ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP

On June 16, 2008, Shearson Financial Network, Inc. (the "Company") filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court located in Law Vegas, Nevada (the " Bankruptcy Court"). The Company's case is No. 08-16350. The Company is continuing to manage its affairs as debtor in possession. The Company elected to seek bankruptcy protection to protect and preserve their assets for the benefit of creditors and stockholders and is currently evaluating the alternatives to maximize the value of its assets.

ITEM 2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT.

The filing of the Bankruptcy Court described in Item 1.03 above constituted an event of default or otherwise triggered repayment obligations under agreements between the Company and AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium Capital Partners, II, LLC according to the callable secured convertible notes issued to such investors as well as certain of the Company's other financial obligations. As a result of the event of default, all debt outstanding under the callable secured notes became automatically and immediately due and payable, subject to the application of applicable bankruptcy law.