U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

OR

[ ] 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: 0-30448

                              5G WIRELESS COMMUNICATIONS, INC.
                  (Exact Name of Registrant as Specified in Its Charter)

                  Nevada                                  20-0420885
(State or Other Jurisdiction of Incorporation          (I.R.S. Employer
             or Organization)                          Identification No.)

    4136 Del Rey Avenue, Marina Del Rey, California         90292
     (Address of Principal Executive Offices)            (Zip Code)

              Registrant's telephone number:  (310) 448-8022

     Securities registered pursuant to Section 12(b) of the Act: None

     Securities registered pursuant to Section 12(g) of the Act: Common
                           Stock, $0.001 Par Value

     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
shorter period that the Registrant was required to file such reports),
and (2) been subject to such filing requirements for the past 90 days.
Yes    X       No         .

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment to this Form 10-KSB [   ].

     The Registrant's revenues for the fiscal year ended December 31,
2004 were $651,450.  As of March 14, 2005, the Registrant had
871,037,368 shares of common stock issued and outstanding.  The
aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 14, 2005: $5,553,400.

     Transitional Small Business Disclosure Format (check one): Yes  No  X   .

                                    TABLE OF CONTENTS

PART I.                                                                   PAGE

ITEM 1.   DESCRIPTION OF BUSINESS                                            3

ITEM 2.   DESCRIPTION OF PROPERTY                                           16

ITEM 3.   LEGAL PROCEEDINGS                                                 16

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               17

PART II.

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS          17

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS                     18

ITEM 7.   FINANCIAL STATEMENTS                                              31

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
          ON ACCOUNTING AND FINANCIAL DISCLOSURE                            32

ITEM 8A.  CONTROLS AND PROCEDURES                                           33

ITEM 8B.  OTHER INFORMATION                                                 34

PART III.

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
          AND CONTROL PERSONS; COMPLIANCE WITH
          SECTION 16(A) OF THE EXCHANGE ACT                                 35

ITEM 10. EXECUTIVE COMPENSATION                                             39

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
         OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS             41

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                     45

ITEM 13. EXHIBITS                                                           47

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES                            47

SIGNATURES                                                                  49

PART I.

ITEM 1.  DESCRIPTION OF BUSINESS.

Business Development.

     5G Wireless Communications, Inc. ("Company") was incorporated as
Tesmark, Inc. in September 1979.  In November 1998, we changed our
state of incorporation from Idaho to Nevada and in January 2001
changed our name to 5G Wireless Communications, Inc.  In March 2001,
we acquired 5G Partners, a Canadian partnership, and changed our
business to provide wireless technology systems through high speed
Internet access and data transport systems.  In April 2002, we
acquired Wireless Think Tank, Inc., a developer of high-speed long
distance wireless technologies.  In July 2003, we shifted our strategy
from that of a service provider to an equipment manufacturer, or OEM.

     In November 2004, the Company elected, by the filing of a Form N-
54A, to be regulated as a business development company ("BDC") under
the Investment Company Act of 1940 ("1940 Act").  On December 31,
2004, we moved certain assets and certain liabilities of the Company
into 5G Wireless Solutions, Inc. ("Portfolio Company") in exchange for
100% of the outstanding shares of the Portfolio Company's common
stock.  The Portfolio Company will continue to focus on broadband
wireless networking solutions for educational campus and citywide
campuses environments.  In addition to manufacturing the existing
product line, the Portfolio Company will focus on developing new
solutions that create larger and more efficient wireless networks.

Business of the Company.

     The Company intends to invest in companies that focus on
providing strategic information and communications technologies or
applications.  We will seek to leverage the combined talents of our
experienced management team to invest in those technologies and to
enhance shareholder value.

     A business development company is defined and regulated by the
1940 Act. A business development company must be organized in the
United States for the purpose of investing in or lending primarily to
private companies and making managerial assistance available to them.
A business development company may use capital provided by public
shareholders and from other sources to invest in long-term, private
investments in businesses. A business development company provides
shareholders the ability to retain the liquidity of a publicly traded
stock, while sharing in the possible benefits, if any, of investing
primarily in privately owned companies.

     As a business development company, the Company may not acquire
any asset other than "qualifying  assets", unless, at the time we make
the acquisition, the value of our qualifying assets represents at
least 70% of the value of our total assets.

     The principal categories of qualifying assets relevant to our
business are:

     - Securities purchased in transactions not involving any public
       offering, the issuer of which is an eligible portfolio company;

     - Securities received in exchange for or distributed with respect
       to securities described in the bullet above or pursuant to the
       exercise of options, warrants or rights relating to such
securities; and

     - Cash, cash items, government securities or high quality debt
       securities (within the meaning of the 1940 Act), maturing in one
       year or less from the time of investment.

     An eligible portfolio company is generally a domestic company
that is not an investment company (other than a small business
investment company wholly owned by a business development company);
and

     - Does not have a class of securities registered on an exchange or
       a class of securities with respect to which a broker may extend
       margin credit; or

     - Is actively controlled by the business development company and
       has an affiliate of a business development company on its board
       of directors.

     To include certain securities described above as qualifying
assets for the purpose of the 70% test, a business development company
must make available to the issuer of those securities significant
managerial assistance such as providing significant guidance and
counsel concerning the management, operations, or business objectives
and policies of a portfolio company or making loans to a portfolio
company.  We offer to provide managerial assistance to each of our
portfolio companies.

     As a business development company, the Company is entitled to
issue senior securities in the form of stock or senior securities
representing indebtedness, including debt securities and preferred
stock, as long as each class of senior security has asset coverage of
at least 200% immediately after each such issuance.  See "Risk Factors."

     The Company may be prohibited under the 1940 Act from knowingly
participating in certain transactions with our affiliates without the
prior approval of our board of directors who are not interested
persons and, in some cases, prior approval by the Securities and
Exchange Commission ("SEC").

     As a business development company, our primary goal is to
increase our net assets by investing in private development stage or
start-up companies that possess or will likely identify emerging and
established technologies and markets for those technologies. These
private businesses are thinly capitalized, unproven, small companies
that lack management depth, are dependent on new, commercially
unproven technologies and have no history of operations. It is the
goal of the Company to assemble a diverse portfolio of companies with
strategic information and communications technologies or applications,
which will leverage the combined talents of our experienced management
team to incubate these companies and seek to enhance shareholder
value.  As a result, the Company will focus on making equity and not
debt investments.

     The Company will likely be periodically examined by the SEC for
compliance with the 1940 Act. As with other companies regulated by the
1940 Act, a business development company must adhere to certain
substantive regulatory requirements.  A majority of our directors must
be persons who are not interested persons, as that term is defined in
the 1940 Act.  Additionally, we are required to provide and maintain a
bond issued by a reputable fidelity insurance company to protect us
against larceny and embezzlement.  Furthermore, as a business
development company, we are prohibited from protecting any director or
officer against any liability to the Company or our shareholders
arising from willful malfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
person's office.

     The Company must maintain a code of ethics that establishes
procedures for personal investment and restricts certain transactions
by our personnel.  Our code of ethics generally does not permit
investment by our employees in securities that may be purchased or
held by us.  As a business development company under the 1940 Act, we
are entitled to provide loans to our employees in connection with the
exercise of options. However, as a result of provisions of the
Sarbanes-Oxley Act of 2002, we are prohibited from making new loans
to, or materially modifying existing loans with, our executive
officers in the future.

     We may not change the nature of our business so as to cease to
be, or withdraw our election as, a business development company unless
authorized by vote of a "majority of the outstanding voting
securities," as defined in the 1940 Act, of our shares. A majority of
the outstanding voting securities of a company is defined under the
1940 Act as the lesser of: (i) 67% or more of such company's shares
present at a meeting if more than 50% of the outstanding shares of
such company are present and represented by proxy or (ii) more than
50% of the outstanding shares of such company. Since we made our
business development company election, we have not made any
substantial change in the nature of our business.

     We fund new investments using cash, through the issuance of our
common equity, the reinvestment of previously accrued interest and
dividends in debt or equity securities, or the current reinvestment of
interest and dividend income through the receipt of a debt or equity
security (payment-in-kind income). From time to time, we may also opt
to reinvest accrued interest receivable in a new debt or equity.

(a)  Valuation Methodology.

     We will determine the value of each investment in our portfolio
on a quarterly basis, and changes in value result in unrealized gains
or losses being recognized. At December 31, 2004, approximately 32% of
our total assets represented an investment, 5G Wireless Solutions,
Inc., our sole portfolio Company at such date, at fair value.  Fair
value is defined in Section 2(a)(41) of the 1940 Act as (i) the market
price for those securities for which a market quotation is readily
available and (ii) for all other securities and assets, fair value is
as determined in good faith by the board of directors. Since there is
typically no readily ascertainable market value for the investments in
our portfolio, we value substantially all of our portfolio investments
at fair value as determined in good faith by the board of directors
pursuant to a valuation policy and a consistently applied valuation
process.  Because of the inherent uncertainty of determining the fair
value of investments that do not have a readily ascertainable market
value, the fair value of our investments determined in good faith by
the board of directors may differ significantly from the values that
would have been used had a ready market existed for the investments,
and the differences could be material.

     There is no single standard for determining fair value in good
faith. As a result, determining fair value requires that judgment be
applied to the specific facts and circumstances of each portfolio
investment while employing a consistently applied valuation process
for the types of investments we make.

     Our investment in the Portfolio Company is carried at historical
carrying amounts (which approximates fair value) as this investment
represents a continuation of the Company's former business prior to
its election as a BDC, and is under common control at date of transfer.

     Unlike banks, we are not permitted to provide a general reserve
for anticipated loan losses. Instead, we are required to specifically
value each individual investment on a quarterly basis. We will record
unrealized depreciation on investments when we believe that an
investment has become impaired.  Conversely, we will record unrealized
appreciation if we believe that the underlying portfolio company has
appreciated in value and, therefore, our equity security has also
appreciated in value.

     As a business development company, we invest in liquid and
illiquid securities, including debt and equity securities primarily of
private companies.  Our investments are generally subject to
restrictions on resale and generally have no established trading
market. Because of the type of investments that we make and the nature
of our business, our valuation process requires an analysis of various
factors. Our fair value methodology includes the examination of, among
other things, the underlying investment performance, financial
condition, and market changing events that impact valuation.

(b)  Risk Factors.

     Investing in the Company involves a number of significant risks
relating to our business and investment objective. As a result, there
can be no assurance that we will achieve our investment objective. In
addition to the risk factors described below, other factors that could
cause actual results to differ materially include:

     - The ongoing global economic uncertainty, coupled with war or the
       threat of war;

     - Risks associated with possible disruption in our operations due
       to terrorism;

     - Future regulatory actions and conditions in our operating areas;
       and

     - Other risks and uncertainties as may be detailed from time to
       time in our public announcements and SEC filings.

     (1)  Investing in Private Companies Involves a High Degree of Risk.

     The Company's portfolio will consist of primarily long-term loans
to and investments in private companies.  Investments in private
businesses involve a high degree of business and financial risk, which
can result in substantial losses and accordingly should be considered
speculative. There is generally no publicly available information
about the companies in which we invest, and we rely significantly on
the diligence of our employees and agents to obtain information in
connection with our investment decisions. In addition, some smaller
businesses have narrower product lines and market shares than their
competition, and may be more vulnerable to customer preferences,
market conditions or economic downturns, which may adversely affect
the return on, or the recovery of, our investment in such businesses.

     (2)  Our Portfolio of Investments Will Be Illiquid.

     The Company intends to acquire its investments directly from the
issuer in privately negotiated transactions.  The majority of the
investments in our portfolio will typically be subject to restrictions
on resale or otherwise have no established trading market.  We intend
to exit our investments when the portfolio company has a liquidity
event such as a sale, recapitalization, or initial public offering of
the company.  The illiquidity of our investments may adversely affect
our ability to dispose of debt and equity securities at times when it
may be otherwise advantageous for us to liquidate such investments.
In addition, if we were forced to immediately liquidate some or all of
the investments in the portfolio, the proceeds of such liquidation
would be significantly less than the current value of such investments.

     Pursuant to the requirements of the 1940 Act, we will value
substantially all of our investments at fair value as determined in
good faith by our board of directors on a quarterly basis.  Since
there is typically no readily ascertainable market value for the
investments in our portfolio, our board of directors has to determine
in good faith the fair value of these investments pursuant to a
valuation policy and a consistently applied valuation process.  Such
policies and procedures shall fall in the exclusive purview of the
Audit Committee of the board of directors.

     There is no single standard for determining fair value in good
faith. As a result, determining fair value requires that judgment be
applied to the specific facts and circumstances of each portfolio
investment while employing a consistently applied valuation process
for the types of investments we make. Unlike banks, we are not
permitted to provide a general reserve for anticipated loan losses; we
are instead required by the 1940 Act to specifically value each
individual investment on a quarterly basis, and record unrealized
depreciation for an investment that we believe has become impaired,
including where collection of a loan or realization of an equity
security is doubtful, or when the enterprise value of the company does
not currently support the cost of our debt or equity investment.
Conversely, we will record unrealized appreciation if we believe that
the underlying portfolio company has appreciated in value and,
therefore, our equity security has also appreciated in value. Without
a readily ascertainable market value and because of the inherent
uncertainty of valuation, the fair value of our investments determined
in good faith by the board of directors may differ significantly from
the values that would have been used had a ready market existed for
the investments, and the differences could be material.

     We will adjust quarterly the valuation of our portfolio to
reflect the board of directors' determination of the fair value of
each investment in our portfolio.

     (3)  Our Quarterly and Annual Operating Results Fluctuate
Significantly.

     The Company's quarterly and annual operating results could
fluctuate significantly due to a number of factors.  These factors
include the small number and range of values of the transactions that
are completed each quarter, fluctuations in the values of our
investments, the timing of the recognition of unrealized gains and
losses, the degree to which we encounter competition in our markets,
the volatility of the stock market and its impact on our unrealized
gains and losses, as well as other general economic conditions. As a
result of these factors, quarterly and annual results are not
necessarily indicative of our performance in future quarters and years.

     (4)  Our Investment Model is Highly Speculative in Nature and Our
History of Using the Model is Limited.

     The Company's investment model is highly speculative since it
includes making investments in new development stage companies and
having those companies invest in new, untested technology.
Furthermore, we have only been using our investment model for a
relatively short period of time and have little or no historical
information upon which to judge whether or not the model is
successful. We cannot assure you that our investment model will be
successful or that any of our investments will be successful.

     Our financial results are largely dependent upon the performance
of 5G Wireless Solutions, Inc., which represents 32% of all the assets
of the Company at December 31, 2004.

     The Portfolio Company is dependent upon the successful
commercialization of new technologies.  Each of our investments in
portfolio companies will be subject to a high degree of risk and we
may lose all of our investment in a portfolio company if it is not
successful.  We may also invest in development stage companies that
our management believes can benefit from our knowledge of technology
transfer.  Development stage companies are subject to all of the risks
associated with new businesses.  In addition, our portfolio companies
are also subject to the risks associated with research and development
of new technologies.  These risks include the risk that new
technologies cannot be identified, developed or commercialized, may
not work, or become obsolete. Our portfolio companies must
successfully acquire, license or in some cases further develop new
technologies. We cannot assure you that any of our investments in our
portfolio companies will be successful. Our portfolio companies will
be competing with larger, established companies, with greater access
to, and resources for, further development of these new technologies.
We may lose our entire investment in any or all of our portfolio companies.

     (5)  We May Need to Make Additional Cash Investments in our Portfolio
Companies.

     The Company may have to make additional cash investments in our
portfolio companies to protect our overall investment value in the
particular company. We retain the discretion to make any additional
investments as our management determines. The failure to make such
additional investments may jeopardize the continued viability of a
portfolio company, and our initial (and subsequent) investments.
Moreover, additional investments may limit the number of companies in
which we can make initial investments.  We have no established
criteria in determining whether to make an additional investment
except that our management will exercise its business judgment and
apply criteria similar to those used when making the initial
investment.  We cannot assure you that we will have sufficient funds
to make any necessary additional investments, which could adversely
affect our success and result in the loss of a substantial portion or
all of our investment in a portfolio company.

     (6)  The Securities We Hold in Our Portfolio Companies are
Subject to Restriction on Resale.

     Our portfolio companies will be private entities and we will
acquire their securities in  private transactions.  As a result, all
of the securities we will hold in our portfolio companies are subject
to legal restrictions on resale.  Furthermore, our ability to sell the
securities in our portfolio may be limited by, and subject to, the
lack of or limited nature of a trading market for such securities.
Therefore, we cannot assure you that we will be able to sell our
portfolio company securities for amounts equal to the values that we
have ascribed to them or at the time we desire to sell.

     (7)  We Are Dependent Upon the Efforts of Our Portfolio Companies
to Successfully Commercialize Their Products and Services.

     Our portfolio companies may face intense competition, including
competition from companies with greater financial resources, more
extensive research and development, manufacturing, marketing and
service capabilities and a greater number of qualified and experienced
managerial and technical personnel.  They may need additional
financing which they are unable to secure and we are unable or
unwilling to provide or they may be subject to adverse developments
unrelated to the technologies they acquire.

     They may lose the rights granted to them for a technology or a
licensing agreement. We cannot assure you that our portfolio company
will be successful or that we will be able to sell the securities we
receive at a profit or for sufficient amounts to even recover our
initial investment in the portfolio company or that our portfolio
company will not take actions that could be detrimental to us.

     (8)  Investments in Our Portfolio Companies Will be Concentrated
in the Information and Communications Technologies and Applications
Industry.

     The Company's investments in its portfolio companies will be
concentrated in the information and communications technologies and
applications industry.  This concentration will mean that our
investments will be particularly dependent on the development and
performance of this industry. Accordingly, our investments may not
benefit from any advantages, which might be obtained with greater
diversification of the industries in which our portfolio companies
operate. If this industry should decline or fail to develop as
expected, our investments in our portfolio companies in this industry
will be subject to loss.

     (9)  We have a Limited Amount of Funds Available for Investment
in Potential Portfolio Companies.

     Based on the amount of our existing available funds, it is
unlikely that the Company will be able to commit our funds to
investments in, and the acquisition of, securities of a large number
of companies.  Prospective investors should understand that our
current investments are not, and in the future may not be,
substantially diversified.  We will not be able to achieve the same
level of diversification as larger entities engaged in similar venture
capital activities.  Therefore, our assets may be subject to greater
risk of loss than if they were more widely diversified, because the
failure of one or more of our limited number of investments would have
a material adverse effect on our financial condition and the price of
our common stock.

     (10)  We are subject to government regulations because of our
status as a business development company.

     The Company has elected to be treated as a BDC under the 1940
Act. The 1940 Act imposes numerous restrictions on our activities,
including restrictions on the nature of our investments and
transactions with affiliates.  Any change in the law or regulations
that govern our business could have a material impact on us or our
operations. Laws and regulations may be changed from time to time, and
the interpretations of the relevant laws and regulations also are
subject to change.

     (11)  Two of Our Current Stockholders Have Significant Influence
Over Our Management and Affairs.

     Jerry Dix, our chief executive officer and chairman, and Don
Boudewyn, our executive vice president and secretary/treasurer,
beneficially own approximately 8.92% of our common stock and all the
restricted 3,000,000 convertible series "A" preferred shares which
translates to 75.8% of the common shares, on a fully diluted basis,
for the purpose of voting rights as of December 31, 2004. Therefore,
they may be able to exert influence over our management and policies
and may acquire additional equity in the future.  The concentration of
ownership may also have the effect of delaying, preventing or
deterring a change of control of our company, could deprive our
shareholders of an opportunity to receive a premium for their common
stock as part of the sale of our company and might ultimately affect
the market price of our common stock.

     (12)  Our Common Stock Price May Be Volatile.

     The trading price of our common stock may fluctuate
substantially. The price of the common stock may be higher or lower
than the price you pay for your shares, depending on many factors,
some of which are beyond our control and may not be directly related
to our operating performance.  These factors include the following:

     - Price and volume fluctuations in the overall stock market from
       time to time;

     - Significant volatility in the market price and trading volume of
       securities of business development companies or other financial
       services companies;

     - Changes in regulatory policies with respect to business
       development companies;

     - Actual or anticipated changes in our earnings or fluctuations in
       our operating results;

     - General economic conditions and trends;

     - Loss of a major funding source; or

     - Departures of key personnel.

     Due to the continued potential volatility of our stock price, we
may be the target of securities litigation in the future.  Securities
litigation could result in substantial costs and divert management's
attention and resources from our business.

     (13)  No Assurance of Public Trading Market and Risk of Low Priced
Securities May Affect Market Value of Our Stock.

     The SEC has adopted a number of rules to regulate "penny stocks."
Such rules include Rule 3a51-1 and Rules 15g-1 through 15g-9 under the
Securities Exchange Act of 1934, as amended.  Because the securities
of the Company may constitute "penny stocks" within the meaning of the
rules (as any equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per
share, largely traded in the Over the Counter Bulletin Board or the
Pink Sheets), the rules would apply to the Company and to its securities.

       The SEC has adopted Rule 15g-9 which established sales practice
requirements for certain low price securities.  Unless the transaction
is exempt, it shall be unlawful for a broker or dealer to sell a penny
stock to, or to effect the purchase of a penny stock by, any person
unless prior to the transaction: (i) the broker or dealer has approved
the person's account for transactions in penny stock pursuant to this
rule and (ii) the broker or dealer has received from the person a
written agreement to the transaction setting forth the identity and
quantity of the penny stock to be purchased.  In order to approve a
person's account for transactions in penny stock, the broker or dealer
must: (a) obtain from the person information concerning the person's
financial situation, investment experience, and investment objectives;
(b) reasonably determine that transactions in penny stock are suitable
for that person, and that the person has sufficient knowledge and
experience in financial matters that the person reasonably may be
expected to be capable of evaluating the risks of transactions in
penny stock; (c) deliver to the person a written statement setting
forth the basis on which the broker or dealer made the determination
(i) stating in a highlighted format that it is unlawful for the broker
or dealer to affect a transaction in penny stock unless the broker or
dealer has received, prior to the transaction, a written agreement to the
transaction from the person; and (ii) stating in a highlighted format
immediately preceding the customer signature line that (iii) the
broker or dealer is required to provide the person with the written
statement; and (iv) the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect
the person's financial situation, investment experience, and
investment objectives; and (d) receive from the person a manually
signed and dated copy of the written statement.  It is also required
that disclosure be made as to the risks of investing in penny stock
and the commissions payable to the broker-dealer, as well as current
price quotations and the remedies and rights available in cases of
fraud in penny stock transactions.  Statements, on a monthly basis,
must be sent to the investor listing recent prices for the penny stock
and information on the limited market.

     There has been only a limited public market for the common stock
of the Company.  Our common stock is currently traded on the Over the
Counter Bulletin Board.  As a result, an investor may find it
difficult to dispose of, or to obtain accurate quotations as to the
market value of our securities.  The regulations governing penny
stocks, as set forth above, sometimes limit the ability of broker-
dealers to sell the Company's common stock and thus, ultimately, the
ability of the investors to sell their securities in the secondary market.

     Potential shareholders of the Company should also be aware that,
according to SEC Release No. 34-29093, the market for penny stocks has
suffered in recent years from patterns of fraud and abuse.  Such
patterns include (i) control of the market for the security by one or
a few broker-dealers that are often related to the promoter or issuer;
(ii) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling broker-
dealers; and (v) the wholesale dumping of the same securities by
promoters and broker dealers after prices have been manipulated to a
desired level, along with the resulting inevitable collapse of those
prices and with consequent investor losses.

Description of Portfolio Company.

(a)  Products.

     5G Wireless Solutions, Inc. ("Portfolio Company") markets and
sells both outdoor and indoor wireless radio systems including Wi-Fi
that, because of their distance and user capacity, can be used in both
wireless LAN and WAN applications.  The outdoor products can be
configured in point-to-point or point-to-multipoint networks that can
reach distances of eight miles or more in fixed wireless
configurations or up to one mile in roaming scenarios using laptops
with off-the-shelf Wi-Fi cards.  We believe that the antenna design
and wireless access points allows the systems to more effectively
penetrate buildings and trees than competitors while improving overall
performance for end users. The indoor product shares many of the same
characteristics as outdoor products, including user capacity and
penetration of objects, but is designed to maximize local coverage at
lower costs, for indoor distances up to 2,500 feet.

     Both the outdoor and indoor products provide strong security at
both the hardware and software levels, can transmit voice, data, and
video at multi-megabit speeds, and can work together seamlessly in
wireless networks with each other or with other common wireless
network equipment.  We believe that these products enable customers to
combine wireless networks with fewer components that cost less,
perform better and provide a faster return on invested capital.

(b)  Target Market.

     Demand for broadband connectivity continues to expand rapidly.
However a growing portion of end-users have found that existing wire-
line and wireless broadband access solutions are unable to meet their
needs.  We believe this is due in part to installation delays, higher
infrastructure costs, and lack of maintenance and support for end
users. Using its proprietary wireless solutions, the Portfolio
Company's customers can be up and running very quickly at a fraction
of the cost.  The Portfolio Company intends to target the following markets:

Market                         Solution

Universities and               The solution can replace VPN lines
Corporate Campuses             with direct and secure wireless
                               connections, which can provide
                               always-on roaming capabilities
                               around the campus, with Internet
                               access-control managed at the
                               classroom or office level.  In
                               addition, with our access points
                               the wireless connection can cover
                               multiple campuses in the same city
                               and allow individual end-users to
                               stay connected while off campus.

Municipalities                 The solution can provide a network
                               covering over six mile point-to-
                               point shots that meet the security
                               requirements critical for the
                               passage of government and police
                               documents between departments,
                               stations and substations.

Government & Military          The solutions create a private
                               network designed to be able to
                               handle highly sensitive data
                               including surveillance camera, full
                               motion video, remote censoring, etc.

Wireless ISP                   The solution delivers one of the
                               fastest returns on investment for
                               the ISP's. The solution virtually
                               eliminates the need for multiple
                               towers and connectivity by covering
                               areas as large as 10 sq. miles
                               which can support a large number of
                               concurrent users per access point,
                               while servicing clients with
                               greater throughputs and quality of
                               service than traditional wireless solutions.

(c)  Distribution Channel Strategy.

     Currently, the Portfolio Company services clients through a two-
tier distribution model. In addition to having an OEM element, the
majority of the current sales have been through direct sales, which
are mostly from domestic sources.  We anticipate that the Portfolio
Company will grow its sales through its value added resellers and
distribution channels.

     Select international accounts will lead the way to greater
expansion overseas as it progresses.  Additionally, we expect that the
Portfolio Company will have a number of VAR relationships that will
continue to grow as more value added resellers learn about its
technology.

(d)  Sales.

     Most of its products are sold domestically through direct sales
and the value added reseller channels. In addition, the Portfolio
Company has a few international resellers that it believes will lead
to greater expansion of its international business.

     For fiscal 2004, campus environment, such as universities and
municipalities, represented 33.3% of its business while 64.1% was
through value added resellers and ISPs with the balance coming from
miscellaneous sales.

     During 2004, revenues of the portfolio company increased quarter
over quarter.  This is mainly due to marketing and sales efforts that
have focused on its core areas of strength and the building of the "5G
Wireless Solutions" brand.  In an effort to improve sales, the
Portfolio Company is looking to add independent sales representatives
and/or agencies that are compensated on a commission basis.

(e)  Competition.

     There is intense competition in the wireless industry.
Competition is based on design and quality of the products, product
performance, price and service, with the relative importance of each
factor varying among products and markets.

     Competitors include Cisco, Alvarion, Proxim, Motorola, Trango and
Vivato. The wireless products and services offered by these
competitors include products in the 900Mhz, 2.4 Ghz and 5.8 Ghz
frequencies. Many of these companies have much greater financial and
other resources available to help them withstand adverse economic or
market conditions. These factors, in addition to other influences such
as increased price competition and market and economic conditions
could potentially impair the Portfolio Company's ability to compete.

(f)  Patents and Trademarks.

     The Portfolio Company has applied for two patents, both of which
include software, hardware and antenna design and expect to apply for
additional patents to the extent its product line is expanded. Hotzone
and G-Force are trademarks of 5G Wireless Solutions.  Other trademarks
referenced herein are the property of their respective owners.

(g)  Government Regulation.

     Currently, the technology can be deployed in the highly regulated
license free frequency bands. As such, the products are not subject to
any wireless or transmission licensing in the United States, and many
other jurisdictions worldwide.  The products do, however, have to be
approved by the Federal Communications Commission, for use in the
United States as part of FCC Rule 15.247.  For use in Canada, and
other jurisdictions certain regulatory requirements may be necessary
to ensure they meet the rigorous requirements for use of these bands.

     Continued license-free operation will be dependent upon the
continuation of existing government policy and, while we are not aware
of any policy changes planned or expected, this cannot be assured.
License-free operation of the Portfolio Company's products in the 2.4
GHz band are subordinate to certain licensed and unlicensed uses of
the bands and the Portfolio Company's products must not cause harmful
interference to other equipment operating in the bands and must accept
interference from any of them.  If the Portfolio Company should be
unable to eliminate any such harmful interference, or should its
products be unable to accept interference caused by others, the
Portfolio Company or its customers could be required to cease
operations in the bands in the locations affected by the harmful
interference. Additionally, in the event the 2.4 GHz bands become
unacceptably crowded, and no additional frequencies are allocated, our
business could be adversely affected.

(h)  Employees.

     As of December 31, 2004, the Portfolio Company has 13 employees
and 6 consultants working for the Portfolio Company, all of whom are
full-time. To facilitate anticipated growth, the Portfolio Company
intends to hire additional sales representatives, engineers and radio
frequency technicians to service and maintain network support, as well
as improve manufacturing capabilities at the Portfolio Company.  There
will also be a need to increase sales and support staff to ensure
continued growth and maintenance of the Portfolio Company's quality of
service.  These numbers may vary depending on the size and scope of
the client's projects. The focusing will be on several new areas of
expansion, including the development of a market strategy that focuses
on specific vertical markets.

(i)  Research and Development.

     The Portfolio Company has defined a robust roadmap for the
development of additional products intended to enhance network
performance, decrease product costs, improve manufacturing, analyze
outsource options, and expand the range of customer applications.
This includes refined and completely new access point and client
premise equipment (CPE) designs that complement current products.  It
also includes new antenna designs that could open up new markets for
the Portfolio Company.

     All developed products and projects must meet a minimum return on
investment, or return on investment, threshold in order to be
considered for development.   The Portfolio Company believes this will
help to ensure that it is utilizing resources correctly, that assets
are being deployed properly, and that all projects ultimately add
shareholder value. Areas of positive return on investment development
includes:

     - A less-expensive, yet high-performance CPE device designed for
       WISP applications and other requirements for extending the range
       of a PC laptop.

     - Access Points that operate at various frequencies along the
       spread spectrum within legal limits.

     - WiMAX (IEEE 802.16) products that have a variety of applications
       including backhauling, etc.

     - Public Safety and Homeland Security applications designed to
       serve the needs of police, fire and other emergency vehicles and
       field operators.

     For the fiscal years 2004 and 2003, all internal research and
development costs were charged to expense as incurred.  Third-party
research and developments costs are expensed when the contracted work
has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both
present and future products are expensed in the period incurred.
Research and development costs for the years ended December 31, 2004
and 2003 were minor and are included in general and administrative expenses.

ITEM 2.  DESCRIPTION OF PROPERTY.

     The principal executive offices for the Company currently
consists of approximately 10,560 square feet of office space, which
are located at 4136 Del Rey Avenue in Marina Del Rey, California.  We
leased this property on October 30, 2003 for a five-year term at the
current monthly rent of $11,420 as of December 31, 2004.

ITEM 3.  LEGAL PROCEEDINGS.

     Other than as set forth below, the Company is not a party to any
material pending legal proceedings, claims or assessments and, to the
best of its knowledge, no such action by or against the Company has
been threatened.

     On July 26, 2004, John P. Kelly, a former employee of the
Company, filed a complaint against the Company alleging certain
statutory and common law claims against us based upon the non-payment
of certain amounts allegedly due to Mr. Kelly following his voluntary
resignation from the Company.  The parties agreed in December 2004 to
a settlement of this action that resulted in the return of 1,100,230
restricted shares of common stock, originally valued at $68,000, to
the Company for cancellation in exchange for the payment of $68,163 to
Mr. Kelly.  This complaint has been dismissed with prejudice.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.

PART II.

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information.

     The Company's shares of common stock are traded on the Over the
Counter Bulletin Board ("OTCBB") (under the symbol "FGWC"; prior to
February 12, 2001 the symbol was "TSMK") and the range of closing bid
prices shown below is as reported by the OTCBB.  The quotations shown
reflect inter-dealer prices, without retail mark-up, markdown or
commission and may not necessarily represent actual transactions.

Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on December 31, 2004

                                                 High      Low

Quarter Ended December 31, 2004                  0.024     0.008
Quarter Ended September 30, 2004                 0.030     0.009
Quarter Ended June 30, 2004                      0.049     0.004
Quarter Ended March 31, 2004                     0.086     0.008

Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on December 31, 2003

                                                 High      Low

Quarter Ended December 31, 2003                  0.086     0.079
Quarter Ended September 30, 2003                 0.143     0.055
Quarter Ended June 30, 2003                      0.032     0.024
Quarter Ended March 31, 2003                     0.003     0.002

Holders of Common Equity.

     As of December 31, 2004, the Company had approximately 116
shareholders of record.  The number of registered shareholders
excludes any estimate by us of the number of beneficial owners of
common shares held in street name.

Dividend Information.

     The Company has not declared or paid a cash dividend to
stockholders since it was incorporated.  The board of directors
presently intends to retain any earnings to finance our operations and
does not expect to authorize cash dividends in the foreseeable future.
Any payment of cash dividends in the future will depend upon our
earnings, capital requirements and other factors.

Sales of Unregistered Securities.

     Except as follows, all sales of unregistered (restricted)
securities during the fiscal year ended on December 31, 2004 have been
previously reported either in a Form 10-QSB or in a Form 8-K:

     Upon the appointment of Phil E. Pearce, Stanley A. Hirschman, and
Kirk Haney to the board of directors, they were granted unvested
options to purchase up to 1,000,000 restricted shares of the Company's
common stock based on the closing price the day prior to their
appointment.  However, when the Company became a BDC, effective on
November 6, 2004, these options were cancelled due to prohibitions
imposed on the Company under the 1940 Act.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

     The following discussion and analysis of financial condition and
results of operations is based upon, and should be read in conjunction
with, the audited financial statements and related notes included
elsewhere in this Form 10-KSB, which have been prepared in accordance
with accounting principles generally accepted in the United States.

Overview.

     The Company has elected to be regulated as a business development
company under the 1940 Act, which became effective November 6, 2004.
Prior to this date the company operated as a provider of wireless
solutions during 2004 and as an Internet service provider during a
portion of 2003.  Accordingly, the comparability of our results of
operations is impacted by our changes in business strategy during
these periods.

     On December 31, 2004, the Company moved certain assets and certain
liabilities into a portfolio company, 5G Wireless Solutions, Inc.
("Portfolio Company"), which for purposes of this section, designs,
builds, markets and services innovative Wi-Fi compatible wireless
broadband systems.  We believe the integrated hardware and software
solutions offer significant improvements in distance, performance,
throughputs and security while servicing both line of sight and non-
line of sight applications.  The Portfolio Company is focused on
manufacturing products and developing solutions to create large and
efficient wireless LAN and WAN with far less equipment and expense
than its competitors.  The Portfolio Company's customers include
universities, businesses, governments, municipalities and wireless
Internet service provider.

     The Portfolio Company markets and sells both outdoor and indoor
Wi-Fi wireless radio systems that, because of their distance and user
capacity, can be used in both wireless LAN and WAN applications.  The
outdoor products can be configured in point-to-point or point-to-
multipoint networks that can reach distances of eight miles or more in
fixed wireless configurations or up to one mile in roaming scenarios
using laptops with off-the-shelf Wi-Fi cards.  The Portfolio Company
believes its antenna design and wireless packet switching allows its
systems to more readily penetrate buildings and trees than
competitors, and to accommodate up to 1000 user associations.  The
indoor product shares many of the same characteristics and strengths
as the outdoor product, including user capacity and penetration of
objects, but is designed to utilize less power, at a lower cost and
for indoor distances up to 1,000 feet depending upon the structure.

     Both the Portfolio Company's outdoor and indoor products provide
strong security at both the hardware and software levels, can transmit
voice, data, and video at multi-megabit speeds, and can work together
seamlessly in wireless networks with each other or with other common
wireless network equipment.  Because of these advantages, the
Portfolio Company believes its products enable customers to combine
wireless networks with fewer components that cost less, perform better
and potentially provide a faster return on invested capital.  The
Portfolio Company has devoted substantial resources to the build out
of its networks and product research and development with limited
resources applied to its marketing programs.

     As a result, the Company has historically experienced operating
losses and negative cash flow.  We expect that these operating losses
and negative cash flows may continue through additional periods.  In
addition, the Portfolio Company only has a limited record of revenue-
producing operations and there is only a limited operating history
upon which to base an assumption that it will be able to achieve its
business plans.

Results of Operations.

     Because the Company has elected to be regulated as a business
development company under the 1940 Act, the comparability of our
results of operations is impacted by our changes in business strategy
during these periods.  The results of operations reflected in this
discussion include the operations of the Company for the past two years.

(a)  Revenue.

     Revenue from continuing operations increased by $484,148, or
approximately 289%, from $167,302 for the year ended December 31, 2003
to $651,450 for the year ended December 31, 2004.  The increase in
revenue was primarily due to sales of wireless solutions to customers
as a result of an increase in awareness of our wireless solutions,
particularly in the university campus market place.  We expect this
trend to continue as more university campuses look to upgrade their
network infrastructure.

(b)  Cost of Revenue.

     Cost of revenue principally includes the cost of the components
required to produce wireless systems sold.  Total cost of revenue
increased by $62,297, or approximately 46%, from $137,314 for the year
ended December 31, 2003 to $199,611 for the year ended December 31,
2004.  The increase was principally due to the increase in sales
mitigated by the cost for component parts remaining relatively stable.
We believe this trend will continue in the future.

(c)  Operating Expenses.

     Total operating expenses increased by $2,591,916, or
approximately 123%, from $2,112,663 for the year ended December 31,
2003 to $4,704,579 for the year ended December 31, 2004.  The increase
was primarily attributable to an increase in professional consulting,
accounting and legal services related to financing and the conversion
to a BDC.  These expenses are expected to decrease in 2005.

(d)  Other Expenses.

     Interest expenses increased during the year ended December 31,
2004 primarily due to an increase in the amount of debt carried by the
Company.  Interest expense increased by $687,441, or approximately
856%, from $77,019 at the year ended December 31, 2003 to $736,460
for the year ended December 31, 2004.  This may increase in the coming
year should the Company seek additional debt financing.

(e)  Net loss

     Net loss increased by $2,829,506, or approximately 131%, from a
net loss of $2,159,694 for the year ended December 31, 2003 to a net
loss of $4,989,200 for the year ended December 31, 2004.  The
increased net loss was attributed to higher operating costs during the
year, which is expect to decrease in 2005 due to planned cost
reductions and increases in sales.

Factors That May Affect Operating Results.

     The operating results of the Company, and after December 31,
2004, 5G Wireless Solutions, Inc. and any other portfolio companies
for purposes of this discussion, can vary significantly depending upon
a number of factors, many of which are outside its control.  General
factors that may affect the Company's operating results include:

     - market acceptance of and changes in demand for products and
       services;

     - a small number of customers account for, and may in future
       periods account for, substantial portions of our revenue, our
       revenue could decline because of delays of customer orders or the
       failure to retain customers;

     - gain or loss of clients or strategic relationships;

     - announcement or introduction of new services and products by the
       Company or by its competitors;

     - the ability to build brand recognition;

     - timing of sales to customers;

     - price competition;

     - the ability to upgrade and develop systems and infrastructure to
       accommodate growth;

     - the ability to attract and integrate new personnel in a timely
       and effective manner;

     - the ability to introduce and market products and services in
       accordance with market demand;

     - changes in governmental regulation;

     - reduction in or delay of capital spending by clients due to the
       effects of terrorism, war and political instability; and

     - general economic conditions.

     The Company believes that its planned growth and profitability
will depend in large part on the ability to promote its services, gain
clients and expand its relationship with current clients.
Accordingly, we intend to invest in marketing, strategic partnerships,
and development of our customer base.  If the Company is not
successful in promoting its services and expanding its customer base,
this may have a material adverse effect on its financial condition and
its ability to continue to operate its business.

     The Company is also subject to the following specific factors
that may affect its operating results:

(a)  Competition.

     The market for wireless products and services is highly
competitive.  The Company's future success will depend on its ability
to adapt to rapidly changing technologies, evolving industry
standards, product offerings and evolving demands of the marketplace.

     Some of our competitors have:

     - longer operating histories;

     - larger customer bases;

     - greater name recognition and longer relationships with clients;
       and

     - significantly greater financial, technical, marketing, public
       relations and managerial resources than the Company.

     The Company's competitors may also be better positioned to
address technological and market developments or may react more
favorably to technological changes.  The Company competes on the basis
of a number of factors, including:

     - range

     - non-line of sight capabilities

     - data rate

     - security scheme

     - simultaneous users

     - implementation cost

     Competitors may develop or offer services that provide
significant (technological, creative, performance, price) or other
advantages over the services offered by the Company.  If the Company
fails to gain market share or lose existing market share, our
financial condition, operating results and business could be adversely
affected and the value of the investment in the Company could be
reduced significantly.  The Company may not have the financial
resources, technical expertise or marketing, distribution or support
capabilities to compete successfully.

(b)  Protection of Proprietary Rights.

     The Company's success and ability to compete will be dependent in
part on the protection of its potential patents, trademarks, trade
names, service marks and other proprietary rights.  The Company
intends to rely on trade secret and copyright laws to protect the
intellectual property that it plans to develop, but there can be no
assurance that such laws will provide sufficient protection to us,
that others will not develop services that are similar or superior to
ours, or that third parties will not copy or otherwise obtain and use
our proprietary information without authorization.  In addition,
certain of the Company's know-how and proprietary technology may not
be patentable.

     The Company may rely on certain intellectual property licensed
from third parties, and may be required to license additional products
or services in the future, for use in the general operations of its
business plan.  There can be no assurance that these third party
licenses will be available or will continue to be available to us on
acceptable terms or at all.  The inability to enter into and maintain
any of these licenses could have a material adverse effect on our
business, financial condition or operating results.

     There is a risk that some of the Company's products may infringe
the proprietary rights of third parties.  In addition, whether or not
the Company's products infringe on proprietary rights of third
parties, infringement or invalidity claims may be asserted or
prosecuted against it and it could incur significant expense in
defending them.  If any claims or actions are asserted against the
Company, it may be required to modify its products or seek licenses
for these intellectual property rights.  The Company may not be able
to modify its products or obtain licenses on commercially reasonable
terms, in a timely manner or at all.  The Company's failure to do so
could have a negative affect on its business and revenues.

(c)  Dependence on Suppliers.

     The Company depends upon a number of suppliers for components of
its products.  There is an inherent risk that certain components of
our products will be unavailable for prompt delivery or, in some
cases, discontinued.  The Company only has limited control over any
third-party manufacturer as to quality controls, timeliness of
production, deliveries and various other factors.  Should the
availability of certain components be compromised, it could force the
us to develop alternative designs using other components, which could
add to the cost of goods sold and compromise delivery commitments.  If
the Company is unable to obtain components in a timely manner, at an
acceptable cost, or at all, we may need to select new suppliers,
redesign or reconstruct processes used to build its devices.  In such
an instance, the Company would not be able to manufacture any devices
for a period of time, which could materially adversely affect its
business, results from operations, and financial condition.

(d)  Technological and Market Changes.

     The markets in which the Company competes are characterized by
new service introductions, evolving industry standards, and changing
needs of customers.  There can be no assurance that our existing
services will continue to be properly positioned in the market or that
it will be able to introduce new or enhanced products into the market
on a timely basis, or at all.  Currently, the Company is focusing on
upgrading and introducing new services.  There can be no assurance
that enhancements to existing products or new products will receive
customer acceptance.

     There is a risk to the Company that there may be delays in
initial implementation of new services.  Further risks inherent in new
service introductions include the uncertainty of price-performance
relative to services of competitors, competitors' responses to its new
service introductions, and the desire by customers to evaluate new
services for longer periods of time.  Also, the Company does not have
any control over the pace of technology development.  There is a
significant risk that rights to a technology could be acquired or be
developed that is currently or is subsequently made obsolete by other
technological developments.  There can be no assurance that any new
technology will be successfully acquired, developed, or transferred.

(e)  Government Regulation.

     The Company's technology is deployed in license-free frequency
bands and is not subject to any wireless or transmission licensing in
most jurisdictions, including the United States.  Continued license-
free operation is dependent upon the continuation of existing
government policy.  While we are not aware of any policy changes
planned or expected, there can be no assurances that government policy
will not change.  License-free operation of the Company's products in
the 2.4 GHz bands are subordinate to certain licensed and unlicensed
uses of the bands and its products must not cause harmful interference
to other equipment operating in the bands and must accept interference
from any of them.  If we are unable to eliminate any such harmful
interference, or should its products be unable to accept interference
caused by others, the Company and its customers could be required to
cease operations in the bands in the locations affected by the harmful
interference.  Additionally, in the event the 2.4 GHz band becomes
unacceptably crowded, and no additional frequencies are allocated, our
business could be adversely affected.

(f)  Key Personnel.

     The Company's success is largely dependent on the personal
efforts and abilities of its senior management.  The loss of certain
members of the Company's senior management, including our chief
executive officer, chief financial officer and chief technical
officer, could have a material adverse effect on our business and prospects.

     The Company intends to recruit in fiscal year 2005 employees who
are skilled in its industry. The failure to recruit these key
personnel could have a material adverse effect on the our business. As
a result, we may experience increased compensation costs that may not
be offset through either improved productivity or higher revenue.
There can be no assurances that we will be successful in retaining
existing personnel or in attracting and recruiting experienced
qualified personnel.

(g)  Operation as a Business Development Company.

     Although the Company is limited by the 1940 Act with respect to
the percentage of its assets that must be invested in qualified
investment companies, we are not limited with respect to the minimum
standard that any investment company must meet, or the industries in
which those investment companies must operate.  The Company may make
investments without shareholder approval and such investments may
deviate significantly from our historic operations.  Any change in our
investment policy or selection of investments could adversely affect
our stock price, liquidity, and the ability of our shareholders to
sell their stock.

     The Company intends to make investments into qualified companies
that will provide the greatest overall return on its investment.
However, certain of those investments may fail, in which case we may
not receive any return on our investment.  In addition, the Company's
investments may not generate income, either in the immediate future,
or at all.  As a result, the Company may have to sell additional
stock, or borrow money, to cover its operating expenses.  The effect
of such actions could cause its stock price to decline or, if we are
not successful in raising additional capital, the Company could cease
to continue as a going concern.

(h)  Limitations on Liability and Indemnification.

     The Company's bylaws include provisions to the effect that we may
indemnify any director, officer, or employee.  In addition, provisions
of Nevada law provide for such indemnification, as well as for a
limitation of liability of our directors and officers for monetary
damages arising from a breach of their fiduciary duties.  Any
limitation on the liability of any director or officer, or
indemnification of any director, officer, or employee, could result in
substantial expenditures being made by the Company in covering any
liability of such persons or in indemnifying them.

Operating Activities.

     The net cash used in operating activities was $2,335,904 for the
year ended December 31, 2004 compared to $415,751 for the year ended
December 31, 2003, an increase of $1,920,153 or approximately 462%.
This increase is attributed primarily to an increase in accrued
expenses and accounts receivable.

Investing Activities.

     Net cash used in investing activities increased to $200,356
during the year ended December 31, 2004 as compared to $46,337 during
the year ended December 31, 2003 as a result of the purchase of
additional equipment.

     In addition, the Company may wish to pursue possible acquisitions
of, or investments in businesses, technologies or products
complementary to ours in order to expand our geographic presence,
broaden the Company's product offerings and achieve operating
efficiencies.

Liquidity and Capital Resources.

     As of December 31, 2004, the Company had cash of $636,904.
During the years ended December 31, 2004 and 2003, the Company
incurred losses of $4,989,200 and $2,159,694, respectively, and the
Company has an accumulated deficit of $18,759,655 as of December 31,
2004. These factors raise substantial doubt as to the Company's
ability to continue as a going concern.

     The accompanying financial statements have been prepared assuming
that the Company continues as a going concern that contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business assuming the Company will continue as a
going concern.  However, the ability of the Company to continue as a
going concern on a longer-term basis will be dependent upon its
ability to generate sufficient cash flow from operations to meet its
obligations on a timely basis, to retain its current financing, to
obtain additional financing, and ultimately attain profitability.

     Management plans to continue raising additional capital through a
variety of fund raising methods during 2005 and to pursue all
available financing alternatives in this regard. Management may also
consider a variety of potential partnership or strategic alliances to
strengthen its financial position. In addition, we will  continue to
seek  additional  funds to ensure our successful growth  strategy  and
to  allow  for  potential  investments  into a diverse portfolio of
companies with strategic information and communications technologies
or applications. Whereas the Company has been successful in the past
in raising capital, no assurance can be given that these sources of
financing will continue to be available to us and/or that demand for
our equity/debt instruments will be sufficient to meet our capital
needs, or that financing will be available on terms favorable to the
Company.  The financial statements do not include any adjustments
relating to the recoverability and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.

     If funding is insufficient at any time in the future, the Company
may not be able to take advantage of business opportunities or respond
to competitive pressures, or may be required to reduce the scope of
its planned product development and marketing efforts, any of which
could have a negative impact on its business and operating results.
In addition, insufficient funding may have a material adverse effect
on the Company's financial condition, which could require us to:

     - curtail operations significantly;

     - sell significant assets;

     - seek arrangements with strategic partners or other parties that
       may require us to relinquish significant rights to products,
       technologies or markets; or

     - explore other strategic alternatives including a merger or sale
       of the Company.

     To the extent that the Company raises additional capital through
the sale of equity or convertible debt securities, the issuance of such
securities will result in dilution to existing stockholders.  If
additional funds are raised through the issuance of debt securities,
these securities may have rights, preferences and privileges senior to
holders of common stock and the terms of such debt could impose
restrictions on our operations.

     The Company has been successful in obtaining the required cash
resources through private placements, convertible debentures and notes
payable to service the Company through to the end of 2005.  Financing
activities provided cash of $2,961,494 during the year ended December
31, 2004 and included the issuance of $85,000 in notes payable,
$2,985,000 in convertible debentures, $21,628 in proceeds from the
sales of our common stock and the repayment of $125,634 of notes
payable.  Recent financing activities:

(a)  $135,000 Convertible Notes.

     The Company agreed to terms with four investors, in the third
quarter of 2003, one of which was the then president of the Company,
Peter Trepp, to loan the Company a total of $135,000 under
subordinated promissory notes.  The subordinated notes, bearing 8%
simple interest payable at maturity or conversion, automatically
convert into shares of the security issued in connection with the
receipt of a new $2,500,000 equity financing, or into shares of common
stock in case of a change in control of the Company.  The notes are
subordinated to all of our indebtedness to banks, commercial finance
lenders, insurance companies or other financial institutions regularly
engaged in the business of lending money, but are senior to all other
debt on our balance sheet.  As of December 31, 2004, the balance
remaining was $50,000. Each investor was issued warrants to purchase
shares of our common stock equal to 40% of the amount invested in the
notes.  See Exhibit 4.10.

(b)  $250,000 Convertible Notes.

     In March 2004, the Company borrowed $250,000 under convertible
notes payable ("$250,000 Convertible Notes"), of which $100,000 came
from management or individuals related to certain management
personnel.  All borrowings are due in March 2006, with monthly
interest payments on the outstanding balance; interest accrues at 9%
per annum. The $250,000 Convertible Notes may be converted into common
stock of the Company at the lesser of: (a) in accordance with the
terms of a subsequent financing, at the option of the holder, (b) 125%
of the closing bid price on the closing date, as defined, or (c) 60%
of the average of the three lowest closing bid prices during the
twenty trading days immediately prior to the conversion date.  In
connection with the $250,000 Convertible Notes, the Company granted
warrants to purchase 666,667 shares of the Company's restricted common
stock at an exercise price of the lesser of: (a) the five day average
closing bid price prior to closing or (b) the fifteen day average
closing bid price prior to exercise.  The warrants vested upon grant
and expire in March 2006.  See Exhibits 4.11 to 4.13.

(c)  $805,000 Convertible Notes.

     In March 2004, the Company borrowed $715,000 under convertible
notes payable ("$715,000 Convertible Notes").  All of these borrowings
are due in March 2006, with monthly interest payments on the
outstanding balance; interest accrues at 9% per annum. The $715,000
Convertible Notes may be converted into common stock of the Company at
the lesser of: (a) in accordance with the terms of a subsequent
financing, at the option of the holder, (b) 125% of the closing bid
price on the closing date, as defined, or (c) 100% of the closing bid
price during the sixty trading days immediately prior to the
conversion date.  See Exhibits 4.11 to 4.13.

     In connection with the issuance of the $715,000 Convertible
Notes, we paid issuance costs of $74,500, which has been recorded as a
debt discount and is being amortized, into interest expense over the
life of notes. During the year ended December 31, 2004, we amortized
approximately $28,000 of such amount.  In July 2004, we borrowed an
additional $90,000 under terms identical to those of the $715,000
Convertible Notes.

(d)  $2,000,000 Convertible Notes.

     On September 22, 2004, the Company entered into a subscription
agreement with Longview Fund, LP, Longview Equity Fund, LP, and
Longview International Equity Fund, LP whereby these investors are to
purchase up to $2,000,000 of principal amount of promissory notes,
bearing interest at 5% per annum, convertible into shares of the
Company's common stock at a conversion price equal to the lesser of
(i) 75% of the average of the five lowest closing bid prices of the
Company's common stock as reported by the OTC Bulletin Board for the
ninety trading days preceding the conversion date, or (ii) $0.05.  See
Exhibit 4.15.

     In addition the convertible note holders will receive Class A and
Class B share warrants to purchase shares of common stock based on the
following formulas:

     (1)  Class A Warrants

     30 Class A Warrants will be issued for each 100 shares which
     would be issued on each closing, assuming the complete conversion
     of the notes issued on each such closing date at the conversion
     price in effect on each such closing date.  The per warrant share
     exercise price to acquire a share upon exercise of a Class A
     Warrant is 120% of the closing bid price of the common stock on
     the trading day immediately preceding the Initial Closing Date
     and is exercisable until five years after the issue date of the
     Class A Warrants.

     (2)  Class B Warrants

     The Company will issue and deliver 125 Class B Warrants to the
     subscribers for each $1.00 of purchase price invested on each
     closing date.  The per warrant share exercise price to acquire a
     share upon exercise of a Class B Warrant is $0.02 and is
     exercisable until three years after the issue date of the Class B
     Warrant.

     $1,000,000 of promissory notes was purchased on the initial
closing date.  The other $1,000,000 of promissory notes will be
purchased within five business days after the earlier of (i) the
actual effectiveness of a registration statement to be filed with the
SEC, or (ii) the date upon which the Company is able to issue to the
subscribers free trading unrestricted common stock as a "business
development company" as defined in Rule 602(a) of Regulation E under
the Securities Act of 1933, which took effect on November 6, 2004.

     As part of this funding arrangement, Jerry Dix and Don Boudewyn,
the Company's chief executive officer and executive vice president,
respectively, have agreed that for the period of 180 days after the
second funding amount during which such registration statement will be
current and available for use in connection with the public resale of
the shares and warrant shares, they will not sell or otherwise dispose
of any shares of common stock or any options, warrants or other rights
to purchase shares of common stock or any other security of the
Company which they own or have a right to acquire, other than (i) in
connection with an offer made to all shareholders of the Company or
any merger, consolidation or similar transaction involving the
Company, or (ii) with the prior written consent of the investors and
the Company, which shall not be unreasonably withheld.

Off Balance Sheet Arrangements.

     The Company does not engage in any off balance sheet arrangements
that are reasonably likely to have a current or future effect on our
financial condition, revenues, results of operations, liquidity or
capital expenditures.

Contractual Obligations.

     The Company has contractual obligations to repay our notes
payable and to make payments under our operating lease agreement.  See
Notes 3 and 6, respectively, to our accompanying financial statements.

Critical Accounting Policies.

     The SEC has issued Financial Reporting release No. 60,
"Cautionary Advice Regarding Disclosure About Critical Accounting
Policies" ("FRR 60"); suggesting companies provide additional
disclosure and commentary on their most critical accounting policies.
In FRR 60, the SEC defined the most critical accounting policies as
the ones that are most important to the portrayal of a company's
financial condition and operating results, and require management to
make its most difficult and subjective judgments, often as a result of
the need to make estimates of matters that are inherently uncertain.
Based on this definition, the Company's most critical accounting
policies include: (a) the use of estimates in the preparation of
financial statements; (b) revenue recognition; and (c) stock based
compensation arrangements.  The methods, estimates and judgments the
Company uses in applying these most critical accounting policies have
a significant impact on the results reported in its financial statements.

(a)  Use of Estimates.

     The preparation of the financial statements contained in this
report requires the Company to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities.
Pursuant to the requirements of the 1940 Act, our board of directors
is responsible for determining in good faith the fair value of our
securities and assets for which market quotations are not readily
available. The board of directors is required to value such securities
if the validity of the market quotations appears to be questionable,
or if the number of quotations is such as to indicate that there is a
thin market in the security.  In making its determination, the board
of directors considers valuation appraisals provided by independent
valuation service providers.

     The board of directors bases its determination of fair value
upon, among other things, applicable quantitative and qualitative
factors.  These factors may include, but are not limited to, type of
securities, nature of business, marketability, market price of
unrestricted securities of the same issue (if any), comparative
valuation of securities of publicly-traded companies in the same or
similar industries, current financial conditions and operating
results, sales and earnings growth, operating revenues, competitive
conditions and current and prospective conditions in the overall stock market.

     Unlike banks, the Company is not permitted to provide a general
reserve for anticipated loan losses; we are instead required by the
1940 Act to specifically value each individual investment on a
quarterly basis, and record unrealized depreciation for an investment
that we believe has become impaired.  Conversely, we will record
unrealized appreciation if we believe that the underlying portfolio
company has appreciated in value and, therefore, our equity security
has also appreciated in value.  Without a readily ascertainable market
value and because of the inherent uncertainty of valuation, the fair
value of our investments determined in good faith by the board of
directors may differ significantly from the values that would have
been used had a ready market existed for the investments, and the
differences could be material.

     The Company will adjust quarterly the valuation of our portfolio
to reflect the board of directors' determination of the fair value of
each investment in our portfolio.

     The Company's Audit Committee reviews each report along with
information provided by management which may include correspondence
that could materially affect the value of the investment, recent SEC
filings that have information that could materially affect the
valuations, answers to questions that management has posed on a
quarterly basis to the CEO of the investments which make up the
majority of the total value.

     The Audit Committee reviews the information provided and makes a
recommendation to the board of directors regarding the valuation
reports and other information pertinent to the final valuation.  The
board of directors then determines the value of the investments based
on all the information provided.  Due to the uncertainty inherent in
the valuation process, such estimates of fair value may differ
significantly from the values that would have been obtained had a
ready market for the securities existed, and the differences could be
material.

     Additionally, changes in the market environment and other events
that may occur over the life of the investments may cause the gains or
losses ultimately realized on these investments to be different than
the valuations currently assigned.  No single standard for determining
fair value in good faith exists since fair value depends upon
circumstances of each individual case. In general, fair value is the
amount that we might reasonably expect to receive upon the current
sale of the security.

     At December 31, 2004, Jim Tucker, CPA provided the Company with
initial valuations of our investment in 5G Wireless Solutions, Inc.,
our sole portfolio company.

(b)  Revenue Recognition.

     Revenues in 2004 and 2003 resulted principally from the sale and
installation of wireless radio systems to customers.  Revenues prior
to July 2003 resulted from broadband subscriber fees charged to
residential and business customers , web hosting and design, licensing
fees and engineering consulting services.  Equipment sales are
recognized when products are delivered without any further services
required.  Subscription revenues, which were partially received as an
up front activation fee and monthly recurring revenues that vary, were
recognized as earned on a pro rata basis. Licensing revenues were
recognized when the earnings process was completed.  Consulting
services were recognized as earned pursuant to contracts.

(c)  Stock Based Compensation Arrangements.

     The Company issues shares of common stock to various individuals
and entities for certain management, legal, consulting and marketing
services.  These issuances are valued at the fair market value of the
service provided and the number of shares issued is determined, based
upon the closing price of our common stock on the date of each
respective transaction after the period of service.  These
transactions are reflected as a component of general and
administrative expenses in the accompanying statement of operations.

     On June 8, 2004, the Company's board of directors adopted the 5G
Wireless Communications, Inc. 2004 Non-Employee Directors and
Consultants Retainer Stock Plan ("Retainer Stock Plan"). On June 21,
2004, the Company filed with the SEC a registration statement on form
S-8 for the purpose of registering 150,000,000 common shares issuable
under the Retainer Stock Plan under the Securities Act of 1933.
However, since the Company has now converted to a BDC, it notified
those individuals that they no longer would receive stock compensation
under the plan effective December 31, 2004.

Forward Looking Statements.

     Information in this Form 10-KSB contains "forward looking
statements" within the meaning of Rule 175 of the Securities Act of
1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as
amended.  When used in this Form 10-KSB, the words "expects,"
"anticipates," "believes," "plans," "will" and similar expressions are
intended to identify forward-looking statements.  These are statements
that relate to future periods and include, but are not limited to,
statements regarding our adequacy of cash, expectations regarding net
losses and cash flow, statements regarding our growth, our need for
future financing, our dependence on personnel, and our operating expenses.

     Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected. These risks and uncertainties include, but are
not limited to, those discussed below, as well as risks related to our
ability to market fluctuations and our ability to obtain future
financing, and the risks set forth below under "Factors That May
Affect Our Results."  These forward-looking statements speak only as
of the date hereof.  The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in
its expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.

ITEM 7.  FINANCIAL STATEMENTS.

     Financial statements are presented in a separate section of this report
following Item 14.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.

     None.

ITEM 8A.  CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

     The Company maintains disclosure controls and procedures (as
defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities
Exchange Act of 1934, as amended) that are designed to ensure that
information required to be disclosed in our periodic reports filed
under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to our
management, including our chief executive officer and chief financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.

     As of the end of the period covered by this report, our
management carried out an evaluation, under the supervision and with
the participation of our principal (chief) executive officer and
principal financial officer, of our disclosure controls and procedures
(as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).
Based upon the evaluation, our principal (chief) executive officer and
principal financial officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission's rules and forms.

     Because of the inherent limitations in all control systems,
no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, will be or have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can
occur because of simple error or mistake.  Additionally, controls can
be circumvented by the individual acts of some persons, by collusion
of two or more people, and/or by management override of the control.
The design of any system of controls also is based in part upon
certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions; over time,
controls may become inadequate because of changes in conditions,
and/or the degree of compliance with the policies and procedures may
deteriorate. Because of the inherent limitations in a cost-effective
internal control system, misstatements due to error or fraud may occur
and not be detected.

Changes in Internal Control Over Financial Reporting.

     During the quarter ended December 31, 2004, there was no change in our
internal controls over financial reporting (as defined in Rule 13a-15(f) of
the Exchange act) or in other factors that could affect these controls during
our last fiscal quarter that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.

ITEM 8B.  OTHER INFORMATION.

Subsequent Events.

     (a)  On February 17, 2005, the Company made an investment in the
Portfolio Company in the amount of $125,000.   The purpose of the
investment was to support the ongoing working capital and general and
administrative expense needs of the Portfolio Company.   On March 10,
2005, the Company made another investment in the Portfolio Company in
the amount of $106,000.   This was also to fund general corporate purposes.

     (b)  On March 17, 2005,  the Company issued 4,000,000 restricted
shares of common stock valued at $19,196 as a partial conversion of
the first $1,000,000 convertible note (principal and accrued interest)
described in Item 6, Liquidity and Capital Resources ($2,000,000
Convertible Notes) above.

     (c)  On March 22, 2005, the Company entered into a subscription
agreement with Longview Fund, LP, Longview Equity Fund, LP, and
Longview International Equity Fund, LP whereby these investors are
purchasing $1,000,000 in convertible notes, with Class A Warrants to
purchase up to 100 additional shares of common stock for each 100
shares issued on the Closing Date (as defined in the subscription
agreement) assuming the complete conversion of the notes issued on the
Closing Date.  The exercise price of the warrant is $0.01 per share.
The Class A Warrants are exercisable until five years after the
Closing Date.  The $1,000,000 investment has been received by the
Company on March 22, 2005.

     Under the secured convertible note, they are convertible into
common stock of the Company at a price per share equal to subject to
the lower of (i) $0.01, or (ii) 75% of the average of the five lowest
closing bid prices of the common stock as reported by Bloomberg L.P.
for the principal market for the 90 trading days preceding a
conversion date.  The maximum conversion price is $0.01.

     As part of this funding arrangement, the Company's chief
executive officer and executive vice president have agreed that from
the Closing Date until one year after the Actual Effective Date (as
defined in the subscription agreement) they will not sell or otherwise
dispose of any shares of common stock or any options, warrants or other
rights to purchase shares of common stock or any other security of the
Company which they own or have a right to acquire, other than in
connection with an offer made to all shareholders of the Company or any
merger, consolidation or similar transaction involving the Company.

PART III.

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Directors and Executive Officers.

     The names, ages, and respective positions of the directors and
executive officers of the Company are set forth below.  The directors
named below will serve until the next annual meeting of our
stockholders or until their successors are duly elected and have
qualified.  Directors are elected for a term until the next annual
stockholders' meeting.  Officers will hold their positions at the will
of the board of directors, absent any employment agreement, of which
none currently exist or are contemplated.

     There are no family relationships between any two or more of our
directors or executive officers. There are no arrangements or
understandings between any two or more of our directors or executive
officers. There is no arrangement or understanding between any of our
directors or executive officers and any other person pursuant to which
any director or officer was or is to be selected as a director or
officer, and there is no arrangement, plan or understanding as to
whether non-management shareholders will exercise their voting rights
to continue to elect the current board of directors. There are also no
arrangements, agreements or understandings between non-management
shareholders that may directly or indirectly participate in or
influence the management of our affairs.  There are no other promoters
or control persons of the Company.  There are no legal proceedings
involving the executive officers or directors of the Company.

(a)  Jerry Dix, President/Chief Executive Officer/Director.

     Mr. Dix, age 59, has been in the wireless industry since 1994 and
was a pioneer in the pre-paid cellular industry with Globalwise
Communications and Prepaid Technologies.  In 1995, Dix and his partner
launched PrePay Technologies, a wholly owned subsidiary of Globalwise
Communications.  PrePay Technologies was developed with proprietary
technology that enabled PrePay Technology to deliver a prepaid
wireless platform as a re-seller for AirTouch in San Diego,
California.  In 1996, Mr. Dix helped found Satellite Control
Technologies, a publicly traded company with patented one and two-way
paging technologies, where he worked until being named president and
chief executive officer of the Company in January 2002.  Mr. Dix
helped develop and launch the AlphaTrak locating and control system
that utilizes this patented technology combined with GPS technology to
locate assets in North America.

(b)  Don Boudewyn, Executive Vice President/Secretary/Treasurer/Director.

     Mr. Boudewyn, age 40, has held his current position with the
Company since January 2002.  He has held various positions with the
Company, including president and vice president of international sales
since founding the Company in 2000.  From October 1998 to October
2000, Mr. Boudewyn served as a major account executive and business
development manager for Celterra Vancouver Ltd., where he was
responsible for sales, marketing and business development strategies
for a national fiber optic network.  Prior to his experience in the
communications arena, Mr. Boudewyn worked in real estate from July
1986 to October 1998.  He graduated from the British Columbia
Institute of Technology with a Bachelor of Arts degree in sales and
marketing management.  He is also a graduate of the UCLA Director
Training & Certification Program.

(c)  Phil E. Pearce, Director.

     Mr. Pearce, age 76, has been an independent business consultant
with Phil E. Pearce & Associates and Chairman of Financial Express
Corporation since 1990.  Prior to this, Mr. Pearce was senior vice
president and a director of E.F. Hutton, and was chairman of the board
of governors of the National Association of Securities Dealers, where
he was closely involved in the formation of the NASDAQ Stock Market.
He had also been a governor of the New York Stock Exchange and a
member of The Advisory Council to the United States Securities and
Exchange Commission on the Institutional Study of the Stock Markets.
Mr. Pearce is a graduate of the University of South Carolina and the
Wharton School of Investment Banking at the University of
Pennsylvania.  He was appointed to the Company's board of directors on
October 4, 2004.

(d)  Stanley A. Hirschman, Director.

     Mr. Hirschman, age 58, is president of CPointe Associates, Inc.,
an executive management consulting firm that specializes in solutions
for companies with emerging technology-based products and is well-
versed in the challenges of regulated corporate governance.  He is
also chairman of the board of Bravo Foods International (a public
company), former chairman of Mustang Software and a former director of
Imaging Diagnostic Systems, Inc., Aqua-Wellington Funds and ObjectSoft
Corporation. While at Mustang Software, Mr. Hirschman took a hands-on
role in the planning and execution of the strategic initiative
resulting in the acquisition of the company by Quintus Corporation.
Prior to establishing CPointe Associates in 1996, he was vice
president operations, Software Etc., Inc., a 396 retail store software
chain.  He also held senior executive management positions with T.J.
Maxx, Gap Stores and Banana Republic.  He was appointed to the
Company's board of directors on September 23, 2004.

(e)  Murray H. Williams, Director.

     Mr. Williams, age 34, is the co-founder of Brand Shopping
Network, Inc., a shopping service that started in 2001.  In this
position, he has written the business plan and created five-year
projections and successfully completed a reverse merger into a public
shell.  Prior to that, Mr. Williams was one of the founding members of
Buy.com, Inc., where he created, developed and managed the finance,
business development, legal and human resource departments.  Between
1998 and 2001, he developed the finance, legal, business development
and HR departments.  Prior to joining Buy.com, he was employed with
KPMG Peat Marwick, LLP from 1993 through 1998, and last served as a
manager in their assurance practice.  Mr. Williams managed a team of
over 20 professionals specializing in financial services with an
emphasis on public offerings, private financings and
mergers/acquisitions.  He was appointed to the Company's board of
directors on November 8, 2004.

(f)  Kirk Haney, Director.

     Mr. Haney, age 33, works in Global Business Development for Cisco
Systems, Inc. where he was instrumental in creating Cisco's global
security sales strategy.  In addition to leading several of Cisco's
enterprise and advanced technology sales and engineering teams, he has
also been an advisor to Cisco's Corporate Business Development team on
various investment and acquisition candidates.  Prior to his Cisco
experience, which began in 1999, Mr. Haney held senior management
positions in sales, marketing and business development for 3Com
Corporation and ArrowPoint Communications (acquired by Cisco).  He
holds a Bachelor of Arts degree in political science from California
State University, Long Beach, and an MBA degree from Pepperdine
University.  Mr. Haney was appointed to the Company's board of
directors on October 27, 2004.

Compliance with Section 16(a) of the Exchange Act.

     Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially own
more than 10% of any class of the Company's equity securities to file
initial reports of ownership and reports of changes in ownership with
the SEC.  Executive officers, directors and beneficial owners of more
than 10% of any class of the Company's equity securities are required
by SEC regulations to furnish us with copies of all Section 16(a)
forms they file.

     Based solely upon a review of Forms 3 and 4 and amendments
thereto furnished to us under Rule 16a-3(d) during fiscal 2004, and
certain written representations from executive officers and directors,
the Company is aware of the following required reports that have not
been timely filed: (a) Form 4's to cover restricted shares of common
stock issued to Mr. Dix on May 2, 2004, June 30, 2004, September 30,
2004, and December 31, 2004, and a Form 4 to cover restricted shares
of Series A Convertible Preferred Stock issued to Mr. Dix on October
7, 2004, and a Form 5 by Mr. Dix to cover these Form 4 issuances (this
form has been prepared and filed with the SEC; (b) Form 4's to cover
restricted shares of common stock issued to Mr. Boudewyn on May 2,
2004, June 30, 2004, September 30, 2004, and December 31, 2004, and a
Form 4 to cover restricted shares of Series A Convertible Preferred
Stock issued to Mr. Dix on October 7, 2004, and a Form 5 by Mr.
Boudewyn to cover these Form 4 issuances (this form has been prepared
and filed with the SEC); (c) Form 3's to cover appointment to the
board of directors by Messrs Pearce. Hirschman, Williams and Haney
(these Forms have been filed with the SEC).  Other than this, the
Company is unaware of any other required reports that were not timely
filed.

Code of Ethics.

     The Company has adopted a code of ethics that applies to our
board of directors, principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions (see Exhibit 14).  The code of ethics in
general prohibits any officer, director or advisory person of the
Company from acquiring any interest in any  security  which  the
Company (i) is considering a purchase or sale thereof, (ii)  is being
purchased or sold by the Company, or (iii) is being sold short by the
Company.  These persons are required to advise us in writing of his or
her acquisition or sale of any such security.  This code of ethics is
broader and differs from the one specifically required of the Company
under the 1940 Act.

Investment Committee.

     The  members  of  the  Investment Committee are Messrs. Williams,
Pearce, Hirschman, and Haney, all being independent directors of the
Company.  The  Investment  Committee has responsibility with respect
to reviewing and overseeing the Company's contemplated investments and
portfolio companies and investments on behalf of the Board and
reports the results of its activities to the full board of directors.
Such Investment Committee has the ultimate authority for and
responsibility (i) to evaluate and recommend investments, and (ii)
review and discuss with management (a) the performance of portfolio
companies,  (b) the diversity and risk of the Company's investment
portfolio, and, where appropriate, make recommendations respecting the
role or addition of portfolio investments and (c) all solicited and
unsolicited offers to purchase portfolio companies.

Compensation Committee.

     The members of the Compensation Committee are Messrs. Williams,
Pearce, Hirschman, and Haney.  The Compensation Committee has
responsibility with respect to reviewing and overseeing the Company's
compensation to directors and officers of the Company, including the
issuance of any stock to these individuals, reports the results of its
activities to the full board of directors.

ITEM 10.  EXECUTIVE COMPENSATION.



<TABLE>
<CAPTION>
                           Annual compensation                      Long-term Compensation
                                                                 Awards           Payouts
Name and                                  Other           Restricted   Securities
principal                                 annual            stock     underlying       LTIP    All other
position       Year     Salary   Bonus   compensation     award(s)    options/SARs(1) payouts compensation
                          ($)     ($)       ($)             ($)           (#)           ($)       ($)
<S>            <C>      <C>       <C>     <C>             <C>         <C>             <C>       <C>
Jerry Dix, CEO 2004     136,800    -      159,800(1)       -           -               -         -
               2003     216,000    -         -             -           -               -         -
               2002     144,000    -      792,144(2)       -           -               -         -

Don Boudewyn,
EVP            2004      91,700    -       88,200(3)       -           -               -         -
               2003     144,000    -         -             -           -               -         -
               2002     108,000    -       62,000(4)       -           -               -         -

Brian Corty,
former CTO     2004      63,700    -       59,200(5)       -           -               -         -
               2003     168,000    -         -             -           -               -         -
               2002     120,000    -      792,144(6)       -           -               -         -
</TABLE>


(1)  During 2003 and 2002, Mr. Dix was paid $47,300 and $60,700,
respectively, and had an accrued balance of $293,300 at December
31, 2003, which was paid by the restricted shares issued for
accrued salaries valued at this amount.

(2)  Value of stock compensation received by Mr. Dix per a
consulting agreement dated February 6, 2002.

(3)  During 2003 and 2002, Mr. Boudewyn was paid $19,350 and
25,500, respectively, and had an accrued balance of $262,650 at
December 31, 2003, which was paid by the restricted shares issued
for accrued salaries valued at this amount.

(4)  Value of stock compensation received by Mr. Boudewyn per a
consulting agreement dated February 6, 2002.

(5)  Mr. Corty joined the Company in January 2002 and resigned on
September 23, 2004.  During 2003 and 2002, Mr. Corty was paid
$83,590 and $68,044, respectively, and had an accrued balance of
$156,322 at December 31, 2003, which was paid by the restricted
shares issued for accrued salaries valued at this amount.

(6)  Value of stock compensation received by Mr. Corty per a
consulting agreement dated February 6, 2002.

None of the other current or former officers or directors of the
Company have received compensation exceeding $100,000 over the past
three fiscal years.

Employment Agreements.

     (a)  On February 1, 2002, the Company entered into an
employment agreement with Mr. Dix pursuant to which he is employed as
our chief executive officer at a monthly base salary of $12,000 for a
term of three years. Pursuant to the terms of the agreement, Mr. Dix's
base monthly salary will increase to $18,000 in year two and $25,000
in year three.  The Company's board of directors will review Mr. Dix's
pay annually and may, in its sole discretion, grant an increase as it
deems appropriate.  Mr. Dix is also eligible to receive an incentive
bonus in the sole discretion of our board of directors. In addition,
Mr. Dix is eligible to receive an annual performance bonus of up to
80% of his base annual salary; provided, however, if he achieves 100%
completion of his performance objectives, he is entitled to receive at
least 75% of the performance bonus or 60% of his annual salary.  If we
terminate Mr. Dix without cause (as defined in the agreement), Mr. Dix
is entitled to receive severance pay equal to the sum of the remaining
amounts owed under the agreement.

     (b)  On February 1, 2002, the Company entered into an
employment agreement with Mr. Boudewyn pursuant to which he is
employed as our vice president, market development, at a monthly base
salary of $7,000 for a term of three years.  The Company's board of
directors will review Mr. Boudewyn's pay annually and may, in its sole
discretion, grant an increase as it deems appropriate.  Mr. Boudewyn
is also eligible to receive an incentive bonus in the sole discretion
of our board of directors.  In addition, Mr. Boudewyn is eligible to
receive an annual performance bonus of up to 80% of his base annual
salary; provided, however, if he achieves 100% completion of his
performance objectives, he is entitled to receive to at least 75% of
the performance bonus or 60% of his annual salary.  If we terminate
Mr. Boudewyn without cause (as defined in the agreement), Mr. Boudewyn
is entitled to receive severance pay equal to the sum of the remaining
amounts owed under the agreement.

     (c)  On April 1, 2002, the Company amended Mr. Boudewyn's
agreement to change his title to executive vice president and chief
operations officer and to increase his monthly base salary to $9,000
commencing on April 1, 2002.  Under this amendment, Mr. Boudewyn's
base monthly salary will increase to $12,000 in year two and $15,000
in year three.  Currently, Mr. Boudewyn is the executive vice
president, secretary/treasurer and principal financial officer of the
Company.

Other Compensation.

     (a)  There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees of the
Company in the event of retirement at normal retirement date as there
was no existing plan as of December 31, 2004 provided for or
contributed to by the company.

     (b)  With the exception of director compensation, no remuneration
is proposed to be paid in the future directly or indirectly by the
Company to any officer or director.  Our independent directors, under
their agreements with the Company (see Exhibit 10.3), receive $3,000
per month ($36,000 per year).

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth information regarding the
beneficial ownership of shares of the Company's common stock as of
March 14, 2005 (871,037,368 issued and outstanding) and Series A
Preferred Stock as of that date (3,000,000 issued and outstanding) by
(i) all stockholders known to us to be beneficial owners of more than
5% of the outstanding common stock; and (ii) all officers and
directors of the Company, individually and as a group (except as
otherwise noted, each person has sole voting power and sole
dispositive power as to all of the shares shown as beneficially owned
by them):

Title of Class    Name and Address of               Amount of      Percent of
                    Beneficial Owner                Beneficial       Class (2)
                                                    Owner (1)

Common Stock      Jerry Dix                         47,275,350 (3)      5.43%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Common Stock      Don Boudewyn                      30,419,161 (4)      3.49%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Common Stock      Phil E. Pearce                             0          0.00%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Common Stock      Stanley A. Hirschman                       0         0.00%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Common Stock      Murray H. Williams                         0         0.00%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Common Stock      Kirk Haney                                 0         0.00%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Common Stock      All Directors and Executive       77,694,511         8.92%
                  Officers as a Group (6 persons)

Series A
Preferred Stock   Jerry Dix                          1,800,000        60.00%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Series A
Preferred
Stock             Don Boudewyn                       1,200,000        40.00%
                  4136 Del Rey Avenue
                  Marina Del Rey, California 90292

Series A
Preferred
Stock             All Directors and                  3,000,000 (5)   100.00%
                  Executive Officers as a
                  Group (2 persons)

(1)  None of these security holders has the right to acquire any
amount of the shares within sixty days from options, warrants,
rights, conversion privilege, or similar obligations

(2)  Applicable percentage ownership of common stock is based on
871,037,368 shares issued and outstanding on March 14, 2005
divided by the total common stock for each beneficial owner.
Beneficial ownership is determined in accordance with the rules
and regulations of the SEC.  In computing the number of shares
beneficially owned by a person and the percentage ownership of
that person, shares of common stock subject to options or
convertible or exchangeable into such shares of common stock
held by that person that are currently exercisable, or
exercisable within 60 days, are included.

(3)  All shares held by Jerry and Karen Dix, joint tenants with right
of survivorship, except for 106,666 shares held by Market Force,
Inc. of which Mr. Dix and Steven Lipman have shared voting and
investment control.

(4)  Of the total, 1,184,523 shares are held by Wireless Xstream
Technologies Ltd., which is controlled by Mr. Boudewyn.

(5)  The Series A Preferred Stock, issued on October 7, 2004, is
convertible after three years following its issuance, providing
the holder is still employed by the Company.  There are no other
plans or arrangements to issue any additional Series A Preferred
Stock at this time.

Securities Authorized for Issuance under Equity Compensation Plans.

     The Company has adopted three equity compensation plans (none of
which has been approved by the Company's shareholders):

(a)  2004 Non-Employee Directors and Consultants Retainer Stock Plan.

     On June 8, 2004, the Company adopted the 2004 Non-Employee
Directors and Consultants Retainer Stock Plan.  The purposes of the
plan are to enable the Company to promote its interests by attracting
and retaining non-employee directors and consultants capable of
furthering our business and by aligning their economic interests more
closely with those of our shareholders, by paying their retainer or
fees in the form of shares of common stock.  All 150,000,000 shares of
common stock authorized under this plan have been registered as a
result of a Form S-8 filed with the SEC on June 21, 2004.  As of
December 31, 2004, the Company had issued 47,375,095 shares of common
stock under this plan, leaving 102,624,905 shares remaining to be issued.

(b)  Non-Employee Directors and Consultants Retainer Stock Plan.

     On January 30, 2002, the Company adopted a Non-Employee Directors
and Consultants Retainer Stock Plan (the Company amended this plan on
June 1, 2003).  The purposes of the plan are to enable the Company to
promote its interests by attracting and retaining non-employee
directors and consultants capable of furthering our business and by
aligning their economic interests more closely with those of our
shareholders, by paying their retainer or fees in the form of shares
of common stock.  All 75,000,000 shares of common stock authorized
under this plan have been registered as a result of Form S-8's filed
with the SEC on January 31, 2002 and June 26, 2003.  As of December
31, 2004, the Company had issued  72,216,836 shares of common stock
under this plan, leaving 2,783,164 shares remaining to be issued.

(c)  Stock Incentive Plan.

     On October 1, 2001, the Company adopted a Stock Incentive Plan
(the Company amended this plan on January 30, 2002).  This plan is
intended to allow directors, officers, employees, and certain non-
employees of the Company to receive options to purchase our common
stock.  The purpose of this plan is to provide these persons with
equity-based compensation incentives to make significant and
extraordinary contributions to the long-term performance and growth of
the Company, and to attract and retain employees.  All 10,000,000
shares of common stock authorized under this plan have been registered
as a result of Form S-8's filed with the SEC on December 10, 2001 and
January 31, 2002.  Options granted under this plan are to be
exercisable for a period of ten years from the grant date at whatever
price is established by the board of directors, in its sole discretion,
on the date of the grant.  Through December 31, 2004, the Company  had
granted options covering 6,540,385 shares of common stock under this
plan, leaving 3,459,615 shares remaining to be issued.



<TABLE>
<CAPTION>
                                    Equity Compensation Plan Information
                                            December 31, 2004
                                                                                 Number of
                                                                                 securities
                                                                                 remaining
                                 Number of                                   available for future
                              securities to be                                  issuance under
                                 issued up               Weighted-average           equity
                               exercise of             exercise price of         compensation
                               outstanding               outstanding            plan (excluding
                             options, warrants         options, warrants      securities reflected
                               and rights                 and rights             in column (a)
Plan category                     (a)                       (b)                      (c)
<S>                            <C>                     <C>                        <C>
Equity compensation plans
approved by security holders    0                       0                          0

Equity compensation plans not
approved by security holders    0                       0                     2004 Director's and
                                                                              Consultant's Plan:
                                                                              102,624,905;
                                                                              Director's and
                                                                              Consultant's Plan:
                                                                              2,783,164; Stock
                                                                              Incentive Plan:
                                                                              3,459,615

Total                           0                       0                     2004 Director's and
                                                                              Consultant's Plan:
                                                                              102,624,905;
                                                                              Director's and
                                                                              Consultant's Plan:
                                                                              2,783,164; Stock
                                                                              Incentive Plan:
                                                                              3,459,615
</TABLE>


     Since the Company has now converted to a BDC, and under the 1940
Act it is prohibited from issuing stock or options for services, it
intends to deregister all of the remaining registered shares under
each of these plans as the rules under which it operates do not allow
for such issuances.  This deregistration will be accomplished by the
filing of a Form S-8 POS with the SEC.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     During the last two fiscal years there have not been any
relationships, transactions, or proposed transactions to which the
Company was or is to be a party, in which any of the directors,
officers, or 5% or greater shareholders (or any immediate family
thereof) had or is to have a direct or indirect material interest,
other than as set forth below.

     (a)  During 2002 and 2003, the Company used the credit of
Service Group, which is a personal company of Mr. Dix, to help the
Company purchase equipment.

     (b)  On July 4, 2003, the Company entered into an employment
agreement with Mr. Trepp pursuant to which he was employed as our
president and chief operating officer at a base annual salary of
$150,000 for a term of three years.  Pursuant to the terms of the
agreement, Mr. Trepp received a signing bonus of 432,080 shares of our
common stock.  This agreement terminated upon Mr. Trepp's resignation
on May 1, 2004.

     (c)  On August 4, 2003 the Company issued 2,325,000 shares to Mr.
Corty for expenses incurred by the employee on behalf of the Company
and on September 2, 2003 it issued 2,500,000 shares to Mr. Corty in
partial settlement of accrued liabilities.

     (d)  The Company agreed to terms with four investors, in the
third quarter of 2003, one of which was the then president of the
Company, Peter Trepp, to loan the company a total of $135,000 under
subordinated promissory notes.  For further details on these loans,
please see "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources."

     (e)  In March 2004, the Company borrowed $250,000 under
convertible notes payable, of which $100,000 came from management or
individuals related to certain management personnel ($50,000 came from
Mr. & Mrs. Trepp, Mr. Trepp being the former president, $25,000 from
Paul Zygielbaum, a former employee of the Company, and $25,000 from
Thomas Janes, who is the father in law of Donald Boudewyn, the
Company's executive vice president).  For further details on these
loans, please see "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources."

     (f)  In March 2004, the Company issued 1,000,000 restricted
shares of common stock to Mr. Corty, a former director, for expenses
incurred on behalf of the Company in the amount of $23,950.

     (g)  On June 30, 2004 and September 30, 2004, the Company issued
a total of 2,255,220 shares of common stock to Mr. Corty for accrued
salaries for 2002, 2003 and 2004.

     (h)  On September 29, 2004, the Company's board of directors
appointed Stanley A. Hirschman as an independent board member.  Mr.
Hirschman owns a 1/2% interest in Redwood Capital Management, which is
the management company for the investors in the $2,000,000 convertible
notes described above.

     (i)  On October 4, 2004, the Company's board of directors
appointed Phil E. Pearce as an independent board member.  Mr. Pearce
owns a 1/2% interest in Redwood Capital Management, which is the
management company for the investors in the $2,000,000 convertible
notes described above.

     (j)  On October 6, 2004 the Company's Compensation Committee
granted and the Company issued Series "A" convertible preferred shares
("Convertible Preferred Stock") to Mr. Dix and Mr. Boudewyn totaling
3,000,000.  Each share of Convertible Preferred Stock is convertible
initially at the rate of 800 shares of common stock for each full
share of convertible preferred stock.  Each share of outstanding
Series A Convertible Preferred Stock entitles the holder thereof to
vote on each matter submitted to a vote of the stockholders of the
Company and to have the number of votes equal to the number (including
any fraction) of shares of common stock into which such share of
Convertible Preferred Stock is then convertible pursuant to the
provisions hereof at the record date for the determination of
shareholders entitled to vote on such matters or, if no such record
date is established, at the date such vote is taken or any written
consent of stockholders becomes effective.  The preferred shares are
convertible after three years from issuance.  See  Exhibit 4.17.

     A third party conducted an evaluation prior to the issuance and
concluded that the value of the preferred shares was $200,000, $50,000
of which was expensed for the year ended December 31, 2004.  The
difference of $150,000 is carried as unearned compensation in the
Consolidated Statement of Stockholders' Deficit.

     The following provides a summary of some of the other terms of the
preferred shares:

     - All shares of Convertible Preferred Stock shall rank prior to all
       of the Company's common stock, both as to payment of dividends
       and as to distributions of assets upon liquidation, dissolution
       or winding up of the Company, whether voluntary or involuntary.

     - In the event of any dividend or other distribution payable in
       cash, securities or other property, each holder of shares of
       Convertible Preferred Stock shall be entitled to receive payment
       or distribution of such dividend.

     - In the event of any voluntary or involuntary liquidation,
       dissolution, or winding-up of the Company, the holders of shares
       of any series of preferred stock, has a priority on liquidation
       superior to that of the Convertible Preferred Stock.

     - The shares of Convertible Preferred Stock are not redeemable,
       however the Company from time to time may increase the conversion
       rate by any amount for any period of time if the period is at
       least 20 days and if the increase is irrevocable during the
       period whenever the conversion rate is to be so increased.

     - The Company will pay any and all issue or other taxes that may be
       payable in respect of any issue or delivery of shares of Common
       Stock on conversion of the Convertible Preferred Stock.  The
       Company will not, however, be required to pay any tax which may
       be payable in respect of any transfer involved in the issue or
       delivery of Common Stock (or other securities or assets) in a
       name other than that which the shares of Convertible Preferred
       Stock so converted were registered, and no such issue or delivery
       shall be made unless and until the person requesting such issue
       has paid to the Company the amount of such tax or has
       established, to the satisfaction of the Company, that such tax
       has been paid.

     (k)  During the year ended December 31, 2004, the Company issued
a total of 33,660,001 restricted shares of common stock to Mr. Dix for
accrued salaries for 2002, 2003 and 2004.

     (l)  During the year ended December 31, 2004, the Company issued
a total of 28,234,638 restricted shares of common stock to Mr.
Boudewyn for accrued salaries for 2002, 2003 and 2004.

     For each of the transactions noted above, the transaction was
negotiated, on the part of the Company, on the basis of what is in the
best interests of the Company and its shareholders.  In addition, in
each case the interested affiliate did vote in favor of the
transaction; however, the full board of directors did make the
determination that the terms in each case were as favorable as could
have been obtained from non-affiliated parties.

     Certain of our directors are engaged in other businesses, either
individually or through corporations in which they have an interest,
hold an office, or serve on a board of directors.  As a result,
certain conflicts of interest may arise between the Company and
such directors.  The Company will attempt to resolve such conflicts of
interest in our favor.

ITEM 13.  EXHIBITS.

Exhibits.

     Exhibits included or incorporated by reference herein are set
forth under the Exhibit Index.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees.

     The aggregate fees billed for each of the last two fiscal years
for professional services rendered by Squar, Milner, Reehl &
Williamson, LLP and Carter & Balsam (collectively, "Accountants") for
the audit of our annual financial statements, and review of financial
statements included in the company's Form 10-QSB's: 2004: $67,000; and
2003: $40,000.

Audit-Related Fees.

     The aggregate fees billed in each of the last two fiscal years
for assurance and related services by the Accountants that are
reasonably related to the performance of the audit or review of our
financial statements and are not reported under Audit Fees above: $0.

Tax Fees.

     The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the Accountants for tax compliance,
tax advice, and tax planning: 2004: $9,000; and 2003: $17,400.

All Other Fees.

     The aggregate fees billed in each of the last two fiscal years
for products and services provided by the Accountants, other than the
services reported above: $0.

Audit Committee.

     The Company's audit committee consists of Messrs. Williams,
Pearce, Hirschman, and Haney, all being independent directors.  The
audit committee has adopted a written charter.  Mr. Williams has been
designated the Audit Committee's "financial expert" in compliance with
Item 401(e) of Regulation S-B.

     The primary responsibility of the Audit Committee is to oversee
our financial reporting process on behalf of the Company's board of
directors and report the result of their activities to the board.
Such responsibilities include, but are limited to, the selection, and
if necessary the replacement, of the Company's independent auditors,
review and discuss with such independent auditors (i) the overall
scope and plans for the audit, (ii) the adequacy and effectiveness of
the accounting and financial controls, including the Company's system
to monitor and manage business risks, and legal and ethical programs,
and (iii) the results of the annual audit, including the financial
statements to be included in our annual report on Form 10-KSB.

     The Company's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors.  These
services may include audit services, audit-related services, tax
services and other services.  Pre-approval is generally provided for
up to one year and any pre-approval is detailed as to the particular
service or category of services and is generally subject to a specific
budget.  The independent auditors and management are required to
periodically report to the audit committee regarding the extent of
services provided by the independent auditors in accordance with this
pre-approval, and the fees for the services performed to date.  The
audit committee may also pre-approve particular services on a case-by-
case basis.

                               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.

                                       5G Wireless Communications, Inc.


Dated:  March 30, 2005                 By: /s/  Jerry Dix
                                       Jerry Dix, Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the date indicated:

         Signature                    Title                        Date

/s/  Jerry Dix               Chief Executive Officer/Director    March 30, 2005
Jerry Dix

/s/  Don Boudewyn            Executive Vice                      March 30, 2005
Don Boudewyn                 President/Secretary/Treasurer
                             (principal financial and
                             accounting officer)/Director

/s/   Phil E Pearce          Director                            March 30, 2005
Phil E Pearce

/s/  Stanley A. Hirschman    Director                            March 30, 2005
Stanley A. Hirschman

/s/  Murray H. Williams      Director                            March 30, 2005
Murray H. Williams

/s/  Kirk Haney              Director                            March 30, 2005
Kirk Haney

               REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders
5G Wireless Communications, Inc.

We have audited the accompanying consolidated balance sheet of 5G
Wireless Communications, Inc.  (the "Company"), as of December 31,
2004 and the related consolidated statements of operations,
stockholders' deficit, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of 5G Wireless Communications, Inc. as of December 31, 2004, and the
consolidated results of its operations and its cash flows for the year
then ended in conformity with accounting principles generally accepted
in the United States of America.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As disclosed in Note 1,
the Company incurred losses of $4,989,200 and $2,159,694 during the
years ended December 31, 2004 and 2003, respectively, and has an
accumulated deficit of $18,759,655 as of December 31, 2004. These
factors raise substantial doubt as to the Company's ability to
continue as a going concern. If the Company is unable to generate
sufficient cash flow from operations and/or continue to obtain
financing to meet its working capital requirements, it may have to
curtail its business sharply or cease business altogether.
Management's plans in regard to these matters are also described in
Note 1.  The financial statements do not include any adjustments
relating to the recoverability and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.


/s/  Squar, Milner, Reehl & Williamson, LLP
Newport Beach, California
March 5, 2005

        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Shareholders
5G Wireless Communications, Inc.

We have audited the consolidated statements of operations,
stockholders' deficit, and cash flows of 5G Wireless Communications,
Inc. (the "Company") for the year ended December 31, 2003.  These
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the results of the
Company's operations and its cash flows for the year ended December
31, 2003, in conformity with accounting principles generally accepted
in the United States of America.

The consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in
Note 1 to the consolidated financial statements, the Company has
suffered recurring losses from operations and has a net capital
deficit that raise substantial doubt about its ability to continue as
a going concern.  Management's plans in regard to these matters are
also described in Note 1.  The consolidated financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.


/s/ Carter & Balsam
Sherman Oaks, California
May 13, 2004

                      5G WIRELESS COMMUNICATIONS, INC.
                        CONSOLIDATED BALANCE SHEET
                           DECEMBER 31, 2004

ASSETS
Investments in portfolio company, at fair value
(cost $302,230 at December 31, 2004)                                $ 302,230
Cash                                                                  636,904
Prepaid expenses                                                        2,520
Total assets                                                        $ 941,654

                       LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities:
Accounts payable and accrued liabilities                           $ 325,716
Notes payable                                                         57,648
Convertible notes - current portion                                1,191,916

     Total liabilities                                             1,575,280

Stockholders' deficit:
Preferred Series "A" convertible stock,
$0.001 par value; 10,000,000 shares
authorized; 3,000,000 outstanding                                      3,000
Common stock, $0.001 par value;
5,000,000,000 shares authorized;
871,037,368 outstanding                                              871,037
Additional paid in capital                                        17,757,548
Common stock held in escrow                                         (355,556)
Unearned compensation                                               (150,000)
Accumulated deficit                                              (18,759,655)
Total stockholders' deficit                                         (633,626)

Total liabilities and stockholders' deficit                          941,654

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


                              5G WIRELESS COMMUNICATIONS, INC.
                           CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
                                                          2004          2003

Revenues                                               $ 651,450     $ 167,302
Cost of revenues                                         199,611       137,314
Gross profit                                             451,839        29,988

Operating expenses:
General and administrative                               563,290       238,690
Salaries and related                                     835,999       657,042
Professional/consulting services                       3,217,407     1,145,653
Depreciation                                              87,883        71,278
          Total operating expenses                     4,704,579     2,112,663

         Operating loss                               (4,252,740)   (2,082,675)

Interest expense (including amortization
of financing costs and debt discounts)                  (736,460)      (77,019)
Net loss                                              (4,989,200)   (2,159,694)

Loss per common share:
    Basic and diluted                                     (0.011)       (0.018)

Weighted average shares outstanding:                 459,645,106    120,043,524

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

                          5G WIRELESS COMMUNICATIONS INC.
                         STATEMENTS OF STOCKHOLDERS' DEFICIT
                    FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


<TABLE>
<CAPTION>

                                                                     Common
                Preferred Stock        Common Stock                Stock Held
                 ($0.001 Par)          ($0.001 Par)     Additional     in        Unearned    Accumulated
                                                         Paid-In     Escrow    Compensation     Deficit     Total
                Shares   Amount        Shares   Deficit   Total
<S>>             <C>      <C>           <C>      <C>       <C>         <C>          <C>           <C>        <C>
Balance,
December 31,
2002                  -  $    -     164,922,457 $164,922 $10,646,593 $      -    $      -     $(11,610,761) $(799,246)
Shares issued
for:
Services              -       -      61,692,783   61,692   1,097,193        -           -                -  1,158,885
Debt                  -       -      62,189,106   62,189     353,736        -           -                -    415,925
Cash                  -       -       7,686,900    7,688     345,812        -           -                -    353,500

Net loss                                                                    -           -       (2,159,694) (2,159,694)
Balance,
December 31,
2003                  -       -    296,491,246   296,491  12,443,334        -           -      (13,770,455) (1,030,630)

Shares issued
for:
Services              -       -    154,204,849   154,205   2,274,741        -           -                -   2,428,946
Debt conversion       -       -     63,450,490    63,450     523,938        -           -                -     587,388
Cash for common       -       -      1,335,221     1,335      20,293        -           -                -      21,628
Shares held in
Escrow                             355,555,562   355,556             (355,556)          -                -           -
Services for
preferred
stock         3,000,000   3,000              -         -     197,000        -    (150,000)               -      50,000
Debt discount
related to
beneficial
conversion
features              -       -              -         -   2,298,242        -           -                -   2,298,242
Net Loss                                                                                        (4,989,200) (4,989,200)
Balance,
December 31,
2004         3,000,000   3,000     871,037,368   871,037  17,757,548  (355,556)   (150,000)    (18,759,655)   (633,626)
</TABLE>


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


                          5G WIRELESS COMMUNICATIONS, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                      2004          2003

Cash flows from operating activities:
Net loss                                              $(4,989,200) $(2,159,694)
Adjustments to reconcile net loss to
net cash used in operating activities:
       Deprecation and amortization                        87,883       71,278
Amortization of unearned compensation                      50,000            -
Common stock for services                               2,428,946    1,158,884
Amortization of BCF/discount on convertible notes         627,067            -
Changes in:
        Accounts receivable                              (236,779)      (6,301)
        Inventory                                         (29,309)      (4,500)
 Prepaid expenses                                          72,056            -
        Other assets                                            -      (62,340)
        Accounts payable and accrued liabilities          103,572      126,849
        Other accrued expenses                           (450,140)     460,073
Net cash flows used in operating activities            (2,335,904)    (415,751)

Cash flows from investing activities:
   Transfer of cash to portfolio company                 (100,000)           -
   Purchase of property and equipment                    (100,356)     (46,337)
   Net cash flows used in investing activities           (200,356)     (46,337)

Net cash flows from financing activities:
Proceeds from notes payable                                85,000       80,000
Repayments on notes payable                              (125,634)           -
Net proceeds from convertible notes payable             2,980,500      235,000
Cash received for common stock                             21,628      353,500
   Net cash flows provided by financing activities      2,961,494      668,500

Net increase in cash                                      425,234      206,412

Cash, beginning of period                                 211,670        5,258

Cash, end of period                                    $  636,904   $  211,670

Supplemental disclosure of noncash investing
  and financing activities:
Transfer of assets and liabilities
to portfolio company                                   $  302,230   $        -

Conversion of debt to common stock                     $  587,388   $        -

Common stock issued and held in escrow                 $  355,556   $        -

Preferred stock issued for unearned
Compensation                                           $  200,000   $        -

Beneficial conversion feature on convertible
   notes payable                                       $2,298,242   $        -

Supplemental disclosure of cash flow information:
   Cash paid of income taxes                           $     800    $     800

   Cash paid for interest                              $ 644,092    $  77,019


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


                          5G WIRELESS COMMUNICATIONS, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 2004

1.  NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business.

5G Wireless Communications, Inc. ("Company") was incorporated as
Tesmark, Inc. in September 1979.  In November 1998, the Company
changed its state of incorporation from Idaho to Nevada; in January
2001, it changed its name to 5G Wireless Communications, Inc.  In
March 2001, the Company acquired 5G Partners, a Canadian partnership,
and changed its business to provide wireless technology systems
through high speed Internet access and data transport systems.  In
April 2002, it acquired Wireless ThinkTank, Inc., a developer of high-
speed long distance wireless technologies and in July 2003, it shifted
its strategy from that of a service provider to an equipment
manufacturer, or OEM.

Effective November 2004, the Company elected to be treated as a
business development company ("BDC") under the Investment Company Act
of 1940 ("1940 Act").  As a BDC, it is the intent of the Company to
seek out investment candidates in areas related to its prior
operating business that can benefit from the management expertise and
technology already inherent in its operations.   In addition, it
intends to assemble a diverse portfolio of companies with strategic
information and communications technologies or applications,
leveraging the combined talents of its experienced management team to
incubate these companies and seeking to enhance shareholder value.

Pursuant to its new business focus, on December 31, 2004, the Company
transferred certain of its OEM assets and liabilities into 5G Wireless
Solutions, Inc., a portfolio company ("Portfolio Company") of the
Company, in exchange for 302,230 shares of the subsidiary's common
stock.  Consequently, the Company's statements of operations for 2004
and 2003 reflect the revenues and expenses of its OEM business prior
to the transfer.  The transfer of the OEM assets and liabilities to
the Portfolio Company was recorded based on the Company's historical
carrying amounts, which management and the board of directors also
believe approximates fair value at December 31, 2004.

The Portfolio Company is a technology company that succeeds to the OEM
business of the Company.  It provides patent pending, innovative
wireless technology.  It designs, builds, markets and sells both
outdoor and indoor wireless radio systems used for both wireless LAN
and WAN applications, including Wi-Fi, to customers that include
colleges, universities and cities.

Going Concern Basis of Presentation.

The accompanying financial statements have been prepared assuming that
the Company continues as a going concern that contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business assuming the Company will continue as a
going concern.  However, the ability of the Company to continue as a
going concern on a longer-term basis will be dependent upon its
ability to generate sufficient cash flow from operations to meet its
obligations on a timely basis, to retain its current financing, to
obtain additional financing, and ultimately attain profitability.

During the years ended December 31, 2004 and 2003, the Company
incurred losses of $4,989,200 and $2,159,694, respectively, and the
Company has an accumulated deficit of $18,759,655 as of December 31,
2004. These factors raise substantial doubt as to the Company's
ability to continue as a going concern.  If the Company is unable to
generate sufficient cash flow from operations and/or continue to
obtain financing to meet its working capital requirements, it may have
to curtail its business sharply or cease business altogether.

Management plans to continue raising additional capital through a
variety of fund raising methods during 2005 and to pursue all
available fundraising alternatives in this regard. Management may also
consider a variety of potential partnership or strategic alliances to
strengthen its financial position.  In addition, the Company  will
continue to seek  additional  funds to ensure its  successful growth
strategy  and to  allow  for  potential  investments  into a diverse
portfolio of companies with strategic information and communications
technologies or applications.  Whereas the Company has been successful
in the past in raising capital, no assurance can be given that these
sources of financing will continue to be available to the Company
and/or that demand for the Company's equity/debt instruments will be
sufficient to meet its capital needs.  The financial statements do not
include any adjustments relating to the recoverability and
classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

If funding is insufficient at any time in the future, the Company may
not be able to take advantage of business opportunities or respond to
competitive pressures, or may be required to reduce the scope of its
planned product development and marketing efforts, any of which could
have a negative impact on its business and operating results.  In
addition, insufficient funding may have a material adverse effect on
the Company's financial condition, which could require us to:

     - curtail operations significantly;

     - sell significant assets;

     - seek arrangements with strategic partners or other parties that
       may require us to relinquish significant rights to products,
       technologies or markets; or

     - explore other strategic alternatives including a merger or sale
       of the Company.

To the extent that the Company raises additional capital through the
sale of equity or convertible debt securities, the issuance of such
securities will result in dilution to existing stockholders.  If
additional funds are raised through the issuance of debt securities,
these securities may have rights, preferences and privileges senior to
holders of common stock and the terms of such debt could impose
restrictions on our operations.  Regardless of whether our cash assets
prove to be inadequate to meet the Company's operational needs, we may
seek to compensate providers of services by issuing stock in lieu of
cash, which will also result in dilution to existing shareholders.

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 include the valuation of the portfolio
company investment, revenue recognition, and concentrations of credit
risk. Actual results could differ from those estimates.

Investments in Portfolio Companies.

At December 31, 2004, Company's investment in portfolio companies
consists solely of the Portfolio Company.

Pursuant to the requirements of the 1940 Act, the Company's board of
directors is responsible for determining, in good faith, the fair
value of our securities and assets for which market quotations are not
readily available.  Fair value is determined pursuant to a valuation
methodology adopted by the board of directors.

The board of directors bases its determination upon, among other
things, applicable quantitative and qualitative factors.  These
factors may include, but are not limited to, type of securities,
nature of business, marketability, market price of unrestricted
securities of the same issue (if any), comparative valuation of
securities of publicly-traded companies in the same or similar
industries, current financial conditions and operating results, sales
and earnings growth, operating revenues, competitive conditions and
current and prospective conditions in the overall stock market.  The
valuation methodology requires:

(1)  With respect to equity securities in privately-owned companies,
that each investment be valued using valuation appraisals
provided by an independent valuation service provider or industry
valuation benchmarks, with the value assigned discounted to
reflect the illiquid nature of the investment as well as a
minority, non-control position, if such should be applicable.
When an external event such as a purchase transaction, public
offering, or subsequent equity sale occurs, the pricing indicated
by the external event is used to corroborate private equity valuation.

(2)  With respect to equity securities in public companies that carry
certain restrictions on resale, that each such investment be
valued at a discount from the market value of the securities as
quoted on the national securities exchange or national securities
association.

Without a readily available market value, the value of the Company's
portfolio of equity securities may differ significantly from the
values that would be placed on the portfolio if there existed a ready
market for such equity securities.

Principles of Consolidation.

The consolidated financial statements as of and for the years ended
December 31, 2004 and 2003 include the accounts of the Company and its
wholly owned subsidiary, Wireless ThinkTank, Inc.  All significant
intercompany transactions and balances have been eliminated in consolidation.

Cash and Cash Equivalents.

The Company considers all highly liquid fixed income investments with
maturities of three months or less at the time of acquisition, to be
cash equivalents.   The Company had no cash equivalents at December 31, 2004.

Concentrations of Credit Risk.

Financial instruments that potentially subject the Company to
concentrations of credit risk include cash and accounts receivable.
The Company maintains its cash funds in Bank Certificates of Deposits
or as bank deposits in highly rated credit institutions. At times,
such investments may be in excess of the Federal Deposit Insurance
Corporation insurance limit. At December 31, 2004, these uninsured
funds totaled $610,455.

The Company's customers are located in the United States.  The Company
provides an allowance for losses on trade receivables based on a
review of the current status of existing receivables and management's
evaluation of periodic aging of accounts. The Company charges off
accounts receivable against the allowance for losses when an account
is deemed to be uncollectible. It is not the Company's policy to
accrue interest on past due receivables.

Income Taxes.

Deferred taxes are provided on the liability method whereby deferred
tax assets are recognized for deductible temporary differences and
operating loss and tax credit carry forwards and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases.  A deferred tax asset
is reduced by a valuation allowance if, in the opinion of management,
it is more likely than not that some portion or all of the deferred
tax assets will not be realized in the future.  Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

Revenue Recognition.

Revenues in 2004 and 2003 result principally from the sale and
installation of wireless radio systems to customers.  Revenues prior
to July 2003 result from broadband subscriber fees charged to
residential and business customers, web hosting and design, licensing
fees and engineering consulting services (See "Nature of Business"
above).  Equipment sales are recognized when products are delivered
without any further services required.  Subscription revenues, which
were partially received as an up front activation fee and monthly
recurring revenues that vary, were recognized as earned on a pro rata
basis. Licensing revenues were recognized when the earnings process
was completed.  Consulting services were recognized as earned pursuant
to contracts.

In December 1999, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue
Recognition," as amended and updated by SAB No. 104, which outlines
the basic criteria that must be met to recognize revenue and provides
guidance for presentation of revenue and for disclosure related to
revenue recognition policies in  financial statements filed with the
SEC.  Management believes that the Company's revenue recognition
policy for services and product sales conforms to SAB No. 104.

Basic and Diluted Loss Per Common Share.

Under Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share," basic  earnings  per common  share is computed
by dividing income available to common stockholders by the weighted-
average number of common shares assumed to be outstanding during the
period of computation.  Diluted earnings per share is computed similar
to basic earnings per share except that the denominator is increased
to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the
additional common shares were dilutive.  Because the Company has
incurred net losses, basic and diluted loss per share are the same
since additional potential common shares would be anti-dilutive.  The
calculated diluted loss per share does not take into account the
effect of obligations, such as restricted shares, convertible
securities and warrants, considered to be potentially dilutive.  Such
potentially dilutive securities averaged 459,645,106 and 120,043,524
shares for 2004 and 2003, respectively.

Fair Value of Financial Instruments.

For certain of the Company's financial instruments, including cash,
prepaid expenses, notes payable, convertible debt, accounts payable
and accrued liabilities, the carrying amounts approximate fair value
due to their short maturities.

Stock Based Compensation Arrangements.

The Company accounts for stock-based compensation to employees under
the recognition and measurement principles of Accounting Principles
Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations.  Under APB Opinion No. 25,
compensation expense is recorded for the difference between the fair
value of equity instruments and the amount to be paid by the employee.
In addition, the Company accounts for stock issued to non-employees
for services under SFAS No. No. 123, " Accounting for Stock Based
Compensation.  Under SFAS No. 123, stock compensation expense is
recorded based on the fair value of equity instruments, or the fair
value of the services, whichever is more clearly determinable.
Accordingly, the Company incurred expense of $2,478,946 in total stock
based compensation in 2004 and $1,158,885 in 2003.

During 2004, the Company granted certain options to independent
directors.  However, as a result of its conversion to a BDC, those
options were cancelled due to prohibitions imposed on the Company
under the 1940 Act, and therefore are no longer outstanding for
accounting purposes.

On June 8, 2004, the Company's board of directors adopted the 5G
Wireless Communications, Inc. 2004 Non-Employee Directors and
Consultants Retainer Stock Plan ("Retainer Stock Plan"). The purpose
of the Retainer Stock Plan is to enable the Company and its
subsidiaries to promote the interests of the Company and its
shareholders by attracting and retaining non-employee directors and
consultants capable of furthering the future success of the Company
and by aligning their economic interests more closely with those of
the Company's shareholders, by paying their retainer or fees in the
form of shares of the Company's common stock.  Each individual who is
a director or consultant is eligible to be a participant in the
Retainer Stock Plan.  On June 21, 2004, the Company filed with the SEC
a registration statement on form S-8 for the purpose of registering
150,000,000 common shares issuable under the Retainer Stock Plan under
the Securities Act of 1933.  However, since the Company has now
converted to a BDC, it notified those individuals that they no longer
would receive stock compensation under the plan effective December 31, 2004.

Research and Development.

In accordance with SFAS No. 2, "Accounting for Research and
Development Costs," all research and development costs must be charged
to expense as incurred.  Accordingly, internal research and
development costs are expensed as incurred. Third-party research and
developments costs are expensed when the contracted work has been
performed or as milestone results have been achieved. Company-
sponsored research and development costs related to both present and
future products are expensed in the period incurred.  Research and
development costs for the years ended December 31, 2004 and 2003 were
minor and are included in general and administrative expenses.

Segment Disclosures.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," changed the way public companies report information
about segments of their business in their annual financial statements
and requires them to report selected segment information in their
quarterly reports issued to shareholders. It also requires entity-wide
disclosures about the products and services an entity provides, the
foreign countries in which it holds significant assets and its major
customers. At December 31, 2004 and 2003, the Company operates in one
segment, as the Company at its current stage only includes one
operating company.

Reclassifications.

Certain reclassifications have been made to the prior year financial
statements to conform to the current year presentation.

Significant Recent Accounting Pronouncements.

In January 2003, the Financial Accounting Standards Board ("FASB")
issued FASB Interpretation ("FIN") No. 46, "Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51."  The primary
objectives of FIN No. 46 are to provide guidance on the identification
of entities for which control is achieved through means other than
voting rights (variable interest entities, or ("VIEs") and how to
determine when and which business enterprise should consolidate the
VIE.  This new model for consolidation applies to an entity for which
either: (1) the equity investors don't have a controlling financial
interest; or (2) the equity investment at risk is insufficient to
finance that entity's activities without receiving additional
subordinated financial support from other parties.  In addition, FIN
No. 46 requires that both the primary beneficiary and all other
enterprises with a significant variable interest in a VIE make
additional disclosures.  As amended in December 2003, the effective
dates of FIN No. 46 for public entities that are small business
issuers, as defined ("SBIs"), are as follows: (a) For interests in
special-purpose entities ("SPEs"): periods ended after December 15,
2004.  The December 2003 amendment of FIN No. 46 also includes
transition provisions that govern how an SBI which previously adopted
the pronouncement (as it was originally issued) must account for
consolidated VIEs.  Management has concluded that the Company does not
have any VIEs and does not believe FIN No. 46 will have any
significant effect on the Company's future financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity."  SFAS No. 150 establishes standards for how a company
classifies and measures certain financial instruments with
characteristics of both liabilities and equity, and is effective for
public companies as follows: (i) in November 2003, the FASB issued
FASB Staff Position ("FSP") No. 150-3, which defers indefinitely (a)
the measurement and classification guidance of SFAS No. 150 for all
mandatory redeemable non-controlling interests in (and issued by)
limited-life consolidated subsidiaries, and (b) SFAS No. 150's
measurement guidance for other types of mandatory redeemable non-
controlling interests, provided they were created before November 5,
2003; (ii) for financial instruments entered into or modified after
May 31, 2003 that are outside the scope of FSP No. 150-3; and (iii)
otherwise, at the beginning of the first interim period beginning
after June 15, 2003.  The Company adopted SFAS No. 150 (as amended) on
the aforementioned effective dates.  The adoption of this
pronouncement did not have a material impact on the Company's results
of operations or financial condition.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an
amendment of ARB No. 43, Chapter 4," which clarifies the accounting
for abnormal amounts of idle facility expense, freight, handling costs
and wasted material.  In Chapter 4 of Accounting Research Bulletin
("ARB") No. 43, paragraph 5 previously stated that ".under some
circumstances, items such as idle facility expense, excessive
spoilage, double freight, and re-handling costs may be so abnormal as
to require treatment as current period charges.."  SFAS No. 151
requires that such items be recognized as current-period charges,
regardless of whether they meet the criterion of so abnormal (an
undefined term).  This pronouncement also requires that allocation of
fixed production overhead to the costs of conversion be based on the
normal capacity of the production facilities.  SFAS No. 151 is
effective for inventory costs incurred in years beginning after June
15, 2005.  Management does not believe this pronouncement will have a
significant impact on its future financial statements.

In December 2004, the FASB issued SFAS No. 123-R, "Share-Based
Payment," which requires that the compensation cost relating to share-
based payment transactions (including the cost of all employee stock
options) be recognized in the financial statements.  That cost will be
measured based on the estimated fair value of the equity or liability
instruments issued.  SFAS No. 123-R covers a wide range of share-based
compensation arrangements including share options, restricted share
plans, performance-based awards, share appreciation rights, and
employee share purchase plans.  SFAS No. 123-R replaces SFAS No. 123,
"Accounting for Stock-Based Compensation," and supersedes APB Opinion
No. 25, "Accounting for Stock Issued to Employees."  As originally
issued, SFAS No. 123 established as preferable a fair-value-based
method of accounting for share-based payment transactions with
employees.  However, that pronouncement permitted entities to continue
applying the intrinsic-value model of APB Opinion No. 25, provided
that the financial statements disclosed the pro forma net income or
loss based on the preferable fair-value method.  Small Business
Issuers are required to apply SFAS No. 123-R in the first interim or
annual reporting period that begins after December 15, 2005.  Thus,
the Company's financial statements will reflect an expense for (a) all
share-based compensation arrangements granted after December 31, 2005
and for any such arrangements that are modified, cancelled, or
repurchased after that date, and (b) the portion of previous share-
based awards for which the requisite service has not been rendered as
of that date, based on the grant-date estimated fair value.
Management has not determined the future effect of this pronouncement
on its future financial statements.

The FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets, an
amendment of APB Opinion  No. 29, Accounting for Nonmonetary
Transactions."  The amendments made by SFAS No. 153 are based on the
principle that exchanges of nonmonetary assets should be measured
using the estimated fair value of the assets exchanged.  SFAS No. 153
eliminates the narrow exception for nonmonetary exchanges of similar
productive assets, and replaces it with a broader exception for
exchanges of nonmonetary assets that do not have commercial substance.
A nonmonetary exchange has "commercial substance" if the future cash
flows of the entity are expected to change significantly as a result
of the transaction.  This pronouncement is effective for nonmonetary
exchanges in fiscal periods beginning after June 15, 2005.  Management
does not believe that this pronouncement will have a significant
effect on its future financial statements.

Other recent accounting pronouncements issued by the FASB (including
its Emerging Issues Task Force), the American Institute of Certified
Public Accountants, and the SEC did not or are not believed by
management to have a material impact on the Company's present or
future consolidated financial statements.

2.  INVESTMENT IN PORTFOLIO COMPANY

On December 31, 2004, the Company transferred certain of its OEM
assets and liabilities into the  Portfolio Company in exchange for
302,230 shares of the Portfolio Company's common stock.  The assets
and liabilities transferred are summarized below:

     Cash                                    $100,000
     Accounts receivable, net of
     allowance for doubtful
     accounts of $29,794                      243,884
     Inventories                               33,809
     Computer and other
     equipment, net of
     accumulated depreciation of
     $203,216                                 106,579
Other assets                                    3,614
Trade accounts payable and
other accrued liabilities                    (185,656)

                                             $302,230

The transfer of the OEM assets and liabilities to the Portfolio
Company was recorded based on the Company's historical carrying
amounts. At December 31, 2004, the carrying value of the investment
approximates fair value as determined by a valuation prepared by an
independent third party provider.

3.  NOTES PAYABLE

Notes payable consist of the following at December 31, 2004:

Note payable, interest bearing at 10% per annum
with principal and interest payment of $2,500
monthly, maturing in July, 2006                                  $48,733

Note payable, interest bearing at 9% per annum with
principal and interest payment of $1,000
monthly, maturing in September, 2005                               8,915

$135,000 convertible note, bearing interest
8% per annum, due through July, 2005                              50,000

$250,000 convertible note, bearing interest at
9%, net of discount of $103,458, maturing in
March, 2006                                                      146,542

$805,000 convertible note, bearing interest at
9% per annum, net of discount
of $46,562 due through April, 2006                               758,438

$2,000,000 convertible note, bearing interest at
5% per annum, net of discount of $1,595,655 and $167,409
of principal converted, maturing in September, 2007              236,936

Total                                                         $1,249,564

$135,000 Convertible Notes.

In 2003, the Company agreed to terms with four investors, one of which
was the president of the Company, Peter Trepp, to loan the company a
total of $135,000 under subordinated promissory notes.  The
subordinated notes, bearing 8% simple interest payable at maturity or
conversion, automatically convert into shares of the security issued
in connection with the receipt of a new $2,500,000 equity financing,
or into shares of common stock in case of a change in control of the
Company.  The notes are subordinated to all of the Company's
indebtedness to banks, commercial finance lenders, insurance companies
or other financial institutions regularly engaged in the business of
lending money, but are senior to all other debt on the Company's
balance sheet.  Each investor was issued warrants to purchase shares
of the Company's common stock equal to 40% of the amount invested in
the notes. As of December 31, 2004 there was only $50,000 of the
original principal which remained outstanding.

$250,000 Convertible Notes.

In March 2004, the Company borrowed $250,000 under convertible notes
payable ("$250,000 Convertible Notes"), of which $100,000 came from
management or individuals related to certain management personnel.
All borrowings are due in March 2006, with monthly interest payments
on the outstanding balance; interest accrues at 9% per annum. The
$250,000 Convertible Notes may be converted into common stock of the
Company at the lesser of: (a) in accordance with the terms of a
subsequent financing, at the option of the holder, (b) 125% of the
closing bid price on the closing date, as defined, or (c) 60% of the
average of the three lowest closing bid prices during the twenty
trading days immediately prior to the conversion date.

In connection with the $250,000 Convertible Notes, the Company granted
warrants to purchase 666,667 shares of the Company's restricted common
stock at an exercise price of the lesser of: (a) the five day average
closing bid price prior to closing or (b) the fifteen day average
closing bid price prior to exercise.  The warrants vested upon grant
and expire in March 2006.

The convertible feature of the $250,000 Convertible Notes provides for
a rate of conversion that is below market value.  Such feature is
normally characterized as a "beneficial conversion feature" ("BCF").
Pursuant to Emerging Issues Task Force ("EITF") Issue No. 98-5,
"Accounting For Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratio" and EITF Issue
No. 00-27, "Application of EITF Issue No. 98-5 To Certain Convertible
Instruments," the Company has estimated the fair value of such BCF to
be approximately $176,000 related to these notes and recorded such
amount as a debt discount. Such discount is being amortized to
interest expense over the term of the notes. Amortization expense
during the year ended December 31, 2004 approximated $73,000.  Of the
$250,000 in proceeds, $50,000 came from Mr. & Mrs. Trepp, former
president and COO, $25,000 from Paul  Zygielbaum, a former employee of
the Company and $25,000 from Thomas Janes who is the father in law of
Donald Boudewyn, the Company's executive vice president. The note
holders are eligible to receive a warrant for 40% of the vested amount
for two years.

$805,000 Convertible Notes.

In March 2004, the Company borrowed $715,000 under convertible notes
payable ("$715,000 Convertible Notes").  All borrowings are due in
March 2006, with monthly interest payments on the outstanding balance;
interest accrues at 9% per annum. The $715,000 Convertible Notes may
be converted into common stock of the Company at the lesser of: (a) in
accordance with the terms of a subsequent financing, at the option of
the holder, (b) 125% of the closing bid price on the closing date, as
defined, or (c) 100% of the closing bid price during the sixty trading
days immediately prior to the conversion date.

In connection with the issuance of the $715,000 Convertible Notes, the
Company paid issuance costs of $74,500, which has been recorded as a
debt discount and is being amortized to interest expense over the life
of notes. During the year ended December 31, 2004, the Company
amortized approximately $28,000 of such amount.  In July 2004, the
Company borrowed an additional $90,000 under terms identical to those
of the $715,000 Convertible Notes.

$2,000,000 Convertible Notes.

On September 22, 2004, the Company entered into a subscription
agreement with Longview Fund, LP, Longview Equity Fund, LP, and
Longview International Equity Fund, LP whereby these investors shall
purchase up to $2,000,000 of principal amount of promissory notes,
bearing interest at 5% per annum, of the Company convertible into
shares of the Company's common stock at a conversion price equal to
the lesser of (i) 75% of the average of the five lowest closing bid
prices of the Company's common stock as reported by the OTC Bulletin
Board for the ninety trading days preceding the conversion date, or
(ii) $0.05. In addition, the convertible note holders will receive
Class A and Class B share warrants to purchase shares of common stock,
as described below.

$1,000,000 of promissory notes was purchased on the initial closing
date ("Initial Closing Purchase Price") and the second $1,000,000 of
the purchase price ("Second Closing Purchase Price") will be payable
within five business days after the earlier of (i) the actual
effectiveness of a Form SB-2 registration statement to be filed with
the SEC, or (ii) the date upon which the Company is able to issue to
the subscribers free trading unrestricted common stock as a "business
development company" as defined in Rule 602(a) of Regulation E under
the Securities Act of 1933 which took effect on November 6, 2004.  On
November 9, 2004, the Company received the $1,000,000 that was the
balance of the $2,000,000 convertible note.

In addition, the convertible note holders will receive Class A and
Class B share warrants to purchase shares of common stock based on the
following formulas:

(1) Class A Warrants

     30 Class A Warrants will be issued for each 100 shares which
     would be issued on each closing, assuming the complete conversion
     of the notes issued on each such closing sate at the conversion
     price in effect on each such closing date.  The per warrant share
     exercise price to acquire a share upon exercise of a Class A
     Warrant is 120% of the closing bid price of the common stock on
     the trading day immediately preceding the Initial Closing Date
     and is exercisable  until five years after the issue date of the
     Class A Warrants.

(2) Class B Warrants

     The Company will issue and deliver 125 Class B Warrants to the
     subscribers for each $1.00 of purchase  price  invested on each
     closing  date.  The per warrant share  exercise price to acquire
     a share upon exercise of a Class B Warrant is $0.02 and is
     exercisable  until three years after the issue date of the Class
     B Warrant.

As part of this funding arrangement, Jerry Dix and Don Boudewyn, the
Company's chief executive officer and executive vice president,
respectively, have agreed that for the period of 180 days after the
Second Closing Date during which such registration statement shall
have been current and available for use in connection with the public
resale of the shares and warrant shares, they will not sell or
otherwise dispose of any shares of common stock or any options,
warrants or other rights to purchase shares of common stock or any
other security of the Company which they own or have a right to
acquire, other than (i) in connection with an offer made to all
shareholders of the Company or any merger, consolidation or similar
transaction involving the Company, or (ii) with the prior written
consent of the investors and the Company, which shall not be
unreasonably withheld.

The convertible feature of the $1,000,000 Convertible Notes provides
for a rate of conversion that is below market value.  Pursuant to EITF
98-5 and EITF 00-27, the Company has estimated the fair value of such
BCF to be approximately $1,000,000 related to these notes and recorded
such amount as a debt discount.  Such discount is being amortized to
interest expense over the two-year term of the notes.  Amortization
expense on these notes during the year ended December 31, 2004
approximated $404,000.

During 2004, approximately $407,000 of principal balance of
convertible notes payable were converted into common stock (see Note
4), including $100,000 from a debt agreement entered into during 2003.

Other Notes Payable

On March 21, 2003, the Company signed a $50,000 promissory note to a
consultant due on or before December 31, 2003 which as of March 31,
2004 had a balance of $48,733 and is being repaid in monthly
installment of $2,500 per month.  In addition the company has on other
note payable that is a small loan that as of December 31, 2004 has an
outstanding balance of $8,915 with payments of $1,000 per month.

Maturities

Principal maturities of notes and convertible notes (assuming no
conversion) are as follows for the years ending December 31:

                                               Total Maturity

     2005                                      $     88,733
     2006                                         1,073,733
     2007                                         1,832,773
     2008                                                 -
     2009                                                 -
     thereafter                                           -
                                               $  2,995,239

4.  STOCKHOLDERS DEFICIT

Preferred Stock.

The Company has 10,000,000 authorized preferred shares.  On October 6,
2004, the Company's Compensation Committee granted and the Company
issued Series "A" convertible preferred shares ("Convertible Preferred
Stock") to Mr. Dix and Mr. Boudewyn totaling 3,000,000.  Each share of
Convertible Preferred Stock is convertible initially at the rate of
800 shares of common stock for each full share of convertible
preferred stock.  Each share of outstanding Series A Convertible
Preferred Stock entitles the holder thereof to vote on each matter
submitted to a vote of the stockholders of the Company and to have the
number of votes equal to the number (including any fraction) of shares
of common stock into which such share of Convertible Preferred Stock
is then convertible pursuant to the provisions hereof at the record
date for the determination of shareholders entitled to vote on such
matters or, if no such record date is established, at the date such
vote is taken or any written consent of stockholders becomes
effective.  The preferred shares are convertible after three years
from issuance.

A third party conducted an evaluation prior to the issuance and
concluded that the value of the preferred shares was $200,000, $50,000
of which was expensed for the year ended December 31, 2004.  The
difference of $150,000 is carried as unearned compensation in the
Consolidated Statement of Stockholders' Deficit.

The following provides a summary of some of the other terms of the
preferred shares:

     - All shares of Convertible Preferred Stock shall rank prior to all
       of the Company's common stock, both as to payment of dividends
       and as to distributions of assets upon liquidation, dissolution
       or winding up of the Company, whether voluntary or involuntary.

     - In the event of any dividend or other distribution payable in
       cash, securities or other property, each holder of shares of
       Convertible Preferred Stock shall be entitled to receive payment
       or distribution of such dividend.

     - In the event of any voluntary or involuntary liquidation,
       dissolution, or winding-up of the Company, the holders of shares
       of any series of preferred stock, has a priority on liquidation
       superior to that of the Convertible Preferred Stock.

     - The shares of Convertible Preferred Stock are not redeemable,
       however the Company from time to time may increase the conversion
       rate by any amount for any period of time if the period is at
       least 20 days and if the increase is irrevocable during the
       period whenever the conversion rate is to be so increased.

     - The Company will pay any and all issue or other taxes that may be
       payable in respect of any issue or delivery of shares of Common
       Stock on conversion of the Convertible Preferred Stock.  The
       Company will not, however, be required to pay any tax which may
       be payable in respect of any transfer involved in the issue or
       delivery of Common Stock (or other securities or assets) in a
       name other than that which the shares of Convertible Preferred
       Stock so converted were registered, and no such issue or delivery
       shall be made unless and until the person requesting such issue
       has paid to the Company the amount of such tax or has
       established, to the satisfaction of the Company, that such tax
       has been paid.

Common Stock.

During the period January 1, 2004 to March 31, 2004, the Company
issued a total of 4,320,000 shares pursuant to a registration
statement on Form S-8 and 254,752 in restricted shares to consultants
during the period for a total value of $226,583.

On July 15, 2004, the Company issued 3,000,000 shares of common stock
to one company for consulting services rendered to the company. These
shares had an aggregate value of $75,000 ($0.025 per share).  No
commissions were paid in connection with any of these sales. These
sales were undertaken under Rule 506 of Regulation D under the
Securities Act of 1933. Each of the transactions did not involve a
public offering and each of the investors represented that he/she was
a "sophisticated" or "accredited" investor as defined in Rule 502 of
Regulation D.

On September 16, 2004, the Company filed a Certificate of Amendment to
Articles of Incorporation. This document amended Article III of the
Articles of Incorporation to increase the number of authorized shares
of common stock from 800,000,000 to 5,000,000,000.  Under the
provisions of the Company's Articles of Incorporation, as amended,
this action does not require a vote of shareholders.

During the year ended December 31, 2004, the Company issued
154,204,849 shares of common stock for services, which were valued at
approximately $2,429,000.  Value is based on the terms of an agreement
or if no value is given for the shares, the closing market price on
the dates of granting will be used.  Included in such issuances, were
approximately 89,262,484 shares issued to certain consultants,
employees and directors of the Company in accordance with the related
employment agreements valued at approximately $1,100,587 (based on the
closing market price on the dates of grant or based on the average
closing price 5 days before and after a quarter).  Approximately
68,908,000 shares (valued at approximately $661,000) of the shares
issued to certain officers, directors and employees during the year
ended December 31, 2004 were issued to settle prior years obligations.

During the year ended December 31, 2004, in accordance with the terms
of the applicable convertible notes payable agreements, the Company
issued approximately 63,450,000 shares of common stock in connection
with the conversion of notes payable and accrued expenses totaling
approximately $587,000.

On November 9, 2004, the Company issued restricted shares of common
stock valued at $10,000 ($0.01015 per share) to an investor.  In
addition, the investor will receive four warrants to purchase a
minimum of $10,000, but not greater than $250,000, in shares of common
stock during each quarterly period during the 2005 calendar year.
This purchase of shares is in connection with a license agreement
entered into by the parties, dated February 19, 2004.

On November 3, 2004, the Company placed 177,777,778 shares in an
escrow account pursuant to terms of $2,000,000 convertible notes,
described above.

Warrants.

From time to time, the Company may grant warrants to third party
service providers or directors.

During the years ended December 31, 2004 and 2003, the Company granted
warrants to certain convertible note holders to purchase a total of
402,016,667 and 54,000 shares, respectively, of the Company's common
stock at exercise prices ranging from $0.058 per share to $.008 per share.

                                        Number of Shares     Weighted-Average
                                                              Exercise Price
Warrants outstanding and exercisable
at January 1, 2003                              -                      -

Granted                                 4,800,000               $0.01125

Exercised                                       -                      -

Expired                                         -                      -

Warrants outstanding and exercisable
at December 31, 2003                    4,800,000               $0.01125

Granted                               397,270,667               $0.0200

Expired
Warrants outstanding and exercisable
at December 31, 2004                  402,070,667               $0.0201

The number of outstanding and exercisable warrants as of December 31,
2004 is provided below:


<TABLE>
<CAPTION>
                                                       Outstanding and Exercisable
                                                                      Weighted-Average    Weighted-Average
                                                       Number          of Exercise           Remaining
Range of Exercise Prices                               Shares             Price            Life (Years)
<S>                                                    <C>               <C>                  <C>
$0.01125                                               54,000            $0.01125              3.4

$0.058 to $0.008                                      100,000            $0.033                1

$ 0.0204                                           70,666,667            $0.0204               3.5
$0.02                                             331,250,000            $0.02                 1.5

                                                  402,070,667
</TABLE>


Fair Value Disclosure.

The fair value of warrants was estimated using the Black-Scholes
option-pricing model with the following weighted-averaged assumptions:

                                                     Years Ended December 31,
                                                         2004        2003

Weighted-average expected life (years)                   0.083       0.083
Annual dividend per share                                    -           -
Risk-free interest rate                                   4.5%          5%
Volatility                                                2.25         4.5
Weighted-average fair value of
options and warrants granted                            $0.02       $0.083

Because the determination of the fair value of all warrants and
options granted includes the factors described in the preceding
paragraph, and because additional warrants and option grants are
expected to be made each year, the pro forma disclosures included in
Note 1 are not likely to be representative of the pro forma effect on
reported net income for future years.

5.  INCOME TAXES

                                                         2004        2003
Current:
  Federal                                               $    -     $      -
  State                                                      -            -

Total current                                                -            -

Deferred:
  Federal                                                    -            -
  State                                                      -            -

Total deferred                                               -            -

                                                        $    -     $      -

At December 31, 2004, the Company has federal net operating loss
carryforwards of approximately $14.7 million and state tax net
operating loss carryforwards of approximately $1 million.  The
carryforwards begin to expire in 2011 and 2013, respectively.

The benefit for income tax differs from the amounts computed by
applying the statutory federal income tax rate of 34% as follows:

                                                        2004        2003

Computed tax (benefit) expense:                       $(1,696,328)  $(734,296)
State taxes, net of federal benefit                      (299,352)   (129,581)
Valuation allowance                                     1,995,680     863,877

                                                                -           -

The tax effects of temporary differences that gave rise to significant
portions of deferred tax assets at December 31, 2004 and 2003 are as follows:

Deferred tax assets

                                                        2004        2003

Federal and state net operating losses                 $5,236,874  $3,241,194
Accruals for financial statement purposes
not currently deductible                                  506,187     506,187

Total deferred tax assets                              $5,743,061  $3,747,381

Valuation allowance                                    (5,743,061) (3,747,381)

                                                       $        -  $        -

In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized.  The ultimate
realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary
differences become deductible.  Management considers projected future
taxable income and tax planning strategies in making this assessment.
Based upon the history of operating losses, management believes it is
more likely than not the Company will not realize the benefits of
these deductible differences.  A full reduction allowance has been
recorded to offset 100% of the deferred tax asset.

6.  COMMITMENTS AND CONTINGENCIES

Lease Commitments.

In October, 2003, the Company negotiated an operating lease agreement
for its office and research and development space of approximately
10,560 square feet in Marina Del Rey, California for a five-year term,
ending in 2008.

The Company is committed to make future aggregate rental payments
under the terms of the lease agreement as noted below.


                                                  Year Ended
                                                  December 31,

2004                                              $  133,056
2005                                                 137,040
2006                                                 141,144
2007                                                 145,368
2008                                                 149,724
Total commitment                                     706,332

Rent expense approximated $148,000 and $78,000 for the years ended
December 31, 2004 and 2003, respectively.

Litigation.

Other  than as set  forth  below,  the  Company  is not a party to any
material pending  legal  proceedings,  claims  or  assessments  and,
to the  best of its knowledge, no such action by or against the
Company has been threatened.

On July 26, 2004, John P. Kelly, a former employee of the Company,
filed a Complaint against the Company alleging certain statutory and
common law claims against the Company based upon the non-payment of
certain amounts allegedly due to Mr. Kelly following his voluntary
resignation from the Company. The parties agreed in December to a
settlement which saw the return of 1,100,230 in common stock
originally valued at $68,000 to treasury in exchange for a settlement
of $68,163 to Mr. Kelly.

Consulting Agreements.

In connection with the Longview subscription agreement, the Company
entered into a consulting  agreement  with Ghillie Fanaz AG.  Under
this  agreement, the consultant will be paid a  "commencement bonus"
of $50,000 payable immediately, and an additional $50,000 immediately
upon the next closing of a funding to the Company of approximately
$1,000,000 in gross proceeds on similar terms as the current  funding.
Under this agreement, this consultant will help in:

     - developing and implementing appropriate plans and means for
       presenting the Company and its  business  plans,  strategy  and
       personnel to the financial  community,  establishing  an image
       for the  company  in the financial  community,  and  creating
       the  foundation  for  subsequent financial public relations
       efforts;

     - maintain an awareness of the Company's plans,  strategy and
       personnel, as  they  may  evolve,   and  consult   with  the
       company   regarding communicating  appropriate  information
       regarding such plans, strategy and personnel to the financial
       community;

     - introduce  to the  Company  investors  who the  consultant
       reasonably believes to be "accredited  investors" with whom the
       consultant has a pre-existing substantive relationship; and

     - at the Company's request, review business plans,  strategies,
       mission statements,  budgets,  proposed  transactions  and other
       plans for the purpose of advising the company of the economic
       implications thereof.

7.  RELATED PARTY TRANSACTIONS

In March 2004, the Company borrowed $250,000 under convertible notes
payable, of which $100,000 came from management or individuals related
to certain management personnel.  See Note 3 above.

In March 2004, the Company issued 1,000,000 restricted shares of
common stock to Mr. Corty, a former director, for expenses incurred on
behalf of the Company in the amount of $23,950.

On June 30, 2004 and September 30, 2004, the Company issued a total of
2,255,220 shares of common stock to Mr. Corty for accrued salaries for
2002, 2003 and 2004.

On September 29, 2004, the Company's board of directors appointed
Stanley A. Hirschman as an independent board member.  Mr. Hirschman
owns a 1/2% interest in Redwood Capital Management, which is the
management company for the investors in the $2,000,000 convertible
notes described above.

On October 4, 2004, the Company's board of directors appointed Phil E.
Pearce as an independent board member.  Mr. Pearce owns a 1/2%
interest in Redwood Capital Management, which is the management
company for the investors in the $2,000,000 convertible notes
described above.

During the year ended December 31, 2004, the Company issued a total of
33,660,001 restricted shares of common stock to Mr. Dix for accrued
salaries for 2002, 2003 and 2004.  In addition, on October 7, 2004, he
was issued 1,800,000 restricted shares of Series A Convertible
Preferred Stock in connection with the formation of the Portfolio Company.

During the year ended December 31, 2004, the Company issued a total of
28,234,638 restricted shares of common stock to Mr. Boudewyn for
accrued salaries for 2002, 2003 and 2004.  In addition, on October 7,
2004, he was issued 1,200,000 restricted shares of Series A
Convertible Preferred Stock in connection with the formation of the
Portfolio Company.

8.  SUBSEQUENT EVENTS (UNAUDITED)

(a)  On February 17, 2005, the Company made an investment in the
Portfolio Company in the amount of $125,000.   The purpose of the
investment was to support the ongoing working capital and general and
administrative expense needs of the Portfolio Company.   On March 10,
2005, the Company made another investment in the Portfolio Company in
the amount of $106,000.   This was also to fund general corporate purposes.

(b)  On March 17, 2005,  the Company issued 4,000,000 restricted shares
of common stock valued at $19,196 as a partial conversion of the first
$1,000,000 convertible note (principal and accrued interest) described
in Note 3 ($2,000,000 Convertible Note) above.

(c)  On March 22, 2005, the Company entered into a subscription
agreement with Longview Fund, LP, Longview Equity Fund, LP, and
Longview International Equity Fund, LP whereby these investors are
purchasing $1,000,000 in convertible notes, with Class A Warrants to
purchase up to 100 additional shares of common stock for each 100
shares issued on the Closing Date (as defined in the subscription
agreement) assuming the complete conversion of the notes issued on the
Closing Date.  The exercise price of the warrant is $0.01 per share.
The Class A Warrants are exercisable until five years after the
Closing Date.  The $1,000,000 investment has been received by the
Company on March 22, 2005.

Under the secured convertible note, they are convertible into common
stock of the Company at a price per share equal to subject to the
lower of (i) $0.01, or (ii) 75% of the average of the five lowest
closing bid prices of the common stock as reported by Bloomberg L.P.
for the principal market for the 90 trading days preceding a
conversion date.  The maximum conversion price is $0.01.

As part of this funding arrangement, the Company's chief executive
officer and executive vice president have agreed that from the Closing
Date until one year after the Actual Effective Date (as defined in the
subscription agreement) they will not sell or otherwise dispose of any
shares of common stock or any options, warrants or other rights to
purchase shares of common stock or any other security of the Company
which they own or have a right to acquire, other than in connection
with an offer made to all shareholders of the Company or any merger,
consolidation or similar transaction involving the Company.

                                    EXHIBIT INDEX

Number            Description

1       Agency Agreement between the Company and May Davis Group,
        Inc., dated April 1, 2003 (incorporated by reference to
        Exhibit 1 of the Form 10-QSB/A filed on November 17, 2003).

2.1     Agreement and Plan of Reorganization and Merger between
        Tesmark, Inc., an Idaho corporation, and the Company
        (formerly know as Tesmark, Inc.), a Nevada corporation,
        dated November 10, 1998 (incorporated by reference to
        Exhibit 2 of the Form 10-SB filed on December 15, 1999).

2.2     Acquisition Agreement between the Company, and Richard
        Lejeunesse, Curtis Mearns, and Don Boudewyn, a partnership
        (known as 5G Partners), dated December 15, 2000, as amended
        (incorporated by reference to Exhibit 10 of the Form 8-K
        filed on February 14, 2001).

2.3     Share Purchase Agreement between the Company, and Sea Union
        Industries Pte. Ltd., Richard Lajeunesse, Rita Chou, Peter
        Chen, Yeo Lai Ann, Tan Lam Im, Choa So Chin, Tan Ching
        Khoon, Tan Sek Toh, and 5G Wireless Communication Pte. Inc.
        (formerly known as Peteson Investment Pte Ltd.), dated May
        5, 2001 (incorporated by reference to Exhibit 2 of the Form
        8-K filed on June 5, 2001).

2.4     Purchase Agreement between the Company and Skyhub Asia
        Holdings Limited, eVision USA.com, and eBanker USA.com,
        dated May 19, 2001 (incorporated by reference to Exhibit 2.4
        of the Form 10-KSB filed on April 18, 2002).

2.5     Definitive Acquisition Agreement between the Company and
        Wireless Think Tank, dated April 30, 2002 (incorporated by
        reference to Exhibit 2 of the Form 8-K filed on August 13, 2002).

3.1     Articles of Incorporation, dated September 24, 1998
        (incorporated by reference to Exhibit 3 of the Form 10-SB
        filed on December 15, 1999).

3.2     Certificate of Amendment to Articles of Incorporation, dated
        May 5, 2000 (incorporated by reference to Exhibit 3.3 of the
        Form SB-2 filed on January 10, 2002).

3.3     Certificate of Amendment to Articles of Incorporation, dated
        January 19, 2001 (incorporated by reference to Exhibit 3.1
        of the Form 8-K filed on February 14, 2001).

3.4     Certificate of Amendment to Articles of Incorporation, dated
        January 21, 2003 (incorporated by reference to Exhibit 3.4
        of the Form 10-KSB filed on May 8, 2003).

3.5     Certificate of Amendment to Articles of Incorporation, dated
        September 16, 2004 (incorporated by reference to Exhibit 3.1
        of the Form 8-K filed on September 22, 2004).

3.6     Certificate of Correction, dated September 20, 2004
        (incorporated by reference to Exhibit 3.2 of the Form 8-K
        filed on September 22, 2004).

3.7     Bylaws, dated September 25, 2002 (incorporated by reference
        to Exhibit 3.5 of the Form 10-KSB filed on May 8, 2003).

4.1     2001 Stock Incentive Plan, dated November 1, 2001
        (incorporated by reference to Exhibit 10 of the Form S-8
        filed on December 10, 2001).

4.2     Non-Employee Directors and Consultants Retainer Stock Plan,
        dated January 30, 2002 (incorporated by reference to Exhibit
        4.1 of the Form S-8 filed on January 31, 2002).

4.3     Amended and Restated Stock Incentive Plan, dated January 30,
        2002 (incorporated by reference to Exhibit 4.2 of the Form
        S-8 filed on January 31, 2002).

4.4     Form of Subscription Agreement Between the Company and
        investors, dated February 12, 2002 (including the following
        exhibits: Exhibit A: Form of Notice of Conversion; Exhibit
        B: Form of Registration Rights Agreement; Exhibit C: Form of
        Debenture; and Exhibit D: Form of Opinion of Company's
        Counsel) (the following to this agreement have been omitted:
        Exhibit E: Board Resolution; Schedule 3(A): Subsidiaries;
        Schedule 3(C): Capitalization; Schedule 3(E): Conflicts;
        Schedule 3(G): Material Changes; Schedule 3(H): Litigation;
        Schedule 3(L): Intellectual Property; Schedule 3(N): Liens;
        and Schedule 3(T): Certain Transactions) (incorporated by
        reference to Exhibit 4.4 of the Form 10-QSB filed on May 20, 2002).

4.5     Escrow Agreement between the Company, First Union Bank, and
        May Davis Group, Inc., dated February 12, 2002 (incorporated
        by reference to Exhibit 4.5 of the Form 10-QSB filed on May 20, 2002).

4.6     Form of Escrow Agreement between the Company, Joseph B.
        LaRocco, Esq., and investors, dated February 12, 2002
        (incorporated by reference to Exhibit 4.6 of the Form 10-QSB
        filed on May 20, 2002).

4.7     Security Agreement (Stock Pledge) between the Company and
        investors, dated February 12, 2002 (incorporated by
        reference to Exhibit 4.7 of the Form 10-QSB filed on May 20, 2002).

4.8     Amended and Restated Non-Employee Directors and Consultants
        Retainer Stock Plan, dated June 1, 2003 (incorporated by
        reference to Exhibit 4 of the Form S-8 POS filed on June 26, 2003).

4.9     Form of Subscription Agreement Between the Company and
        investors (including the following exhibits: Exhibit A: Form
        of Debenture ; Exhibit B: Form of Notice of Conversion;
        Exhibit C: Form of Opinion; and Exhibit D: Subscription
        Procedures) (the following schedules have been omitted:
        Schedule 3(a): Subsidiaries; Schedule 3(c): Capitalization;
        Schedule 3(e): Conflicts; Schedule 3(g): Material Changes;
        Schedule 3(h): Litigation; Schedule 3(l): Intellectual
        Property; Schedule 3(n): Liens; and Schedule 3(t): Certain
        Transactions) (incorporated by reference to Exhibit 4.9 of
        the Form 10-QSB/A filed on November 17, 2003).

4.10    Form of Subordinated, Convertible Note and Warrants
        Agreement between the Company and investors (including the
        following exhibits: Exhibit A: Form of Convertible
        Subordinated Promissory Note; and Exhibit B: Form of Warrant
        Agreement) (incorporated by reference to Exhibit 4.10 of the
        Form 10-QSB filed on November 24, 2003)

4.11    Form of Promissory Note issued by the Company to
        investors, dated March 4, 2004 (incorporated by reference to
        Exhibit 4.1 of the Form 10-QSB/A filed on May 28, 2004).

4.12    Form of Note Purchase Agreement between the Company and
        investors, dated March 4, 2004 (incorporated by reference to
        Exhibit 4.2 of the Form 10-QSB/A filed on May 28, 2004).

4.13    Form of Warrant issued by the Company to investors,
        dated March 4, 2004 (incorporated by reference to Exhibit
        4.3 of the Form 10-QSB/A filed on May 28, 2004).

4.14    2004 Non-Employee Directors and Consultants Retainer Stock
        Plan, dated June 8, 2004 (incorporated by reference to
        Exhibit 4 of the Form S-8 filed on June 21, 2004).

4.15    Subscription Agreement between the Company, on the one
        hand, and Longview Fund, LP, Longview Equity Fund, LP, and
        Longview International Equity Fund, LP, on the other hand,
        dated September 22, 2004 (including the following items:
        Exhibit A1: Form of Class A Warrant; Exhibit A2: Form of
        Class B Warrant; Exhibit B: Funds Escrow Agreement; Exhibit
        E: Shares Escrow Agreement; Exhibit F: Form of Limited
        Standstill Agreement; Exhibit G: Security Agreement; and
        Exhibit H: Collateral Agent Agreement) (not including the
        following items: Attachment 1: Disclosure Schedule; Exhibit
        C: Form of Legal Opinion; Exhibit D: Form of Public
        Announcement on Form 8-K; Schedule 5(d): Additional
        Issuances; Schedule 5(q): Undisclosed Liabilities; Schedule
        5(s): Capitalization; Schedule 9(e) Use of Proceeds;
        Schedule 9(q): Limited Standstill Providers; and Schedule
        11.1: Other Securities to be Registered) (incorporated by
        reference to Exhibit 4 of the Form 8-K filed on September
        30, 2004).

4.16    Form of Common Stock Purchase Warrant issued by the Company
        in favor of Pole Star Communications, Inc., dated November
        1, 2004 (incorporated by reference to Exhibit 4 of the Form
        8-K filed on November 12, 2004).

4.17    Certificate of Designation of Series A Convertible Preferred
        Stock, dated October 5, 2004 (filed herewith).

4.18    Subscription Agreement between 5G Wireless Communications,
        Inc., on the one hand, and Longview Fund, LP, Longview
        Equity Fund, LP, and Longview International Equity Fund, LP,
        on the other hand, dated March 22, 2005 (including the
        following items: Exhibit A: Form of Class A Warrant; Exhibit
        B: Funds Escrow Agreement; Exhibit C: Security Agreement;
        Exhibit D: Collateral Agent Agreement; and Exhibit G: Form
        of Limited Standstill Agreement) (not including the
        following items: Attachment 1: Disclosure Schedule; Exhibit
        E: Legal Opinion; Exhibit F: Form of Public Announcement or
        Form 8-K; Schedule 5(d): Additional
        Issuances/Capitalization; Schedule 5(q): Undisclosed
        Liabilities; Schedule 5(x): Subsidiaries; Schedule 9(e) Use
        of Proceeds; and Schedule 9(p): Limited Standstill
        Providers) (incorporated by reference to Exhibit 4.1 of the
        Form 8-K filed on March 31, 2005).

4.19    Form of Secured Convertible Note between 5G Wireless
        Communications, Inc., on the one hand, and Holders on the
        other hand, dated March 22, 2005 (incorporated by reference
        to Exhibit 4.3 of the Form 8-K filed on March 31, 2005).

10.1    Employment Agreement between the Company and Jerry Dix,
        dated February 1, 2002 (incorporated by reference to Exhibit
        10.12 of the Form 10-KSB filed on April 18, 2002).

10.2    Employment Agreement between the Company and Don Boudewyn,
        dated February 1, 2002 (incorporated by reference to Exhibit
        10.13 of the Form 10-KSB filed on April 18, 2002).

10.3    Employment Agreement Amendment between the Company and Don
        Boudewyn, dated April 1, 2002 (incorporated by reference to
        Exhibit 10.17 of the Form 10-KSB filed on April 18, 2002).

10.4    Executive Employment Agreement between the Company and Peter
        Trepp, dated July 4, 2003 (including Exhibit A: Employee
        Proprietary Information and Inventions Agreement) (the
        following exhibits have been omitted: Exhibit A - Schedule
        A: Employee's Disclosure; and Exhibit A - Schedule B:
        Termination Certificate Concerning 5G Wireless
        Communications, Inc. Proprietary Information (incorporated
        by reference to Exhibit 10 of the Form 10-QSB filed on
        November 24, 2003).

10.5    Independent Consulting Agreement between the Company and
        Ghillie Finaz, AG, dated September 22, 2004 (incorporated by
        reference to Exhibit 10 of the Form 8-K filed on September
        30, 2004).

10.6    Form of agreement between the Company and its independent
        directors (incorporated by reference to Exhibit 10.2 of the
        Form 10-QSB filed on November 17, 2004).

10.7    Contribution Agreement between the Company 5G Wireless
        Solutions, Inc. (the following to this agreement have been
        omitted: Schedule 1: List of Assets; and Schedule 2: List of
        Liabilities), dated December 31, 2004 (incorporated by
        reference to Exhibit 10 of the Form 8-K filed on January 7, 2005).

14      Code of Ethics, dated October 5, 2004 (filed herewith).

16.1    Letter on Change in Certifying Accountant (incorporated by
        reference to Exhibit 16 of the Form 8-K/A filed on August 28, 2003).

16.2    Letter on Change in Certifying Accountant (incorporated by
        reference to Exhibit 16 of the Form 8-K/A filed on September 30, 2004).

21      Subsidiaries of the Company (incorporated by reference to
        Exhibit 21 of the Form 10-QSB filed on August 27, 2002).

31.1    Rule 13a-14(a)/15d-14(a) Certification of Jerry Dix (filed herewith).

31.2    Rule 13a-14(a)/15d-14(a) Certification of Don Boudewyn
        (filed herewith).

32      Section 1350 Certification of Jerry Dix and Don Boudewyn
        (filed herewith).

99.1    Patent Application, dated March 28, 2002 (incorporated by
        reference to Exhibit 99.2 of the Form 10-KSB filed on May 8, 2003).

99.2    Text of Press Release Issued by the Company, dated September
        29, 2004 (incorporated by reference to Exhibit 99.1 of the
        Form 8-K filed on September 30, 2004).

99.3    Text of Press Release Issued by the Company, dated September
        30, 2004 (incorporated by reference to Exhibit 99.2 of the
        Form 8-K filed on September 30, 2004).

99.4    Text of Press Release Issued by the Company, dated October
        5, 2004 (incorporated by reference to Exhibit 99 of the Form
        8-K filed on October 8, 2004).

99.5    Text of Press Release Issued by the Company dated October
        28, 2004 (incorporated by reference to Exhibit 99 of the
        Form 8-K filed on November 3, 2004).