UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008.

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

FOR THE TRANSITION PERIOD FROM ____________ TO _____________

Commission File Number 0-21931

WI-TRON, INC.
(Exact name of small business issuer as specified in its charter)

DELAWARE 
  
22-3440510
(State or other jurisdiction of
  
(I.R.S. Employer
incorporation or organization)
  
Identification No.)

59 LaGrange Street
Raritan, New Jersey 08869
(Address of principal executive offices)

(908) 253-6870
(Issuer's telephone number)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or 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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)  Smaller reporting company x

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

The number of shares outstanding of the Issuer's Common Stock, $.0001 Par Value, as of August 19, 2008 was 75,853,293.


WI-TRON, INC.
FORM 10-QSB
SIX MONTHS ENDED JUNE 30, 2008

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
  
     
Item 1
Financial Statements (Unaudited):
  
     
 
Balance Sheets
1–2
     
 
Statements of Operations.
3
     
 
Statement of Changes in Stockholders' Deficiency
4
     
 
Statements of Cash Flows
5
     
 
Notes to Financial Statements
6–10
     
Item 2
Management's Discussion and Analysis of Financial Condition and Results of Operations
11–14
     
Item 3.
Controls and Procedures
15
     
PART II - OTHER INFORMATION
  
     
Item 1.
Legal Proceedings
15
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
15
Item 4.
Submission of Matters to a Vote of Security Holders
15
Item 5.
Other Information
15
Item 6.
Exhibits
16
     
Signatures
17
     
Exhibit Index
18

The following unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the company believes that the disclosures made are adequate to make the information not misleading.

It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the company’s latest shareholders’ annual report (Form 10-KSB).
 
 
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

WI-TRON, INC.
BALANCE SHEETS

   
June 30
2008
  
December 31
2007
  
   
Unaudited
      
ASSETS (Pledged)
          
               
CURRENT ASSETS
              
Cash and cash equivalents
 
$
-
  
$
13,917
  
Accounts receivable, net of allowance for doubtful accounts of  $5,872 and $702 in 2008 and 2007, respectively
    
75,396
    
7,834
  
Inventories
    
31,761
    
42,500
  
               
Total current assets
    
107,157
    
64,251
  
               
PROPERTY AND EQUIPMENT - AT COST
             
Machinery and equipment
    
587,276
    
587,276
  
Furniture and fixtures
    
43,750
    
43,750
  
Leasehold improvements
    
8,141
    
8,141
  
     
639,167
    
639,167
  
Less accumulated depreciation and amortization
   
(632,129
)
  
(629,965
)
     
7,038
    
9,202
  
               
SECURITY DEPOSITS AND OTHER NON-CURRENT ASSETS
    
5,500
    
5,500
  
Total Assets
  
$
119,695
  
$
78,953
  

The accompanying notes are an integral part of these financial statements
 
1
 
WI-TRON, INC.
BALANCE SHEETS
(Continued)

   
June 30
2008
  
December 31
2007
  
   
Unaudited
      
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
          
CURRENT LIABILITIES
          
           
Bank Overdraft
  
$
35,758
  
$
-
  
Secured note payable in connection with Phoenix investor rescinded agreement - payment in default
    
10,000
    
10,000
  
Notes payable issued in connection with private placement of common stock, including accrued interest of $52,016 (2008) and $43,016 (2007) - payment in default
    
352,016
    
343,016
  
Accounts payable
    
213,296
    
255,281
  
Accrued expenses and other current liabilities (including delinquent federal and state payroll taxes, penalties and interest aggregating $254,865 at June 30, 2008 and $263,322 at December 31, 2007
    
410,061
    
300,097
  
Accrued settlement of litigation
    
95,000
    
95,000
  
Loans payable to Tek, Ltd.
    
1,046,702
    
908,662
  
Loans payable - officers
    
6,673
    
159,511
  
Total current liabilities
    
2,169,506
    
2,071,567
  
 
STOCKHOLDERS' (DEFICIENCY)
              
               
Convertible Preferred stock, Series C authorized 5,000,000 shares of $.0001 par value; no shares issued or outstanding at June 30, 2008 and December 31, 2007, respectively, with a liquidation preference of $2 per share
    
-
    
-
  
               
Common stock - authorized, 100,000,000 shares of $.0001 par value; shares 70,778,293 and 50,028,293 shares issued and outstanding at June 30, 2008 and December 31, 2007, respectively
    
7,078
    
5,003
  
               
Additional paid-in capital
    
26,693,107
    
26,007,755
  
               
Accumulated deficit
    
(28,749,996
)
  
(28,005,372
)
               
Total Stockholders' (Deficiency)
    
(2,049,811
)
  
(1,992,614
)
               
Total Liabilities and Stockholders' (Deficiency)
  
$
119,695
  
$
78,953
  
 
The accompanying notes are an integral part of these financial statements
 
2

WI-TRON, INC.
STATEMENTS OF OPERATIONS (Unaudited)

   
Three Months Ended
June 30
  
Six Months Ended
June 30
  
   
2008
  
2007
  
2008
  
2007
  
                   
Net sales
  
$
75,040
    
42,200
  
$
106,221
  
$
56,224
  
Cost of goods sold
    
78,315
    
101,330
    
153,610
    
145,166
  
                           
Gross profit (loss)
    
(3,275
)
  
(59,130
)
  
(47,389
)
  
(88,942
)
                           
Operating expenses
                          
Selling, general and administrative
    
235,648
    
111,688
    
441,896
    
261,553
  
Research, engineering and development
    
94,860
    
110,819
    
228,595
    
284,159
  
Total operating expenses
    
330,508
    
222,507
    
670,491
    
545,712
  
                           
Operating loss
    
(333,783
)
  
(281,637
)
  
(717,880
)
  
(634,654
)
                           
Nonoperating income (expenses)
                          
Interest income and other income
    
31
    
-
    
169
    
-
  
Interest expense
    
(6,761
)
  
(4,500
)
  
(11,261
)
  
(9,000
)
Tax penalties and interest
    
(7,457
)
  
(25,309
)
  
(14,642
)
  
(35,947
)
                           
Loss before income taxes.
    
(347,970
)
  
(311,446
)
  
(743,614
)
  
(679,601
)
                           
Provision for income taxes
    
490
    
-
    
1,010
    
520
  
                           
NET LOSS.
  
$
(348,460
)
$
(311,446
)
$
(744,624
)
$
(680,121
)
                           
Net loss per share - basic and diluted
  
$
(0.01
)
$
(0.01
)
$
(0.01
)
$
(0.01
)
                           
Weighted average number of shares outstanding
    
69,459,612
    
50,028,293
    
63,840,106
    
49,232,160
  

The accompanying notes are an integral part of these financial statements
 
3

WI-TRON, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Six Months Ended June 30, 2008

   
Common Stock
  
Additional
Paid-In
  
Accumulated
      
   
Shares
  
Par Value
  
Capital
  
Deficit
  
Total
  
                       
BALANCE AT DECEMBER 31, 2007
    
50,028,293
  
$
5,003
  
$
26,007,755
  
$
(28,005,372
)
$
(1,992,614
)
                                 
Net loss for the six months ended June 30, 2008
                      
(744,624
)
  
(744,624
)
                                 
Private placement of common stock - (February 2008)
    
15,250,000
    
1,525
    
213,475
          
215,000
  
                                 
Amortization of share based compensation
                
4,977
          
4,977
  
                                 
Shares issued to investor relations firm (February 2008)
    
2,500,000
    
250
    
87,250
          
87,500
  
                                 
Shares issued to Devendar Bains in settlement of note payable (May 2008)
    
3,000,000
    
300
    
149,700
          
150,000
  
                                 
Funds received from private placement escrow in connection with subscription agreements for 22,995,000 shares to be issued after the increase in authorized shares (May and June 2008)
                  
229,950
           
229,950
  
                                 
BALANCE AT JUNE 30, 2008
    
70,778,293
  
$
7,078
  
$
26,693,107
  
$
(28,749,996
)
$
(2,049,811
)

The accompanying notes are an integral part of these financial statements
 
4

WI-TRON, INC.
STATEMENTS OF CASH FLOWS - UNAUDITED

   
Six Months Ended June 30,
  
   
2008 
  
2007 
  
           
Operating activities:
              
Net Loss
  
$
(744,624
)
$
(680,121
)
               
Adjustments to reconcile net loss to net cash used in operating activities
              
Depreciation and amortization
    
2,164
    
2,166
  
Amortization of share based compensation
    
4,977
    
4,978
  
(Decrease) increase in allowance for doubtful accounts
          
9,000
  
Interest accrued on notes payable issued in connection with private placement of common stock
    
9,000
    
9,000
  
Common shares issued to public relations firm
    
87,500
    
-
  
Changes in assets and liabilities
              
Accounts receivable
    
(67,562
)
  
15,680
  
Inventories
    
10,739
    
10,180
  
Accounts payable and accrued expenses
    
67,979
    
191,217
  
Total adjustments
    
114,797
    
242,221
  
Net cash (used) for operating activities
    
(629,827
)
  
(437,900
)
               
Financing activities:
              
Overdraft 
    
35,758
    
1,279
  
Advances from Tek, Ltd.
    
138,040
    
437,121
  
Officer loans
    
(2,838
)
  
(500
)
Funds received from private placement escrow in connection with subscription agreements for 22,995,000 shares to be issued after the increase in authorized shares
    
229,950
    
-
  
Proceeds from private placements of common stock
    
215,000
    
-
  
Net cash provided by financing activities
   
615,910
    
437,900
  
DECREASE IN CASH
    
(13,917
)
      
Cash at beginning of period
    
13,917
    
-
  
Cash at end of period
  
$
-
  
$
-
  
               
Supplemental disclosures of cash flow information:
              
Cash paid for:  Interest
  
$
-
  
$
-
  
Income taxes
  
$
-
  
$
-
  
               
Non-cash financing activities
              
               
Conversion of Note Payable to Devendar Bains (former CEO) into 3,000,000 shares of restricted common stock
  
$
150,000
  
$
-
  

5

WI-TRON, INC.
Notes to Financial Statements (Unaudited)
June 30, 2008
 
NOTE A - ADJUSTMENTS AND RECENT DEVELOPMENTS

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of (a) results of operations for the three month periods ended June 30, 2008 and 2007 (b) the financial position at June 30, 2008 (c) the statements of cash flows for the three month period ended June 30, 2008 and 2007 , and (d) the changes in stockholders' deficiency for the three month period ended June 30, 2008 have been made. The results of operations for the three months ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year.

In February 2008, the Company entered into a letter of intent providing for the acquisition of all of the outstanding shares of Cellvine in exchange for 85% of the outstanding common stock of Wi-tron on a fully diluted basis, leaving the existing owners of the Company's common stock with 15% on a fully diluted basis. Among other things, the agreement provides for the conversion of the Tek, Ltd. debt ($1,046,702 at June 30, 2008) into common stock at $.05 per share. Pursuant to the merger, the Company will change its name to Cellvine.

In February 2008, the Company received gross proceeds of $215,000 in connection with the private placement sale to accredited investors of 15,250,000 shares of restricted common stock.

Effective in May 2008, the Company entered into a Promissory Note Settlement Agreement with Devendar S. Bains, a former executive officer of the Company (former CEO) whereby 3,000,000 shares of restricted common stock of the Company was issued in exchange for debt previously owed by the Company to such person in the amount of $150,000.

In May 2008, the Company entered into a Debt Conversion Agreement with its CEO where the Company would issue up to 18,500,000 shares of restricted common stock in exchange for debt in the amount of $925,000. Such debt will be converted at the election of the Company at $0.05 per share. Conversion of such debt will be at the Company’s election but is expected to occur prior to the completion of a merger with Cellvine, Ltd. as disclosed in these Notes.

In May and June 2008, the Company received $224,950 from escrow representing the net proceeds of the private placement sale to accredited investors of 22,995,000 shares of restricted common stock. The shares will be issued after the Company increases its authorized shares under its charter, or the Company authorizes a new series of preferred stock with equivalent voting rights. The subscription agreements provide for full anti-dilution rights in connection with the Cellvine merger.

NOTE B - UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for financial statements. For further information, refer to the audited financial statements and notes thereto for the year ended December 31, 2007 included in the Company's Form 10-KSB filed with the Securities and Exchange Commission on April 14, 2008.

6

WI-TRON, INC.
Notes to Financial Statements (Unaudited)
June 30, 2008

The Company's financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The liquidity of the Company has been adversely affected in recent years by significant losses from operations. As further discussed in Note F, the Company incurred losses of WI-TRON, INC. for the six months ended June 30, 2008, has no cash and its working capital declined by $55,033 to a deficiency of $2,062,349 since the beginning of the fiscal year. Current liabilities exceed cash and receivables by $2,094,110 indicating that the Company will have substantial difficulty meetings its financial obligations for the balance of this fiscal year. These factors raise substantial doubt as to the Company's ability to continue as a going concern. Recently, operations have been funded by loans from the Chief Executive Officer and private placements of common stock.

NOTE C - STOCKHOLDERS' EQUITY

1.
Warrants and Options

At June 30, 2008, the following 1,370,000 warrants, remained outstanding:

(1)
20,000 exercisable at $1.00 through May 2010
(2)
600,000 exercisable at $.20 through August 2009
(3)
750,000 exercisable at $.20 through August 2009
 
At June 30, 2008, the Company had employee stock options outstanding to acquire 2,800,000 shares of common stock at exercise prices of $0.15 to $.20 per share.

2.
Private Placements of Common Stock and Debt

From May 2008 to June 2008, the Company received proceeds in the aggregate amount of $229,950 as a result of private offerings of restricted common stock to accredited investors (as defined in Regulation D promulgated under the Securities Act of 1933, as amended). A total of 22,995,000 shares of restricted common stock (or 229,950 shares of preferred stock) are issuable in connection with these offerings.

In February 2008, the Company received $215,000 in proceeds from the private placement of 15,250,000 shares of restricted common stock to accredited investors.

In August 2005, the Company completed a private placement of common stock and notes payable. These notes with a total balance of $352,016 including accrued interest of $52,016 remain unpaid at June 30, 2008. No actions have been taken by the note holders to collect the balance up to and since June 30, 2008 through the date of this filing.

7

WI-TRON, INC.
Notes to Financial Statements (Unaudited)
June 30, 2008
 
NOTE D - LOSS PER SHARE

The Company complies with the requirements of the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128"). SFAS No. 128 specifies the compilation, presentation and disclosure requirements for earnings per share for entities with publicly held common stock or potential common stock. Net loss per common share - basic and diluted is determined by dividing the net loss by the weighted average number of common stock outstanding.

Net loss per common share - diluted does not include potential common shares derived from stock options and warrants (see Note C) because they are antidilutive.

NOTE E - LITIGATION

From time to time, the Company is party to what it believes are routine litigation and proceedings that may be considered as part of the ordinary course of its business. Except for the proceedings noted below, the Company is not aware of any pending litigation or proceedings that could have a material effect on the Company's results of operations or financial condition.

In April 2004, a law firm filed a judgment against the Company in the amount of approximately $40,000 in connection with non-payment of legal fees owed to it. Inasmuch as this is a perfection of an already recorded liability, management does not believe that the judgment will have a material impact on the financial position of the Company. In March 2005, a settlement was reached whereby the Company made a down payment of $2,500 and agreed to pay the balance in 24 equal monthly installments of approximately $1,600.

NOTE F - LIQUIDITY

The Company's financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The liquidity of the Company has been adversely affected in recent years by significant losses from operations. The Company has incurred losses of $744,624 and $679,601 for the six months ended June 30, 2008 and 2007, respectively.

With no cash and reduced revenues, management believes that the Company will have great difficulty meeting its working capital and litigation settlement obligations over the next 12 months. The Company is presently dependent on cash flows generated from sales and private placements of common stock to meet our obligations. Our failure to consummate a merger with an appropriate partner or to substantially improve our revenues will have serious adverse consequences and, accordingly, there is substantial doubt in our ability to remain in business over the next 12 months. There can be no assurance that any financing will be available to the Company on acceptable terms, or at all. If adequate funds are not available, the Company may be required to delay, scale back or eliminate its research, engineering and development or manufacturing programs or obtain funds through arrangements with partners or others that may require the Company to relinquish rights to certain of its technologies or potential products or other assets. Accordingly, the inability to obtain such financing could have a material adverse effect on the Company's business, financial condition and results of operations.

8

WI-TRON, INC.
Notes to Financial Statements (Unaudited)
June 30, 2008

Management's plans for dealing with the foregoing matters include:

o Increasing sales of its high speed internet connectivity products through both individual customers, strategic alliances and mergers.
 
o Decreasing the dependency on certain major customers by aggressively seeking other customers in the amplifier markets;
 
o Partnering with significant companies to jointly develop innovative products, which has yielded orders with multinational companies to date, and which are expected to further expand such relationships;
 
o Maintaining a reduced cost structure through a more streamlined operation by using automated machinery to produce components for our products;
 
o Deferral of payments of officers' salaries, as needed;
 
o Selling remaining net operating losses applicable to the State of New Jersey, pursuant to a special government high-technology incentive program in order to provide working capital, if possible;
 
o Reducing overhead costs and general expenditures.
 
o Merging with another company to provide adequate working capital and jointly develop innovative products.
 
NOTE G - OFFICER LOANS
 
As of June 30, 2008, the Company owes $6,673 to the Vice President of Operations for loans and unpaid salaries. These balances are non-interest bearing, unsecured, and have no fixed maturity dates.
 
NOTE H - SEGMENT INFORMATION
The Company has not pursued its wireless Internet connectivity business since 2003 and is currently operating in one segment.
 
NOTE I - RELATED PARTY TRANSACTIONS
As of June 30, 2008, the aggregate balance due to Tek, Ltd. (a company wholly owned by John C. Lee, the Company's Chairman and Chief Executive Officer) was $1,046,702. Due to the Company's lack of available funds requiring C.O.D. terms from most vendors, Tek purchases parts and leases equipment on behalf of and for the benefit of the Company and re-sells the materials or services to the Company at cost. During the six months ended June 30, 2008, Tek advanced funds to or on behalf of the Company of $138,040.

Effective May 2008, the Company entered into a Promissory Note Settlement Agreement with a former executive officer of the Company (former CEO) whereby 3,000,000 shares of restricted common stock of the Company was issued in exchange for debt previously owed by the Company to such person in the amount of $150,000.

9

WI-TRON, INC.
Notes to Financial Statements (Unaudited)
June 30, 2008

In May 2008, the Company entered into a Debt Conversion Agreement with its CEO where the Company would issue up to 18,500,000 shares of restricted common stock in exchange for debt in the amount of $925,000. Such debt will be converted at the election of the Company at $0.05 per share. Conversion of such debt will be at the Company’s election but is expected to occur prior to the completion of a merger with Cellvine, Ltd. as disclosed in these Notes.

In May 2008, in connection with the Company execution of a Merger Agreement with Cellvine, Ltd., officers and other persons having employment agreements with the Company agreed to terminate such agreements and waive rights to severance in connection with the completion of the merger with Cellvine Ltd. In exchange, such officers will receive revised employment agreements and an aggregate of 6,000,000 shares of restricted common stock upon the closing of and conditional upon the merger with Cellvine Ltd.

NOTE J - COMMITMENTS AND OTHER COMMENTS

1.
Premises leases
On April 22, 2005, concurrent with the closing of the purchase of the building by Tek, the Company entered into a non-cancelable operating lease with Tek which commences on June 1, 2005 and expired on May 31, 2008. Tek is holding a security deposit of $5,500 in connection with this lease.

Rent expense, including the Company's share of real estate taxes, utilities and other occupancy costs, was
$40,500 and $36,000 for the six months ended June 30, 2008 and 2007, respectively.

2.
Phoenix Opportunity Fund II, L.P.
On January 28, 2004, the Company entered into a Subscription Agreement (the "Agreement") with Phoenix Opportunity Fund II, L.P. ("Phoenix"), which was later rescinded. The Company agreed to pay Phoenix in settlement, which included a $40,000 secured promissory note due March 31, 2005, and bearing interest at the rate of eight percent per annum secured by substantially all the assets of the Company. The Company did not make all of the required payments due under the Phoenix rescission agreement, and the Company remains currently delinquent. The balance due on the note at June 30, 2008 was $10,000. As yet, no action has been taken by Phoenix concerning this default.

NOTE K - SUBSEQUENT EVENTS
 
In July and August 2008, the Company received approximately $127,000 of additional private placement funds from various accredited investors in exchange for the issuance of either a newly authorized class of preferred stock (at $1.00 per share, convertible into common stock at a 100 for 1 basis) or the Company's common stock (at $0.01 per share).

10

PART I - FINANCIAL INFORMATION

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
 
Financial Condition and Results of Operations

Results of Operations - The Three Months Ended June 30, 2008 Compared to the Three Months Ended June 30, 2007 .

Revenues for the three months ended June 30, 2008 increased by $32,840 from $42,200 to $75,040, or 89% compared to the same period in the preceding year. The sales increases were primarily attributable to amplifier purchases by Cellvine.

The Company has continued to develop and refine its amplifier products for the wireless communications market. Sales and marketing efforts have been focused on Asian markets.

Cost of sales was $153,610 or 104% of sales compared to $101,330 or 240% of sales during the same period for 2007. Gross margin for the three months ended June 30, 2008 amounted to a loss of $(3,275) ($145,166) compared to a loss of $(59,130) ((140)%), for the three months ended June 30, 2007. The improvement in gross margin was principally due to improved production efficiencies. While this was an improvement, we don't consider it meaningful since our production and sales levels were so low.

Selling, general and administrative expenses increased in 2008 by $123,960 to $235,648 from $111,688 in 2007. Expressed as a percentage of sales, the selling, general and administrative expenses were 416% in 2008 and 465% in 2007. The principal factors contributing to the increase were professional fees, mostly in connection with the Cellvine merger.
 
Research, engineering and development expenses were $94,860 or 215% of net sales for the three months ended June 30, 2008 compared to $110,819 or 505% of net sales in 2007. In 2008, the principal activity of the business related to the design and production of product for OEM manufacturers, particularly for the W-CDMA with DSP control. The research, engineering and development expenses consist principally of salary cost for engineers and the expenses of equipment purchases specifically for the design and testing of the prototype products.

Interest income was $NIL in 2008 and 2007 because we have had no available cash balances to invest.

Interest expense and tax penalties were $14,218 in 2008 compared to $29,809 in 2007 with the reduction attributable to a reduction in payroll tax liabilities outstanding.

Results of Operations - The Six Months Ended June 30, 2008 Compared to Six Months Ended June 30, 2007.

Revenues for the six months ended June 30, 2008 increased by $49,997 from $56,224 to $106,221, or 89% compared to the six months ended June 30, 2007.

The Company has continued to develop and refine its amplifier products for the wireless communications market. Sales and marketing efforts have been focused on Asian markets.
 
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Cost of sales was $153,610 or 104% of sales compared to $145,166 or 240% of sales during the same period for 2007. The improvement in gross margin was principally due to increased sales volume. However, the analysis is not meaningful as sales are still too low to develop operating efficiencies to improve gross margins.

Selling, general and administrative expenses increased in 2008 by $180,343 to $441,896 from $261,553, in 2007. Expressed as a percentage of sales, the selling, general and administrative (SG&A) expenses were 416% in 2008 and 465% in 2007. The principal factors contributing to the increase were professional fees, mostly in connection with the Cellvine merger. Management believes that costs have been reduced about as low as operations can sustain.
 
Research, engineering and development expenses were 215% of net sales for the six months ended June 30, 2008 compared to 505% in 2007. In 2008 and 2007, the principal activity of the business related to the design and production of product for OEM manufacturers, particularly for the W-CDMA amplifier and 3.5 GHz single channel products and refinements to the High Speed Internet products. The research, engineering and development expenses consist principally of salary cost for engineers and the expenses of equipment rentals specifically for the design and testing of the prototype products. The Company's research and development efforts are influenced by available funds and the level of effort required by the engineering staff on customer specific projects.

We had no interest income in 2008 and 2007 because our excess cash balances which we have historically temporarily invested in interest bearing accounts have been fully depleted.
Interest expense and tax penalties were $25,903 in 2008 compared to $44,947 in 2007 with the reduction attributable to a reduction in payroll tax liabilities outstanding.

As a result of the foregoing, the Company incurred net losses of $744,624 or $0.01 per share for the six months ended June 30, 2008 compared with net losses of $680,121 or $0.01 per share for the same period in 2007.

Liquidity and Capital Resources 

Liquidity refers to our ability to generate adequate amounts of cash to meet our needs. We have been generating the cash necessary to fund our operations from private placements. We have incurred a loss in each year since inception. It is possible that we will incur further losses, that the losses may fluctuate, and that such fluctuations may be substantial. As of June 30, 2008, we had an accumulated deficit of $28,749,996. Potential immediate sources of liquidity continued to be private placements of common stock.

As of June 30, 2008, our current liabilities exceeded our cash and receivables by $2,094,110. Our current ratio was 0.05 to 1.00, but our ratio of accounts receivable to current liabilities was only 0.03 to 1.00. While this indicates that we will have difficulty meeting our obligations as they come due, we are hopeful that the merger with Cellvine will help to mitigate this concern, although we may still have need for additional liquidity after its consummation. We are carrying $31,761 in inventory, of which $21,058 represents component parts. Because of the lead times in our manufacturing process, we will likely need to replenish many items before we use everything we now have in stock. Accordingly, we will need more cash to replenish our component parts inventory before we are able realize cash from all of our existing inventories.

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As of June 30, 2008, we had a bank overdraft of $35,758 compared to cash in banks of $13,917 at December 31, 2007. Accordingly, our cash position declined by $49,675 during 2008. Our cash used for operating activities was $629,827. We received proceeds from private placements of equity securities of $444,950 during the six months ended June 30, 2008. Tek, Ltd., a company wholly owned by John C. Lee, loaned the Company $138,040 during the six months ended June 30, 2008.

The allowance for doubtful accounts on trade receivables was $5,872 at June 30, 2008. Because of our relatively small number of customers and low sales volume, accounts receivable balances and allowances for doubtful accounts do not reflect a consistent relationship to sales. We determine our allowance for doubtful accounts based on a specific customer-by-customer review of collectiblity.

Our inventories decreased by $10,739 to $31,761 in 2008 compared to $42,500 at December 31 2007, a decrease of 25%.

The Company continues to explore strategic relationships with ISP's, customers and others, which could involve jointly developed products, revenue-sharing models, investments in or by the Company, or other arrangements. There can be no assurance that a strategic relationship can be consummated.

With no remaining cash and no near term prospects of private placements, options or warrant exercises and reduced revenues, we could have difficulty meeting our working capital obligations over the next 12 months. While we may continue to have working capital concerns after the consummation of the merger with Cellvine, we believe that the merger will substantially reduce those concerns. Should we be unable to consummate the merger with Cellvine, and/or substantially improve our revenues, there may be serious adverse consequences and, accordingly, there remains substantial doubt in our ability to remain in business over the next 12 months. There can be no assurance that the merger with Cellvine will close on or before the scheduled date or at all. There can further be no assurance that any financing from other sources will be available to the Company on acceptable terms, or at all. If adequate funds are not available, the Company may be required to delay, scale back or eliminate its research, engineering and development or manufacturing programs or obtain funds through arrangements with partners or others that may require the Company to relinquish rights to certain of its technologies or potential products or other assets. Accordingly, the inability to consummate the Cellvine merger or obtain financing from other sources could have a material adverse effect on the Company's business, financial condition and results of operations.

Critical Accounting Policies

1. REVENUE RECOGNITION
Revenue is recognized upon shipment of products to customers because our shipping terms are F.O.B. shipping point. And there are generally no rights of return, customer acceptance protocols, installation or any other post-shipment obligations. All of our products are custom built to customer specifications. We provide an industry standard one-year limited warranty under which the customer may return the defective product for repair or replacement.

2. INVENTORIES
Inventories are stated at the lower of cost or market; cost is determined using the first-in, first-out method. As virtually all of our products are made to customer specifications, we do not keep finished goods in stock except for completed customer orders that have not been shipped. Our work-in-progress generally consists of customer orders that are in the process of manufacture but are not yet complete at the period end date. We review all of our components for obsolescence and excess quantities on a periodic basis and make the necessary adjustments to net realizable value as deemed necessary.
 
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3. ALLOWANCE FOR DOUBTFUL ACCOUNTS
Because of our small customer base, we determine our allowance for doubtful accounts based on a specific customer-by-customer review of collectiblity. Therefore, our allowance for doubtful accounts and our provision for doubtful accounts may not bear a consistent relationship to sales but we believe that this is the most accurate and conservative approach under our circumstances.

4. USE OF ESTIMATES
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. The principal areas that we use estimates in are: allowance for doubtful accounts; work-in-process percentage of completion; accounting for stock based employee compensation; and inventory net realizable values.
 
5. STOCK-BASED EMPLOYEE COMPENSATION
The proforma disclosures previously permitted are no longer an alternative to financial statement recognition. Accordingly, the Company has adopted FASB Statement No. 123R and has recognized $4,977 of stock-based compensation for the three months ended June 30, 2008.

6. LOSS PER SHARE
Statement of Financial Accounting Standards No.128 (SFAS No. 128), Earnings per Share, specifies the computation, presentation and disclosure requirements for earnings per share for entities with publicly held common stock or potential common stock.

Net loss per common share - basic and diluted is determined by dividing the net loss by the weighted average number of shares of common stock outstanding. Net loss per common share - diluted does not include potential common shares derived from stock options and warrants because they are antidilutive.

7. SEGMENT INFORMATION
We discontinued our internet business to concentrate on our core competence, which is in the amplifier business. Accordingly, we currently operate in one segment.

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Item 3. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the"Exchange Act"), the Company's management, with the participation of the Company's Chief Executive Officer ("CEO") and Principal Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report in reaching a reasonable level of assurance that the information required to be disclosed by the Company in the reports that it files with the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time period specified in the SEC's rules and forms. Based upon that evaluation, the CEO and Principal Financial Officer concluded that the Company's disclosure controls and procedures continued to be ineffective as of the end of the period covered by this report.

As required by Exchange Act Rule 13a-15(d), the Company's management, including the Chief Executive Officer and Principal Financial Officer, conducted an evaluation of the Company's internal control over financial reporting to determine whether any changes occurred during the fiscal quarter ended March 31, 2007 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Based on that evaluation, other than the changes reported in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2007, which remained in effect during the six months ended June 30, 2008, there were no other changes during such quarter.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
See Note E to the Company's financial statements set forth in Part I.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the six months ended June 30, 2008, the Company issued securities as follows.

In February 2008, the Company issued 15,250,000 shares of restricted common stock to various accredited investors for aggregate gross proceeds of $215,000.

In May and June 2008, an escrow agent received investor funds of $225,000 representing the sale of 22,500,000 restricted common shares (or its equivalent) to various accredited investors in connection with a private placement.

Proceeds with respect to the amounts raised were for general working capital purposes and to repay outstanding liabilities related to payroll taxes.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
None.
 
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

ITEM 5. OTHER INFORMATION.
None.
 
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ITEM 6. EXHIBITS
(a) (2) Exhibits 
  1.1(1)
 
Form of Underwriting Agreement
  1.2(1)
 
Form of Selected Dealer Agreement
  1.3(1)
 
Form of Agreement Among Underwriters
  3.1(1)
 
Certificate of Incorporation of the Company
  3.2(1)
 
Certificate of Merger (Delaware)
  3.3(1)
 
Certificate of Merger (New Jersey)
  3.4(1)
 
Agreement and Plan of Merger
  3.5(1)
 
By-Laws of the Company
  3.6(2)
 
Certificate of Designation of Series A Preferred Stock
  3.7(3)
 
Certificate of Amendment to the Certificate of Incorporation
  4.1(1)
 
Specimen Certificate for shares of Common Stock
  4.2(1)
 
Specimen Certificate for Warrants
  4.3(1)
 
Form of Underwriter’s Purchase Option
  4.4(1)
 
Form of Warrant Agreement
10.1(1)
 
1996 Incentive Stock Option Plan
10.2(1)
 
Employment Agreement between the Company and Devendar S. Bains
10.3(1)
 
Employment Agreement between the Company and Tarlochan Bains
10.4(1)
 
Employment Agreement between the Company and Nirmal Bains
10.5
 
Intentionally Omitted
10.6
 
Intentionally Omitted
10.7(1)
 
Agreement between the Company and Electronic Marketing Associates, Inc.
10.8(1)
 
Agreement between the Company and Link Microtek Limited.
10.9(1)
 
Agreement between the Company and ENS Engineering.
10.10(4)
  
Settlement Agreement between John Chase Lee and the Company
10.11(5)
  
2005 Stock Option Plan
10.12*
  
Merger Agreement and Plan of Reorganization
14(6)
 
Code of Ethics
     
31.1*
 
Certification of Principal Executive Officer Pursuant to Section 302 of the
 
  
Sarbanes- Oxley Act of 2002 (18 U.S.C. Sec. 1350).
31.2*
 
Certification of Principal Accounting Officer Pursuant to Section 302 of the
   
Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350).
32.1*
 
Written Statement of Principal Executive Officer Pursuant to Section 906 of the
   
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2*
 
Written Statement of Principal Accounting Officer Pursuant to Section 906 of the
   
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

(1)
Incorporated by Reference to the Company’s Registration Statement on Form SB-2, No. 333-11015.
(2)
Incorporated by Reference to the Company’s Current Report on Form 8-K filed on August 3, 1999.
(3)
Incorporated by Reference to the Company’s Current Report on Form 8-K filed on November 9, 2005.
(4)
Incorporated by Reference to the Company’s Current Report on Form 8-K filed on July 21, 2005.
(5)
Incorporated by Reference to the Company’s Annual Report for December 31, 2005 on Form 10-KSB filed on April 6, 2006.
(6)
Incorporated by Reference to the Company’s Annual Report for December 31, 2006 on Form 10-KSB filed on May 18, 2007.
* Filed herewith.
 
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SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.`
     
  WI-TRON, INC.
 
 		  
 		  
 
Dated:  August 19, 2008 By:   /s/  John C. Lee
  Name:  John C. Lee
  Title: Chief Executive Officer and Director
   
Dated:  August 19, 2008 By:   /s/  Tarlochan S. Bains
  Name:  Tarlochan S. Bains
  Title: Vice President and Principal Accounting Officer

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EXHIBIT INDEX

Exhibit
    
No.
  
Description
10.12
  
Merger Agreement and Plan of Reorganization
31.1
  
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 (18 U.S.C. Sec. 1350).
31.2
  
Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350).
32.1
  
Written Statement of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2
  
Written Statement of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
 
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