UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended March 31, 2006

                 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Transition Period From _____ to ____

                        Commission File Number 000-27339

                            NEXTPHASE WIRELESS, INC.
                 (Name of Small Business Issuer in its Charter)



               Nevada                                  88-0343832
     --------------------------------            -------------------
     (State or Other Jurisdiction of               (I.R.S. Employer
      Incorporation or Organization)               Identification No.)


      300 S. Harbor Blvd, Suite 500
            Anaheim, California                         92805
     --------------------------------               ----------------
  (Address of Principal Executive Offices)            (Zip Code)




         Issuer's telephone number, including area code: (800) 748-5548

                  Securities registered under Section 12(b) of
                                the Exchange Act:

                                            Name of Each Exchange
                 Title of Each Class        on Which Registered
                 -------------------        ---------------------


                                      None

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $.001 par value
                         -----------------------------
                                (Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Note - Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act from their
obligations under those Sections.

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes | | No |X|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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. [ ]

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

State issuer's revenues for its most recent fiscal year: $ 643,367.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates, based upon the average bid and asked price of such common equity
as of June 22, 2006, was $3,311,011.


      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |_| No |_|

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

The number of shares outstanding of the issuer's common stock as of June 22,
2006 was 25,193,921 shares.

                    DOCUMENTS INCORPORATED BY REFERENCE: none

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

<PAGE>


                            NEXTPHASE WIRELESS, INC.

                                TABLE OF CONTENTS

                                                                            Page

                                  PART I

Item 1.     Description of Business........................................... 1
Item 2.     Description of Property........................................... 9
Item 3.     Legal Proceedings.................................................10
Item 4.     Submission of Matters to a Vote of Security Holders...............10


                                  PART II
Item 5.     Market for Common Equity, Related Stockholder Matters
            and Small Business Issuer Purchases of Equity Securities..........10
Item 6.     Management's Discussion and Analysis or Plan of Operation.........12
Item 7.     Financial Statements..............................................17
Item 8.     Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure...............................17
Item 8A.    Controls and Procedures...........................................18
Item 8B     Other Information.................................................19


                                 PART III
Item 9.     Directors, Executive Officers, Promoters and Control Persons
            of the Registrant; Compliance with Section 16(a) of the Act.......19
Item 10.    Executive Compensation............................................20
Item 11.    Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters........................21
Item 12.    Certain Relationships and Related Transactions....................22
Item 13.    Exhibits..........................................................23
Item 14.    Principal Accountant Fees and Services............................24
            Signature Page....................................................25
            Financial Statements....................................F-1 to  F-21



<PAGE>

                                     PART I

                     RISK FACTORS AND CAUTIONARY STATEMENTS

Forward-looking statements in this report are made pursuant to the "safe harbor"
provisions of the Private Securities  Litigation Reform Act of 1995. The company
wishes to advise readers that actual results may differ  substantially from such
forward-looking   statements.   Forward-looking  statements  include  underlying
assumptions  and  other  statements  that  are  other  than  historical   facts.
Forward-looking  statements  involve  risks and  uncertainties  that could cause
actual  results  to differ  materially  from those  expressed  or implied by the
statements,  including,  but not limited to, the  following:  the ability of the
company to provide for its  obligations,  to provide  working capital needs from
operating  revenues,  to  obtain  additional  financing  needed  for any  future
acquisitions,  to meet competitive  challenges and  technological  changes,  and
other  risks  detailed  in  the  company's  periodic  report  filings  with  the
Securities and Exchange Commission.


ITEM 1. DESCRIPTION OF BUSINESS.

General
-------

NextPhase Wireless, Inc. is a connectivity company that specializes in
delivering integrated Internet, voice and data communications solutions to our
customers. We offer a full portfolio of connectivity solutions, including
dial-up access, DSL, wireless, T1, co-location and web-hosting. We design,
deploy and operate our own wireless networks, and we also provide wireless
connectivity solutions to businesses and municipalities.

NextPhase has been operating in this business since August 3, 2004 when we
acquired our subsidiary NextPhase Technologies, Inc. in a share exchange
transaction which is described below under the heading "Corporate History".
Accordingly, the company has limited operating history upon which prospects and
future performance can be evaluated. Before August 3, 2004 we had no revenues
while we incurred expenses in developing our business. Although the company
generated approximately $643,000 in revenues in fiscal year 2006, it continues
to incur relatively substantial expenses in the development of its business.

NextPhase continues to develop an integrated portfolio of connectivity products
and services which include:

o    Operating as an Internet Service Provider (ISP) of tiered Internet
     connectivity services to business and residential subscribers, nationwide.

o    Design, deployment, operation and support of integrated wireless networking
     solutions.

o    Bundling multiple technologies, such as Broadband Wireless Access (BWA),
     Voice over Internet Protocol (VoIP) and WiFi, along with a high service
     component that target vertical markets such as public safety, transport and
     homeland security.

NextPhase is exploiting the broadband connectivity and integration markets, by:

o    Developing and deploying our portfolio of connectivity products and
     services.

o    Continuing to develop our management team with best-in-class experienced
     executives and professionals.

o    Seeking strategic alliances, relationships, and acquisitions to augment the
     growth of our connectivity products and services operations.

o    Growing our market share and extending our footprint through selective
     acquisitions and franchise and licensing programs.


Business Model
--------------

NextPhase is developing an integrated portfolio of innovative connectivity
products and services in the following divisions:

     o    NEXTPHASE BROADBAND operates as an Internet Service Provider (ISP)
          from our Network Operations Centers (NOCs) in Anaheim, CA and
          Marietta, GA, providing tiered Internet connectivity services
          (utilizing both wired and wireless technologies) to business and


                                       1
<PAGE>

          residential subscribers. We significantly expanded our capability and
          customer base in this area by acquiring the assets of Synkronus, Inc.
          in April 2006. Since the acquisition, we operate our ISP business
          under the name SpeedFactory. We are extending our wireless "footprint"
          by negotiating the deployment of network repeaters at strategic
          geographic locations, and plan to expand further through strategic
          alliances and selective acquisitions. By broadening our range of
          connectivity offerings to include DSL and T1 circuits in addition to
          our wireless capabilities, we have been able to provide connectivity
          services to customers outside our physical "footprint" and also to
          develop value-added redundancy and failover offerings by combining
          multiple technologies.

     o    NEXTPHASE PROFESSIONAL SERVICES designs, deploys, operates and
          supports wireless connectivity solutions. We leverage our
          relationships with leading manufacturers, distributors and service
          partners to offer a broad range of turnkey solutions and individually
          customized services to customers in our target markets, such as
          municipalities, enterprises and large-scale systems integrators.
          Leveraging our operational expertise and experience from designing and
          building the networks that supports our fast-growing wireless ISP
          business, we also design, build, deploy and operate large-scale
          NextZone(TM) and NextMetro(TM) networks in conjunction with, or on
          behalf of, clients such as property developers and municipalities.
          NextZone(TM) and NextMetro(TM) networks extend the hotspot concept,
          both in terms of scale and by including a service layer that is
          tailored to the specific needs of targeted markets.

          o    NextZone(TM) networks are primarily targeted at property
               developers (both commercial and residential), stadiums, airports,
               small municipalities, etc. and provide them with the capability
               to provision, deliver, monitor and invoice end-consumers for
               Internet connectivity services (or they can contract with us to
               do some or all of that on their behalf).

          o    NextMetro(TM) networks builds upon the NextZone(TM) offering in
               three key ways; scale, integration and multi-use:

               o    In terms of scale, NextMetro(TM) networks are targeted at
                    major municipalities and large enterprises; customers whose
                    needs are complex and who are looking for comprehensive
                    connectivity solutions.


               o    While NextZone(TM) networks tend to be stand-alone solutions
                    (the networks usually consisting of a sizeable backhaul
                    connection to the Internet, with point-to-multipoint
                    wireless connectivity to the end-customers, aggregating and
                    servicing the demand ) that provides initial connectivity or
                    extends existing connectivity, NextMetro(TM) networks often
                    require extensive integration into existing network
                    infrastructures, which often incorporate multiple
                    connectivity technologies (e.g. fiber, leased lines, CDMA,
                    etc.).

               o    In terms of traffic and usage, NextZone(TM) networks are
                    primarily used for connectivity to and from the Internet,
                    with some secondary uses dependent on the specific customer
                    and their application requirements (e.g. video surveillance,
                    remote monitoring, VoIP, etc.). The traffic / usage patterns
                    for NextMetro(TM) networks are often more complex, with
                    requirements to provide multiple service types with
                    differing Quality of Service (QoS) expectations to different
                    end-users. An example would be a major municipality
                    requiring a combination of services that could include:
                    mobile data/voice connectivity for police, public
                    transportation and EMS vehicles; enterprise-level
                    connectivity for municipal offices; Virtual Private Network
                    (VPN) connectivity for employees; tiered paid-access
                    broadband connectivity services for businesses, residents
                    and visitors (potentially including `free' connectivity
                    services in specific geographic locations for economic
                    development purposes).


Market Opportunity
------------------

In refining our business model, we have identified multiple niche market
opportunities that we are actively pursuing.

                                       2
<PAGE>

     O    NEXTPHASE BROADBAND

          o    SMALL TO MIDSIZE BUSINESSES (SMBS)
               SMBs are not served well by traditional connectivity
               technologies. As they're often physically located outside the
               footprint of cable providers (who primarily focus on residential
               markets), their choices are often limited to services provided by
               their telephone companies such as DSL and T1 circuits. The
               majority of DSL services are asynchronous in nature, with faster
               download speeds than upload capabilities. This can result in
               bottlenecks for companies who need to transmit a lot of data.
               While T1s offer fast, synchronous connections (1.5 Mbps each
               way), they are relatively expensive for small businesses,
               generally have long installation lead times and are not scaleable
               as connectivity needs grow. NextPhase has developed a range of
               flexible, scalable and cost-effective solutions that target the
               connectivity needs of SMBs, letting them focus on growing their
               businesses.

          o    UNDERSERVED / FAST GROWING RESIDENTIAL MARKETS
               The high deployment costs for traditional technologies such as
               cable and DSL often results in `cherry picking' of high-density
               markets, leaving rural and low-density markets underserved. In
               addition to being expensive to deploy (ten times more costly than
               wireless infrastructure), it is also very time consuming to
               deploy, resulting in a `window of opportunity' for technologies
               that can be rapidly and cost-effectively deployed. By deploying
               wireless connectivity technologies, NextPhase can `light up'
               marginal markets faster and at lower cost than any competing
               technology, providing cost-effective connectivity services to
               markets that enjoy little or none of the pricing pressures seen
               in more attractive markets.

          o    NATIONWIDE DSL RESELLER OF CHOICE
               As part of the 1996 Telecommunications Act, pro-competitive rules
               governing network unbundling were introduced by the FCC, enabling
               other ISPs to access to the carriers' networks at discounted
               rates. While the DSL market is fiercely competitive and very
               price-sensitive at the lower end of the market, NextPhase has
               identified niche opportunities for differentiated services. In
               particular, we believe that there is a growing market for
               cost-effective, high-touch (enabled through automation and
               integration) connectivity services to customers alienated by
               impersonal Service Providers. Our market research suggests that
               this segment is not as price sensitive and is willing to pay a
               premium for offerings that include high customer service /
               technical support components. In order to serve this segment, we
               have negotiated favorable reseller agreements that allow us to
               offer DSL and T1 services nationwide, with us providing the
               additional service layer.


     O    NEXTPHASE PROFESSIONAL SERVICES

          o    TIER 1 MUNICIPAL MARKETS
               Many of these high profile projects are being won by large scale
               system integrators, who often have relatively little in-house
               expertise in wireless integration and implementation, and in RF
               projects in general. We are still relatively early in the life
               cycle for projects of this nature, with few deployments of this
               size or level of complexity. From a capital perspective, the
               technologies being deployed are not yet mass market and so the
               associated economies of scale are not yet realizable. From a
               revenue perspective, the business models are still evolving and
               it remains uncertain whether forecasts will be realized in the
               short-term. By positioning ourselves as a trusted advisor to the
               general contractors responsible for these large-scale projects,
               we have an opportunity to leverage our experience and expertise,
               allowing us to maximize our returns while minimizing our levels
               of risk and exposure.

                                       3
<PAGE>

          o    TIER 2 / 3 MUNICIPAL MARKETS
               While competition to build out wireless capabilities in Tier 1
               markets has been intense (where traditional connectivity
               technologies are often readily available, or at least available
               in the high-margin neighborhoods), smaller cities are often
               overlooked and underserved by traditional providers who have been
               slow or reluctant to build out broadband infrastructure in these
               markets. While these markets often escape the `loss leader'
               predatory pricing seen in the Tier 1 markets, the lower density
               and often lower percentage of high-margin business customers
               results in more complex, multi-use networks (e.g. public,
               commercial, government and public safety traffic, all utilizing
               the same network infrastructure) being the only way that the
               projects can be made viable. NextPhase's integration capabilities
               are key differentiators in this segment, and we are partnering
               with wireless equipment manufacturers, municipalities and
               agencies in designing, deploying, operating and supporting
               complex (often multi-use) wireless networking solutions.

          o    VERTICAL MARKETS - TRANSPORTATION / MOBILE SECURITY
               Homeland Security mandates and the associated funding that is
               being made available is rapidly transforming mobile security from
               a niche market to a major market. Wireless connectivity
               technologies are being deployed as a `wrapper' to the core
               technologies, allowing differentiating high value services to be
               defined and delivered. Again, NextPhase's integration
               capabilities and focus on service delivery are key
               differentiators in these markets. Through partnering with
               premiere manufacturers we enable the provision of enhanced mobile
               security solutions (i.e. extended capabilities, reduced operating
               costs) to regional and metropolitan transit authorities.


Business Strategy
-----------------

NextPhase operates in the rapidly evolving broadband connectivity industry, with
our primary expertise and experience in the provision of broadband internet
services and wireless connectivity and integration. In order to distinguish
ourselves from the competition and to emerge as an acknowledged market leader,
we focus on executing a disciplined business strategy that is highlighted by a
seasoned management team, elite professional services, new market-driven
products and innovative customer-centric marketing programs.

     o    With the seasoned executive team we've built, we have a lot of
          experience and expertise for a young company. We plan to continue to
          bring in best-in-class professionals and executives as we grow.

     o    NextPhase Professional Services will continue to be a "jewel in the
          crown", establishing and reinforcing our reputation in the
          marketplace, serving as an important revenue source, and leveraging
          our experience and expertise in designing, deploying and operating
          wireless networks to provide turnkey connectivity solutions in target
          markets such as municipalities, public safety, transport, homeland
          security and others.

     o    With the acquisition of SpeedFactory (completed post year-end), we are
          now focusing our broadband activities on becoming a national broadband
          internet service provider of choice. Our research has identified an
          opportunity for cost-effective, high-touch connectivity services to
          customers alienated by impersonal services provided by existing
          internet service providers. SpeedFactory's previous investment in
          automation and integration enables us to rapidly scale from our
          existing regional base in Georgia, and we have negotiated favorable
          reseller agreements with three leading telecommunication companies
          that allow us to offer those products and services on a nationwide
          basis.

     o    Through a combination of strategic relationships and acquisitions, we
          plan to continue rolling out our portfolio of innovative connectivity
          products and services to customers in target markets across the U.S.

     o    We plan to focus on growing market share and extending our "footprint"
          through selective acquisitions and the development and deployment of
          franchise and licensing programs.


                                       4
<PAGE>

Marketing Strategy
------------------

We take a market-back approach to those markets identified as offering potential
for sustainable growth. In order to determine the basis for differentiation and
strategy, we develop a deep understanding of our target markets. This includes
customers, competitors, value chains, leverage points, and the strategic
opportunities that they represent. These opportunities are then assessed against
our own capabilities and competitive advantages, with potential strategies
evaluated in light of anticipated competitive responses and market developments.

Building off the business strategy, our marketing strategy focuses on locating,
attracting, and retaining customers. Our approach is to first establish and
validate ourselves as a thought leader within our chosen segments, building
relationships with all key industry participants and developing strong,
recognizable brands in the marketplace. Once we capture `mind share', we will
then utilize a combination of marketing tools to translate that into market
share, with the goal of achieving market leadership.


Competition
-----------

NextPhase faces intense competition from:

     o    Wireless equipment manufacturers relative to our manufacture of
          wireless products.

     o    Large, medium and small scale system integrators relative to our
          wireless professional services business.

     o    Cable, DSL, fiber optic lines and satellite communication providers
          relative to our broadband connectivity business.

Entry barriers in these areas are relatively low and increased competition is
likely. As we seek to develop and expand our business, we expect to face a
greater number of competitors, many of whom will be well-established in the
markets in which we operate and those we seek to penetrate. Many of our
competitors are much larger, have better name recognition and have far greater
financial and other resources. We cannot provide assurances that we will be able
to effectively compete against them, or any future competitors.

Competition may lower the prices we are able to charge our customers, thereby
potentially lowering the amount of income on future sales and sales of products
and services. We cannot provide assurances that we will be able to compete
successfully in our evolving markets.

o    WIRELESS PROFESSIONAL SERVICES

     As wireless connectivity is increasingly accepted as an alternative and/or
     supplement to wireline communications, new applications are rapidly being
     developed and deployed, such as wireless security, and wireless
     technologies are increasingly being considered for existing
     mission-critical applications. Typical projects are becoming both larger
     and more complex. In terms of competition, the marketplace can be
     characterized into four groups;

          o    Large scale system integrators, such as IBM, Hewlett Packard,
               CSC.

          o    Medium-size system integrators, such as Avaya, Alcatel and
               Siemens.

          o    Specialized wireless engineering and integration firms, such as
               WPCS International and Business Information Group (BIG).

          o    Smaller "garage shop" cellular and tower installation companies.

     As wireless installations have become more complex, a distinction is being
     drawn between those companies with to `soup to nuts' capabilities, from
     design through deployment to operation and maintenance (either having the
     skills themselves or access to them through strategic partnerships and
     alliances), and those that do not. As the bar continues to be raised,
     smaller "garage shops" are being excluded by enterprise-level customers,
     and also by leading wireless manufacturers and large scale integrators
     looking for partners.

                                       5
<PAGE>

     The large scale integrators are starting to see this market as attractive,
     as projects approach the size and level of complexity that they are
     familiar with. Recognizing that they have skill gaps in terms of wireless
     design and deployment, these integrators are forming relationships with the
     specialized wireless engineering and integration firms to win bids and
     complete projects. Simultaneously, they are determining whether they need
     to buy or build their own wireless capabilities over the longer term. In
     seeking relationships with the large scale integrators and leading wireless
     manufacturers, those specialized wireless engineering and integration firms
     that have a regional or national presence, either by themselves or through
     alliances with other similar players, have a significant advantage.

O    BROADBAND WIRELESS ACCESS (BWA)

     By the end of 2005, the worldwide installed base for broadband connections
     had grown from 130 million in 2004 to 221 million connections. Forecasts
     suggest that the market will further grow to 286 million connections by the
     end of 2006, and 448 million connections by 2010. In building out this
     market, the key challenge that every provider faces has been in
     cost-effectively connecting their customers to the Internet backbone.
     Various technologies such as cable, DSL, fiber, satellite, wireless and
     leased line, have been deployed to bridge this `last mile', and have met
     with varying degrees of success and resultant market share.

     While cable and DSL currently represent approximately 90% of the
     residential market, they are not a universal panacea. In particular, rural
     markets have proven uneconomic to cable and their telephone infrastructure
     does not always support DSL because it is a distance-sensitive technology.
     In addition, areas of many urban markets, for example 40% of Greater
     Philadelphia, and many smaller regional markets have been overlooked as
     incumbent providers such as telephone companies and cable providers focus
     on the more attractive metropolitan markets.

     In the business market, the high-end continues to be dominated by leased
     lines, with DSL leading the low-end. Cable has limited coverage in this
     market because the underlying infrastructure is often not present.

     Research indicates that today the broadband wireless access market is
     fragmented, with over 3000 companies providing solutions in niche
     markets across the U.S. The advent of common technology standards, which is
     driving down costs and promoting compatibility and interoperability, and
     Intel's support in seeding the market by building awareness, educating the
     customer base and creating demand, is driving rapid change. While it
     currently has relatively low market penetration, management believes that
     wireless broadband is poised to become a market leader for both fixed and
     mobile connectivity.

          In terms of competition, the BWA market can be divided into three
          groups:

               o    telcos and leading ISPs looking to cost-effectively extend
                    their reach and presence,

               o    well-funded national and regional WISPs such as Towerstream,
                    Clearwire and Speakeasy pursuing aggressive roll-out and
                    roll-up strategies in both business market, which is their
                    primary focus.

               o    the residential market and smaller WISPs providing
                    connectivity, primarily to residential consumers, in single
                    locations.

          Increasingly, the smaller WISPs are being squeezed as price wars
          between cable and DSL operators have brought prices down to
          uncompetitive levels and the underserved market continues to shrink
          from 40% of zip codes with no high speed providers in December 1999,
          to 5% in December 2004. Continuing high Consumer Premises Equipment
          (CPE) costs, little opportunity to negotiate favorable bandwidth
          costs, limited marketing expertise and restricted access to funding
          alternatives means that the smaller WISPs are in no position to
          compete on price.


Suppliers
---------

NextPhase selects "best-of-breed" components and equipment for our products and


                                       6
<PAGE>

services, which are readily available from several vendors at relatively similar
prices. Accordingly, we are not dependent on any suppliers.


Customers
---------

NextPhase began developing its customer base in August 2004 when we acquired our
wholly owned subsidiary, NextPhase Technologies, Inc. With the recent
acquisition of the SpeedFactory assets from Synkronus, Inc. (completed after the
2006 fiscal year-end), we have increased that customer base by over 1100%, from
approximately 250 to 3000 customers. We believe that if we lose one or more
current or future customers, we will readily be able to replace them with new
customers. We receive a substantial portion of our professional services
customers through our relationships with large scale wireless equipment
manufacturers and system integrators. If we lose any of these relationships, we
may experience a slow down in volume of customers for a period of time until we
develop similar relationships with other wireless equipment manufacturers and
system integrators. We cannot predict our business will develop or that our
customer base will continue to expand as we expect.


Research and Development
------------------------

The company focuses its research and development efforts on products, services
and methodologies that enable it to build on its expertise in designing,
deploying, operating and supporting connectivity solutions. The company does not
currently conduct pure, general research, but focuses upon developing specific,
marketable products and services which the company has the current capability to
deliver.

For the fiscal year ended March 31, 2006, the company specifically focused on
developing a range of innovative connectivity solutions designed to satisfy the
connectivity needs of municipalities and enterprises:

o    NextZone(TM) Connectivity Solutions
     An innovative range of connectivity products and services that can be
     integrated with existing infrastructure (copper, fiber, ethernet, etc.) to
     provide flexible, scalable, reliable and cost-effective connectivity
     solutions.

o    Sudden Network(TM) Solutions
     A portfolio of innovative products and services that enable design,
     deployment and management of 'on demand' networks, enabling rapid and
     cost-effective extension of existing networks, either to satisfy spikes in
     demand or to provide additional functional requirements. The same
     technologies can also be rapidly deployed in response to unplanned events,
     offering timely support for emergency responders, and business continuity /
     disaster recovery for impacted communities and businesses.

o    NextNode Virtual Networks(TM)
     Leveraging our partner's 20,000 route miles of metro and regional fiber,
     NextNode Virtual Networks(TM) combines an 'on-net' fiber backbone with a
     wireless 'last mile' to deliver flexible, reliable, scalable and
     cost-effective connectivity solutions to customers nationwide.



Intellectual Property
---------------------

NextPhase's proprietary wireless products are based on readily available
component parts, units and off-the-shelf software. Our technology is not
patented, nor have we obtained or applied for, copyright registration for our
products. The configuration and specifications of our products and the
compilation, integration, bundling or embedding of component parts and software
which comprises our products are protected as a trade secret.

We believe the designs, complexity and total integration of components and
software into our products and know-how best protects our trade secrets. We
cannot assure that our trade secrets, know-how and confidential and proprietary
information will provide us with meaningful protections. We require that every
employee and consultant sign an agreement of non-disclosure and assignment of
development rights.


                                       7
<PAGE>

Government Regulation
---------------------

Our products and services, as well as components that we purchase from suppliers
to bundle or include in our product and service offerings, are subject to
telecommunications-based regulation by the United States and foreign laws and
international treaties. We must conform our products to a variety of regulatory
requirements and protocols established to, among other things, avoid
interference among users of radio frequencies and to permit interconnection of
equipment. The delays inherent in this regulatory approval process may force us
to reschedule, postpone or cancel the installation of our products by our
customers, or the commencement of our services to our customers, which may
result in reductions in our sales.

In the United States, we are subject to various Federal Communications
Commission, or FCC, rules and regulations. Current FCC regulations permit
license-exempt operation in certain FCC-certified bands in the radio spectrum.
Operation in these frequency bands is governed by rules set forth in Part 15 of
the FCC regulations. The Part 15 rules are designed to minimize the probability
of interference to other users of the spectrum and, thus, accord Part 15 systems
license-exempt status in the frequency band. In the event that there is harmful
interference caused by a Part 15 user, the FCC can require the Part 15 user to
curtail transmissions that create interference. In addition, if users of our
products or services experience excessive interference from primary users,
market acceptance of our products or services could be adversely affected, which
could materially and adversely affect our business and operating results. The
FCC, however, has established certain standards that create an irrefutable
presumption of noninterference for Part 15 users and we believe that our
products comply with such requirements. There can be no assurance that the
occurrence of regulatory changes, including changes in the allocation of
available license-exempt frequency spectrum, changes in the use of allocated
frequency spectrum, or modification to the standards establishing an irrefutable
presumption of non-interference for unlicensed Part 15 users, would not
significantly affect our operations by rendering current products and services
obsolete, restricting the applications and markets served by our products or
increasing the opportunity for additional competition.

Several changes by the FCC were approved within the last several years including
changes in the availability of spectrum, as well as the granting of an interim
waiver. These approved changes could create opportunities for other wireless
networking products and services. There can be no assurance that new regulations
will not be promulgated, that could materially and adversely affect our business
and operating results. It is possible that the United States and other
jurisdictions will adopt new laws and regulations affecting the pricing,
characteristics and quality of broadband wireless systems and products.
Increased government regulations could:


     o    decrease the growth of the broadband wireless industry;

     o    hinder our ability to conduct business internationally;

     o    reduce our revenues;

     o    affect the costs and pricing of our products;

     o    increase our operating expenses; and

     o    expose us to significant liabilities.

Any of these events or circumstances could seriously harm our business and
results of operations.

Personnel
---------

We have thirteen full time employees and one contract part-time employee. Nine
full time employees are located at our corporate offices in Anaheim, California,
with the remaining employees located at our office in Marietta, Georgia.


Corporate History
-----------------

NextPhase Wireless, Inc. was incorporated on August 28, 1995 in Nevada under the
name of Professional Mining Consultants, Inc.


                                       8
<PAGE>

On August 3, 2004 the company, then known as Edison Renewables, Inc.,
consummated a share exchange in which it issued 12,943,000 shares of common
stock, or approximately 76% of the company's outstanding common stock, to the
shareholders of NextPhase Technologies, Inc. ("NTI") in exchange for all of the
shares of NTI. As a result, NTI became a wholly owned subsidiary of the company.
NTI did not have an operating business. Its assets were technology related to
high-speed wireless networks, which had an ability to penetrate populated areas,
and special antennas and equipment in the area of microwave technology.

Prior to August 3, 2004 the company had no revenues, while it incurred expenses
in the development of its business. In fiscal year 2006 NextPhase generated
approximately $643,000 in revenues and continued to incur relatively substantial
expenses to develop its business.

The company's corporate address is 300 S. Harbor Blvd, Anaheim, CA 92805 and its
telephone number is (800) 748-5548. The company maintains a website at
www.npwireless.com. Information contained on the website is not part of this
report.


Subsidiaries
------------

The company has two wholly owned subsidiaries.

     o    SPEEDFACTORY, INC., a Nevada corporation, which operates the company's
          Internet Service Provider business.

     o    NEXTPHASE TECHNOLOGIES, INC., a California corporation, which does not
          currently have any operations.


Available Information
---------------------

The company files annual, quarterly and reports, proxy and information
statements, and registration statements with the Securities and Exchange
Commission. The public may read and copy any materials we file with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information regarding issuers such as the company that files electronically with
the SEC and state the address of that site (http://www.sec.gov).



ITEM 2. DESCRIPTION OF PROPERTY.

The company leases 1,748 square feet of Class A office space at 300 S. Harbor
Blvd., Suite 500, Anaheim, California, which serve as the corporate offices and
company headquarters. The monthly cost of this office space is $2,359 and the
lease expires on October 31, 2009.

The company also leases 2,767 square feet of additional Class A office space in
the same building as its corporate offices. The monthly cost of this office
space is $3,598 and the lease expires on April 30, 2009.

The company also leases 1,169 square feet of data center space in the same
building as its corporate offices. This space serves as the company's main data
facility and houses the equipment that provides broadband Internet service to
the surrounding areas. The monthly cost of this data center space is $2,630.25
and the lease expires on November 30, 2008.

Effective April 1, 2006, the company leased approximately 2,000 square feet of
space in Marietta, Georgia, to house its acquisition of certain assets of
Synkronus, Inc. This lease calls for monthly payments of $2,350 and has a
one-year term.

NextPhase's facilities are adequate for its current needs and anticipated needs
for the next 12 months. However, in the event we consummate any acquisitions in
the future, we may need additional or alternative space.


                                       9
<PAGE>

ITEM 3. LEGAL PROCEEDINGS.

The company is subject to legal proceedings and claims that arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the company believes that the final disposition of such
matters will not have material adverse effect on its financial position, results
of operations or liquidity.


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

None




                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
        ISSUER PURCHASE OF EQUITY SECURITIES.

NextPhase Wireless' common stock trades in the over-the-counter market and is
quoted on the OTC Bulletin Board under the trading symbol NXPW. As of June 22,
2006, we had 24,293,921 shares of common stock issued and outstanding.

The following table sets forth, for the periods indicated, the high and low bid
prices per share of our common stock as quoted on the OTC Bulletin Board. The
quotations reflect inter-dealer quotations without retail markup, markdown, or
commission, and may not represent actual transactions.

         Source: www.quotemedia.com
                 ------------------



                            High           Low
                           ------        ------
2006 Fiscal Year
----------------

First Quarter              $ 2.50        $ .93
Second Quarter               1.25          .25
Third Quarter                 .40          .22
Fourth Quarter                .45          .20

2005 Fiscal Year
----------------

First Quarter              $ 2.50        $ .25
Second Quarter                .55          .55
Third Quarter                1.15          .45
Fourth Quarter               1.50          .30






As of June 22, 2006, the last reported sale price of the company's stock was
$0.16 per share.


Dividend Policy
---------------

No dividends have been paid by the company since its inception. We currently
intend to retain any earnings for use in the business and therefore do not
anticipate paying any dividends in the near future. Dividends on our common
stock can be paid lawfully only out of current and retained earnings and surplus
of the company, when, and if, declared by the Board of Directors. We have not
declared or paid any dividends on the common stock and there is no assurance
dividends will be paid in the foreseeable future. The payment of dividends in
the future rests within the discretion of the Board of Directors and will
depend, among other things, upon our earnings, our capital requirements and our
financial condition, as well as other factors, which the Board of Directors
deems relevant.

                                       10
<PAGE>

Holders
-------

There were 424 stockholders of record of the company's common stock as of June
22, 2006.


Securities Authorized for Issuance under Equity Compensation Plans
------------------------------------------------------------------

NextPhase Wireless adopted its 2003 Equity Participation Plan on February 24,
2003. Our shareholders approved the adoption of the plan by majority written
consent on the same day. No securities have been granted or issued under this
plan.

NextPhase Wireless, adopted its 2005 Employee Stock Compensation Plan on
October 19, 2005. This plan has not been approved by the company's stockholders.
This plan is used to issue shares of common stock of NextPhase to the employees
of NextPhase Wireless and its subsidiaries, in payment of wages, salary, bonuses
or other compensation from time to time. No options, warrants or other rights
exercisable or convertible into common stock or other securities of the company,
are issuable under this plan.

The plan is currently administered by a Compensation Committee selected by the
Board.

NextPhase Wireless has reserved a total of 20,000,000 shares of common stock for
issuance under the plan. As of March 31, 2006, 2,944,473 shares of common stock
had been issued and 17,055,527 shares remained available for issuance under this
plan.

As a condition to receiving shares under the plan, the employee receiving the
shares must consent in writing to accept shares in payment of wages, salary,
bonus or other compensation, as the case may be, prior to the issuance of shares
to that employee under the plan.

The board of directors of NextPhase may terminate the plan at any time or make
amendments or modifications which the board deems advisable from time to time,
including among other things

o    Increasing the maximum number of shares which can be issued under the plan,
     and

o    Changing the designations of class of employees who are eligible to receive
     shares under the plan.


Recent Sales of Unregistered Securities; Use of Proceeds from Registered
Securities
------------------------------------------------------------------------

All of the shares listed below were offered and sold under the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.


<TABLE>
<CAPTION>

                                                                                        Type of
Holder Name                   Date Sold     Number of Shares      Total Price         Consideration
----------------------------- ----------- -------------------- ------------------ ---------------------
<S>                           <C>         <C>                  <C>                <C>
Alex Gianetti                 7/22/2005                20,000             10,000    Cash
Hazar Marwan Alemem           7/8/2005                 13,200             10,560    Finders fee
Lynbrook Partners LLC         7/22/2005                20,000              8,600    Payment of trade debt
Rene Cummings                 7/26/2005                40,000             14,000    Finders fee
Crescent Fund LLC             8/25/2005               500,000            150,000    Services
Damon Brewer                  1/27/2006                10,000              2,500    Sign on bonus
Tim Waite                     1/27/2006                10,000              2,500    Sign on bonus
Stephen Taylor                1/27/2006                23,456              7,818    Services
John Trueman                  1/27/2006                23,456              7,818    Services
Pasadena Capital Partners     1/27/2006               400,000            100,000    IR Services
Market Solutions LLC          3/8/2006                 20,000              6,400    IR Services
OTC Picks LLC                 3/8/2006                120,000             33,600    IR Services

                                          -------------------- ------------------

                                                    1,200,112          $ 353,796
                                          ==================== ==================
</TABLE>

                                       11
<PAGE>

         All of the sales described above were made above were made

          o    directly by us to persons with whom management had direct contact
               and personal relationships, and

          o    to persons who were introduced to us by members of our
               management.

The company did not pay any commission or provide underwriter discounts for
shares sold for cash.

company also issued unregistered shares during fiscal year 2006 as previously
reported in its Quarterly Reports on Form 10-QSB filed during the 2006 fiscal
year.



ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The Management's Discussion and Analysis is intended to help shareholders and
other readers understand the dynamics of NextPhase Wireless Inc.'s business and
the key factors underlying its financial results. It explains trends in
NextPhase's financial condition and results of operations for the year ended
March 31, 2006 compared with the operating results for the year ended March 31,
2005.

Forward Looking Statements.
---------------------------

Certain information contained in this report may include "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, and is subject to the safe harbor created by that act. The safe harbor
created by the Securities Litigation Reform Act will not apply to certain
"forward looking statements" because we issued "penny stock" (as defined in
Section 3(a)(51) of the Securities Exchange Act of 1934 and Rule 3a51-1 under
the Exchange Act) during the three year period preceding the date(s) on which
those forward looking statements were first made, except to the extent otherwise
specifically provided by rule, regulation or order of the Securities and
Exchange Commission. We caution readers that certain important factors may
affect our actual results and could cause such results to differ materially from
any forward-looking statements which may be deemed to have been made in this
Report or which are otherwise made by or on behalf of us. For this purpose, any
statements contained in this report that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting the generality
of the foregoing, words such as "may", "will", "expect", "believe", "explore",
"consider", "anticipate", "intend", "could", "estimate", "plan", "propose",
"seem", "hope" or "continue" or the negative variations of those words or
comparable terminology are intended to identify forward-looking statements.
Factors that may affect our results include, but are not limited to, the risks
and uncertainties associated with:

          o    our ability to raise capital necessary to sustain our anticipated
               operations and implement our proposed business plan,

          o    our ability to implement our proposed business plan,

          o    the ability to successfully integrate the operations of
               businesses we have acquired, or may acquire in the future, into
               our operations.

          o    our ability to generate sufficient cash to pay our lenders and
               other creditors,

          o    our ability to obtain regulatory permits and approvals to operate
               in the high-speed wireless network industry,

          o    the introduction of new broadband connectivity technologies by
               our competitors that may have advantages over our planned
               products and may make our planned products less attractive to our
               potential customers,

          o    our ability to identify and complete acquisitions and
               successfully integrate the businesses we acquire, if any,

          o    our ability to employ and retain qualified management and
               employees,

          o    our dependence on the efforts and abilities of our current
               employees and executive officers,

                                       12
<PAGE>
          o    changes in government regulations that are applicable to our
               anticipated business,

          o    changes in the demand for our services,

          o    the degree and nature of our competition,

          o    our lack of diversification of our business plan,

          o    the general volatility of the capital markets and the
               establishment of a market for our shares,

          o    disruption in the economic and financial conditions primarily
               from the impact of past terrorist attacks in the United States,
               threats of future attacks, police and military activities
               overseas and other disruptive worldwide political events.

We are also subject to other risks detailed from time to time in other
Securities and Exchange Commission filings and elsewhere in this report. Any one
or more of these uncertainties, risks and other influences could materially
affect our results of operations and whether forward-looking statements made by
us ultimately prove to be accurate. Our actual results, performance and
achievements could differ materially from those expressed or implied in these
forward-looking statements. We undertake no obligation to publicly update or
revise any forward-looking statements, whether from new information, future
events or otherwise.


Critical Accounting Policy and Estimates
----------------------------------------

Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgments, including those related
to revenue recognition, accrued expenses, financing operations, and
contingencies and litigation. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. There are no significant
accounting estimates inherent in the preparation of our financial statements.



Business Overview
-----------------

NextPhase Wireless, Inc. is a connectivity company that specializes in
delivering integrated Internet, voice and data communications solutions to our
customers. We offer a full portfolio of connectivity solutions, including
dial-up access, DSL, wireless, T1, co-location, web-hosting, etc. Designing,
deploying and operating our own wireless networks, we also provide wireless
connectivity solutions to businesses and municipalities.

NextPhase has been operating in this business since August 3, 2004 when we
acquired our subsidiary NextPhase Technologies, Inc. in a share exchange
transaction. Accordingly, the company has limited operating history upon which
prospects and future performance can be evaluated. Before August 3, 2004 we had
no revenues while expenses were incurred in the development of the business.
Although the company generated approximately $643,000 in revenues in fiscal year
2006, it continues to incur relatively substantial expenses in the development
of its business.

NextPhase continues to develop an integrated portfolio of connectivity products
and services which include:

o    Operating as an Internet Service Provider (ISP) of tiered Internet
     connectivity services to business and residential subscribers.

o    Design, deployment, operation and support of integrated wireless networking
     solutions.

                                       13
<PAGE>

o    Bundling multiple technologies, such as Broadband Wireless Access (BWA),
     Voice over Internet Protocol (VoIP) and WiFi, along with a high service
     component that target vertical markets such as public safety, transport and
     homeland security.

NextPhase is exploiting the broadband connectivity and integration markets, by:

o    Developing and deploying our portfolio of connectivity products and
     services.

o    Continuing to develop our management team with best-in-class experienced
     executives and professionals.

o    Seeking strategic alliances, relationships, and acquisitions to augment the
     growth of our connectivity products and services operations.

o    Growing our market share and extending our footprint through selective
     acquisitions and franchise and licensing programs.


Financial Statement Overview
----------------------------

NextPhase has a limited operating history. NextPhase began generating revenue
during the third quarter of the fiscal year-ended March 31, 2005. Our financial
statements include the accounts of the company and our wholly owned subsidiary,
NextPhase Technologies, Inc. ("NTI") which was formed on September 14, 2000.

NextPhase acquired all of the issued and outstanding common stock of NTI in a
share exchange with NTI's shareholders on August 3, 2004. As a result of this
transaction, NTI's former shareholders obtained control of NextPhase, which had
no operations at that time. For accounting purposes, this acquisition has been
treated as a reverse acquisition of NextPhase

The financial statements presented include the accounts of NextPhase Wireless,
Inc., and NextPhase Technologies, Inc., a California corporation which does not
currently have any operations.


Results of Operations
---------------------

For the year ended March 31, 2006, revenue increased to $643,367 compared to
$40,758 during the twelve months ended March 31, 2005, an increase of $602,609
or approximately 1,479%. The increase was due to increased demand for the
company's portfolio of connectivity products and services.

Cost of good sold was $519,404 for the twelve months ended March 31, 2006,
compared to $9,539 during the twelve months ended March 31, 2005, an increase of
$509,865 or 5,345%. The increase was primarily due to increased equipment and
bandwidth costs used in providing the company's portfolio of connectivity
products and services.

Gross profit increased to $123,963 for the year ended March 31, 2006, compared
to $31,219 for the twelve months ended March 31, 2005. The increase in gross
profit of $92,744 or 297% was due to increased demand for the company's
portfolio of connectivity products and services.

Sales, General, and Administrative expenses were $ 2,968,115 for the twelve
months ended March 31, 2006, compared to $3,650,972 for the twelve months ended
March 31, 2005, a decrease of $ 682,857 or approximately 19%. The improvement in
operations was due to better absorption of SG&A expenses as revenues increased
over the year. The primary components of sales, general, and administrative
expenses during the current year were non-cash compensation to employees and
consultants of $1,395,045; payroll and related costs of $624,108; legal and
accounting fees of $448,814; facilities and related expenses of $172,927; public
relations and marketing costs of $87,979; travel and entertainment of $58,736;
consulting and professional fees of $51,276; office supplies and expenses of
$48,193; equipment rental and expenses of $44,445; and insurance (other than
employee health insurance) of $11,232.

Depreciation and amortization expense was $70,248 for the twelve months ended
March 31, 2006, compared to $15,028 for the prior period, an increase of $55,220
or approximately 367%. The difference is due an increase in depreciable assets
during the current year as we implement our operating plan.

Acquisition costs were $0 during the current year, compared to $646,000 during
the twelve months ended March 31, 2005.

                                       14
<PAGE>

Legal settlement income was $1,115,500 during the twelve months ended March 31,
2006, compared to $0 during the prior year. During the year ended March 31,
2006, the company settled all litigations which had been previously disclosed in
the company's reports filed with the Securities and Exchange Commission under
the Securities Exchange Act of 1934.

Interest expense, net of interest income, was $65,027 during the twelve months
ended March 31, 2006, compared to $4,239 during the prior period, an increase of
$60,788 or approximately 1,434%. The increase is due to increased borrowings
during the current period, as well as two capital leases for the acquisition of
furniture and equipment.

Other (income) expense was $(2,000) during the twelve months ended March 31,
2006, compared to $0 during the twelve months ended March 31, 2005. During the
current period, the
company  recognized a gain on the sale of marketable securities of $2,000.

For the reasons above, the company had a net loss of $ 1,861,927 or $0.08 per
share during the twelve months ended March 31, 2006, a decrease of $2,423,093 or
approximately 57% compared to a net loss of $4,285,020 or $0.30 per share
compared to the twelve months ended March 31, 2005.



Liquidity and Capital Resources
-------------------------------

As of March 31, 2006, the company had a cash balance of $35,847, and the
company's accumulated deficit was $6,154,787. Total liabilities were $1,782,306,
consisting of notes payable, capital leases payable, trade accounts payable and
accrued liabilities, and deferred revenue.


The notes payable are as follows:


O    CONVERTIBLE NOTE PAYABLE IN THE AMOUNT OF $30,000 PAYABLE TO A BOARD
     MEMBER.
     The note bears interest at the rate of 6% per annum, and is due in full on
     April 1, 2007. Upon maturity, the note and accrued interest are convertible
     into common stock of the company at the lower of the fair market value of
     the company's common stock at the date of conversion or $0.32 per share.
     The minimum price at which the note and accrued interest may convert is
     $0.15 per share. There was no beneficial conversion feature embedded in
     this note at the time of issuance. At March 31, 2006, the book value of
     this note is $30,000.

O    NOTE PAYABLE TO FORMER COMPANY OFFICER FOR EQUIPMENT PURCHASED.
     The note is payable in twelve monthly installments, ten installments of
     $8,900 and two installments of $9,000. The note is secured by the assets
     purchased. During the twelve months ended March 31, 2006, the company made
     principal payments of $71,200. The final payment is being held, pending
     settlement of other outstanding transactions between the company and the
     ex-officer. At March 31, 2006, the book value of this note is $9,100.

Capital lease payable is as follows:

o    CAPITAL LEASE PAYABLE IN THE AMOUNT OF $11,715 FOR FURNITURE.
     This lease is payable in the amount of $360 per month through April 15,
     2009. During the twelve months ended March 31, 2006, the company
     capitalized assets in the amount of $13,291 pursuant to this lease, and
     made principal payments in the aggregate amount of $1,576. The company will
     assume ownership of this furniture upon making the final of these payments
     in April, 2009. At March 31, 2006, the principal amount due under this
     lease is $11,715.

The company's cash on hand may be insufficient to fund its planned operating
needs. The company completed the acquisition of SpeedFactory in April 2006, and
management expects this acquisition to positively impact the company's revenue
and cash flow. Management is continuing to pursue new debt and/or equity
financing and is continually evaluating the company's cash burn rate and capital
needs. During the year ended March 31, 2006, the company has satisfied its cash
requirements to date primarily through cash advances of $800,000; notes payable
in the amount of $55,000; private placements of common stock valued at $445,000;
and non-cash compensation issued in lieu of payment for services in the amount
of $1,395,045.

                                       15
<PAGE>

NextPhase plans on continuing to fund working capital requirements, necessary
equipment purchases, marketing costs, and other operations for the next year and
foreseeable future by raising capital through the sale of equity and/or debt
securities, issuing common stock in lieu of cash for services and by advances
from shareholders.

We expect that any sale of additional equity securities or convertible debt will
result in additional dilution to our stockholders. The company can give no
assurance that it will be able to generate adequate funds from operations, that
funds will be available to us from debt or equity financing, or that if
available, the company will be able to obtain such funds on favorable terms and
conditions. If the company cannot secure additional funds it will not be able to
continue as a going concern. The company currently has no definitive
arrangements with respect to additional financing.

By adjusting its operations and development to the level of capitalization ,
management believes it has sufficient capital resources to meet projected cash
flow deficits through the next twelve months . However, if thereafter, we are
not successful in generating sufficient liquidity from operations or in raising
sufficient capital resources, on terms acceptable to us, this could have a
material adverse effect on our business, results of operations, liquidity and
financial condition.

The independent auditors report on our March 31, 2006 financial statements
states that our recurring losses raise substantial doubts about our ability to
continue as a going concern.


Off-Balance Sheet Arrangements
------------------------------

We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operation, liquidity, capital
expenditures or capital resources that is material to investors.


Inflation
---------

In the opinion of management, inflation has not had a material effect on the
company's financial condition or results of its operations

New Accounting Pronouncements
-----------------------------

In March 2006, the FASB issued FASB Statement No. 156, Accounting for Servicing
of Financial Assets - an amendment to FASB Statement No. 140. Statement 156
requires that an entity recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
service contract under certain situations. The new standard is effective for
fiscal years beginning after September 15, 2006. The company does not expect its
adoption of this new standard to have a material impact on its financial
position, results of operations or cash flows.

In February 2006 the FASB issued SFAS 155, "Accounting for Certain Hybrid
Instruments," which amends SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities," and SFAS 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." SFAS 155 allows financial
allows financial instruments that have embedded derivatives to be accounted for
as a whole (eliminating the need to bifurcate the derivative from its host) if
the holder elects to account for the whole instrument on a fair value basis.
SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS
140. This statement is effective for all financial instruments acquired or
issued in fiscal years beginning after September 15, 2006. The company does not
expect its adoption of this new standard to have a material impact on its
financial position, results of operations or cash flows.

In May 2005, the FASB issued FASB Statement No. 154, ("FAS 154"), "Accounting
Changes and Error Corrections." FAS 154 establishes retrospective application as
the required method for reporting a change in accounting principle in the
absence of explicit transition requirements specific to the newly adopted
accounting principle. FAS 154 also provides guidance for determining whether
retrospective application of a change in accounting principle is impracticable
and for reporting a change when retrospective application is impracticable. FAS
154 becomes effective for accounting changes and corrections of errors made in
fiscal years beginning after December 15, 2005. We do not expect the adoption of
FAS 154 to have a material impact on our financial position, cash flows or
results of operations.

                                       16
<PAGE>

In December 2004, the FASB issued FASB Statement No. 123(R), ("FAS 123(R)"),
"Share-Based Payment," which is a revision of FASB Statement No. 123 ("FAS
123"), "Accounting for Stock-Based Compensation." FAS 123(R) supersedes APB
Opinion No. 25, (APB 25), "Accounting for Stock Issued to Employees," and amends
FASB Statement No. 95, "Statement of Cash Flows." FAS 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values at the
date of grant and to record that cost as compensation expense over the period
during which the employee is required to perform service in exchange for the
award (generally over the vesting period of the award). Excess tax benefits, as
defined by FAS 123(R), will be recognized as an addition to common stock. In
April 2005, the SEC adopted a new rule that amends the compliance dates for FAS
123(R). In accordance with the new rule, we  implemented FAS 123(R)
at the beginning of our interim period that begins January 1, 2006. The
Commission's new rule does not change the accounting required by FAS 123(R); it
changes only  the dates of compliance.

In November 2005, the FASB issued FASB Staff Position No. FAS 123(R)-3,
"Transition Election Related to Accounting for Tax Effects of Share-Based
Payment Awards." The alternative transition method includes simplified methods
to establish the beginning balance of the additional paid-in capital pool ("APIC
pool") related to the tax effects of employee share-based compensation, and to
determine the subsequent impact on the APIC pool and consolidated statements of
cash flows of the tax effects of employee share-based compensation awards that
are outstanding upon adoption of SFAS 123(R). An entity may make a one-time
election to adopt the transition method described in this guidance and may take
up to one year from the later of its initial adoption of SFAS 123(R) or the
effective date of this guidance, which was November 11, 2005. The company has
elected not to  adopt the alternative transition method
provided in FAS 123(R)-3 for calculating the tax effects of share-based
compensation pursuant to SFAS 123(R).

Effective January 1, 2006, the company adopted FAS 123(R) using the modified
prospective transition method, which provides for certain changes to the method
for valuing share-based compensation. The valuation provisions of FAS 123(R)
apply to new awards and to awards that are outstanding at the effective date and
subsequently modified or cancelled. Estimated compensation expense for awards
outstanding at January 1, 2006 will be recognized over the remaining service
period using the compensation cost calculated for pro forma disclosure purposes
under FAS 123. In accordance with the modified prospective transition method,
our statements of operations for periods prior to January 1, 2006 will not be
restated to reflect the impact of FAS 123(R).

Our calculation of share-based compensation expense in future periods will be
calculated using the Black-Scholes option valuation model and will include the
portion of share-based payment awards that is ultimately expected to vest during
the period and therefore will be adjusted to reflect estimated forfeitures. SFAS
123(R) requires forfeitures to be estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ from those
estimates. In our pro forma information required under SFAS 123 for the periods
prior to 2006, we accounted for forfeitures as they occurred. For share awards
granted after January 1, 2006, expenses will be amortized under the
straight-line attribution method. For share awards granted prior to 2006,
expenses are amortized under the straight-line single option method prescribed
by SFAS 123. We expect that our adoption of FAS 123(R) in the interim period
commencing on January 1, 2006 will have a material impact on our results of
operations and net loss per share.


ITEM 7. FINANCIAL STATEMENTS.

The financial statements required by this item are included in this report after
Part III Item 14, beginning after page 26.


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

On November 8, 2004, upon recommendation of its Board of Directors, the company
dismissed its certifying accountant, Abrams & company, P.C. ("Abrams"). Abram's
report on the company's financial statements for of the two fiscal years ended
March 31, 2004 and 2003 did not contain any adverse opinion or disclaimer of
opinion; however, the audit reports for the years ended March 31, 2004 and 2003
contained an explanatory paragraph regarding the substantial doubt about the
company's ability to continue as a going concern. There were no disagreements

                                       17
<PAGE>

with Abrams on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, during the two fiscal
years ended March 31, 2005 and during the interim period ended November 8, 2004,
which, if not resolved to Abram's satisfaction, would have caused it to make
reference to the subject matter of the disagreement in connection with its
report, as required by Item 304(a)(3) of Regulation S-B. The company engaged
Russell Bedford Stefanou Mirchandani LLP (" Russell Bedford Stefanou
Mirchandani") as its certifying accountant as of November 8, 2004 for the
company's fiscal year ending March 31, 2005. The company has not consulted
Russell Bedford Stefanou Mirchandani previously.


ITEM 8A.  CONTROLS AND PROCEDURES.

Disclosure controls and procedures are controls and other procedures that are
designed 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 Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.


Evaluation of Disclosure Controls and Procedures
------------------------------------------------

As of the end of the period covered by this Annual Report, we conducted an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, of our disclosure controls and
procedures (as defined in Rules 13a-15(e) of the Exchange. Based on their
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures need improvement and were not
adequately effective as of March 31, 2006 to ensure timely reporting with the
Securities and Exchange Commission. Our management is in the process of
identifying deficiencies with respect to our disclosure controls and procedures
and implementing corrective measures, which includes the establishment of new
internal policies related to financial reporting.


Changes in Internal Control over Financial Reporting
----------------------------------------------------

As required by Rule 13a-15(d), the company's Chairman and Chief Financial
Officer, also conducted an evaluation of the company's internal controls over
financial reporting to determine whether any changes occurred during the fourth
fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the company's internal control over financial reporting.

During the preparation of the company's financial statements as of and for the
year ended March 31, 2006, the company has concluded that the current system of
disclosure controls and procedures was not effective because of the internal
control weaknesses identified below. As a result of this conclusion, the company
has initiated the changes in internal control, to the extent possible given
limitations in financial and manpower resources, also described below. It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the
system will be met. In addition, the design of any control system is based in
part upon certain assumptions about the likelihood of future events.


Lack of Adequate Financial and Management Resources.
----------------------------------------------------

In April 2006 NextPhase Wireless closed the acquisition of its SpeedFactory
business by purchasing the assets of Synkronus, Inc. The expansion of the
company's business through the SpeedFactory acquisition has caused a significant
short-term increase in required information and financial analysis. NextPhase
Wireless' current financial and management resources have proven to be
inadequate to address this increased workload in order to complete and file the
company's Annual Report on Form 10-KSB for the year ended March 31, 2006 on a
timely basis. As a result, the company has redesigned work processes,
reallocated responsibilities between existing employees and engaged additional
contract resources to bolster its finance and accounting team and correct this
material weakness. The company feels that these measures will improve the
quality of future period financial reporting and timeliness in completing
reports.

                                       18
<PAGE>

ITEM 8B. OTHER INFORMATION

None.




                                    PART III

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

Management
----------

The following table sets forth the name, age and position of our executive
officers, certain non-executive officers and directors:

     Name                   Age         Position and Offices with the company
     ------------------ ---------- ---------------------------------------------

     Stephen D. Young       52      Chairman of the Board
     Robert Ford            45      President, Chief Executive Officer, Chief
                                    Financial Officer, Treasurer and Director
                                    (Principal Executive Officer and Principal
                                    Financial Officer)
     Michael Jones          50      President of NextPhase International
                                    Division, Director

STEPHEN D. YOUNG
In August 2004, Mr. Young was elected a Director and in November 2004 he was
elected as our Chairman of the Board, Chief Executive Officer, Chief Financial
Officer, Treasurer and Director. He stepped down as Chief Executive Officer,
Chief Financial Officer and Treasurer in February 2005 when Robert Ford joined
NextPhase. Mr. Young has been a Director of NextPhase Technologies, Inc., which
became a subsidiary of the company as a result of a share exchange transaction
on August 3, 2004, since April 1, 2004, and the President, Chief Executive
Officer, Secretary and Chief Financial Officer of NextPhase Technologies since
May 1, 2004. Mr. Young served as the Chairman of the Board and Chief Executive
Officer of Viper Networks, Inc., a publicly traded company whose shares are
traded on the Pink Sheets, from July 2003 to July 2004. From January 1999
through June 2003, he served as the President and Chief Executive office of
Worldlink-C.com d/b/a Coliance Communications, Inc. which was acquired by Viper
Networks in June 2003.

ROBERT FORD
Robert Ford became our Chief Executive Officer, Chief Financial Officer,
Treasurer and a Director of NextPhase in February 2006. From November 2002 to
June 2004 Mr. Ford was the Global Corporate Communications Manager at E.I.
DuPont Nemours. From June 2001 to November 2002 he was the Chief Information
Officer of DuPont Solutions and Services. From January 2001 to November 2002 Mr.
Ford served as the Chief Technology Officer of DuPont Global Services. From
September 1998 to November 2002 he was a Business Manager of DuPont
Communications Solutions. Prior to that, from September 1997 to September 1988,
Mr. Ford was the Chief Information Officer of DuPont External Affairs. Mr. Ford
received his B.S. in Applied Science (Computing/Economics) from Wolverhampton
University (UK) and his M.B.A. from Bradford University (UK).


MICHAEL JONES
In August 2004, Michael Jones was elected a Director of NextPhase. In February
2006, Mr. Jones was elected President of the NextPhase International division.
Since April 1, 2004, Mr. Jones has been a Director of NextPhase Technologies,
Inc., which became our wholly owned subsidiary as a result of a share exchange
in August 2004. From June 2001 to August 2004, Mr. Jones was an independent
consultant, specializing in the technology and communications industries and
specifically on broadband, wireless data, and emerging technologies sectors.
From August 1999 to June 2001, Mr. Jones was the Vice President of Network
Engineering and Operations for Flashcom, Inc. Prior to that, Mr. Jones was Vice
President of Network Operations for IBCTV, Inc. from February 1998 to August
1999.


Audit Committee
---------------

We do not have an audit committee, and accordingly we do not have an audit
committee financial expert. Currently we have three members of the Board of

                                       19
<PAGE>

Directors, none of whom are independent. The Board of Directors plans to seek
qualified candidates for election as independent board and audit committee
members. We cannot anticipate when we will have independent board members'
elected or will establish an audit committee.


Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

Section 16 of the Exchange Act requires that reports of beneficial ownership of
common shares and changes in such ownership be filed with the Securities and
Exchange Commission by Section 16 "reporting persons," including directors,
certain officers, holders of more than 10% of the outstanding common shares and
certain trusts of which reporting persons are trustees. We are required to
disclose in this Annual Report each reporting person whom we know to have failed
to file any required reports under Section 16 on a timely basis during the
fiscal year ended March 31, 2006. To our knowledge, during the fiscal year ended
March 31, 2006, our officers, directors and 10% stockholders complied with all
Section 16(a) filing requirements applicable to them, except that Stephen Young
filed eight Forms 4 reporting 17 transactions late, Robert Ford filed three
Forms 4 reporting three transactions late, and Viper Networks, Inc. filed one
Form 4 reporting one transaction late.

Code of Ethics
--------------

NextPhase has adopted a Code of Business Conduct and Ethics that applies to its
Principal Executive Officer, Principal Financial Officer, Principal Accounting
Officer as Controller, or persons performing similar functions, as well as the
company's other officers and managers, and the company's directors.

NextPhase's Code of Business Conduct and Ethics is posted on the company's
website at: http://www.npwireless.com/ethics-policy.shtml

NextPhase will furnish a copy of its Code of Business Conduct and Ethics without
charge to any person upon request made in writing to NextPhase Wireless, Inc.,
300 S. Harbor Blvd., Suite 500, Anaheim, California 92805 Attention: Secretary.




ITEM 10. EXECUTIVE COMPENSATION.

<TABLE>
<CAPTION>

                                                     Annual Compensation
Name & Position                        Year        Salary            Bonus             Other
                                                                                   Compensation
------------------------------------- -------- ---------------- ----------------- ----------------
<S>                                   <C>      <C>              <C>                <C>
Robert Ford (1)                        2006     $120,000 (2)     $289,500 (3)        $     -
President and Chief                    2005     $ 30,000         $     -             $     -
Executive Officer                      2004     $     -          $     -             $     -

Steven D. Young (4)                    2006     $120,000 (5)     $ 22,500 (6)        $     -
Chairman of the Board                  2005     $ 30,000         $ 50,000            $     -
                                       2004     $     -          $     -             $     -

James Wray (7)                         2006     $120,000 (8)     $ 20,000 (9)        $     -
Former company Secretary and           2005     $ 30,000         $ 50,000            $     -
President, Broadband Division          2004     $     -          $     -             $     -


</TABLE>


(1) Robert Ford became NextPhase's President and the Chief Executive Officer on
February 4, 2005.

(2) Comprised of $14,038 in cash and 423,846 shares of common stock, valued at
$0.25 per share.

(3) Comprised of 300,000 shares of common stock valued at $0.50 per share;
100,000 shares of common stock value at $0.27 per share; and 750,000 shares of
common stock valued at $0.15 per share.

                                       20
<PAGE>

(4) Stephen D. Young was elected our Chief Executive Officer on August 3, 2004.
He stepped down from this position when Mr. Ford joined NextPhase on February 4,
2005.

(5) Comprised of $16,535 cash and 413,860 shares of common stock valued at $0.25
per share.

(6) Comprised of 150,000 shares of common stock valued at $0.15 per share.

(7) James Wray served as the company's Vice President of Business Development
from November 2004 to May 2005. He served as President of the company's
Broadband Division from May 2005 to May 23, 2006. He served as a director of the
company from August 2004 to May 23, 2006 and as Secretary from November 2004 to
May 23, 2006.

(8) Comprised of $36,715 cash and 333,138 shares of common stock valued at $0.25
per share.

(9) Comprised of 125,000 shares of common stock valued at $0.16 per share.

     Officers and directors are eligible to receive stock options, restricted
stock and other grants out of the company's 2003 Equity Participation Plan, and
the company's 2005 Employee Stock Compensation Plan.

Employment Agreements
---------------------

     ROBERT FORD

     NextPhase and Robert Ford are parties to an employment agreement which
     provides, among other things:

          o    that Mr. Ford will serve as NextPhase's Chief Executive Officer,

          o    for a term of three (3) years, commencing February 1, 2005,
               subject to earlier termination by either party in accordance with
               the Employment Agreement,

          o    that Mr. Ford's salary shall be $120,000 per annum, payable by
               the company in regular installments in accordance with the
               company's general payroll practices

          o    that Mr. Ford shall be eligible to receive additional stock
               bonuses under the company's 2005 Employee Stock Compensation
               Plan.




     STEPHEN YOUNG

     NextPhase and Stephen Young are parties to an employment agreement which
     provides, among other things:

          o    that Mr. Young will serve as NextPhase's Chairman of The Board,

          o    for a term of three (3) years, commencing April 1, 2005, subject
               to earlier termination by either party in accordance with the
               Employment Agreement,

          o    that Mr. Young's salary shall be $120,000 per annum, payable by
               the company in regular installments in accordance with the
               company's general payroll practices

          o    that Mr. Young shall be eligible to receive additional stock
               bonuses under the company's 2005 Employee Stock Compensation
               Plan.



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

The following table sets forth certain information, as of June 22, 2006,
regarding beneficial ownership of our common stock by

     o    each stockholder known by us to be the beneficial owner of more than
          five percent (5%) of the outstanding shares of common stock;

                                       21
<PAGE>
     o    each of our directors;

     o    each of the named executive officers; and all of our current executive
          officers and directors as a group.




Name and Address of             Number of Shares
 Beneficial Owner              Beneficially Owned       Percent of Class
-------------------           --------------------      -----------------

Stephen D. Young                  2,596,250                  10.3%
300 S. Harbor Blvd.
Suite 500
Anaheim, CA  92805


Robert Ford                       1,903,846                   7.6%
300 S. Harbor Blvd.
Suite 500
Anaheim, CA  92805


Michael Jones                     1,010,000                   4.0%
2304 Ruhland Avenue
Suite A
Redondo Beach, CA 90278



James Wray                        2,255,813                   9.0%
32459 Via Destello
Temecula, CA  92592




All Executive Officers and        5,510,096                  21.9%
Directors and Nominees for
Directors as a group
(3 persons)




ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

NextPhase and Robert Ford, and NextPhase and Stephen Young, are parties to
employment agreements which is described under Item 10 "Executive Compensation".





                                       22
<PAGE>




ITEM 13. EXHIBITS.

2.1         Agreement and Plan of Share Exchange dated August 3, 2004 between
            NextPhase (a/k/a Edison Renewables, Inc.) and the stockholders of
            NextPhase Technologies, Inc.1

3.1         Articles of Incorporation.(2)

3.2         Certificate of Amendment to Articles of Incorporation, as filed
            on May 15, 2000.(2)

3.3         Certificate of Amendment to Articles of Incorporation, as filed on
            March 13, 2001. (2)

3.4         Certificate of Amendment to Articles of Incorporation, as filed on
            May 5, 2003.(2)

3.5         Certificate of Amendment to Articles of Incorporation as filed on
            January 21, 2005.(3)

3.6         Amended and Restated By-Laws.(4)

10.1        Asset Purchase Agreement between Edison and Buchanan ITS, LLC. (4)

10.2        $107,000 Promissory Note from Edison to Buchanan ITS, LLC.(5)

10.3        Employment Agreement dated February 1, 2005 between NextPhase and
            Robert Ford(6)

10.4        Employment Agreement dated April 1, 2005 between NextPhase and
            Stephen D. Young.

10.5        Master Lease Agreement date May 4, 2005 between Agility Lease
            Fund I, LLC and NextPhase(6)

10.6        Asset Purchase Agreement dated March 29, 2006 between Synkronus,
            Inc. and SpeedFactory, Inc.(7)

14          Code of Business Conduct and Ethics for Officers, Managers
            and Directors(6)

23.1        Consent of Registered Independent  Certified Public Accounting Firm

21          Subsidiaries

31          Certificate of the Principal Executive Officer and Principal
            Accounting Officer pursuant to 18 U.S.C. Section 1350 as adopted
            pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

32          Certificate of the Principal Executive Officer and Principal
            Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as
            adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

-----------------------
(1) Incorporated herein by reference to the exhibit in the company's Quarterly
Report for the period ended June 30, 2004.

(2) Incorporated herein by reference to the exhibits in the company's Annual
Report on Form 10-KSB for the year ended March 31, 2003.

(3) Incorporated herein by reference to the exhibit in the company's Current
Report on Form 8-K for an event dated January 21, 2005.

(4) Incorporated herein by reference to the exhibits to the company's Quarterly
Report on Form 10-QSB for the period ended September 30, 2004.

(5) Incorporated herein by reference to the exhibit in the company's
Registration Statement on Form S-8 Registration No. 333-117964 filed with the
Securities and Exchange Commission on August 5, 2004.

(6) Incorporated  herein by  reference  to the exhibit in the  company's  Annual
Report on Form 10-KSB for the year ended March 31, 2005.

(7) Incorporated herein by reference to the exhibit in the company's Current
Report on form 8-K filed with the Securities and Exchange Commission on April
12, 2006.

                                       23
<PAGE>

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountants, Russell Bedford Stefanou Mirchandani, have billed us
approximately $40,325, for the audit of our financial statements for the year
ended March 31, 2006 and the review of our financial statements included in our
Quarterly Reports on Form 10-QSB for the periods ended June 30, September 30,
and December 31, 2005.

Our principal accountants, Russell Bedford Stefanou Mirchandani, have billed us
approximately $16,000, for the audit of our financial statements for the year
ended March 31, 2005 and the review of our financial statements included in our
Quarterly Reports on Form 10-QSB for the periods ended September 30, and
December 31, 2004.

Our principal accountants did not bill us any fees for tax compliance, tax
advice and tax planning for our fiscal years ended March 31, 2006 and 2005.

Our principal accountants did not bill us any fees for any assurance and related
services for our fiscal years ended March 31, 2006 and 2005.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

The company currently does not have a designated Audit Committee, and
accordingly, the company's Board of Directors' 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 company's Board of
Directors 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 Board of Directors may also pre-approve particular services on a
case-by-case basis.

                                      24
<PAGE>


                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                          NextPhase Wireless, Inc.
                                          (Registrant)

                                          By: /s/Robert Ford
                                             ----------------------
                                             Robert Ford, Chief Executive
                                             Officer, Chief Financial
                                             Officer and Director

                                             Date: July 14, 2006






In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.



                                             /s/Robert Ford
                                             ----------------------
                                             Robert Ford, Chief Executive
                                             Officer, Chief Financial
                                             Officer and Director

                                             Date:  July 14, 2006



                                             /s/Stephen D. Young
                                             ----------------------
                                             Stephen D. Young, Chairman of
                                             the Board and Director

                                             Date: July 14, 2006




                                             /s/Michael Jones
                                             ----------------------
                                             Michael Jones, President NextPhase
                                             International Division and Director

                                             Date: July 14, 2006


                                       25
<PAGE>


                            NEXTPHASE WIRELESS, INC.
                        CONSOLIDATED FINANCIAL STATEMENTS

                             CONTENTS                                   PAGE

Report of Registered Independent Certified Public Accounting Firm        F-1

Consolidated Balance Sheet as of March 31, 2006                          F-2

Consolidated Statements of Losses for the years ended
March 31, 2006 and 2005                                                  F-3

Consolidated Statement of Deficiency in Stockholders' Equity for
the two years ended March 31, 2006                                       F-4

Consolidated Statements of Cash Flows for the years ended March
31, 2006 and 2005                                                        F-6


Notes to Consolidated Financial Statements                            F-8 - F-21

<PAGE>

                  RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                         Certified Public Accountants

        REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders
NextPhase Wireless Inc.
Anaheim, California

We have audited the accompanying consolidated balance sheet of NextPhase
Wireless Inc. and subsidiaries (the "company") as of March 31, 2006 and the
related consolidated statements of losses, deficiency in stockholders' equity,
and cash flows for each of the two years in the period ended March 31, 2006.
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 audits.

We have conducted our audits in accordance with the standards of the Public
Accounting Oversight Board (United States of America). 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the company at
March 31, 2006 and the consolidated results of its operations and its cash flows
for each of the two years in the period ended March 31, 2006, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements for the year ended March 31,
2006 have been prepared assuming that the company will continue as a going
concern. As shown in the financial statements, the company has incurred net
losses since its inception. This raises substantial doubt about the company's
ability to continue as a going concern. Management's plans in regard to this
matter are described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


                              /s/RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                              -------------------------------------------
                                 Russell Bedford Stefanou Mirchandani LLP
                                      Certified Public Accountants
New York, New York
June 23, 2006






                                      F-1
<PAGE>

                             NEXTPHASE WIRELESS, INC.
                           CONSOLIDATED BALANCE SHEET

                                                                      March 31,
                                                                        2006
                                                                    -----------
ASSETS

Current assets

    Cash and cash equivalents                                       $    35,847
    Accounts receivable, net of reserve of $8,383                       199,211
    Other current assets                                                  2,628

                                                                    -----------

      Total current assets                                              237,686

    Property and equipment, net of accumulated
       depreciation of $84,698 (note 4)                                 226,371

    Other assets (note 5)                                                 8,037
                                                                    -----------

Total assets                                                        $   472,094
                                                                    ===========

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY

Current liabilities

    Accounts payable and accrued liabilities (note 6)               $   897,710
    Advances payable                                                    800,000
    Deferred revenue                                                     33,781
    Notes payable and capital lease - current portion (note 7)           12,718
                                                                    -----------

      Total current liabilities                                       1,744,209

    Notes payable and capital lease, long-term (note 7)                  38,097
                                                                    -----------

      Total liabilities                                               1,782,306

Commitments and contingencies (note 12)                                     --

(Deficiency in) stockholder's equity (note 8)
    Preferred stock, 0.001 par value: 20,000,000 shares
    authorized, no shares issued and outstanding                            --
    Common stock, $0.001 par value; 200,000,000 shares
       authorized; 23,136,309 shares issued and outstanding              23,136
    Additional paid-in capital                                        5,135,774
    Stock cancellation receivable                                      (250,000)
    Stock subscription payable                                           25,000
    Deferred Compensation                                               (89,335)
    Accumulated deficit                                              (6,154,787)
                                                                    -----------
      Total (deficiency in) stockholder's equity                     (1,310,212)

                                                                    -----------
Total liabilities and (deficiency in) stockholders' equity          $   472,094
                                                                    ===========

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

                                      F-2
<PAGE>

                            NEXTPHASE WIRELESS, INC.
                      CONSOLIDATED STATEMENTS OF LOSSES


                                                  For the Year    For the Year
                                                     Ended           Ended
                                                    March 31,       March 31,
                                                      2006            2005
                                                  ------------    ------------


Revenues                                          $    643,367    $     40,758

   Cost of revenue                                     519,404           9,539
                                                  ------------    ------------

Gross profit                                           123,963          31,219

Operating expenses:
   Selling, general and administrative expenses      2,968,115       3,650,972
   Depreciation                                         70,248          15,028
   Acquisition costs                                      --           646,000

                                                  ------------    ------------
      Total operating expenses                       3,038,363       4,312,000

Operating loss                                      (2,914,400)     (4,280,781)

Other (income) expense:
   Gain on legal settlement (note 10)               (1,115,500)           --
   Interest (income) expense                            65,027           4,239
   Other (income) expense                               (2,000)           --
                                                  ------------    ------------

      Total other (income) expense                  (1,052,473)          4,239

  Loss before income taxes                          (1,861,927)     (4,285,020)

   Provision for income taxes                             --              --

                                                  ------------    ------------
Net loss                                          $ (1,861,927)     (4,285,020)
                                                  ============    ============

Loss per share - basic and assuming dilution      $      (0.08)   $      (0.30)
                                                  ============    ============


                                                  ------------    ------------
Weighted average shares outstanding                 21,930,310      14,317,257
                                                  ============    ============





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



                                      F-3
<PAGE>

                          NEXTPHASE WIRELESS, INC.
          CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                     FOR THE TWO YEARS ENDED MARCH 31, 2006


<TABLE>
<CAPTION>

                                                                                                             Subscriptions Payable
                                                           Preferred Stock            Common Stock           ----------------------
                                                        --------------------   -------------------------     Quantity
                                                          Shares     Value        Shares        Value        Reserved       Value
------------------------------------------------------- ---------  ---------   -----------    ----------    -----------   ---------
<S>                                                     <C>        <C>         <C>            <C>           <C>           <C>
                         Balance at March 31, 2004          --     $   --       4,000,000     $    4,000          --     $     --

Shares issued to consultants for services provided          --         --      11,785,000         11,785          --           --

Shares of NTI received in exchange for shares in
   NextPhase issued as per share exchange agreement         --         --     (12,943,000)       (12,943)         --           --

Shares of NextPhase issued as per share
   exchange agreement                                       --         --      12,943,000         12,943          --           --

Shares sold for cash                                        --         --       3,897,000          3,897          --           --

Common stock subscribed                                     --         --            --             --         210,000       52,500

Shares issued for equipment purchase                        --         --            --             --         560,000      140,000

Shares retained in reverse acquisition                      --         --         214,724            215          --           --

Cost of offering                                            --         --            --             --            --           --

Cost of stock purchase                                      --         --            --             --         350,000       87,500

Contributed capital                                         --         --            --             --            --           --

Net loss for the twelve months ended March 31, 2005         --         --            --             --            --           --

                                                        --------   --------   -----------    -----------    ----------    ---------

                         Balance at March 31, 2005          --     $   --      19,896,724     $   19,897     1,120,000   $  280,000


Common stock sold for cash                                  --         --         890,000            890          --           --

Common stock issued,  previously subscribed                 --         --       1,120,000          1,120    (1,120,000)    (280,000)

Discount on convertible notes payable                       --         --            --             --            --           --

Common stock subscribed in Blazen acquisition               --         --            --             --          50,000       25,000

Common stock issued for services                            --         --       4,124,585          4,124          --           --

Amortization of deferred compensation                       --         --            --             --            --           --

Cancellation of common stock in legal settlement            --         --      (2,895,000)        (2,895)         --           --

Warrants issued to consultant for services                  --         --            --             --            --           --

Shares to be cancelled in Rawlins settlement                --         --            --             --            --           --

Loss for the twelve months ended March 31, 2006             --         --            --             --            --           --
                                                        --------   --------   -----------    -----------    ----------    ---------

                         Balance at March 31, 2006          --     $   --      23,136,309     $   23,136        50,000   $   25,000
                                                        ========   ========   ===========    ===========    ==========    =========
</TABLE>


                                      F-4
<PAGE>


                            NEXTPHASE WIRELESS, INC.
          CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                    FOR THE YEARS ENDED MARCH 31, 2006 AND MARCH 31, 2005
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                         Total
                                                           Stock                        Additional                   Deficiency in
                                                         Cancellation    Deferred         Paid-in      Accumulated   Shareholders'
                                                         Receivable    Compensation      Capital        Deficit         Equity
------------------------------------------------------- ------------    -----------    -----------   ------------    -----------
<S>                                                     <C>             <C>            <C>            <C>            <C>
                         Balance at March 31, 2004      $   --          $   --        $       640    $    (7,840)    $    (3,200)

Shares issued to consultants for services provided          --              --          2,934,465           --         2,946,250

Shares of NTI received in exchange for shares in
   NextPhase issued as per share exchange agreement         --              --               --             --           (12,943)

Shares of NextPhase issued as per share
   exchange agreement                                       --              --               --             --            12,943

Shares sold for cash                                        --              --            970,353           --           974,250

Common stock subscribed                                     --              --               --             --            52,500

Shares issued for equipment purchase                        --              --               --             --           140,000

Shares retained in reverse acquisition                      --              --               (215)          --              --

Cost of offering                                            --              --            (15,033)          --           (15,033)

Cost of stock purchase                                      --              --               --             --            87,500

Contributed capital                                         --              --              5,031           --             5,031

Net loss for the twelve months ended March 31, 2005         --              --               --       (4,285,020)     (4,285,020)

                                                        -----------    -----------    -----------    -----------     -----------

                         Balance at March 31, 2005      $   --          $   --       $  3,895,241    $(4,292,860)    $   (97,722)


Common stock sold for cash                                  --              --            444,110           --           445,000

Common stock issued,  previously subscribed                 --              --            278,880           --              --

Discount on convertible notes payable                       --              --             20,000           --            20,000

Common stock subscribed in Blazen acquisition               --              --               --             --            25,000

Common stock issued for services                            --           (183,600)      1,147,142           --           967,666

Amortization of deferred compensation                       --            165,521            --             --           165,521

Cancellation of common stock in legal settlement            --              --           (720,855)          --          (723,750)

Warrants issued to consultant for services                  --            (71,256)         71,256           --              --

Shares to be cancelled in  legal settlement               (250,000)         --               --             --          (250,000)

Loss for the twelve months ended March 31, 2006             --              --               --       (1,861,927)     (1,861,927)
                                                        -----------    -----------    -----------    -----------     -----------

                         Balance at March 31, 2006      $ (250,000)     $ (89,335)   $  5,135,774    $(6,154,787)    $(1,310,212)
                                                        ===========    ===========    ===========    ===========     ===========
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.



                                      F-5
<PAGE>


                            NEXTPHASE WIRELESS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 For the       For the
                                                               Year Ended     Year Ended
                                                                 Mar 31         Mar 31
                                                                  2006           2005
                                                              -----------    -----------
<S>                                                           <C>           <C>
Cash flows from operating activities:
   Net loss                                                   $(1,861,927)   $(4,285,020)
  Adjustments to reconcile net loss to to net
  cash used in operating activities:
    Legal settlement                                           (1,115,500)          --
    Gain on sale of equity securities                              (2,000)          --
    Non-cash compensation                                       1,395,045           --
    Impairment on fixed assets                                       --          140,000
    Amortization of discount on notes payable                      20,000           --
    Increase in reserve for bad debts                               8,383           --
    Acquisition cost                                                 --           87,500
    Shares issued for services                                       --        2,946,250
    Depreciation and amortization                                  70,248         15,028
  Changes in assets and liabilities:
     (Increase) decrease in assets:
        Accounts receivable                                      (190,017)       (17,577)
        Other current assets                                       (2,628)          --
        Other receivables                                         200,000           --
 Increase (decrease) in liabilities:
        Advances payable                                          (12,206)          --
        Accounts payable                                          477,301         99,101
        Deferred revenue                                           29,656          4,125
                                                              -----------    -----------
   Net cash used in operating activities                         (983,645)    (1,010,593)
                                                              -----------    -----------

Cash flows from investing activities:
   Payments for  long term lease deposits                          (8,037)          --
   Payments for purchase of furniture and equipment              (113,265)      (147,713)
                                                              -----------    -----------
   Net cash used in investing activities                         (121,302)      (147,713)
                                                              -----------    -----------

Cash flows from financing activities:

    Proceeds from note issued for NextPhase Wireless                 --          510,000
    Principal payment on note for stock retirement                   --         (410,000)
    Proceeds from notes payable                                    55,000           --
    Proceeds from cash advances payable                           800,000           --
    Principal payments on notes payable and capital leases       (210,154)          --
    Principal of note payable on asset purchase                      --          107,000
    Principal payment on note of asset purchase                      --          (26,700)
    Proceeds from sale of common stock                            445,000      1,026,750
    Cost of sale of common stock                                     --          (15,033)
    Contributed capital                                              --            5,031
    Advance payable - stockholder                                    --           12,206
                                                              -----------    -----------
   Net cash provided by financing activities                    1,089,846      1,209,254
                                                              -----------    -----------

Increase in cash and cash equivalents                             (15,101)        50,948

Cash and cash equivalents at beginning of period                   50,948           --

                                                              -----------    -----------
Cash and cash equivalents at end of period                    $    35,847    $    50,948
                                                              ===========    ===========


                                      F-6
<PAGE>

Supplemental disclosure of cash flow information:

                Cash paid during the period for:
                                        Interest              $      --      $     4,239
                                                              ===========    ===========

                                        Taxes                 $      --      $      --
                                                              ===========    ===========

Non-cash transactions:
    Common stock retained                                     $      --      $       215
    Common stock issued                                              --           87,500
    Acquisition fees                                                 --           48,285
    Assets acquired                                                  --               --
    Note payable                                                     --          510,000
                                                              -----------    -----------
    Total consideration paid/acquisition costs                $      --      $   646,000
                                                              ===========    ===========

    Stock subscription payable for purchase
    of equipment for shares                                   $      --      $   140,000
                                                              ===========    ===========



    Warrants issued to consultants for services               $    71,256    $      --
                                                              ===========    ===========

    Cash advance converted to note payable                    $   800,000    $      --
                                                              ===========    ===========

    Issued of common stock previously subscribed              $   280,000    $      --
                                                              ===========    ===========

    Cancellation of stock from legal settlements              $   973,750    $      --
                                                              ===========    ===========

     Value of shares of Nathaniel Energy received in
       legal settlement                                       $   198,000    $      --
                                                              ===========    ===========

    Shares issuable for Blazen acquisition                    $    25,000    $      --
                                                              ===========    ===========

    Acquisition of equipment under capital lease agreements   $    25,669    $      --
                                                              ===========    ===========

    Amortization of deferred compensation                     $   165,521    $      --
                                                              ===========    ===========

    Common stock issued for services                          $   957,666    $      --
                                                              ===========    ===========

    Accrual of common stock issued in April, 2006 for
     services performed during the year ended March 31, 2006  $   271,858    $ 2,946,250
                                                              ===========    ===========


</TABLE>

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



                                      F-7
<PAGE>


                            NEXTPHASE WIRELESS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2006 and 2005


NOTE 1-NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
--------------------

NextPhase Wireless,  Inc. (the "company") was incorporated on August 28, 1995 in
Nevada under the name of Professional Mining Consultants, Inc.

On August 3, 2004 the company  consummated  a share  exchange in which it issued
12,943,000  shares  of  common  stock,  or  approximately  76% of the  company's
outstanding  common stock, to the shareholders of NextPhase  Technologies,  Inc.
("NTI")  in  exchange  for all of the shares of NTI.  As a result,  NTI became a
wholly owned  subsidiary  of the company.  NTI was formed on September 14, 2000.
For accounting purposes,  this transaction is considered a "reverse merger", and
the financial statements of the company reflect the operations of NTI.

In April 2006, through its wholly-owned subsidiary SpeedFactory, Inc., acquired
substantially all of the assets of Synkronus, Inc., excluding cash, pursuant to
an Asset Purchase Agreement dated March 29, 2006 between SpeedFactory and
Synkronus. The assets acquired by SpeedFactory comprise Synkronus's internet
service and connectivity business operated by Synkronus under the name
"SpeedFactory". SpeedFactory paid $1,500,000 in cash for the assets at closing.
SpeedFactory did not assume any pre-closing liabilities from Synkronus. The
amount of $1,200,000 was delivered to the seller on April 7, 2006 and the
closing documents were released from escrow on that date. The amount of $300,000
was delivered to escrow on April 7, 2006, pending resolution of certain elements
of the transaction. The closing was effective as of April 5, 2006.

The company has a limited operating history with revenue-generating products and
services only recently entering the market. The company experienced its first
sources of revenue(from professional service fees, equipment sales, and
broadband wireless access subscriptions) during the third and fourth quarters of
the fiscal year-ended March 31, 2005. The financial statements include the
accounts of the company and its wholly owned subsidiary, Next Phase
Technologies, Inc. ("NTI"), which was acquired in a reverse acquisition on
August 3, 2004. NTI was engaged in the development of a web based software
product, the development of which has been abandoned. The costs of the
development were paid by its then parent company. NextPhase had no operations
prior to the reverse acquisition. Management's plans are discussed further in
the Going Concern portion of Note 1. On January 21, 2005 the company changed its
name from Edison Renewables, Inc. to NextPhase Wireless, Inc.


     o As we have extended our wireless  `footprint'  in Orange County through a
combination  of  organic  growth  and  acquisitions,  we have  continued  to add
residential  subscribers in underserved markets, small office/home office (SOHO)
subscribers and small to medium business subscribers to our network.

     o By their very nature,  the markets targeted by our Professional  Services
division (e.g.  municipalities,  public safety,  transport,  homeland  security,
enterprises,  large-scale systems integrators etc.)have complex value chains and
extended sales cycles. Typically,  projects consist of multiple phases, with the
early  phases  requiring  extensive   non-billable  activity  such  as  customer
relationship activity and pre-sales support, especially when considered relative
to the  resultant  revenue  from those  phases.  As the  customer  relationships
develop and deepen,  the revenues  derived from  successive  phases (e.g.  as we
build and deploy  networks  that we've  previously  designed,  or we operate and
maintain networks that we've previously deployed)often  increases.  Depending on
the  type of  project,  many  of the  activities  that  provide  support  to our
customers are understood to be value-adding and as such, become billable.

Basis of Presentation
---------------------

The accompanying  financial statements include the accounts of NextPhase and its
wholly owned  subsidiary NTI, a California  corporation  formed on September 14,
2000.  The  term  "company"  refers  to  NextPhase  and  NTI  collectively.  All
significant  inter-company  accounts and  transactions  have been  eliminated in
consolidation.

The  company  conducts  its  operations  from its  office  located  in  Anaheim,
California.

Effective August 3, 2004, NextPhase acquired all of the issued and outstanding
common stock of NTI. As a result of this transaction, NTI's former shareholders
obtained control of NextPhase, a shell corporation with no operations. For
accounting purposes, this acquisition has been treated as a reverse acquisition
of NextPhase. The financial statements presented include only the accounts of
NextPhase from August 3, 2004 through March 31, 2006.


                                      F-8
<PAGE>


Going Concern
-------------

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
company as a going concern. The company incurred a loss of $1,861,927 and
$4,285,020 for the years ended March 31, 2006 and 2005, respectively and has
experienced net operating losses of $ 6,154,787 since inception through March
31, 2006. These factors raise substantial doubt about the company's ability to
continue as a going concern. Without realization of additional capital, it would
be unlikely for the company to continue as a going concern. These financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts, or amounts and classification of
liabilities that might result from this uncertainty.

Management's Plan
-----------------

NextPhase Wireless, Inc. is a connectivity company that specializes in
delivering integrated Internet, voice and data communications solutions to our
customers. We offer a full portfolio of connectivity solutions, including
dial-up access, DSL, wireless, T1, co-location, web-hosting, etc. Designing,
deploying and operating our own wireless networks, we also provide wireless
connectivity solutions to businesses and municipalities. The company has a
working capital deficit of $ 1,506,523 at March 31, 2006. The company's cash on
hand may be insufficient to fund its planned operating needs. The company
completed the acquisition of Synkronus, Inc. in April 2006, and management
expects this acquisition to positively impact the company's revenue and cash
flow. Management is continuing to pursue new debt and/or equity financing and is
continually evaluating the company's cash burn rate and capital needs. NextPhase
plans on continuing to fund working capital requirements, necessary equipment
purchases, marketing costs, and other operations for the next year and
foreseeable future by raising capital through the sale of equity and/or debt
securities, issuing common stock in lieu of cash for services and by advances
from shareholders.

Cash and Cash Equivalents
-------------------------

The company  considers all highly  liquid  investments  purchased  with original
maturities of three months or less to be cash equivalents.

Accounts Receivable
-------------------

Trade receivables  consist of  uncollateralized  customer  obligations due under
normal trade terms  requiring  payment  usually net 30 days of the invoice date.
Payments on trade  receivables  are  applied to the  earliest  unpaid  invoices.
Management  reviews  trades  receivables  periodically  and reduces the carrying
amount by a valuation allowance that reflects  management's best estimate of the
amount that may not be collectible.

Disclosures about Fair Value of Financial Instruments
-----------------------------------------------------

The carrying  amounts of the  company's  financial  instruments,  which  include
accounts  receivable and accounts  payable,  approximate fair value at March 31,
2006.

Concentrations of Credit Risk
----------------------------

Financial instruments and related items, which potentially subject the company
to concentrations of credit risk, consist primarily of cash and cash equivalents
and accounts receivables. The company places its cash and temporary cash
investments with high credit quality institutions. At times, such investments
may be in excess of the FDIC insurance limit. Allowance for doubtful accounts at
March 31, 2006 and 2005 was $8,383 and $0, respectively.

Accounting for Bad Debts and Allowances
---------------------------------------

Bad debts and allowances are provided based on historical experience and
management's evaluation of outstanding accounts receivable. The management
periodically evaluates past due or delinquency of accounts receivable in
evaluating its allowance for doubtful accounts. Allowance for doubtful accounts
at March 31, 2006 and 2005 was $8,383 and $0, respectively.

Segment Information
-------------------

The company adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information (SFAS 131)
upon the first date of required adoption. SFAS 131 establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
regarding the allocation of resources and asset performance. The information
disclosed herein materially represents all of the financial information related
to the company's principal operating segment.

Advertising
-----------

The company follows the policy of charging the costs of advertising to expense
as incurred. The company did not incur advertising costs for the years ended
March 31, 2006 and 2005.

Impairment of Long-Lived Assets
------------------------------

The company has adopted Statement of Financial Accounting Standards No.144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). The
Statement requires that long-lived assets and certain identifiable intangibles
held and used by the company be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Events relating to recoverability may include significant
unfavorable changes in business conditions, recurring losses, or a forecasted
inability to achieve break even operating results over an extended period. The
company evaluates the recoverability of long-lived assets based upon forecasted
undiscounted cash flows. Should an impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use of and ultimate disposition
of the intangible, to be reported at the lower of the carrying amount or the
fair value less costs to sell.

Property and Equipment
---------------------

Property and equipment are stated at cost. When retired or otherwise disposed,
the related carrying value and accumulated depreciation are removed from the
respective accounts and the net difference less any amount realized from
disposition, is reflected in earnings. Minor additions and renewals are expensed
in the year incurred. Major additions and renewals are capitalized and
depreciated over their estimated useful lives being 3 years up to 10 years.

Inventories
-----------

The company does not currently maintain any material amount of inventory. Small
parts, Small tools, and consumables are charged to operations.


Guarantees and Product Warranties
--------------------------------------------

FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN
45"), requires that upon issuance of a guarantee, the guarantor must disclose
and recognize a liability for the fair value of the obligation it assumes under
that guarantee.

The company's guarantees issued subject to the recognition and disclosure
requirements of FIN 45 as of March 31, 2006 and 2005 were not material. The
company has service level agreements that can result in a liability to its
customers. Using the company's historical costs as a basis, a reserve of $0 was
accrued. Prior to the fiscal year of 2005, the company had not established
historical ratio of claims, and the cost of replacing defective products and
product returns were immaterial and within management's expectations,
accordingly there were no warranties provided with the purchase of the company's
products during the year ended March 31, 2005.

Research and Development
------------------------

The company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs."
Under SFAS 2, 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. Total expenditures on
research and product development for the year ended March 31, 2006 and 2005 was
$0.


Reclassifications
-----------------

Certain reclassifications have been made in prior year's financial statements to
conform to classifications used in the current year.

Revenue Recognition and Deferred Revenue
----------------------------------------

Revenues are recognized in the period that services are provided. For revenue
from product sales, the company recognizes revenue in accordance with Staff
Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which superseded
Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS
("SAB101"). SAB 101 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions


                                      F-9
<PAGE>

for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The company defers any revenue for which the product has not been
delivered or for which services have not been rendered or are subject to refund
until such time that the company and the customer jointly determine that the
product has been delivered or services have been rendered or no refund will be
required.

SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the company's consolidated financial position and results of operations was not
significant.

The company considers amounts to be earned once evidence of an arrangement has
been obtained, services are delivered, fees are fixed or determinable, and
collectibility is reasonably assured. The company generates and recognizes
revenue as follows:

Revenue from operating as a wireless Internet service provider of tiered
wireless Internet services to business and residential subscribers: Internet
services are billed at the beginning of each month's activity at a fixed rate
for each customer. Customers sign an annual agreement or utilize the service on
a month-to-month basis. Revenue not yet earned is credited to deferred revenue.

Revenue from the sale and configuration of wireless equipment: NextPhase acts as
a reseller of certain components and equipment related to its products and
services. Equipment revenue is recognized at the time of shipment FOB to the
customer. Configuration is billed at an hourly rate and recognized after
completion. Costs associated with the equipment are expensed at the time of
shipment. In order to maximize the company's cash flows, revenue from the sale
and configuration of wireless equipment is sometimes billed in advance of
shipment. In such cases, these invoices are credited to deferred revenue.

Revenue from professional and consulting services provided by its staff: These
services include wireless network consulting, interference surveys, network
management and telephone consulting. Revenue is recognized after the
professional or consulting service has been provided. In order to maximize the
company's cash flows, revenue from professional services is sometimes billed in
advance of project completion. In such cases, these invoices are credited to
deferred revenue.

Deferred revenue at March 31, 2006 consists of the following:

Sale and configuration of wireless equipment:     $  18,313
Internet fees:                                       13,468
Professional services:                                2,000
                                                  ----------
Total deferred revenue                            $  33,781
                                                  ==========


Income Taxes
------------

Deferred income taxes are provided using the asset and liability method for
financial reporting purposes in accordance with the provisions of Statements of
Financial Standards No. 109, "Accounting for Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for temporary differences
between the tax bases of assets and liabilities and their carrying values for
financial reporting purposes and for operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be removed or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date. Temporary
differences between taxable income reported for financial reporting purposes and
income tax purposes are insignificant.

Stock Based Compensation
------------------------

On January 1, 2006 the company adopted Statement of Financial Accounting
Standards No. 123 (revised 2004) "Share-Based Payment" ("SFAS 123 (R) which
requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors including employee
stock options and employee stock purchases related to a Employee Stock Purchase
Plan based on the estimated fair values. SFAS 123 (R) supersedes the company's
previous accounting under Accounting Principles Board Opinion No.25, "Accounting
for Stock Issued to Employees" ("APB 25") for the periods beginning fiscal 2006.

                                      F-10
<PAGE>

The company adopted SFAS 123 (R) using the modified prospective transition
method, which required the application of the accounting standard as of January
1, 2006. The company's Consolidated Financial Statements as of and for twelve
months Ended March 31, 2006 reflect the impact of SFAS 123(R). In accordance
with the modified prospective transition method, the company's Consolidated
Financial Statements for the prior periods have not been restated to reflect,
and do not include the impact of SFAS 123 (R). Stock based compensation expense
recognized under SFAS 123 (R) for the twelve months ended March 31, 2006 was $0.
Pro forma stock based compensation was $0 for the twelve months ended March 31,
2006.

Stock-based compensation expense recognized during the period is based on the
value of the portion of share-based payment awards that is ultimately expected
to vest during the period.

A summary of option activity under the Plan as of March 31, 2006, and changes
during the period then ended are presented below:



                                                                    Weighted-
                                                                Average Exercise
                                                Options                Price
                                                --------        ----------------

      Outstanding at March 31, 2005                    0           $    0.00
      Issued                                           0                0.00
      Exercised                                        0                0.00
      Forfeited or expired                             0                0.00

      Outstanding at March 31, 2006                    0           $    0.00
      Non-vested at March 31, 2006                     0                0.00
      Exercisable at March 31, 2006                    0           $    0.00


Aggregate intrinsic value of options outstanding and options exercisable at
March 31, 2006 was $0. Aggregate intrinsic value represents the difference
between the company's closing stock price on the last trading day of the fiscal
period, which was $0.39 as of March 31, 2006, and the exercise price multiplied
by the number of options outstanding. As of March 31, 2006, total unrecognized
stock-based compensation expense related to non-vested stock options was $0. The
total fair value of options vested was $0 for the twelve-month periods ended
March 31, 2006 and 2005, respectively.

The modified transition method of SFAS 123 (R) requires the presentation of pro
forma information for periods presented prior to the adoption of SFAS 123 (R)
regarding net loss an net loss per share as if we had accounted for our stock
plans under the fair value method of SFAS 123 (R). For pro forma purposes, the
fair value of stock options was estimated using the Black-Scholes option
valuation model and amortizing on a straight-line basis. The pro forma amounts
are as follows:

<TABLE>
<CAPTION>

                               Twelve Months Ended
                                                                March 31, 2006     March 31, 2005
                                                              -----------------    --------------
<S>                                                          <C>                  <C>
Net loss - as reported                                        $      (1,861,927)  $  (4,285,020)
Add:  Stock-based employee compensation expense
   included in reported loss                                                  -             -
Deduct: Total stock-based employee compensation expense
   determined under fair-value based method for all rewards                   -             -
                                                              -----------------   ---------------
Net loss - pro forma                                          $      (1,861,927)  $   (4,285,020)
                                                              =================   ===============

Basic & diluted loss per share - as reported                  $           (0.08)  $       (0.30)
Basic & diluted loss per share - pro forma                    $           (0.08)  $       (0.30)

</TABLE>


Net Loss per Common Share
-------------------------

The company computes earnings per share under Financial Accounting Standard No.
128, "Earnings Per Share" (SFAS 128). Net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and


                                      F-11
<PAGE>

dilutive common stock equivalents outstanding during the year. Dilutive common
stock equivalents consist of shares issuable upon conversion of convertible
notes and the exercise of the company's stock options and warrants (calculated
using the treasury stock method). During the twelve months ended March 31, 2006
and 2005, common stock equivalents were not considered in the calculation of the
weighted average number of common shares outstanding because they would be
anti-dilutive, thereby decreasing the net loss per common share.

Management Estimates
--------------------

The presentation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Comprehensive Income
--------------------

SFAS No. 130, "Reporting Comprehensive Income", establishes standards for
reporting and displaying of comprehensive income, its components and accumulated
balances. Comprehensive income is defined to include all changes in equity,
except those resulting from investments by owners and distributions to owners.
Among other disclosures, SFAS No. 130 requires that all items that are required
to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. The company does not have any
items of comprehensive income in any of the periods presented.

Recent Accounting Pronouncements
--------------------------------

In March 2006, the FASB issued FASB Statement No. 156, Accounting for Servicing
of Financial Assets - an amendment to FASB Statement No. 140. Statement 156
requires that an entity recognize a servicing asset or servicing liability each
time it undertakes an obligation to service a financial asset by entering into a
service contract under certain situations. The new standard is effective for
fiscal years beginning after September 15, 2006. The company does not expect its
adoption of this new standard to have a material impact on its financial
position, results of operations or cash flows.

In February 2006 the FASB issued SFAS 155, "Accounting for Certain Hybrid
Instruments," which amends SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities," and SFAS 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." SFAS 155 allows financial
allows financial instruments that have embedded derivatives to be accounted for
as a whole (eliminating the need to bifurcate the derivative from its host) if
the holder elects to account for the whole instrument on a fair value basis.
SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS
140. This statement is effective for all financial instruments acquired or
issued in fiscal years beginning after September 15, 2006. The company does not
expect its adoption of this new standard to have a material impact on its
financial position, results of operations or cash flows.

In May 2005, the FASB issued FASB Statement No. 154, ("FAS 154"), "Accounting
Changes and Error Corrections." FAS 154 establishes retrospective application as
the required method for reporting a change in accounting principle in the
absence of explicit transition requirements specific to the newly adopted
accounting principle. FAS 154 also provides guidance for determining whether
retrospective application of a change in accounting principle is impracticable
and for reporting a change when retrospective application is impracticable. FAS
154 becomes effective for accounting changes and corrections of errors made in
fiscal years beginning after December 15, 2005. We do not expect the adoption of
FAS 154 to have a material impact on our financial position, cash flows or
results of operations.

In November 2005, the FASB issued FASB Staff Position No. FAS 123(R)-3,
"Transition Election Related to Accounting for Tax Effects of Share-Based
Payment Awards." The alternative transition method includes simplified methods
to establish the beginning balance of the additional paid-in capital pool ("APIC
pool") related to the tax effects of employee share-based compensation, and to
determine the subsequent impact on the APIC pool and consolidated statements of
cash flows of the tax effects of employee share-based compensation awards that
are outstanding upon adoption of SFAS 123(R). An entity may make a one-time
election to adopt the transition method described in this guidance and may take
up to one year from the later of its initial adoption of SFAS 123(R) or the
effective date of this guidance, which was November 11, 2005. The company has
elected not to adopt the alternative transition method provided in FAS 123(R)-3
for calculating the tax effects of share-based compensation pursuant to SFAS
123(R).

                                      F-12
<PAGE>

In December 2004, the FASB issued FASB Statement No. 123(R), ("FAS 123(R)"),
"Share-Based Payment," which is a revision of FASB Statement No. 123 ("FAS
123"), "Accounting for Stock-Based Compensation." FAS 123(R) supersedes APB
Opinion No. 25, (APB 25), "Accounting for Stock Issued to Employees," and amends
FASB Statement No. 95, "Statement of Cash Flows." FAS 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values at the
date of grant and to record that cost as compensation expense over the period
during which the employee is required to perform service in exchange for the
award (generally over the vesting period of the award). Excess tax benefits, as
defined by FAS 123(R), will be recognized as an addition to common stock. In
April 2005, the SEC adopted a new rule that amends the compliance dates for FAS
123(R). In accordance with the new rule, we are required to implement FAS 123(R)
at the beginning of our interim period that began January 1, 2006. The
Commission's new rule does not change the accounting required by FAS 123(R); it
changes only the dates of compliance.

Effective January 1, 2006, the company adopted FAS 123(R) using the modified
prospective transition method, which provides for certain changes to the method
for valuing share-based compensation. The valuation provisions of FAS 123(R)
apply to new awards and to awards that are outstanding at the effective date and
subsequently modified or cancelled. Estimated compensation expense for awards
outstanding at January 1, 2006 will be recognized over the remaining service
period using the compensation cost calculated for pro forma disclosure purposes
under FAS 123. In accordance with the modified prospective transition method,
our statements of operations for periods prior to January 1, 2006 will not be
restated to reflect the impact of FAS 123(R).

Our calculation of share-based compensation expense in future periods will be
calculated using the Black-Scholes option valuation model and will include the
portion of share-based payment awards that is ultimately expected to vest during
the period and therefore will be adjusted to reflect estimated forfeitures. SFAS
123(R) requires forfeitures to be estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ from those
estimates. In our pro forma information required under SFAS 123 for the periods
prior to 2006, we accounted for forfeitures as they occurred. For share awards
granted after January 1, 2006, expenses will be amortized under the
straight-line attribution method. For share awards granted prior to 2006,
expenses are amortized under the straight-line single option method prescribed
by SFAS 123. We expect that our adoption of FAS 123(R) in 2006 will have a
material impact on our results of operations and net loss per share.

NOTE 2 - CORPORATE REORGANIZATION AND SHARE EXCHANGE

On August 3, 2004, NextPhase and the shareholders of NTI closed a Share Exchange
Agreement pursuant to which NextPhase acquired all of the issued and outstanding
common stock of NTI. In connection with the transaction, the shareholders of NTI
received an aggregate of 12,943,000 shares of NextPhase common stock for their
12,943,000 shares of NTI.

Additionally, pursuant to a concurrent Stock Purchase Agreement, a NextPhase
shareholder sold 120,625 shares of NextPhase common stock to NTI for $510,000.
The purchase price for the stock was paid by a $350,000 promissory note and
$160,000 in cash.

The company also paid a finders fee of $20,000 in cash, plus 350,000 shares of
common stock, valued at $87,500, to an unaffiliated third party in connection
with the share exchange transaction. At March 31, 2005, $10,000 of the finder's
fee had been paid.

As a result of the share exchange transaction, the former shareholders of NTI
acquired or controlled a majority of the shares of NextPhase. Accordingly, the
transaction has been treated for accounting purposes as a recapitalization of
NTI; therefore, these financial statements represent a continuation of the
accounting acquirer, NTI, not NextPhase, the legal acquirer.

While the transaction is accounted for using the purchase method of accounting,
in substance the Agreement is a recapitalization of NTI's capital structure. The
company did not recognize goodwill or any intangible assets in connection with
the transaction.


In accounting for this transaction:

o    NTI is deemed to be the purchaser and  surviving  company for  accounting
purposes. Accordingly, its net assets are included in the balance sheet at their
historical book values;

o    Control of the net assets of NTI was acquired effective August 3, 2004 (the
"Effective Date"). This transaction has been accounted for as a purchase of the
assets and liabilities of NextPhase by NTI. At the Effective Date, NextPhase had
no assets; liabilities or operations and NTI had no operating business.

o    The consolidated statements of operations and cash flows include include
only the accounts of NextPhase from August 3, 2004 through March 31, 2006.

The total consideration paid was $646,000 and the significant components of the
transaction are as follows:

       Common stock retained                       $    215
       Common stock issued                           87,500
       Acquisition fees                              48,285
       Assets acquired                                    -
       Note payable                                 510,000
                                                   --------

       Total consideration paid/acquisition costs  $646,000
                                                   ========

In accordance with SOP 98-5, the company expensed $646,000 as acquisition costs.

                                      F-13
<PAGE>


NOTE 3 - RELATED PARTY TRANSACTIONS

For the Year Ended March 31, 2005:
----------------------------------

On August 3, 2004, NextPhase and the shareholders of NTI closed a Share Exchange
Agreement pursuant to which NextPhase acquired all of the issued and outstanding
common stock of NTI. In connection with the transaction, the shareholders of NTI
received an aggregate of 12,943,000 shares of NextPhase common stock for their
12,943,000 shares of NTI.

Additionally, pursuant to a concurrent Stock Purchase Agreement, a NextPhase
shareholder sold 120,625 shares of NextPhase common stock to NTI for $510,000.
The purchase price for the stock was paid by a $350,000 promissory note and
$160,000 in cash.

The company entered into a three-year Consulting Agreement with a stockholder,
pursuant to which the stockholder agreed to assist the company in developing its
business model and corporate structure, product market positioning, and
strategizing the marketing of industry related products, and performing other
advisory services in connection with business development and corporate
strategy. The company issued the shareholder 3,500,000 shares of common stock
for services to be rendered under the Consulting Agreement. The fair value of
the stock issued was $875,000.


For the Year Ended March 31, 2006:
----------------------------------

A company's director purchased 200,000 shares of common stock at a price of
$0.50 per share for a total cost of $100,000.

The company made principal payments of $100,000 on a note payable related to the
acquisition of the company's merger shell in August, 2004.

The company issued 560,000 shares of common stock to an officer of the company
pursuant to the terms of an asset acquisition which had been completed during
the year ended March 31, 2005.

The company made principal payments in the amount of $71,200 on a note payable
to a company. officer. Principal in the amount of $9,100 remains outstanding
under this note at March 31, 2006.

The company received a loan in the amount of $25,000 from a company director.
This loan was fully paid during the year ended March 31, 2006. The company
issued 423,846 shares of common stock to its Chief Executive Officer in lieu or
$105,962 of salary, and a total of 400,000 shares valued at $177,000 to Digitis,
Inc., a company controlled by NextPhase's Chief Executive Officer, as a bonus.
The company also granted a bonus of 750,000 shares valued at $112,500 for
services performed during the period ended March 31, 2006. These shares will be
issued subsequent to March 31, 2006. The company also issued 120,000 shares
valued at $30,000 for services performed during the year ended March 31, 2005.

The company issued 413,860 shares of common stock to its Chairman in lieu of
$103,465 of salary, and a total of 200,000 shares of common stock valued at
$50,000 as a bonus. The company also granted a bonus of 150,000 shares valued at
$22,500 for services performed during the period ended March 31, 2006. These
shares will be issued subsequent to March 31, 2006. The company also issued
120,000 shares valued at $30,000 for services performed during the year ended
March 31, 2005.

The company issued 333,138 shares of common stock to its Executive Vice
President - Business Development in lieu of $83,285 salary, and 325,000 shares
of common stock valued at $70,000 as a bonus. The company also issued a total of
120,000 shares valued at $30,000 in lieu of salary.

A convertible note payable in the amount of $30,000 was assigned by the original
maker of the note to the company's Chairman, and the company is now indebted to
its Chairman in the amount of $30,000 plus accrued interest. See Note 7.

The company's chairman realized a short-swing profit in the amount of $4,251 by
trading in the company's stock. This amount was remitted by the chairman to the
company in April, 2006. The Company is unable to predict the extent of its
ultimate liability with respect to any and all future securities matters. The
costs and other effects of any future litigation, government investigations,
legal and administrative cases and proceedings, settlements, judgments and
investigations, claims and changes in this matter could have a material adverse
effect on the Company's financial condition and operating results.





                                      F-14
<PAGE>



NOTE 4 - PROPERTY AND EQUIPMENT

Communications Towers
---------------------

The company intends to utilize broadcast towers as their main POP's (Points of
Presence) and to deliver Point to Multipoint broadband connectivity to the
company's existing and potential clients. Depending on tower location and
visibility, each tower will cover a range from 240 to 360 degrees, with a
broadcast strength in excess of 25 miles delivering an average of 32Mbps of
broadband data service. Within this coverage area, the company will sell data
circuits for internet service, video and/or VoIP service.

At March 31, 2006, there were nine towers in operation. The estimated useful
life of the towers is approximately ten years. The company begins to depreciate
the cost of each tower when the tower is placed into service.

Property and equipment are recorded at cost. Depreciation is provided by the
straight-line method over the estimated useful lives of the related assets,
which is estimated to be three years. Major classes of property and equipment at
March 31, 2005 and 2004 consist of the followings


Property and equipment at March 31, 2006
----------------------------------------

Telecommunications equipment                       $ 146,378
Communications towers                                 88,964
Computer equipment                                    55,260
Furniture and fixtures                                13,291
Leasehold improvements                                 7,176
                                                   ---------
Total property and equipment                         311,069
Less: accumulated depreciation                       (84,698)
                                                   ---------
Net property and equipment                         $ 226,371
                                                   =========

Depreciation expense was $70,248 and $15,028 for the years ended March 31, 2006
and 2005, respectively.


NOTE 5 - OTHER ASSETS

Other assets of $8,037 at March 31, 2006 consists of security deposits.

NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at March 31, 2006 consist of the
following:

Trade accounts payable and accrued liabilities:    $ 553,426
Payroll and accrued bonus                            295,392
Accrued interest payable                              42,980
Sales taxes payable                                    5,912
                                                   ---------
                                                   $ 897,710
                                                   =========

NOTE 7 - NOTES PAYABLE AND CAPITAL LEASE

At March 31, 2005, the company had outstanding two notes payable in the
aggregate amount of $180,300. During the twelve months ended March 31, 2006, the
company made principal payments on notes payable in the aggregate amount of
$196,200, and entered into two new notes payable agreements in the aggregate
amount of $25,000. The company also entered into two capital lease agreements in
the aggregate amount of $25,669, and made principal payments on these capital
leases in the amount of $13,954.

                                      F-15
<PAGE>

The company also recorded total interest expense on notes payable of $63,563,
consisting of cash paid of $583, accrued interest of $42,980, and amortization
of discount on notes payable of $20,000. The company also recorded interest
expense on the capital leases in the amount of $1,589, consisting of cash
payments.

At March 31, 2006, the company has outstanding notes payable in the aggregate
amount of $50,815. The company also had capital leases payable in the aggregate
amount of $11,715 (included in $50,815). Notes and capital leases payable at
March 31, 2006, consist of the following:



Convertible note payable in the amount of $30,000
payable to a board member. The note bears interest at the
rate of 6% per annum, and is due in full on April 1, 2007.
Upon maturity, the note and accrued interest are
convertible into common stock of the company at the
lower of the fair market value of the company's
common stock at the date of conversion or $0.32 per
share. The minimum price at which the note and
accrued interest may convert is $0.15 per share. There
was no beneficial conversion feature embedded in this
note at the time of issuance.                                   $    30,000

Note payable to ex- company officer for equipment
purchased. The note is payable in twelve monthly
installments, ten installments of $8,900 and two
installments of $9,000. The note is secured by the
assets purchased. During the twelve months ended
March 31, 2006, the company made principal payments
of $71,200. The final payment is being help pending
settlement of other outstanding transactions between
the company and the ex-officer.                                       9,100

Capital lease payable for the purchase of furniture.
The lease is payable in monthly installments of $360
through April, 2009.                                                 11,715
                                                                -----------

Total notes  and capital leases payable at
March 31, 2006, net of discount                                      50,815

Less: current portion                                               (12,718)
                                                                -----------

Long-term notes and capital leases  payable
at March 31, 2006                                               $    38,097
                                                                ===========

Aggregate maturities of long-term debt as of March 31, 2006 are as follows:

                   Fiscal Year                       Amount
                   -----------                     ----------
                      2007                          $ 12,718
                      2008                            33,716
                      2009                             4,029
                      2010                               352
                                                   ----------
                                                    $ 50,815
                                                   ==========






NOTE 8 -  EQUITY

Common stock
------------


The  company is  authorized  to issue  200,000,000  shares of common  stock with


                                      F-16
<PAGE>

$0.001 par value per share.  As of March 31,  2006,  the  company has issued and
outstanding 23,136,309 shares of common stock.

NTI issued  4,000,000  founders shares upon its formation on September 14, 2000.
The company has recorded a receivable of $4,000 attributable to the par value of
these shares, which was paid as described in Note 2.

For the twelve months ended March 31, 2005:
-------------------------------------------

The company sold 3,897,000 shares of common stock for gross proceeds of
$974,250. Costs related to the sale were $15,033, which have been charged to
additional paid-in capital.

The company issued an aggregate of 8,250,000  shares of common stock,  valued at
$2,062,500, for services.

The company entered into a three-year Consulting Agreement with a shareholder,
pursuant to which the stockholder agreed to assist the company in developing its
business model and corporate structure, product market positioning, and
strategizing the marketing of industry related products, and performing other
advisory services in connection with business development and corporate
strategy. The company issued the shareholder 3,500,000 shares of common stock
for services to be rendered under the Consulting Agreement. The fair value of
the stock was $875,000.

The company awarded 35,000 shares of common stock,  valued at $8,750, as a bonus
to an officer.

The company agreed to issue 350,000 shares of common stock, valued at $87,500 to
an unaffiliated third party as part of a finder's fee in connection with the
share exchange transaction described in Note 2. These shares were issued
subsequent to March 31, 2005, and the amount of $87,500 is carried in Common
Stock Subscribed on the company's balance sheet at March 31, 2005.

The company agreed to issue 560,000 shares of common stock, valued at $140,000,
as a partial payment for equipment purchased. These shares were issued
subsequent to March 31, 2005, and the amount of $140,000 is carried in Common
Stock Subscribed on the company's balance sheet at March 31, 2005.

The company sold 210,000 shares of common stock for $52,500 cash. These shares
were issued subsequent to March 31, 2005, and the amount of $52,500 is carried
in Common Stock Subscribed on the company's balance sheet at March 31, 2005.

For the twelve months ended March 31, 2006:
-------------------------------------------

The company sold 890,000 shares of common stock for $445,000 cash.

The company issued 1,120,000 shares of common stock which were subscribed during
the year ended March 31, 2005 for $280,000 cash.

The company charged to additional paid-in capital the amount of $20,000
representing the discount on convertible debt attributed to embedded beneficial
conversion features.

The company agreed to issue 50,000 shares of common stock valued at $25,000 for
an asset acquisition. This amount was charged to subscriptions payable at March
31, 2006; these shares were issued subsequent to March 31, 2006.

The company issued 4,124,585 shares of common stock for services valued at
$1,151,266. The company charged the amount of $967,666 to operations during the
twelve months ended March 31, 2006, and $183,600 to deferred compensation.

The company charged to operations the amount of $165,521 for the amortization of
deferred compensation.

The company cancelled 2,895,000 shares of common stock valued at $723,750
pursuant to legal settlements.

The company also issued to consultants warrants to purchase 350,000 shares of
common stock at a price of $0.30 per share. The company valued these warrants
using the Black-Scholes valuation model, and charged the amount of $71,256 to
additional paid-in capital during the twelve months ended March 31, 2006.

Warrants
--------

During the year ended March 31, 2006, the company issued warrants to purchase
350,000 shares of common stock at a price of $0.30 to consultants for services
to be provided through January 19, 2007. The company valued these warrants using
the Black-Scholes valuation model, and charged the amount of $71,256 to deferred
compensation during the year ended March 31, 2006. $12,299 of this amount was
amortized to operations during the year ended March 31, 2006, and $58,957
remains on the company's balance sheet at March 31, 2006 as deferred
Compensation.

The following table summarizes the changes in warrants outstanding and the
related prices for the shares of the company's common stock issued to
non-employees of the company. These warrants were granted in lieu of cash
compensation for services performed or financing expenses and in connection with
placement of convertible debentures.

         Warrants Outstanding                        Warrants Exercisable
   -----------------------------------    --------------------------------------
                          Weighted                                  Weighted
                          Average        Weighted                   Average
                          Remaining      Average                    Remaining
Exercise    Number        Contractual    Exercise     Number        Contractual
Prices      Outstanding   Life (years)   Price        Exercisable   Life (years)
--------    -----------   ------------   ---------    -----------   ------------

$ 0.30          350,000       2.81        $0.30           350,000       2.81
            -----------   ------------                -----------    -----------
                350,000       2.81        $0.30           350,000       2.81
            ===========   ============                ===========    ===========

Transactions involving warrants are summarized as follows:

                                        Number of Shares    Weighted Average
                                          (post-split)      Price Per Share
                                                              (post-split)
                                         ---------------    ------------------

   Outstanding at March 31, 2005                   --                N/A
      Granted                                  350,000               $0.30
      Exercised                                    --                 --
      Canceled or expired                          --                 --
                                              ----------           --------
   Outstanding at March 31, 2006               350,000               $0.30
                                              ==========           ========



The estimated value of the compensatory warrants granted to non-employees in
exchange for services and financing expenses was determined using the
Black-Scholes pricing model and the following assumptions:

                                                       2006
                                                       ----
 Significant assumptions (weighted-average):
     Risk-free interest rate at grant date             4.75%
     Expected stock price volatility                    154%
     Expected dividend payout                           --
     Expected option life-years (a)                      3


Preferred Stock
---------------

The company is authorized to issue 20,000,000 shares of preferred stock with
$0.001 par value per share. As of March 31, 2006 and 2005, the company did not
issue any preferred shares.

                                      F-17
<PAGE>

NOTE 9 - INCOME TAXES

Financial Accounting Standard No. 109 requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statement or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between financial statements and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. Temporary differences between taxable income reported for financial
reporting purposes and income tax purposes are insignificant.

At March 31, 2006, the company has available for federal income tax purposes a
net operating loss carryforward of approximately $6,000,000, expiring in the
year 2025, that may be used to offset future taxable income. The company has
provided a valuation reserve against the full amount of the net operating loss
benefit, since in the opinion of management based upon the earnings history of
the company, it is more likely than not that the benefits will not be realized.
Also, due to a change in the control after the reverse acquisition of NTI by
NextPhase, the company's past accumulated losses to be carried forward may be
limited.

Components of deferred tax assets as of March 31, 2006 are as follows:

                Non current:
                Net operating loss carry forward               $  2,040,000

                Valuation allowance                              (2,040,000)
                                                               ------------
                Net deferred tax asset                         $        --
                                                               ============

NOTE 10 - LEGAL SETTLEMENTS

During the year ended March 31, 2006,  the company  entered into three
settlement  agreements  with  regard to  legal disputes.
Pursuant to the terms of these settlement agreements,  the company recorded
other income in the aggregate amount of $1,115,500, comprised
of the following:

                                           Shares      Value
Common stock of the company
  received for cancellation:             2,895,000  $ 723,750
Common stock of the company
  to be received for cancellation;
  recorded to stock cancellation
  receivable at March 31, 2006:          1,000,000    250,000
Shares of Nathaniel Energy Corp.
  stock received                         3,300,000    198,000
Cash, net                                             (56,250)
                                                   ----------
Total legal settlement income                      $1,115,500
                                                   ==========



NOTE 11 - LOSSES PER COMMON SHARE

The following table presents the computation of basic and diluted loss per share
for the Years Ended March 31, 2006 and 2005:

                                                  For the Year Ended March 31,
                                                     2006               2005
                                                 ------------       ------------

Net loss available for common shareholders       $(1,861,927)       $(4,285,020)
                                                 ------------       ------------
Loss per share (basic and assuming dilution)     $     (0.08)       $     (0.30)
                                                 ------------       ------------
Weighted average common shares outstanding
  - basic                                          21,930,310        14,317,257
  - fully diluted                                  29,202,542        14,317,257



Fully-diluted weighted-average common shares outstanding are not utilized in the
calculation  of loss per  common  share as the  effect  would be  anti-dilutive,
decreasing the reported loss per common share.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

Lease Commitments
-----------------

As of March 31, 2006, the company leased certain equipment under a
non-cancelable operating lease agreement which calls for monthly payments of
$3,498 (including tax) for a thirty-six month period, through January 2009.

The company also occupied an aggregate of approximately 1,748 square feet in
Anaheim, California, which serve as the corporate offices and company
headquarters for a monthly rental cost of $2,447. This lease expires on October
31, 2009. In September 2005, the company leased an additional 2,767 square feet
of space in the same building as its corporate offices at a monthly rental of
$3,598. This lease expires in April 2009.

The company also leases approximately 1,169 square feet of data center space in
the same building as its corporate offices. This space serves as the company's
main data facility and houses the equipment that provides broadband Internet
service to the surrounding areas. The monthly rental cost of this space is
$2,630. This lease expires on November 30, 2008.

                                      F-18
<PAGE>

The company also leases small areas of space for purposes of operating its
broadcast towers. These spaces are either on rooftops, or upon existing towers
owned by outside entities. At March 31, 2006, the company leases seven such
areas. Three of these are on a month-to-month basis, at an aggregate monthly
rental cost of $650. One of these is on a month-to-month basis, with the
specific terms under negotiation. Three of these are covered by non-cancellable
lease arrangements, with an aggregate monthly rent of $1,600, with leases
expiring from June 2008 through January 2009.

Effective April 1, 2006, the company leased approximately 2,000 square feet of
space in Marietta, Georgia, to house its acquisition of certain assets of
Synkronus, Inc. (see Note 14). This lease calls for monthly payments of $2,350
and has a one-year term.

Commitments for minimum rentals under non-cancelable lease at March 31, 2006 are
as follows:

            Year Ended March 31,                    Amount
            --------------------                  ---------
            2007                                  $ 198,219
            2008                                    174,955
            2009                                     99,929
            2010                                     22,482
                                                  ---------
            Total                                 $ 495,585
                                                  ---------

Total rental expense relating to operating expenses for the years ended March 31
2006 and 2005 was $110,471 and $30,040 respectively.

Capital Lease Obligations
---------------------------------

Property and equipment (Note 4) includes the following amounts for capitalized
leases at March 31, 2006 and 2005:

                                                       2006        2005
                                                     --------    --------
Office furniture                                     $ 13,291   $     --
Less: accumulated depreciation and amortization          (665)        --
                                                     --------   --------
                                                     $ 12,626   $     --
                                                     --------   --------


The company has office furniture under a non-cancelable lease with an original
cost of $13,291. As of March 31, 2006, the company has paid principal in the
amount of $1,576 on this lease. Depreciation expense of $665 and $0 were charged
to operations in connection with the capital leased furniture during the years
ended March 31, 2006 and 2005, respectively.

Short-swing profit
------------------
The company's chairman realized a short-swing profit in the amount of $4,251 by
trading in the company's stock. This amount was remitted by the chairman to the
company in April, 2006. The Company is unable to predict the extent of its
ultimate liability with respect to any and all future securities matters. The
costs and other effects of any future litigation, government investigations,
legal and administrative cases and proceedings, settlements, judgments and
investigations, claims and changes in this matter could have a material adverse
effect on the Company's financial condition and operating results.



Employment and Consulting Agreements
------------------------------------

The company has employment agreements with the company's officers and certain
employees. These employment agreements provide for salaries and benefits,
including stock grants and extend up to three years. In addition to salary and
benefit provisions, the agreements include defined commitments should the
employer terminate the employee with or without cause.

     ROBERT FORD

     NextPhase  and Robert Ford are  parties to an  employment  agreement  which
     provides, among other things:

          o    that Mr. Ford will serve as NextPhase's Chief Executive Officer,

          o    for a term of three  (3)  years,  commencing  February  1,  2005,
               subject to earlier termination by either party in accordance with
               the Employment Agreement,

          o    that Mr. Ford's  salary shall be $120,000 per annum,  payable by
               the  company  in  regular  installments  in  accordance  with the
               company's general payroll practices

          o    that Mr. Ford shall be eligible to receive additional stock
               bonuses under the company's 2005 Employee Stock Compensation
               Plan.



                                      F-19
<PAGE>

     STEPHEN YOUNG

     NextPhase and Stephen Young are parties to an  employment  agreement  which
     provides, among other things:

          o    that Mr. Young will serve as NextPhase's Chairman of The Board,

          o    for a term of three (3) years,  commencing April 1, 2005, subject
               to earlier  termination  by either party in  accordance  with the
               Employment Agreement,

          o    that Mr. Young's  salary shall be $120,000 per annum,  payable by
               the  company  in  regular  installments  in  accordance  with the
               company's general payroll practices

          o    that Mr. Young shall be eligible to receive additional stock
               bonuses under the company's 2005 Employee Stock Compensation
               Plan.




Litigation
----------

The company is subject to legal proceedings and claims that arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the company believes that the final disposition of such
matters will not have material adverse effect on its financial position, results
of operations or liquidity.

NOTE 13 - BUSINESS CONCENTRATION

For the year ended March 31, 2006:
Revenue from two (2) major customers approximated $229,163 or 36% of sales.
Total accounts receivable of $159,265 or 80% of total accounts receivable was
due from these two customers as of March 31, 2006

Purchases  from  two  (2)  major  suppliers  approximated  $222,867  or 43% of
purchases.  Total accounts payable of $169,222 or 19% of total accounts payable
was due to these two suppliers as of March 31, 2006.

For the year ended March 31, 2005:
Revenue from one (1) major customer approximated $4,655 or 11% of sales.
Total accounts receivable of $4,655 or 26% of total accounts receivable was
due from these two customers as of March 31, 2005.

Purchases  from  one (1)  major  supplier  approximated  $5,538  or 58% of
purchases.  Total accounts payable of $5,538 or 5% of total accounts payable
was due to this supplier as of March 31, 2005.


NOTE 14 - SUBSEQUENT EVENTS

Synkronus Asset Acquisition
---------------------------

In April 2006, through its wholly-owned subsidiary SpeedFactory, Inc., acquired
all of the assets of Synkronus, Inc., excluding cash, pursuant to an Asset
Purchase Agreement dated March 29, 2006 between SpeedFactory and Synkronus. The
assets acquired by SpeedFactory comprise Synkronus's internet service and
connectivity business operated by Synkronus under the name "SpeedFactory".

SpeedFactory paid $1,500,000 in cash for the assets at closing. SpeedFactory did
not assume any pre-closing liabilities from Synkronus. The amount of $1,200,000
was delivered to the seller on April 7, 2006 and the closing documents were
released from escrow on that date. The amount of $300,000 was delivered to
escrow on April 7, 2006, pending resolution of certain elements of the
transaction. The closing was effective as of April 5, 2006.

                                      F-20
<PAGE>

NextPhase borrowed $1,500,000 to fund the purchase price from a private lender.
This borrowing was secured by substantially all the assets of NextPhase. The
company previously disclosed the terms of this loan in a Current Report on Form
8-K which was filed with the Securities and Exchange Commission on April 5,
2006.



The company has made a preliminary allocation of the purchase price to the
Synkronus assets at estimated fair values. This allocation is subject to
revision; subsequent revisions, if any, are not expected to be material. The
following table summarized the estimated fair values of the assets acquired at
the date of acquisition:

Cash consideration                                  $1,500,000
                                                   -----------
Total purchase price                                $1,500,000
                                                   ===========

Allocation of purchase price:

                                                       Amount       Life
                                                    ----------   ----------
Computers and related equipment                     $  100,000     3 years
Customer lists                                       1,200,000    10 years
Trademarks                                             100,000   indefinite
Supply contracts                                       100,000     5 years
                                                    ----------
Total purchase price                                $1,500,000
                                                    ==========


The trademarks are deemed to have an indefinite life and, accordingly, are not
being amortized, but will be subject to periodic impairment testing at future
periods in accordance with SFAS No. 142 ("Goodwill and Other Intangible
Assets"). The customer lists and supply contracts will be amortized based on
estimated weighted cash flows over their lives.

The following unaudited pro forma information is provided for the Acquisition
assuming it occurred as of April 1, 2004:


                                                 Year Ended
                                         03/31/2006     03/31/2005
                                         ----------     ----------
Net sales                               $ 2,530,000     $ 2,070,000
Net loss                                 (1,518,000)     (4,124,000)
Net loss per share - basic and diluted        (0.07)          (0.29)


In April 2006, the company leased approximately 2,000 square feet of space in
Marietta, Georgia, to house the Synkronus assets. This lease calls for monthly
payments of $2,350 and has a one-year term.

Issuance of common stock
------------------------

Subsequent to March 31, 2006, the company issued 2,057,612 shares of common
stock for the following purposes: 900,000 shares were issued to two officers as
bonuses for; 387,151 shares for services; 360,000 shares to officers in lieu of
cash salary; 125,461 in satisfaction of accounts payable; 185,000 as a
separation agreement with an officer; and 100,000 shares previously subscribed.


Resignation of Officer and Director
-----------------------------------

On May 23, 2006 James Wray resigned as a Corporate Officer and Director of
NextPhase Wireless, Inc.




                                      F-21