| | U.S. SECURITIES AND EXCHANGE COMMISSION | 
| | --------------------------------------- | 

|Washington, D.C. 20549
|----------------------

|Form 10-KSB
|-----------

|[X] | Annual Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 for the Fiscal Year Ended December 31,
2004
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|[ ] | Transition Report Under Section 13 or 15(d) of the Securities Exchange
      Act of 1934 for the Transition Period From ________ to
________
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

|Commission File No. 33-19961
|----------------------------

| | Diamond I, Inc. | 
| | --------------- | 

|(Name of Small Business Issuer in its Charter)
|----------------------------------------------

| | Delaware                                                       |  | 01-0623010                           | 
| | -------------------------------------------------------------- |  | ------------------------------------ | 
| | (State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification Number) | 

| | 5555 Hilton Avenue, Suite 207, Baton Rouge, Louisiana 70808  | 
| | ------------------------------------------------------------ | 
| | (Address of Principal Executive Offices, Including Zip Code) | 

| | (225) 923-1034                                   | 
| | ------------------------------------------------ | 
| | (Issuer's Telephone Number, Including Area Code) | 

| | Securities Registered under Section 12(b) of the Exchange
      Act: None | 
| | ------------------------------------------------------------------------- | 

|Securities Registered under Section 12(g) of the Exchange Act:
    None
|-----------------------------------------------------------------------

|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 of such filing requirements for the
      past 90 days. Yes [ ] No [ X ]
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Check if there is no disclosure of delinquent filers in response to
      Item 405 of Regulation S-B contained in this form, and no disclosure will
      be contained, to the best of registrant's knowledge, in definitive proxy
      or information statements incorporated by reference in Part III of this
      Form 10-KSB or any amendment to this Form 10-KSB. [X]
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Registrant's revenues for its most recent fiscal year were
    $8,094.
|----------------------------------------------------------------------

|The aggregate market value of the voting stock held by non-affiliates
      computed based on the closing price of such stock as of April 18, 2005,
      was approximately $7,000,000.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The number of shares outstanding of the issuer's common equity as of
      April 18, 2005, was 187,216,525 shares of common stock, par value
      $.001.
|---------------------------------------------------------------------------------------------------------------------------------------------------------

|Documents Incorporated by Reference: Current Report on Form 8-K, date
      of event: January 18, 2005.
|-------------------------------------------------------------------------------------------------------

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

|
|

|<PAGE>
|------

|
|

|PART I
|------

|Item 1. | Description of Business | 
|------- | ----------------------- | 

|Recent Developments and Changes | 
|------------------------------- | 

|During the last half of 2004, our Wi-Fi (wireless fidelity) Internet
      access, or â€œhotspotâ€, business did not expand as we had expected. This
      lack of growth was in line with the rest of the hotspot industry. To date,
      Wi-Fi hotspot use by consumers has not met, by a wide margin, forecasts
      made during 2002 and 2003, with several well-known telecommunications
      companies abandoning their efforts to develop a hotspot
business.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During the last quarter of 2004, our management determined to change
      the direction of our company, to focus on the development of products that
      embody Wi-Fi technologies rather than on the provision of hotspot Internet
      access. In conjunction with this determination, we began a search for
      Wi-Fi-related products that offered growth potential and were available
      for acquisition.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As a result, on January 18, 2005, pursuant to an agreement and plan of
      reorganization, we acquired all of the outstanding capital stock of
      Diamond I Technologies, Inc., a Nevada corporation
(â€œDITechâ€).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DITech has developed a hand-held Wi-Fi-based gaming system for
      on-premises use by casinos/resorts, known as â€œWiFiCasino GSâ€(TM).
      WiFiCasino GS is based on a patent-pending security system and would
      permit casino patrons to secure a PDA device from the casino that would
      enable the patrons to enjoy in-room and pool-side gaming action, as well
      as other casino services. DITech has previewed WiFiCasino GS for private
      audiences in client-and-regulatory-specific presentations. WiFiCasino GS
      is not yet licenced for use in any jurisdiction. DITech intends to seek
      regulatory approval of its gaming system and has begun to take necessary
      steps to do so in the State of Nevada and the Republic of the
      Philippines.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Due to our determination not to actively pursue our Wi-Fi hotspot
      business, this Annual Report on Form 10-KSB does not contain a description
      of that business. Rather, inasmuch as our future success depends on our
      ability to develop and expand our WiFiCasino GS products, the following
      disclosure focuses on those business operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|What is Wi-Fi? | 
|-------------- | 

|The term â€œWi-Fiâ€ is short for â€œwireless fidelityâ€ and refers to an
      industry standard for wireless equipment that meets published 802.11(x)
      standards. Wi-Fi equipment operates in unlicensed spectra, such as 2.4 and
      5.8 Ghz.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|General | 
|------- | 

|We are a development-stage business. In response to the down turn in
      the hotspot industry, our management has determined to commit all
      available current and future capital and other resources to developing and
      expanding the business of DITech. Should the hotspot business gain
      strength, it is possible that our management will again invest in that
      part of our business.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|What is WiFiCasino GS(TM)? | 
|-------------------------- | 

|Wireless Gaming System | 
|---------------------- | 

|Our WifiCasino GS is a secure wireless PDA-based gambling and media
      network designed for Las Vegas-style casinos and resorts, as well as
      cruise ships and race tracks. The WifiCasino GS is designed to allow
      patrons to gamble anywhere on a casinoâ€TMs, shipâ€TMs or trackâ€TMs premises (as
      permitted by regulatory bodies), including in their rooms, pool-side and
      at the bar. Using unique, patent-pending proprietary technologies, our
      wireless gaming system offers a highly secure and consumer friendly
      gambling solution.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, our wireless gaming system is capable of extending beyond
      gambling applications, to include providing Internet access, obtaining
      resort information, ordering meals and drinks, accessing concierge
      services, etc. With future applications in mind, WifiCasino GSâ€TMs modular
      design will accommodate future plug-in modules that provide additional
      functionality, thereby permitting the host resort to provide its patrons
      with new forms of services and experiences.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Implementation Options | 
|---------------------- | 

|WifiCasino GS can be setup solely as a wireless gambling product or can
      be implemented as a full resort services/gambling/management/media system,
      depending on the preferences of the resort. Our system can be integrated
      into a resortâ€TMs existing IT infrastructure or can be installed and
      operated as a stand-alone system.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WifiCasino GS is made up of five integrated systems that deliver
      wireless gambling, multimedia applications and Advanced Customer
      Relationship Management (CRM), as well as Statistical Recording/Analysis
      (SRA).
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | SecureGamble provides the gambling and security features allowing users
      to gamble from PDAâ€TMs within the hotel. It uses biometric identification,
      location tracking, and other security implementations to guarantee
      legitimate gambling.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | MediaServe is a modular system that handles the non-gambling media,
      marketing, and other amenities and services. At anytime, the resort can
      choose to implement optional modules that deliver customized features to
      the casino guest, such as internet access, resort and event info,
      audio/video features, account information, concierge services, checkout
      and billing info.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | AirTrack is the location tracking system. This system is used by every
      other system and location-based service.
|- | ---------------------------------------------------------------------------------------------------------------------

|- | GSAdmin is the management and administration system for the WifiCasino
      GS, which allows management to monitor any active module or application in
      real-time.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | OpenHand CRM/SRA is the full CRM and Statistical Recording/Analysis
      engine of the system. It works to collect user data, activity info,
      location info, etc.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Market Development | 
|------------------ | 

|Republic of the Philippines | 
|--------------------------- | 

|We have begun the process towards securing a license for our WiFiCasino
      GS product in the Republic of the Philippines. Our first in-person
      presentation to the Philippine Amusement and Gaming Corporation (PAGCOR)
      is expected to occur in late May or early June of this year. We cannot
      assure you that we will obtain a license to operate our WiFiCasino GS
      system in the Republic of the Philippines, which would be detrimental to
      the development of our business.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|State of Nevada | 
|--------------- | 

|Currently, we are supporting pending legislation, which has passed
      through committee and is now before the full legislature, in the State of
      Nevada that would permit gaming in public areas within a casinoâ€TMs
      premises, inasmuch as our WiFiCasino GS system was designed to operate in
      such areas. Although we are optimistic that this pending legislation will
      become law, we cannot predict whether such will be the
case.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In conjunction with our legislative activities, we seek to secure a Las
      Vegas hotel/casino to serve as the demonstration site for our WifiCasino
      GS. We are currently in negotiations with one or more Las Vegas casinos to
      serve as the demonstration facility for our WiFiCasino GS
system.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Other Venues | 
|------------ | 

|We are also working to secure a cruise ship on which to implement one
      of our WifiCasino GS systems. We have had preliminary discussions with the
      owners of one or more cruise ships. We have also had preliminary
      discussions with the owners of one or more horse racing facilities, with
      respect to its establishing a WifiCasino GS system on such a facility. We
      cannot assure you that we will be successful in these
efforts.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Gaming Industry Background | 
|-------------------------- | 

|For 2003, worldwide casino-based gaming revenues have been estimated to
      have been approximately $800 billion. For 2002, U.S. casino-based gaming
      revenues were approximately $26.5 billion. (Source: Ernst & Young,
      â€œ2004 United States Gaming Bulletinâ€).
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|According to industry sources, casino-based gaming revenues are
      expected to increase each year for the foreseeable future. Historically,
      revenues from slot machines and poker have comprised approximately 70% of
      total gaming revenues. Due the long-term high popularity of slot machines,
      as well as the current popularity of â€œTexas Holdâ€TMemâ€ poker, our WiFiCasino
      GS will initially offer video slots and poker games to
users.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Gaming-Related Equipment and Software | 
|------------------------------------- | 

|All of the equipment used in our WiFiCasino GS systems will be
      off-the-shelf or modified-off-the-shelf items. Inasmuch as there are
      several manufacturers of the types of equipment we require, we expect no
      problems in obtaining needed equipment at competitive
prices.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In configuring the WiFiCasino GS system for use, we use a combination
      of open-use software and proprietary technologies and software developed
      by us.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

|Gaming Industry Competition | 
|--------------------------- | 

|The gaming industry is extremely competitive. We compete against many
      large gaming companies who have far greater resources, financial and
      otherwise, than do we. We cannot provide any assurance that we will be
      able to compete effectively, which will adversely affect our financial
      condition.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Gaming Regulation and Licensing | 
|------------------------------- | 

|General Regulation of Shareholders of Publicly Traded Companies | 
|--------------------------------------------------------------- | 

|In most jurisdictions, any beneficial owner of our common stock is
      subject on a discretionary basis to being required to file applications
      with gaming regulatory authorities, be investigated and found suitable or
      qualified as such. In addition, shareholders whose holdings of our common
      stock exceed certain designated percentages are subject to certain
      reporting and qualification requirements imposed by state and federal
      gaming regulators and any shareholder, if found to be unsuitable, may be
      required to immediately dispose of its holdings of our common
  stock.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Further, we must obtain a registration, license, approval or finding of
      suitability and equipment approval in all jurisdictions before it can
      offer gaming devices for sale to licensed gaming operations within those
      jurisdictions. The licensing process usually involves the licensing or
      approval of certain officers, directors and shareholders of a corporation,
      and approval of the specific product that a company wants to offer for
      sale.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Nevada Regulatory Matters | 
|------------------------- | 

|As a manufacturer and distributor of gaming equipment, we will be
      required to obtain approval to do so from the Nevada Gaming Authorities.
      As a â€œRegistered Companyâ€, we will be required to file periodic reports,
      including detailed financial reports, with the Nevada Gaming Authorities,
      to assure our compliance with applicable laws. In addition, substantially
      all material loans, leases, sales of securities and similar financing
      transactions by us will be required to be reported to, or approved by the
      Nevada Gaming Authorities.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Applicable Nevada law also requires that any beneficial holder of a
      Registered Corporation's voting securities, regardless of the number of
      shares owned, may be required to file an application, be investigated and
      have his suitability determined as a beneficial holder of the Registered
      Corporation's voting securitiesif the Nevada Gaming Authorities has reason
      to believe that such ownership would otherwise be inconsistent with the
      declared policies of the State of Nevada. The applicant must pay all costs
      of investigation incurred by the Nevada Gaming Authorities in conducting
      any such investigation.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Nevada law requires any person who acquires beneficial ownership of
      more than 5% of a Registered Corporation's voting securities to report the
      acquisition to the Nevada Gaming Authorities. Such law also requires that
      beneficial owners of more than 10% of a Registered Corporation's voting
      securities apply to the Nevada Gaming Authorities for a finding of
      suitability within thirty days after the Chairman of the Nevada Board
      mails the written notice requiring such filing, with certain exceptions
      for â€œinstitutional investorsâ€. If the beneficial holder of voting
      securities who must be found suitable is a corporation, partnership or
      trust, it must submit detailed business and financial information
      including a list of beneficial owners. The applicant is required to pay
      all costs of investigation. Any person who fails or refuses to apply for a
      finding of suitability or a license within thirty days after being ordered
      to do so by the Nevada Gaming Authorities or the Chairman of the Nevada
      Board, may be found unsuitable.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We will be required to maintain a current stock ledger in Nevada which
      may be examined by the Nevada Gaming Authorities at any time. If any
      securities are held in trust by an agent or by a nominee, the record
      holder may be required to disclose the identity of the beneficial owner to
      the Nevada Gaming Authorities. Failure to make such disclosure may be
      grounds for finding the record holder unsuitable. We will also be required
      to render maximum assistance in determining the identity of the beneficial
      owner. The Nevada Gaming Authorities have the power to require our stock
      certificates to bear a legend indicating that the securities are subject
      to Nevada law.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As a Registered Corporation, we will not be able to make a public
      offering of our securities, such as an IPO or follow-on offering, without
      the prior approval of the Nevada Gaming Authorities, if the securities or
      proceeds therefrom are intended to be used to construct, acquire or
      finance gaming facilities in Nevada, or to retire or extend obligations
      incurred for such purposes. Approval of a public offering, if given, does
      not constitute a finding, recommendation or approval by the Nevada Gaming
      Authorities as to the accuracy or adequacy of the offering disclosure
      documents or the investment merits of the securities offered. Any
      representation to the contrary is unlawful.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Changes in control of a Registered Corporation through merger,
      consolidation, stock or asset acquisitions, management or consulting
      agreements, or any act or conduct by a person whereby he obtains control,
      may not occur without the prior approval of the Nevada Gaming
      Authorities.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Federal Regulation | 
|------------------ | 

|The Federal Gambling Devices Act of 1962 (the "Federal Act") makes it
      unlawful, in general, for a person to manufacture, deliver or receive
      gaming machines, gaming machine type devices and components across state
      lines or to operate gaming machines, unless that person has first
      registered with the Attorney General of the United States. We will be
      required to register and to renew our registration annually, which we
      intend to do. In addition, various record keeping equipment identification
      requirements are imposed by the Federal Act. Violation of the Federal Act
      may result in seizure and forfeiture of the equipment, as well as other
      penalties.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Native American Gaming | 
|---------------------- | 

|Gaming on Native American lands, including the terms and conditions
      under which gaming equipment can be sold or leased to Native American
      tribes, is or may be subject to regulation under the laws of the tribes,
      the laws of the host state, the Indian Gaming Regulatory Act of 1988
      ("IGRA"), which is administered by the National Indian Gaming Commission
      (the "NIGC") and the Secretary of the U.S. Department of the Interior (the
      "Secretary"), and also may be subject to the provisions of certain
      statutes relating to contracts with Native American tribes, which are
      administered by the Secretary. As a precondition to gaming involving
      gaming machines, IGRA requires that the tribe and the state have entered
      into a written agreement (a "tribal-state compact") that specifically
      authorizes such gaming, and that has been approved by the Secretary, with
      notice of such approval published in the Federal Registrar. Tribal-state
      compacts vary from state to state. Many require that equipment suppliers
      meet ongoing registration and licensing requirements of the state and/or
      the tribe and some impose background check requirements on the officers,
      directors, and shareholders of gaming equipment suppliers. Under IGRA,
      tribes are required to regulate all commercial gaming under ordinances
      approved by the NIGC. Such ordinances may impose standards and technical
      requirements on gaming hardware and software, and may impose registration,
      licensing and background check requirements to gaming equipment suppliers
      and their officers, directors, and shareholders.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Regulation in the Republic of the Philippines | 
|--------------------------------------------- | 

|Because we have identified the Republic of the Philippines as a market
      with significant potential, we will be required to obtain a license to do
      business in the Philippines from the Philippine Amusement and Gaming
      Corporation (PAGCOR). PAGCOR is the licensing authority in the Philippines
      and owns and operates all casinos there. Our first in-person presentation
      to the Philippine Amusement and Gaming Corporation (PAGCOR) is expected to
      occur during the summer of this year.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Application of Future or Additional Regulatory Requirements | 
|----------------------------------------------------------- | 

|In the future, we intend to seek the necessary registrations, licenses,
      approvals and findings of suitability for us, our products and our
      personnel in other U.S. and foreign jurisdictions in which we identify
      significant sales potential for our products. However, there can be no
      assurance that such registrations, licenses, approvals or findings of
      suitability will be obtained and will not be revoked, suspended or
      conditioned or that we will be able to obtain the necessary approvals for
      our future products as they are developed in a timely manner, or at all.
      If a registration, license, approval or finding of suitability is required
      by a regulatory authority and we fail to seek or do not receive the
      necessary registration, license, approval or finding of suitability, we
      may be prohibited from selling our products for use in the respective
      jurisdiction or may be required to sell our products through other
      licensed entities at a reduced profit to us.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|We believe that to compete favorably we must invest in research and
      development of our gaming products. However, due to our lack of excess
      capital, it is likely that our research and development activities will be
      minimal through the first nine months of 2005.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Employees | 
|--------- | 

|We currently have ten employees, four of whom are officers. We also
      retain the services of independent contractors and needed outside
      professionals on an as-needed basis.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Risk Factors | 
|------------ | 

|You should carefully consider the risks described below before you
      decide to buy our common stock. If any of the following risks occur, our
      business, financial condition or results of operations would likely
      suffer. In such case, the trading price of our common stock could decline,
      and you could lose all or part of your investment.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Risks Relating to Diamond I | 
|--------------------------- | 

| | Because we have a short operating history, there is a limited amount
      of information about us upon which you can evaluate our business and
      potential for future success. | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|We have only a limited operating history upon which you can evaluate
      our full business and prospects. You must consider the risks and
      uncertainties frequently encountered by early-stage companies, especially
      companies that rely on new and evolving technologies, such as our
      WiFiCasino GS products.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our independent auditor has expressed substantial doubt about our
      ability to continue as a going concern. | 
| | --------------------------------------------------------------------------------------------------------------- | 

|In its opinion on our financial statements for the year ended December
      31, 2004, our independent auditor, Lopez, Blevins, Bork & Associates,
      LLP, expressed substantial doubt about our ability to continue as a going
      concern. This means that, when issuing its opinion relating to our
      December 31, 2004, financial statements, given our then-current and
      historical lack of capital, our independent auditor has substantial doubt
      that we will be able to continue as a going business concern. Please
      review the Independent Auditorâ€TMs Report and Note 2 to the consolidated
      financial statements appearing elsewhere herein.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We may be unable to obtain sufficient capital to sustain our
      business or pursue our growth strategy. | 
| | ---------------------------------------------------------------------------------------------------------- | 

|Currently, we do not have sufficient financial resources to implement
      our complete business plan. There is no assurance that we will be able to
      generate revenues that are sufficient to sustain our operations, nor can
      we assure you that we will be able to obtain additional sources of
      financing in order to satisfy our working capital needs. Should needed
      financing be unavailable or prohibitively expensive when we require it, it
      is possible that we would be forced to cease operations.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In particular, it should be noted that we do not currently possess
      adequate funds with which to satisfy our future funding obligations to
      DITech. While management expects to be able to secure the necessary funds,
      there is no assurance that we will be able to do so.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our future operating results may vary from period to period, and, as
      a result, we may fail to meet the expectations of our investors and
      analysts, which could cause our stock price to fluctuate or decline and
      inhibit our ability to obtain funds. | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|Our revenues and results of operations are expected to fluctuate as we
      make financial commitments to facilitate expected growth. The following
      factors will influence our operating results:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | access to funds for capital expenditures;
|- | -----------------------------------------

|- | our ability to obtain needed licensing from regulatory
bodies;
|- | --------------------------------------------------------------

|- | market acceptance of our WiFiCasino GS products; and
|- | ----------------------------------------------------

|- | potential competition from large, well-funded national and
      international gaming companies.
|- | ------------------------------------------------------------------------------------------------

|Our future personnel costs, marketing programs and overhead cannot be
      adjusted quickly and are, therefore, relatively fixed in the short term.
      Our operating expense levels will be based, in part, on our expectations
      of future revenue. If actual revenues are below our expectations, our
      results of operations will suffer and we could be forced to cease
      operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Period-to-period comparisons of our results of operations will likely
      not provide reliable indications of our future
performance.
|---------------------------------------------------------------------------------------------------------------------------------------

|Price fluctuations of our common stock could negatively impact our
      ability to obtain needed capital.
|----------------------------------------------------------------------------------------------------------

| | Our WiFiCasino GS products are new and consumer acceptance may not
      be achieved. | 
| | ------------------------------------------------------------------------------------- | 

|Our WiFiCasino GS products are new and do not enjoy wide-spread name
      recognition among potential consumers, namely casinos, cruise ships and
      race tracks. If we are unable to achieve consumer acceptance of our
      products, it is unlikely that we would be able to earn a
profit.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If the security components of our WiFiCasino GS products are
      ineffective, breached and unauthorized use occurs, we may not be permitted
      to continue to enjoy our gaming licensing. | 
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|It is imperative that our WiFiCasino GS systemâ€TMs security components
      work dependably. If a failure of such security components occurs, we may
      not be permitted to continue to enjoy our gaming licensing. Any such
      circumstance would have a material and detrimental affect on our
      business.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We face strong competition in our market, which could make it
      difficult for us to succeed. | 
| | ------------------------------------------------------------------------------------------------ | 

|The gaming industry is extremely competitive. We compete against many
      large gaming companies who have far greater resources, financial and
      otherwise, than do we. We provide any assurance that we will be able to
      compete effectively, which will adversely affect our financial
      condition.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If we are unable to manage future expansion effectively, our
      business may be adversely impacted. | 
| | ------------------------------------------------------------------------------------------------------ | 

|In the future, we may experience rapid growth in operations, which
      could place a significant strain on our operations, in general, and
      development of services, our internal controls and other managerial,
      operating and financial resources, in particular. If we do not manage
      future expansion effectively, our business will be harmed. To manage any
      future expansion effectively, we will need to improve our operational and
      financial systems and managerial controls and procedures, which include
      the following:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | managing our research and development efforts for new and evolving
      technologies;
|- | --------------------------------------------------------------------------------------

|- | developing our administrative, accounting and management information
      systems and controls; and
|- | ----------------------------------------------------------------------------------------------------

|- | effectively maintaining coordination among our various
    departments.
|- | -----------------------------------------------------------------------

| | Litigation arising out of intellectual property infringement could
      be expensive and disrupt our business. | 
| | --------------------------------------------------------------------------------------------------------------- | 

|We cannot be certain that our products do not, or will not, infringe
      upon patents, trademarks, copyrights or other intellectual property rights
      held by third parties, or that other parties will not assert infringement
      claims against us. From time to time, we may be involved in disputes with
      these third parties. Any claim of infringement of proprietary rights of
      others, even if ultimately decided in our favor, could result in
      substantial costs and diversion of our resources. Successful claims
      against us may result in an injunction or substantial monetary liability,
      which could, in either case, significantly impact our results of
      operations or materially disrupt the conduct of our business. If we are
      enjoined from using a technology, we will need to obtain a license to use
      the technology, but licenses to third-party technology may not be
      available to us at a reasonable cost, or at all.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We depend on our key personnel; the loss of any key personnel could
      disrupt our operations, adversely affect our business and result in
      reduced revenues. | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|Our future success will depend on the continued services and on the
      performance of our senior management, particularly our president, David
      Loflin, and, as we grow, other key employees. We have entered into
      employment agreements with each of our officers. The loss of their
      services for any reason could seriously impair our ability to execute our
      business plan, which could reduce our revenues and have a materially
      adverse effect on our business and results of operations. We have not
      purchased any key-man life insurance.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our directors and executive officers own enough of our common stock
      effectively to control directorsâ€TM elections and thereby control our
      management policies. | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

|Our directors and executive officers own, directly and indirectly,
      approximately 40% of our currently outstanding common stock. These
      shareholders may be able effectively to control the outcome of corporate
      actions requiring shareholder approval by majority action. Their stock
      ownership may have the effect of delaying, deferring or preventing a
      change in control of Diamond I, Inc.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our business plan is not based on independent market studies, so we
      cannot assure you that our strategy will be successful. | 
| | --------------------------------------------------------------------------------------------------------------------------------- | 

|We have not commissioned any independent market studies concerning the
      extent to which customers will utilize our WiFiCasino GS products. Rather,
      our plans for implementing our business strategy and achieving
      profitability are based on the experience, judgment and assumptions of our
      key management personnel, and upon other available information concerning
      the communications industry. If our managementâ€TMs assumptions prove to be
      incorrect, we will not be successful in establishing our gaming
      business.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We may not be able to protect our intellectual property rights,
      which could dramatically reduce our ability to earn a profit. | 
| | ----------------------------------------------------------------------------------------------------------------------------------- | 

|We have filed patent applications with respect to our WiFiCasino GS
      wireless gaming system. We believe that obtaining these patents, as well
      as any future patents related to our products, is extremely important and
      we intend to pursue these patents vigorously. However, we can offer no
      assurance that we will be granted any patents relating to our WiFiCasino
      GS wireless gaming system.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We currently rely on common law principles for the protection of our
      copyrights and trademarks and trade secret laws to protect our proprietary
      intellectual property rights. We have not yet filed trademark applications
      relating to the â€œDiamond Iâ€ and â€œWiFiCasino GSâ€ brand
names.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Without patent or trademark protection, the existing trade secret and
      copyright laws afford us only limited protection. Third parties may
      attempt to disclose, obtain or use our technologies. Others may
      independently develop and obtain patents or copyrights for technologies
      that are similar or superior to our technologies. If that happens, we may
      need to license these technologies and we may not be able to obtain
      licenses on reasonable terms, if at all, thereby causing great harm to our
      business.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Risks Relating to the Gaming Industry | 
|------------------------------------- | 

| | Financial, political or economic conditions could adversely affect
      our revenues. | 
| | -------------------------------------------------------------------------------------- | 

|Our revenues and profitability depend on the overall demand for gaming
      outlets and related activities. Further acts of terrorism, such as
      occurred on September 11, 2001, international hostilities or other future
      financial, political, economic and other uncertainties could lead to a
      reduction in the use of our future gaming products, thereby reducing our
      revenues.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Government regulation of the gaming industry is
extensive. | 
| | ---------------------------------------------------------- | 

|Government regulation of the gaming industry is extensive and
      compliance is costly. Our failure to comply with all applicable
      regulations, including local, state or federal in the United States, could
      cause us to become unable to continue to operate our business. In such a
      circumstance, we would be forced to cease operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Risks Relating to Our Common Stock | 
|---------------------------------- | 

| | Concentration of ownership of our common stock may prevent new
      investors from influencing significant corporate decisions. | 
| | -------------------------------------------------------------------------------------------------------------------------------- | 

|Our directors, entities affiliated with our directors and our executive
      officers beneficially own a significant percentage of our outstanding
      common stock. Assuming the exercise of all outstanding warrants, these
      persons and entities will own approximately 30% of our then-outstanding
      common stock. These shareholders, as a group, may be able to control our
      management and our affairs. Acting together, they could control most
      matters requiring the approval by our shareholders, including the election
      of directors, any merger, consolidation or sale of all or substantially
      all of our assets, and any other significant corporate transaction. The
      concentration of ownership may also delay or prevent a change of control
      of Diamond I, Inc. at a premium price, if these shareholders oppose it.
      See the â€œPrincipal Shareholdersâ€ section for details regarding our stock
      ownership and how beneficial ownership is calculated.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Anti-takeover provisions in our corporate documents may discourage
      or prevent a takeover. | 
| | ----------------------------------------------------------------------------------------------- | 

|Provisions in our restated certificate of incorporation and bylaws may
      have the effect of delaying or preventing an acquisition or merger in
      which we are acquired or a transaction that changes our board of
      directors. Specifically, these provisions:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | authorize the board to issue preferred stock without shareholder
      approval;
|- | --------------------------------------------------------------------------------

|- | prohibit cumulative voting in the election of
directors;
|- | --------------------------------------------------------

|- | limit the persons who may call special meetings of shareholders;
    and
|- | ------------------------------------------------------------------------

|- | establish advance notice requirements for nominations for the election
      of the board of directors or for proposing matters that can be acted on by
      shareholders at shareholder meetings.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, we are governed by the provisions of Section 203 of the
      Delaware General Corporation Law. These provisions may prohibit large
      shareholders, in particular those owning 15% or more of the outstanding
      voting stock, from consummating a merger or combination to which we are a
      party. These provisions could limit the price that investors might be
      willing to pay in the future for our common stock. See â€œDescription of
      Capital Stockâ€ for a further discussion of these
provisions.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A large number of shares may be sold in the market, which may
      depress the market price of our common stock. | 
| | ----------------------------------------------------------------------------------------------------------------- | 

|A large number of our currently outstanding shares of common stock,
      approximately 30,000,000 shares, will become eligible for unrestricted
      sale in the public markets beginning in June 2005, under Rule 144(k) of
      the SEC. It is possible that sales of a substantial number of shares of
      our common stock may occur at that time. These sales, or the perception
      that these sales might be occurring, could cause the market price of our
      common stock to decline.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | You will suffer substantial dilution in the net tangible book value
      of the common stock you purchase. | 
| | ----------------------------------------------------------------------------------------------------------- | 

|You will suffer substantial and immediate dilution, due to the lower
      book value per share of our common stock compared to the purchase price
      per share of our common stock. We cannot predict your actual
    dilution.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The market price of our common stock will continue to be extremely
      volatile, and it may drop unexpectedly. | 
| | ---------------------------------------------------------------------------------------------------------------- | 

|The stock market in general, and the market for technology-related
      stocks in particular, has recently experienced dramatic declines and
      fluctuations that have often been unrelated to the operating performance
      of companies. If market-based or industry-based volatility continues, the
      trading price of our common stock could decline significantly independent
      of our actual operating performance, and you could lose all or a
      substantial part of your investment. The market price of our common stock
      could fluctuate significantly as a result of several factors,
      including:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | actual or anticipated variations in our results of
operations;
|- | --------------------------------------------------------------

|- | announcements of innovations, new services or significant price
      reductions by us or our competitors;
|- | ----------------------------------------------------------------------------------------------------------

|- | announcements by us or our competitors of significant contracts or
      acquisitions;
|- | --------------------------------------------------------------------------------------

|- | our failure to meet the performance estimates of investment research
      analysts;
|- | ------------------------------------------------------------------------------------

|- | changes in financial estimates by investment research analysts;
    and
|- | -----------------------------------------------------------------------

|- | general economic and market conditions.
|- | ---------------------------------------

| | Our common stock is a â€œpenny stockâ€. | 
| | ---------------------------------------- | 

|Our common stock is quoted on the NASDAQâ€TMs OTC Bulletin Board and is
      considered a â€œpenny stockâ€, as long as it trades below $5.00 per share.
      Broker-dealer practices in connection with transactions in penny stocks
      are regulated by penny stock rules adopted by the SEC. The penny stock
      rules require a broker-dealer, prior to a transaction in a penny stock not
      otherwise exempt from the rules, to deliver a standardized risk disclosure
      statement prepared by the SEC that provides information about penny stocks
      and the nature and level of risks in the penny stock market. The
      broker-dealer also must provide the customer with current bid and offer
      quotations for the penny stock, the compensation of the broker-dealer and
      its salesperson in the transaction, as well as the monthly account
      statements showing the market value of each penny stock held in the
      customerâ€TMs account. In addition, the penny stock rules require that, prior
      to a transaction in a penny stock not otherwise exempt from such rules,
      the broker-dealer must make a special written determination that the penny
      stock is a suitable investment for the purchaser and receive the
      purchaserâ€TMs written agreement to the transaction.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|These disclosure requirements may have the effect of reducing the level
      of trading activity in the secondary market for a stock that is subject to
      the penny stock rules. In this regard, it can be expected that investors
      in our common stock may find it more difficult to profit on their
      investments in our common stock.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 2. | Description of Property | 
|------- | ----------------------- | 

|Facilities | 
|---------- | 

|We lease approximately 2,000 square feet of space for our headquarters
      in Baton Rouge, Louisiana, under a lease that expires in 2005. We believe
      that this facility will be adequate for our needs for at least the next
      two years. We expect that additional facilities will be available as we
      expand our business operations.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Intellectual Property | 
|--------------------- | 

|We have filed patent applications with respect to our WiFiCasino GS
      wireless gaming system. We believe that obtaining these patents, as well
      as any future patents related to our products, is extremely important and
      we intend to pursue these patents vigorously. However, we can offer no
      assurance that we will be granted any patents relating to our WiFiCasino
      GS wireless gaming system.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, we rely on a combination of trademark laws, trade secret
      laws and disclosure restrictions to protect our intellectual property
      rights. We also enter into confidentiality agreements with our employees,
      consultants and other third parties who have access to sensitive and
      proprietary information. Diamond I(TM), as well as its associated mark,
      and WiFiCasino GS(TM) are designations that we use and for which we intend
      to obtain registered trademarks.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|If a claim is asserted that we have infringed the intellectual property
      of a third party, we may be required to seek licenses to that technology.
      Licenses from third parties may not continue to be available to us at a
      reasonable cost, or at all.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Additionally, the steps we have taken to protect our intellectual
      property rights may not be adequate. Third parties may infringe or
      misappropriate our proprietary rights. Competitors may also independently
      develop technologies that are substantially equivalent or superior to the
      technologies we employ in our business. If we fail to protect our
      proprietary rights adequately, our competitors could offer similar
      services, potentially significantly harming our competitive position and
      decreasing our revenues.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 3. | Legal Proceedings | 
|------- | ----------------- | 

|We are not currently involved in any legal proceedings.
|-------------------------------------------------------

|Item 4. | Submission of Matters to Vote of Security Holders | 
|------- | ------------------------------------------------- | 

|On May 21, 2004, a majority of our shareholders, acting by written
      consent in lieu of a meeting, approved a change of our name from Air-Q
      Wi-Fi Corporation to AirRover Wi-Fi Corp.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On January 3, 2005, a majority of our shareholders, acting by written
      consent in lieu of a meeting, approved an amendment to our amended and
      restated certificate of incorporation, whereby our authorized number of
      shares of common stock was increased from 200,000,000 shares to
      700,000,000 shares.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On January 20, 2005, a majority of our shareholders, acting by written
      consent in lieu of a meeting, approved a change of our name from AirRover
      Wi-Fi Corp. to Diamond I, Inc.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|PART II
|-------

|Item 5. | Market for Common Equity and Related Stockholder Matters | 
|------- | -------------------------------------------------------- | 

|Market Information | 
|------------------ | 

|Our common stock is quoted on the OTC Bulletin Board, under the symbol
      â€œDMOIâ€. Previously, our common stock has been quoted on the OTC Bulletin
      Board, under the symbols â€œAQWFâ€, â€œAVWFâ€ and â€œCVNTâ€. The table below sets
      forth, for the periods indicated, the high and low bid prices for our
      common stock, as reported by the OTC Bulletin Board.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Quarter Ended |  | High Bid * |  | Low Bid * | 
| | ------------- |  | ---------- |  | --------- | 

| | March 31, 2003 |  | $.375 |  | $.375 | 
| | -------------- |  | ----- |  | ----- | 

| | June 30, 2003 |  | $.1875 |  | $.125 | 
| | ------------- |  | ------ |  | ----- | 

| | September 30, 2003 |  | $.52 |  | $.1875 | 
| | ------------------ |  | ---- |  | ------ | 

| | December 31, 2003 |  | $1.025 |  | $.535 | 
| | ----------------- |  | ------ |  | ----- | 

| | March 31, 2004 |  | $1.125 |  | $.525 | 
| | -------------- |  | ------ |  | ----- | 

| | June 30, 2004 |  | $.85 |  | $.2125 | 
| | ------------- |  | ---- |  | ------ | 

| | September 30, 2004 |  | $.4875 |  | $.06 | 
| | ------------------ |  | ------ |  | ---- | 

| | December 31, 2004 |  | $.17 |  | $.06 | 
| | ----------------- |  | ---- |  | ---- | 

| | March 31, 2005 |  | $.37 |  | $.08 | 
| | -------------- |  | ---- |  | ---- | 

|* | The foregoing prices have been adjusted to reflect a four-for-one
      forward split of our common stock occurring in September
2004.
|- | --------------------------------------------------------------------------------------------------------------------------------------

|These prices represent quotations between dealers without adjustment
      for retail mark-ups, mark-downs or commissions, and may not necessarily
      represent actual transactions.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|You should note that our common stock, like many technology-related
      stocks, is likely to experience significant fluctuations in its price and
      trading volume. We cannot predict the future trading patterns of our
      common stock.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Holders | 
|------- | 

|On April 18, 2005, the number of record holders of our common stock,
      excluding nominees and brokers, was 135 holding 187,216,525
  shares.
|------------------------------------------------------------------------------------------------------------------------------------------------

|Dividends | 
|--------- | 

|We have never paid cash dividends on our common stock. We intend to
      re-invest any future earnings into the Company for the foreseeable
      future.
|----------------------------------------------------------------------------------------------------------------------------------------------------------

|Securities Authorized for Issuance Under Equity Compensation
    Plans | 
|---------------------------------------------------------------------- | 

|
|

|Plan Category |  | Number of securities to be issued upon exercise of outstanding options,
      warrants and rights |  | Weighted average exercise price of outstanding options, warrants, and
      rights |  | Number of securities remaining available for future
issuance
|------------- |  | ------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | ------------------------------------------------------------

|Equity compensation plans approved by security holders |  | -0- |  | -0- |  | -0-
|------------------------------------------------------ |  | --- |  | --- |  | ---

|Equity compensation plans not approved by security holders |  | (1) |  | (2) |  | 10,647,422(3)
|---------------------------------------------------------- |  | --- |  | --- |  | -------------

|Individual Compensation Arrangements |  | -0- |  | -0- |  | -0-
|------------------------------------ |  | --- |  | --- |  | ---

|(1) | The precise number of shares to be issued upon exercise of outstanding
      options cannot be determined, as the exercise price of such options is
      based on future market prices.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The precise weighted average exercise price of outstanding options
      cannot be determined, as the exercise price of such options is based on
      future market prices.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | This figure represents the number of shares of our common stock as of
      April 18, 2005, remaining available for issuance under our 2004 Stock
      Ownership Plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Recent Issuances of Unregistered Securities | 
|------------------------------------------- | 

|During the three months ended December 31, 2004, we issued the
      following unregistered securities:
|-------------------------------------------------------------------------------------------------------

|1. | (a) | Securities Sold. In October 2004, a total of 4,642,856 shares of our
      common stock were issued.                                                                                                                                                                                                                                                                                          
|-- | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | (b) | Underwriter or Other Purchasers. These shares of common stock were
      issued to David Loflin (2,857,142 shares) and Waddell D. Loflin (1,785,714
      shares).                                                                                                                                                                                                                            
|   | (c) | Consideration. These shares of common stock were issued as an
      employment bonus and were valued at $.08 per share, the closing price of
      our common stock, as reported by the OTC Bulletin Board, on the date
      immediately preceding their issue, an aggregate value of
  $371,428.                                                                                            
|   | (d) | Exemption from Registration Claimed. These securities are exempt from
      registration under the Securities Act of 1933, as amended, pursuant to the
      provisions of Section 4(2) thereof and Rule 506 thereunder, as a
      transaction not involving a public offering. These purchasers were
      sophisticated investors capable of evaluating an investment in the
      company.

|2. | (a) | Securities Sold. In October 2004, a total of 400,000 shares of our
      common stock were issued.                                                                                                                                                                                                                                                                                            
|-- | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | (b) | Underwriter or Other Purchasers. These shares of common stock were
      issued to Gregory A. Bonner (200,000 shares) and Ira R. Witkin (200,000
      shares).                                                                                                                                                                                                                               
|   | (c) | Consideration. These shares of common stock were issued as bonuses for
      service as a member of the board of directors and were valued at $.08 per
      share, the closing price of our common stock, as reported by the OTC
      Bulletin Board, on the date immediately preceding their issue, an
      aggregate value of $32,000.                                                   
|   | (d) | Exemption from Registration Claimed. These securities are exempt from
      registration under the Securities Act of 1933, as amended, pursuant to the
      provisions of Section 4(2) thereof and Rule 506 thereunder, as a
      transaction not involving a public offering. These purchasers were
      sophisticated investors capable of evaluating an investment in the
      company.

|3. | (a) | Securities Sold. In October 2004, 2,500,000 shares of our common stock
      were issued.                                                                                                                                                                                                                                                                                                   
|-- | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | (b) | Underwriter or Other Purchasers. These shares of common stock were
      issued to Newlan & Newlan, Attorneys at Law.                                                                                                                                                                                                                                                                       
|   | (c) | Consideration. These shares of common stock were issued is payment of
      legal services and were valued at $.08 per share, the closing price of our
      common stock, as reported by the OTC Bulletin Board, on the date
      immediately preceding their issue, an aggregate value of
  $200,000.                                                                                    
|   | (d) | Exemption from Registration Claimed. These securities are exempt from
      registration under the Securities Act of 1933, as amended, pursuant to the
      provisions of Section 4(2) thereof and Rule 506 thereunder, as a
      transaction not involving a public offering. This purchaser was a
      sophisticated investor capable of evaluating an investment in the
      company.

|Item 6. | Managementâ€TMs Discussion and Analysis of Financial Condition and Results
      of Operations | 
|------- | --------------------------------------------------------------------------------------------- | 

|FORWARD-LOOKING STATEMENTS
|--------------------------

|This report by Diamond I, Inc. contains forward-looking statements.
      These are statements regarding financial and operating performance and
      results and other statements that are not historical facts. The words
      "expect", "project", "estimate", "believe", "anticipate", "intend",
      "plan", "forecast" and similar expressions are intended to identify
      forward-looking statements. Certain important risks could cause results to
      differ materially from those anticipated by some of the forward-looking
      statements. Some, but not all, of the important risks that could cause
      actual results to differ materially from those suggested by the
      forward-looking statements include, among other things:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Events that deprive us of the services of our president and largest
      shareholder, David Loflin;
|- | ----------------------------------------------------------------------------------------------------

|- | Whether or not we can successfully establish a market for our wireless
      gaming products;
|- | ---------------------------------------------------------------------------------------------

|- | Whether we are able to obtain adequate capital with which to pursue our
      full business plan; and
|- | -----------------------------------------------------------------------------------------------------

|- | Other uncertainties, all of which are difficult to predict and many of
      which are beyond our control.
|- | ----------------------------------------------------------------------------------------------------------

|We do not intend to update forward-looking statements.
|------------------------------------------------------

|Background | 
|---------- | 

|In June 2003, we experienced a change in control. Pursuant to a stock
      purchase agreement, FMF Investments, Ltd., a Texas limited partnership,
      purchased 611,000 shares, or 54.59%, of our outstanding common stock from
      Eric Anderson. FMF Investments paid Mr. Anderson a total of $70,000 in
      cash, which funds were obtained by FMF Investments through its other
      business activities and not as a loan.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Following FMF Investmentsâ€TM acquiring control, our then-directors
      resigned and FMF Investments, acting by written consent in lieu of a
      meeting of a majority of shareholders, elected David Loflin and Waddell D.
      Loflin as our directors.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Also, in June 2003, pursuant to a stock purchase agreement, we acquired
      all of the outstanding capital stock of Air-Q Corp., a Nevada corporation
      (Air-Q NV).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|For accounting purposes, this reverse-merger will be treated as an
      acquisition of our company (then known as Covenant Financial Corporation)
      and a recapitalization of Air-Q Corp. (now one of our
  subsidiaries).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Recent Acquisition; Change in Business Plan | 
|------------------------------------------- | 

|During the last half of 2004, our Wi-Fi (wireless fidelity) Internet
      access, or â€œhotspotâ€, business did not expand as we had expected. This
      lack of growth was in line with the rest of the hotspot industry. To date,
      Wi-Fi hotspot use by consumers has not met, by a wide margin, forecasts
      made during 2002 and 2003, with several well-known telecommunications
      companies abandoning their efforts to develop a hotspot
business.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During the last quarter of 2004, our management determined to change
      the direction of our company, to focus on the development of products that
      embody Wi-Fi technologies rather than on the provision of hotspot Internet
      access. In conjunction with this determination, we began a search for
      Wi-Fi-related products that offered growth potential and were available
      for acquisition.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As a result, on January 18, 2005, pursuant to an agreement and plan of
      reorganization, we acquired all of the outstanding capital stock of
      Diamond I Technologies, Inc., a Nevada corporation
(DITech).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DITech has developed a hand-held Wi-Fi-based gaming system for
      on-premises use by casinos/resorts, known as â€œWiFiCasino
GSâ€(TM).
|------------------------------------------------------------------------------------------------------------------------------------------

|Our management has determined to focus all of our available resources,
      financial and otherwise, on the exploitation of this wireless gaming
      system and will not pursue additional Wi-Fi hotspot locations, unless that
      industry regains its former vitality.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Sales of Equity | 
|--------------- | 

|In March 2004, we entered into a securities purchase agreement. Under
      this agreement, we issued securities for cash in the amount of $500,000,
      as follows: 500,000 shares of our Series A preferred stock, convertible
      into 100,000 shares of our common stock after September 2, 2004, 1,000,000
      common stock purchase warrants to purchase a like number of shares at an
      exercise price, as adjusted to reflect a four-for-one forward stock split,
      of $.875 per share and 250,000 common stock purchase warrants to purchase
      a like number of shares at an exercise price, as adjusted to reflect a
      four-for-one forward stock split, of $1.125 per share. These warrants
      expire March 1, 2007.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In June 2003, we entered into four securities purchase agreements. We
      entered into agreements with four separate entities. Under each of these
      agreements, we issued securities for cash in the amount of $125,000 for a
      total of $500,000 under these agreements. We sold each of these entities
      (1) 1,250,000 shares of our common stock, (2) 1,250,000 common stock
      purchase warrants to purchase a like number of shares at an exercise price
      of $.20 per share, (3) 1,250,000 common stock purchase warrants to
      purchase a like number of shares at an exercise price of $.30 per share,
      (4) 1,250,000 common stock purchase warrants to purchase a like number of
      shares at an exercise price of $.40 per share and (5) 1,250,000 common
      stock purchase warrants to purchase a like number of shares at an exercise
      price of $.50 per share. In April 2004, each of these entities agreed to
      cancel all of their respective common stock purchase warrants, in exchange
      for 1,250,000 common stock purchase warrants to purchase a like number of
      shares at an exercise price of $1.00 per share. As a result of our
      four-for-one forward stock split, each of these entities now holds
      5,000,000 common stock purchase warrants to purchase a like number of
      shares at an exercise price of $0.25 per share. All of the warrants are
      exercisable for five years.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During 2004, we issued a total of 2,948,900 shares upon exercise of
      certain options, for cash in the amount of $150,000.
|------------------------------------------------------------------------------------------------------------------------------

|Critical Accounting Policies | 
|---------------------------- | 

|There were no material changes to our critical accounting policies
      during the year ended December 31, 2004.
|-----------------------------------------------------------------------------------------------------------------

|Management's Discussion and Analysis discusses the results of
      operations and financial condition as reflected in our consolidated
      financial statements, which have been prepared in accordance with
      accounting principles generally accepted in the United States of America.
      The preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities, disclosure of contingent assets and
      liabilities at the date of the financial statements and reported amounts
      of revenues and expenses during the reporting period. On an ongoing basis,
      management evaluates its estimates and judgments, including those related
      to accounts receivable, inventory valuation, amortization and
      recoverability of long-lived assets, including goodwill, litigation
      accruals and revenue recognition. Management bases its estimates and
      judgments on relevant factors, 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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|While we believe that the factors considered provide a meaningful basis
      for the accounting policies applied in the preparation of the consolidated
      financial statements, we cannot guarantee that our estimates and
      assumptions will be accurate. If such estimates and assumptions prove to
      be inaccurate, we may be required to make adjustments to these estimates
      in future periods.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Revenue Recognition | 
|------------------- | 

|We will charge our customers service fees for Internet access and
      recognize the revenue in the month the services are
provided.
|-------------------------------------------------------------------------------------------------------------------------------------

|Litigation and Tax Assessments | 
|------------------------------ | 

|Should we become involved in lawsuits, we intend to assess the
      likelihood of any adverse judgments or outcomes of any of these matters as
      well as the potential range of probable losses. A determination of the
      amount of accrual required, if any, for these contingencies will be made
      after careful analysis of each matter. The required accrual may change
      from time to time, due to new developments in any matter or changes in
      approach (such as a change in settlement strategy) in dealing with these
      matters.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Additionally, in the future, we may become engaged in various tax
      audits by federal and state governmental authorities incidental to our
      business activities. We anticipate that we will record reserves for any
      estimated probable losses for any such proceeding.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|We account for stock-based compensation based on the provisions of
      Accounting Principles Board Opinion No. 25, â€œAccounting for Stock Issued
      to Employeesâ€, as amended by the Financial Accounting Standards Board
      Interpretation No. 44, â€œAccounting for Certain Transactions Involving
      Stock Compensationâ€. Accounting Principles Board Opinion No. 25 and
      Financial Accounting Standards Board Interpretation No. 44 state that no
      compensation expense is recorded for stock options or other stock-based
      awards to employees that are granted with an exercise price equal to or
      above the estimated fair value per share of the companyâ€TMs common stock on
      the grant date. We adopted the disclosure requirements of Statement of
      Financial Accounting Standards No. 123, â€œAccounting for Stock-Based
      Compensationâ€, which requires compensation expense to be disclosed based
      on the fair value of the options granted at the date of the
  grant.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In December 2002, the Financial Accounting Standards Board issued its
      Statement No. 148, â€œAccounting for Stock-Based Compensation â€” Transition
      and Disclosureâ€”an amendment of Financial Accounting Standards Board
      Statement No. 123â€. This Statement amends Statement of Financial
      Accounting Standards No. 123, to provide alternative methods of transition
      for an entity that voluntarily changes to the fair value based method of
      accounting for stock-based employee compensation. It also amends the
      disclosure provisions of Statement of Financial Accounting Standards No.
      123 to require prominent disclosure about the effects on reported net
      income of an entityâ€TMs accounting policy decisions with respect to
      stock-based employee compensation. The transition and annual disclosure
      provisions of Statement of Financial Accounting Standards No. 148 are
      effective for fiscal years ending after December 15, 2002, and the interim
      disclosure provisions were effective for the first interim period
      beginning after December 15, 2002. We did not voluntarily change to the
      fair value based method of accounting for stock-based employee
      compensation, therefore, the adoption of Statement of Financial Accounting
      Standards No. 148 did not have a material impact on our operations and/or
      financial position.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|During the year ended December 31, 2004, our business operations
      generated $8,094 in revenues, compared to the year ended December 31,
      2003, when our business operations did not generate revenues. It is likely
      that our revenues for all of 2005 will not be any greater than for prior
      years, due to our determination to develop our wireless gaming products
      rather than to pursue further development of our hotspot business. We
      currently lack the capital necessary to pursue aggressively our business
      objectives, and we may never possess enough capital with which to do so.
      In this circumstance, it is likely that we would never earn a
    profit.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During 2004, our hotspot business generated nearly all of our revenues;
      however, revenues from the segment of our business are expected to
      contract during 2005, due to our managementâ€TMs determination to pursue the
      development of our gaming products and related business. These
      circumstances will be reflected in our statement of operations for the
      first quarter of 2005 and for the remainder of 2005.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Due to our severe lack of capital, during the year ended December 31,
      2004, we issued a total of 6,480,465 shares of our common stock to
      consultants in payment of their services. The fair value of the shares
      issued to consultants is $1,506,118 and is included in our statement of
      revenues and expenses. Likewise, during the year ended December 31, 2003,
      we issued a total of 3,152,500 shares of our common stock to consultants
      in payment of their services. The fair value of the shares issued to
      consultants is $2,024,826 and is included in our statement of revenues and
      expenses. Issuing shares of our common stock was the only means by which
      we could obtain the consultantsâ€TM services and, until we obtain needed
      capital, we anticipate that we will continue to issue shares in payment of
      services. The value of the consulting services received by us under each
      agreement was expensed in the month in which the consulting agreement was
      signed.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Also during 2004, we issued a total of 5,522,856 shares to our officers
      and directors in payment of services or, in the case of our officers, as
      bonuses for their service, in light of the fact that they were receiving
      approximately only one-third of their salaries. The fair value of the
      shares issued to our officers and directors is $583,428 and is included in
      our statement of revenues and expenses.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Our payroll expense during 2004 was higher than in 2003, due to our
      hiring personnel necessary to establish our hotspot business. Due to the
      lack of success in this business, we have eliminated nearly all of the
      employees hired for this purpose. Our payroll expense for 2005, is
      expected be near that for 2004, depending upon the amount of capital
      obtained by us.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|Since our inception, we have lacked adequate capital with which to
      accomplish our business objectives. Currently, we are not in a liquid
      position, and have a working capital deficit of $75,464, although we are
      able to pay our operating expenses as they are incurred. Following our
      acquisition of DITech, we have focused on the development of our wireless
      gaming products.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During 2004, we obtained $500,000 from the sale of preferred stock, the
      proceeds of which equity sale were used to develop our hotspot business
      and for working capital. We also obtained $150,000 from the exercise of
      certain options, which funds were used for operating
expenses.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Since the end of 2004, we have obtained a total of $269,000 (unaudited)
      from the exercise of certain options, which funds have been used to pay
      costs associated with our wireless gaming business and for operating
      expenses. We are actively seeking capital for use in our business. We can
      make no assurance that we will obtain enough to continue our business
      operations.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Our Capital Needs | 
|----------------- | 

|Our current level of operations can be maintained for the next six
      months. However, to begin the aggressive pursuit of our wireless gaming
      business objectives, we will require approximately $2
million.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, we are obligated to provide funding to DITech, as follows:
      (i) within one month of the consummation of the reorganization agreement,
      we must provide to DITech the sum of $100,000; (ii) within six months of
      the consummation of the reorganization agreement, we must provide to
      DITech the additional sum of $400,000; (iii) within nine months of the
      consummation of the reorganization agreement, we must provide to DITech
      the additional sum of $500,000; and (iv) within one year of the
      consummation of the reorganization agreement, we must provide to DITech
      the additional sum of $2,000,000. Should we fail to provide any portion of
      these funds on or before the required dates, we are required to deliver to
      the former owners of DITech 100% of the then-outstanding shares of common
      stock of DITech. Should this occur, we would no longer have any interest
      in DITech or its business. We made the first required payment to DITech in
      a timely manner and expect to meet all future obligations to DITech.
      However, currently, we do not currently possess adequate funds with which
      to satisfy our other funding obligations to DITech. While management
      expects to be able to secure the necessary funds, there is no assurance
      that we will be able to do so.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Management's Plans Relating to Future Liquidity | 
|----------------------------------------------- | 

|We will be able to sustain our current level of operations for the next
      six months, due to expected exercise of certain options. However, this
      level of funding will not be adequate for us to aggressively pursue the
      exploitation of our wireless gaming products. We continue to seek capital
      for these purposes.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Capital Expenditures | 
|-------------------- | 

|In 2004, we purchased approximately $64,000 of equipment compared to
      2003 when we purchased approximately $32,000 of equipment. We currently
      have limited capital with which to make any significant capital
      expenditures. Should we obtain significant funding, of which there is no
      assurance, we would be able to make significant expenditures for
      equipment. The amount of these equipment purchases cannot be predicted due
      to the uncertainty of funding levels and timing. However, without
      additional capital, we will make no capital expenditures.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 7. | Financial Statements | 
|------- | -------------------- | 

|The financial statements required to be furnished under this Item 7 are
      attached at the end of this Annual Report on Form 10-KSB. An index to our
      financial statements is also included below in Item 13(a).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 8. | Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure | 
|------- | ------------------------------------------------------------------------------------------ | 

|During 2004, we did not change our independent auditor and had no
      disagreements with our auditor with respect to any issue relating to
      accounting or financial disclosure.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 8A. | Controls and Procedures | 
|-------- | ----------------------- | 

|As of December 31, 2004, an evaluation was performed by our President
      and Acting Chief Financial Officer of the effectiveness of the design and
      operation of our disclosure controls and procedures. Based on that
      evaluation, our management, including our President and Acting Chief
      Financial Officer, concluded that our disclosure controls and procedures
      were effective as of December 31, 2004. There have been no significant
      changes in our internal controls or in other factors that could
      significantly affect internal controls subsequent to December 31,
    2004.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|PART III
|--------

|Item 9. | Directors, Executive Officers, Promoters and Control Persons;
      Compliance with Section 16(a) of the Exchange Act | 
|------- | --------------------------------------------------------------------------------------------------------------------- | 

|Directors and Officers | 
|---------------------- | 

|The following table sets forth the officers and directors of Air-Q
      Wi-Fi Corporation.
|-------------------------------------------------------------------------------------------

| | Name |  | Age |  | Position(s)
| | ---- |  | --- |  | -----------

| | David M. Loflin |  | 47 |  | President, Acting Chief Financial Officer and Director
| | --------------- |  | -- |  | ------------------------------------------------------

| | Waddell D. Loflin |  | 54 |  | Executive Vice President, Secretary and Director
| | ----------------- |  | -- |  | ------------------------------------------------

| | Casey Jensen |  | 31 |  | Vice President of Operations
| | ------------ |  | -- |  | ----------------------------

| | Alex P. Davis |  | 24 |  | Vice President of Corporate Development
| | ------------- |  | -- |  | ---------------------------------------

| | Gregory A. Bonner |  | 47 |  | Director
| | ----------------- |  | -- |  | --------

| | Ira R. Witkin |  | 45 |  | Director
| | ------------- |  | -- |  | --------

| | David M. Loflin and Waddell D. Loflin are brothers.
| | ---------------------------------------------------

|Our current officers and directors serve until the next annual meeting
      of our board of directors or until their respective successors are elected
      and qualified. All officers serve at the discretion of our board of
      directors. Family relationships between our officers and directors are
      noted above. Certain information regarding the backgrounds of each of the
      officers and directors is set forth below.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DAVID LOFLIN | 
|------------ | 

|Mr. Loflin is our founder. He resigned as an executive officer and
      director of USURF America, Inc. (AMEX Symbol: UAX) in October 2003, after
      serving in those capacities for seven years. .
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WADDELL D. LOFLIN | 
|----------------- | 

|Mr. Loflin is one of our original officers and directors. For more than
      the five years prior to April 2003, Mr. Loflin served as vice president,
      secretary and director of USURF America, Inc. From April to June 2003, Mr.
      Loflin worked as a private consultant.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CASEY JENSEN | 
|------------ | 

|For more than the five years prior to his joining Diamond I, Inc., Mr.
      Jensen has owned and operated a commercial equipment financing business.
      Mr. Jensen also owned and operated JPM Holdings, Inc., a wireless
      communications company.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ALEX P. DAVIS | 
|------------- | 

|During the past five years, Mr. Davis has been a full-time student and
      managed his own investments.
|---------------------------------------------------------------------------------------------------------

|GREGORY A. BONNER | 
|----------------- | 

|For over 20 years, Mr. Bonner served Albemarle Corporation, a large
      chemicals company, in several capacities, including business development
      manager, product/marketing manager and customer service specialist.
      Recently, Mr. Bonner has been engaged in private entrepreneurial
      endeavors. Mr. Bonner is a graduate of Georgia Institute of Technology in
      Atlanta, with a BS degree in Chemistry.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|IRA R. WITKIN | 
|------------- | 

|Mr. Witkin is currently a program director at IBM. In that capacity,
      Mr. Witkin has responsibility for over 200 developers and marketing
      professionals worldwide. During his 24 year career, Mr. Witkin has held
      numerous positions with a focus on information technology as it relates to
      the travel and transportation, computer servicer, financial, manufacturing
      and communications industries. Mr. Witkin is a graduate of Rensselaer
      Polytechnic Institute in Troy, New York, with a BS degree in Computer
      Science and minors in management and marketing.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Board of Directors | 
|------------------ | 

|Our full board did not meet during 2004; however, it took action by
      unanimous written consent in lieu of a meeting on 23
occasions.
|-----------------------------------------------------------------------------------------------------------------------------------------

|Executive Committee | 
|------------------- | 

|Our board of directors created an executive committee to facilitate
      management between meetings of the full board of directors. The executive
      committee is composed of David Loflin (chairman), Waddell D. Loflin and
      Gregory A. Bonner. Pursuant to our bylaws, between meetings of the full
      board, the executive committee has the full power and authority of the
      board in the management of our business and affairs, except to the extent
      limited by Delaware law. Pursuant to the bylaws of the executive
      committee, as adopted by the full board, the executive committee has the
      authority to exercise all powers of the board, except the
power:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | to declare dividends;
|- | ---------------------

|- | to sell or otherwise dispose of all or substantially all of our
      assets;
|- | -----------------------------------------------------------------------------

|- | to recommend to our shareholders any action requiring their approval;
      and
|- | -------------------------------------------------------------------------------

|- | to change the membership of any committee, fill the vacancies thereon
      or discharge any committee.
|- | -------------------------------------------------------------------------------------------------------

|During 2004, the Executive Committee did not meet or otherwise take
      action.
|---------------------------------------------------------------------------------

|Audit Committee | 
|--------------- | 

|The audit committee of our board of directors is composed of Ira R.
      Witkin (chairman), Gregory A. Bonner and David Loflin. Our board has
      appointed Messrs. Witkin, Bonner and Loflin to the audit committee. The
      purposes of the audit committee are:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | to oversee the quality and integrity of the financial statements and
      other financial information we provide to any governmental body or the
      public;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | to oversee the independent auditorsâ€TM qualifications and
      independence;
|- | -----------------------------------------------------------------------------

|- | to oversee the performance of our independent auditors;
|- | -------------------------------------------------------

|- | to oversee our systems of internal controls regarding finance,
      accounting, legal compliance and ethics that management and the board have
      established or will establish in the future;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | to establish procedures for the receipt, retention and treatment of
      complaints regarding accounting, internal controls, and other auditing
      matters and for the confidential, anonymous submission by our employees of
      concerns regarding questionable accounting or auditing
matters;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | to provide an open avenue of communication among the independent
      auditors, financial and senior management, the internal auditing
      department, and the board, always emphasizing that the independent
      auditors are accountable to the audit committee; and
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | to perform such other duties as are directed by the
board.
|- | ----------------------------------------------------------

|Compensation of Directors | 
|------------------------- | 

|We do not pay any of our directors for their services as directors. It
      is possible that our management could begin to pay our directors for
      meetings attended, grant a small number of stock options or issue shares
      of our common stock for their services. However, no specific determination
      in this regard has been made.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In November 2003, two of our directors, Gregory A. Bonner and Ira R.
      Witkin, were issued 10,000 shares our common stock each, in payment of
      future services as directors. There shares were valued, for financial
      reporting purposes, at $3.85 per share, or $77,000, in the
    aggregate.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In June 2004, each of Messrs. Bonner and Witkin, were issued 200,000
      shares our common stock, in payment of their services as directors. There
      shares were valued, for financial reporting purposes, at $.4375 per share,
      or $150,000, in the aggregate.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In October 2004, each of Messrs. Bonner and Witkin, were issued 100,000
      shares our common stock, in payment of their services as directors. There
      shares were valued, for financial reporting purposes, at $.08 per share,
      or $32,000, in the aggregate.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In March 2005, each of Messrs. Bonner and Witkin, were issued 100,000
      shares our common stock, in payment of their services as directors. There
      shares were valued, for financial reporting purposes, at $.08 per share,
      or $32,000, in the aggregate.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Limitation of Liability and Indemnification | 
|------------------------------------------- | 

|Our restated certificate of incorporation contains provisions limiting
      the liability of directors. Our restated certificate of incorporation
      provides that a director will not be personally liable to us or to our
      shareholders for monetary damages for any breach of fiduciary duty as a
      director, but will continue to be subject to liability for the
      following:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | any breach of the directorâ€TMs duty of loyalty to us or to our
      shareholders;
|- | ----------------------------------------------------------------------------------

|- | acts or omissions not in good faith or that involve intentional
      misconduct or a knowing violation of law;
|- | ---------------------------------------------------------------------------------------------------------------

|- | unlawful payment of dividends or unlawful stock repurchases or
      redemptions; and
|- | -------------------------------------------------------------------------------------

|- | any transaction from which the director derived an improper personal
      benefit.
|- | -----------------------------------------------------------------------------------

|If Delaware law is amended to authorize corporate action further
      eliminating or limiting the personal liability of a director, then the
      liability of our directors will be eliminated or limited to the fullest
      extent permitted by Delaware law, as so amended. Our restated certificate
      of incorporation does not eliminate a directorâ€TMs duty of care and, in
      appropriate circumstances, equitable remedies such as injunctive or other
      forms of non-monetary relief remain available under Delaware law. Our
      restated certificate of incorporation does not affect a directorâ€TMs
      responsibilities under any other laws, such as state or federal securities
      laws or state or federal environmental laws.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, we have entered into agreements to indemnify our directors
      and executive officers to the fullest extent permitted under Delaware law,
      including the non-exclusivity provisions of Delaware law, and under our
      bylaws, subject to limited exceptions. These agreements, among other
      things, provide for indemnification of our directors and executive
      officers for fees, expenses, judgments, fines, and settlement amounts
      incurred by any of these persons in any action or proceeding to which any
      of those persons is, or is threatened to be, made a party by reason of the
      personâ€TMs service as a director or officer, including any action by us,
      arising out of that personâ€TMs services as our director or officer or that
      personâ€TMs services provided to any other company or enterprise at our
      request. We believe that these bylaw provisions and agreements are
      necessary to attract and retain qualified persons as directors and
      officers. We also intend to maintain liability insurance for our officers
      and directors.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The limitation of liability and indemnification provisions in our
      restated certificate of incorporation and bylaws may discourage
      shareholders from bringing a lawsuit against directors for breach of their
      fiduciary duties. They may also reduce the likelihood of derivative
      litigation against directors and officers, even though an action, if
      successful, might benefit us and our shareholders. A shareholderâ€TMs
      investment may be adversely affected to the extent we pay the costs of
      settlement and damage awards against directors and officers pursuant to
      these indemnification provisions.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 10. | Executive Compensation | 
|-------- | ---------------------- | 

|The following table sets forth in summary form the compensation
      received during each of the last three completed fiscal years by our chief
      executive officer and each executive officer who received total salary and
      bonus exceeding $100,000 during any of the last three fiscal
  years.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Long-Term Compensation
| | ----------------------

| | Securities |  | All
| | ---------- |  | ---

| | Annual Compensation |  | Underlying |  | Other
| | ------------------- |  | ---------- |  | -----

|Name, Principal Position |  | Fiscal Year |  | Salary $ |  | Bonus $ |  | Other $ |  | Options |  | Compensation $
|------------------------ |  | ----------- |  | -------- |  | ------- |  | ------- |  | ------- |  | --------------

|David Loflin |  | 2004 |  | $180,000(1) |  | $228,571(2) |  | -0- |  | -0- |  | -0-
|------------ |  | ---- |  | ----------- |  | ----------- |  | --- |  | --- |  | ---

|President and CEO |  | 2003 |  | -0- |  | -0- |  | -0- |  | -0- |  | -0-
|----------------- |  | ---- |  | --- |  | --- |  | --- |  | --- |  | ---

| |  | 2002 |  | -0- |  | -0- |  | -0- |  | -0- |  | -0-
| |  | ---- |  | --- |  | --- |  | --- |  | --- |  | ---

| |  |  |  |  |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  |  |  |  |  | 

|Waddell D. Loflin |  | 2004 |  | $120,000(3) |  | $142,857(4) |  | -0- |  | -0- |  | -0-
|----------------- |  | ---- |  | ----------- |  | ----------- |  | --- |  | --- |  | ---

|Executive Vice President and Secrtary |  | 2003 |  | -0- |  | $50,000(5) |  | -0- |  | -0- |  | -0-
|------------------------------------- |  | ---- |  | --- |  | ---------- |  | --- |  | --- |  | ---

| |  | 2002 |  | -0- |  | -0- |  | -0- |  | -0- |  | -0-
| |  | ---- |  | --- |  | --- |  | --- |  | --- |  | ---

|(1) | $112,000 of Mr. David Loflin's salary amount was accrued. Mr. Loflin
      has advised us that he will not demand payment of his accrued salary until
      such time as we possess adequate funds.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. David Loflin's bonus amount was paid by the issuance of 2,857,152
      shares of our common stock, which shares were valued at $.08 per share,
      the closing price of our common stock, as reported by the OTC Bulletin
      Board, on the date of issuance.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | $62,000 of Mr. Waddell D. Loflin's salary amount was accrued. Mr.
      Loflin has advised us that he will not demand payment of his accrued
      salary until such time as we possess adequate funds.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Mr. Waddell Loflin's bonus amount was paid by the issuance of 1,785,714
      shares of our common stock, which shares were valued at $.08 per share,
      the closing price of our common stock, as reported by the OTC Bulletin
      Board, on the date of issuance.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Mr. Waddell Loflin's bonus amount was paid by the issuance of 2,000,000
      shares of our common stock (as adjusted following a four-for-one forward
      stock split), which shares were valued at $.025 per share, the closing
      price of our common stock, as reported by the OTC Bulletin Board, on the
      date of issuance.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Neither Mr. David Loflin nor Mr. Waddell Loflin was employed by us
      during 2002.
|--- | -------------------------------------------------------------------------------------

|Employment Contracts and Termination of Employment and
      Change-in-Control Agreements | 
|----------------------------------------------------------------------------------------- | 

|David Loflin Employment Agreement | 
|--------------------------------- | 

|David Loflin has entered into an employment agreement to serve as our
      president for three years, ending in September 2006. Mr. Loflinâ€TMs annual
      salary is $180,000. In 2004, Mr. Loflin received $62,000 of his salary and
      accrued the balance. In 2003, Mr. Loflin was not paid, nor did he accrue
      any salary. In connection with his employment agreement, Mr. Loflin
      executed an indemnity agreement, a confidentiality agreement and an
      agreement not to compete.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Waddell D. Loflin Employment Agreement | 
|-------------------------------------- | 

|Waddell D. Loflin has entered into an employment agreement to serve as
      our executive president for three years, ending in September 2006. Mr.
      Loflinâ€TMs annual salary is $120,000. In 2004, Mr. Loflin received $58,000
      of his salary and accrued the balance. In 2003, Mr. Loflin was not paid,
      nor did he accrue any salary. In connection with his employment agreement,
      Mr. Loflin executed an indemnity agreement, a confidentiality agreement
      and an agreement not to compete.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Alex P. Davis Employment Agreement | 
|---------------------------------- | 

|In March 2005, Alex P. Davis entered into an employment agreement to
      serve as our vice president of corporate development for two years. Mr.
      Davisâ€TM annual salary is $150,000; Mr. Davisâ€TM first yearâ€TMs salary was paid
      by the issuance to him of 1,000,000 shares of our common stock. In
      connection with his employment agreement, Mr. Davis executed an indemnity
      agreement, a confidentiality agreement and an agreement not to
    compete.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Casey Jensen Employment Agreement | 
|--------------------------------- | 

|In June 2004, Casey Jensen entered into an employment agreement to
      serve as our vice president of operations for one years, with one-year
      renewal terms. Mr. Jensenâ€TMs annual salary is $96,000, payable in shares of
      our common stock. In connection with his employment agreement, Mr. Jensen
      executed an indemnity agreement, a confidentiality agreement and an
      agreement not to compete.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We have no compensatory plan or arrangement that results or will result
      from the resignation, retirement or any other termination of an executive
      officerâ€TMs employment or from a change in control or a change in an
      executive officerâ€TMs responsibilities following a change in
  control.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Option/SAR Grants | 
|----------------- | 

|We have never granted any stock options to any person, though we may do
      so in the future. We have never granted any stock appreciation rights
      (SARs), nor do we expect to grant any SARs in the foreseeable
    future.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 11. | Security Ownership of Certain Beneficial Owners and Management | 
|-------- | -------------------------------------------------------------- | 

|The following table sets forth, as of the date hereof, information
      regarding beneficial ownership of our capital stock by the
    following:
|--------------------------------------------------------------------------------------------------------------------------------------------------

|- | each person, or group of affiliated persons, known by us to be the
      beneficial owner of more than five percent of any class of our voting
      securities;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | each of our directors;
|- | ----------------------

|- | each of the named executive officers; and
|- | -----------------------------------------

|- | all directors and executive officers as a group.
|- | ------------------------------------------------

|Beneficial ownership is determined in accordance with the rules of the
      SEC, based on voting or investment power with respect to the securities.
      In computing the number of shares beneficially owned by a person and the
      percentage ownership of that person, shares of common stock underlying
      warrants held by that person are deemed to be outstanding if the warrants
      are exercisable within 60 days of the date hereof. All percentages in this
      table are based on a total of 225,216,525 shares of common stock
      outstanding as of the date hereof, which amount includes a total of
      38,000,000 shares underlying currently outstanding and exercisable
      warrants. Except as indicated in the footnotes below, we believe, based on
      information furnished to us, that the persons and entities named in the
      table below have sole voting and investment power with respect to all
      shares of common stock shown as beneficially owned by them. Unless
      otherwise indicated, the address for each of the shareholders in the table
      below is c/o Diamond I, Inc., 5555 Hilton Avenue, Suite 206, Baton Rouge,
      Louisiana 70808.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Beneficially Owned | 
| | ------------------ | 

| | Name and Address of Beneficial Owner |  | Shares |  | Percent(1) | 
| | ------------------------------------ |  | ------ |  | ---------- | 

| | David Loflin |  | 33,377,142(2) |  | 14.82% | 
| | ------------ |  | ------------- |  | ------ | 

| | Waddell D. Loflin |  | 7,585,714 |  | 3.37% | 
| | ----------------- |  | --------- |  | ----- | 

| | Alex P. Davis |  | 1,000,000 |  | * | 
| | ------------- |  | --------- |  | - | 

| | Casey Jensen |  | 40,000 |  | * | 
| | ------------ |  | ------ |  | - | 

| | Gregory A. Bonner(3) |  | 540,000 |  | * | 
| | -------------------- |  | ------- |  | - | 

| | Ira R. Witkin(4) |  | 540,000 |  | * | 
| | ---------------- |  | ------- |  | - | 

| | All executive officers and directors as a group (6 persons) |  | 43,082,856(2) |  | 19.13% | 
| | ----------------------------------------------------------- |  | ------------- |  | ------ | 

| | Jason Davis |  | 17,672,757 |  | 7.84% | 
| | ----------- |  | ---------- |  | ----- | 

| | Mike Prasad |  | 14,138,204 |  | 6.27% | 
| | ----------- |  | ---------- |  | ----- | 

| | Ryan Hayden |  | 14,138,204 |  | 6.27% | 
| | ----------- |  | ---------- |  | ----- | 

| | Larry Shultz(5) |  | 14,138,204 |  | 6.27% | 
| | --------------- |  | ---------- |  | ----- | 

| | Clayton D. Carter |  | 10,603,657 |  | 4.71% | 
| | ----------------- |  | ---------- |  | ----- | 

| | Loflin Childrenâ€TMs Trust(6) |  | 12,000,000(7) |  | 5.33% | 
| | ---------------------------- |  | ------------- |  | ----- | 

| | FMF Investments, Ltd.(8) |  | 8,884,000 |  | 3.94% | 
| | ------------------------ |  | --------- |  | ----- | 

| | Newlan & Newlan, Attorneys at Law(8) |  | 5,000,000 |  | 2.22% | 
| | ------------------------------------ |  | --------- |  | ----- | 

| | Heyer Capital Fund(9)(19) |  | 10,000,000(10) |  | 4.44% | 
| | ------------------------- |  | -------------- |  | ----- | 

| | 1008212 Alberta Ltd.(11)(19) |  | 10,000,000(12) |  | 4.44% | 
| | ---------------------------- |  | -------------- |  | ----- | 

| | Douglasdale Capital Ltd.(13)(19) |  | 10,000,000(14) |  | 4.44% | 
| | -------------------------------- |  | -------------- |  | ----- | 

| | Douglasbank Capital Ltd.(15)(19) |  | 10,000,000(16) |  | 4.44% | 
| | -------------------------------- |  | -------------- |  | ----- | 

| | Shelter Capital Ltd.(17) |  | 16,000,000(18) |  | 7.10% | 
| | ------------------------ |  | -------------- |  | ----- | 

|* | Less than 1%
|- | ------------

|(1) | Based on 225,216,525 shares outstanding, including a total of
      38,000,000 shares underlying currently outstanding and exercisable
      warrants.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | 12,000,000 of these shares are beneficially owned by the Loflin
      Childrenâ€TMs Trust; 500,000 of these shares are owned by the Phoenix Trust.
      The beneficiaries of both entities are the minor children of David Loflin.
      Mr. Loflin is the trustee of each entity and possesses voting and
      investment control over the shares owned by each. Mr. Loflin disclaims any
      beneficial ownership of the shares owned by either trust.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Mr. Bonnerâ€TMs address is 5223 Hagerstown Avenue, Baton Rouge, Louisiana
      70817.
|--- | -------------------------------------------------------------------------------------

|(4) | Mr. Witkinâ€TMs address is 980 Crepe Myrtle Lane, Copper Canyon, Texas
      76226.
|--- | ----------------------------------------------------------------------------------

|(5) | Mr. Shultzâ€TMs address is 2769 Deep Canyon Drive, Beverly Hills,
      California 90210.
|--- | ----------------------------------------------------------------------------------------

|(6) | Loflin Childrenâ€TMs Trustâ€TMs address is 7635 Jefferson Highway, #309,
      Baton Rouge, Louisiana 70809. David Loflin is the trustee of this entity
      and possesses voting and investment control of the shares owned by
    it
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | See footnote 2.
|--- | ---------------

|(8) | FMF Investmentsâ€TM and Newlan & Newlanâ€TMs address 2652 F.M. 407, Suite
      230, Bartonville, Texas 76226. L. A. Newlan, Jr. and Eric Newlan are the
      partners in the law firm of Newlan & Newlan and are the officers of
      the general partner of FMF Investments, and, in these capacities, possess
      voting and investment control of the shares owned by FMF Investment and
      Newlan & Newlan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Heyer Capitalâ€TMs address is 418 Douglas Park View S.E., Calgary,
      Alberta, Canada T2Z 2R1. Peter Rochow is the owner of this entity and
      possesses voting and investment control of the shares owned by
  it.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | 5,000,000 of these shares have been issued; 5,000,000 of these shares
      have not been issued, but underlie currently exercisable
  warrants.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | 1008212 Albertaâ€TMs address is 418 Douglas Park View S.E., Calgary,
      Alberta, Canada T2Z 2R1. Joanne Rochow is the owner of this entity and
      possesses voting and investment control of the shares owned by
  it.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | 5,000,000 of these shares have been issued; 5,000,000 of these shares
      have not been issued, but underlie currently exercisable
  warrants.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Douglasdale Capitalâ€TMs address is 418 Douglas Park View S.E., Calgary,
      Alberta, Canada T2Z 2R1. Peter Rochow possesses voting and investment
      control of the shares owned by this entity. Mr. Rochow disclaims any
      beneficial ownership of the shares owned by this entity.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(14) | 5,000,000 of these shares have been issued; 5,000,000 of these shares
      have not been issued, but underlie currently exercisable
  warrants.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(15) | Douglasbank Capitalâ€TMs address is 418 Douglas Park View S.E., Calgary,
      Alberta, Canada T2Z 2R1. Peter Rochow possesses voting and investment
      control of the shares owned by this entity. Mr. Rochow disclaims any
      beneficial ownership of the shares owned by this entity.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(16) | 5,000,000 of these shares have been issued; 5,000,000 of these shares
      have not been issued, but underlie currently exercisable
  warrants.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(17) | Shelter Capitalâ€TMs address is P.O. Box 64, Providenciales, Turks and
      Caicos Islands. Peter Rochow possesses voting and investment control of
      the shares owned by this entity. Mr. Rochow disclaims any beneficial
      ownership of the securities owned by this entity.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(18) | None of these shares has been issued, but underlie currently
      exercisable warrants.
|---- | ----------------------------------------------------------------------------------------

|(19) | Heyer Capital Fund, Douglasdale Capital Ltd. and Douglasbank Capital
      Ltd. have common management, Mr. Peter Rochow, who possesses the power of
      disposition over the securities owned by these entities; the beneficial
      ownership of each of these entities is different. Mr. Rochow disclaims any
      beneficial ownership of the shares owned by these entities, except for
      those owned by Heyer Capital Fund, of which he is the beneficial
    owner.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 12. | Certain Relationships and Related Transactions | 
|-------- | ---------------------------------------------- | 

|2005 Acquisition of Diamond I Technologies, Inc. | 
|------------------------------------------------ | 

|On January 18, 2005, pursuant to an agreement and plan of
      reorganization, we acquired all of the outstanding capital stock of
      Diamond I Technologies, Inc., a Nevada corporation (DITech), by issuing a
      total of 70,591,026 shares of our common stock to the shareholders of
      DITech. The reorganization agreement provides for further issuances of
      shares of our common stock, upon DITechâ€TMs satisfying certain performance
      standards, as follows: (a) we are obligated to issue an additional
      35,295,513 shares to the shareholders of DITech, if, on or before the date
      which is two years from the consummation of the reorganization agreement,
      DITech shall have completed the design and installation of a hand-held
      Wi-Fi-based gaming system in a first-class hotel/casino with no fewer than
      400 guest rooms located in the State of Nevada (the â€œâ€œTarget Systemâ€), to
      the effect that the Target System is 100% operational and ready for use by
      guests of the host hotel/casino, which readiness shall include the
      approval of the Nevada Gaming Commission; and (b) we are obligated to
      issue an additional 35,295,513 shares to the shareholders of DITech, if,
      on or before the date which is five years from the consummation of the
      reorganization agreement, the Target System shall have operated at a
      profit, as determined by generally accepted accounting principles, for a
      period of three consecutive months. In addition, we are required to
      provide to DITech a total of $3,000,000 as operating capital, as follows:
      (i) within one month of the consummation of the reorganization agreement,
      we must provide to DITech the sum of $100,000; (ii) within six months of
      the consummation of the reorganization agreement, we must provide to
      DITech the additional sum of $400,000; (iii) within nine months of the
      consummation of the reorganization agreement, we must provide to DITech
      the additional sum of $500,000; and (iv) within one year of the
      consummation of the reorganization agreement, we must provide to DITech
      the additional sum of $2,000,000. Should we fail to provide any portion of
      these funds on or before the required dates, we are required to deliver to
      the former owners of DITech 100% of the then-outstanding shares of common
      stock of DITech. Should this occur, we would no longer have any interest
      in DITech or its business. We made the first required payment to DITech in
      a timely manner and expect to meet all future obligations to DITech.
      However, currently, we do not possess adequate funds with which to satisfy
      our other funding obligations to DITech. While management expects to be
      able to secure the necessary funds, there is no assurance that we will be
      able to do so.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In determining the number of shares of our common stock to be issued to
      the shareholders of DITech, our board of directors did not employ any
      standard valuation formula or any other standard measure of value. Rather,
      the number of shares issued to the shareholders of DITech was determined
      through armâ€TMs-length negotiations.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2005 Stock Bonuses | 
|------------------ | 

|In March 2005, each of Messrs. Bonner and Witkin, were issued 100,000
      shares our common stock, in payment of their services as directors. There
      shares were valued, for financial reporting purposes, at $.08 per share,
      or $16,000, in the aggregate.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2004 Stock Bonuses | 
|------------------ | 

|In June 2004, each of Messrs. Bonner and Witkin, were issued 200,000
      shares our common stock, in payment of their services as directors. There
      shares were valued, for financial reporting purposes, at $.4375 per share,
      or $175,000, in the aggregate.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In October 2004, each of Messrs. Bonner and Witkin, were issued 100,000
      shares our common stock, in payment of their services as directors. There
      shares were valued, for financial reporting purposes, at $.08 per share,
      or $16,000, in the aggregate.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2003 Change in Control Transaction | 
|---------------------------------- | 

|In June 2003, we experienced a change in control. Pursuant to a stock
      purchase agreement, FMF Investments, Ltd., a Texas limited partnership,
      purchased 611,000 shares, or 54.59%, of our outstanding common stock from
      Eric Anderson. FMF Investments paid Mr. Anderson a total of $70,000 in
      cash, which funds were obtained by FMF Investments through its other
      business activities and not as a loan.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Following FMF Investmentsâ€TM acquiring control, our then-directors
      resigned and FMF Investments, acting by written consent in lieu of a
      meeting of a majority of shareholders, elected David Loflin and Waddell D.
      Loflin as our directors.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2003 Stock Purchase Agreement | 
|----------------------------- | 

|In June 2003, pursuant to a stock purchase agreement, we acquired all
      of the outstanding capital stock of Air-Q Corp., a Nevada corporation
      (Air-Q NV), by issuing a total of 11,000,000 shares of our common stock to
      the shareholders of Air-Q Corp. In connection with our acquiring Air-Q NV,
      our president, David Loflin, was issued 9,000,000 shares of our common
      stock and FMF Investments, Ltd. was issued 2,000,000 shares of our common
      stock. In determining the number of shares of our common stock to be
      issued to the shareholders of Air-Q NV, our board of directors did not
      employ any standard valuation formula or any other standard measure of
      value.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2003 Securities Purchases | 
|------------------------- | 

|In June 2003, we entered into four securities purchase agreements. We
      entered into agreements with Douglasdale Capital Ltd., Douglasbank Capital
      Ltd., Heyer Capital Fund and 1008212 Alberta Ltd. Under each of these
      agreements, we issued securities for cash in the amount of $125,000 for a
      total of $500,000 under these agreements. We sold each of these entities
      (1) 1,250,000 shares of our common stock, (2) 1,250,000 common stock
      purchase warrants to purchase a like number of shares at an exercise price
      of $.20 per share, (3) 1,250,000 common stock purchase warrants to
      purchase a like number of shares at an exercise price of $.30 per share,
      (4) 1,250,000 common stock purchase warrants to purchase a like number of
      shares at an exercise price of $.40 per share and (5) 1,250,000 common
      stock purchase warrants to purchase a like number of shares at an exercise
      price of $.50 per share. In April 2004, each of these entities agreed to
      cancel all of their respective common stock purchase warrants, in exchange
      for 1,250,000 common stock purchase warrants to purchase a like number of
      shares at an exercise price of $1.00 per share. As a result of our
      four-for-one forward stock split, each of these entities now holds
      5,000,000 common stock purchase warrants to purchase a like number of
      shares at an exercise price of $0.25 per share. All of the warrants are
      exercisable for five years.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|At the time of these transactions, the entities that purchased
      securities from us were under the common management of Peter Rochow. The
      beneficial ownership of these entities is different and Mr. Rochow
      disclaims any beneficial ownership of these entities, except for Heyer
      Capital Fund.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2003 Finderâ€TMs Fee | 
|------------------- | 

|In connection with the sales of securities described under â€œ2003
      Securities Purchasesâ€ above, we paid Shelter Capital, Ltd. a finderâ€TMs fee.
      For its efforts as a finder, Shelter Capital received 10% of the cash
      proceeds derived by us and common stock purchase warrants, as follows: (1)
      1,000,000 warrants to purchase a like number of shares at an exercise
      price of $.20 per share; (2) 1,000,000 warrants to purchase a like number
      of shares at an exercise price of $.30 per share; (3) 1,000,000 warrants
      to purchase a like number of shares at an exercise price of $.40 per
      share; and (4) 1,000,000 warrants to purchase a like number of shares at
      an exercise price of $.50 per share. As a result of our four-for-one
      forward stock split, Shelter Capital now holds (A) 4,000,000 warrants to
      purchase a like number of shares at an exercise price of $.05 per share;
      (B) 4,000,000 warrants to purchase a like number of shares at an exercise
      price of $.075 per share; (C) 4,000,000 warrants to purchase a like number
      of shares at an exercise price of $.10 per share; and (D) 4,000,000
      warrants to purchase a like number of shares at an exercise price of $.125
      per share. All of these warrants are exercisable for five years. Shelter
      Capital is managed by Peter Rochow, a principal in each of the entities
      who purchased securities from us, who disclaims any beneficial ownership
      of Shelter Capital.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2003 Stock Bonuses | 
|------------------ | 

|In August 2003, one of our directors, Waddell D. Loflin, was issued
      500,000 shares of our common stock as a bonus for his service as a
      director. As a result of our four-for-one forward stock split, these
      shares now total 2,000,000. These shares were valued at $50,000 for
      financial reporting purposes.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In November 2003, two of our directors, Gregory A. Bonner and Ira R.
      Witkin, were issued 10,000 shares our common stock each, in payment of
      future services as directors. As a result of our four-for-one forward
      stock split, these shares now total 80,000. There shares were valued, for
      financial reporting purposes, at $77,000, in the
aggregate.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Employment Agreements | 
|--------------------- | 

|David Loflin Employment Agreement | 
|--------------------------------- | 

|David Loflin has entered into an employment agreement to serve as our
      president for three years, ending in September 2006. Mr. Loflinâ€TMs annual
      salary is $180,000. In 2004, Mr. Loflin received $62,000 of his salary and
      accrued the balance. In 2003, Mr. Loflin was not paid, nor did he accrue
      any salary. In connection with his employment agreement, Mr. Loflin
      executed an indemnity agreement, a confidentiality agreement and an
      agreement not to compete.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Waddell D. Loflin Employment Agreement | 
|-------------------------------------- | 

|Waddell D. Loflin has entered into an employment agreement to serve as
      our executive vice president for three years, ending in September 2006.
      Mr. Loflinâ€TMs annual salary is $120,000. In 2004, Mr. Loflin received
      $58,000 of his salary and accrued the balance. In 2003, Mr. Loflin was not
      paid, nor did he accrue any salary. In connection with his employment
      agreement, Mr. Loflin executed an indemnity agreement, a confidentiality
      agreement and an agreement not to compete.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Alex P. Davis Employment Agreement | 
|---------------------------------- | 

|In March 2005, Alex P. Davis entered into an employment agreement to
      serve as our vice president of corporate development for two years. Mr.
      Davisâ€TM annual salary is $150,000; Mr. Davisâ€TM first yearâ€TMs salary was paid
      by the issuance to him of 1,000,000 shares of our common stock. In
      connection with his employment agreement, Mr. Davis executed an indemnity
      agreement, a confidentiality agreement and an agreement not to
    compete.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Casey Jensen Employment Agreement | 
|--------------------------------- | 

|In June 2004, Casey Jensen entered into an employment agreement to
      serve as our vice president of operations for one year, with one-year
      renewal terms. Mr. Jensenâ€TMs annual salary is $96,000, payable in shares of
      our common stock. In connection with his employment agreement, Mr. Jensen
      executed an indemnity agreement, a confidentiality agreement and an
      agreement not to compete.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Director and Officer Indemnification | 
|------------------------------------ | 

|Our restated certificate of incorporation contains provisions limiting
      liability of directors. In addition, we have entered into agreements to
      indemnify our directors and officers to the fullest extent permitted under
      Delaware law. Please see â€œItem 9. Directors, Executive Officers, Promoters
      and Control Persons; Compliance with Section 16(a) of the Exchange
      Actâ€.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 13. | Exhibits and Reports on Form 8-K | 
|-------- | -------------------------------- | 

|(a)(1) Financial Statements | 
|--------------------------- | 

|Index to Financial Statements of Diamond I, Inc. | 
|------------------------------------------------ | 

|- | Independent Auditorsâ€TM Report
|- | ------------------------------

|- | Consolidated Balance Sheet as of December 31, 2004
|- | --------------------------------------------------

|- | Consolidated Statement of Revenues and Expenses for the Year Ended
      December 31, 2004, the Period from June 17, 2003 (Inception), Through
      December 31, 2003, and the Period from June 17, 2003 (Inception), Through
      December 31, 2004
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Consolidated Statement of Stockholders' Equity for the Year Ended
      December 31, 2004, and for the Period from June 17, 2003 (Inception),
      Through December 31, 2003
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Consolidated Statement of Cash Flows for the Year Ended December 31,
      2004, the Period from June 17, 2003 (Inception), Through December 31,
      2003, and the Period from June 17, 2003 (Inception), Through December 31,
      2004
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|- | Notes to Consolidated Financial Statements
|- | ------------------------------------------

|(a)(2) Exhibits | 
|--------------- | 

|Exhibit No. |  | Description | 
|----------- |  | ----------- | 

|21.1 |  | Subsidiaries of Registrant. | 
|---- |  | --------------------------- | 

|31.1 |  | Certification of Chief Executive Officer required by Rule 13a-14(a) or
      Rule 15d-14(b). | 
|---- |  | -------------------------------------------------------------------------------------------- | 

|31.2 |  | Certification of Chief Financial Officer required by Rule 13a-14(a) or
      Rule 15d-14(b). | 
|---- |  | -------------------------------------------------------------------------------------------- | 

|32.1 |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
      1350 enacted by Section 906 of the Sarbanes-Oxley Act of 2002. | 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------- | 

|32.2 |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
      1350 enacted by Section 906 of the Sarbanes-Oxley Act of 2002. | 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------- | 

|(b) Reports on Form 8-K | 
|----------------------- | 

|During the three months ended December 31, 2004, we did not file a
      Current Report on Form 8-K.
|----------------------------------------------------------------------------------------------------

|Since December 31, 2004, we have filed four Current Reports on Form
      8-K, as follows:
|------------------------------------------------------------------------------------------

|- | Date of event: January 18, 2005, wherein we reported an amended to our
      amended and restated certificate of incorporation.
|- | -------------------------------------------------------------------------------------------------------------------------------

|- | Date of event: January 18, 2005, wherein we reported the acquisition of
      Diamond I Technologies, Inc.
|- | ----------------------------------------------------------------------------------------------------------

|- | Date of event: January 24, 2005, wherein we reported a change in our
      corporate name and provided disclosure pursuant to Regulation
FD.
|- | --------------------------------------------------------------------------------------------------------------------------------------------

|- | Date of event: January 27, 2005, wherein we provided disclosure
      pursuant to Regulation FD.
|- | ------------------------------------------------------------------------------------------------

|Item 14. | Principal Accountant Fees and Services | 
|-------- | -------------------------------------- | 

|The following table sets forth fees billed to us by our auditors during
      the fiscal years ended December 31, 2004 and 2003, for: (i) services
      rendered for the audit of our annual financial statements and the review
      of our quarterly financial statements, (ii) services by our auditors that
      are reasonably related to the performance of the audit or review of our
      financial statements and that are not reported as Audit Fees, (iii)
      services rendered in connection with tax compliance, tax advice and tax
      planning and (iv) all other fees for services rendered.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Year Ended December 31, 2004 |  | Year Ended December 31, 2003 | 
| |  |  | ---------------------------- |  | ---------------------------- | 

| | Audit fees |  | $5,000 |  | $0 | 
| | ---------- |  | ------ |  | -- | 

| | Audit related fees |  | $0 |  | $0 | 
| | ------------------ |  | -- |  | -- | 

| | Tax |  | $0 |  | $0 | 
| | --- |  | -- |  | -- | 

| | All other fees |  | $5,970 |  | $6,300 | 
| | -------------- |  | ------ |  | ------ | 

|
|

|SIGNATURES
|----------

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

| | DIAMOND I, INC.
| | ---------------

|
|

| | By: | /s/ DAVID LOFLIN | 
| | --- | ---------------- | 

| | David Loflin President | 
| | ---------------------- | 

|Pursuant to the requirements of the Securities Act of 1933, as amended,
      this Registration Statement on Form S-8 has been signed by the following
      persons in the capacities and on the dates included:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                 |  |                                                                                                                           |  |               
|---------------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | --------------
|/s/ DAVID LOFLIN |  |                                                                                                                           |  | April 25, 2005
|David Loflin     |  | President (principal executive officer), Acting Chief Accounting
      Officer (principal financial officer) and Director |  |               

|
|

|/s/ WADDELL D. LOFLIN |  |                                        |  | April 25, 2005
|--------------------- |  | -------------------------------------- |  | --------------
|Waddell D. Loflin     |  | Vice President, Secretary and Director |  |               

|
|

|              |  |                                         |  | April __, 2005
|------------- |  | --------------------------------------- |  | --------------
|Alex P. Davis |  | Vice President of Corporate Development |  |               

|
|

|             |  |                              |  | April __, 2005
|------------ |  | ---------------------------- |  | --------------
|Casey Jensen |  | Vice President of Operations |  |               

|
|

|/s/ GREGORY A. BONNER |  |          |  | April 25, 2005
|--------------------- |  | -------- |  | --------------
|Gregory A. Bonner     |  | Director |  |               

|
|

|              |  |          |  | April __, 2005
|------------- |  | -------- |  | --------------
|Ira R. Witkin |  | Director |  |               

|
|

|Supplemental Information to be Furnished With Reports Filed Pursuant to
      Section 15(d) of the Exchange Act by Non-reporting
Issuers.
|-----------------------------------------------------------------------------------------------------------------------------------------

|As of the date of this Annual Report on Form 10-KSB, no annual report
      or proxy material has been sent to security holders of Diamond I, Inc. It
      is anticipated that an annual report and proxy material will be furnished
      to security holders subsequent to the filing of this Annual Report on Form
      10-KSB.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|<PAGE>
|------

|
|

|INDEPENDENT AUDITORSâ€TM REPORT
|------------------------------

|
|

|To the Board of Directors
|-------------------------

|Diamond I, Inc.
|---------------

|(A Development Stage Company)
|-----------------------------

|Baton Rouge, LA
|---------------

|
|

|We have audited the accompanying balance sheet of Diamond I, Inc. as of
      December 31, 2004, and the related statements of operations, stockholdersâ€TM
      deficit, and cash flows for the year then ended, the period from June 17,
      2003 (Inception) and for the period from June 17, 2003 (Inception) through
      December 31, 2004. These financial statements are the responsibility of
      Diamond I, Inc.â€TMs management. Our responsibility is to express an opinion
      on these financial statements based on our audit.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|In our opinion, the financial statements referred to above present
      fairly, in all material respects, the financial position of Diamond I,
      Inc. as of December 31, 2004, and the results of its operations and its
      cash flows for the periods described in conformity with accounting
      principles generally accepted in the United States of
America.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As discussed in Note 2 to the financial statements, the Company's
      recurring losses from operations and the need to raise additional
      financing in order to satisfy its vendors and other creditors and execute
      its Business Plan raise substantial doubt about its ability to continue as
      a going concern. Management's plans as to these matters are also described
      in Note 2. The 2004 financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|/s/ LOPEZ, BLEVINS, BORK & ASSOCIATES, LLP
|------------------------------------------

|Lopez, Blevins, Bork & Associates, LLP
|--------------------------------------

|Houston, Texas
|--------------

|April 11, 2005
|--------------

|
|

|<PAGE>
|------

|
|

| | DIAMOND I, INC. | 
| | --------------- | 

| | (Formerly AirRover Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation and
      formerly Covenant Financial Corporation) (a development stage
    company) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | CONSOLIDATED BALANCE SHEET | 
| | -------------------------- | 

| | December 31, 2004 | 
| | ----------------- | 

|ASSETS
|------

|Current assets: |  | 
|--------------- |  | 

| | Cash | $11,192 | 
| | ---- | ------- | 

| | Total Current Assets | 11,192 | 
| | -------------------- | ------ | 

|Equipment, net of accumulated depreciation of $52,507 | 44,257 | 
|----------------------------------------------------- | ------ | 

| | Total Assets | $55,449 | 
| | ------------ | ------- | 

|LIABILITIES AND STOCKHOLDERS' DEFICIT
|-------------------------------------

|Current Liabilities: |  | 
|-------------------- |  | 

| | Accounts payable | $13,839 | 
| | ---------------- | ------- | 

| | Accrued expenses | 17,817 | 
| | ---------------- | ------ | 

| | Notes payable - current | 55,000 | 
| | ----------------------- | ------ | 

| | Total current liabilities | 86,656 | 
| | ------------------------- | ------ | 

| | Commitments |  | 
| | ----------- |  | 

|Stockholdersâ€TM deficit: |  | 
|------------------------ |  | 

| | Preferred stock, $.001 par value, 50,000,000 shares authorized, 500,000
      Series A shares issued and outstanding | 500 | 
| | -------------------------------------------------------------------------------------------------------------------- | --- | 

| | Common stock, $.001 par value; 700,000,000 shares authorized,
      96,101,398 shares issued and outstanding | 96,102 | 
| | ------------------------------------------------------------------------------------------------------------ | ------ | 

| | Additional paid-in capital | 5,663,889 | 
| | -------------------------- | --------- | 

| | Deficit accumulated during the development stage | (5,791,698) | 
| | ------------------------------------------------ | ----------- | 

| | Total Stockholders' Deficit | (31,207) | 
| | --------------------------- | -------- | 

| | Total Liabilities and Stockholdersâ€TM Deficit | $55,449 | 
| | --------------------------------------------- | ------- | 

|
|

|The accompanying notes are an integral part of these
  statements.
|------------------------------------------------------------------

|
|

|<PAGE>
|------

|
|

| | DIAMOND I, INC. | 
| | --------------- | 

| | (Formerly AirRover Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation and
      formerly Covenant Financial Corporation) (a development stage
    company) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | STATEMENT OF REVENUES AND EXPENSES | 
| | ---------------------------------- | 

| | For the Year Ended December 31, 2004, the Period from June 17, 2003
      (Inception), Through December 31, 2003, and the Period from June 17, 2003
      (Inception), Through December 31, 2004 | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

| | Year Ended December 31, 2004 |  | Inception Through December 31, 2003 |  | Inception through December 31, 2004
| | ---------------------------- |  | ----------------------------------- |  | -----------------------------------

|Revenues | $8,094 |  | $0 |  | $8,094
|-------- | ------ |  | -- |  | ------

|Internet access costs | (26,064) |  | 0 |  | (26,064)
|--------------------- | -------- |  | - |  | --------

|Gross profit (loss) | (17,970) |  | 0 |  | (17,970)
|------------------- | -------- |  | - |  | --------

|OPERATING EXPENSES |  |  |  |  | 
|------------------ |  |  |  |  | 

| | Consulting fees | 1,532,750 |  | 0 |  | 1,532,750
| | --------------- | --------- |  | - |  | ---------

| | Salaries and commissions | 385,962 |  | 0 |  | 385,962
| | ------------------------ | ------- |  | - |  | -------

| | Legal and professional | 74,698 |  | 0 |  | 74,698
| | ---------------------- | ------ |  | - |  | ------

| | Depreciation | 39,057 |  | 0 |  | 39,057
| | ------------ | ------ |  | - |  | ------

| | Rent | 45,927 |  | 0 |  | 45,927
| | ---- | ------ |  | - |  | ------

| | Impairment loss | 502,000 |  | 0 |  | 502,000
| | --------------- | ------- |  | - |  | -------

| | Other general and administrative | 785,000 |  | 2,409,433 |  | 3,194,433
| | -------------------------------- | ------- |  | --------- |  | ---------

| | Total Operating Expenses | 3,365,394 |  | 2,409,433 |  | 5,774,827
| | ------------------------ | --------- |  | --------- |  | ---------

|LOSS FROM OPERATIONS | (3,383,364) |  | (2,409,433) |  | (5,792,797)
|-------------------- | ----------- |  | ----------- |  | -----------

|OTHER INCOME (EXPENSE) | 1,099 |  | 0 |  | 1,099
|---------------------- | ----- |  | - |  | -----

|NET LOSS | (3,382,265) |  | (2,409,433) |  | (5,791,698)
|-------- | ----------- |  | ----------- |  | -----------

|Deemed Dividend on Preferred Stock | (165,442) |  | 0 |  | (165,442)
|---------------------------------- | --------- |  | - |  | ---------

|Net Loss Available to Common Shareholders | (3,547,707) |  | (2,409,433) |  | (5,957,140)
|----------------------------------------- | ----------- |  | ----------- |  | -----------

|Net loss applicable to common shareholders |  |  |  |  | 
|------------------------------------------ |  |  |  |  | 

| | Basic and diluted | (0.041) |  | (0.038) |  | 
| | ----------------- | ------- |  | ------- |  | 

|Weighted average number of shares outstanding |  |  |  |  | 
|--------------------------------------------- |  |  |  |  | 

| | Basic and diluted | 85,348,329 |  | 62,785,544 |  | 
| | ----------------- | ---------- |  | ---------- |  | 

|
|

|The accompanying notes are an integral part of these
  statements.
|------------------------------------------------------------------

|
|

|<PAGE>
|------

|
|

| | DIAMOND I, INC. | 
| | --------------- | 

| | (Formerly AirRover Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation and
      formerly Covenant Financial Corporation) (a development stage
    company) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | CONSOLIDATED STATEMENT OF STOCKHOLDERSâ€TM EQUITY (DEFICIT) | 
| | ---------------------------------------------------------- | 

| | For the Year Ended December 31, 2004, and the Period from June
      17, 2003 (Inception), Through December 31, 2003 | 
| | -------------------------------------------------------------------------------------------------------------------- | 

| | Preferred Stock |  | Common Stock | 
| | --------------- |  | ------------ | 

| | Shares |  | Amount |  | Shares |  | Amount |  | Additional Paid-in Capital |  | Deficit Accumulated During the Development Stage |  | Total
| | ------ |  | ------ |  | ------ |  | ------ |  | -------------------------- |  | ------------------------------------------------ |  | -----

|Issuance of common stock to founders | 0 |  | $0 |  | 44,000,000 |  | $44,000 |  | $(43,000) |  | $0 |  | $1,000
|------------------------------------ | - |  | -- |  | ---------- |  | ------- |  | --------- |  | -- |  | ------

|Stock issued in reverse acquisition | 0 |  | 0 |  | 4,476,816 |  | 4,477 |  | (3,358) |  | 0 |  | 1,119
|----------------------------------- | - |  | - |  | --------- |  | ----- |  | ------- |  | - |  | -----

|Stock issued for services | 0 |  | 0 |  | 12,610,000 |  | 12,610 |  | 2,012,216 |  | 0 |  | 2,024,826
|------------------------- | - |  | - |  | ---------- |  | ------ |  | --------- |  | - |  | ---------

|Stock issued for cash and warrants, net of cost | 0 |  | 0 |  | 20,000,000 |  | 20,000 |  | 430,000 |  | 0 |  | 450,000
|----------------------------------------------- | - |  | - |  | ---------- |  | ------ |  | ------- |  | - |  | -------

|Net loss | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | (2,409,433) |  | (2,409,433)
|-------- | - |  | - |  | - |  | - |  | - |  | ----------- |  | -----------

|Balance, December 31, 2003 | 0 |  | 0 |  | 81,086,816 |  | 81,087 |  | 2,395,858 |  | (2,409,433) |  | 67,512
|-------------------------- | - |  | - |  | ---------- |  | ------ |  | --------- |  | ----------- |  | ------

|Preferred stock issued for cash and warrants | 500,000 |  | 500 |  | 0 |  | 0 |  | 499,500 |  | 0 |  | 500,000
|-------------------------------------------- | ------- |  | --- |  | - |  | - |  | ------- |  | - |  | -------

|Stock issued in acquisition | 0 |  | 0 |  | 824,000 |  | 824 |  | 380,276 |  | 0 |  | 381,100
|--------------------------- | - |  | - |  | ------- |  | --- |  | ------- |  | - |  | -------

|Stock issued for wi-fi hotspots | 0 |  | 0 |  | 208,000 |  | 208 |  | 120,692 |  | 0 |  | 120,900
|------------------------------- | - |  | - |  | ------- |  | --- |  | ------- |  | - |  | -------

|Stock issued for cash on option exercise | 0 |  | 0 |  | 1,640,435 |  | 1,640 |  | 148,360 |  | 0 |  | 150,000
|---------------------------------------- | - |  | - |  | --------- |  | ----- |  | ------- |  | - |  | -------

|Stock issued for salary | 0 |  | 0 |  | 338,826 |  | 339 |  | 41,661 |  | 0 |  | 42,000
|----------------------- | - |  | - |  | ------- |  | --- |  | ------ |  | - |  | ------

|Stock issued for services | 0 |  | 0 |  | 6,480,465 |  | 6,481 |  | 1,494,637 |  | 0 |  | 1,506,118
|------------------------- | - |  | - |  | --------- |  | ----- |  | --------- |  | - |  | ---------

|Stock issued as bonuses | 0 |  | 0 |  | 5,522,856 |  | 5,523 |  | 577,905 |  | 0 |  | 583,428
|----------------------- | - |  | - |  | --------- |  | ----- |  | ------- |  | - |  | -------

|Beneficial conversion feature embedded in preferred stock and
      warrants | 0 |  | 0 |  | 0 |  |  |  | 165,442 |  | 0 |  | 165,442
|---------------------------------------------------------------------------- | - |  | - |  | - |  |  |  | ------- |  | - |  | -------

|Deemed dividend on preferred stock | 0 |  | 0 |  | 0 |  | 0 |  | (165,442) |  | 0 |  | (165,442)
|---------------------------------- | - |  | - |  | - |  | - |  | --------- |  | - |  | ---------

|Net loss | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | (3,382,265) |  | (3,382,265)
|-------- | - |  | - |  | - |  | - |  | - |  | ----------- |  | -----------

|Balance, December 31, 2004 | 500,000 |  | $500 |  | 96,101,398 |  | $96,102 |  | $5,663,889 |  | $(5,791,698) |  | $(31,207)
|-------------------------- | ------- |  | ---- |  | ---------- |  | ------- |  | ---------- |  | ------------ |  | ---------

|
|

|The accompanying notes are an integral part of these
  statements.
|------------------------------------------------------------------

|
|

|<PAGE>
|------

|
|

| | DIAMOND I, INC. | 
| | --------------- | 

| | (Formerly AirRover Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation and
      formerly Covenant Financial Corporation) (a development stage
    company) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | STATEMENT OF CASH FLOWS | 
| | ----------------------- | 

| | For the Year Ended December 31, 2004, the Period from June 17, 2003
      (Inception), Through December 31, 2003, and the Period from June 17, 2003
      (Inception), Through December 31, 2004 | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

| | Year Ended December 31, 2004 |  | Inception Through December 31, 2003 |  | Inception through December 31, 2004
| | ---------------------------- |  | ----------------------------------- |  | -----------------------------------

|CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  | 
|------------------------------------ |  |  |  |  | 

|Net loss | $(3,382,265) |  | $(2,409,433) |  | $(5,791,698)
|-------- | ------------ |  | ------------ |  | ------------

| | Adjustments to reconcile net loss to cash used in operating
      activities: |  |  |  |  | 
| | ----------------------------------------------------------------------------- |  |  |  |  | 

| | Depreciation | 48,279 |  | 4,228 |  | 52,507
| | ------------ | ------ |  | ----- |  | ------

| | Stock issued for services | 2,131,546 |  | 2,024,828 |  | 4,156,374
| | ------------------------- | --------- |  | --------- |  | ---------

| | Impairment loss and write-down of assets | 502,000 |  | 0 |  | 502,000
| | ---------------------------------------- | ------- |  | - |  | -------

| | Changes in assets and liabilities: |  |  |  |  | 
| | ---------------------------------- |  |  |  |  | 

| | Accrued expenses | 17,817 |  | 0 |  | 17,817
| | ---------------- | ------ |  | - |  | ------

| | Accounts payable | 9,250 |  | 6,706 |  | 15,956
| | ---------------- | ----- |  | ----- |  | ------

|CASH FLOWS USED IN OPERATING ACTIVITIES | (673,373) |  | (373,671) |  | (1,047,044)
|--------------------------------------- | --------- |  | --------- |  | -----------

|
|

|CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  | 
|------------------------------------ |  |  |  |  | 

| | Purchase of equipment | (64,144) |  | (32,620) |  | (96,764)
| | --------------------- | -------- |  | -------- |  | --------

|
|

|CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  | 
|------------------------------------ |  |  |  |  | 

| | Issuance of note payable | 0 |  | 55,000 |  | 55,000
| | ------------------------ | - |  | ------ |  | ------

| | Issuance of preferred shares | 209,558 |  | 0 |  | 209,558
| | ---------------------------- | ------- |  | - |  | -------

| | Issuance of warrants | 290,442 |  | 0 |  | 290,442
| | -------------------- | ------- |  | - |  | -------

| | Sale of common stock, net | 150,000 |  | 450,000 |  | 600,000
| | ------------------------- | ------- |  | ------- |  | -------

|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 650,000 |  | 505,000 |  | $1,155,000
|------------------------------------------- | ------- |  | ------- |  | ----------

|
|

|NET INCREASE (DECREASE) IN CASH | (87,517) |  | 98,709 |  | 11,192
|------------------------------- | -------- |  | ------ |  | ------

|Cash, beginning of period | 98,709 |  | 0 |  | 0
|------------------------- | ------ |  | - |  | -

|Cash, end of period | $11,192 |  | $98,709 |  | $11,192
|------------------- | ------- |  | ------- |  | -------

|
|

|Supplemental information: |  |  |  |  | 
|------------------------- |  |  |  |  | 

| | Income taxes paid | $0 |  | $0 |  | $0
| | ----------------- | -- |  | -- |  | --

| | Interest paid | $0 |  | $0 |  | $0
| | ------------- | -- |  | -- |  | --

|
|

|Non-cash Financial Activities: |  |  |  |  | 
|------------------------------ |  |  |  |  | 

| | Liabilities assumed in merger | $0 |  | $8,922 |  | $8,922
| | ----------------------------- | -- |  | ------ |  | ------

| | Stock issued in acquisition | $381,100 |  | $0 |  | $381,100
| | --------------------------- | -------- |  | -- |  | --------

| | Stock issued for wi-fi hotspots | $120,900 |  | $0 |  | $120,900
| | ------------------------------- | -------- |  | -- |  | --------

|
|

|The accompanying notes are an integral part of these
  statements.
|------------------------------------------------------------------

|
|

|<PAGE>
|------

|
|

| | DIAMOND I, INC. | 
| | --------------- | 

| | (Formerly AirRover Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation and
      formerly Covenant Financial Corporation) (a development stage
    company) | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------- | 

| | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 
| | ------------------------------------------ | 

|
|

|NOTE 1 - BASIS OF PRESENTATION | 
|------------------------------ | 

|Nature of Company | 
|----------------- | 

|On June 20, 2003, Diamond I, Inc. (â€œDiamond Iâ€), formerly AirRover
      Wi-Fi Corp., formerly Air-Q Wi-Fi Corporation, formerly Covenant Financial
      Corporation ("Covenant"), a U.S. public company, issued 11,000,000 shares
      of common stock for 100% of the outstanding common stock of Air-Q Corp, a
      privately held corporation (â€œAir-Qâ€). After the merger, the stockholders
      of Air-Q owned approximately 95% of the outstanding common stock of
      Covenant and Covenant changed its corporate name (see note
2).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On June 17, 2003, Air-Q was incorporated in Nevada. At the time of the
      merger, Air-Q was a development-stage company with a plan to establish
      wireless internet access systems in various cities. Following the merger,
      Diamond I pursued the business plan of Air-Q and now operates Wi-Fi
      hotspots in five states and the District of Columbia. The term Wi-Fi
      refers to an industry standard for wireless equipment that meets published
      802.11(x) standards. Wi-Fi equipment operates in unlicensed spectra, such
      as 2.4 and 5.8 Ghz.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On May 24, 2004, Diamond I acquired all of the outstanding common stock
      of AirRover Networks, Inc., a privately-held Maryland corporation
      (â€œAirRover Networksâ€), for 206,000 shares of Diamond I common stock. At
      the time of acquisition, AirRover Networks was operating Wi-Fi hotspots in
      three states.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Hereinafter, all references to Diamond I include the operations and
      financial condition of Air-Q for the period from inception, June 17, 2003,
      through December 31, 2003, and for the year ended December 31, 2004, and
      the operations of AirRover Networks from the date of acquisition through
      December 31, 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Consolidation | 
|------------- | 

|As of December 31, 2004, Diamond I had two wholly owned subsidiaries,
      Diamond I Technologies, Inc. (formerly Air-Q Corp.) and AirRover Networks,
      Inc. All material inter-company balances and inter-company transactions
      have been eliminated for the purpose of presenting the accompanying
      consolidated financial statements.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Use of Estimates | 
|---------------- | 

|The preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities at the date of the balance sheet. Actual
      results could differ from those estimates.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|Cash and cash equivalents include cash and all highly liquid financial
      instruments with purchased maturities of three months or
less.
|-------------------------------------------------------------------------------------------------------------------------------------------

|Fair Value of Financial Instruments | 
|----------------------------------- | 

|Diamond Iâ€TMs financial instruments consist of cash and debt. The
      carrying amount of these financial instruments approximates fair value due
      either to length of maturity or interest rates that approximate prevailing
      market rates unless otherwise disclosed in these consolidated financial
      statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Equipment | 
|--------- | 

|Equipment consists of computer equipment stated at cost. Depreciation
      is computed using the straight-line method over the estimated economic
      lives of three years. Impairment losses are recorded on long-lived assets
      used in operations when indicators of impairment are present and the
      undiscounted cash flows estimated to be generated by those assets are less
      than the assets' carrying amount. No impairment losses have been recorded
      since inception.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Income Taxes | 
|------------ | 

|Income taxes are computed using the asset and liability method. Under
      the asset and liability method, deferred income tax assets and liabilities
      are determined based on the differences between the financial reporting
      and tax bases of assets and liabilities and are measured using the
      currently enacted tax rates and laws. A valuation allowance is provided
      for the amount of deferred tax assets that, based on available evidence,
      are not expected to be realized.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Comprehensive Income (Loss) | 
|--------------------------- | 

|Comprehensive income (loss) is defined as all changes in shareholders'
      equity, exclusive of transactions with owners, such as capital
      instruments. Comprehensive income (loss) includes net income or loss,
      changes in certain assets and liabilities that are reported directly in
      equity such as translation adjustments on investments in foreign
      subsidiaries, changes in market value of certain investments in securities
      and certain changes in minimum pension liabilities. The Company's
      comprehensive loss was equal to its net loss for the period ended December
      31, 2003, and for the year ended December 31, 2004.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Basic Loss Per Share | 
|-------------------- | 

|Diamond I is required to provide basic and dilutive earnings (loss) per
      common share information.
      The basic net loss per common share is computed by dividing the net
      loss applicable to common stockholders by the weighted average number of
      common shares outstanding.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Diluted net loss per common share is computed by dividing the net loss
      applicable to common stockholders, adjusted on an "as if converted" basis,
      by the weighted average number of common shares outstanding plus potential
      dilutive securities. For 2003 and 2004, potential dilutive securities had
      an anti-dilutive effect and were not included in the calculation of
      diluted net loss per common share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Basic loss per share has been calculated based on the weighted average
      number of shares of common stock outstanding during the period, as
      adjusted to reflect a four-for-one forward common stock
split.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Forward Stock Split | 
|------------------- | 

|In September 2004, Diamond I completed a four-for-one forward split of
      its outstanding common stock. The financial statements, including per
      share amounts, for the period ended December 31, 2003, and for the year
      ended December 31, 2004, have been adjusted to reflect this forward common
      stock split.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|In December 2004, the FASB issued SFAS No.123 (revised 2004),
      "Share-Based Payment" ("SFAS 123(R)"). SFAS 123(R) will provide investors
      and other users of financial statements with more complete and neutral
      financial information by requiring that the compensation cost relating to
      share-based payment transactions be recognized in financial statements.
      That cost will be measured based on the fair value of the equity or
      liability instruments issued. SFAS 123(R) covers a wide range of
      share-based compensation arrangements including share options, restricted
      share plans, performance-based awards, share appreciation rights, and
      employee share purchase plans. SFAS 123(R) replaces SFAS No. 123,
      "Accounting for Stock-Based Compensation", and supersedes APB Opinion No.
      25, "Accounting for Stock Issued to Employees". SFAS 123, as originally
      issued in 1995, established as preferable a fair-value-based method of
      accounting for share-based payment transactions with employees. However,
      that Statement permitted entities the option of continuing to apply the
      guidance in Opinion 25, as long as the footnotes to financial statements
      disclosed what net income would have been had the preferable
      fair-value-based method been used. Public entities (other than those
      filing as small business issuers) will be required to apply SFAS 123(R) as
      of the first interim or annual reporting period that begins after June 15,
      2005. Diamond I has evaluated the impact of the adoption of SFAS 123(R),
      and believes that it could have an impact to Diamond Iâ€TMs overall results
      of operations depending on the number of stock options granted in a given
      year.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 2 - GOING CONCERN | 
|---------------------- | 

|Diamond I, Inc. has incurred losses totaling $5,791,698 through
      December 31, 2004 has a working capital deficit of $75,464 at December 31,
      2004. Because of these conditions, Diamond I will require additional
      working capital to develop business operations. Diamond I intends to raise
      additional working capital either through private placements, public
      offerings and/or bank financing.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|There are no assurances that Diamond I will be able to achieve a level
      of revenues adequate to generate sufficient cash flow from operations or
      obtain additional financing through private placements, public offerings
      and/or bank financing necessary to support Diamond Iâ€TMs working capital
      requirements. To the extent that funds generated from any private
      placements, public offerings and/or bank financing are insufficient,
      Diamond I will have to raise additional working capital. No assurance can
      be given that additional financing will be available, or if available,
      will be on terms acceptable to Diamond I. If adequate working capital is
      not available Diamond I may not increase its operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|NOTE 3 - REVERSE ACQUISITION | 
|---------------------------- | 

|On June 20, 2003, Diamond I, then known as Covenant Financial
      Corporation (Covenant), issued 11,000,000 shares of common stock for 100%
      of the outstanding common stock of Air-Q. After the merger, the
      stockholders of Air-Q owned approximately 95% of the outstanding common
      stock of Covenant and, on June 24, 2003, changed its corporate
  name.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|For accounting purposes, the merger has been treated as an acquisition
      of Covenant and a recapitalization of Air-Q using the purchase method of
      accounting. Air-Qâ€TMs historical financial statements replace Covenantâ€TMs in
      the accompanying financial statements. Air-Q is now known as â€œDiamond I
      Technologies, Inc.â€
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 4 - ACQUISITION | 
|-------------------- | 

|In May 2004, Diamond I issued 206,000 shares of its common stock in
      connection with the acquisition of AirRover Networks, Inc., a
      privately-held Maryland corporation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The following represents the allocation of the purchase price over the
      historical net book values of the acquired assets and assumed liabilities
      of AirRover Networks on the date of the acquisition. The allocation made
      is as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Tangible assets acquired at fair value | $16,041 | 
| | -------------------------------------- | ------- | 

| | Cost in excess of net tangible assets | 366,162 | 
| | ------------------------------------- | ------- | 

| | Liabilities assumed | (1,103) | 
| | ------------------- | ------- | 

| | Total purchase price | $381,100 | 
| | -------------------- | -------- | 

|At December 31, 2004, in reviewing the assets associated with AirRover
      Networks, Diamond I determined that, due a significant downturn in the
      Wi-Fi hotspot industry, these assets had become substantially impaired.
      Based on this determination, the entire amount of the purchase price of
      AirRover Networks, $381,100, was written-down.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 5 - PROPERTY | 
|----------------- | 

|Property consisted of the following as of December 31,
2004:
|------------------------------------------------------------

| | Furniture and equipment | $96,764 | 
| | ----------------------- | ------- | 

| | Less: accumulated depreciation | (52,507) | 
| | ------------------------------ | -------- | 

| | Net book value | $44,257 | 
| | -------------- | ------- | 

|Depreciation expense totaled $48,279 and $4,228 for 2004 and 2003,
      respectively.
|--------------------------------------------------------------------------------------

|NOTE 6 - NOTE PAYABLE | 
|--------------------- | 

|Diamond I has a $55,000 unsecured note payable with the Douglas Park
      Group a third party bearing interest at 8% per annum. Diamond I received
      the funding for working capital purposes. The note is due two business
      days after Diamond I raises $200,000 from the exercise of warrants. See
      â€œNote 12 - Subsequent Events (Unaudited)â€.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 7 - INCOME TAXES | 
|--------------------- | 

|Diamond I follows Statement of Financial Accounting Standards Number
      109 (SFAS 109), â€œAccounting for Income Taxes.â€ Deferred income taxes
      reflect the net effect of (a) temporary difference between carrying
      amounts of assets and liabilities for financial purposes and the amounts
      used for income tax reporting purposes, and (b) net operating loss
      carryforwards. No net provision for refundable Federal income tax has been
      made in the accompanying statement of loss because no recoverable taxes
      were paid previously. Similarly, no deferred tax asset attributable to the
      net operating loss carryforward has been recognized, as it is not deemed
      likely to be realized.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The provision for refundable Federal income tax consists of the
      following:
|--------------------------------------------------------------------------------

| |  | December 31, 2004 | 
| |  | ----------------- | 

| | Refundable Federal income tax attributable to: |  | 
| | ---------------------------------------------- |  | 

| | Current operations | $1,050,000 | 
| | ------------------ | ---------- | 

| | Less, Change in valuation allowance | (1,050,000) | 
| | ----------------------------------- | ----------- | 

| | Net refundable amount | $0 | 
| | --------------------- | -- | 

|The cumulative tax effect at the expected rate of 34% of significant
      items comprising our net deferred tax amount is as
follows:
|--------------------------------------------------------------------------------------------------------------------------------------

| |  | December 31, 2004 | 
| |  | ----------------- | 

| | Deferred tax asset attributable to: |  | 
| | ----------------------------------- |  | 

| | Net operating loss carryover | $1,050,000 | 
| | ---------------------------- | ---------- | 

| | Less, Change in valuation allowance | (1,050,000) | 
| | ----------------------------------- | ----------- | 

| | Net deferred tax asset | $0 | 
| | ---------------------- | -- | 

|NOTE 8 - CAPITAL STOCK | 
|---------------------- | 

|Amended and Restated Certificate of Incorporation | 
|------------------------------------------------- | 

|On September 23, 2003, Diamond I amended and restated its certificate
      of incorporation to increase the number of authorized shares of stock to
      250,000,000: 200,000,000 shares of common and 50,000,000 shares of
      preferred. Shares of preferred stock may be issued from time to time in
      one or more series, at the discretion of Diamond Iâ€TMs board of
      directors.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On January 18, 2005, Diamond I amended its Amended and Restated
      Certificate of Incorporation to increase the authorized number of shares
      of common stock to 700,000,000.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Stock Purchase Agreements | 
|------------------------- | 

|In June 2003, Diamond I entered into four securities purchase
      agreements for a total of 5,000,000 shares of common stock at $.10 per
      share. Diamond I received proceeds totaling $450,000, net of $50,000 cost
      of raising the capital. As part of the securities purchase agreements,
      Diamond I issued warrants to acquire a total of 20,000,000 shares of
      common stock at an average exercise price per share of $.35. In April
      2004, these warrants were cancelled and replaced with 5,000,000 warrants
      that expire in April 2008 with an average exercise price of $1.00 per
      share. In addition, Diamond I issued, to a third party as a fee related to
      raising the capital, warrants to acquire a total of 4,000,000 shares of
      common stock that expire in September 2008 with an average exercise price
      of $.35 per share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Series A Preferred Stock | 
|------------------------ | 

|On March 2, 2004, Diamond I issued 500,000 shares of a newly created
      Series A convertible preferred stock and warrants for cash proceeds of
      $500,000. The shares of Series A preferred stock are convertible at any
      time into 400,000 shares of Diamond I common stock. The shares of common
      stock underlying the Series A preferred stock and the warrants possesses
      certain demand registration rights. In addition, the Series A preferred
      stock bears a cash dividend at the rate of 6% per annum, with cumulative
      rights. At December 31, 2004, Diamond I recorded a dividend payable of
      $22,500, in connection with its shares of Series A preferred
  stock.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Each holder of outstanding shares of Series A preferred stock is
      entitled to the number of votes equal to the number of whole shares of
      common stock into which the shares of Series A preferred stock held by
      such holder are then convertible at each meeting of shareholders with
      respect to any and all matters presented to the shareholders for their
      action or consideration.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Stock for Services and Bonuses | 
|------------------------------ | 

|During 2003, Diamond I issued a total of 2,656,500 shares of common
      stock to third-party consultants for services, resulting in $1,514,825 in
      non-cash compensation expense included in general and administrative
      expense in the accompanying statement of revenues and expenses. During
      2004, Diamond I issued a total of 5,172,000 shares of common stock to
      third-party consultants for services, resulting in $1,762,422 in non-cash
      compensation expense included in professional fees in the accompanying
      statement of revenues and expenses.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During 2003, as Diamond I issued a total of 500,000 shares of common
      stock, valued at $470,000, to its secretary/vice-president as an
      employment bonus to serve as an officer of Diamond I. During 2004, Diamond
      I issued, as bonuses, a total of 4,642,856 shares of common stock, valued
      at $401,428, to certain of its officers and a total of 800,000 of common
      stock, valued at $182,000, to certain of its directors.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Diamond I measured the transactions at the respective dates of issuance
      at the quoted market price, at prices ranging from $.07 to $.9625 per
      share There are no performance commitments or penalties for
      non-performance, therefore Diamond I recorded the expense at the date of
      issuance.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 9 - WARRANTS | 
|----------------- | 

|In June 2003, Diamond I issued, in conjunction with the sale of shares
      of its common stock, a total of 20,000,000 warrants to purchase a total of
      20,000,000 shares of common stock, with an average exercise price of $.35
      per share. In April 2004, Diamond I reached an agreement to restructure
      the 20,000,000 warrants. Under the agreement, these warrants were
      cancelled and new warrants to purchase a total of 5,000,000 shares at an
      average exercise price of $1.00 per share were issued. The 5,000,000
      warrants will expire on April 22, 2008. The warrants were valued using
      Black-Scholes and charged against equity as a financing cost, resulting in
      no change in net equity. As a result of Diamond Iâ€TMs four-for-one forward
      stock split, these warrants increased in number to 20,000,000 to purchase
      a like number of shares of common stock at an average exercise price of
      $.25 per share.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In March 2004, Diamond I issued, in conjunction with the sale of shares
      of its Series A Preferred Stock, 250,000 warrants to purchase 250,000
      shares of its common stock at an exercise price of $3.50 per share and
      250,000 warrants to purchase 250,000 shares of its common stock at an
      exercise price of $4.50 per share. These warrants will expire in March
      2007. The warrants were valued using Black-Scholes and charged against
      equity as a financing cost, resulting in no change in net equity. As a
      result of Diamond Iâ€TMs four-for-one forward stock split, these warrants
      increased in number to 2,000,000 to purchase a like number of shares of
      common stock at an average exercise price of $1.00 per
share.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The warrants issued to the holder of the Series A preferred stock were
      assigned a value of $290,442, which decreased the carrying value of the
      Series A preferred stock. These warrants were valued using the
      Black-Scholes method with the following assumptions: a risk-free interest
      rate of 3.5%, and expiration date of March 1, 2007, a volatility factor of
      53% and a dividend yield of 0%. In connection with the issuance of the
      Series A preferred stock and warrants, Diamond I recorded $165,442 related
      to the beneficial conversion feature on the Series A preferred stock as a
      deemed dividend, which is reflected in the income or loss applicable to
      common stockholders in the calculation of basic and diluted net loss per
      share. A beneficial conversion feature is present because the effective
      conversion price of the Series A preferred stock was less that the fair
      value of the common stock on the commitment date.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In connection with certain sales of securities, Diamond I paid a
      finderâ€TMs fee. For its efforts, the finder received 10% of the cash
      proceeds and common stock purchase warrants, as follows: (1) 1,000,000
      warrants to purchase a like number of shares at an exercise price of $.20
      per share; (2) 1,000,000 warrants to purchase a like number of shares at
      an exercise price of $.30 per share; (3) 1,000,000 warrants to purchase a
      like number of shares at an exercise price of $.40 per share; and (4)
      1,000,000 warrants to purchase a like number of shares at an exercise
      price of $.50 per share. As a result of Diamond Iâ€TMs four-for-one forward
      stock split, this finder now holds (A) 4,000,000 warrants to purchase a
      like number of shares at an exercise price of $.05 per share; (B)
      4,000,000 warrants to purchase a like number of shares at an exercise
      price of $.075 per share; (C) 4,000,000 warrants to purchase a like number
      of shares at an exercise price of $.10 per share; and (D) 4,000,000
      warrants to purchase a like number of shares at an exercise price of $.15
      per share.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As of December 31, 2004, no warrants have been
exercised.
|---------------------------------------------------------

|NOTE 10 - OPTIONS | 
|----------------- | 

|In September 2004, Diamond I entered into a consulting agreement with a
      third party. Pursuant to this consulting agreement, the consultant had the
      right to purchase up to $50,000 worth of Diamond Iâ€TMs common stock each
      month, at a purchase price equal to 70% of the market price for Diamond
      Iâ€TMs common stock, at the time of issue. The value of these options, as
      calculated pursuant to the Black-Scholes model, was approximately $21,000
      per month. During 2004, Diamond I issued a total of 1,640,435 shares upon
      the exercise of these options, for cash in the amount of
  $150,000.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Subsequent to December 31, 2004, this consulting agreement was amended
      to permit the purchase of up to $150,000 worth of Diamond Iâ€TMs common stock
      each month.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 11 - COMMITMENTS | 
|--------------------- | 

|Employment Agreements | 
|--------------------- | 

|Diamond I has entered into employment agreements with each of its
      officers, with terms ranging from two to three years and salaries ranging
      from $96,000 to $180,000 per year, respectively. During 2003, Diamond I
      did not pay all sums owed under certain of the employment agreements, and
      the subject employees have forfeited the unpaid amounts due pursuant to
      their agreements for the year ended December 31, 2003. During 2004,
      Diamond I did not pay all sums owed under certain of the employment
      agreements, and the subject employees have accrued the unpaid amounts, a
      total of $174,000, due pursuant to their agreements for the year ended
      December 31, 2004.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Office Lease | 
|------------ | 

|Diamond I leases approximately 2,000 square feet of office space under
      a lease agreement that expires in 2005. Under the lease agreement, Diamond
      I paid a deposit of $3,560 and makes monthly lease payments of
    $3,560.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 12 - SUBSEQUENT EVENTS (UNAUDITED) | 
|--------------------------------------- | 

|Acquisition of Diamond I Technologies, Inc. | 
|------------------------------------------- | 

|On January 18, 2005, pursuant to an agreement and plan of
      reorganization, Diamond I acquired all of the outstanding capital stock of
      Diamond I Technologies, Inc., a Nevada corporation (â€œDITechâ€), by issuing
      a total of 70,591,026 shares of its common stock to the shareholders of
      DITech. The reorganization agreement provides for further issuances of
      shares of Diamond Iâ€TMs common stock, upon DITechâ€TMs satisfying certain
      performance standards, as follows: (a) an additional 35,295,513 shares to
      the shareholders of DITech, if, on or before the date which is two years
      from the consummation of the reorganization agreement, DITech shall have
      completed the design and installation of a hand-held Wi-Fi-based gaming
      system in a first-class hotel/casino with no fewer than 400 guest rooms
      located in the State of Nevada (the â€œTarget Systemâ€), to the effect that
      the Target System is 100% operational and ready for use by guests of the
      host hotel/casino, which readiness shall include the approval of the
      Nevada Gaming Commission; and (b) an additional 35,295,513 shares to the
      shareholders of DITech, if, on or before the date which is five years from
      the consummation of the reorganization agreement, the Target System shall
      have operated at a profit, as determined by generally accepted accounting
      principles, for a period of three consecutive months. In addition, Diamond
      I is required to provide to DITech a total of $3,000,000 as operating
      capital, as follows: (i) within one month of the consummation of the
      reorganization agreement, the sum of $100,000; (ii) within six months of
      the consummation of the reorganization agreement, the additional sum of
      $400,000; (iii) within nine months of the consummation of the
      reorganization agreement, the additional sum of $500,000; and (iv) within
      one year of the consummation of the reorganization agreement, the
      additional sum of $2,000,000. Diamond Iâ€TMs failure to provide any portion
      of these funds on or before the required dates will cause Diamond I to
      return to the shareholders of DITech 100% of the then-outstanding shares
      of common stock of DITech. Should this occur, Diamond I would no longer
      have any interest in DITech or its business. Diamond I satisfied the first
      payment obligation and expects to be able to satisfy the second payment
      obligation when it become due. However, Diamond I does not presently
      possess adequate funds with which to satisfy its future funding
      obligations to DITech.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In determining the number of shares of our common stock to be issued to
      the shareholders of DITech, Diamond Iâ€TMs board of directors did not employ
      any standard valuation formula or any other standard measure of value.
      Rather, the number shares issued to the shareholders of Diamond I was
      determined through armâ€TMs-length negotiations.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|DITech has developed a hand-held Wi-Fi-based gaming system for
      on-premises use by casinos/resorts. DITechâ€TMs gaming system, based on a
      patent-pending security system, would permit casino patrons to secure a
      PDA device from the casino that would enable the patrons to enjoy in-room
      and pool-side gaming action, as well as other casino services. Diamond I
      has previewed the system for private audiences in
      client-and-regulatory-specific presentations (where necessary, DITech
      intends to seek regulatory approval of its gaming system).
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Amendments of Amended and Restated Certificate of Incorporation | 
|--------------------------------------------------------------- | 

|On January 18, 2005, Diamond I amended its amended and restated
      certificate of incorporation, whereby its authorized number of shares of
      common stock was increased from 200,000,000 shares to 700,000,000
      shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On January 24, 2005, a change in corporate name become effective; on
      that date, the companyâ€TMs corporate name changed from â€œAirRover Wi-Fi
      Corp.â€ to â€œDiamond I, Inc.â€
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note Payment | 
|------------ | 

|Subsequent to December 31, 2004, Diamond I paid in full its note
      payable in the principal amount of $55,000, plus all accrued and unpaid
      interest of approximately $7,000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------