**U.S.
      Securities and Exchange Commission**


Washington,
      D.C. 20549








**FORM
      10-QSB/A**




**Amendment
      No. 3**










**[X]
      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT**


OF
      1934
      for the quarterly period ended September 30, 2005





**[
      ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**


ACT
      OF
      1934 for the transition period from _______ to _______







**CHINA
      MOBILITY SOLUTIONS,
      INC.**


(Exact
      name of small business issuer as specified in its charter)





**XIN
      NET CORP.**


(Former
      name of registrant)







**Florida**
            ******330-751560**(State
                or other jurisdiction of incorporation or
                organization)
            (IRS
                Employer Identification No.)




**#900
      - 789 West Pender Street, Vancouver, B.C., Canada V6C 1H2**


(Address
      of principal executive offices)





**(604)
      632-9638**


(Issuer's
      telephone number)
















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 [x] No [ ]**





Number
      of
      shares of common stock outstanding as of September 30, 2005: **20,011,670**






**EXPLANATORY
              PARAGRAPH**
 
 This
                  Amendment No. 3 to the Form 10-QSB of China Mobility Solutions,
                  Inc. for
                  September 30, 2005, is being filed solely to amend Part I, Item
                  4. Controls and
                  Procedures.









**INDEX
                TO FORM 10-QSB**Page
                No.PART
              IItem
              1.Financial
              Statements
            3Consolidated
              Balance
              Sheet - September 30, 2005 (unaudited)
            4Consolidated
              Statements of Operations - Three Months and Nine Months Ended September
              30, 2005 and 2004 (unaudited)
            5Consolidated
              Statements
              of Stockholders’ Equity
            6Consolidated
              Statements of Cash Flows - Nine Months Ended
              September 30, 2005 and 2004 (unaudited)
            7Consolidated
              Statements of Deficit
            8Notes
              to
              Consolidated Financial Statements (unaudited)
            9-14Item
                2.Management's
                Discussion and Analysis of Financial
                Condition and Results of Operations
            15Item
              3.Quantitative
              and Qualitative Disclosures About Market
              Risk
            17Item
              4.Controls
              and Procedures
            18PART
              IIItem
              1.Legal
              Proceedings
            19Item
              2. Changes in Securities
            19Item
              3. Defaults Upon Senior Securities
            21Item
              4.Submission
              of Matters to a Vote of Security
              Holders
            21Item
              5.Other
              Information
            21Item
                6.Exhibits
                and Reports on Form 8-K
            21Signature
              Page
            22







-2-
 *Index*




**CHINA
        MOBILITY SOLUTIONS, INC.**
 **AND
                SUBSIDIARIES**
 **QUARTERLY
                REPORT ON FORM 10-QSB/A**
 **AMENDMENT
                NO. 3**
 
 PERIOD
                ENDEDSEPTEMBER30,
                2005


**ITEM
      1** **.
      FINANCIAL STATEMENTS.**





The
      financial statements have been adjusted with all adjustments, which, in the
      opinion of management, are necessary in order to make the financial statements
      not misleading.





For
      financial information, please see the financial statements and the notes
      thereto, attached hereto and incorporated herein by this reference.





The
      financial statements have been prepared by China Mobility Solutions, Inc.,
      a
      Florida corporation (the "Company"), without audit pursuant to the rules and
      regulations of the Securities and Exchange Commission. Certain information
      and
      note disclosures normally included in financial statements prepared in
      accordance with accounting principles generally accepted in the United States
      of
      America, have been condensed or omitted as allowed by such rules and
      regulations, and management believes that the disclosures are adequate to make
      the information presented not misleading. These financial statements include
      all
      of the adjustments which, in the opinion of management, are necessary to a
      fair
      presentation of financial position and results of operations. All such
      adjustments are of a normal and recurring nature. These financial statements
      should be read in conjunction with the audited financial statements at December
      31, 2004, included in the Company's Form 10-KSB.





Cautionary
      and Forward Looking Statements





In
      addition to statements of historical fact, this Form 10-QSB contains
      forward-looking statements. The presentation of future aspects of the Company
      found in these statements is subject to a number of risks and uncertainties
      that
      could cause actual results to differ materially from those reflected in such
      statements. Readers are cautioned not to place undue reliance on these
      forward-looking statements, which reflect management's analysis only as of
      the
      date hereof. Without limiting the generality of the foregoing, words such as
      "may," "will," "expect," "believe," "anticipate," "intend," or "could" or the
      negative variations thereof or comparable terminology are intended to identify
      forward-looking statements.





These
      forward-looking statements are subject to numerous assumptions, risks and
      uncertainties that may cause the Company's actual results to be materially
      different from any future results expressed or implied in those statements.
      Important facts that could prevent the Company from achieving any stated goals
      include, but are not limited to, the following:





Some
      of
      these risks might include, but are not limited to, the following:





(a) volatility
      or decline of the Company's stock price;





(b) potential
      fluctuation in quarterly results;





(c) failure
      of the Company to earn revenues or profits;




(d)
              inadequate capital to continue or expand its business, inability to
              raise
              additional capital or financing to implement its business
              plans;




(e) failure
      to commercialize its technology or to make sales;





(f) rapid
      and significant changes in markets;





(g) litigation
      with or legal claims and allegations by outside parties;





(h) 
      insufficient revenues to cover operating costs.





There
      is
      no assurance that the Company will be profitable, the Company may not be able
      to
      successfully develop, manage or market its products and services, the Company
      may not be able to attract or retain qualified executives and technology
      personnel, the Company's products and services may become obsolete, government
      regulation may hinder the Company's business, additional dilution in outstanding
      stock ownership may be incurred due to the issuance of more shares, warrants
      and
      stock options, or the exercise of warrants and stock options, and other risks
      inherent in the Company's businesses.





The
      Company undertakes no obligation to publicly revise these forward-looking
      statements to reflect events or circumstances that arise after the date hereof.
      Readers should carefully review the factors described in other documents the
      Company files from time to time with the Securities and Exchange Commission,
      including the Quarterly Reports on Form 10-QSB and Annual Report on Form 10-KSB
      filed by the Company in 2004 and any Current Reports on Form 8-K filed by the
      Company.




-3-
 *Index*


**CHINA
                  MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES**(formerly
                  Xin Net Corp.)**CONSOLIDATED
                  BALANCE SHEETS****September
                  30, 2005 and December 31, 2004**(Unaudited)**Stated
                  in U.S. dollars**
              
              **2005**
              
              **2004****(Unaudited)**
              
              **(Audited)****ASSETS****Current
                  Assets**Cash
                  and Cash Equivalents
              
              $
              7,634,523
              
              $
              5,380,622Accounts
                  receivable
              
              
              6,204
              
              
              34,560Prepaid
                  Expenses and Other Current Assets
              
              
              348,373
              
              
              33,070Amount
                  due from related parties
              
              
              21,531
              
              
              18,322**Total
                  Current Assets**
              
              
              8,010,631
              
              
              5,466,574**Investment**
              
              
              1
              
              
              1**Property
                  and Equipment, Net**
              
              
              6,988
              
              
              6,549**Goodwill**
              
              
              4,802,520
              
              
              973,906**Total
                  Assets**
              
              $
              12,820,140
              
              $
              6,447,030**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities**Accounts
                  Payable and Other Accrued Liabilities
              
              $
              2,338,873
              
              $
              340,824Deferred
                  Revenue
              
              
              2,474,458
              
              
              2,111,698Convertible
                  Debentures (Note 4)
              
              
              3,350,000
              
              
              -Amount
                  due to related parties
              
              
              500
              
              
              -**Total
                  Current Liabilities**
              
              
              8,163,831
              
              
              2,452,522**Minority
                  Interest**
              
              
              -
              
              
              32,791**Commitments
                  and Contingencies**
              
              
              -
              
              
              -**Stockholders'
                  Equity**Common
                  Stock : $0.001 Par ValueAuthorized
                  :
                  50,000,000Issued
                  and Outstanding : 20,011,670 (2004: 15,826,670)
              
              
              20,012
              
              
              15,827Additional
                  Paid
                  In Capital
              
              
              18,442,826
              
              
              8,770,378Subscription
                  Receivable
              
              
              (140,000
              )
              
              -Accumulated
                  Deficit
              
              
              (13,469,927
              )
              
              (4,640,956
              )Accumulated
                  Other Comprehensive Loss
              
              
              (196,602
              )
              
              (183,532
              )**Total
                  Stockholders' Equity**
              
              
              4,656,309
              
              
              3,961,717**Total
                  Liabilities and Stockholders' Equity**
              
              $
              12,820,140
              
              $
              6,447,030(The
                  accompanying notes are an integral part of these consolidated financial
                  statements)




-4-
 *Index*




**CHINA
                  MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES**(formerly
                  Xin Net Corp.)**CONSOLIDATED
                  STATEMENTS OF OPERATIONS****For
                  the three months and nine months ended September 30, 2005 AND
                  2004**(Unaudited)**Three
                  months ended**
              
              
              
              **Nine
                  months ended****September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,****Stated
                  in U.S. dollars**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004****Revenue**Mobile
                  marketing services
              
              $
              1,190,328
              
              $
              888,082
              
              $
              3,376,829
              
              $
              888,082Tuition
                  fee
              
              
              53,100
              
              
              95,383
              
              
              160,408
              
              
              218,2981,243,428
              
              
              983,465
              
              
              3,537,237
              
              
              1,106,380**Cost
                  of revenue**Mobile
                  marketing services
              
              
              368,552
              
              
              236,229
              
              
              903,022
              
              
              236,229Tuition
                  fee
              
              
              16,596
              
              
              15,268
              
              
              43,614
              
              
              43,641385,148
              
              
              251,497
              
              
              946,636
              
              
              279,870**Gross
                  profit**
              
              
              858,280
              
              
              731,968
              
              
              2,590,601
              
              
              826,510**Expenses**Advertising
                  and
                  promotion
              
              
              253,970
              
              
              273,696
              
              
              663,402
              
              
              280,471Commission
              
              
              359,500
              
              
              -
              
              
              359,500
              
              
              -Consulting
                  and
                  professional
              
              
              186,736
              
              
              17,463
              
              
              214,421
              
              
              56,800Depreciation
              
              
              765
              
              
              2,255
              
              
              1,933
              
              
              3,890Fair
                  value of warrants issued
              
              
              6,891,470
              
              
              -
              
              
              6,891,470
              
              
              -Foreign
                  exchange gain
              
              
              (97,536
              )
              
              (17,219
              )
              
              (92,942
              )
              
              (8,801
              )General
                  and administrative
              
              
              223,239
              
              
              1,682
              
              
              280,132
              
              
              59,761Interest
                  -
                  intrinsic value of the conversion feature
              
              
              1,052,863
              
              
              -
              
              
              1,052,863
              
              
              -Investor
                  relations
              
              
              87,825
              
              
              -
              
              
              175,650
              
              
              -Rent
              
              
              224,421
              
              
              124,499
              
              
              554,370
              
              
              150,060Salaries,
                  wages
                  and sub-contract
              
              
              344,797
              
              
              307,532
              
              
              1,034,949
              
              
              379,198Stock-based
                  compensation
              
              
              126,000
              
              
              -
              
              
              126,000
              
              
              -Website
                  development
              
              
              -
              
              
              -
              
              
              80,000
              
              
              -9,654,050
              
              
              709,908
              
              
              11,341,748
              
              
              921,379**Operating
                  Income (Loss)**
              
              
              (8,795,770
              )
              
              22,060
              
              
              (8,751,147
              )
              
              (94,869
              )**Other
                  Income and Expenses**Interest
                  income
              
              
              24,211
              
              
              30,290
              
              
              60,625
              
              
              59,846Other
                  income
              
              
              1
              
              
              9
              
              
              20
              
              
              1,470Equity
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (81,273
              )24,212
              
              
              30,299
              
              
              60,645
              
              
              (19,957
              )**Income
                    (Loss) before minority interest and**discontinued
                    operations
              
              
              (8,771,558
              )
              
              52,359
              
              
              (8,690,502
              )
              
              (114,826
              )**Minority
                  interest**
              
              
              (6,141
              )
              
              -
              
              
              (138,469
              )
              
              4,634**Income
                  (Loss) from Continuing Operations**
              
              
              (8,777,699
              )
              
              52,359
              
              
              (8,828,971
              )
              
              (110,192
              )**Discontinued
                  operations**Loss
                  from discontinued business press operations
              
              
              -
              
              
              -
              
              
              -
              
              
              (41,654
              )**Net
                  Income (Loss) Available to Common Stockholders**
              
              $
              (8,777,699
              )
              $
              52,359
              
              $
              (8,828,971
              )
              $
              (151,846
              )**Earnings
                  (loss) per share attributable to common
                  stockholders:**Earnings
                  (loss)
                  from continuing operations
              
              $
              (0.49
              )
              $
              0.00
              
              $
              (0.52
              )
              $
              (0.01
              )Earnings
                  (loss)
                  from discontinued operations
              
              
              0.00
              
              
              0.00
              
              
              0.00
              
              
              -0.00Total
                  basic and diluted
              
              $
              (0.49
              )
              $
              0.00
              
              $
              (0.52
              )
              $
              (0.01
              )**Weighted
                  average number of common shares outstanding:**Basic
                  and diluted
              
              
              17,929,279
              
              
              15,826,670
              
              
              16,996,285
              
              
              14,531,196(The
                  accompanying notes are an integral part of these consolidated financial
                  statements)


-5-
 *Index*




**CHINA
                  MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES**(formerly
                  Xin Net Corp.)**CONSOLIDATED
                  STATEMENT OF STOCKHOLDERS' EQUITY****for
                  the nine months ended September 30, 2005 and December 31,
                  2004**(Unaudited)**Accumulated****Stock**
              
              **Additional**
              
              
              
              
              
              **Other****Common**
              
              **Amount
                  At**
              
              **Paid
                  In**
              
              **Subscription**
              
              **Accumulated**
              
              **Comprehensive****Stated
                  in U.S. dollars**
              
              **Shares**
              
              **Par
                  Value**
              
              **Capital**
              
              **Receivable**
              
              **Deficit**
              
              **Loss**
              
              **Total**Balance,
                  December 31, 2003
              
              
              41,360,010
              
              $
              41,360
              
              $
              8,194,045
              
              $
              -
              
              $
              (7,659,628
              )
              $
              (163,763
              )
              $
              412,014Issuance
                    of common stock foracquisition of Quicknet on June 23,
                    2004
              
              
              6,120,000
              
              
              6,120
              
              
              544,680
              
              
              
              
              
              
              
              
              
              
              
              550,800Reverse
                  stock split 3:1 on June 24, 2004
              
              
              (31,653,340
              )
              
              (31,653
              )
              
              31,653
              
              
              
              
              
              
              
              
              
              
              
              -Net
                    income for the year ended December31, 2004
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              3,018,672
              
              
              
              
              
              3,018,672Foreign
                  currency translation adjustments
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (19,769
              )
              
              (19,769
              )Balance,
                  December 31, 2004
              
              
              15,826,670
              
              $
              15,827
              
              $
              8,770,378
              
              
              
              
              $
              (4,640,956
              )
              $
              (183,532
              )
              $
              3,961,717Issuance
                      of common stock for cash onexercise of stock options on February
                      24, 2005 @$0.30
              
              
              495,000
              
              
              495
              
              
              148,005
              
              
              
              
              
              
              
              
              
              
              
              148,500Issuance
                    of common stock for servicesrendered
              
              
              600,000
              
              
              600
              
              
              350,700
              
              
              
              
              
              
              
              
              
              
              
              351,300Issuance
                    of common stock for cash onexercise of stock options on September
                    1, 2005 @$0.40
              
              
              500,000
              
              
              500
              
              
              199,500
              
              
              
              
              
              
              
              
              
              
              
              200,000Issuance
                      of common stock for cash onexercise of stock options on September
                      1, 2005 @$0.35
              
              
              2,590,000
              
              
              2,590
              
              
              903,910
              
              
              
              
              
              
              
              
              
              
              
              906,500Stock-based
                  compensation
              
              
              
              
              
              
              
              
              126,000
              
              
              
              
              
              
              
              
              
              
              
              126,000Fair
                  value of Series 'C' warrants issued
              
              
              
              
              
              
              
              
              3,254,305
              
              
              
              
              
              
              
              
              
              
              
              3,254,305Fair
                  value of Series 'D' warrants issued
              
              
              
              
              
              
              
              
              3,637,165
              
              
              
              
              
              
              
              
              
              
              
              3,637,165Intrinsic
                    value of the ocnversionfeature of the convertible
                    debentures
              
              
              
              
              
              
              
              
              1,052,863
              
              
              
              
              
              
              
              
              
              
              
              1,052,863Subscription
                    receivable upon theexercise of stock options on September 1, 2005
                    @$0.35
              
              
              
              
              
              
              
              
              
              
              
              (140,000
              )
              
              
              
              
              
              
              
              (140,000
              )Net
                    loss for the nine months endedSeptember 30,
                    2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (8,828,971
              )
              
              
              
              
              (8,828,971
              )Foreign
                  currency translation adjustments
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (13,070
              )
              
              (13,070
              )Balance,
                  September 30, 2005
              
              
              20,011,670
              
              $
              20,012
              
              
              18442826
              
              $
              (140,000
              )
              
              -13469927
              
              $
              (196,602
              )
              $
              4,656,309(The
                  accompanying notes are an integral part of these consolidated financial
                  statements)




-6-
 *Index*





**CHINA
                    MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES**(formerly
                    Xin Net Corp.)**CONSOLIDATED
                    STATEMENTS OF CASH FLOWS****For
                    the nine months ended September 30, 2005 AND
                    2004**(Unaudited)**Stated
                    in U.S. dollars**
                
                **2005**
                
                **2004****Cash
                    flows from operating activities**Net
                    loss
                
                $
                (8,828,971
                )
                $
                (151,846
                )Less:
                    loss from discontinued operations
                
                
                -
                
                
                41,654Adjustments
                    to
                    reconcile net loss to net cashProvided
                    by
                    (Used in) operating activitiesDepreciation
                    and amortization
                
                
                1,933
                
                
                3,890Stock-based
                    compensation
                
                
                126,000
                
                
                -Fair
                    value of warrants issued
                
                
                6,891,470
                
                
                -Interest
                    -
                    intrinsic value of the conversion feature of the convertibledebentures
                
                
                1,052,863
                
                
                -Translation
                    adjustments
                
                
                (13,070
                )
                
                (5,600
                )Minority
                    interest
                
                
                138,469
                
                
                (4,634
                )Non-cash
                    operating expenses
                
                
                191,650
                
                
                -Equity
                    loss
                
                
                -
                
                
                81,273Changes
                    in assets and liabilities(Increase)Decrease
                    in accounts receivable
                
                
                28,356
                
                
                139,688(Increase)Decrease
                    in prepaid expenses and other current assets
                
                
                (139,680
                )
                
                10,509Increase
                    in
                    amount due from (to) related parties
                
                
                (2,709
                )
                
                (102,416
                )Decrease
                    in
                    accounts payable
                
                
                1,982,049
                
                
                (155,851
                )Increase
                    in
                    deferred revenue
                
                
                362,760
                
                
                311,974Increase
                    in
                    liabilities to be disposed of
                
                
                -
                
                
                137,926Net
                    cash provided by (used in) operating activities
                
                
                1,791,120
                
                
                306,567**Cash
                    flows from investing activities**Cash
                    transferred in from acquisition of Quicknet
                
                
                -
                
                
                1,477,355Purchases
                    of
                    remaining interest of Quicknet
                
                
                (4,000,000
                )
                
                -Purchases
                    of
                    property and equipment
                
                
                (2,346
                )
                
                (1,727
                )Net
                    cash flows provided by financing activities
                
                
                (4,002,346
                )
                
                1,475,628**Cash
                    flows from financing activities**Issuance
                    of
                    common stock for cash
                
                
                1,115,000
                
                
                -Issuance
                    of
                    convertible debentures for cash
                
                
                3,350,000
                
                
                -Net
                    cash flows provided by financing activities
                
                
                4,465,000
                
                
                -Effect
                    of exchange rate changes on cash
                
                
                127
                
                
                (1,052
                )Net
                    cash provided by continuing operations
                
                
                2,253,901
                
                
                1,781,143Net
                    cash provided by (used in) discontinued operations
                
                
                -
                
                
                (10,656
                )**Increase
                    in cash and cash equivalents**
                
                
                2,253,901
                
                
                1,770,487**Cash
                    and cash equivalents - beginning of period**
                
                
                5,380,622
                
                
                3,303,677**Cash
                    and cash equivalents - end of period**
                
                $
                7,634,523
                
                $
                5,074,164Supplemental
                    Information :Cash
                    paid for :Interest
                
                $
                2
                
                $
                -Income
                    taxes
                
                
                -
                
                
                -Non-cash
                    investment :Issuance
                    of
                    2,040,000 common shares for the acquisition of Quicknet
                
                $
                -
                
                $
                1,224,000Issuance
                    of
                    600,000 common shares for services rendered
                
                
                351,300
                
                
                -(The
                    accompanying notes are an integral part of these consolidated
                    financial
                    statements)




-7-
 *Index*




**CHINA
                  MOBILITY SOLUTIONS, INC. AND SUBSIDIARIES**(formerly
                  Xin Net Corp.)**CONSOLIDATED
                  STATEMENTS OF DEFICIT****For
                  the three months and nine months ended September 30, 2005 AND
                  2004**(Unaudited)**Three
                  months ended**
              
              
              
              **Nine
                  months ended****September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,**
              
              **September
                  30,****Stated
                  in U.S. dollars**
              
              **2005**
              
              **2004**
              
              **2005**
              
              **2004****Deficit,
                  Beginning of period**
              
              $
              (4,692,228
              )
              $
              (7,863,833
              )
              $
              (4,640,956
              )
              $
              (7,659,628
              )Net
                  Income (Loss) Available to Common
                  Stockholders
              
              
              (8,777,699
              )
              
              52,359
              
              
              (8,828,971
              )
              
              (151,846
              )**Deficit,
                  End of period**
              
              $
              (13,469,927
              )
              $
              (7,811,474
              )
              $
              (13,469,927
              )
              $
              (7,811,474
              )




-8-
 *Index*





**CHINA
      MOBILITY SOLUTIONS, INC.**


**(Previously
      known as Xin Net Corp.)**


**NOTES
      TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30, 2005**


**(
      Unaudited )**










**1.
      Basis of Presentation**


The
      accompanying unaudited financial statements have been prepared in conformity
      with generally accepted accounting principles in the United States of America.
      However, certain information and footnote disclosures normally included in
      financial statements prepared in accordance with generally accepted accounting
      principles have been omitted or condensed pursuant to the rules and regulations
      of the Securities and Exchange Commission (“SEC”). In the opinion of management,
      all adjustments of a normal recurring nature necessary for a fair presentation
      have been included. The results for interim periods are not necessarily
      indicative of results for the entire year. These condensed consolidated
      financial statements and accompanying notes should be read in conjunction with
      the Company’s annual consolidated financial statements and the notes thereto for
      the fiscal year ended December 31, 2004 included in its Annual Report on Form
      10-KSB.





The
      unaudited condensed consolidated financial statements include China Mobility
      Solutions, Inc. and its subsidiaries. All inter-company transactions and
      accounts have been eliminated.





Certain
      items have been reclassified to conform to the current period presentation.
      There is no effect on total results of operations or stockholders’
equity.





**2.
      Significant Accounting Policies**





(i)
      Accounting for convertible securities with beneficial conversion
      features





According
      to Emerging Issue Task Force (“EITF”) Issue 98-5, the beneficial conversion
      features embedded in convertible securities should be valued at the issue date.
      Embedded beneficial conversion features should be recognized and measured as
      follows:





(a)
      Allocate a portion of the proceeds equal to the intrinsic value of the embedded
      beneficial conversion feature to additional paid-in-capital. The intrinsic
      value
      is calculated as the difference between the conversion price and the fair value
      of the common stock or other securities into which the security can be converted
      at the date when the investors have committed to purchase the convertible
      securities based on the terms specified, multiplied by the number of shares
      into
      which the security can be converted.





(b)
      If
      the intrinsic value of the beneficial conversion feature is greater than the
      proceeds from the sale of the convertible instrument, the discount assigned
      to
      the beneficial conversion feature should not exceed the amount of the proceeds
      allocated to the convertible instruments. A discount, if any, is amortized
      beginning on the security’s issuance date to the earliest conversion
      date.





**3.
      Property and Equipment**





September
                30, 2005
            
            December
                31,2004Equipment
            
            $
            26,964
            
            $
            24,832Library
            
            
            9,554
            
            
            9,554Furniture
            
            
            10,187
            
            
            9,975Total
            
            
            46,705
            
            
            44,361Less
                : Accumlated depreciation
            
            
            (39,717
            )
            
            (37,812
            )Net
                book figures
            
            $
            6,988
            
            $
            6,549




The
      depreciation expenses charged to continuing operations for the three-month
      and
      nine-month periods ended September 30, 2005 were $765 and $1,933
      respectively.




-9-
 *Index*


**CHINA
        MOBILITY SOLUTIONS, INC.**
 **(Previously
        known as Xin Net Corp.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **September
        30, 2005**
 **(
        Unaudited )**


**4.
      Acquisition of the remaining 49% ownership of Beijing Quicknet Telecommunication
      Corp. Ltd. (“Quicknet”)**




On
      June
      23, 2004, the Company completed the acquisition of 49% equity interest from
      the
      shareholders of Beijing Quicknet Technology Development Corp. ("Quicknet"),
      located in Beijing, China by signing a Purchase Agreement (the “Quicknet
      Purchase Agreement”). Quicknet is engaged in the development of software for
      mobile/wireless communication and for Short Message Services ("SMS"). The
      Company acquired the 49% equity interest from Quicknet shareholders in exchange
      for the Company’s issuance of 6,120,000 shares of common stock of the Company at
      a deemed price of $0.50 per share (2,040,000 post-reverse split shares at a
      market price of $0.27 per share for a total of $550,800). In June 2004, the
      Company signed a Purchase Agreement (the “Chinaco Purchase Agreement”) with
      Beijing Shi Ji Rong Chuang Service & Technology Co., Ltd., a local China
      company (“Chinaco”), which owned 2% of the equity interest of Quicknet through
      purchasing a 1% interest from each of the two unaffiliated shareholders of
      Quicknet, Mr. Bo Yu and Mr. Fang Hu. Under the Chinaco Purchase Agreement,
      the
      Company was granted the right to purchase 100% of the equity of Chinaco for
      a
      nominal consideration when Chinese law permits such sale. Chinaco is owned
      by
      two senior officers of the Company who have Chinese citizenship. Due to current
      government restrictions on foreign ownership of telecommunication companies
      in
      China, the Company was not permitted to acquire the additional 2% of the equity
      interest of Quicknet that is still held by Chinaco. Therefore, Chinaco has
      granted an unconditional, irrevocable proxy, without time limit, to the Company.
      Through the above-described proxy, the Company can appoint all directors and
      officers of Quicknet and therefore directly and indirectly controls 51% of
      the
      equity interest of Quicknet through directly owning 49% equity interest and
      indirectly owning the remaining 2% equity interest, through the contract
      arrangements with Chinaco.





Under
      the
      Quicknet Purchase Agreement, the Company also had an option to acquire the
      remaining 49% equity interest in Quicknet from the Quicknet Shareholders within
      the first year for $4,000,000. The Company had an option to acquire this
      remaining 49% equity interest in Quicknet within the second year for $5,000,000.
      As a general rule, the Company could pay these amounts by 50% in shares of
      the
      common stock of the Company and 50% in cash. The final percentage of shares
      versus cash could be negotiated between both parties. The Company exercised
      its
      right to purchase the remaining 49% interest in August 2005 (the “Option
      Exercise”), by having Chinaco purchase a 24.5% interest from each of the two
      unaffiliated shareholders of Quicknet, Mr. Bo Yu and Mr. Fang Hu.





As
      previously mentioned, pursuant to the Chinaco Purchase Agreement, the Company
      was granted the right to acquire 100% of the equity of Chinaco, if and when
      Chinese law permits. The Company directly owns 49% of Quicknet and through
      Chinaco, indirectly controls a combined total of 51% equity interest, and thus
      controls a total 100% of Quicknet.





Until
      such time, if ever, that Chinese law permits the transfer of a controlling
      interest in Quicknet, the Company will maintain control of Quicknet under its
      Quicknet Purchase Agreement, Chinaco Purchase Agreement, and August 2005 Option
      Exercise. However, the Company will be unable to directly own the remaining
      51%
      interest held by Chinaco.




On
      September 30, 2005, the Company acquired the remaining 49% of ownership of
      Quicknet through exercising its option under the original acquisition agreement.
      The Company has to pay US$2,000,000 (paid) by September 30, 2005 and another
      US$2,000,000 by December 31, 2005, which is included as part of the accounts
      payable as of September 30, 2005.




The
      value
      assigned to assets and liabilities acquired can be summarized as follows:





Cash
                and short term investments
            
            $
            1,356,834Accounts
                receivables
            
            
            1,626Goodwill
            
            
            3,973,646Accounts
                payables and accrued liabilities
            
            
            (134,452
            )Unearned
                revenue
            
            
            (1,197,654
            )Cash
                paid and payable
            
            $
            4,000,000








-10-
 *Index*


**CHINA
        MOBILITY SOLUTIONS, INC.**
 **(Previously
        known as Xin Net Corp.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **September
        30, 2005**
 **(
        Unaudited )**


**5.
      Convertible debentures**




On
      August
      15, 2005, the Company completed an offering of 134 units ("Units") for
      $3,350,000. Each Unit was sold for $25,000, consisting of $25,000 principal
      amount of senior convertible debentures (the "Debentures"), and one Series
“C”
Warrant and one Series “D” Warrants. The Debentures are initially convertible at
      $0.35 per share for 71,429 shares of common stock of the Company; maturing
      on
      August 15, 2006 and accruing interest at a rate of not less than 6% per annum
      equal to the sum of 2% per annum plus the one-month London Inter-Bank Offer
      Rate
      (LIBOR). The Debentures are subject to redemption at 125% of the principal
      amount plus accrued interest commencing six months after the effective date
      (the
      "Effective Date") of the registration statement. The registration statement
      has
      not been approved by the regulatory authority.





Each
      Unit
      also includes: (i) Series “C” Warrants exercisable at $0.44 per share to
      purchase 71,429 shares of Common Stock of the Company for two years from the
      Effective Date, but no later than February 15, 2008; and (ii) Series “D”
Warrants exercisable at $0.52 per share to purchase 71,429 shares of Common
      Stock for three years from the Effective Date, but no later than February 15,
      2009. The Series “C” and Series “D” Warrants are subject to redemption by the
      Company at $0.001 per Warrant at any time commencing six months and twelve
      months, respectively, from the Effective Date, provided the average closing
      bid
      price of the common stock of the Company equals or exceeds 175% of the
      respective exercise prices for 20 consecutive trading days.





The
      Company incurred $335,000 as the 10% sales commission of the aggregate purchase
      price, $100,500 as the 3% non-accountable expenses of the agent, $16,750 for
      the
      agent's out-of-pocket expenses and $120,609 for legal fees. All of them have
      been recorded as expenses for the current quarter.





As
      of
      September 30, 2005, interest payable of $24,416 has been recorded as part of
      the
      accounts payable.





**6.
      Basic and Diluted Earnings (Loss) Per Share**





Basic
      earnings (loss) per share are computed by dividing net earnings (loss) available
      to common stockholders by the weighted-average number of common shares
      outstanding during the period. Diluted earnings per share is computed by
      dividing net earnings available to common stockholders by the weighted-average
      number of common shares outstanding during the period increased to include
      the
      number of additional common shares that would have been outstanding if
      potentially dilutive common shares had been issued.





The
      following table sets forth the computations of shares and net loss used in
      the
      calculation of basic and diluted loss per share for the three-month and
      nine-month periods ended September 30, 2005 and 2004:





Three
                months ended
            
            Nine
                months endedSeptember
                30,
            
            September
                30,2005
            
            2004
            
            2005
            
            2004Income
                (Loss) from continuing operations
            
            $
            $
                (8,777,699
            $
                )
            $
            52,359
            
            $
            $
                (8,828,971
            $
                )
            $
            (110,192
            )Income
                (Loss) from discontinued operations
            
            
            -
            
            
            -
            
            
            -
            
            
            (41,654
            )Net
                income (loss) for the period
            
            
            (8,777,699
            )
            
            52,359
            
            
            (8,828,971
            )
            
            (151,846
            )Weighted-average
                number of shares outstanding
            
            
            17,929,279
            
            
            15,826,670
            
            
            16,996,285
            
            
            14,531,196Effective
                of dilutive securities :Dilutive
                options - $0.30
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dilutive
                warrants Series "B" - $2.25
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dilutive
                warrants Series "C" - $0.44
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dilutive
                warrants Series "D" - $0.52
            
            
            -
            
            
            -
            
            
            -
            
            
            -Dilutive
                potential common shares
            
            
            -
            
            
            -
            
            
            -
            
            
            -Adjusted
                weighted-average shares and
            
            
            17,929,279
            
            
            15,826,670
            
            
            16,996,285
            
            
            14,531,196assumed
                conversionsBasic
                income (loss) per share attributable to common shareholders
                :Income
                (loss) from continuing operations
            
            $
            (0.49
            )
            $
            0.00
            
            $
            (0.52
            )
            $
            (0.01
            )Income
                (loss) from discontinued operations
            
            
            0.00
            
            
            0.00
            
            
            0.00
            
            
            -0.00Total
                basic income (loss) per share
            
            $
            (0.49
            )
            $
            0.00
            
            $
            (0.52
            )
            $
            (0.01
            )Diluted
                income (loss) per share attributable to common shareholders
                :Income
                (loss) from continuing operations
            
            $
            (0.49
            )
            $
            0.00
            
            $
            (0.52
            )
            $
            (0.01
            )Income
                (loss) from discontinued operations
            
            
            0.00
            
            
            0.00
            
            
            0.00
            
            
            -0.00Total
                diluted income (loss) per share
            
            $
            (0.49
            )
            $
            0.00
            
            $
            (0.52
            )
            $
            (0.01
            )




The
      effect of outstanding options and warrants was not included as the effect would
      be antidilutive.


On
      June
      24, 2004, the Company carried out a 3-for-1 reverse stock-split. Figures of
      prior periods have been retroactively restated to reflect the effect of the
      reverse stock-split.




-11-
 *Index*


**CHINA
        MOBILITY SOLUTIONS, INC.**
 **(Previously
        known as Xin Net Corp.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **September
        30, 2005**
 **(
        Unaudited )**
 
  **7.
        Share Capital**





During
      the quarter ended June 30, 2005, the Company issued 600,000 shares of its common
      stock at a fair value of $351,300 to a company for one year investor relations
      services until March 2006. As of September 30, 2005, $175,650 was recorded
      as
      prepaid expenses and $175,650 was recorded as investor relations
      expense.





During
      the quarter ended September 30, 2005, the Company has increased its authorized
      share capital from 50,000,000 to 500,000,000 shares of common stock with a
      par
      value of $0.001 per share.




Conversion
      Feature of the convertible debenture





According
      to EITF 98-5, the intrinsic value of the conversion feature of the convertible
      debenture is $1,052,863. The whole amount has been recorded as interest expenses
      in the statement of operations as the debentures are convertible at any time
      during the specified periods and an increase in additional paid-in-capital
      on
      balance sheet.





**8.
      Share Purchase Warrants**





5,884,990
      Series “A” Warrants were expired during the nine-month period ended September
      30, 2005.





During
      the quarter ended September 30, 2005, the Company issued 134 Series “C”
Warrants. Each Series “C” Warrant entitles the holder to purchase 71,429 shares
      of common stock of the Company at $0.44 per share for two years from the
      Effective Date, but no later than February 15, 2008. The Company also issued
      134
      Series “D” Warrants. Each Series “D” Warrant entitles the holder to purchase
      71,429 shares of common stock of the Company at $0.52 per share for three years
      from the Effective Date, but no later than February 15, 2009. The Series “C” and
“D” Warrants are subject to redemption by the Company at $0.001 per Warrant at
      any time commencing six months and twelve months, respectively, from the
      Effective Date, provided the average closing bid price of the common stock
      of
      the Company equals or exceeds 175% of the respective exercise prices for 20
      consecutive trading days.





As
      of
      September 30, 2005, 10 Series “B” warrants were outstanding which entitle the
      holders to purchase a common share of the Company at $2.25 each on or before
      March 31, 2006. 134 Series “C” warrants were outstanding which entitle the
      holders to purchase 71,429 common shares of the Company at $0.44 each within
      two
      years from the Effective Date but no later than February 15, 2008. 134 Series
      “D” warrants were outstanding which entitle the holders to purchase 71,429
      common shares of the Company at $0.52 each within three years from the Effective
      Date but no later than February 15, 2009.





The
      fair
      value of the Series “C” warrants issued was estimated at $24,286 each by using
      the Black-Scholes Option Pricing Model with the following assumptions: dividend
      yield of 0%, expected volatility of 141%, risk-free interest rates of 3.14%,
      and
      expected lives of two years.





The
      fair
      value of the Series “D” warrants issued was estimated at $27,143 each by using
      the Black-Scholes Option Pricing Model with the following assumptions: dividend
      yield of 0%, expected volatility of 158%, risk-free interest rates of 3.26%,
      and
      expected lives of three years.





**9.
      Stock Options**





On
      February 24, 2005, 495,000 stock options at $0.30 each were
      exercised.





On
      September 1, 2005, the Company granted 3,090,000 stock options to consultants
      and employees with an exercise price of $0.35 each and $0.40 each for 2,590,000
      and 500,000 stock options, respectively, expiring on September 1, 2015. These
      stock options were all exercised on the date of grant.





The
      Company accounts for stock-based compensation using the intrinsic value method
      prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock
      Issued to Employees,” under which no compensation cost for stock options is
      recognized for stock options awards granted at or above fair market value.
      Had
      compensation expense for the Company’s stock-based compensation plans been
      determined under FAS No. 123, based on the fair market value at the grant dates,
      the Company’s pro forma net loss and pro forma net loss per share would have
      been reflected as follows at September 30:




**2005**
            
            **2004****Net
                loss**As
                reported
            
            $
            (7,776,108
            )
            $
            (151,846
            )Stock-based
                employee compensation cost, net of tax
            
            
            (301,600
            )
            
            -Proforma
            
            $
            (8,077,708
            )
            $
            (151,846
            )**Loss
                per share**As
                reported
            
            $
            (0.46
            )
            $
            (0.01
            )Proforma
            
            $
            (0.48
            )
            $
            (0.01
            )




The
      fair
      values of the options grant during the nine-month period ended September 30,
      2005, were from $0.13 to $0.14 each and were estimated on the date of grant
      using the Black-Scholes option pricing model with the following weighted-average
      assumption used for those options granted during the nine-month period ended
      September 30, 2005: dividend yield of 0%, expected volatility of 132%, risk-free
      interest rate of 2.78%, and an expected life of 1 year.




Options
      outstanding at September 30, 2005 were 660,000 with option price of $0.30 each.
      No options were canceled or forfeited during the nine-month period ended
      September 30, 2005. The weighted average remaining contractual life is 1.81
      years.




-12-
 *Index*


**CHINA
        MOBILITY SOLUTIONS, INC.**
 **(Previously
        known as Xin Net Corp.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **September
        30, 2005**
 **(
        Unaudited )**


**10.
      Related Party Transactions**





During
      the three-month and nine-month periods ended September 30, 2005, the Company
      paid $9,182 and $19,571 to a director and an officer as wages and
      benefits.





As
      of
      September 30, 2005, the Company has an amount of $21,531 due from a company
      with a common director without interest or specific terms of
      repayment.





As
      of
      September 30, 2005, the Company has an amount of $500 due to a director of
      the
      Company for expenses advanced on behalf of the Company. The amount is
      non-interest bearing and is repayable on demand.





**11.
      Segment and Geographic Data**





The
      Company’s reportable segments are geographic areas and two operating segments,
      the latter comprised of mobile communication and ESL education. Summarized
      financial information concerning the Company’s reportable segments is shown in
      the following table. The “Other” column includes corporate related items, and,
      as it relates to segment profit (loss), income and expenses not allocated to
      reportable segments.








**A.
                By geographic areas**
            
            **China**
            
            **Canada**
            
            **Other**
            
            **Total****Three
                months ended September 30, 2005**Revenue
                from continuing operations
            
            $
            1,190,328
            
            $
            53,100
            
            $
            -
            
            $
            1,243,428Operating
                income (loss)
            
            
            89,897
            
            
            465
            
            
            (8,886,132
            )
            
            (8,795,770
            )Total
                assets
            
            
            9,984,876
            
            
            128,825
            
            
            2,706,439
            
            
            12,820,140Depreciation
            
            
            -
            
            
            765
            
            
            -
            
            
            765Interest
                income
            
            
            24,202
            
            
            9
            
            
            -
            
            
            24,211Income
                from discontinued operations
            
            
            -
            
            
            -
            
            
            -
            
            
            -Investment
                in equity method investee
            
            
            -
            
            
            -
            
            
            1
            
            
            1**Three
                months ended September 30, 2004**Revenue
                from continuing operations
            
            $
            888,082
            
            $
            95,383
            
            $
            -
            
            $
            983,465Operating
                income (loss)
            
            
            (35,478
            )
            
            68,768
            
            
            (11,230
            )
            
            22,060Total
                assets
            
            
            9,214,140
            
            
            145,885
            
            
            172,468
            
            
            9,532,493Depreciation
            
            
            1,419
            
            
            794
            
            
            42
            
            
            2,255Interest
                income
            
            
            30,282
            
            
            8
            
            
            -
            
            
            30,290Income
                from discontinued operations
            
            
            -
            
            
            -
            
            
            -
            
            
            -Investment
                in equity method investee
            
            
            -
            
            
            -
            
            
            172,251
            
            
            172,251







**A.
                By geographic areas**
            
            **China**
            
            **Canada**
            
            **Other**
            
            **Total****Nine
                months ended September 30, 2005**Revenue
                from continuing operations
            
            $
            3,376,829
            
            $
            160,408
            
            $
            -
            
            $
            3,537,237Operating
                income (loss)
            
            
            351,823
            
            
            (28,237
            )
            
            (9,074,733
            )
            
            (8,751,147
            )Total
                assets
            
            
            9,984,876
            
            
            128,825
            
            
            2,706,439
            
            
            12,820,140Depreciation
            
            
            -
            
            
            1,925
            
            
            8
            
            
            1,933Interest
                income
            
            
            60,605
            
            
            20
            
            
            -
            
            
            60,625Income
                from discontinued operations
            
            
            -
            
            
            -
            
            
            -
            
            
            -Investment
                in equity method investee
            
            
            -
            
            
            -
            
            
            1
            
            
            1**Nine
                months ended September 30, 2004**Revenue
                from continuing operations
            
            $
            888,082
            
            $
            218,298
            
            $
            -
            
            $
            1,106,380Operating
                loss
            
            
            (34,781
            )
            
            (17,354
            )
            
            (42,734
            )
            
            (94,869
            )Total
                assets
            
            
            9,214,140
            
            
            145,885
            
            
            172,468
            
            
            9,532,493Depreciation
            
            
            1,419
            
            
            2,347
            
            
            124
            
            
            3,890Interest
                income
            
            
            59,838
            
            
            8
            
            
            -
            
            
            59,846Income
                from discontinued operations
            
            
            -
            
            
            (41,654
            )
            
            -
            
            
            (41,654
            )Investment
                in equity method investee
            
            
            -
            
            
            -
            
            
            172,251
            
            
            172,251




-13-
 *Index*


**CHINA
        MOBILITY SOLUTIONS, INC.**
 **(Previously
        known as Xin Net Corp.)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **September
        30, 2005**
 **(
        Unaudited )**


**B.
                By operating segments**
            
            **Mobile
                communications**
            
            **ESL****education**
            
            **Other**
            
            **Total****For
                the three months ended September 30, 2005**Revenue
                from external customers
            
            $
            1,190,328
            
            $
            53,100
            
            $
            -
            
            $
            1,243,428Intersegment
                revenue
            
            
            -
            
            
            -
            
            
            -
            
            
            -Interest
                revenue
            
            
            5,310
            
            
            9
            
            
            18,892
            
            
            24,211Interest
                expense
            
            
            -
            
            
            -
            
            
            24,412
            
            
            24,412Depreciation
            
            
            -
            
            
            569
            
            
            196
            
            
            765Segment
                operation profit (loss)
            
            
            7,221
            
            
            7,697
            
            
            (8,810,688
            )
            
            (8,795,770
            )Segment
                assets
            
            
            2,772,366
            
            
            111,022
            
            
            9,936,752
            
            
            12,820,140**For
                the three months ended September 30, 2004**Revenue
                from external customers
            
            $
            888,082
            
            $
            95,383
            
            $
            -
            
            $
            983,465Intersegment
                revenue
            
            
            -
            
            
            -
            
            
            -
            
            
            -Interest
                revenue
            
            
            6,711
            
            
            4
            
            
            23,575
            
            
            30,290Interest
                expense
            
            
            -
            
            
            -
            
            
            -
            
            
            -Depreciation
            
            
            1,419
            
            
            746
            
            
            90
            
            
            2,255Segment
                operation profit (loss)
            
            
            (34,078
            )
            
            38,032
            
            
            18,106
            
            
            22,060Segment
                assets
            
            
            1,887,804
            
            
            124,528
            
            
            7,520,161
            
            
            9,532,493








**B.
                By operating segments**
            
            **Mobile
                communications**
            
            **ESL
                education**
            
            **Other**
            
            **Total****For
                the nine months ended September 30, 2005**Revenue
                from external customers
            
            $
            3,376,829
            
            $
            160,408
            
            $
            -
            
            $
            3,537,237Intersegment
                revenue
            
            
            -
            
            
            -
            
            
            -
            
            
            -Interest
                revenue
            
            
            14,280
            
            
            20
            
            
            46,325
            
            
            60,625Interest
                expense
            
            
            -
            
            
            -
            
            
            24,414
            
            
            24,414Depreciation
            
            
            -
            
            
            1,646
            
            
            287
            
            
            1,933Segment
                operation profit (loss)
            
            
            268,309
            
            
            21,288
            
            
            (9,040,744
            )
            
            (8,751,147)
            )Segment
                assets
            
            
            2,772,366
            
            
            111,022
            
            
            9,936,752
            
            
            12,820,140**For
                the nine months ended September 30, 2004**Revenue
                from external customers
            
            $
            888,082
            
            $
            218,298
            
            $
            -
            
            $
            1,106,380Intersegment
                revenue
            
            
            -
            
            
            -
            
            
            -
            
            
            -Interest
                revenue
            
            
            6,711
            
            
            8
            
            
            53,127
            
            
            59,846Interest
                expense
            
            
            -
            
            
            -
            
            
            -
            
            
            -Depreciation
            
            
            1,419
            
            
            2,204
            
            
            267
            
            
            3,890Segment
                operation profit (loss)
            
            
            (34,078
            )
            
            (5,268
            )
            
            (55,523
            )
            
            (94,869
            )Segment
                assets
            
            
            1,887,804
            
            
            124,528
            
            
            7,520,161
            
            
            9,532,493




-14-
 *Index*





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





The
      information presented here should be read in conjunction with China Mobility
      Solutions, Inc.'s consolidated financial statements and related notes. In
      addition to historical information, the following discussion and other parts
      of
      this document contain certain forward-looking information. When used in this
      discussion, the words "believes," "anticipate," "expects," and similar
      expressions are intended to identify forward-looking statements. Such statements
      are subject to certain risks and uncertainties, which could cause actual results
      to differ materially from those projected due to a number of factors beyond
      the
      Company's control. The Company does not undertake to publicly update or revise
      any of its forward-looking statements even if experience or future changes
      show
      that the indicated results or events will not be realized. Readers are cautioned
      not to place undue reliance on these forward-looking statements, which speak
      only as of the date hereof. Readers are also urged to carefully review and
      consider the Company's discussions regarding the various factors, which affect
      its business, included in this section and elsewhere in this
      report.





**CRITICAL
      ACCOUNTING POLICIES**





Our
      discussion and analysis is based upon our consolidated financial statements,
      which have been prepared in accordance with accounting principles generally
      accepted in the United States. The preparation of these financial statements
      requires us to make estimates and judgments that affect the reported amounts
      of
      assets, liabilities, revenues and expenses, and related disclosure of contingent
      assets and liabilities. On an on-going basis, we evaluate our estimates,
      including those related to revenue recognition, accounts receivable and
      allowance for doubtful accounts, intangible and long-lived assets, and income
      taxes. We base our estimates on historical experience and on various other
      assumptions that are believed to be reasonable under the circumstances, the
      results of which form the basis for making judgments about the carrying values
      of assets and liabilities that are not readily apparent from other sources.
      Actual results may differ from these estimates under different assumptions
      or
      conditions.





An
      accounting policy is deemed to be critical if it requires an accounting estimate
      to be made based on assumptions about matters that are highly uncertain at
      the
      time the estimate is made, and if different estimates that reasonably could
      have
      been used or changes in the accounting estimate that are reasonably likely
      to
      occur could materially change the financial statements. We believe the following
      critical accounting policies reflect our more significant estimates and
      assumptions used in the preparation of our consolidated financial
      statements:





**RESULTS
      OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2005 AS COMPARED TO THE
      QUARTER ENDED SEPTEMBER 30, 2004**





Revenues.
      The Company had revenues of $1,243,428 in the third quarter of 2005 compared
      to
      $983,465 in the third quarter of 2004 in the form of net sales of Mobile
      marketing services (Quicknet) of $1,190,328 and education courses (Windsor)
      of
      $53,100. The Company incurred operating expenses of $9,654,050 in the third
      quarter of 2005 compared to operating expenses of $709,908 in the third quarter
      of 2004. The Company had an operating loss of $8,795,770 in the third quarter
      of
      2005, and a net loss of $8,777,699 compared to an operating income of $22,060
      and a net income of $52,359 in the third quarter in 2004. The huge difference
      is
      mainly caused by the “fair value of warrants issued” totaled at $6,891,470.





Business
      Segments





During
                the quarter, the Company had revenues in two segments:Mobile
                marketing services
            
            $
            1,190,328Windsor
                - ESL Education
            
            $
            53,100The
                cost of revenue in each segment was:Mobile
                marketing services
            
            $
            368,552Windsor
            
            $
            16,596The
                gross profit from each of the business segments was:Mobile
            
            $
            821,776Windsor
            
            $
            36,504$
            858,280




-15-
 *Index*




Note:
      Quicknet is the operating subsidiary in China which provides mobile solutions
      such as mobile marketing services by cell phone advertisement to enterprises
      in
      China. On September 30, 2005, the Company acquired the remaining 49% of
      ownership of Quicknet through exercising its option under the original
      acquisition agreement.





Net
      Income/Loss per share: The per share loss for the third quarter of 2005 was
      $0.49, and the per share earnings for the third quarter of 2004 was
      $0.00





**RESULTS
      OF OPERATIONS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2005 COMPARED TO
      THE
      SAME PERIOD ENDED SEPTEMBER 30, 2004**





The
      Company had revenues of US$3,537,237 in the period ended September 30, 2005,
      compared to US$1,106,380 in the same period in 2004. The Company had a cost
      of
      revenue of $946,636 in the period in 2005 compared to $279,870 in the same
      period in 2004. The revenue has been deferred into the 12-month period which
      is
      the service period according to the US GAAP. The Company incurred expenses
      of
      $11,341,748 in the nine-month period in 2005 and $921,379 in expenses in the
      period in 2004. The expenses in the nine-month period in 2005 includes
      US$1,052,863 of intrinsic value of the conversion feature of the convertible
      debenture (see Note 7 of the financial statements for details), a 10% sales
      commission equal to $359,500, a 3% non-accountable expense allowance of $100,500
      which is related to a convertible debenture completed on Aug.15, 2005, a
      US$126,000 stock-based compensation and a U$6,891,470 “fair value of warrants
      issued”. Net cash provided by operating activities is US$1,791,120 in the
      nine-month period in 2005 compared to US$306,567 in the same period in 2004.
      The
      operating (losses) in the periods in 2005 and 2004 were ($8,751,147) and
      ($94,869) respectively, after interest income of $60,625 and $59,846 in 2005
      and
      2004, respectively, and adjustment for minority interests (in QuickNet in 2005),
      the Company had a loss from continuing operations in the period in 2005 of
      ($8,828,971) and in 2004 of (110,192).
      The net loss per share was $0.43 in the period in 2005 compared to ($0.01)
      in
      the period in 2004.





The
      Company expects the trend of losses to continue at about the same rate in the
      succeeding periods.





**Business
      Segment Revenue**





During
                the nine month period in 2005, the Company had revenues in two
                segments:Mobile
                marketing services
            
            $
            3,376,829Windsor
                - ESL Education
            
            $
            160,408The
                gross profit from each of the business segments was:Mobile
                marketing services
            
            $
            2,473,807Windsor
                - ESL Education
            
            $
            116,794




**Changes
      in Financial Condition:**





At
      the
      end of the third quarter of 2005, Company had assets of $12,820,140 compared
      to
      $6,447,030 at year-end 2004. The current assets totaled $8,010,631 at the end
      of
      the third quarter of 2005 compared to $5,466,574 at 2004 year-end. Total current
      liabilities at the end of the third quarter of 2005 were $8,163,831 compared
      to
      $2,452,522 at 2004 year-end. At September 30, 2005 the Company had $ 7,634,523
      in cash compared to $5,380,622 at year-end 2004.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company had cash capital of $7,634,523 at the quarter ended September 30, 2005.
      The Company has no other capital resources other than the ability to use its
      common stock to achieve additional capital raising. Other than cash capital,
      its
      other assets would be illiquid.





At
      the
      quarter ended September 30, 2005 it had $8,010,631 in current assets and current
      liabilities of $8,163,831.





The
      cash
      capital at the end of the period of $7,634,523 will be used to fund continuing
      operations.





Net
      cash
      flows provided by operating activities increased to $1,791,120 for the quarter
      ended September 30, 2005.


On
      September 30, 2005, the Company acquired the remaining 49% of Quicknet that
      it
      did not own, and paid US$2,000,000 on September 30, 2005. Another US$2,000,000
      will be paid before December 31, 2005, which is included as part of the accounts
      payable as of September 30, 2005. The Company raised US$1,115,000 through
      issuing common stock and US$3,350,000 through issuing convertible debentures
      during the quarter ended September 30, 2005.


-16-
 *Index*
  **Need
        for Additional Financing:**





The
      Company believes it has sufficient capital to meet its short-term cash needs,
      including the costs of compliance with the continuing reporting requirements
      of
      the Securities Exchange Act of 1934. However, if losses occur it may have to
      seek loans or equity placements to cover longer term cash needs to continue
      operations and expansion.





No
      commitments to provide additional funds have been made by management or other
      stockholders. Accordingly, there can be no assurance that any additional funds
      will be available to the Company to allow it to cover operations
      expenses.





If
      future
      revenue declines, or operations are unprofitable, it will be forced to develop
      another line of business, or to finance its operations through the sale of
      assets it has, or enter into the sale of stock for additional capital, none
      of
      which may be feasible when needed. The Company has no specific management
      ability, or financial resources or plans to enter any other business as of
      this
      date.





From
      the
      aspect of whether it can continue toward the business goal of maintaining and
      expanding the businesses in Canada and grow the new business of mobile marketing
      services in China, it may use all of its available capital without generating
      a
      profit.





The
      effects of inflation have not had a material impact on its operation, nor is
      it
      expected to in the immediate future.





**Market
      Risk:**





The
      Company does not hold any derivatives or investments that are subject to market
      risk. The carrying values of any financial instruments, approximate fair value
      as of those dates because of the relatively short-term maturity of these
      instruments which eliminates any potential market risk associated with such
      instruments.





**Future
      Trends:**





For
      the
      Education Services side, we have operated for over two years now, the
      competition is very fierce in the market. The Canadian government has tightened
      its budget on English training for new immigrants, which lead to a termination
      of government funding for Windsor, and this change had negative effects to
      the
      revenue of Windsor Education Academy.





The
      Company has experienced growth in revenues in its Quicknet services, and it
      anticipates future growth in revenues although China must always be viewed
      as a
      highly competitive market where profitability may be difficult to achieve or
      sustain.





**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**





We
      do not
      have any material risk with respect to changes in foreign commodities prices
      or
      interest rates. We do not believe that we have any other relevant market risk
      with respect to the categories intended to be discussed in this item of this
      report.





**Concentrations
      and Risks**





During
      2005, about 78 % of the Company's assets were located in China and 22% of the
      Company's assets were located in Canada. In addition, 96% of the Company’s
      revenues were derived from customers in China and 4% of the Company’s revenues
      were derived from customers in Canada.





In
      2005
      and 2004, the Company did not derive revenue from any one customer for more
      than
      10% of its total revenue.


-17-
 *Index*




**I** **TEM
      4. CONTROLS AND PROCEDURES**





**Quarterly
      Evaluation of Controls**




As
        of the
        end of the period covered by this quarterly report on Form 10-QSB, we evaluated
        the effectiveness of the design and operation of our disclosure controls
        and
        procedures ("Disclosure Controls") as defined in Rules 13a -15(e) or 15d-15(e)
        under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This
        evaluation ("Evaluation") was performed by our Chief Executive Officer and
        Principal Accounting Officer, Angela Du, ("CEO") and Ernest Cheung, our
        Principal Financial Officer ("CFO"). In this section, we present the conclusions
        of our CEO and CFO based on and as of the date of the Evaluation, with respect
        to the effectiveness of our Disclosure Controls and
        Procedures.


Based
          upon the Evaluation, our CEO and CFO determined that our disclosure controls
          and
          procedures are effective to ensure that information required to be disclosed
          by
          the issuer in the reports that it files or submits under the Exchange Act
          is
          recorded, processed, summarized and reported, within time periods specified
          in
          the Commission’s rules and forms. Our CEO and CFO have concluded that our
          disclosure controls and procedures are effective to ensure that information
          required to be disclosed by an issuer in the reports it files or submits
          under
          the Exchange Act is accumulated and communicated to the issuer’s management
          including the CEO and CFO, to allow timely decisions regarding required
          disclosure.
  As
          a
          non-accelerated issuer, the Company is not required to provide management’s
          assessment and report on the Company’s internal control over financial
          reporting. However, in our Form 10-QSB for the period ended March 31, 2005,
          we
          determined that there were material weaknesses in our internal controls
          in our
          operations in China, that needed to be addressed by
          management.
  The
          changes which we are in the process of implementing to our internal controls
          over financial reporting could materially affect or are reasonably likely
          to
          materially affect those controls. However, management does not believe
          such
          material weakness in our internal controls did, in fact, affect our disclosure
          controls and procedures.
  The
          Company has implemented document control procedures for its subsidiary
          QuickNet
          in its manual. These include:
  A.  Expenditure
          controls/approvals and documentation by Board Committee for the subsidiary
          in
          China, Beijing QuickNet; and
  B.  Subscription
          accounting and tracking for its subsidiary in China, Beijing
          QuickNet.
  The
          Company is still working on the implementing such changes to our internal
          controls and procedures based on the model framework created by the Committee
          of
          Sponsoring Organizations of the Treadway Commission (or “COSO”) and plans to
          finish such revisions by December 31, 2005.
  There
          were changes in the Company’s document control procedures as stated above, for
          its subsidiary QuickNet during the Company’s last fiscal quarter. However, no
          other changes in the Company’s internal controls over financial reporting
          identified in connection with the Evaluation occurred during the Company’s last
          fiscal quarter that has materially affected, or is reasonably likely to
          materially affect the Company’s internal controls over our financial
          reports.


-18-
 *Index*




**PART
      II. OTHER INFORMATION**





**Item
      1. Legal Proceedings**





On
      February 7, 2005, we were sued by Sino-I Technology Limited for $88,270 for
      breach of warranty and a claim under a guaranty. Our counsel is vigorously
      defending this action.





No
      director, officer or affiliate of ours, and no owner of record or beneficial
      owner of more than 5.0% of our securities, or any associate of any such
      director, officer or security holder is a party adverse to us or has a material
      interest adverse to us in reference to pending litigation.





**Item
      2. Changes in Securities**





We
      raised
      $3,350,000 in a private placement of our securities, on a "best efforts, all
      or
      none" basis (the "Offering") of 134 units (the "Units"). The Offering was for
      $2
      million with an over-subscription of up to $1,350,000. Each Unit was sold for
      $25,000, consisting of $25,000 principal amount of senior convertible debentures
      (the "Debentures"), and Class A Warrants and Class B Warrants, to purchase
      shares of common stock, $0.001 par value (the "Common Stock"). The Debentures
      are initially convertible at $0.35 per share for 71,429 shares of Common Stock;
      mature on August 15, 2006 and accrue interest at a rate of not less than 6%
      per
      annum equal to the sum of 2% per annum plus the one-month London Inter-Bank
      Offer Rate (LIBOR). The Debentures are subject to redemption at 125% of the
      principal amount plus accrued interest commencing six months after the effective
      date (the "Effective Date") of the registration statement concerning the
      securities sold in the Offering.





In
      addition, if for the 12 months ending August 15, 2006, the Company issues or
      sells any shares of Common Stock or any equity or equity equivalent securities
      (collectively, "Common Stock Equivalents") for a per share consideration less
      than the Conversion Price on the date of such issuance or sale (a "Dilutive
      Issuance"), then the Conversion Price shall be adjusted so as to equal the
      value
      of the consideration received or receivable by us (on a per share basis) for
      the
      additional shares of Common Stock or Common Stock Equivalents so issued. The
      same provision applies to the warrants ending on their Expiration
      Date.




-19-
 *Index*





Each
      Unit
      also includes: (i) Class A Warrants exercisable at $.44 per share to purchase
      71,429 shares of Common Stock for two years from the Effective Date, but no
      later than February 15, 2008; and (ii) Class B Warrants exercisable at $.52
      per
      share to purchase 71,429 shares of Common Stock for three years from the
      Effective Date, but no later than February 15, 2009. The Class A and Class
      B
      Warrants are subject to redemption by the us at any time commencing six months
      and twelve months, respectively, from the Effective Date; provided the average
      closing bid price of the Common Stock equals or exceeds 175% of the respective
      exercise prices for 20 consecutive trading days.





If
      any
      Event of Default occurs and at any time thereafter, the principal amount, all
      accrued but unpaid interest on, and all other amounts payable under this
      Debenture may be declared, and upon such declaration shall become, immediately
      due and payable without presentment, demand, protest, or other notice of any
      kind, all of which are expressly waived. An Event of Default includes: failure
      to pay principal or interest when due; dissolution; an act of bankruptcy;
      foreclosures; certain judgments; failure to perform any agreement contained
      in
      the Debenture and related transaction agreements; default on other indebtedness;
      breach of any representation or warranty made in this transaction.





If
      payment of the outstanding principal amount of the Debenture, together with
      accrued unpaid interest thereon at the applicable rate of interest is not made
      by such Accelerated Maturity Date (any date prior to the Maturity Date),
      interest shall accrue (including from and after the date of the entry of
      judgment in favor of the Holder in an action to collect the Debenture) at an
      annual rate equal to the lesser of twelve percent (12%) or the maximum rate
      of
      interest permitted by applicable law.





Upon
      an
      Event of Default the Holder may (i) sue in equity or at law, or both, (ii)
      enforce payment of the Debenture, or (iii) enforce any other legal or equitable
      right of the holder of the Debenture.





Pursuant
      to the Registration Rights Agreements entered into between the Company and
      the
      investors, the Company agreed to file the registration statement covering the
      resale of all shares underlying the Debentures and Warrants no later than
      September 15, 2005. If such registration statement was not filed by September
      15, 2005, or declared effective within 90 days following the filing of such
      registration statement, and/or certain other events occur, the Company shall
      pay
      to each investor liquidated damages equal to 2% of the purchase price per month
      up to an aggregate of 16% of the purchase price.





The
      Closing occurred on August 15, 2005, and we received total gross proceeds of
      $3,350,000 and net proceeds of approximately $2,866,000, after deducting fees
      payable to the placement agent and expenses of the Offering. These fees included
      a 10% sales commission equal to $359,500, a 3% non-accountable expense allowance
      of $100,500 (less $25,000 that was already paid as a non-refundable advance),
      as
      well as other transaction and legal expenses payable by the
      Registrant.





The
      net
      proceeds received in the Offering will be used to support the growth of our
      fixed assets and sales support offices, to launch our next four mobile business
      solutions: Office Automation Solutions, Mobile Banking, Mobile Tax Services,
      and
      SMS-based Services for Police, to open approximately 15 small sales support
      offices throughout China and to identify, analyze and finalize opportunities
      for
      the acquisition of other mobile solution companies in China intended to deliver
      respective synergistic benefits. Other remaining proceeds from this Offering
      will be used for research and development, and for working capital and general
      corporate uses. Included in this amount is $250,000 to develop an investor
      relations/public relations program.





The
      Units
      were offered to certain institutional and other accredited investors without
      registration under the Securities Act, or state securities laws, in reliance
      on
      the exemptions provided by Section 4(2) of the Securities Act and Rule 506
      of
      Regulation D promulgated thereunder and in reliance on similar exemptions under
      applicable state laws.





In
      addition to the financing described above, on November 3, 2005, we adopted
      a
      2006 Non-Qualified Employee Stock Compensation Plan and filed a Registration
      Statement on Form S-8 with the Commission in connection therewith, which
      registered 2,000,000 shares of common stock for awards and 2,000,000 shares
      of
      common stock for issuance upon exercise of underlying stock options. To date,
      none of the shares of common stock have been awarded and issued by the
      Compensation Committee.


-20-
 *Index*




**Item
      3. Defaults Upon Senior Securities**





None.





**Item
      4. Submission of Matters to a Vote of Security Holders**





We
      held
      our Annual Meeting of Shareholders on July 1, 2005, and the following actions
      were passed by a majority vote of our outstanding shareholders entitled to
      vote
      thereat: (a) We elected two directors to hold office until the next annual
      meeting of shareholders and qualification of their respective successors; (b)
      the appointment of Moen and Company, as Independent Accountants for the annual
      period ending December 31, 2004, was ratified; (c) the number of authorized
      shares of common stock was increased to 500 million shares; and (d) the 2005
      Stock Option Plan was adopted.





**Item
      5. Other Information**





None.





**Item
      6. Exhibits and Reports on Form 8-K**





Exhibits:





(a)  Exhibits
      are incorporated by reference.





Current
      Reports on Form 8-K:




(a)
            On
              August 26, 2005, we filed a
              Form 8-K with the Commission.(b)
            On
                August 18, 2005, we filed a Form 8-K with the
                Commission.(c)
            On
                August 18, 2005, we filed a Form 8-K with the
                Commission.(d)
            On
              July 7, 2005, we filed a Form 8-K with the
              Commission.




-21-
 *Index*




**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.




**CHINA
                MOBILITY SOLUTIONS, INC.**
              (Registrant)Date: *July
              24, 2006*
            By:
            /s/ *Angela
              Du**Angela Du*
              *Chief
                  Executive Officer and Principal Accounting
                  Officer*




Date: *July
              24, 2006*
            By:
            /s/ *Ernest
              Cheung**Ernest Cheung*
              *Principal
                  Financial Officer*






-22-