Group issued 200,000 shares
      of
      common stock valued and expensed at $30,000 as loan costs. Our board of
      directors authorized the issuance of an additional 125,000 shares to the
      shareholder for use of the certificate of deposit as collateral for the
      extension. At November 30, 2007, there was $25 available to us under this line
      of credit.





At
      November 30, 2007, we had current maturities of long-term debt of $301,423,
      most
      of which we owed to Reel-Thing Innovations, Inc. In the past, we have missed
      installment payments to Reel-Thing, and risk our assets reverting back to
      Reel-Thing. On February 21, 2008, Reel-Thing and we amended the contract to
      revise the repayment schedule so we are no longer past due on our installment
      payments. Under the amendment, Reel-Thing converted $291,811, which consisted
      of
      $238,000 of past due installment payments on the purchase price and $53,811
      of
      accrued late payment interest, into 1,209,524 restricted shares of our common
      stock. Reel-Thing also agreed to modify the payment schedule for $195,000 of
      the
      purchase price which remained unpaid. We paid $5,000 of the purchase price
      to
      Reel-Thing in finalizing the amendment and we are scheduled to pay twenty-four
      (24) installment payments of $7,917 on the first business day of each month
      beginning on August 1, 2008.





On
      March
      6, 2007, we sold an aggregate of 1,000,000 shares of common stock for $200,000
      to Richard L. Bienvenue, who subsequently became one of our directors. We may
      be
      required to offer additional directorships to obtain capital funding in the
      future. On October 02, 2007, we borrowed $10,000 from Mr. Bienvenue, and issued
      him a twelve-month promissory note which accrues interest at a rate of 7% and
      has a final balloon payment due on October 2, 2008.





We
      have
      issued a significant amount of shares as compensation to executive officers,
      employees and professional services providers for services rendered or to be
      rendered to us. We currently have a limited amount of cash and cash equivalents,
      and may be required to issue additional shares of common stock as compensation
      in the future. We value the shares based upon prior sales of our common stock
      to
      third parties, which is currently $0.20 per share which could cause our expense
      level to be disproportionate to our revenue. We believe that if there was a
      market for our common stock, our service providers would consider it less risky
      and be willing to accept fewer shares at the market price.


-9-


We
      need
      to raise $1,500,000 of additional financing in order to meet our cash
      requirements for the next twelve (12) months and to fully implement our business
      plan. The funds would be used to increase manufacturing of our products, expand
      our research and development efforts, and attract a larger talented sales force.
      The table below depicts how we plan to utilize the additional financing in
      the
      event that 25%, 50%, 75% and 100% of the funds are raised; however, the amounts
      actually expended for any purposes may vary significantly and will depend on
      a
      number of factors, including the amount of our future revenues and the other
      factors described, below, under the heading “Risk Factors”. Accordingly, we will
      retain broad discretion in the allocation of any additional
      financing.





**Purpose**Sales
                Force
            
            $
            141,000
            
            $
            300,000
            
            $
            300,000
            
            $
            300,000Inventory
            
            
            141,000
            
            
            300,000
            
            
            300,000
            
            
            300,000Advertising
                and Marketing
            
            
            93,000
            
            
            150,000
            
            
            200,000
            
            
            200,000Technology
                and Software
            
            
            -
            
            
            -
            
            
            75,000
            
            
            75,000Engineering
                and Testing
            
            
            -
            
            
            -
            
            
            50,000
            
            
            50,000Misc.
                Other Purposes
            
            
            -
            
            
            -
            
            
            106,000
            
            
            575,000**Net
                Proceeds****(1)**
            
            **$**
            **375,000**
            
            **$**
            **750,000**
            
            **$**
            **1,125,000**
            
            **$**
            **1,500,000**





We
      intend
      to raise the financing from the sale of common stock in one or more private
      placements or public offerings and/or from bank financing. We do not have any
      firm commitments or identified sources of additional capital from third parties
      or from our officers, directors or shareholders. There can be no assurance
      that
      additional capital will be available to us, or that, if available, it will
      be on
      terms satisfactory to us. Any additional financing may involve dilution to
      our
      shareholders. If we are unable to raise additional financing on terms
      satisfactory to us, or at all, we would not be able to fully implement our
      business plan which would have a materially adverse effect our business and
      financial position and could cause us to delay, curtail, scale back or forgo
      some or all of our operations or we could cease to exist.





**Contractual
      Obligations**





In
      June
      2004, we engaged GoPublicToday.com, Inc. (“GPT”) for $75,000 and 500,000 shares
      of our common stock to provide us with management consulting services in
      connection with our efforts to become a fully reporting publicly traded company.
      As of November 30, 2007, we had paid $64,500 and issued the 500,000 shares
      to
      GPT. The remaining cash compensation is due upon the effectiveness or
      abandonment of this registration statement. We also engaged PCMS, a
      sister-company of GPT for $48,000 and 750,000 shares of our common stock to
      provide us with regulatory compliance services during the first twelve (12)
      months that we are required to file periodic and other reports with the SEC
      and
      comply with Sarbanes-Oxley. We have issued the 750,000 shares to PCMS and will
      pay PCMS $4,000 per month during the period that PCMS is providing us with
      the
      regulatory compliance services. In February 2007, we issued an additional
      500,000 shares to PCMS for additional management consulting services beyond
      the
      hours contemplated under our agreement. GPT and PCMS are subsidiaries of Public
      Company Management Corporation (“PCMC”), a fully reporting, public company.





We
      lease
      approximately 3,600 square feet of office and warehouse space for $1,200 per
      month under a month-to-month operating lease in Fairbanks, Alaska for our
      corporate headquarters. The lease is cancelable with thirty (30) days written
      notice.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures, or capital resources that is material to investors.





**Critical
      Accounting Policies**





Our
      discussion and analysis of our financial condition and results of operations
      is
      based upon our financial statements, which have been prepared in accordance
      with
      accounting principals generally accepted in the United States. The preparation
      of these financial statements requires us to make estimates and judgments that
      affect the reported amounts of assets, liabilities, revenues and expenses,
      and
      related disclosure of any contingent assets and liabilities. We base our
      estimates on various assumptions that we believe to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      carrying values of assets and liabilities that are not readily apparent from
      other sources. On an on-going basis, we evaluate our estimates. Actual results
      may differ from these estimates if our assumptions do not materialize or
      conditions affecting those assumptions change.


-10-


We
      believe the following critical accounting policies affect our more significant
      judgments and estimates used in the preparation of our financial
      statements:





Revenue
      Recognition





We
      derive
      revenues primarily from selling power cord products. We recognize revenue when
      persuasive evidence of an agreement exists, the sale is complete, the price
      is
      fixed or determinable, and collectibility is reasonable assured. This typically
      occurs when the order is shipped. Provisions for discounts, estimated returns
      and allowances, and other adjustments are provided for in the same period the
      related revenues are recorded.





Customers
      have the right to inspection and acceptance for generally up to thirty days
      after taking delivery. We also offer lifetime warranties on power cord products
      to limited customers with proof of purchases and accrue for estimated future
      warranty costs in the period in which the revenue is recognized. Since
      inception, we have experienced insignificant product returns and
      exchanges.





Allowance
      for Doubtful Accounts





Bad
      debt
      expense is recognized based on management’s estimate of likely losses per year,
      past experience and an estimate of current year uncollectible
      amounts.





Stock-Based
      Compensation





Effective
      January 1, 2006, we began recording compensation expense associated with stock
      options and other forms of equity compensation in accordance with Statement
      of
      Financial Accounting Standards No. 123R, *Share-Based Payment,* as
      interpreted by SEC Staff Accounting Bulletin No. 107. Prior to January 1, 2006,
      we accounted for stock options according to the provisions of Accounting
      Principles Board Opinion No. 25, *Accounting for Stock Issued to Employees,* and
      related interpretations, and therefore no related compensation expense was
      recorded for awards granted with no intrinsic value. We adopted the modified
      prospective transition method provided for under SFAS No. 123R, and,
      consequently, have not retroactively adjusted results from prior periods. During
      the years ended November 30, 2007 and 2006, no options were granted by us to
      our
      employees.





Going
      Concern Considerations





In
      its
      report dated April 20, 2008, our principal independent auditors expressed an
      opinion that there is substantial doubt about our ability to continue as a
      going
      concern because we suffered recurring losses of $889,462 and $675,488 in 2007
      and 2006, respectively, and we had an accumulated deficit of $3,289,299 and
      a
      working capital deficit of $396,657 at November 30, 2007. We will try to raise
      additional capital from the sale of common stock in one or more private
      placements or public offerings and/or from bank financing. The accompanying
      financial statements have been prepared assuming that we will continue as a
      going concern. The financial statements do not include any adjustments that
      might result in the event that we cannot continue as a going concern. Our
      continuation as a going concern is dependent upon future events, including
      the
      acquisition of additional financing to fully implement our business plan. If
      we
      are unable to continue as a going concern, you will lose your entire
      investment





**Risk
      Factors**





**Risks
      Related to Our Business and Industry**





***We
      need to raise a significant amount of additional capital to meet our current
      and
      future business requirements and such capital raising may be costly or difficult
      to obtain and could dilute current stockholders’ ownership
      interests.***





We
      need
      to raise $1,500,000 of additional financing in order to meet our cash
      requirements for the next twelve (12) months and to fully implement our business
      plan during the next twelve months. The funds would be used to increase
      manufacturing of our products, expand our research and development efforts,
      and
      attract a larger talented sales force. We intend to raise the financing from
      the
      sale of common stock in one or more private placements or public offerings
      and/or from bank financing. We do not have any firm commitments or identified
      sources of additional capital from third parties or from our officers, directors
      or shareholders. Although our officers and directors or their affiliates have
      facilitated capital for us, or provide us with capital, in the past, they are
      not legally bound to do so. There can be no assurance that additional capital
      will be available to us, or that, if available, it will be on terms satisfactory
      to us. Any additional financing may involve dilution to our shareholders. If
      we
      are unable to raise additional financing on terms satisfactory to us, or at
      all,
      we would not be able to fully implement our business plan which would have
      a
      materially adverse effect our business and financial position and could cause
      us
      to delay, curtail, scale back or forgo some or all of our operations or we
      could
      cease to exist.


-11-


***We
      may become past due on our payments to Reel-Thing Innovations, Inc. and risk
      reversion of our right to the patents, molds, blueprints, design drawings,
      websites, instructional manuals, promotional materials and trade names for
      our
      products which would have a material adverse effect on our business and results
      of operations or could cause us to delay, curtail or cease
      operations.***





As
      of
      November 30, 2007, we were ninety (90) or more days past due on our installment
      payments to Reel-Thing Innovations Inc. in the amount of approximately $213,000.
      We did not have enough cash to make the scheduled installment payments and
      fund
      our operations. Under the terms of our contract with Reel-Thing Innovations
      Inc., the patents, molds, blueprints, design drawings, websites, instructional
      manuals, promotional materials and trade names for our products revert back
      to
      Reel-Thing Innovations Inc. in the event that we are ninety (90) days past
      due
      unless they provide their written consent waiving their right to the reversion.
      On February 21, 2008, Reel-Thing and we amended the contract to revise the
      repayment schedule so we are no longer past due on our installment payments.
      In
      addition, Reel-Thing provided a waiver of their right to reversion of the assets
      during the period we were past due. Under the amendment, Reel-Thing converted
      $291,811, which consisted of $238,000 of past due installment payments on the
      purchase price and $53,811 of accrued late payment interest, into 1,209,524
      restricted shares of our common stock. Reel-Thing also agreed to modify the
      payment schedule for $195,000 of the purchase price which remained unpaid.
      We
      paid $5,000 of the purchase price to Reel-Thing in finalizing the amendment
      and
      we are scheduled to pay twenty-four (24) installment payments of $7,917 on
      the
      first business day of each month beginning on August 1, 2008. If we become
      past
      due under the revised schedule, we risk reversion of our right to use the
      patents, molds, blueprints, design drawings, websites, instructional manuals,
      promotional materials and trade names which would have a material adverse effect
      on our business and results of operations or could cause us to delay, curtail
      or
      cease operations.





***We
      have a history of operating and net losses which we anticipate will
      continue.***





We
      have a
      history of losses from operations. We anticipate that for the foreseeable
      future, we will continue to experience losses from operations. We had a net
      loss
      of $889,462 during fiscal 2007 and a net loss of $675,488 during fiscal 2006.
      We
      anticipate that our net loss will increase for fiscal 2008.





***Disruptions
      in the supply of copper and other raw materials used in our products could
      cause
      us to be unable to meet customer demand, which could result in the loss of
      customers and net sales.***





Copper
      is
      the primary raw material that we use to manufacture our products. Other
      significant raw materials that we use are plastics, such as polyethylene. There
      are a limited number of domestic and foreign suppliers of copper and these
      other
      raw materials. If we are unable to maintain good relations with our manufactures
      or if there are any business interruptions at our suppliers, we may not have
      access to a sufficient supply of raw materials. If we lose one or both of our
      manufactures and are unable to locate alternative manufactures, we may not
      be
      able to meet customer demand, which could result in the loss of customers and
      net sales.





***Fluctuations
      in the price of copper and other raw materials, as well as fuel and energy,
      and
      increases in freight costs could increase our cost of goods sold and results
      of
      operations.***





The
      prices of copper and our other significant raw materials, as well as fuel and
      energy costs, are subject to considerable volatility. This volatility has
      affected our profitability and we expect that it will continue to do so in
      the
      future. For example, from 2004 to 2006, the average selling price of copper
      cathode on the COMEX increased from $1.29 per pound in 2004 to $3.10 per pound
      in 2006, an increase of 140.3%. As a result, volatility in these prices,
      particularly copper prices, can result in significant fluctuations in our cost
      of goods sold. If the cost of raw materials increases and we are unable to
      increase the prices of our products, or offset those cost increases with cost
      savings in other parts of our business, our results of operations would be
      reduced. We do not engage in activities to hedge the price of our raw materials.
      As a result, increases in the price of copper and other raw materials may affect
      our results of operations if we cannot effectively pass these price increases
      on
      to our customers.


-12-


***The
      markets for our products are highly competitive, and our inability to compete
      with other manufacturers in the extension cord and cable reel industry could
      harm our net sales and profitability.***





The
      markets for extension cord and cable reel products are highly competitive.
      We
      compete with much larger competitors in each of our business lines. Many of
      our
      products are made to industry specifications and may be considered similar
      to
      our competitors' products. Accordingly, we are subject to competition in many
      of
      our markets primarily on the basis of price. We must also be competitive in
      terms of quality, availability, payment terms and customer service. Many of
      our
      competitors have greater resources, financial and otherwise, than we do and
      may
      be better positioned to invest in manufacturing and supply chain efficiencies
      and product development. We may not be able to compete successfully with our
      existing competitors or with new competitors.





***We
      are dependent upon a number of key customers. If they were to cease purchasing
      our products, our net sales and operating results would likely decline.***





We
      are
      dependent upon a number of key customers; one of our customers accounted for
      more than 10% of our net sales for the year ended November 30, 2007. Our
      customers can cease buying our products at any time and can also sell products
      that compete with our products. The loss of one or more key customers, or a
      significant decrease in the volume of products they purchase from us, could
      result in a drop in our net sales and a decline in our operating results. In
      addition, a disruption or a downturn in the business of one or more key
      customers could reduce our sales and could reduce our liquidity if we were
      unable to collect amounts they owe us.





***We
      face pricing pressure in each of our markets, and our inability to continue
      to
      achieve operating efficiency and productivity improvements in response to
      pricing pressure may result in lower margins.***





We
      face
      pricing pressure in each of our markets as a result of significant competition,
      and price levels for many of our products (after excluding price adjustments
      related to the increased cost of copper) have declined over the past few years.
      We expect pricing pressure to continue for the foreseeable future. A component
      of our business strategy is to continue to achieve operating efficiencies and
      productivity improvements with a focus on lowering purchasing, manufacturing
      and
      distribution costs. We may not be successful in lowering our costs. In the
      event
      we are unable to lower these costs in response to pricing pressure, we may
      experience lower margins and decreases in operating results.





***Our
      independent auditors have expressed substantial doubt about our ability to
      continue as a going concern.***





In
      its
      report dated April 20, 2008, our independent auditors, Malone & Bailey, PC,
      expressed an opinion that there is substantial doubt about our ability to
      continue as a going concern because we have suffered recurring losses from
      operations and we have an accumulated deficit and a working capital deficit.
      We
      expect to continue to incur losses for the foreseeable future. The accompanying
      financial statements have been prepared assuming that we will continue as a
      going concern. The financial statements do not include any adjustments relating
      to the recoverability of recorded assets, or the amounts and classification
      of
      liabilities that might be necessary in the event we cannot continue in
      existence. Our continuation as a going concern is dependent upon future events,
      including the acquisition of additional capital to fully implement our business
      plan. There can be no assurance these future events will occur or that we will
      continue as a going concern even if they do occur. If we are unable to continue
      as a going concern, you will lose your entire investment.





***We
      will incur increased costs as a result of being a public company.***




We
      have
      plans to become a publicly traded company in the U.S. As a public company,
      we
      will incur significant legal, accounting and other expenses that we did not
      incur as a private company. We will incur costs associated with our public
      company reporting requirements. We also anticipate that we will incur costs
      associated with recently adopted corporate governance requirements, including
      requirements under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), as well as
      new rules implemented by the Securities and Exchange Commission (the
“Commission” or the “SEC”) and the Financial Industry Regulatory Authority
      (“FINRA”), formerly the National Association of Securities Dealers (the “NASD”).
      We expect these rules and regulations to increase our legal and financial
      compliance costs and to make some activities more time-consuming and costly.
      We
      also expect these new rules and regulations may make it more difficult and
      more
      expensive for us to obtain director and officer liability insurance, if we
      can
      obtain such insurance at all. We may be required to accept reduced policy limits
      and coverage or incur substantially higher costs to obtain the same or similar
      liability coverage. As a result, it may be more difficult for us to attract
      and
      retain qualified individuals to serve on our board of directors or as executive
      officers. We are currently evaluating and monitoring developments with respect
      to these new rules, and we cannot predict or estimate the amount of additional
      costs we may incur or the timing of such costs.


-13-


***If
      we were to lose the services of Kenneth S. Forster, we may not be able to
      execute our business strategy.***





Kenneth
      S. Forster, our only executive officer, serves as our President, CEO, Secretary
      and Treasurer. Our future success depends in large part upon Mr. Forster’s
      continued service. Mr. Forster is an at-will employee, and we do not maintain
      a
      key-person life insurance policy covering Mr. Forster. The loss of Mr. Forster
      could seriously harm our business.





***If
      we lose the services of our independent order taking and fulfillment companies,
      our revenues could be reduced.***





We
      depend
      on the subcontract services of an independent order taking and fulfillment
      company to sell our products and provide order fulfillment to our customers.
      Although we believe that we could replace the independent order taking and
      fulfillment company if our agreement were cancelled, we would face business
      disruption and possibly increased costs. The loss of our independent order
      taking and fulfillment company would have a material adverse effect on our
      business and results of operations.





***We
      may be subject to product liability claims that could be costly and time
      consuming or harm our reputation and reduce the demand for our products which
      would have a material adverse effect on our business, financial condition and
      results of operations.***




Although
      we have had no prior experience with product liability claims, our business
      exposes us to this risk and other adverse effects of product failures. For
      example, the MedReel is used in health care facilities for a wide range of
      applications such as operating theatre beds, dialysis machines, and other
      electrical medical equipment. If a MedReel extension cord failed to perform,
      the
      resultant injury could be serious or even fatal and subject us to product
      liability claims. A product liability claim can cause us to incur significant
      legal defense costs and adverse publicity regardless of the claim’s merit or
      eventual outcome. If we were required to pay damages, such payments could
      significantly harm our financial condition. A product liability claim also
      could
      harm our reputation and lead to a decline in the demand for our products. We
      do
      not carry general or other liability insurance to protect us against product
      liability claims. If we become subject to a product liability claim, it could
      have a material adverse effect of our business, financial condition and results
      of operation.





***If
      we fail to protect our intellectual property rights, our competitors may take
      advantage of our ideas to compete more effectively with us.***





Our
      proprietary rights are one of the keys to our performance and ability to remain
      competitive. We rely on a combination of patent, trademark, copyright and trade
      secret laws in the U.S. and other jurisdictions as well as confidentiality
      agreements and procedures, non-compete agreements and other contractual
      provisions to protect our intellectual property, other proprietary rights and
      our brand. Our intellectual property rights may be challenged, invalidated
      or
      circumvented by third parties. We may not be able to prevent the unauthorized
      disclosure or use of our technical knowledge or other trade secrets by
      employees. Furthermore, the laws of foreign countries may not protect our
      intellectual property rights to the same extent as the laws of the U.S.
      Litigation may be necessary to enforce our intellectual property rights which
      could result in substantial costs to us and substantial diversion of management
      attention. If we do not adequately protect our intellectual property, our
      competitors could use it to enhance their products. Our inability to adequately
      protect our intellectual property rights could adversely affect our business
      and
      financial condition, and the value of our brand name and other intangible
      assets.





**Risk
      Related To Ownership of Our Common Stock**





***There
      is currently no market for our common stock, and we expect that any market
      that
      does develop will be illiquid and extremely volatile.***





There
      is
      currently no market for our common stock. We hope to clear our common stock
      for
      quotation on the over-the-counter Bulletin Board (“OTCBB”). As of April 27,
      2008, we had eighty-eight (88) shareholders of record, and we had been subject
      to the reporting requirements of the Exchange Act for at least ninety (90)
      days.
      There were 10,670,748 shares of our common stock that had been held by
      non-affiliates for a minimum of one year which could be freely resold under
      Rule
      144, and 75,000 shares of our common stock that had been held by such persons
      for a minimum of six months which could be resold under Rule 144 subject to
      public information requirements for reporting issuers. There were 10,765,474
      shares of our common stock that had been held by affiliates for a minimum of
      six
      months which could be resold under Rule 144 subject to the volume limitations,
      manner of sale provisions, public information requirements for reporting issuers
      and notice requirements. There were 1,334,524 shares of our common stock that
      had been held by non-affiliates for less than six months and could not be resold
      under Rule 144.


-14-


If
      there
      is a market for our common stock in the future, we anticipate that such market
      would be illiquid and subject to wide fluctuations in response to several
      factors, including, but not limited to:





·
            limited
                numbers of buyers and sellers in the
                market;


·
            actual
                or anticipated variations in our results of
                operations;


·
            our
                ability or inability to generate new
                revenues;


·
            increased
                competition; and


·
            conditions
                and trends in the extension cord
                industry.





Furthermore,
      our stock price may be impacted by factors that are unrelated or
      disproportionate to our operating performance which include stock market
      fluctuations, general economic, political and overall global market conditions,
      such as recessions, interest rates or international currency fluctuations.
      Any
      and all of these factors, while unrelated directly to us, may adversely affect
      the market price and liquidity of our common stock.





***We
      have authorized preferred stock which can be designated by our board of
      directors without shareholder approval and have established Series A preferred
      stock, which gives the holders majority voting power over our
      company.***





We
      have
      authorized 5,000,000 shares of preferred stock. The shares of preferred stock
      may be issued from time to time in one or more series, each of which shall
      have
      distinctive designation or title as shall be determined by or board of directors
      prior to the issuance of any shares thereof. The preferred stock shall have
      such
      voting powers, full or limited, or no voting powers, and such preferences and
      relative, participating, optional or other special rights and such
      qualifications, limitations or restrictions thereof as adopted by our board
      of
      directors. Because our board of directors is able to designate the powers and
      preferences of the preferred stock without the vote of the holders of our common
      stock, the holders of our common stock will have no control over what
      designations and preferences our preferred stock will have. As a result of
      this,
      our board of directors could designate one or more series of preferred stock
      with superior rights to the rights of the holders of our common
      stock.





***We
      have issued 66,000 of our outstanding Series A preferred stock to Kenneth S.
      Forster who, because of the terms of the stock, thereby controls our company,
      which may continue into perpetuity and he essentially cannot be replaced, and
      his interest may be different than, or adverse to the interests of our other
      stockholders.***





Our
      board
      of directors designated 100,000 shares of Series A preferred stock with
      super-voting rights and issued 66,000 shares of Series A preferred stock to
      Kenneth S. Forster, our only executive officer. Mr. Forster, voting separately
      as a class, has the right to vote on all shareholder matters (including the
      election of directors) equal to fifty-one percent (51%) of the total vote
      regardless of the number of common shares that may be issued in the future.
      For
      example, if there are 21,511,222 shares of our common stock issued and
      outstanding at the time of a shareholder vote, Mr. Forster, voting separately
      as
      a class, would have the right to vote an aggregate of 22,389,231 shares, out
      of
      a total number of 43,900,453 shares voting. If the issued and outstanding shares
      of our common stock increased to 25,000,000, Mr. Forster, voting separately
      as a
      class, would have the right to vote an aggregate of 26,020,408 shares, out
      of a
      total number of 51,020,408 shares voting. Accordingly, Mr. Forster will exercise
      control over our company on matters submitted to the stockholders for approval,
      including the election of directors, mergers, consolidations, the sale of all
      or
      substantially all of our assets, and also the power to prevent or cause a change
      in control. You should understand that the holder(s) of the Series A preferred
      stock, currently Mr. Forster, will always have voting control regardless of
      the
      number of shares of common stock that may be issued in the future and
      effectively cannot be replaced unless the holder(s) were to return the shares
      to
      us for cancellation and our board of directors terminated the Series A preferred
      stock designation. Mr. Forster’s interest may differ from the interests of our
      other stockholders and thus result in corporate decisions that are
      adverse to our other stockholders.





The
      Series A preferred stock may only be issued to our President and Treasurer,
      which could be a person or persons other than Mr. Forster. Their relative
      ownership interests shall be determined by our board of directors in its sole
      discretion. The Series A preferred stock may not be transferred, sold, assigned
      or hypothecated or transferred by will or by the laws of descent and
      distribution or for the benefit of any person. In the event of death or
      disability or the holder’s termination of service to us or removal from office
      without cause, such holder’s shares of Series A preferred stock shall revert
      back to us at $0.50 per share, shall be retired and restored to the status
      of
      authorized and unissued shares, and our board of directors, in its sole
      discretion, may reissue the authorized and unissued shares as Series A preferred
      stock to such holder’s successor in office. The holders of Series A preferred
      stock are not entitled to receive any dividends paid on our common stock, have
      no preemptive or other subscription rights, and there are no liquidation
      preferences, conversion rights or redemption or sinking fund provisions with
      respect to the shares of our Series A preferred stock.


-15-





***We
      do not expect to pay dividends for the foreseeable
      future.***





We
      have
      not declared or paid, and do not anticipate declaring or paying in the
      foreseeable future, any cash dividends on our common stock. Our ability to
      pay
      dividends is dependent upon, among other things, our future earnings, operating
      and financial condition, our capital requirements, general business conditions
      and other pertinent factors, and is subject to the discretion of our board
      of
      directors. Accordingly, there is no assurance that any dividends will ever
      be
      paid on our common stock.





***Investors
      may face significant restrictions on the resale of our common stock due to
      federal regulations of penny stock*** **.**





Our
      common stock will be subject to the requirements of Rule 15(g)9, promulgated
      under the Securities Exchange Act as long as the price of our common stock
      is
      below $5.00 per share. Under such rule, broker-dealers who recommend low-priced
      securities to persons other than established customers and accredited investors
      must satisfy special sales practice requirements, including a requirement that
      they make an individualized written suitability determination for the purchaser
      and receive the purchaser's consent prior to the transaction. The Securities
      Enforcement Remedies and Penny Stock Reform Act of 1990, also requires
      additional disclosure in connection with any trades involving a stock defined
      as
      a penny stock. Generally, the SEC defines a penny stock as any equity security
      not traded on an exchange or quoted on NASDAQ that has a market price of less
      than $4.00 per share. The required penny stock disclosures include the delivery,
      prior to any transaction, of a disclosure schedule explaining the penny stock
      market and the risks associated with it. Such requirements could severely limit
      the market liquidity of the securities and the ability of purchasers to sell
      their securities in the secondary market. In addition, various state securities
      laws impose restrictions on transferring penny stocks.


-16-





**Item
                7.**
            **Financial
                Statements.**





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors


APC
      Group, Inc.


Fairbanks,
      Alaska.





We
      have
      audited the accompanying balance sheet of APC Group, Inc. as of November 30,
      2007 and 2006 and the related statements of operations, changes in shareholders’
deficit and cash flows for the two years then ended. These financial statements
      are the responsibility of APC Group’s management. Our responsibility is to
      express an opinion on these financial statements based on our
      audits.





We
      conducted our audits in accordance with 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. APC Group 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 APC’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 financial statements referred to above present fairly, in all
      material respects, the financial position of APC Group as of November 30, 2007
      and 2006 and the results of its operations and cash flows for the two years
      then
      ended in conformity with accounting principles generally accepted in the United
      States of America.





The
      accompanying financial statements have been prepared assuming that APC Group
      will continue as a going concern. As discussed in Note 2 to the financial
      statements, APC Group suffered recurring losses from operations and has an
      accumulated deficit, which raises substantial doubt about its ability to
      continue as a going concern. Management’s plans regarding those matters are also
      described in Note 2. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.





Malone
      & Bailey, P.C.


www.malone-bailey.com


Houston,
      Texas





April
      20,
      2008





-17-





**APC
      GROUP, INC.**


**BALANCE
      SHEETS**





**November
                30,**
            
            **November
                30,****2007**
            
            **2006****ASSETS****CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            3,796
            
            $
            13,637Accounts
                receivable, net of allowance for bad debt of $19,159 and $22,549,
                respectively
            
            
            25,483
            
            
            47,552Inventory
            
            
            87,865
            
            
            53,330Prepaid
                expenses
            
            
            13,108
            
            
            2,076Total
                current assets
            
            
            130,252
            
            
            116,595Property
                and equipment, net of accumulated depreciation of $30,285 and $18,659,
                respectively
            
            
            50,953
            
            
            62,579**TOTAL
                ASSETS**
            
            $
            181,205
            
            $
            179,174**LIABILITIES
                AND SHAREHOLDERS’ DEFICIT****CURRENT
                LIABILITIES**Accounts
                payable-trade
            
            $
            86,218
            
            $
            78,602Accounts
                payable-related party
            
            
            31,941
            
            
            17,383Accrued
                expenses
            
            
            57,179
            
            
            39,155Note
                payable-related party
            
            
            10,000
            
            
            30,000Line
                of credit
            
            
            99,975
            
            
            -Current
                maturities of long-term debt
            
            
            241,596
            
            
            207,006Total
                current liabilities
            
            
            526,909
            
            
            372,146Long-term
                debt, net of current maturities
            
            
            193,317
            
            
            213,330**TOTAL
                LIABILITIES**
            
            
            720,226
            
            
            585,476**SHAREHOLDERS’
                DEFICIT**Preferred
                stock, $0.001 par value; 5,000,000 shares authorized; 100,000 designated
                as Series A; 66,000 Series A shares issued and outstanding
            
            
            66
            
            
            66Common
                stock, $0.001 par value; 50,000,000 shares authorized; 21,511,222
                and
                17,537,000 shares issued and outstanding, respectively
            
            
            21,511
            
            
            17,537Additional
                paid-in-capital
            
            
            2,728,701
            
            
            1,975,932Accumulated
                deficit
            
            
            (3,289,299
            )
            
            (2,399,837
            )Total
                shareholders’ deficit
            
            
            (539,021
            )
            
            (406,302
            )**TOTAL
                LIABILITIES AND SHAREHOLDERS’ DEFICIT**
            
            $
            181,205
            
            $
            179,174





See
      accompanying summary of accounting policies and notes to financial
      statements.


-18-





**APC
      GROUP, INC.**


**STATEMENTS
      OF OPERATIONS**


**Years
      Ended November 30, 2007 and 2006**





**2007**
            
            **2006****REVENUES**
            
            $
            191,763
            
            $
            264,967**COST
                OF REVENUES**
            
            
            77,700
            
            
            139,404Gross
                profit
            
            
            114,063
            
            
            125,563**OPERATING
                EXPENSES**Selling,
                general and administrative expenses
            
            
            892,638
            
            
            728,366Depreciation
                expense
            
            
            11,626
            
            
            11,876Loss
                on sale of assets
            
            
            -
            
            
            911Net
                operating loss
            
            
            (790,201
            )
            
            (615,590
            )**OTHER
                EXPENSES**Loan
                costs
            
            
            (30,000
            )
            
            -Interest
                expense
            
            
            (69,261
            )
            
            (59,898
            )Net
                loss
            
            $
            (889,462
            )
            $
            (675,488
            )Basic
                and diluted net loss per share
            
            $
            (0.04
            )
            $
            (0.04
            )Weighted
                average shares outstanding
            
            
            20,198,912
            
            
            16,763,620





See
      accompanying summary of accounting policies and notes to financial
      statements.


-19-





**APC
      GROUP, INC.**


**STATEMENT
      OF CHANGES IN SHAREHOLDERS’ DEFICIT**


**Years
      Ended November 30, 2007 and 2006**





Preferred
                Shares
            
            Common
                Shares
            
            Preferred
                Stock
            
            Common
                Stock
            
            Additional
              Paid
                in
              Capital
            
            Accumulated
                Deficit
            
            TotalBalances,
                November 30, 2005
            
            
            -
            
            
            15,784,000
            
            $
            -
            
            $
            15,784
            
            $
            1,434,752
            
            $
            (1,724,349
            )
            $
            (273,813
            )Stock
                issued for:Cash
            
            
            -
            
            
            1,003,000
            
            
            -
            
            
            1,003
            
            
            150,497
            
            
            -
            
            
            151,500Services
            
            
            66,000
            
            
            750,000
            
            
            66
            
            
            750
            
            
            390,683
            
            
            -
            
            
            391,499Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (675,488
            )
            
            (675,488
            )Balances,
                November 30, 2006
            
            
            66,000
            
            
            17,537,000
            
            
            66
            
            
            17,537
            
            
            1,975,932
            
            
            (2,399,837
            )
            
            (406,302
            )Stock
                issued for:Cash
            
            
            -
            
            
            1,075,000
            
            
            -
            
            
            1,075
            
            
            213,925
            
            
            -
            
            
            215,000Services
            
            
            -
            
            
            2,699,222
            
            
            -
            
            
            2,699
            
            
            509,044
            
            
            -
            
            
            511,743Loan
                costs
            
            
            -
            
            
            200,000
            
            
            -
            
            
            200
            
            
            29,800
            
            
            -
            
            
            30,000Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (889,462
            )
            
            (889,462
            )Balances,
                November 30, 2007
            
            
            66,000
            
            
            21,511,222
            
            $
            66
            
            $
            21,511
            
            $
            2,728,701
            
            $
            (3,289,299
            )
            $
            (539,021
            )





See
      accompanying summary of accounting policies and notes to financial
      statements.


-20-





**APC
      GROUP, INC.**


**STATEMENTS
      OF CASH FLOWS**


**Years
      Ended November 30, 2007 and 2006**





**2007**
            
            **2006**Cash
                flows from operating activities:Net
                loss
            
            $
            (889,462
            )
            $
            (675,488
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Stock
                issued for services
            
            
            511,743
            
            
            391,499Stock
                issued for loan costs
            
            
            30,000
            
            
            -Depreciation
                expense
            
            
            11,626
            
            
            11,876Accretion
                of discount on notes payable
            
            
            28,250
            
            
            38,250Bad
                debt expense (recovery)
            
            
            (3,390
            )
            
            17,606Loss
                on sale of assets
            
            
            -
            
            
            911Changes
                in assets and liabilitiesAccounts
                receivable
            
            
            25,459
            
            
            29,409Inventory
            
            
            (34,535
            )
            
            (33,727
            )Prepaid
                expenses
            
            
            (11,032
            )
            
            (876
            )Accounts
                payable-trade
            
            
            7,616
            
            
            13,258Accounts
                payable-related parties
            
            
            14,558
            
            
            (9,588
            )Accrued
                liabilities
            
            
            18,024
            
            
            22,500Net
                cash used in operating activities
            
            
            (291,143
            )
            
            (194,370
            )Cash
                flows from investing activities:Purchase
                of property and equipment
            
            
            -
            
            
            (36,728
            )Proceeds
                from sale of property and equipment
            
            
            -
            
            
            10,673Net
                cash used in investing activities
            
            
            -
            
            
            (26,055
            )Cash
                flows from financing activities:Proceeds
                from sale of common stock
            
            
            215,000
            
            
            151,500Net
                borrowings under revolving line of credit
            
            
            99,975
            
            
            -Proceeds
                from issuance of debt to related party
            
            
            10,000
            
            
            63,728Payments
                made on long-term debt
            
            
            (43,673
            )
            
            (25,381
            )Net
                cash provided by financing activities
            
            
            281,302
            
            
            189,847Net
                decrease in cash and cash equivalents
            
            
            (9,841
            )
            
            (30,578
            )Cash
                and cash equivalents, at beginning of year
            
            
            13,637
            
            
            44,215Cash
                and cash equivalents, at end of year
            
            $
            3,796
            
            $
            13,637Supplemental
                cash flows information:Cash
                paid for interest
            
            $
            22,220
            
            $
            3,924Cash
                paid for income tax
            
            
            -
            
            
            -





See
      accompanying summary of accounting policies and notes to financial
      statements.


-21-


**APC
      GROUP, INC.**


**NOTES
      TO FINANCIAL STATEMENTS**





**1.**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**





*Organization
      and nature of business*





APC
      Group, Inc. was originally formed in April 1, 2003, as a general partnership
      in
      Alaska. On October 20, 2003, the partnership was converted to a limited
      liability company. On April 28, 2004, APC, LLC was converted into a corporation
      in Nevada and changed its name to APC Group, Inc. APC Group's products include
      a
      broad range of polar and non-polar standard extension cords, retractable
      extension cords for consumer, industry, construction, medical facilities, and
      marine use.





*Use
      of Estimates in Financial Statement Preparation*





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





*Revenue
      Recognition*





APC
      Group
      recognizes revenue when persuasive evidence of an agreement exists, services
      have been rendered, the sales price is fixed or determinable, and collectibility
      is reasonable assured. This typically occurs when the product is
      shipped.





*Cash
      and Cash Equivalents*





APC
      Group
      considers all highly liquid investments with original maturities of three months
      or less at the date of purchase to be cash equivalents.





*Inventory*





Inventory
      consists of finished goods stated at the lower of average cost or market.
      Retractable extension cords produced using an APC Group mold are assembled
      with
      various parts to produce finished goods.





*Allowance
      for Doubtful Accounts*





Bad
      debt
      expense is recognized based on management’s estimate of likely losses per year,
      past experience and an estimate of current year uncollectible amounts. Allowance
      for doubtful accounts was $19,159 as of November 30, 2007.





*Property
      and Equipment*





Property
      and equipment are recorded at cost. The cost and related accumulated
      depreciation of assets sold, retired or otherwise disposed of are removed from
      the respective accounts, and any resulting gains or losses are included in
      the
      Statements of Operations. Maintenance and repairs are expensed as incurred.
      Replacements and betterments are capitalized. Depreciation is computed for
      financial reporting purposes using the straight-line method over the estimated
      useful lives of the related assets as follows:





Molds
            15
                yearsFurniture
                and Fixtures
            7
                yearsComputers
                and Equipment
            5
                yearsVehicles
            5
                years




-22-





Depreciation
      expense related to property and equipment was approximately $11,626 and $11,876
      for the years ended November 30, 2007 and 2006, respectively.





*Impairment
      of Long-Lived Assets*





APC
      Group
      reviews the carrying value of its long-lived assets annually or whenever events
      or changes in circumstances indicate that the historical cost-carrying value
      of
      an asset may no longer be appropriate. APC Group assesses recoverability of
      the
      carrying value of the asset by estimating the future net cash flows expected
      to
      result from the asset, including eventual disposition. If the future net cash
      flows are less than the carrying value of the asset, an impairment loss is
      recorded equal to the difference between the asset’s carrying value and fair
      value.





*Fair
      Value of Financial Instruments*





APC
      Group
      believes that the carrying value of its current assets and current liabilities
      approximate the fair value of such items due to their short-term nature.





*Income
      Taxes*





Prior
      to
      incorporating as APC Group, the company operated as a partnership named Alaskan
      Products Company, LLC. No provision for income taxes was required because the
      partners reported their proportional shares of partnership taxable income or
      loss on their respective income tax returns.





Income
      tax expense is now based on reported earnings before income taxes. Deferred
      income taxes reflect the impact of temporary differences between assets and
      liabilities recognized for financial reporting purposes and such amounts
      recognized for tax purposes, and are measured by applying enacted tax rates
      in
      effect in years in which the differences are expected to reverse.





*Stock-Based
      Compensation*





Effective
      January 1, 2006, APC Group began recording compensation expense associated
      with
      stock options and other forms of equity compensation in accordance with
      Statement of Financial Accounting Standards No. 123R, *Share-Based Payment,* as
      interpreted by SEC Staff Accounting Bulletin No. 107. Prior to January 1, 2006,
      APC Group accounted for stock options according to the provisions of Accounting
      Principles Board Opinion No. 25, *Accounting for Stock Issued to Employees,* and
      related interpretations, and therefore no related compensation expense was
      recorded for awards granted with no intrinsic value. APC Group adopted the
      modified prospective transition method provided for under SFAS No. 123R, and,
      consequently, has not retroactively adjusted results from prior periods. During
      the years ended November 30, 2007 and 2006, no options were granted by APC
      Group
      to its employees.





*Basic
      and Diluted Net Loss per Share*





Basic
      and
      diluted net loss per share calculations are presented in accordance with
      Financial Accounting Standards Statement 128, and are calculated on the basis
      of
      the weighted average number of common shares outstanding during the year. They
      include the dilutive effect of common stock equivalents in years with net
      income. Basic and diluted loss per share are the same due to the absence of
      common stock equivalents.





*Recently
      Issued Accounting Pronouncements*





APC
      Group
      does not expect the adoption of any recently issued accounting pronouncements
      to
      have a significant impact on its financial position, results of operations
      or
      cash flows.


-23-





**2.**  **GOING
      CONCERN**





APC
      Group
      suffered losses in 2007 and 2006, has an accumulated deficit and a working
      capital deficit at November 30, 2007. These conditions raise substantial doubt
      as to APC Group’s ability to continue as a going concern. Management is trying
      to raise additional capital through sales of common stock. The financial
      statements do not include any adjustments that might be necessary if APC Group
      is unable to continue as a going concern.




**3.**  **LONG-TERM
      DEBT**





APC
      Group
      has long-term obligations that are secured by APC Group’s assets. The obligation
      to Reel-Thing Innovations requires periodic payments of varying amounts, with
      the last payment due in October 2009. A 10% interest rate was used to discount
      the loan for the non-interest bearing obligation.





APC
      Group
      has two equipment loans, bearing interest at 22% that require monthly payments
      through January 2009 and 2010. APC Group has a vehicle loan, bearing interest
      at
      6% that requires monthly payments through January 2012.





Balances
      of long-term debt obligations as of November 30, 2007 and 2006 and scheduled
      maturities of that debt are set out below.





2007
            
            2006Note
                payable to Reel-Thing Innovations
            
            $
            433,000
            
            $
            441,000Loan
                discount
            
            
            (26,203
            )
            
            (54,453
            )Equipment
                loans
            
            
            1,831
            
            
            3,086Vehicle
                loan
            
            
            26,285
            
            
            30,703434,913
            
            
            420,336Current
                maturities of long-term debt
            
            
            (241,596
            )
            
            (207,006
            )Long-term
                debt
            
            $
            193,317
            
            $
            213,330





See
      the
      debt restructuring subsequent event discussion in Note 11.





**4.**  **NOTE
      PAYABLE - RELATED PARTY**





On
      October 26, 2006, APC Group borrowed $30,000 from Francine Forster. Francine
      Forster is the mother of a majority shareholder, President and Officer of APC
      Group, Ken Forster. A promissory note was issued for $30,000, with interest
      (10%) only for a period of 12 months with a final balloon payment due on October
      26, 2007. APC repaid this note in full along with accrued interest of $1,250
      on
      March 9, 2007.





On
      October 02, 2007, APC Group borrowed $10,000 from Richard Bienvenue a
      shareholder of APC Group. A promissory note was issued for $10,000, with
      interest (7%) only for a period of 12 months with a final balloon payment due
      on
      October 02, 2008.





**5.**  **LINE
      OF CREDIT**





On
      November 30, 2006, a business loan was signed between APC Group and Denali
      State
      Bank establishing a $100,000 line of credit with a maturity date of November
      30,
      2007, at an annual interest rate of 6.25% with accrued interest paid monthly
      beginning December 30, 2006. A certificate of deposit in the amount of $100,000
      was assigned by an APC Group shareholder as collateral for which APC Group
      issued 200,000 shares of common stock valued and expensed at $30,000 as loan
      costs.


-24-





**6.**  **MAJOR
      CUSTOMERS**





During
      the year ended November 30, 2007, 14% of APC Group’s revenue was from one
      customer. During the year ended November 30, 2006, no one customer accounted
      for
      more than 10% of APC Group’s revenue.





**7.**  **INCOME
      TAX**





APC
      Group
      uses the liability method, where deferred tax assets and liabilities are
      determined based on the expected future tax consequences of temporary
      differences between the carrying amounts of assets and liabilities for financial
      and income tax reporting purposes. During fiscal 2007 and 2006, APC Group
      incurred net losses and, therefore, has no tax liability. The net deferred
      tax
      asset generated by the loss carry-forward has been fully reserved. The
      cumulative net operating loss carry-forward is approximately $2,187,000 at
      November 30, 2007, and will expire in the years 2026 through 2027.





At
      November 30, 2007 and 2006, deferred tax assets consisted of the
      following:





2007
            
            2006Deferred
                tax assetsNet
                operating losses
            
            $
            766,312
            
            $
            450,000Less:
                valuation allowance
            
            
            (766,312
            )
            
            (450,000
            )Net
                deferred tax asset
            
            $
            -
            
            $
            -





**8.**  **PREFERRED
      STOCK**





On
      January 9, 2006, the Board of Directors of APC Group amended the Articles of
      Incorporation to authorize 5,000,000 shares of preferred stock at $0.001 par
      value.





On
      January 25, 2006, APC Group issued 66,000 shares of preferred stock to Ken
      Forster, a majority shareholder, President and Officer of APC Group. The
      preferred stock is entitled to exercise at least a majority of the voting power.
      As a result, Mr. Forster has voting control of APC Group. The preferred stock
      of
      APC Group was valued at $16,499 and recorded as compensation
      expense.





**9.**  **COMMON
      STOCK**





Between
      December 1, 2005 and November 30, 2006, APC Group issued 1,003,000 shares for
      $151,500 in cash and issued 750,000 shares, valued at $375,000, for
      services.





Between
      December 1, 2006 and August 31, 2007, APC Group issued 1,075,000 common shares
      for $215,000 in cash, issued 2,699,222 shares, valued at $511,743 for services
      and issued 200,000 common shares, valued and expensed at $30,000 as loan
      costs.




-25-





**10.**  **COMMITMENTS
      AND CONTINGENCIES**





APC
      Group
      leases office and warehouse space in Fairbanks, Alaska under a month to month
      operating lease. The lease is cancelable with thirty days written notice. Rent
      expense was $17,150 and $14,400 for the years ended November 30, 2007, and
      2006,
      respectively.





On
      June
      11, 2007, APC Group made an Offer of Judgment to a former employee in the amount
      of $21,407 which was accepted. As of November 30, 2007, APC Group has accrued
      $28,755 consisting of $21,407 judgment amount, interest of $3,345 from April
      1,
      2006 to November 30, 2007 at the rate of 9.25% per annum, attorney fees of
      $3,853 at 18% of the judgment amount and filing fees of $150.





**11.**  **SUBSEQUENT
      EVENTS**





On
      November 30, 2007, the $100,000 line of credit between APC Group and Denali
      State Bank was renewed with a new maturity date of November 30, 2008, at an
      annual interest rate of 5.95% with accrued interest paid monthly beginning
      December 30, 2007. A certificate of deposit in the amount of $100,000 was
      assigned by Ludwig Bergh, an APC Group shareholder, as collateral. On December
      1, 2007, APC Group consented to issue 125,000 shares of common stock to Ludwig
      Bergh, valued at $25,000 as loan costs.





On
      February 21, 2008, APC Group and Reel Thing Innovations, Inc. amended their
      May
      5, 2005 agreement to convert the past due amount consisting of $238,000
      principal and $53,810 accrued late payment interest for 1,209,524 shares of
      APC’s common stock. The remaining balance of $195,000 shall be modified such
      that $5,000 is due on the effective date of the amended agreement and 24
      installment payments of $7,916 beginning on August 1, 2008 and ending on August
      1, 2010.


-26-





**Item
                8.**
            **Changes
                In and Disagreements With Accountants on Accounting and Financial
                Disclosure.**





None.





**Item
                8A.**
            **Controls
                and Procedures.**





Evaluation
      of Disclosure Controls and Procedures




Our
      Chief
      Executive Officer and Chief Financial Officer, after evaluating the
      effectiveness of our “disclosure controls and procedures” (as defined in the
      Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end
      of
      the period covered by this report (the “Evaluation Date”), has concluded that as
      of the Evaluation Date, our disclosure controls and procedures were effective
      to
      provide reasonable assurance that information required to be disclosed by us
      in
      the reports that we file or submit under the Exchange Act (i) is accumulated
      and
      communicated to our management, including our Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosure, and (ii) is recorded, processed, summarized and reported within
      the
      time periods specified in the Commission’s rules and forms.





Changes
      in Internal Control over Financial Reporting





There
      were no changes in our internal control over financial reporting that occurred
      during the period covered by this report that have materially affected, or
      are
      reasonably likely to materially affect, our internal control over financial
      reporting.





**Item
      8A(T).**  **Controls
      and Procedures.**




Management’s
      Annual Report on Internal Control Over Financial Reporting.





This
      annual report does not include a report of management's assessment regarding
      internal control over financial reporting or an attestation report of the
      Company's registered public accounting firm due to a transition period
      established by rules of the Securities and Exchange Commission for newly public
      companies.





**Item
                8B.**
            **Other
                Information.**





None.





**PART
      III**





**Item
                9.**
            **Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance With Section 16(a) of the Exchange
                Act.**





**Executive
      Officers and Directors**





Our
      executive officers and directors, and their ages and positions are as
      follows:





**Name**
            
            **Age**
            
            **Position**Kenneth
                S. Forster
            
            46
            
            President,
                CEO, Secretary and TreasurerRichard
                L. Bienvenue
            
            56
            
            DirectorMatthew
                Meyer
            
            46
            
            DirectorRobert
                C. Tsigonis
            
            56
            
            DirectorA.
                Roy Wilbur
            
            60
            
            Director





*Kenneth
      S. Forster* has
      served as our President and CEO since April 2003 and also as our Secretary
      and
      Treasurer since October 2006. Mr. Forster was not employed during March 2003.
      From June 2001 to February 2003, Mr. Forster was the Weatherman and Marketing
      Representative for CBS and Fox Television affiliates in Fairbanks, Alaska.
      From
      May 2000 to May 2001, he served as a Radio Talk Show Host for Clear Channel
      Communications of Fairbanks, Alaska, which produces radio programs. From April
      1996 to May 2000, Mr. Forster was the Vice President of Marketing and Sales
      for
      Coconut Telegraph Company, which sold, serviced and maintained telecommunication
      equipment in Santa Barbara, California and the surrounding areas. From July
      1994
      to April 1996, Mr. Forster worked as President of Island Communications of
      Oregon, providing telecommunication contractors to the federal government,
      maintaining national forest communication equipment in southern Oregon and
      many
      local businesses, and for ten years prior to that, Mr. Forster was President
      of
      Business Telephone Services, which sold, serviced, engineered, manufactured
      and
      maintained telecommunication equipment throughout Southern California.


-27-





*Richard
      L. Bienvenue* ,
      has
      served as a member of our board of directors since May 2007. Mr. Bienvenue
      has
      served as Vice President of AA Roofing, of Fairbanks, Alaska since 1982. Mr.
      Bienvenue has specialized education on construction. He is a member of the
      National Roofing Contractors Association.





*Matthew
      Meyer* has
      served as a member of our board of directors since June 2006 and as Chairman
      since May 2007. From September 2004 to present, Mr. Meyer has been employed
      as
      an Educational Advisor at Devry University. From February 2002 to September
      2004, Mr. Meyer was employed as an Admissions Advisor at Charter College in
      Anchorage, Alaska. From January 2002 to February 2002, Mr. Meyer served as
      District Manager for the Anchorage Daily News. From July 1979 to January 2002,
      Mr. Meyer served in the United States Air Force and retired as Master Sergeant,
      E-7. Mr. Meyer received a Bachelors degree in Business from Wayland Baptist
      University and Associate degrees in both Financial Management and Personnel
      Management from the Community College of the Air Force. Mr. Meyer is a licensed
      real estate salesperson in the State of Alaska.





*Robert
      C. Tsigonis* has
      served as a member of our board of directors since June 2006. Mr. Tsigonis
      has
      over 34 years of experience as an engineer. From February 1998 to present,
      Mr.
      Tsigonis has been the Principal and sole owner of Lifewater Engineering Company,
      a consulting engineering and manufacturing company focusing on water, wastewater
      and environmental engineering projects in cold regions. Mr. Tsigonis is also
      a
      Lecturer on arctic engineering at the University of Washington in Seattle.
      Mr.
      Tsigonis received a Bachelors degree in engineering and geology from Dartmouth
      College, a Bachelors degree in general engineering from Thayer School of
      Engineering, a Masters degree in engineering and science management from the
      University of Alaska, and a Masters degree in theology from Christian Life
      School of Theology.





*A.
      Roy Wilbur* has
      served as a member of our board of directors since June 2006. Mr. Wilbur has
      over 40 years of experience as a Sheet Metal Journeyman. From April 1998 to
      present, Mr. Wilbur has been the President and director of Wilbur Brothers,
      Inc., an Alaska corporation in which he and his wife are the owners. Mr. Wilbur
      attended Edison Technical School in Seattle, Washington to become a Sheet Metal
      Journeyman.





There
      are
      no family relationships among our directors, executive officers or persons
      nominated to become directors or executive officers, except that Robert C.
      Tsigonis and A. Roy Wilbur are brothers-in-law. There are no arrangements or
      understandings between Mr. Forster, as the controlling shareholder, and the
      members of our board of directors regarding board composition or board voting
      positions, such as Mr. Forster’s compensation and the issuance to him of the
      Series A preferred stock.





We
      are
      not aware of the occurrence during the last five years of any events that are
      material to an evaluation of the ability or integrity of any of our directors
      or
      executive officers such as the following:





·
            Any
                bankruptcy petition filed by or against any business of which such
                person
                was a general partner or executive officer either at the time of
                the
                bankruptcy or within two years prior to that
                time;


·
            Any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor
                offenses);


·
            Being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                the
                involvement of such person in any type of business, securities or
                banking
                activities; and


·
            Being
                found by a court of competent jurisdiction (in a civil action), the
                United
                States Securities Commission (the “SEC” or the “Commission”) or the
                Commodity Futures Trading Commission to have violated a federal or
                state
                securities or commodities law, and the judgment has not been reversed,
                suspended, or vacated.





**Committees
      of the Board of Directors**





We
      do not
      have a standing audit, nominating, or compensation committee, or any other
      committees of our board of directors performing similar functions. We do not
      have an audit committee financial expert. We do not anticipate implementing
      any
      of these committees or seek an individual to serve as an audit committee
      financial expert until we are required to do so under federal or state corporate
      or securities laws or the rules of any stock exchange or inter-dealer quotation
      system on which our securities may be listed or cleared for
      quotation.


-28-





**Section
      16(a) Beneficial Ownership Reporting Compliance**





Section
      16(a) of the Exchange Act requires our directors, officers and holders of more
      than 10% of our common stock to file with the SEC reports regarding their
      ownership and changes in ownership of our equity securities. During our most
      recent fiscal year Kenneth S. Forster, Richard L. Bienvenue, John P. Hoff (a
      former director), Matthew Meyer, Robert C. Tsigonis and A. Roy Wilbur each
      failed to file a Form 3 to report their initial beneficial ownership of our
      common stock within the time period specified on such form after our common
      stock became registered under Section 12 of the Exchange Act.





In
      making
      these statements, we have relied upon examination of copies of Forms 3, 4 and
      5
      provided to us and any written representations of our directors, executive
      officers and 10% stockholders.





**Code
      of Ethics**





Our
      board
      of directors adopted a code of ethics meeting the requirements of Section 406
      of
      the Sarbanes-Oxley Act of 2002. We will provide to any person without charge,
      upon request, a copy of our code of ethics. Persons wishing to make such a
      request should contact Secretary, APC Group, Inc., 3526 Industrial Avenue,
      Fairbanks, Alaska 99701.





**Item
                10.**
            **Executive
                Compensation.**





The
      table
      below sets forth, for
      our
      fiscal year ended November 30, 2007 and our last two completed fiscal
      years ,
      the
      compensation earned by our President and CEO, who is our only “Named Executive
      Officer” as he is currently our only executive officer and no person who served
      as an executive officer during our last completed fiscal year received $100,000
      or more of compensation during such year.




**SUMMARY
                COMPENSATION TABLE (1)****Name
                and**
              **Principal Position**
            
            **Year****(2)**
            
            **Salary ($)**
            
            **Stock**
              **Awards ($)****(3)**
            
            **All Other**
              **Compensation ($)**
            
            **Total ($)**Kenneth
                S. Forster
            
            2007
            
            $
            46,500
            
            $
            387,440
            (4)
            $
            13,916
            (5)
            $
            447,856President,
                CEO, Secretary
            
            2006
            
            $
            66,280
            
            $
            -
            
            $
            16,500
            (6)
            $
            82,780and
                Treasurer
            
            2005
            
            $
            52,278
            
            $
            7,889
            (7)
            $
            -
            
            $
            60,167Christopher
                J. Dailey
            
            2007
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Former
                Treasurer
            
            2006
            
            $
            37,932
            
            $
            -
            
            $
            -
            
            $
            37,9322005
            
            $
            41,937
            
            $
            149,980
            (8)
            $
            -
            
            $
            191,917





(1)
            Does
                not include perquisites and other personal benefits or property unless
                the
                aggregate amount of such compensation is $10,000 or
                more.


(2)
            The
                amounts for 2007 are only calculated through August 31,
                2007.


(3)
            Stock
                awards are valued based on the price per share of the last sale of
                our
                common stock to a third party as of the grant
                date.


(4)
            Consists
                of 1,937,202 shares issued on May 3, 2007 for services as our sole
                executive officer.


(5)
            Represents
                commissions paid in advance for future estimated sales. In the event
                that
                actual sales are less or more than estimated sales, the compensation
                is
                decreased or increased,
                respectively.


(6)
            Consists
                of 66,000 shares of Series A preferred stock valued at $16,500 based
                upon
                an independent third-party
                valuation.


(7)
            Consists
                of 39,444 shares issued on January 12, 2005 for services as our President.


(8)
            Consists
                of 749,900 shares issued on January 12, 2005, for services as our
                Treasurer.





We
      and
      Kenneth S. Forster have orally agreed to compensation of $54,000 per year,
      and
      commissions at a rate of 10% on new accounts and 5% on reorders that result
      from
      Mr. Forster’s sales efforts. In addition, Mr. Forster has received bonuses in
      the form of stock awards at the sole discretion of our board of
      directors.





The
      table
      below sets forth, for our six month period ended May 31, 2007 and our last
      completed fiscal year, compensation earned by certain directors during the
      periods presented.


-29-





**Compensation
      of Directors**





**DIRECTOR
                COMPENSATION****(1)****Name**
            
            **Year**
            
            **Stock**
              **Awards
                ($)**
            
            **Total
                ($)**Matthew
                Meyer
            
            2007
            
            $
            40,000
            (2)
            $
            40,0002006
            
            $
            -
            
            $
            -





(1)
            Does
                not include perquisites and other personal benefits or property unless
                the
                aggregate amount of such compensation is $10,000 or
                more.


(2)
            Consists
                of 200,000 shares issued on May 3, 2007 as a one-time bonus for taking
                over as Chairman of our board of directors. Stock awards are valued
                based
                on the price per share of the last sale of our common stock to third
                parties as of the grant date.





Annual
      Fee – We do not have in effect a policy regarding an annual fee or other
      compensation for serving on our board of directors.





Equity
      Incentives – Our directors will be eligible to participate in any equity
      incentive plan which we may adopt in the future.





Other
      Benefits – We reimburse our directors for their reasonable expenses incurred in
      attending meetings of our board of directors. Our bylaws, subject to the
      provisions of Nevada Law, contain provisions which allow us to indemnify our
      directors and director nominees against liabilities and other expenses incurred
      as the result of defending or administering any pending or anticipated legal
      issue in connection with their service to us if it is determined that that
      person acted in good faith and in a manner which he reasonably believed was
      in
      our best interest.





**Item
                11.**
            **Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.**





The
      following table sets forth information regarding beneficial ownership of our
      common stock as of April 27, 2008 by (i) each person known by us to be the
      beneficial owner of more than 5% of our common stock; (ii) each of our
      directors, nominees and named executive officers; and (iii) all directors and
      executive officers as a group:





**Common Stock Beneficially Owned**
              **(without taking into account Series A**
              **Preferred Stock****(1)**
            
            **Common Stock and Series A**
              **Preferred Stock**
              **Beneficially Owned****(1)****Name and address****(2)**
            
            **Number**
            
            **Percent**
            
            **Number**
            
            **Percent**Kenneth
                S. Forster
            
            
            4,837,202
            
            
            21.2
            %
            
            27,226,433
            (7)
            
            58.4
            %A.
                Roy Wilbur and Brenda Wilbur
            
            
            2,700,000
            
            
            11.8
            %
            
            2,700,000
            
            
            5.8
            %Public
                Company Management Corporation(3)
            
            
            1,750,000
            
            
            7.7
            %
            
            1,750,000
            
            
            3.8
            %Christopher
                J. Dailey
            
            
            1,400,000
            
            
            6.1
            %
            
            1,400,000
            
            
            3.0
            %Adrian
                Marangoni(4)
            
            
            1,330,000
            
            
            5.8
            %
            
            1,330,000
            
            
            2.6
            %Reel-Thing
                Innovations, Inc.
            
            
            1,209,524
            
            
            5.3
            %
            
            1,209,524
            
            
            2.6
            %Richard
                L. Bienvenue
            
            
            1,000,000
            
            
            4.4
            %
            
            1,000,000
            
            
            2.1
            %Matthew
                Meyer(5)
            
            
            285,000
            
            
            1.2
            %
            
            285,000
            
            
            *Robert
                C. Tsigonis(6)
            
            
            155,000
            
            
            *
            
            
            155,000
            
            
            *Executive
                Officers and Directors
            
            
            8,977,202
            (5)(6)
            
            39.3
            %
            
            31,366,433
            (5)(6)(7)
            
            67.3
            %As
                a Group (5 people)




-30-


*  Less
        than
        1%.




(1)
            The
                number of shares of common stock owned are those "beneficially owned"
                as
                determined under the rules of the SEC, including any shares of common
                stock as to which a person has sole or shared voting or investment
                power
                and any shares of common stock which the person has the right to
                acquire
                within 60 days through the exercise of any option, warrant or right.
                Shares of common stock subject to securities exercisable or convertible
                into shares of common stock that are currently exercisable or convertible,
                or exercisable or convertible within 60 days, are deemed to be outstanding
                for computing the percentage of ownership of such person holding
                such
                securities, but are not deemed outstanding for computing the percentage
                ownership of any other person. As of April 27, 2008, there were 22,845,746
                shares of common stock outstanding, 1,334,524 of which had not been
                issued. We have authorized 100,000 shares of Series A preferred stock
                with
                super voting rights of which 66,000 shares are outstanding and held
                by Ken
                Forster, our only executive officer, as of April 27, 2008. Mr. Foster,
                solely voting his Series A preferred stock separately as a class,
                has the
                right to vote on all shareholder matters (including a vote for the
                election of directors) equal to fifty-one percent (51%) (or 23,778,225
                shares of common stock) of a total vote of 46,623,971 shares of common
                stock, based on 22,845,746 shares of common stock outstanding as
                of April
                27, 2008, and thereby controls APC.


(2)
            The
                address is 3526 Industrial Avenue, Fairbanks, Alaska
                99701.


(3)
            Includes
                500,000 shares owned by GoPublicToday.com and 1,250,000 shares owned
                by
                Public Company Management Corporation Services, Inc. GoPublicToday.com
                and
                Public Company Management Corporation Services are subsidiaries of
                Public
                Company Management Corporation, a reporting company of which Stephen
                Brock
                is the President and majority
                shareholder.


(4)
            Includes
                450,000 shares owned by a family member, who, based on our records
                with
                our transfer agent, shares the same household with Mr.
                Marangoni.


(5)
            Includes
                10,000 shares owned by Mr. Meyer’s
                spouse.


(6)
            Includes
                an aggregate of 5,000 shares owned by family members, who, based
                on our
                records with the transfer agent, share the same household with Mr.
                Tsigonis.


(7)
            Includes
                voting power over 23,778,225 shares of common stock pursuant to the
                super
                voting right of the Series A preferred
                stock.





**Series
      A Preferred Stock**





We
      have
      designated 100,000 shares of Series A preferred stock with super-voting rights.
      The purpose of the Series A preferred stock is to vest voting control of all
      shareholder matters (including a vote for the election of directors) with the
      holders of the Series A preferred stock to prevent a takeover. Our board of
      directors believed that it was in our best interest to vest such voting control
      with the person or persons operating our company. The Series A preferred stock
      may only be issued to the person or persons serving as our President and
      Treasurer. Their relative ownership interests shall be determined by our board
      of directors in its sole discretion. We issued 66,000 shares of Series A
      preferred stock to Kenneth S. Forster, who serves as our only executive officer,
      in consideration for his services as an executive officer valued at $16,500
      and
      included in his compensation in 2006. We may issue 34,000 shares of Series
      A
      preferred stock if someone takes over as Treasurer. If Mr. Forster were to
      leave
      office, his shares of Series A preferred stock would revert back to us at $0.50
      per share, be retired and restored to the status of authorized and unissued
      shares, and our board of directors, in its sole discretion, would have authority
      to issue the authorized and unissued shares as Series A preferred stock to
      any
      person serving as our President or Treasurer or both. No changes in Series
      A
      voting and ownership provisions are contemplated in connection with our efforts
      to become a fully reporting publicly traded company.





The
      holders of the Series A preferred stock voting separately as a class, have
      the
      right to vote on all shareholder matters (including the election of directors)
      equal to fifty-one percent (51%) of the total vote regardless of the number
      of
      common shares that may be issued in the future. For example, if there are
      21,511,222 shares of our common stock issued and outstanding at the time of
      a
      shareholder vote, the holders of Series A preferred stock, voting separately
      as
      a class, will have the right to vote an aggregate of 22,389,231 shares, out
      of a
      total number of 43,900,453 shares voting. If the issued and outstanding shares
      of our common stock increased to 25,000,000, Mr. Forster, voting separately
      as a
      class, would have the right to vote an aggregate of 26,020,408 shares, out
      of a
      total number of 51,020,408 shares voting. There are no arrangements or
      understandings between Mr. Forster, as the controlling shareholder, and the
      members of our board of directors regarding board compensation or board voting
      positions. The holders of Series A preferred stock are not entitled to receive
      any dividends paid on our common stock, have no preemptive or other subscription
      rights, and there are no liquidation preferences, conversion rights or
      redemption or sinking fund provisions with respect to the shares of our Series
      A
      preferred stock. The Series A preferred stock may not be transferred, sold,
      assigned or hypothecated or transferred by will or by the laws of descent and
      distribution or for the benefit of any person. In the event of death or
      disability or the holder’s termination of service to us or removal from office
      without cause, such holder’s shares of Series A preferred stock shall revert
      back to us at $0.50 per share, shall be retired and restored to the status
      of
      authorized and unissued shares, and our board of directors, in its sole
      discretion, may reissue the authorized and unissued shares as Series A preferred
      stock to such holder’s successor in office.





You
      should understand that the holder(s) of the Series A preferred stock, currently
      Mr. Forster, will always have voting control regardless of the number of shares
      of common stock that may be issued in the future and effectively cannot be
      replaced unless the holder(s) returned the shares to us for cancellation and
      our
      board of directors terminated the Series A preferred stock designation. We
      are
      in the process of having our common stock cleared for quotation on the OTCBB.
      In
      doing so, the OTCBB could require us to change the Series A preferred stock
      voting control status. We have not been informed that such a change would be
      required, but if it is, it would adversely affect the rights or preferences
      of
      the holders of the Series A preferred stock, and we would be required to obtain
      the affirmative vote of the holders of at least 66-2/3% of all outstanding
      shares of Series A preferred stock to change the stock voting control
      status.


-31-





**Item
      12. Certain Relationships and Related Transactions, and Director
      Independence.**





**Since
      the Beginning of Our Last Fiscal Year**





In
      October 2007, we borrowed $30,000 from Richard L. Bienvenue who serves as one
      of
      our directors. We issued a twelve-month note for this principal amount to Mr.
      Bienvenue which bears interest at a rate of 7% per annum. The promissory note
      is
      scheduled to mature in October 2008, at which time a final balloon payment
      of
      the outstanding principal along with any accrued interest will due and payable.
      The dollar value of the amount involved in the transaction (including the dollar
      value of the amount of Mr. Bienvenue’s interest) is $10,725.





**Currently
      Proposed**





We
      have
      agreed to a transaction with PCMS, a wholly-owned subsidiary of PCMC, which
      is
      deemed to be the beneficial owner of 8.1% of our common stock without taking
      into account our Series A preferred stock as set forth in the table in “Item 4.
      Security Ownership of Certain Beneficial Owners and Management”. PCMS will
      provide us with regulatory compliance services during the first twelve (12)
      months that we are required to file periodic and other reports with the SEC
      and
      comply with Sarbanes-Oxley. The approximate dollar value of the amount involved
      in the transaction is $498,000 consisting of $48,000 cash and 750,000 shares
      of
      common stock valued at $375,000 and an additional 500,000 shares valued at
      $75,000 that we issued to PCMS for additional management consulting services
      beyond the hours contemplated under our agreement. We have issued an aggregate
      of 1,250,000 shares to PCMS and will pay PCMS $4,000 per month during the period
      that PCMS is providing us with the regulatory compliance services.  We
      valued the shares based upon the last third-party sale of our common stock
      which
      was at $0.50 per share when our board of directors granted the 750,000 shares
      to
      PCMS and $0.15 per share when our board of directors granted the additional
      500,000 shares to PCMS.





We
      believe that our related party transactions have been entered into upon terms
      no
      less favorable to us than those that could be obtained from unaffiliated third
      parties. Our reasonable belief of fair value is based upon proximate similar
      transactions with third parties or attempts to obtain the services from third
      parties, if such transaction would be available from third parties. All ongoing
      and future transactions with such persons, including any loans from or
      compensation to such persons, will be approved by a majority of disinterested
      members of our board of directors.




**Item
      13.** **Exhibits.**





**Exhibit
                No.**
            
            **Description
                of Exhibit**2.1(1)
            
            Plan
                of Conversion, dated April 28, 20053.1(1)
            
            Articles
                of Incorporation3.2(1)
            
            Bylaws3.3(1)
            
            Certificate
                of Amendment to Articles of Incorporation4.1(1)
            
            Certificate
                of Designation of Series A Preferred Stock10.1(1)
            
            Contract
                to Purchase Assets of Reel-Thing Innovations, Inc., dated July 10,
                200310.2(2)
            
            Amendment
                to Contract to Purchase Assets of Reel-Thing Innovations, Inc., dated
                May
                5, 200510.3(1)
            
            Amended
                and Restated Contract for Services with PCMC, dated June 15,
                200710.4(2)
            
            Lease
                Agreement dated August 25, 200310.5(3)
            
            Second
                Amendment to Contract to Purchase Assets of Reel-Thing Innovations,
                Inc.,
                dated February 21, 200814(4)
            
            Code
                of Ethics31*
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232*
            
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002





*
      Filed
      herein.


(1)
            Filed
                as Exhibits 2.1, 3.1, 3.2, 3.3, 4.1, 10.1 and 10.2, respectively
                to the to
                the registrant’s Form 10-SB filed with the SEC on August 30, 2007, and
                incorporated herein by reference.


(2)
            Filed
                as Exhibits 10.2 and 10.3, respectively to the to the registrant’s Form
                10-SB/A, Amendment No. 1 filed with the SEC on February 12, 2008,
                and
                incorporated herein by reference.


(3)
            Filed
                as Exhibit 10.5 to the registrant’s Form 10/A, Amendment No. 2 filed with
                the SEC on May 16, 2008, and incorporated herein by
                reference. (4)
            Filed as Exhibit 14 to the registrant's Form 10-KSB
              filed
              with the SEC on May 16, 2008, and incorporated herein by
              reference.


-32-





**Item
                14.**
            **Principal
                Accountant Fees and
                Services.**





The
      following table sets forth the aggregate fees incurred by us for the audit
      and
      other services provided by Malone & Bailey, PC during the fiscal years ended
      November 30, 2006 and 2007:




2006
              
              2007Audit
                  Fees
              
              $
              40,000
              
              $
              40,000Audit-Related
                  Fees
              
              $
              -
              
              $
              -Tax
                  Fees
              
              $
              -
              
              $
              -All
                  Other Fees
              
              $
              -
              
              $
              -




**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.




**APC
                  GROUP, INC.**Date:
                  June 20, 2008
              By:
              */s/
                  Kenneth S. Forster*Name:
                  Kenneth S. Forster
                Title:
                  President and Chief Executive
                  Officer





In
      accordance with the requirements of 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.





**Signature**
            **Title**
            **Date***/s/
                Kenneth S. Forster*
            President,
                Chief Executive Officer and Treasurer
            June
                20, 2008Kenneth
                S. Forster
            (Principal
                Executive Officer,(Principal
                Financial Officer andPrincipal
                Accounting Officer)*/s/
                Matthew Meyer*
            Director
            June
                20, 2008Matthew
                Meyer*/s/
                Robert C. Tsigonis*
            Director
            June
                20, 2008Robert
                C. Tsigonis*/s/
              A. Roy Wilbur*
            Director
            June
                20, 2008A.
              Roy Wilbur*/s/
                Richard L. Bienvenue*
            Director
            June
                20, 2008Richard
                L. Bienvenue




-33-