SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934

For the quarterly period ended September 30, 2008

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 000-09283

Aperture Health, Inc.

(Exact name of registrant as specified in its charter)

Nevada	20-8085447
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization

27201 Puerta Real, Suite 350
Mission Viejo, California	92691
(Address of principal executive offices)	(Zip Code)

(949) 609-1966

(Registrant’s telephone number, including area code)

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 of 1934 during the preceding 12 months (or for such short 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 ¨

Indicate by check mark whether the registrant is a large accelerated filer, and 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 ¨		Accelerated filer ¨

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

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

Yes ¨ No x

As of September 30, 2008, there were outstanding 81,103,455 shares of the registrant’s common stock, $0.001 par value.

APERTURE HEALTH, INC.

SEPTEMBER 30, 2008

INDEX

		PAGE

PART I.	Financial Information

ITEM 1.	Financial Statements

	Balance Sheet as of September 30, 2008 (Unaudited) and June 30, 2008 (Audited)	1

	Statement of Operations for the Three Months Ended September 30, 2008 (Unaudited) and September 30, 2007 (Unaudited)	2

	Statement of Changes in Stockholders’ Deficit for the Three Months Ended September 30, 2008 (Unaudited)	3

	Statement of Cash Flows for the Three Months Ended September 30, 2008 (Unaudited) and September 30, 2007 (Unaudited)	4

	Notes to Consolidated Financial Statements	5-10

ITEM 2.	Management’s Discussion and Analysis	11-13

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	12

ITEM 4T.	Controls and Procedures	13

PART II.	Other Information	13

ITEM 1.	Legal Proceedings	13

ITEM 1A.	Risk Factors	13

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13

ITEM 3.	Defaults Upon Senior Securities	13

ITEM 4.	Submission of Matters to a Vote of Security Holders	13

ITEM 5.	Other Information	13

ITEM 6.	Exhibits	13

	Signatures	14

	Exhibit Index	15

	Exhibits	16-18

APERTURE HEALTH, INC.

BALANCE SHEETS

	September 30, 2008 (Unaudited)			June 30, 2008 (Audited)
Assets
Current Assets
Cash	$	13,825		$	3,124
Accounts receivable		--			8,351
Prepaid expenses and other		13,000			--
Total current assets		26,825			11,475

Fixed assets, net		3,915			14,884
Other assets held for investment		251,358			251,358
Deposits, net		37,750			37,750

Total assets	$	319,848		$	315,467

Liabilities and Stockholder's Deficit
Current Liabilities
Accounts payable	$	202,585		$	166,963
Accrued expenses		333,834			291,039
Deferred compensation		397,584			278,153
Current portion of related party notes		585,000			708,131
Short term notes and current portion of long term notes		203,402			153,260
Deferred rent		23,433			31,244
Total current liabilities		1,745,838			1,628,790

Related party notes, net of current portion		650,000			350,000
Long term notes		648,684			450,339
Total long-term liabilities		1,298,684			800,339

Total liabilities		3,044,522			2,429,129

Stockholders' Deficit
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued		--			--
Common stock - $0.001 par value; 150,000,000 shares authorized;
81,061,723 and 80,861,723 shares issued and outstanding September 30, 2008 and June 30, 2008, respectively		81,062			80,862
Additional paid in capital		25,354,670			24,975,021
Accumulated deficit		(28,160,406	)		(27,169,545	)
Total stockholders' deficit		(2,724,674	)		(2,113,662	)

Total liabilities and stockholders' deficit	$	319,848		$	315,467

The accompanying notes are an integral part of these financial statements

APERTURE HEALTH, INC

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30

(Unaudited)

		2008			2007
Sales		$	--		$	--
Cost of sales			--			--
	Gross profit		--			--

Selling, general and administrative			934,370			673,540

	Loss from operations		(934,370	)		(673,540	)

Other income (expense)
	Interest expense		(56,491	)		(23,953	)
	Total other income (expense)		(56,491	)		(23,953	)

Loss before income taxes			(990,861	)		(697,493	)

Income tax expense			--			--

	Net loss	$	(990,861	)	$	(697,493	)

Basic and diluted loss per share:
	Loss per common share	$	(0.01	)	$	(0.01	)

Weighted average shares outstanding			80,937,810			82,718,108

The accompanying notes are an integral part of these financial statements

APERTURE HEALTH, INC

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008

	Common Stock				Additional		Accumulated			Stockholders'
	Shares		Amount		Paid in Capital		Deficit			Deficit
Balance at June 30, 2008		80,861,723	$	80,862	$	24,975,021	$	(27,169,545	)	$	(2,113,662	)

Common shares issued for:
Debt and interest conversions		200,000		200		99,800					100,000
Estimated fair value of warrants:
Granted to employees		--		--		156,089					156,089
Issued for services		--		--		116,361					116,361
Debt discount adjustments		--		--		7,399					7,399
NET LOSS		--		--		--		(990,861	)		(990,861	)
Balance at September 30, 2008		81,061,723	$	81,062	$	25,354,670	$	(28,160,406	)	$	(2,724,674	)

The accompanying notes are an integral part of these financial statements

APERTURE HEALTH, INC.

STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED SEPTEMBER 30

		2008			2007
Cash from operating activities
Net loss		$	(990,861	)	$	(697,493	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization			10,969			10,969
Amortization of debt discount			7,399			--
Estimated fair value of warrants issued for services			116,361			71,455
Estimated fair value of warrants issued to employees			156,089			130,708
Changes in operating assets and liabilities
	Accounts receivable, net		8,351			--
	Prepaid expenses and other assets		(13,000	)		--
	Accounts payable		35,622			25,553
	Accrued expenses and deferred		154,415			92,300
	Registration rights obligation		--			--
Net cash flows from operating activities			(514,655	)		(366,508	)

Cash from financing activities
Additional loan obligations			600,000			200,000
Repayment of notes and loans			(74,644	)		(14,989	)
Net cash flows from financing activities			525,356			185,011

Net change in cash for the quarter			10,701			(181,497	)
Cash, beginning of quarter			3,124			181,879
Cash, end of quarter		$	13,825		$	382

Supplemental disclosures:
Cash paid for interest		$	5,635		$	3,571
Cash paid for income taxes			--			--
Non-cash investing and financing activities
Debt discount recorded for warrants			7,399			--
Conversion of debt and interest for equity			100,000			--

The accompanying notes are an integral part of these financial statements

APERTURE HEALTH, INC.

Notes to Financial Statements

(Unaudited)

NOTE 1 – MANAGEMENT REPRESENTATION

The financial statements included herein have been prepared by Aperture Health, Inc. (“Aperture Health”, or the “Company”), without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America has been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended September 30, 2008 are not necessary indicative of the results that may be expected for the year ended June 30, 2009. It is suggested that the financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended June 30, 2008 included in the Company’s Form 10K filed on October 14, 2008.

NOTE 2 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business

Since its original incorporation on February 13, 2001, Aperture Health formerly known as flexSCAN, Inc. has been principally devoted to research and development, software development, securing and protecting its intellectual property, and raising capital. From inception through June 30, 2008, Aperture Health has established its marketing strategy, developed its foundation technology, established a scalable infrastructure, defined its products and services, established its brand identity, and assembled its executive team. Aperture Health’s business model is designed to provide access to leading-edge medical technology and services to the largest number of individuals in a unique and unprecedented corporate benefit program known as wellness360. wellness360 is a health, wellness and lifestyle program enabling employers the ability to lower their cost of health insurance by: (i) working to improve the general health and wellness of their employees, and (ii) enjoying tangible economic rewards as a result of their employees participation in Aperture Health’s online diet, fitness, online medical records, health risk assessment and internet health, wellness and lifestyle online services.

On January 11, 2008, the Company obtained the written consent of the holders of a majority of the common stock to approve an amendment to the Company’s Articles of Incorporation to change the name of the company from flexSCAN, Inc. to Aperture Health, Inc. On February 28, 2008, the name change was certified by the Secretary of State of the State of Nevada. The Board of Directors believes that the new name is an ideal fit for the business because it captures the notion that its members are able to inspect, view, and manage many areas of their lifestyle and medical information. Similarly, advertisers and medical clinicians are able to direct their promotions and offers to prospective buyers or enrollees on the basis of very specific medical and lifestyle criteria.

Basis of Presentation

The accompanying financial statements include the results of Aperture Health, Inc. and are presented in compliance with US GAAP.

Liquidity and Management’s Plans

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not generated significant revenues from operations and has no assurance of any future revenues. The Company incurred a net loss of $990,861 during the quarter ended September 30, 2008. Also, the Company has a cash balance of $13,825, a working capital deficit of $1,617,315 and a stockholders’ deficit of $1,719,013 at September 30, 2008. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s success is dependent upon numerous items, certain of which are the successful growth of revenues from its services, its ability to obtain new customers in order to achieve levels of revenue adequate to support the Company’s current and future cost structure, and its success in obtaining financing for operations, for which there is no assurance. Unanticipated problems, expenses, and delays are frequently encountered in establishing and maintaining profitable operations. These include, but are not limited to, technical difficulties, market acceptance, and sales and marketing. The failure of the Company to meet any of these conditions could have a materially adverse effect on the Company and may force the Company to reduce or curtail operations. No assurance can be given that the Company can achieve or maintain profitable operations. The Company’s management recognizes that the Company must obtain additional capital for the eventual achievement of sustained profitable operations. Management’s plans include obtaining additional capital through equity financing sources. However, no assurance can be given that additional capital, if needed, will be available when required or upon terms acceptable to the Company or that the Company will be successful in its efforts to negotiate the extension of its existing debt. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, among others, realization of accounts receivable, recoverability of long-lived assets, deferred tax asset valuations and valuation of derivative instruments. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable, accounts payable and accrued expenses, and related party notes payable. The carrying values for all such instruments, except the related party notes payable, approximate fair value at September 30, 2008 due to the short maturities of such financial instruments. The fair value of related party notes payable approximates their carrying value and was determined based on the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Accounting for Stock-Based Compensation

Our share-based employee compensation arrangements are described in Note 7. Effective April 1, 2006, we adopted the fair value recognition provisions of SFAS 123(R), “Share-Based Payment,” using the modified prospective transition method. For warrants granted before April 1, 2006, we amortize the fair value on a straight-line basis. This is the same basis on which we amortized warrants granted before April 1, 2006 for our pro forma disclosures under SFAS 123. For warrants granted on or after April 1, 2006, we amortize the fair value on a straight-line basis. All warrants are amortized over the requisite service periods of the awards, which are generally the vesting periods. Because we used the modified prospective transition method, results for prior periods have not been restated. In March 2005 the Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 107, which provides supplemental implementation guidance for SFAS 123(R). We have applied the provisions of SAB 107 in our adoption of SFAS 123(R).

Basic and Diluted Loss per Share

Basic loss per common share is computed based on the weighted average number of shares outstanding for the period. Diluted loss per share is computed by dividing net loss by the weighted average shares outstanding assuming all potential dilutive common shares were issued. Basic and diluted loss per share are the same as the effect of convertible notes, stock options and warrants on loss per share are anti-dilutive and thus not included in the diluted loss per share calculation.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 163, "Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60" (“SFAS 163”). SFAS 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS 163 on its financial statements but does not expect it to have a material effect.

In May 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 162, "The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company is currently evaluating the impact of SFAS 162 on its financial statements but does not expect it to have a material effect.

In March 2008, FASB issued Statement No. 161, Disclosure about Derivative Instruments and Hedging Activities ("SFAS 161"), which is effective for fiscal years beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity's financial position, financial performance and cash flows. Among other things, SFAS 161 requires disclosures of the fair values of derivative instruments and associated gains and losses in a tabular formant. The Company has not yet determined the impact of the adoption of SFAS 161 on its financial statements and footnote disclosures.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations ("SFAS 141R"), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any on controlling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements for users of financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for the Company starting January 1, 2009 and will change the accounting for business combinations on a prospective basis.

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interest in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51 ("SFAS 160"). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent's ownership interest, and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. This statement is effective for the Company beginning March 1, 2009. This statement is not currently applicable since it has no subsidiaries.

FASB 159 - In February 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115". SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. This Statement applies to all entities, including not-for-profit organizations. SFAS 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended June 30, 2009. The Company is currently evaluating the impact of SFAS 159 on its consolidated financial statements.

NOTE 3 – RELATED PARTY TRANSACTIONS

Certain legal, tax and accounting services are provided by Hoffski and Pisano, a professional corporation. Francis X. Pisano is a partner in the firm and is both an officer and director in the Company. The firm prepares the Company’s tax forms and provides periodic reviews of the Company’s accounting controls and procedures. The firm charges the Company at standard and customary billing rates. Hoffski and Pisano charged the Company $650 and $10,500 during the quarters ended September 30, 2008 and 2007, respectively.

The Company also has received loans and notes from related parties, which are more fully described at Note 6 – Notes Payable, below.

NOTE 4 - FIXED ASSETS

Property and equipment consisted of the following at September 30, 2008 and June 30, 2007:

	September 30,			June 30,
	2008			2008
Furniture and fixtures	$	59,317		$	59,317
Computer hardware		100,402			100,402
Telephone system		11,549			11,549
Computer software		7,513			7,513
Total fixed assets		178,781			178,781
Accumulated depreciation		(174,866	)		(163,897	)
Total fixed assets, net	$	3,915		$	14,884

Depreciation of fixed assets was $10,969 and $42,630 the quarter ended September 30, 2008 and the fiscal year ended June 30, 2008.

NOTE 5 – OTHER ASSETS HELD FOR INVESTMENT

The other assets held for investment were $251,348 at September 30, 2008 and June 30, 2008. The asset value represents the cost of vacant land located in Apple Valley, CA. The Company has listed the land with a real estate broker in the Apple Valley area with a hope of divesting the asset during the current fiscal year.

NOTE 6 – NOTES PAYABLE

Unsecured Promissory Notes and Convertible Debentures

During the year ended June 30, 2008, the Company issued an aggregate of $520,000 in unsecured promissory notes to related parties and no unsecured notes to third parties. In addition, the Company issued $1,110,000 in convertible debentures to related parties and third parties. In connection with the convertible debentures, the Company issued a total of 1,387,500 warrants to purchase common shares at an exercise price of $0.20, which exceeded the market price of the Company’s common stock. The warrants vest upon issuance of the debt and were valued using the Black-Scholes valuation model using the assumptions listed in Note 7 below. In connection with these warrants, the Company recorded a debt discount of $122,135, the full amount of which was amortized to interest expense during the year ended June 30, 2008. Notes issued subsequent to fiscal year ended June 30, 2008 are outlined below:

On July 10, 2008, the Company issued a 10% Convertible Debenture in the amount of $100,000 to a company controlled by a Director. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due July 10, 2011.

On July 14, 2008, the Company issued a 10% Convertible Debenture in the amount of $100,000 to a qualified investor. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due July 14, 2011.

On July 30, 2008, the Company issued a 10% Convertible Debenture in the amount of $100,000 to a company controlled by a Director. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due July 30, 2011.

On August 18, 2008, the Company issued a 10% Convertible Debenture in the amount of $100,000 to a qualified investor. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due August 18, 2011.

On August 27, 2008, the Company issued a 10% Convertible Debenture in the amount of $75,000 to a qualified investor. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due August 27, 2011.

On September 17, 2008, the Company issued a 10% Convertible Debenture in the amount of $25,000 to a qualified investor. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due September 17, 2011.

On September 22, 2008, the Company issued a 10% Convertible Debenture in the amount of $100,000 to a qualified investor. The debenture was pursuant to an unregistered private placement dated March 1, 2008 and had attached warrants. Principal and unpaid interest is due September 22, 2011.

Accrued Interest as of September 30, 2008 and June 30, 2008 was $175,070 and $131,613, respectively. Accrued interest expense for the three months ended September 30, 2008 and 2007 was $43,457 and $20,382, respectively.

The Company is in technical default in respect of several of its notes, which are issued for the benefit of six of its lenders, all of whom are individuals. The notes in default equal $635,000. The note holders are current or former related parties or affiliates and none of the note holders have made demands on the Company for repayment.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its office facilities under a non-cancelable operating lease which requires initial base monthly rent of $16,345 and provides for fixed based rent escalations over the term of the lease which expires in June 2009.

Indemnities and Guarantees

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions. The Company indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of Nevada. In connection with its office facility lease, the Company has indemnified its lessor for certain claims arising from the use of the facilities. The duration of the guarantees and indemnities varies, and in many cases is indefinite. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheet.

NOTE 8 – STOCKHOLDERS' DEFICIT

Preferred Stock

On January 24, 2006, the Company’s Board of Directors approved an increase in the authorized capital stock of the Company to 160,000,000 shares, of which 150,000,000 will be common stock, par value $0.001, and 10,000,000 will be preferred stock, par value $0.001. The authorized shares of Preferred Stock issued will be available for issuance for those purposes as the board of directors may deem advisable without further action by the stockholders, except as may be required by the Company’s Articles of Incorporation and applicable laws and regulations. At September 30, 2008 and June 30, 2008, the Company had no outstanding Preferred Stock.

Common Stock

On August 26, 2008, the Company issued 200,000 shares of Common Stock pursuant to the terms of its Convertible Debenture program and as described in the Company’s private placement memorandum dated March 1, 2008. The Company received total proceeds of $100,000 from the conversion.

Warrants

For share awards granted April 1, 2006 and later, the associated expenses are amortized under the straight-line method as prescribed by SFAS 123r. The Company grants employee warrants from authorized and un-issued shares of common stock. Employee warrants are granted by the Company subject to terms and conditions established by the Chief Executive Officer. Warrants generally have term of three to five years and vest over three years. At the present time, we intend to issue restricted common shares upon the exercise of stock warrants.

The fair value of each warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing model (“Black-Scholes” model) that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of our common stock and other factors. The expected term of warrants granted is equal to the full term of the warrant without considering historical employee termination rates and warrant exercising propensities. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant.

We account for stock options granted to non-employees in accordance with Emerging Issues Task Force No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” (“EITF 96-18”). Under EITF 96-18, we determine the fair value of the stock options granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

The Company issued 5,190,008 warrants during the three months ended September 30, 2008. The activity is summarized in the table below:

	Shares	Price Range	Weighted Avg. Price
Outstanding June 30, 2008	36,229,079	n.a.	$0.35
Granted	5,190,008	$0.05 to $.50	$0.14
Exercised	--	--	--
Forfeited	--	--	--
Outstanding September 30, 2008	41,419,087	n.a.	$0.32

Total estimated share-based compensation expense, related to all of our share-based awards, recognized for the three months ended September 30, 2008 and 2007 was comprised of the following:

	2008		2007
Fair value of warrants issued for services	$	116,361	$	71,455
Fair value of warrants issued to employees		156,089		130,708
Share-based compensation expense before taxes		272,450		202,163
Related income tax benefits		--		--
Share-based compensation expense	$	272,450	$	202,163

Net share-based compensation expense per basic and diluted common share	$	0.03	$	0.02

NOTE 9 - INCOME TAXES

As of September 30, 2008, the Company had net operating loss carry-forwards of approximately $10,750,000 for federal and $8,700,000 for state income tax reporting purposes, which expire at various dates through 2028 and 2018, respectively. The utilization of the net operating loss carry forwards might be limited due to restrictions imposed under federal and state laws upon a change in ownership. The amount of the limitation, if any, has not been determined at this time. No current provision for income taxes is required, except for minimum state taxes, since the Company has incurred taxable losses from inception.

NOTE 10 - SUBSEQUENT EVENTS

On October 3 2008, the Company issued a 10% Convertible Debenture in the amount of $100,000 to a qualified investor pursuant to an unregistered private placement dated March 1, 2008. The Debentures had attached warrants. Principal and unpaid interest will be due three years from the respective dates of issuance.

On October 21, 2008, the Company issued a 10% unsecured promissory note to a director in the amount of $25,000.

Between November 5 and November 10, 2008, the Company raised $50,000 in bridge financing from four of its board members. The promissory notes bear interest at 10% and are due upon the raising of a larger financing or December 15, 2008, whichever occurs earliest.

On November 4, 2008, the Company closed escrow on a refinancing transaction of a $100,000 second mortgage, secured by vacant land that is located in Apple Valley, CA and owned by the Company.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Three Months Ended September 30, 2008 Compared to the Three Months Ended September 30, 2007

Sales

We had no revenues during our three months ended September 30, 2008 and 2007. Our focus was on member development and building upon our online services.

Selling, general and administrative expenses

Selling, general and administrative expenses, which include personnel costs for administration, information systems, and general management, as well as facility expenses, professional fees, legal expenses, and other administrative costs, increased to $934,370 during the three months ended September 30, 2008 from $673,540 for the same period in 2007. This increase of $260,830 is attributed to our increase in staffing, principally in the information technology area as well as an increase in the fair value of incentive warrants and warrants issued to employees and in exchange for services, which we note are non-cash expenses. For the three months ended September 30, 2008, derivative warrant were equal to $272,450 compared to $202,163 for the same period in 2007, representing an expense increase of $70,287 (35%). Disregarding warrant related expenses, there was an increase in selling, general and administrative expenses of $190,543 for the three months ended September 30, 2008 versus the prior year period.

The largest “increase” in selling, general and administrative expense was attributed to payroll expenses, as mentioned above. For the three months September 30, 2008, payroll expenses were $376,478 compared to $284,738 for the same period in the prior year representing an increase of $91,740 (32%). Secondly, rewards cash dollars equaled $34,723 in the current period versus zero for the three months ended September 30, 2007. Our members did not achieve enough activity in the prior year to justify cash rewards. Finally, consulting expenses increased from zero for the three months ended September 30, 2007 to $30,808 for the three months ended September 30, 2008. To a degree this is cosmetic, as we moved one of our employees from full-time status to part time consult status. More significantly, we engaged a professional consulting firm to provide advice and style sheets in connection with our initiatives to migrate our web experience to a Web 2.0 format.

Interest Expense

Interest expense for the three months ended September 30, 2008 and 2007 was $56,491 and $23,953, respectively. This represents an increase of $32,538 (36%), which is consistent with the substantial increase in our debt leverage that we incurred over the past year.

Net Loss

Net losses for the three months ended September 30, 2008 and 2007 were $990,861 and $697,494, respectively. The increase in net losses is due to the significant increases in SG&A and interest as discussed above.

Liquidity and Capital Resources

During the three months ended September 30, 2008, the Company issued an aggregate of $500,000 in unsecured debentures and promissory notes payable to officers, directors, and third parties. In addition, we raised $100,000 through the conversion of convertible debentures to common stock. The proceeds from these financing events were used for working capital purposes and retired $74,644 of notes and loans.

At September 30, 2008, the Company had total assets of $319,848 compared to total assets of $315,467 as of June 30, 2008, which represents an immaterial difference. Cash was $13,825 as of September 30, 2008 and $3,124 as of June 30, 2008, a minor increase of $10,701.

Accounts receivable was $8,351 at June 30, 2008 compared to a balance of zero September 30, 2008. The outstanding receivables at June 30, 2008 were paid-in-full.

Net fixed assets totaled $3,915 at September 30, 2008 and $14,487 at June 30, 2008. The decrease in net fixed assets is attributed to depreciation for the current three month period.

Total liabilities at September 30, 2008 were $3,044,522 compared to $2,429,129 at June 30, 2008, an increase of $615,393 (25%). Accounts payable and accrued expenses were $536,419 at September 30, 2008 and $458,002 as of June 30, 2008, reflecting an increase of $78,417 (17%). There were significant increases in the accruals for vendor items and accrued interest expense.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not generated significant revenues from operations and has no assurance of any future revenues. The Company incurred a net loss of $990,861 during the three months ended September 30, 2008. Also, the Company has a working capital deficit of $1,718,013 and a stockholders’ deficit of $2,724,674 at September 30, 2008. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s working capital requirements will depend upon numerous factors including but not limited to the nature, cost and timing of: product distribution and sales; technological advances and the Company’s ability to establish collaborative arrangements with potential distribution and service relationships to expand Aperture Health’s market reach. The Company’s capital resources will be focused primarily on the marketing of its wellness360 services and development of revenue relationships with sponsors (e.g., large employers), advertisers, clinical researchers and marketers. Currently the Company’s existing capital resources are insufficient to fund operations for the next 12 months. The Company is currently working to raise additional capital to finance operations until the Company achieves breakeven operations.

To date, the Company’s sources of cash have been primarily limited to the sale of promissory notes and convertible debenture securities, issuance of convertible debt, and borrowing. The Company cannot guarantee that revenue from wellness360 activities will increase adequately to sustain operations in the near term, nor can the Company be certain that additional funding will be available on acceptable terms, or at all. Any debt financing, if available, may involve restrictive covenants that could impact the Company’s ability to conduct business. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may have to significantly delay, scale back or discontinue the development and/or commercialization of one or more of the Company’s products and or services.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the small business issuer’s 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

The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported herein. The most significant of these involve the use of estimates. In each situation, management is required to make estimates about the effects of matters or future events that are inherently uncertain.

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and, as such, include amounts based on informed estimates and judgments of management, such as:

●	Determining accruals and contingencies;

●	Valuing options and other equity instruments;

●	Reviewing the realization or disposition of deferred costs;

The Company uses what it believes are reasonable assumptions where applicable, established valuation techniques in making its estimates. Actual results could differ from those estimates.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES

The management of Aperture Health is responsible for establishing and maintaining adequate internal control over financial reporting. Aperture Health’s internal control system was designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Aperture Health management recently assessed the effectiveness of the company’s internal control over financial reporting as of June 30, 2008. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework. Based on our assessment, we believe that, as of September 30, 2008, the company’s internal control over financial reporting is effective based on those criteria.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

Not Applicable

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Refer to Note 6 – Notes Payable and Note 10 – Subsequent Events for a discussion of securities issued during the quarter ended September 30, 2008 and during the period from between the end of the quarter and the filing of this report.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

As mentioned in Note 6 to the financial statements, above, the Company is in technical default in respect of several of its notes, which are issued for the benefit of six of its lenders, all of whom are individuals or entities controlled by related parties. The notes in default equal $635,000. The note holders are current or former related parties or affiliates and none of the note holders have made demands on the Company for repayment.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.

OTHER INFORMATION

None

ITEM 6.

EXHIBITS

31.1

Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)

31.2

Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)

Certification of the Chief Executive Officer and the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350

SIGNATURES

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

	APERTURE HEALTH, INC.
	(Registrant)

November 17, 2008	By:	/s/ Thomas Banks

	Thomas Banks
	Chairman of the Board and
	Chief Executive Officer

November 17, 2008	By:	/s/ Francis X. Pisano

	Francis X. Pisano
	Chief Financial Officer
	Principal Financial and Accounting Officer

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION

31.1		Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)

31.2		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)

32		Certification of the Chief Executive Officer and the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350

Aperture Health, Inc. 10-Q