Background

On March 27, 2008, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Angstrom Microsystems Inc. ("AMI") and Angstrom Acquisition Corp. ("Angstrom Sub"), a private Delaware corporation formed for the purpose of acquiring all of the outstanding shares of AMI thereby merging Angstrom Sub and resulting in "Angstrom Microsystems Inc." being a direct, wholly-owned subsidiary of Angstrom. Under the terms of the Merger Agreement we agreed, among other things, to issue up to 6,927,816 shares of our common stock to the shareholders of AMI on a basis of 1.1 Angstrom shares for each 1 AMI share held.
Effective April 9, 2008, we closed our acquisition of AMI and Angstrom Sub was merged into AMI with AMI being the sole surviving entity under the name "Angstrom Microsystems Inc." and ATC being the sole shareholder of the surviving entity.

Following the completion of the acquisition of AMI, we are now engaged in the business of software development and computer technology. We specialize in Green computing solutions, providing blade servers and workstations uniquely designed for the energy-hungry datacenter sector. Angstrom provides software-based acceleration to significantly reduce the number of machines required to perform a given task. Angstrom combines this technology with novel cooling techniques to further reduce energy consumption in the datacenter. Fewer machines for the same performance coupled with less cooling power required per machine results in a more energy-efficient datacenter.

Over the next twelve months, we plan to continue development of our software and hardware products. In addition, we intend to expand our sales force by direct hiring and/or strategic acquisitions. Angstrom plans to continue building its Green computing brand and market it at tradeshows, publications and through partners. We anticipate that we will have to raise additional funds through private placements of our equity securities and/or debt financing to complete our business plan. There is no assurance that the financing will be completed as planned or at all. We have not been successful raising the funding necessary to proceed with our business plan. Further, we believe that our company may have difficulties raising capital until we locate a prospective business opportunity through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.

Recent Corporate Developments

Since the end of our fiscal year ended December 31, 2007, we have experienced the following significant corporate developments:

1.

On February 19, 2008, we effected a two (2) for one (1) stock split of our authorized and issued and outstanding common stock. As a result, our authorized capital has increased from 75,000,000 shares of common stock with a par value of $0.001 to 150,000,000 shares of common stock with a par value of $0.001.

2.

On February 20, 2008, we entered into a letter of intent with Angstrom Microsystems Inc. ("AMI") and all of the stockholders of AMI, for the purpose of acquiring all of the issued and outstanding shares of AMI. Pursuant to the terms of the Letter of Intent, subject to the entry into a definitive agreement between the parties, stockholders of AMI would receive 1.1 shares of our common stock for each AMI share held. Subsequently on March 27, 2008, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with AMI and Angstrom Acquisition Corp. ("Angstrom Sub"), a private Delaware corporation formed for the purpose of acquiring all of the outstanding shares of AMI thereby merging Angstrom Sub and resulting in "Angstrom Microsystems Inc." being a direct, wholly-owned subsidiary of Angstrom. Under the terms of the Merger Agreement we agreed to issue up to 6,927,816 shares of our common stock to the shareholders of AMI on a basis of 1.1 Angstrom shares to for each 1 AMI share held.

3.

Following completion of all of the closing conditions of the Merger Agreement, on April 9, 2008, Angstrom Sub was merged into AMI with AMI being the sole surviving entity under the name "Angstrom Microsystems Inc." and Angstrom Sub being the sole shareholder of the surviving entity. Upon due delivery of an executed letter of transmittal, accredited investor certificate and old AMI share certificate, AMI stockholders shall receive up to an aggregate of 6,927,816 shares of our common stock representing approximately 30% of the issued and outstanding shares of the Company after issuance of the shares. Also in connection with the closing of the Merger Agreement, the Company issued 734,470 options to employees of AMI pursuant to the 2008 Incentive Stock Option Plan adopted by the Company at closing. Pursuant to the terms of the Merger Agreement, all of the shareholders of AMI which are to receive securities of Angstrom in connection with the merger agree to use their best efforts for a two year period following closing of the transaction (the "Lock-Up Period"), not to directly or indirectly offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any ATC shares acquired or acquirable by them pursuant to the Merger Agreement. ATC agreed following the Lock-Up Period that it will register the ATC shares issued to the ATC shareholders upon request of at least 90% of the shareholders.

4.

Effective April 21, 2008, we changed our name from "Angstrom Technologies Corp." to "Angstrom Microsystems Corp.". The name change has been effected pursuant to a merger with our wholly owned subsidiary Angstrom Microsystems Corp. which was incorporated specifically for the purpose of changing our name. We have changed the name of our company to better reflect the proposed future direction and business of our company. The name change became effective with the Over-the-Counter Bulletin Board on May 2, 2008 under the new stock symbol "AGMS".

5.

Effective May 2, 2008, in accordance with the terms of the Merger Agreement, we appointed Lalit Jain, Nand Todi, and To-Hon Lam as members of our board of directors. Also effective May 2, 2008, we appointed Lalit Jain as our President. Mr. Jain is presently our President, Chief Executive Officer and member of the board of directors. Alpha Pang remains as Chief Financial Officer, Secretary, Treasurer and member of the Board.

6.

During the quarter, we continued developing our next generation solutions based on feedback from our customers. We believe our cooling solutions have several advantages including the use of non-conducting, non-toxic, environmentally friendly liquid in cooling our blade servers. Since the quarter end we have entered into an initial software deal for our accelerated computing solution with a licensing component for each unit sold and a marketing component. We plan to expand our software sales while developing software needed to address the key media markets over the remainder of the fiscal year.

7.

In April, 2008, the Company approved a private placement of up to 3,000,000 units at a price of $1.00 per unit, with each unit consisting of one share and one share purchase warrant entitling the holder to purchase an additional share at a price of $1.20. Effective April 10, 2008 we closed the first tranche of the offering and issued 1,250,000 units to three subscribers at a price of $1.00 per unit. The units were issued to the subscribers pursuant to Regulation S of the Securities Act of 1933 on the basis that each subscriber represented that they were not a "US Person" as such term is defined in Regulation S. Proceeds of the offering were used to repay debt and for working capital purposes.

Plan of Operation

Over the next twelve months, we plan to continue development of our software and hardware products. In addition, we intend to expand our sales force by direct hiring and/or strategic acquisitions. Angstrom plans to continue building its Green Computing brand and market it at tradeshows, publications and through partners.

Cash Requirements


Over the next 12 months we anticipate that we will incur the following operating
expenses:


Expense                      Amount
Office space               $ 140,000
Professional fees          $ 250,000
Travel expenses            $ 80,000
General and administrative $ 100,000
Employee Salaries          $ 800,000
Marketing and Sales        $ 960,000
Research and Development   $ 1,000,000
Consulting Fees            $ 450,000
Total                      $ 3,780,000

Our estimated expenses over the next twelve months are approximately $3,780,000 and our cash position as at March 31, 2008 is $300. We will need additional funds to meet our working capital requirements over the twelve month period ending March 31, 2009. Following the closing of our private placement of 1,250,000 units of our securities on April 10, 2008 we have raised an additional $1,250,000 for our operating expenses. We anticipate that we will have to raise additional funds through private placements of our equity securities and/or debt financing to complete our business plan. There is no assurance that the financing will be completed as planned or at all.

Results of Operation


The following summary of our results of operations should be read in conjunction
with our audited financial statements for the quarter ended March 31, 2008 which
are included herein.  Our operating results for the quarters ended March 31,
2008 and 2007 are summarized as follows:


                                                                                  Percentage
                                   Three Months Ended     Three Months Ended      Increase/
                                     March 31, 2008         March 31, 2007        (Decrease)
Revenue                        $          Nil         $          Nil                 N/A
Expenses
Bank Charges and interest                 321                     63                409.5%
Management fees                          10,500                 1,500                600%
Office and General (recovered)          (4,355)                   -                 (100%)
Professional fees                        35,592                 5,868               506.5%
Regulatory fees                          6,487                  3,053               112.5%
Net Loss                       $        (48,545)      $        (10,484)              363%

Revenues

We have had no operating revenues since our inception on February 24, 2005 through to the period ended March 31, 2008.

Expenses

The increase in our general and administrative expenses for the period ended March 31, 2008 was primarily due to an increase in professional fees associated with the negotiation of and preparation of all documents related to our acquisition of Angstrom Microsystems Inc. during the quarter.

Liquidity and Capital Resources

Working Capital

                      March 31, 2008   December 31, 2007
Current Assets      $     41,122     $      18,456
Current Liabilities      230,634            213,423
Working Capital     $   (189,512)    $     (194,967)


Cash Flows

                                         Three Months ended   Three Months ended
                                           March 31, 2008       March 31, 2007
Cash flow from operating activities    $      (48,644)      $       10,484
Cash flow used in investing activities           -                    -
Cash provided by financing activities          26,149               4,404
Foreign exchange effect on cash                  -                   362
Net increase (decrease) in cash        $      (11,374)      $       11,535

We had cash on hand of $300 and a working capital deficit of $189,512 as of March 31, 2008. We anticipate that we will incur approximately $3,780,000 for operating expenses, including professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next 12 months. Accordingly, we will need to obtain additional financing in order to complete our full business plan.

Cash Used In Operating Activities

Cash used in operating activities was funded by cash from financing activities.

Cash from Financing Activities

Cash generated by financing activities is attributable to the private placement financings of our common stock in December 2007 and advances from shareholders.

Going Concern

We have historically incurred losses and have incurred losses of $365,776 since inception. Because of these historical losses, we will require additional working capital to develop our business operations. We intend to raise additional working capital through private placements, public offerings, bank financing and/or advances from related parties or shareholder loans.

The continuation of our business is dependent upon obtaining further financing and achieving a break even or profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current or future stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (i) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (ii) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Application of Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount 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 period. Actual results could differ from those estimates.

We have identified certain accounting policies, described below, that are most important to the understanding of our financial statements.

Uses of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Financial statement items subject to significant judgment include expense accruals, income taxes and loss contingencies. Actual results could differ from those estimates.

Impairment of Long-lived Assets and Long-lived Assets to be Disposed of

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, our company reviews our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Cash and Cash Equivalents

We consider all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. As at March 31, 2008, we had no cash equivalents.

Foreign Currency Translation

Gains and losses arising upon settlement of foreign currency denominated transactions or balances are included in the determination of income. Our functional currency is the U.S. dollar. Transactions in foreign currency are translated into U.S. dollars in accordance with the SFAS No. 52, Foreign Currency Translation, as follows:

monetary items at the rate prevailing at the balance sheet date;

non-monetary items at the historical exchange rate;

revenue and expenses at the average rate in effect during the applicable accounting period.

Reported in other comprehensive income (loss), a separate component of shareholders' deficiency, are certain foreign currency translation adjustments.

Financial Instruments

The carrying values of the our company's financial instruments, which comprise cash, accounts payable and accrued liabilities and due to shareholder, approximate their fair values due to the immediate or short-term maturity of these instruments. The Company's operations are in Canada which results in exposure to risks from changes in foreign currency rates and the degree of volatility of these rates. We do not use derivative instruments to reduce our exposure to foreign currency risk. Unless otherwise noted, it is management's opinion that our company is not exposed to significant interest or credit risks in respect of its financial instruments.

Revenue Recognition

We recognize revenue in accordance with Securities and Exchange Commission ("SEC") Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB 101"), as modified by SEC Staff Accounting Bulletin No.104. Under SAB 101, revenue is recognized at the point of passage to the customer of title and risk of loss, there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured. We have not generated revenue since inception.

Risks and Uncertainties

Technological change and evolving industry standards

The information technology industry is a fast developing industry and it's characterized by rapidly changing technology, evolving industry standards, emerging competition and frequent introductions of new products and services.
If companies in the IT industry do not keep up with the most up-to-date technologies, they may find it difficult to compete with others who are able to keep abreast of the changes. There is no assurance that the Company will continue to be able to do so in the future. The Company's business will be adversely affected if it is unable to successfully introduce new technology and enhancements and respond to rapid technology changes.

The Directors believe that the Company's ability to compete successfully is also dependent upon the continued compatibility to its technology with products and architectures offered by other companies. The introduction of new products or services by the Company or its competitors and any change in industry standards could cause customers to defer or cancel purchases of existing products and services, which may have a material adverse effect on the Company's business, financial condition and results of operation. In addition, services or technologies developed by others could render the Company's services or technologies uncompetitive or obsolete. While attention is paid to perceive changed in major trends in the market, the Company is still vulnerable to significant loss die to misinterpretation of market conditions.

Credit line risks

The Company requires credit line to compete deployments that are typically capital intensive. The company may not be able to obtain these credit lines from banks or other financial resources. The Company may not be able to accept orders in such cases, and thus can significantly and negatively affect the sales revenues or margins of the Company.

Implementation of Business Plan may not be successful

The Directors expect that there will be a period of rapid growth in the future as a result of the implementation of the Business Plan. This could place significant strain on the Company's managerial, operational and financial resources. To accommodate this growth, the Company must implement new or upgrade its existing operating and financial systems, procedures and controls.
Failure of the Company to manage its expansion or to obtain adequate financing in a timely manner may result in increased expenses or affect the implementation of the Business Plan and in turn slow down the pace of growth and affect the financial position and profitability of the Company.

Reliance on key management

The Company's success is, to a substantial extent, attributable to the strategy and vision of its founder and the efforts of certain key members of its management team, in particular, Lalit Jain, CEO and President of Angstrom. The details of the management team are set out in the section headed "Management Team" of this prospectus. In view of his knowledge and experience of the business of the Company, his continued involvement is important to the future prospects of the Company. Should he cease to be involved in the Company's business operations, the profitability of the Company may be adversely affected.

Risk of infringement of intellectual property by third parties

Mr. Jain has filed U.S. provisional patent applications that he intends to license to the Company. At this point, the Company cannot guarantee whether these provisional patent applications will result in the issuance of a patent or patents.

The Company's success partially depends on its ability to protect its proprietary technologies and processes. The Company relies upon patents, copyrights, and trade secrets, laws and will also rely upon confidentiality and non-disclosure agreements and other measures to establish and protect its proprietary rights to its technologies, products and services. Such protection may not be able to preclude competitors from infringing the Company's intellectual property rights in its technologies, products and services.
Despite such precaution, it may be possible for a third party to copy or otherwise obtain and use such contents and technologies without the Company's authorization, or to develop such technology independently. There can also be no assurance that other companies will not obtain patents similar to or challenge the patents obtained by the Company. In addition, policing unauthorized use of the Company's proprietary contents and technology is difficult and there can be no assurance that the steps taken by the Company will prevent misappropriation or infringement of its rights. In addition, legal proceedings may be necessary in the future to enforce the Company's intellectual property rights, to protect its trade secrets and confidential information or to determine the validity and scope of the proprietary rights of others. This could result in substantial costs and diversion of the Company's resources and could have a material adverse effect on its business, financial condition and results of operations. If a significant portion of the Company's intellectual property is copies, reproduced or used without the Company's authorization, the Company's business may be adversely affected.

In developing the Company's technologies, products and services, the Company has used various technologies or know-how which it believes are in the public domain, license to the Company or its otherwise has the right to use. There can be no assurance, however, that third parties will not institute patent or other intellectual property infringement claims against the Company with respect to such technologies, products and services.

The Directors are not aware of any alleged claims of infringement of patents, copyrights or other intellectual property rights held by third parties in respect of the products manufactured by the Company. Thus, the Directors are not able to ascertain to the intellectual property of others. Intellectual property litigation is expensive and time consuming, and successful infringement claims against the Company may result in substantial monetary liability or disruption to the business of the Company.

Demand for technical and marketing personnel

The success of the Company's operations lies in its ability to attract and retain employees with the appropriate technical expertise or business experience. A shortage of key staff may reduce the Company's ability to expand.

Size of competitors

The Company's competitors are large and more well established - such as IBM, HP and Dell. Marketing of such competitors or introduction of similar products, regardless of Company's proven superiority in products, can result in a reduction of sales of Company's products. This may result in an adverse effect to the Company's business.

We have a limited operating history and limited historical financial information upon which you may evaluate our performance.

We are in our early stages of development and face risks associated with a new company in a growth industry. We may not successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business to the point of having to cease operations and could impair the value of our common stock to the point investors may lose their entire investment. Even if we accomplish these objectives, we may not generate positive cash flows or the profits we anticipate in the future.

We will need substantial additional financing in the future to continue operations.

Our ability to continue present operations will be dependent upon our ability to obtain significant external funding. Additional sources of funding have not been established. We are exploring various financing alternatives. There can be no assurance that we will be successful in securing such financing at acceptable terms, if at all. If adequate funds are not available from the foregoing sources, or if we determine it to otherwise be in our best interests, we may consider additional strategic financing options, including sales of assets.

We will rely on third-party suppliers and manufacturers to provide raw materials for and to produce our products, and we will have limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity.

Substantially all of our products will be manufactured by unaffiliated manufacturers. We may not have any long-term contracts with our suppliers or manufacturing sources, and we expect to compete with other companies for raw materials, production and import quota capacity.

There can be no assurance that there will not be a significant disruption in the supply of raw materials from our intended sources or, in the event of a disruption, that we would be able to locate alternative suppliers of materials of comparable quality at an acceptable price, or at all. In addition, we cannot be certain that our unaffiliated manufacturers will be able to fill our orders in a timely manner. If we experience significant increased demand, or need to replace an existing manufacturer, there can be no assurance that additional supplies of raw materials or additional manufacturing capacity will be available when required on terms that are acceptable to us, or at all, or that any supplier or manufacturer would allocate sufficient capacity to us in order to meet our requirements. In addition, even if we are able to expand existing or . . .